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Half a Loaf? Getting maximum value from the Ring of Fire – by Rick Millette (Northern Policy Institute – August 8, 2014)

http://northernpolicy.wordpress.com/

When I was a youngster, we had a neighbour who kept a jar of coins. When kids would visit, he’d offer the jar and say, “take as many as you like”. If you grabbed too many, your bulging fist wouldn’t make it through the neck of the jar. Lesson learned.

As the development of the Ring of Fire moves ahead, those involved will need to make complicated decisions on how much of the Ring’s wealth to keep in Ontario and how much to let go.

At this point, there are many scenarios of where the North’s chromite might end up. It’s certain that the raw ore will be reduced to concentrate at the mine sites, but after that, it’s a guess. When Cliffs Natural Resources was grabbing the headlines, the plan was to have the concentrate shipped to Sudbury to be turned into ferro chrome at a new smelter they would build in Capreol.

Right now, it’s debatable whether the Ring’s chromite will ever see an Ontario smelter due to provincial electrical costs. Quebec and Manitoba sell their power to industries for less than three cents per kilowatt hour (KWH), while Ontario’s rates are based on a spot market that is often double that.

Other than government intervention, there is nothing that would stop a company from shipping the chromite directly to another province or to another country. At the very least, northerners want the chromite smelted into ferro chrome in the North.

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No reason to be confident in environmental protection – by Barbara Yaffe (Vancouver Sun – August 7, 2014)

http://www.vancouversun.com/index.html

Missteps give B.C. residents no reason to trust companies or government

Could there be a worse time in B.C. to have a tailings pond disaster?

Never mind that the salmon are spawning. A wee debate is taking place in this province about whether to sanction a pipeline to the coast and tanker transport of bitumen along B.C.’s coastline.

Albertans, hoping to get their petroleum to the West Coast, must be as distressed as British Columbians at the Aug. 4 breach of the Mount Polley tailings pond. Or they should be.

That is because this environmental catastrophe is bound to have a chilling effect on those in B.C. who otherwise might have been open to being convinced that — should Enbridge comply with the province’s five conditions and the 209 imposed by a federal review panel — well, maybe the job-generating Northern Gateway project would be worth the presumably diminished risk.

Not now. A slurry of metal-laden sand and waste water from that Imperial Metals tailings pond could well be mistaken for bitumen, with its greyish colour and ability to carry timber and other detritus along with it on its determined path.

This is what happens when goop mixes with water. A water ban, barring both drinking and bathing, was put in place in the vicinity of the breach and aboriginal fishers now fear for the season’s salmon run.

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Company behind Mt. Polley disaster to open mine near Southeast Alaska Fishermen, Native groups concerned – by Anna Bisaro (The Juneau Empire – August 8, 2014)

http://juneauempire.com/

After the tailings pond dam breach at Mount Polley on Monday morning, Southeast Alaskans are worried about another Imperial Metals Corporation mine already being constructed at the headwaters of the Stikine watershed, one of the largest salmon producers in the Tongass National Forest.

The Red Chris Project, an open-pit copper and gold mine, is being constructed in northwest British Columbia near the Iskut River, a major tributary of the Stikine River. The Red Chris is predicted to process almost 30,000 tons of ore per day for 28 years, according to the Imperial Metals Corporation website.

“In Southeast Alaska, we will absorb nothing but risk,” Brian Lynch of the Petersburg Vessel Owner’s Association said. “We have everything to lose and nothing to gain.”

Lynch said that, after Monday’s incident, the fact that the Imperial Mines Corporation is also at the helm of the Red Chris Project increases concern for the Stikine watershed. The Stikine is an important salmon-producing river for the Tongass National Forest.

“A breach like this would be a disaster,” Lynch said of the Red Chris Project. “These systems produce a lot of salmon for our billion-dollar-a-year industry.”

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Rio Tinto’s Kitimat aluminum smelter upgrade price tag rises to US$4.8 billion – by Ross Marowits (Canadian Business – Aug 7, 2014)

 http://www.canadianbusiness.com/

The Canadian Press – MONTREAL – Rio Tinto will pump another US$1.5 billion into the aluminum smelter upgrade at Kitimat, B.C., increasing the total project cost to US$4.8 billion, as the mining giant says it remains confident about long-term fundamentals about metal demand.

The London-based company announced Thursday that its board has approved a further $1.5 billion expenditure to complete the modernization. That’s on top of $400 million that was previously allocated but unspent.

Rio Tinto Alcan’s former CEO Jacynthe Cote had said that difficulty in finding the right workers pushed the project off schedule and over budget.

There are about 1,100 employees at Kitimat and nearly 3,000 people working on the smelter upgrade, which is expected to start metal production in the first half of 2015.

