Republic of Mining

Coal India undermined by basic equipment flaws – by Krishna N Das (Reuters India – July 25, 2014)

July 25, 2014

http://in.reuters.com/

NEW DELHI – (Reuters) – As Prime Minister Narendra Modi’s government looks to shape up Coal India Ltd (COAL.NS) for a potential major restructuring, the world’s biggest coal miner still faces basic problems: it does not have enough mechanical shovels, dumpers and explosives.

The new government, which has a 90 percent stake in the company whose total market value is about $40 billion, is exploring a break up and opening up the sector to foreign investment to boost output and cut imports, sources have said.

But the firm, which accounts for more than 80 percent of India’s production and employs 350,000, has not met its output target for years, ensuring the country remains the world’s third-largest coal importer despite sitting on huge reserves.

A failure to boost efficiency could threaten long-run plans to spin off some of the seven units of the coal miner, a vital part of the government’s reform strategy. [ID:nL3N0O6458]

Two units produced less in the last fiscal year than a year ago, partly due to lack of basic equipment and ageing machinery, Power and Coal Minister Piyush Goyal told parliament this week.

The minister did not provide data but according to a top official at one Coal India unit this issue could be cutting Coal India’s annual output by more than 10 percent. The official declined to be identified due to its policy on talking to media.

Meliadine gold mine’s environmental impact statement short on traditional knowledge: KIA (Nunatsiaq News – July 25, 2014)

July 25, 2014

http://www.nunatsiaqonline.ca/

“Inuit communities of the Kivalliq region have many generations of accumulated observation”

While Agnico Eagle Mines has made efforts to incorporate Inuit Qaujimanituqangit in the research and development of its Meliadine gold project, the Kivalliq Inuit Association has asked the company to consider using more traditional knowledge as the company seeks approval to open its second gold mine in Nunavut.

The KIA is one of a handful of organizations that have submitted comments this month in response to Meladine’s final environmental impact statement (FEIS), which AEM released this past spring.

In a report prepared by Brenda Parlee, an associate professor in the University of Alberta’s department of Resource Economics and Environmental Sociology, the KIA suggests the mining company could benefit from traditional knowledge to identify what parts of the ecosystem are most valued by Inuit, and to better analyze past, current and future trends in the region.

“Inuit communities of the Kivalliq region have many generations of accumulated observations and consequent insights about the local study area and the regional study area,” reads KIA’s submission.

“In addition, Inuit land users, elders and youth have many relevant skills and capacities that can be key to successful long term monitoring.”

Feeling the Ring of Fire’s Burn – by Jason Unrau (Unpublished – January 2014)

July 25, 2014July 25, 2014

This unpublished article was originally written for Canadian Business Magazine in January 2014.

Black Thor, Big Daddy and Thunderbird, unearthed between 2007 and 2008, put a place called Ring of Fire on the mining map. Sounding more like comic book gods than incredible mineral discoveries – chromite their dominant feature and crucial for stainless steel manufacture – by the end of 2013 they had roused nearly one billion dollars to the exploration altar.

Frank Smeenk was among the group of six mining execs and geologists who discovered the Ring. Located deep inside Ontario’s north, its riches are vast enough for a century of mining, yet dispersed in a 5000 square km crescent of muskeg so remote, the place might as well be celestial.

“It’s inaccessible for all practical purposes, except by air, and to sell chrome you’ve got to get it to market and its steel mills of the world,” says Smeenk, CEO of KWG Resources, the plucky junior with a 30 per cent stake in Big Daddy, one of the biggest deposits of them all.

It was DeBeers’ quest for new diamond sources after the Second World War that eventually ushered the first mine into this corner of the James Bay Lowlands. But it was Asia’s insatiable economy, emerging fast and furious in the last decade, that turned sights toward the region’s metal potential.

While Ring of Fire is just 90 kilometres west of DeBeers’ Victor Mine, producing diamonds and mining metal are not analogous, says Smeenk, because “… you can put diamonds in your pocket and walk on the plane.”

UPDATE 2-Brazil’s Vale hits iron ore record, base metals output lags – by Stephen Eisenhammer (Reuters U.K. – July 24, 2014)

July 25, 2014

http://uk.reuters.com/

(Reuters) – Brazil’s Vale SA produced record amounts of iron ore in its latest second quarter, rising to the task of battling Australian rivals for market share, but weaker performance at other divisions fanned some concern ahead of results next week.

Iron ore production rose 12.6 percent to 79.45 million tonnes from a year earlier, Vale said on Thursday, as better weather conditions combined with ramp ups at its two main mine sites in Brazil. The Brazilian company is the world’s largest producer of the mineral.

Vale is expected to post an annual decline in second-quarter net income of more than 40 percent when it reports on July 31, according to an average of analyst forecasts compiled by Reuters.

Giants Vale, Rio Tinto Plc and BHP Billiton Plc are all increasing iron ore capacity in a move expected to squeeze higher-cost producers out of the market. But with iron ore prices .IO62-CNI=SI languishing near 22-month lows during the period, analysts had been looking to Vale’s nickel division to pick up some of the slack.

Some of those analysts were subsequently disappointed as nickel production fell 5.2 percent to 61,700 tonnes due to maintenance at the Sudbury mine in Canada. Its VNC project on the French Pacific island of New Caledonia also suspended operations after an acid spill in May.

UPDATE 2-Potash Corp boosts outlook as profit tops expectations – by Rod Nickel (Reuters U.S. – July 25, 2014)

July 25, 2014

http://www.reuters.com/

(Reuters) – Potash Corp of Saskatchewan raised its full-year earnings outlook on Thursday after second-quarter profit fell less than expected due to improving global fertilizer demand.

