Republic of Mining

Reform essential for WA’s future success – by Kevin Skinner (Australian Mining – October 2, 2014)

October 2, 2014

http://www.miningaustralia.com.au/home

Kevin Skinner works with Field Public Relations.

The government agency charged with driving the reform of Western Australia’s $121 billion a year resources industry says it is essential that the current reforms within the sector continue – and in close consultation with the industry – if the sector is to emerge successfully from the current easing in mineral commodities demand and pricing.

Addressing the Paydirt 2014 Australian Nickel Conference in Perth today, the Director General of WA’s Department of Mines and Petroleum, Richard Sellers, said it was essential however, that any reforms did not add to the cost of doing business in Western Australia, nor detracted from its appeal as a destination for global investment in exploration and mining.

“One of the most successful outcomes to date of our reform is the slashing of the tenement titles approvals processes and backlog to its best level in more than two decades,” Sellers said.

“When you consider there are more than 22 000 active mineral titles operating in Western Australia covering an area of almost 550 000 square kilometres, or just over one fifth of the State’s land mass, the Department’s moves to cut the backlog of outstanding titles applications have seen this drop from more than 18 000 in 2007 to just over 4000 today,” he said.

Agnico has room to grow in Quebec (Northern Miner – October 1, 2014)

October 2, 2014

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

Agnico Eagle Mines (TSX: AEM; NYSE: AEM) has grown over the past two decades from a single asset producer to a mid-tier gold miner, with mines spread across Quebec, Nunavut, Finland and Mexico. But its four gold mines strung out along a 50 km stretch of the Trans-Canada Highway in Quebec’s Abitibi region remain the heart of the Agnico beast, and show significant upside.

The biggest shakeup for Agnico this year has been its joint acquisition with Yamana Gold (TSX: YRI; NYSE: AUY) of Osisko Mining and its Canadian Malartic gold mine in Malartic, halfway between Rouyn-Noranda and Val-d’Or. The deal gave Agnico 50% of the mine, which ranks as one of the largest gold mines in Canada, and produced 475,000 oz. gold and 422,000 oz. silver in 2013.

Canadian Malartic yielded 11,878 oz. gold attributable to Agnico in the first half of 2014 (representing only 15 days of ownership at the end of June), at a total cash cost of US$614 per oz.

A new reserve estimate was recently calculated, and the partners expect to update mine-optimization plans this month.

Speaking at the Denver Gold Forum in September, Agnico president and CEO Sean Boyd said the transition has “gone well,” and that the acquisition “gives us big reserves, big production and good net free cash flow in a part of the world we know really well.”

NEWS RELEASE: “Stones of Shame” returned to IOC/Rio Tinto: Innu First Nations demand that IOC/Rio Tinto pay its rent

October 2, 2014

MONTREAL, Oct. 1, 2014 /CNW Telbec/ – In a historically symbolic gesture, the Innu First Nations of Uashat mak Mani-utenam and Matimekush-Lac John returned two enormous iron ore stones from the mining pits of the Iron Ore Company of Canada (IOC), majority owned by the mining giant Rio Tinto, to IOC/Rio Tinto’s head office (1000, Sherbrooke Street West in Montreal, Quebec). The stones were erected in the Innu communities of Uashat and Mani-utenam in September 1970 to mark 100 years since the discovery of the rich deposits of iron ore in the Schefferville area, which deposits were mined by IOC as of 1954. This act, intended both to heal and to send a message, kicks off a campaign themed “IOC/Rio Tinto must pay its rent” which aims to denounce the violation of the Innu’s rights by IOC/Rio Tinto, particularly its refusal to negotiate a fair economic agreement.

“These stones represent the only thing we have ever received from all of IOC/Rio Tinto’s mining developments on our lands. Our peoples have yet to receive any revenue, compensation, indemnity or royalties whatsoever from IOC/Rio Tinto. We have already reached agreements with all of the other iron ore mining companies, four in total, in our territory, yet the one that was the first to move into our territory and the one which caused us the most harm, IOC/Rio Tinto, is the last one without an agreement with us – the true owners of the land. As a result, we wish to return to IOC/Rio Tinto these “stones of shame” to send a message that the era when companies like IOC/Rio Tinto could profit from our resources all the while ignoring us is over”, stated Mike McKenzie, Chief of Uashat mak Mani-utenam.

