Republic of Mining

UPDATE 4-China says Australian tycoon’s attack “irrational and absurd” – by Ben Blanchard, Jane Wardell, Sonali Paul and Adam Jourdan (Reuters India – August 21, 2014)

August 21, 2014

http://in.reuters.com/

BEIJING/SYDNEY, Aug 21 (Reuters) – China’s foreign ministry has condemned a verbal attack by Australian mining mogul and politician Clive Palmer as irrational and absurd, after the businessman described China’s government as “bastards” who shoot their own people.

The Australian government has rebuked Palmer, who holds the balance of power in the parliament’s upper house. Foreign Minister Julie Bishop said she planned to contact the Chinese embassy to stress that the Australian parliament does not share Palmer’s “abusive” views.

“Palmer’s words about China in recent days are totally irrational and absurd. We strongly condemn them,” Ministry of Foreign Affairs spokesman Qin Gang said in a statement posted on the ministry’s official website late on Wednesday.

Qin’s statement came after a prominent Chinese newspaper, the state-run Global Times tabloid, said Australia should be taught a lesson. “China cannot let him off, or show petty kindness just because the Australian government has condemned him,” it said in an editorial in its Chinese and English editions.

“China must be aware that Palmer’s rampant rascality serves as a symbol that Australian society has an unfriendly attitude toward China.”

Vale secures key licence for flagship iron ore mine expansion – by Cecilia Jamasmie (Mining.com – August 21, 2014)

August 21, 2014

http://www.mining.com/

Brazil’s Vale (NYSE:VALE), the world’s largest producer of iron ore, has secured a key environmental licence for a 90 million tonnes a year expansion of its flagship iron ore mine in the Carajás complex, in the northern state of Para.

The nearly $20 billion plan is expected to start production in 2016 and reach full capacity of 90-million tonnes a year of iron-ore in 2018, or nearly a third of Vale’s existing annual output.

In a statement Wednesday evening, the company said Brazil’s environmental regulator Ibama had granted it a preliminary license for its plans to expand its N4WS, N5S, Morro I and Morro II projects at the Carajás complex, which combined would give Vale an additional 1.8 billion tonnes in reserves.

The expansions are considered vital for Vale as the miner has been losing market share to Rio Tinto (ASX, LON:RIO) and BHP (ASX:BHP).

Carajás, located in a remote corner of the Amazon rainforest, currently holds the world’s largest iron ore deposits with 7.2 billion tonnes combined in proven and provable reserves. It accounts for 35% of Vale’s annual ore output of more than 300 million tonnes. Last summer Vale received a licence from the Environmental Protection Agency of Brazil to build a $19.5 billion railway expansion to its Serra Sul mine, part of the Carajás complex.

Editorial: Once more into the breach – by John Cumming (Northern Miner – August 20, 2014)

August 21, 2014

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. Editor John Cumming MSc (Geol) is one of the country’s most well respected mining journalists. jcumming@northernminer.com

It was another week of major developments in the fast-moving story of Imperial Metals and the massive, 15-million-tonne tailings and waste-water breach at its Mount Polley copper–gold mine in central B.C.’s Cariboo region.

One major worry amongst the general population in B.C. is that they’re looking at a Lac-Mégantic rail-disaster type of situation, where the offending company goes bankrupt soon after the incident, leaving local communities reeling and higher levels of government with the task of cleaning up the devastation and a multi-million dollar bill.

That doesn’t appear to be happening with Imperial Metals and the Mount Polley spill, as Imperial was able to flex a little of its financial muscle on Aug. 14 with the announcement that it would raise $100 million in a convertible debenture, with at least some of the funds to be directed towards the clean-up at Mount Polley.

Playing a large and leading role in the financing is Calgary-based oilsands billionaire Murray Edwards, chairman of Canadian Natural Resources and perhaps best known as a co-owner of the Calgary Flames NHL team. Among his many business ventures in Western Canada, he owns a 30% stake in Imperial Metals, which might account for less than 10% of his wealth, which was pegged by Forbes at US$2.2 billion in 2011.

Duluth PFS shows robust, high margin base/precious metals project – by Lawrence Williams (Mineweb.com – August 21, 2014)

August 21, 2014

http://www.mineweb.com/

The latest PFS on the TMM project provides increasing confidence that the proposed underground mine remains hugely attractive in economic terms.

LONDON (MINEWEB) – Duluth Metals, which is working on moving an enormous base and precious metals project to the development stage in a controversial part of Minnesota, USA, has just announced it has received an independent draft feasibility study prepared by a multi-company team led by AMEC.

The draft PFS, part of an NI 43-101 compliant technical report shows the economics of the proposed underground copper/nickel/pgm mine are supported by fundamentals showing a competitive cost position, high margins sustained over time, and capital efficiencies resulting from outstanding regional and local infrastructure and competitive advantages.