Engineering, procurement and construction is 70 per cent complete but construction is only half finished, spokesman Bryan Tucker said Thursday.

The company announced in 2011 that it would upgrade the aging Kitimat smelter, boosting its aluminum production capacity by more than 48 per cent to about 420,000 tonnes per year.

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Dissident Shareholders Continue to Strike Fear in the Hearts and Minds of Mining/Energy Executives – by Travis McPherson (Ceo.ca – August 6, 2014)

http://ceo.ca/

Just a week after the New York hedge-fund, Casablanca Capital, won its intense proxy fight over the $2.7 billion Cliffs Natural Resources (CLF:NYSE), another New York based fund has sent a warning to Madalena Energy’s management this morning.

In a powerful yet to the point press release this morning, Joshua Silverman of Iroquois Capital Management, LLC stated, “As a shareholder of Madalena we are very concerned with management’s failure to generate shareholder value. We expect to hear some concrete steps the Company is taking to better manage their assets for maximum value creation during their investor conference call tomorrow.”

In May, Madalena (MVN:TSX) surprised investors by acquiring Gran Tierra Energy’s Argentinian assets. Although the deal was accretive on most measures, the rationale for the purchase was unclear due to the fact that management had been telling investors that they were trying to find a farm-in partner for the expensive drilling in Argentina and would be focusing their efforts on their Canadian production.

Haywood Securities’ Senior Energy Analyst, Darrell Bishop said in a note: “there are some investors disappointed that the first major news coming out of Argentina was not a JV deal, as most had expected.”

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Dam Burst Threatens Canada Projects Seeking Approval – by Christopher Donville and Liezel Hill (Bloomberg News – August 08, 2014)

http://www.businessweek.com/

A dam failure that sent billions of gallons of mine waste flowing down a British Columbia creek threatens to put a chill on new mining projects across Canada.

The Aug. 4 accident at Imperial Metals Corp. (III)’s Mount Polley copper-and-gold mine led the local district authority to declare a state of emergency amid concerns about drinking water and the fate of millions of migrating salmon. Provincial government officials are at the mine, about 400 kilometers (248 miles) northeast of Vancouver, and are testing local rivers and lakes for contamination.

The dam breach has been stabilized and the waste isn’t acidic, Vancouver-based Imperial said in a statement the day after the accident. The company is trying to investigate the spill and mitigate its effects, it said yesterday.
Whatever the cause or final outcome of the accident, it’s already bad news for the mining industry, which accounts for about a fifth of Canada’s exports. Mines trying to obtain permits in British Columbia will now be scrutinized much more closely, Adam Low, an analyst at Raymond James Financial Inc., said in an interview.

“This will, I think, cause everyone in government across the country to re-examine policies,” Bill Bennett, the province’s minister of energy and mining, told reporters Aug. 6.

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New leadership at Cliffs Natural Resources – by Ian Ross (Northern Ontario Business – August 7, 2014)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. Ian Ross is the editor of Northern Ontario Business ianross@nob.on.ca.

Sudbury native Gary Halverson has been ousted as president and CEO of Cliffs Natural Resources. As expected, Lourence Goncalves was appointed Aug. 7 to the top job at the Ohio mining giant and was also named chairman of the board.

He replaces Jim Kirsch who served as chairman since July 2013, and Halverson who served as CEO since February. Halverson first appeared on the scene last fall when he was named president and chief operating officer (COO), replacing Joseph Carrabba who retired in November.

Halverson was serving as interim COO of Barrick Gold and had previously worked with Kinross Gold from 2000 to 2004 where he held the general manager role at the Hoyle Pond and Placer Dome Mines in Timmins.

Goncalves is the choice of Casablanca Capital, a New York hedge fund, which won a proxy battle with Cliffs at the company’s annual shareholders’ meeting in Cleveland, July 29.

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Nickel Stockpiles at Record High as China Turns Exporter – by Agnieszka Troszkiewicz (Bloomberg News – August 6, 2014)

http://www.bloomberg.com/

Nickel inventories in warehouses monitored by the London Metal Exchange extended gains to a record after China, the biggest producer and consumer, shipped more metal out than it imported amid a financing scandal.

Stockpiles climbed to 317,874 metric tons, for a 21 percent increase this year, according to the LME data. Exports of refined nickel from China almost tripled in June to 16,737 tons, exceeding imports for the first time ever by 5,723 tons, customs data show. Nickel is used to make stainless steel.

“The recent build is probably attributable to the pick-up in refined nickel exports that came out of China,” Nicholas Snowdon, an analyst at Standard Chartered Plc in London, said by phone. “That is most likely related to some constraints on financing.”