It is worth remembering, that as of 1954, IOC/Rio Tinto operated twenty mines in the Schefferville area before abandoning them (while savagely destroying the city of Schefferville) in 1982 and that the company continues to operate nearly ten iron ore mines on the territory of the Innu of Uashat mak Mani-utenam and of Matimekush-Lac John in the area of Labrador City.

Canada rejects UN resolution on native rights – by Michael Swan (The Catholic Register – October 1, 2014)

October 2, 2014

http://www.catholicregister.org/

The Canadian Conference of Catholic Bishops may have to re-fight a battle with the federal government over the United Nations Declaration on the Rights of Indigenous Peoples.

On Sept. 22 Canada became the only country to object to a draft resolution to the UN General Assembly asking countries to do more to achieve aboriginal rights. The Department of Foreign Affairs Trade and Development (DFATD) said the UN document — from the World Conference on Indigenous Peoples and submitted to the president of the UN General Assembly — “cannot be reconciled with Canadian law, as it exists.”

The Canadian representatives at the UN argued that “free, prior and informed consent” to development that affects indigenous land — whether mining, logging, hydro-electric dams or others — could be interpreted as a “veto” and is therefore inconsistent with Canada’s Constitution and undermines the supremacy of Parliament.

Canada made the same objections when the UN adopted its Declaration on the Rights of Indigenous Peoples in 2010. At that time Canada’s bishops found themselves among many groups urging the federal government to rethink its position.

The government eventually said it supported the UN Declaration as “an aspirational document,” while maintaining its reservations about aboriginal consent for development.

Vale Canada Limited fined $150,000 for workplace safety conviction in connection with death of T-3 scooptram operator Greg Leason – by John Barker (Soundings John Barker.com – October 1, 2014)

October 2, 2014

http://soundingsjohnbarker.wordpress.com/

Vale Canada Limited has been fined $150,000 in provincial court in Winnipeg and ordered to pay $37,500 in a victim surcharge after pleading guilty June 18 in a previously unreported decision to one count of failing to ensure the safety, health and welfare of all workers, contrary to The Workplace Safety and Health Act, in connection with the death of 51-year-old T-3 scooptram operator Greg Leason at Manitoba Operations in Thompson almost three years ago.

Vale was charged last Oct. 3. The Leason case marked the first time Vale, or its predecessor, Inco, had been charged by the province in connection with a mining fatality since mining began in Thompson,

The charge upon which Vale was convicted and nine other charges laid against Vale by Manitoba Labour and Immigration’s Workplace Safety and Health Branch, also under The Workplace Safety and Health Act, in connection with the the death of Leason, which were ordered stayed, all listed an offence date of Oct. 7, 2011, the date of the accident.

While stayed charges technically can be re-activated within one year of the day they are stayed by the prosecution, in practice they almost never are, unless the accused is charged with new offences during the one year period after the original charges have been stayed. When charges are withdrawn instead of stayed, the prosecution of those charges is finished immediately.

RPT-UPDATE 2-New rules to slash Indonesian coal exports in short term at least – by Wilda Asmarini and Yayat Supriatna (Reuters India – October 1, 2014)

October 1, 2014

http://in.reuters.com/

JAKARTA, Sept 30 (Reuters) – Indonesia’s coal exports are expected to fall by between 15 and 20 percent in October from September and could decline 5 percent this year as firms scramble to obtain government export permits to comply with new rules due to come into effect on Oct. 1.

The new regulations, intended to stamp out illegal mining and ensure ample coal supplies for domestic power plants, require exporters to get approval from the mining and trade ministries.

But the industry says the rules are poorly timed and could push many firms out of business with coal prices at a five-year low. Unregistered firms will not be allowed to ship coal past the deadline.