The study was carried out on a proposed underground project which involves mining only a relatively small portion of the company’s Twin Metals Minnesota (TMM) resource on the massive Duluth Complex in eastern Minnesota, and the overall project area should support an even bigger, far longer life operation.

The area is environmentally sensitive and Duluth is keen to demonstrate that a smaller project can be developed which meets all environmental criteria while keeping surface disruption to a minimum by underground mining and very strict environmental controls on waste disposal, processing and tailings storage.

Batista’s MMX to Halt Work at Mine as Iron-Ore Falls – by Juan Pablo Spinetto (Bloomberg News – August 20, 2014)

August 21, 2014

http://www.bloomberg.com/

MMX Mineracao & Metalicos SA (MMXM3), the mining unit of former billionaire Eike Batista, will temporarily stop operations at its only producing mine as it seeks to avoid bankruptcy protection amid lower metal prices.

The Brazilian iron-ore producer will give workers at its Serra Azul unit in Minas Gerais state a 30-day “collective vacation,” MMX said in a statement today. The furlough will begin during the first week of September.

“The necessity of the collective vacation and temporary stop of the production activities at the Serra Azul Unit is a consequence of the significant and prolonged decline of the iron-ore price,” MMX said in the statement. The measure also stems from “the operating restrictions imposed by the environmental authorities of the state of Minas Gerais.”

MMX is reviewing its business plan to bolster cash as iron-ore prices decline. The company will pay workers during the furlough, MMX said in an e-mailed reply to questions.

Batista, once Brazil’s richest person, has been selling assets as missed targets, mounting debt and accumulating losses forced his oil and shipbuilding companies to enter Brazil’s so-called judicial recovery proceedings last year.

UPDATE 2-Mongolia eyes economic boost from China president’s visit – by Terrence Edwards and David Stanway (Reuters India – August 21, 2014)

August 21, 2014

http://in.reuters.com/

ULAN BATOR/BEIJING, Aug 21 (Reuters) – Chinese President Xi Jinping proposed on Thursday the expansion of bilateral trade with Mongolia to $10 billion a year by 2020 as he arrived for a two-day visit aimed at deepening economic ties between the neighbours.

Xi’s arrival marks the first Chinese presidential visit in 11 years to Mongolia which has been hit by plunging commodity prices and a rapid decline in foreign investment. It is keen to agree to new deals on transport, energy and mining investment with its dominant trading partner.

The two countries signed a joint declaration upgrading their relationship to a “comprehensive strategic partnership”. They also signed agreements to cooperate further in areas such as economics, energy, mining and finance.

“Xi proposes to expand China-Mongolia trade to $10 billion by 2020,” China’s Xinhua state news agency said. Two-way trade was worth $324 million in 2002 but rose to $6 billion in 2013, accounting for more than half of Mongolia’s total foreign trade, Xinhua said.

In an article written by Xi for Mongolian newspapers, Xi said China would do all it could to help Mongolia develop. “China hopes that both countries can push cooperation on building inter-connecting railways and roads, the development of mines and processing,” Xi wrote.

B.C. mining boom, recent tailings breach prompt environmental fears in Alaska – by James Keller (CTV News/Canadian Press – August 21, 2014)

August 21, 2014

http://www.ctvnews.ca/

VANCOUVER — Heather Hardcastle has spent her life fishing for salmon at the mouth of the Taku River, which starts in a remote corner of northwestern British Columbia before dumping into the ocean near her home in Juneau, Alaska.

She was six years old when her parents bought a fishing boat. More than a decade ago, she became co-owner of Taku River Reds, a small commercial fishing outfit that ships salmon throughout the United States.

In recent years, however, Hardcastle’s attention has been focused farther upstream in B.C., where a cluster of proposed mining projects has fishermen, environmentalists, aboriginals and a handful of politicians in Alaska concerned about the potential impact on the environment in their state.

And those concerns have only been amplified by a recent mine tailings spill in central B.C., where the full impact from the disaster on aquatic life remains unclear.

“It’s one thing on paper to say that you have standards that are high, but it doesn’t matter when you have a disaster like this,” said Hardcastle, whose concerns prompted her to become involved with the environmental group Trout Unlimited.

“There’s a real lack of confidence and trust right now.”

RPT-COLUMN-Reliance on cost-cutting the real BHP story – by Clyde Russell (Reuters India – August 20, 2014)

August 20, 2014

http://in.reuters.com/

Clyde Russell is a Reuters columnist. The views expressed are his own.

LAUNCESTON, Australia, Aug 20 (Reuters) – BHP Billiton’s plans to spin-off unwanted assets may have received a tepid welcome from investors, but the real news from the mining giant’s results is the limits to cost-cutting.

