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What is Harper’s ‘real interest’ in Mongolia? – by Campbell Clark (Globe and Mail – July 28, 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.

OTTAWA — John Baird was given a ceremonial welcome in Ulan Bator, and invited to try a bow-and-arrow at a festival in the Jargalant Valley. The Foreign Affairs Minister is on a trip to Asia, visiting big powers China and Japan. But last week, his first stop was in a sparsely populated nation of three million.

Stephen Harper’s government is taking a particular interest in, of all places, Mongolia. Why?

Mongolia’s Foreign Minister, Luvsanvandan Bold, called Canada an important part of his country’s foreign policy. Canada just put Mongolia, a middle-income country, on its list of “countries of focus” for foreign aid.

Yes, there’s potential mining trade. But there’s also an invitation that the Harper government finds alluring: to help a little democracy maintain its independence from its two authoritarian neighbours, Vladimir Putin’s Russia and the People’s Republic of China.

“The Prime Minister has taken a real interest in Mongolia,” Mr. Baird said in a telephone interview.

Mr. Harper long ago turned from strident China critic to pragmatic trader with a rising economic power, but he still views its global influence darkly. And Mr. Harper has been a vocal critic of Mr. Putin’s actions in Ukraine: He’s called the Russian President a “throwback” to the Soviet Union.

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INTERVIEW-Mozambique still counting on coal, despite price doldrums – by Pascal Fletcher (Reuters India – July 28, 2014)

http://in.reuters.com/

MAPUTO, July 28 (Reuters) – Mozambique is still counting on increasing coal exports to expand its infrastructure and drive economic growth, despite depressed global prices which might delay the timing of some major railway and port projects, the transport minister said.

Gabriel Muthisse told Reuters the government was also keen to attract investors to help build the infrastructure needed to exploit huge offshore natural gas reserves in the north.

The World Bank has forecast that coal and gas may generate up to $9 billion in revenues by 2032 for the southern African state, which is still poor and recovering from a 1975-1992 civil war.

Rio Tinto , Brazil’s Vale and India’s Jindal have invested heavily in developing Mozambique’s coal deposits – the fourth-largest untapped recoverable coal reserves in the world.

But billions of dollars of investment in rail and port expansions are still needed to carry the coal from the inland Tete mines to the seaborne market.

With global prices for coal in the doldrums because of oversupply and sluggish demand, experts and producers say Mozambican coal mining operations face an uphill battle to be competitive in the next few years, especially when so much infrastructure capacity still needs to be built.

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World’s Best Mining Debt Defies Gold Woe in a Volcano – by David Stringer and Benjamin Purvis (Bllomberg News – July 27, 2014)

http://www.bloomberg.com/

Newcrest Mining Ltd. (NCM) bonds are delivering the best returns this year among metal producers even as the gold miner prepares for new writedowns at a floundering asset inside an extinct volcano.

Debt securities issued by Australia’s biggest gold producer returned 24 percent this year through July 25, compared with 15 percent for the world’s largest extractor Barrick Gold Corp. (ABX), according to a Bank of America Merrill Lynch index of dollar notes sold by investment-grade miners. Falling costs have buoyed the company, which last week flagged a charge of as much as A$2.5 billion ($2.4 billion) mainly on its Lihir mine in Papua New Guinea.

While the writedown may raise Newcrest’s gearing by as much as 6 percent, the miner forecasts cash flow will stay positive after production costs fell 8 percent in the three months to June 30 and gold rose 3.4 percent. Output expenses have been helped by a decline in the Australian dollar, which averaged 10 U.S. cents less in the first half than it did in the same period a year earlier. For every one-cent drop in the Aussie, earnings before interest and tax are boosted by A$28 million, the Melbourne-based company said in February.

“Cost-cutting initiatives and the recent move in the Australian dollar have provided some relief,” Tariq Chotani, a credit strategist at Commonwealth Bank of Australia in Sydney, said in a July 24 interview. “The company’s plan to reduce capital expenditure has also been a credit positive overall.”