Many miners and traders have encountered delays and a backlog of firms have yet to be registered, Pandu Sjahrir, chairman of the commercial committee at the Indonesian Coal Mining Association (ICMA), told Reuters.

“A lot of the backlog happens to be at the coal and minerals directorate level. Everything has to be done manually,” Sjahrir said, adding that firms needed to obtain the signature of each director at the department.

Investors Head for Exit as Commodities Extend Slump – by Luzi Ann Javier (Bloomberg News – September 30, 2014)

October 1, 2014

http://www.bloomberg.com/

Investors are betting that the worst isn’t over for commodity prices that already are the lowest in five years.

About $907 million was pulled from U.S. exchange-traded products backed by raw materials this month, the most since April, data compiled by Bloomberg show. Expanding surpluses, a surging dollar and slowing growth in China helped send the Bloomberg Commodity Index to the lowest since 2009, reversing first-half gains fueled by a polar vortex and dead pigs in the U.S., and escalating tensions in Ukraine and the Middle East.

Banks from Societe Generale SA to Citigroup Inc. expect the losses for many raw material to continue. U.S. farmers are collecting the biggest corn and soybean crops ever, and global stockpiles of nickel are at an all-time high. Americans are producing the most oil since 1986, compounding a global surplus. China, the largest consumer of grains, energy and metals, is poised for its slowest expansion in two decades.

“The commodity complex as a whole did really well for a long time, and as a result, a lot of money poured in across the board and created oversupply and over-capacity,” said Peter Sorrentino, a Cincinnati-based fund manager who helps oversee $1.8 billion at Huntington Asset Advisors Inc. “It definitely has been an asset class that people have been withdrawing money from. Hedge funds congregate in momentum trades, and over the last two years, commodities have been sources of cash.”

The great Canadian LNG poker game – by Peter Tertzakian (Globe and Mail – October 1, 2014)

October 1, 2014

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

“They’re just playing poker, right?” asked an investor friend of mine who knows how to make a dollar. “Guys like Petronas, Shell and Chevron have already put a bazillion or two on the table,” he said with his furrowed face. “Aren’t their investments to date far too large to just walk away from their British Columbian LNG projects?”

I paused before answering. Petronas had just publicly announced that they were unhappy with Canada. It was a tap of the Malaysian company’s closely held cards signalling they might be willing to pack up their B.C. drill bits and go home in the absence of better liquefied natural gas investing odds.

It’s easy to believe that Petronas’s verbal shots in the public arena were a poker-faced “take-it-or-leave-it” bluff to get better terms on the eve of the B.C. government’s anticipated LNG tax announcement. But Canadians with a stake in the multibillion-dollar LNG business – for example, investors, governments and suppliers – should be cautious about interpreting such statements as hollow bravado.

Deferring to the wisdom of country singer Kenny Rogers, I replied to my friend, “Surely you know the lyrics to The Gambler?”

UPDATE 1-Nickel miner Talvivaara gets debt cut plan, still lacks financing – by Jussi Rosendahl (Reuters U.S. – September 30, 2014)

October 1, 2014

http://www.reuters.com/

HELSINKI, Sept 30 (Reuters) – Finnish nickel miner Talvivaara lacks the long-term financing it needs to avoid bankruptcy, it said on Tuesday after an administrator proposed an eight-year restructuring plan that includes slashing its debts by up to 99 percent.

Talvivaara listed to great fanfare in London in 2007 when nickel peaked at around $51,000 per tonne.

But nickel prices have more than halved, and hurt by repeated production disruptions and environmental damage, the company last year suspended its mining operations and started a court-led debt restructuring process to avoid bankruptcy.

The administrator on Tuesday proposed Talvivaara’s unsecured debts of around 1.4 billion euros ($1.8 billion), including group internal debt, be cut by 97-99 percent. The plan could involve a share issue, which the administrator warned could dilute the company’s shares.

It shares fell as much as 24 percent on Tuesday. The company lamented on Tuesday that implementing the plan would need funds and creditor support, which is does not have.