Delving into BHP’s results presentation on Tuesday shows the company has been successful in cutting expenses, with a 12 percent cut in cash costs at the flagship Western Australian iron ore operations, while the Queensland coal business recorded a 24 percent drop.

BHP said its productivity-led volume and cost efficiencies were $2.9 billion in the year to end June 2014, beating its target by $1.1 billion. Given the company’s net income for the period was $13.4 billion, the $2.9 billion in savings represents about 22 percent of the profit, which certainly looks impressive.

The problem comes when you start to look at the savings achieved, the potential for further cost-cutting and the likely trajectory of commodity prices.

BHP said it produced a record 225 million tonnes of iron ore in the 2014 financial year, which resulted in revenue of just under $23 billion, or roughly 34 percent of the group’s total revenue.

Mexican government files criminal charges in copper mine acid spill – by Dorothy Kosich (Mineweb.com – August 20, 2014)

August 20, 2014

http://www.mineweb.com/

Mexico’s Environmental Secretary has estimated that the fine for the Buenavista copper mine spill could reach $3 million.

RENO (MINEWEB) – Mexico’s federal environmental protection regulator, Profepa, has filed criminal charges with the Federal Attorney General’s Office against Grupo Mexico’s Buenavista del Cobre and Minera Mexico over a leakage caused by defects in newly constructed leaching ponds, which contaminated two rivers and left thousands of people without drinking water.

Two days after the Mount Polley tailings dam breach in British Columbia, 40,000 cubic meters of copper sulfate acid solution from Grupo Mexico’s Buenavista mine spilled into the Bacanuchi River and, subsequently, the Sonora River in northern Sonora State.

Initially, Grupo Mexico blamed unseasonal rains for causing the acid solution to spill from a dam now under construction for a new leaching plant in the mining operation. The company said it would pay for all the damage from the accident.

Arturo Rodriguez, chief of industrial inspection for the Attorney General for Environmental Protection, suggested mine operators should have been able to detect the leak before such a large amount of drainage had leaked into the rivers.

However, Mexico’s Environmental Secretary Juan Jose Guerra Abud told a local radio station Tuesday Grupo Mexico’s claim that excessive rain caused the overflow was “totally false” because there was no rain on August 6th, the day the spill is believed to have occurred.

Mining giant Glencore makes good on pledge with $1 billion buyback – by Sivia Antonioli (Globe and Mail – August 20, 2014)

August 20, 2014

http://uk.reuters.com/

LONDON – (Reuters) – Commodities group Glencore (GLEN.L) became the first of the large miners to honor promises to return cash to shareholders, announcing a share buyback program of up to $1 billion as it reported forecast-beating first-half profit.

Diversified mining companies have vowed to control their spending and reward shareholders more after being criticized for years of squandering money on risky projects that resulted in multibillion-dollar writedowns as metals prices started to fall.

However, rival BHP Billiton (BHP.AX)(BLT.L) failed to deliver when it held fire on an expected buyback announcement on Tuesday, while Rio Tinto (RIO.L)(RIO.AX) signaled a share buyback could come when it reports full-year results in February.

Expectation of Glencore making good on its promise was heightened with this month’s completion of the sale of Glencore’s Peruvian copper project Las Bambas to a Chinese consortium for $6.5 billion after tax, either through a buyback or special dividend.

Glencore, which completed a record-breaking acquisition of rival Xstrata a little more than a year ago, is the world’s largest producer of zinc, used to galvanize steel, and one of the top miners and traders of copper and nickel.

However, while it has noted cost overruns at its Koniambo project in New Caledonia, it was the balance-sheet improvement from the Las Bambas sale that allowed it to accelerate the return of capital to shareholders.

Canadian sues Silvercorp over ‘false imprisonment’ in China – by Nathan Vanderklippe (Globe and Mail – August 20,2014)

August 20, 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.

BEIJING — A Canadian man who spent years behind bars in China has filed a lawsuit accusing a mining company of conspiring with Chinese authorities to have him arrested and detained.

Kun Huang was an investigator for a hedge fund manager who in September, 2011, claimed that ore estimates at a Chinese mine owned by Vancouver-based Silvercorp Metals Inc. were too good to be true. Three months later, Chinese officials detained Mr. Huang at the Beijing airport, strip-searched him, seized his computer and placed him in a lengthy detention that culminated in a single-day closed-door trial and a two-year sentence for criminal defamation.

He was released on July 17, and returned to Canada the next day. Now, in a lawsuit filed Tuesday in the Supreme Court of British Columbia, Mr. Huang claims that Silvercorp masterminded his detention as a reprisal for his research, whose publication prompted a steep decline in the company’s share price.

Silvercorp, his court filing claims, effectively enlisted the local Chinese police as its “agent,” giving them money, encouragement and guidance “to falsely imprison and then later knowingly bring baseless criminal charges against Mr. Huang.”