Nickel has gained the most of the six main metals on the LME this year, rising as much as 56 percent after the largest miner Indonesia banned exports of unprocessed ore, a raw material used to make a lower-grade nickel substitute known as nickel-pig iron. Refined nickel production will exceed demand by 44,200 tons this year before turning into shortage of 97,100 tons in 2015, according to Morgan Stanley.

Prices have pared gains to 35 percent this year, to $18,730 a ton, on speculation that supplies are sufficient for now as stockpiles climbed to a record.

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B.C. orders cleanup after mine waste discharged into waterways – by Andrea Woo (Globe and Mail – August 7, 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.

VANCOUVER — Three months ago, the Mount Polley mine experienced a small, but notable, breach that was quickly corrected when the gold and copper operation “got itself into compliance,” according to the province’s mines minister.

But environmental advocates say the incident should have served as a warning to avert the massive tailings-pond failure this week that has spewed millions of cubic metres of potentially contaminated waste into central British Columbia’s waterways, a disaster believed to be the largest of its kind in Canadian history.

The Mount Polley tailings pond damn burst early Monday morning, spewing enough mining waste water into the Cariboo district’s waterways to fill 2,000 Olympic-sized swimming pools. The Cariboo Regional District declared a local state of emergency; up to 300 residents in the rural community of Likely remain without clean water for drinking or bathing.

On Wednesday, the B.C. government ordered Imperial Metals Corporation, which owns the mine, to undertake an environmental impact assessment and submit cleanup plans to the Ministry of Environment.

The exact cause of Monday’s rupture is under investigation. There are three inspectors on site and two consulting companies are working with the Ministry of Energy and Mines, Minister Bill Bennett said.

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Tailings ponds in northern Ontario considered safe, scientist says (CBC News Sudbury – August 07, 2014)

http://www.cbc.ca/news/canada/sudbury

David Pearson says what happened in B.C. is unlikely to happen here

A tailings pond breach in central British Columbia this week is raising questions about how mine waste is being taken care of in northern Ontario.

The recent disaster at the Mount Polley Mine released billions of litres of wastewater into river systems. But, according to Laurentian University professor David Pearson, the tailings ponds here in the North often aren’t built at all.

They’re existing lakes or wetland — and that’s what makes them safer. “It’s not like a pond on a parking lot where a break would cause a massive flood,” Pearson said.

Even so, companies that want to mine in Ontario must prove they can rehabilitate a site or pay for a cleanup before they begin production. And the Ministry of Northern Development and Mines makes inspections every few years.

Former Glencore scientist Lisa Leger said Ontario has strict protocols to prevent what happened in B.C. “I was heavily involved in risk management and know that the companies will definitely listen to all the concerns.” But environmental groups like Mining Watch Canada remain skeptical that full-site rehabilitation after such a disaster is ever possible.

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Door still open for mega-merger between Newmont Mining and Barrick Gold – by Peter Ker (The Age-Business Day – August 7, 2014)

 http://www.theage.com.au/business

A $US35 billion ($37.6 billion) merger of global goldmining companies Newmont Mining and Barrick Gold may not be dead, after the chief executive of Newmont told an audience in Melbourne that he would not “close the door” on a future deal.
The two North American gold companies conducted merger talks earlier this year but the deal fell over in April amid reports they had disagreed over how to handle their respective Australian assets.

While neither company is listed in Australia, a merged entity would wholly own the nation’s biggest goldmine, Boddington, and the nation’s second-biggest goldmine, Kalgoorlie’s Super Pit, as well as other smaller assets.
When asked if he had shut the door on the proposed deal, Mr Goldberg indicated a revival of the deal was not impossible.

“I wouldn’t shut the door on it – we are focusing on running our business as effectively and efficiently as we can going forward and we will see what happens,” he said.

“Clearly we overlap and we work together, [the Super Pit] is an example, and we have a joint venture in Nevada and I wouldn’t close the door on it at all.” But he said he had not heard from Barrick since April.

During a presentation to the Melbourne Mining Club on Thursday, Mr Goldberg said the deal had failed because there were not enough “redundancies” between the two companies.

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First Nations fear the worst for B.C.’s salmon run following Mount Polley breach – by Sunny Dhillon (Globe and Mail – July 7, 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.

VANCOUVER — The exact effect of the Mount Polley spill on B.C. salmon is not yet known, but with the sockeye just entering the Fraser River – and more than one million fish heading directly for the region hit by the mining waste – First Nations and conservation groups are fearing the worst.

Concern about the sockeye’s survival and whether the fish is safe to eat has emerged as another front in the resource battle between First Nations and governments, with aboriginal leaders charging the mining industry has lacked oversight, and questioning the point of the right to fish when the salmon is contaminated.