“In order to ramp-up the Talvivaara group’s mining operations to full scale, a significant amount of new financing for the operative activities is required immediately,” it said in a statement.

Metals and mining: Years of renewal – by David Miller and Alexei Lossan (Russia Beyond the Headlines – September 25, 2014)

October 1, 2014

http://rbth.com/

Global metals and mining firms face a difficult operating environment amid falling commodity prices. Russian companies are cutting costs and refocusing on domestic assets.

Russia’s metals and mining industry, the country’s second-most important sector after oil and gas, has faced its share of adversity since the salad days of the past decade, when commodity prices were pushed skyward by a hike in demand from China and India.

Today, as lower commodity prices put pressure on resource-producers around the world, many Russian metals and mining companies are nevertheless showing respectable profit margins, after shedding non-core operations and taking difficult steps towards rebuilding.

Iron ore prices fell to a five-year low in September as Chinese demand slackened off and economic activity in Europe and Japan remained weak. Even so, for Russian firms, signs are emerging that, in some areas, the future may be looking a little brighter.

“The global aluminum industry has turned a corner,” declared Rusal CEO Oleg Deripaska in a statement this summer after the firm, which produces almost 9% of the world’s aluminum, posted an income of $116 million in the second quarter of 2014.

End of the Iron Age – by James Wilson and Neil Hume (Financial Times – September 29, 2014)

September 30, 2014

http://www.ft.com/home/us

A collapse of ore prices throws miners’ strategies into doubt and threatens an industry shakeout

Iron is one of the most abundant elements on earth but pulling it out of the ground efficiently can be a daunting undertaking. Snaking through the low, green hills of southern Brazil is a 530km pipeline, the decisive link in Anglo American’s $8.2bn Minas-Rio project to extract iron ore in the Brazilian interior and ship it from a new Atlantic port. Way over its original $3.6bn budget and two years late, Minas-Rio is finally close to the point of “first ore on ship”.

For years, huge mining projects such as these have formed the backbone of global economic expansion. The world’s most important commodity after crude oil, iron ore has been devoured by Chinese steel mills, emerging as the raw material for an infrastructure-led growth spurt.

But Minas-Rio is about to deliver its first ore into a much less welcoming world. The price of iron ore has plunged more than 40 per cent this year, the worst performance across metals and bulk commodities in 2014. From an average price of $135 per tonne last year, the benchmark iron ore contract sank last week to less than $80 for the first time since the global financial crisis.

“The iron ore market is in the midst of a transition without precedent in recent commodity history,” says Macquarie, the Australian bank.

Behind the change is a big increase in iron ore exports – and not just the 26.5m tonnes that Minas-Rio will bring to market when fully operational in 2016.

Juniors reap $1bn windfall from big miners’ ‘unloved assets’ – by Paul Garvey (The Australian – October 1, 2014)

September 30, 2014

http://www.theaustralian.com.au/business

ASSETS unloaded by some of the world’s biggest mining houses for less than $250 million created more than $1 billion in value in months for a handful of junior Australian mining companies.

Data compiled by The Australian shows the recent acquisitions by companies such as Northern Star, Poseidon Nickel and Saracen Minerals have paid for themselves several times over given the share price gains since the deals were ¬announced.

Falling commodity prices and shareholder demands for greater financial discipline have prompted the mining giants to offload non-core assets as part of their efforts to rein in operating costs and reduce debt.

The smaller miners and explorers willing to step in and buy assets in a falling market have been richly rewarded. The Australian’s analysis shows the acquirers enjoyed a surge in market capitalisation that collectively totalled more than $1.3bn at its peak.

While share prices across the sector have fallen in recent months, the combined market capitalisation of the acquirers is still $730.8m higher than their pre-purchase levels.

The acquirers have all comfortably outperformed the ASX 300 Resources Index, which has fallen by 7.2 per cent this year.