Africa’s middle-class boom is real, study shows – and it’s gaining speed – by Geoffrey York (Globe and Mail – August 20, 2014)

August 20, 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.

JOHANNESBURG — The rise in Africa’s middle class has been over-hyped in recent years, but it is still a genuine phenomenon that is generating huge commercial and political opportunities, a new study says.

The analysis released on Tuesday by Standard Bank, a South African bank with operations across Africa, estimates that the African middle class has tripled in size over the past 14 years – and the boom is gathering speed.

The study analyzed 11 of the biggest economies in the region, accounting for about half of sub-Saharan Africa’s population and GDP. Those economies have grown tenfold since 2000, reaching a collective GDP of more than $1-trillion today, compared with a growth of just 25 per cent between 1990 and 2000.

Using a more rigorous definition of “middle class,” the study concludes that earlier estimates were much exaggerated. But it still finds dramatic growth, from about 4.6 million households in 2000 to almost 15 million households today in the 11 focal countries, if the middle class and lower-middle-class categories are both included.

Lax safety measures to blame for Lac-Mégantic tragedy, safety board says – by Allan Woods (Toronto Star – August 20, 2014)

August 20, 2014

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

The Transportation Safety Board of Canada identified 18 distinct factors that led to the Lac-Mégantic rail crash, including mechanical problems, unsuitable tank cars carrying crude oil, the cost-conscious rail firm and human error.

MONTREAL — Blame a rule-breaking rail company, blame ineffective train inspectors, but don’t blame the federal government for the deadly Lac-Mégantic train disaster, says Federal Transport Minister Lisa Raitt.

In the wake of a scathing report into the July 2013 derailment that killed 47 people in the Quebec town, Raitt pointed the finger at three employees of the Montreal, Maine & Atlantic railway now charged with criminal negligence, and referred questions about lapses leading to the accident to bureaucrats under her command.

“We need to remember that in terms of safety, the government puts the rules in place. The companies are expected to follow the rules,” Raitt said in Ottawa. “The company did not follow the rules and that’s a very important fact here too.”

The Transportation Safety Board’s definitive account of the incident said the crash was caused by a marginal rail company that put profits before safety during more than a decade in business.

Mt Polley: Expert Panel Review – by Jack Caldwell (I Think Mining.com – August 18, 2014)

August 20, 2014

http://ithinkmining.com/

Jack Caldwell, P.E. has a B.Sc. in Civil Engineering, an M.Sc. (Eng.) in Geotechnical Engineering and a post-graduate law degree. He has over 35 years engineering experience on mining, civil, geotechnical and site remediation projects. He has worked on numerous projects throughout southern Africa, Europe, Canada and the United States.

We are heartened by today’s announcements re the Mt Polley tailings facility failure. I particular we applaud the choice of experts retained to do the engineering review.

CBC New reports as follows on this issue: “Minister of Energy and Mines Bill Bennett says the B.C. government is setting up two separate reviews following the Mount Polley tailings pond failure earlier this month.

Bennett said Monday that:

The first review by three independent experts will investigate the failure of the tailings dam at the Mount Polley mine.
The second review will require all mines in British Columbia that have tailings dams to have independent experts conduct a review of their facilities and submit them to the government.

The first review will be completed and submitted to the government and the Soda Creek and Williams Lake Indian bands by Jan. 31, 2015, and the recommendations will be implemented by the government “where needed,” Bennett promised. The minister said the reviews were necessary to restore public confidence in the mining industry.

NEWS RELEASE: Grand opening of first Remote Training Centre celebrated in Neskantaga

August 20, 2014

NESKANTAGA, ON, Aug. 19, 2014 /CNW/ – The grand opening of the Neskantaga Training Centre was celebrated today in Neskantaga Territory, Ontario, showcasing the new innovative facility and collaboration technology which delivers training directly to the remote community.

The Neskantaga Training Centre is a multi-purpose facility with construction components designed to be flown into remote communities and assembled on-site. The centre is outfitted with state of the art technology, including Cisco TelePresence, high-definition two-way video communication and collaboration technology, a 70-inch Smart Board, a 70-inch LED HDTV, high-speed satellite broadband connectivity, as well as individual laptops. The centre directly connects to e-learning tools and programs to offer a wide variety of curriculum including access to secondary and post-secondary institutions, safety training courses, trades and technical certifications. To see the Neskantaga Training Centre in action, visit: https://www.youtube.com/watch?v=ASjo4mFVOdQ&feature=youtu.be.

“The partnerships formed to build this facility, along with all of the hard work, have culminated in a facility that will have a positive impact on the people of Neskantaga for many years to come,” said Chief Peter Moonias of Neskantaga First Nation during the opening ceremonies.