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‘Nationalisation alone will fix capital’s crime’ – by Chris Barron (Business Day Live – July 27, 2014)

http://www.bdlive.co.za/

THE National Union of Mine-workers (NUM) was shocked by Anglo American Platinum’s decision to sell its most labour-intensive South African mines, but Dick Forslund, the economist who advised the Association of Mineworkers and Construction Union (Amcu) during its devastating platinum strike, seems unmoved.

“We say good riddance. This is one of the Anglo American subsidiaries that have caused a lot of damage to the South African economy,” says Forslund, an economist and researcher at the Alternative Information and Development Centre.

The NUM said after the announcement by Amplats CEO Chris Griffith this week that it feared 20 000 jobs would be lost. Analysts believe the Amplats decision is the inevitable consequence of the five-month strike.

Forslund, 60, a hardcore socialist from Sweden, rejects the possibility that his advice may have prolonged the strike and put these jobs on the line.

Anyway, he says, Griffith “was planning this long before the strike”.

This is what Griffith implied when he said the decision to walk away from its deepest and most labour-intensive mines had nothing to do with the strike, even if the results announced this week left no doubt about its hugely damaging impact on Amplats.

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Pact Putinia: How Russia’s gas plan will unfold – by Diane Francis (National Post – July 26, 2014)

The National Post is Canada’s second largest national paper.

Speculation about President Vladimir Putin proliferates. Does he want to occupy Ukraine? Has he gone too far by arming and training Russian mercenaries who shot down the Malaysian Air jet with 298 passengers? Why is he thumbing his nose at global outrage and more sanctions? What will stop him?

Such questions miss the mark.

Putin has been executing the same business/geopolitical model for years aimed at guaranteeing his natural gas monopoly in Europe and keeping out rivals.

Ukraine is his latest victim because it ousted his puppet, Victor Yanukovych, and also because its huge oil and gas reserves could eventually make Ukraine a competitor for European customers.

Russia has controlled Ukraine since it declared independence in 1991, mostly through corruption. But in 2005, the populace staged the 2005 Orange Revolution and the 2013-14 Maidan uprising rose up against and finally expelled Yanukovych. But their victory became defeat because Putin changed tactics by shifting from managing a Ukrainian kleptocracy to engineering a fake insurrection in parts of the country to turn its resource base into a no-go zone.

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Airport/port authority possible for Ring of Fire – by Rick Garrick (Wawatay News – July 25, 2014)

http://www.wawataynews.ca/

A former deputy minister of Transport Canada recently recommended an airport/port transportation authority model for the Ring of Fire mineral development area.

“It would be at arms length from the government, it would have its own fiduciary financial responsibilities and management responsibilities,” said Nick Mulder, author of the Northern Policy Institute commentary: The Airport/Port Transportation Authority Model Is It Applicable for Ontario’s Ring of Fire Mineral Development. “It would decide on the chair and the management team, it would finalize the plans for the road and railroad or whatever else is needed. It would finalize all the funding with the mining companies and transportation companies and private sector interests, pension funds, whatever.”

Mulder described his recommendation during his July 8 Northern Policy Institute speaker’s breakfast at the Valhalla Inn in Thunder Bay, where he indicated the Ring of Fire infrastructure authority would not be involved in the social and economic infrastructure needs of the First Nation communities in northern Ontario.

“Those 40 or whatever number of communities there are have their own special needs,” Mulder said. “It isn’t up to a business-driven or market-driven kind of entity that I am recommending — they should decide on what kind of water or sewer or other kind of systems they need or local roads in the community or so on.”

Mulder said some of the monies required to finance the Ring of Fire road or railroad could come from the provincial government, but the majority should be raised in the marketplace or through the mining companies.