Bev Sellars, chief of the Soda Creek Indian Band, likened the area touched by the spill to a spiderweb. “When you disturb one part of the spiderweb, it affects all of it. That’s how this mine is going to affect everything,” she said in an interview Wednesday.

Ms. Sellars said test results and data have not yet come in, but the spill will certainly lead to some dead fish. “How could there not be?” she asked. She said members of her community have already seen dead salmon.

Approximately 1.5 million sockeye had been expected to head to the Quesnel region this year. About 20 per cent are believed to have already entered the Fraser River as part of their journey, with the rest expected to begin the trek north by the end of the month.

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Moon First—Mine the Asteroids Later – by Paul D. Spudis (Air Space Magazine – August 6, 2014)

http://www.airspacemag.com/

Let’s learn how to extract space resources closer to home.

The UK Daily Mail recently published a piece extolling the benefits of asteroid mining (before lightly tripping over some mundane, yet critical, technical details). The article leads with the headline: Single asteroid worth £60 trillion if it was mined – as much as world earns in a year. Should we chide them for such blatant sensationalism? Then again, is it blatant, or are they merely following an established pattern?

Asteroid mining is a field with lots of hype but little sober consideration. To redeem the technique of in situ resource utilization (ISRU) from the realm of ridicule and science fiction and make it a routine aspect of space mission architectures, we must honestly discuss the difficulties of extracting useful product from raw asteroid debris.

As with every Solar System body of interest and potential use, I am firmly convinced we will eventually mine asteroids. In truth, if we do not take up these formidable technical challenges, there is little hope for any permanent and extensive human presence in space. As long as we confine ourselves to launching everything we need for spaceflight from the bottom of the deepest gravity well in the inner Solar System, we will remain mass- and power-limited and thus, capability-limited.

Essential, low-information density material – spaceflight’s “dumb mass” of propellant and consumables – should be obtained from sources in space, rather than long-hauled (at great cost) from Earth. Only complex, high-information density items not easily made in space should be brought up from Earth.

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Mt Polley: The Cost of Moving Forward – by Jack Caldwell (I Think Mining.com – August 6, 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.

In one of the many article I read on the Mt Polley tailings failure was an estimate of what it will cost to get the mine going again. A figure of $50 million was quoted as the cost to pick up all the tailings and return them to the tailings facility. I imagine that figure is based on five million cubic meters of tailings at about $10 a cubic meter to pick up. Here is why I suspect the figure is grossly low.

In conventional civil or mining earthworks $10 a cubic meter would be generous. But the material to be picked up is still a near-fluid. It will slosh around in the truck and spill out through the opening in the truck bed. Also the bottom of the creek now covered with tailings is by no means uniform. It is probably rough and rugged and teaspoons will be required to pry the tailings out of every nook and cranny. So let us double the cost of picking up the tailings and taking them back to the facility.

While it will not be easy to pick up the tailings strewn along the creek, it may be impossible to get back the tailings in the lake. Do you dredge the lake? Of course you can dredge, but then you will pick up a lot of clean bottom sediment along with the tailing. Inevitably they will have to consider placing a subaqueous cover on top of the tailings in the lake. This was done off the coast of Los Angeles to cover PCB sediment on the ocean floor, so it could be done in BC. But at what cost? Say another $100 million.

Next the tailings facility breach has to be repaired so that the returned tailings will stay there. That means plugging the breach. I am not sure I would let a workman go near those steep slopes that subtend the failure zone.

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Bottom reached for coal, iron ore? – by Oliver Probert (Australian Journal of Mining – August 07, 2014)

http://www.theajmonline.com.au/

An ANZ commodities expert says iron ore and coking coal prices may have reached their bottom, and he’s singing from the same hymnbook as at least one mining executive.

A report from Mark Pervan, global head of commodity strategy for ANZ, this week said that with the stabilisation of the overall macro environment, commodity markets are entering the second half of 2014 on a positive note.

While an increase in commodity prices is likely to occur, the report says, it will be a modest one, however.

“Overall, the backdrop looks accommodating for commodity markets in H2 2014,” Pervan’s report states. “But the upside looks limited over the next month or two until we see this supported by a pick-up in physical demand, which is expected later in the year.”

Commenting specifically on mined bulk commodities, Pervan wrote: “Supply-side issues remain, but the bottom appears to have passed for coking coal and iron ore. Seasonal drops in power demand will cap any thermal recovery.”

Pervan’s confidence in iron ore was echoed by Atlas Iron chief executive Ken Brinsden, who was referenced in a number of mainstream media outlets for his comments at the Diggers & Dealers conference in WA this week.

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