Many months, probably years for nonferrous mining in Northern Minnesota – by Aaron Brown (Minnesota Star Tribune – September 29, 2014)

September 30, 2014

http://www.startribune.com/

It’s been several months since the public comments period closed for the environmental review and permitting process for PolyMet, a controversial proposed nonferrous mineral mine in Hoyt Lakes, Minnesota. Most had hoped for news about the completion of the Environmental Impact Statement and a clearer timeline for the final permitting by this fall. However, a Marshall Helmberger interview of DNR commissioner Tom Landwehr in the Sept. 24 issue of the Timberjay shows that it could be years, not months.

For those following this issue closely, Helmberger’s story is a must-read.

The reason for the delay, according to Landwehr, is the unprecedented number of primarily critical comments, many of which involve unique and extremely detailed scientific questions and concerns. About 58,000 written comments were received, which raise between 7,000 and 8,000 unique concerns or questions about the massive Draft EIS document discussed last winter.

From the story:

Indeed, it’s by far the largest such undertaking in state history, and that makes it difficult for state officials to even estimate when the job might be completed. Landwehr was blunt: “We don’t know how long it will take. We can’t even say months.”

Commodity super cycle turning downward, says RBI – by Rajesh Bhayani (Business Standard – September 30, 2014)

September 30, 2014

http://www.business-standard.com/

In latest commodity super-cycle, inflation-adjusted prices of commodities rose 60-500% between 1999 and 2010

Mumbai – Global commodities prices have already reached inflexion points and are headed downward, according to the RBI (Reserve Bank of India). The central bank, as a part of its monetary policy announced today, published the analysis based on the last five decades’ data of prices of commodity both energy and non-energy, to show that commodity super cycle may be turning downwards.

Commodity super-cycles are long and rapid rises in prices across commodities, propelled by persistent increases in demand that outstrip supply. The policy statement said that, “since 1894, four super-cycles have been identified, with the last one starting from the late 1990s and attributed to rapid and sustained industrialisation and urbanisation in China and other emerging economies”.

During this latest commodity super-cycle, inflation-adjusted prices of commodities rose in the range of 60 to 500 per cent between 1999 and 2010, the year in which they peaked. Oil price rose by 467 per cent, metals by 202 per cent and agricultural prices by 77 per cent — the largest price increases among all the four commodity super-cycles. The sharp rise in prices are after adjusting for inflation and hence the issue of whether the super cycle is ending arises.

Nic Brown, Head of Commodities Research at London based Natixis said, “We would agree that weak global growth (“stable but secularly lower levels of growth”) is one of the key characteristics behind the relative weakness of commodity prices over the past few years.”

Environmental Disturbance and the Emergence of Tropical Disease: Lessons From the Gold Fields of Ghana – by Mario Machado (Huffington Post – September 29, 2014)

September 30, 2014

http://www.huffingtonpost.com/theworldpost/

Mario Machado is a recently returned Peace Corps volunteer (RPCV) and Independent Scholar.

This forest feels like an eternity as our four-wheel drive vehicle plods down yet another washed-out dirt road. This is the Central Region of Ghana and the lack of infrastructure only adds the ambiance as groups of women pass by with their loads of firewood balanced effortlessly on their head, their babies dozing comfortably in tow.

Abruptly, the trees stop and a barren dirt-scape throws the equatorial sun back into our faces. Compared to the shade of the canopy, this feels like the surface of the sun. And yet, despite the devastating heat, I can easily make out the distant silhouettes of people shoveling and sifting and working through this terrible hole in the earth.

As we get closer, the figures assume the faces and nuances of the tired men and women that they are. Holes in boots; tattered, stained clothing; knee deep in stagnant water with shovels or pick-axes or buckets of mud in hand. All for a paltry daily bounty of gold and the eternal promise to strike it rich someday. It’s enough to keep them busy and fed for now, but at a terrible cost to their bodies and the land. This is the face of unregistered small-scale mining in Ghana, called “galamsey” by the locals.

Ghana, the proverbial “Gold Coast”, has furnished the world with the gold for hundreds of years and although the mechanisms have changed — a colonial administration has been replaced by economic structures that are equally exploitative — the fundamental ethos remains the same: the wealth contained within this land does not belong to those that live and work it, but to those with the might to control it.