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Surface mining’s price – by Rebecca Schmoyer (Albany Times Union – July 26, 2014)

http://www.timesunion.com/

Mountaintop coal removal leaves environmental and health impacts

A few weeks ago, I stood on top of Armstrong Mountain. The day was clear and the valley below filled with spruce, fir and hardwood forest. Unbroken ridges extended into the distance. As my final summit of the 46 Adirondack High Peaks, it was a moment of accomplishment. But while I took in the view, I was troubled by a somber national milestone.

As of this year, over 500 of the Appalachian Mountains have been destroyed by mountaintop removal coal mining. It’s time for New York state to divest from this industry.

According to the Office of State Comptroller’s 2013 asset report, the state has millions invested in companies that practice what the industry decorously calls “surface mining.” But the impact of mountaintop removal mining on the people and landscape of central Appalachia is far from superficial. The U.S. Environmental Protection Agency estimates the industry has left 1.2 million acres, or over 2,000 square miles, of barren, scarred land — an area bigger than the state of Delaware. And the devastation continues.

A few days later, Vernon Haltom and I are standing on a flattened ridge in southwestern West Virginia. Here, in the dust above Coal River Valley, summertime means blasting.

“They’re at it six days a week,” says Haltom, executive director of Naoma, W.Va.-based Coal River Mountain Watch.

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The Devil’s Miner [Child Bolivian Silver Miners] (Mining Documentary – 2005)

 

http://en.wikipedia.org/wiki/Main_Page

The Devil’s Miner is a 2005 documentary film directed by independent film directors Kief Davidson and Richard Ladkani. The film follows a fourteen-year-old Bolivian boy named Basilio Vargas who along with his twelve-year-old brother Bernardino work in the mines near the city of Potosí. The film includes many subtle realities of the miner’s lives such as the need to chew coca leaves to numb the pain of hunger and the long shifts they work regardless of age.[1] The film made its world premier at the Rotterdam film festival and its U.S. debut at the Tribeca Film Festival.

The film concentrates on the concerns of local workers who have fear of what they call “Tio” or devil. In the film, an elder miner claims that over 8 million people have died in the unsafe mines. The workers believe this is because “Tio” controls the mine and that Christ has no power in the mine. The workers often give offerings such as coca leaves, alcohol, cigarettes and perform sacrifices, such as slaughtering a llama and applying its blood to the mine entrance to appease a makeshift statue of “Tio”.

Each mine has its own Tio which all of the workers pray to upon entering so that they may find a good vein of silver and so that they may be granted protection from explosions, toxic gas, silicosis, and falling rocks.

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Mass grave with hundreds of skeletons found in Bolivian mining town – by Cecilia Jamasmie (Mining.com – July 27, 2014)

http://www.mining.com/

Construction workers in the southern city of Potosi, Bolivia, have uncovered the remains of hundreds of miners believed to be from the Spanish colonial era.

They mostly mined at Cerro Rico Mountain, home to what became the world’s biggest silver mine and provided the Spanish with so much of the precious metal to ship to Europe that people used to say a bridge of pure silver could be built from the top of hill to the royal palace’s entrance in Spain.

But that boom came at an extremely high price tag — an estimated eight million miners died in Potosi alone between 1500 and 1800. What it is still unclear is how those miners met their deaths.

Some say the area was an indigenous burial ground for slaves and indentured servants who may have worked in the mines.

Another explanation could be that the remains are linked to the collapse of a reservoir in Potosi during the 17th century, which killed around 2,000 people.

“We are talking about a common grave found at about 1.8 metres, and the human remains are scattered over an area of four by four metres,” Sergio Fidel, a researcher at a museum belonging to Potosi’s Tomas Frias University, told AFP.

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Anglo warns of ore price torpor – by Matt Chambers (The Australian – July 26, 2014)

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

MINING giant Anglo American says iron ore prices are set to remain depressed for the rest of the year as growing supply exceeds demand that is being tempered by a fragile Chinese housing market.

But the outlook is better for coking coal, with the British miner’s Wollongong-born chief executive Mark Cutifani expecting contract prices to rise from six-year lows of $US120 a tonne and change the fortunes of the company’s metallurgical coal unit, where first-half profits fell 86 per cent.

Anglo released first-half earnings last night, reporting a $US2.9 billion ($3.08bn) profit, in line with expectations. Net debt of $US11.5bn was lower than forecasts of $US12bn because of lower capital expenditure.

Anglo is the first of the big miners to deliver its June-half profit report and the first to offer its assessment of the global markets, with Rio Tinto and BHP Billi­ton both having stopped giving their views on economics and fundamentals in quarterly production reports.

“Uncertainty is likely to persist for the balance of 2014, though there are some encouraging signs that activity is strengthening in our key markets,” Mr Cutifani said. “Over the long term, we expect new supply to be constrained and to see tightening market fundamentals and a recovery in price performance.”

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Life reflected in BHP’s figures – by Terry McCrann (The Australian – July 26, 2014)

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

BHP Billiton’s production figures effectively fired the starter’s gun for the annual profit season. They also neatly captured in microcosm the big questions about the future course of the overall economy.

Indeed, they were a much better guide to the future and its uncertainties than the June quarter CPI figures, released on the same day, which sent sections of the economentariat into a frenzy of hyperventilating certainty.

That’s a certainty that will no doubt last until some other statistic sends them hyperventilating in the opposite direction.

There’s no great surprise in the significance of BHPB’s numbers — oh for the day when it returns to the simplified BHP, sloughing off the second “B” along with all the rubbish it bought with Billiton.

BHPB remains our biggest company by far. While it won’t generate a profit this year all-but equal to the profits of all the four big banks combined, as it did a few years ago, it will still post a 2013-14 profit which will put any individual bank profit in the shade.

BHPB is not just the resources boom in miniature, it all but is the resources boom. OK, perhaps in combination with Rio Tinto, given the latter’s edge in iron ore, the resource that really “is” the boom, both in terms of dollars generated and its dominant centrality in our role in the China story.

Then perhaps we should add Twiggy Forrest’s Fortescue as not just the third iron ore major but also more directly representative of the “boom” aspect of the “resources boom”.

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EPA moves to block Pebble as House moves to block EPA – by Elwood Brehmer (Alaska Journal of Commerce – July 24, 2014)

http://www.alaskajournal.com/

The Environmental Protection Agency is continuing its push to block the potential Pebble copper and gold mine.

EPA Region 10 Administrator Dennis McLerran said in a formal statement July 18 that the agency is moving to protect the robust salmon stocks of Bristol Bay from the possible impacts of a large mine in the region.

The 214-page proposed determination document calls for a ban of large-scale mining in the area of the Koktuli River and Upper Talarik Creek watersheds north and west of Iliamna, where the Pebble deposit is located. The watersheds are part of the larger Kvichak River and Nushagak River watersheds — the Pebble deposit sits nearly on the border of the two — which support some of the largest returns of sockeye salmon in the world each year.

“The science is clear that mining the Pebble deposit would cause irreversible damage to one of the world’s last intact salmon ecosystems. Bristol Bay’s exceptional fisheries deserve exceptional protection,” McLerran said. “We are doing this now because we’ve heard from concerned tribes, the fishing industry, Alaskans and many others who have lived and worked for more than a decade under the uncertainty posed by this potentially destructive mine.”

If developed, it is believed the Pebble mine would be one of the world’s largest surface copper and gold mines. Alaska U.S. Rep. Don Young called the determination a “jurisdictional power grab.”

During a July 16 House Transportation and Infrastructure Committee hearing on legislation to limit the EPA’s Clean Water Act authority, Young delivered a heated monologue in which he condemned the agency’s actions and called the Obama administration a “monarchy.”

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Red Dog lead, zinc mine marks 25 years, $1B in royalties – by Tim Bradner (Alaska Journal of Commerce – July 24, 2014)

http://www.alaskajournal.com/

The Red Dog Mine in Northwest Alaska turned 25 years old July 17 after producing since 1989 and paying about $1 billion in royalties to NANA Regional Corp., the landowner.

NANA paid $608 million of that to other Alaska Native corporations under revenue-sharing provisions of the Alaska Native Claims Settlement Act and $199 million in dividends to its own shareholders.

The remaining $103 million was retained by NANA to help pay operations and for investments in other business, which has now helped NANA grow a diversified portfolio of assets that earned the corporation $1.7 billion in revenues last year.

To celebrate the July 17 anniversary, NANA invited guests to the mine including including former Gov. Bill Sheffield and Willie Hensley, NANA leaders and former legislators who played key roles in the original mine development.

Teck president and CEO Don Lindsay also attended. The mine is operated by Teck Alaska Inc. Teck Alaska’s parent, Canada-based Teck Resources, purchased Cominco, the Canadian company that developed Red Dog with NANA in the mid-1980s.

Red Dog is a surface mine that is one of the world’s largest zinc mines, producing 551,300 tonnes of zinc concentrates in 2013 (a tonne is approximately 2,200 pounds). The mine earned $874 million in total revenues that year, according to Teck.

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African Barrick Gold: Better as she goes! – by Lawrence Williams (Mineweb.com – July 25, 2014)

http://www.mineweb.com/

African Barrick has achieved a seventh successive quarterly fall in AISC and has improved its guidance on both gold output and costs after another positive quarter’s financial and operating results.

LONDON (MINEWEB) – The measures being taken to bring African Barrick Gold (ABG) – Barrick Gold’s London quoted African gold mining arm – back towards decent profitability seem to be working and while there are still some hiccups – notably a fall in grades at its flagship Bulyanhulu gold mine – its Q2 production results showed substantial further improvement beating most analysts’ consensus with gold output of 178,000 ounces at all in sustaining costs (AISC) of US$1105 an ounce.

This compares with production of 168,000 ounces in Q1 and 164,000 ounces in Q2 2013 – while AISC have shown the best improvements down from $1404 an ounce a year earlier. Consequently it is upping its production guidance for the year and maintaining its guidance on cash and all in sustaining costs.

CEO Brad Gordon was obviously pleased with the latest figures, commenting “We are pleased to report strong results for H1 2014, with increased production and continued cost discipline enabling the business to return to cash generation.. We have now delivered our seventh successive reduction in quarterly all-in sustaining costs (AISC) as we continue to drive operational improvements through the business”.

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India’s Uranium Boss Says Deformed Children May Be ‘Imported’ – by Rakteem Katakey and Tom Lasseter (Bloomberg News – July 23, 2014)

http://www.businessweek.com/

Confronted with reports villages near Uranium Corp. of India Ltd.’s mines have unusually high numbers of physically deformed people, Chairman Diwakar Acharya said: “I wouldn’t be surprised if a lot of those guys are imported from elsewhere, ok?”

A Bloomberg News report on July 9 highlighted the struggles of the locals with disease and early deaths — and the suspicion they shared with some environmental activists that the health conditions are linked to mining waste.

Acharya dismissed as biased any findings of a correlation between the mines and deformities in nearby villages.

Activists and doctors come with an agenda to Jadugora, a town of about 19,500 people in eastern Jharkhand state that’s home to the company’s main operations, he said in a July 14 interview.

“See, what happens is, you say you are a specialist and you’ll come and treat,” Acharya said at Uranium Corp.’s headquarters. “But all you do is, you are convinced UCIL is evil and you have come here only with the sole motive of finding reasons which would validate your preconceived notions.”

Uranium Corp. sends its security officers to monitor attempts by outsiders to examine villagers, Acharya said, explaining it was a necessary step for collecting information about alleged health problems.

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