Earnings have declined year over year for four straight quarters as the price of the crop nutrient hit a six-year low earlier this year. The breakup last year of global trading partnership Belarusian Potash Co accelerated the price slide, as it created more competition among producers.

Lower prices have recently rekindled demand, however, and cost-cutting has also improved Potash Corp’s bottom line.

Shares of Potash Corp jumped 4 percent to $37.62 in premarket trading. “The key question is, ‘Is this just pent-up (potash) demand finally being satisfied, or is it going to continue into 2015,'” said Peter Prattas, analyst at Cantor Fitzgerald. “Our view is that demand has room to increase slightly in 2015, but we’re not going to continue with the momentum we’ve had to start the year.”

The company said it has a strong potash order book from U.S. buyers for the second half, and Canpotex Ltd – its offshore trading partnership with Mosaic Co and Agrium Inc – is fully committed through the third quarter.

Cold Lake heats up as oil boom beckons – by Yadullah Hussain (National Post – July 25, 2014)

July 25, 2014

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

Osum Oil Sands Corp. CEO Steve Spence says he used to call Cold Lake the “unknown story in the oil sands”.

Not any more. While the city of Fort McMurray further north has garnered all the attention for its rapid growth, Cold Lake city has been an oil boomtown in its own right with production in its vicinity ramping up to half a million barrels per day.

“It is actually the most understood region [in terms of geology],” Mr. Spence said, although the Athabasca basin in Fort McMurray produces the bulk of Canada’s oil output.

Osum made a big move in Cold Lake in June, picking up Royal Dutch Shell Plc.’s assets in the region for $325-million. The Orion project produces about 6,700-bpd and is located close to the company’s Taiga facility, which is yet to start production. Mr. Spence expects the Orion transaction to close by the end of the month.

Mayor Craig Copeland says his city is ripe for a new boom.

“In the past few years, we have really seen a ramp up in development in our city. We have had several small booms before, but all of a sudden a lot of people have been coming to work on construction sites,” Mr. Copeland said in an interview. “This past winter —the winter that was so cold —we had approximately a good 3,000 people embedded in the community in rentals; houses and hotels were full.”

What’s Behind Canada’s Troubled Relationship With Its Aboriginal Peoples –by Jake Flanagin (New York Times – July 24, 2014)

July 25, 2014

https://news.vice.com/

http://www.nytimes.com/

They call it “Murderpeg.” With 6,222 instances of violent crime reported in 2012, the city of Winnipeg, Manitoba consistently ranks among the most violent cities in Canada.

It’s also host to one of the highest concentrations of Aboriginal peoples (indigenous North Americans) in the country – 11.7 percent and growing faster than any other area in Canada, according to the Canadian National Household Survey.

Aboriginal Canadians – First Nations, Inuits, and the Métis (descended from mixed marriages between Europeans and indigenous peoples) – are arguably the most underserved segment of Canadian society. “One in five Aboriginal Canadians live in dilapidated and often overcrowded homes,” reports Nilo Tabrizy for Vice News. Those in Winnipeg are no exception.

Ms. Tabrizy traveled to Winnipeg to shoot a documentary for Vice, highlighting the plight of the city’s Aboriginal population, and unpacking the seedy history of Canada’s relationship with its indigenous communities.

Beleaguered Cliffs posts Q2 loss, beats expectations – by Henry Lazenby (MiningWeekly.com – July 24, 2014)

July 24, 2014

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – US iron-ore and coal producer Cliffs Natural Resources, which is locked in a proxy fight with an activist shareholder for control of the board, on Wednesday reported a net loss for the three months ended June 30, as lower iron-ore and metallurgical steelmaking coal prices and reduced sales pressured the balance sheet.

The Cleveland, Ohio-based miner reported a loss of $2-million, or $0.01 a share, compared with a net income of $133-million, or $0.82 a share, in the second quarter of 2013.

The year-over-year consolidated revenues were 26% lower at $1.1-billion, mainly impacted by a 24% drop in sales volume from the company’s US iron-ore operations.

Seventeen Wall Street analysts had on average expected a loss of $0.06 a share, based on revenue of $1.17-billion.

The cost of goods sold decreased by 17% to $1-billion, mainly driven by reduced volumes, lower idle costs and favourable foreign exchange rates when compared with the second quarter of 2013.

Will Cutifani answer call for Anglo change? – by David McKay (Miningmx.com – July 24, 2014)

July 24, 2014

http://www.miningmx.com/

[miningmx.com] – A YEAR ago, at Anglo American’s 2013 interim results presentation, the group’s then relatively new CEO, Mark Cutifani, set out the broadest of blue-prints for winning back investor interest.

Return on Capital Employed (ROCE) needed to be 15%, not the 11% that had been previously achieved; the project pipeline, described by Cutifani as ‘constipated’, had to be – for want of a better word – loosened; and any under-performing assets would be culled from the group.

At the time, a mere 11% of the group’s 90-odd assets had met operational targets to which Cutifani provided the gloss: “We have to get our arses into gear”.

The question at the time was how a change in gear would be achieved, and whether Cutifani would be bold and quick enough? A year on, and the answer is becoming clearer.

As with its peer, BHP Billiton, Anglo is taking the scalpel to some of its South African assets starting with the less profitable platinum mines held in the 80%-controlled Anglo American Platinum (Amplats).

“He has made it absolutely, abundantly clear that the Rustenburg and Union assets in Amplats are not priorities for the group’s capital,” said a Johannesburg-based analyst.

NEWS RELEASE: Productivity still down in mining and metals sector: EY report

July 24, 2014

http://www.ey.com/CA/en/Home

Companies must overhaul business models to get productivity back on track

(Vancouver, July 24, 2014) Miners will need to drastically transform their business models if they want to reverse the decade-long decline in productivity, according to a new EY report.

Productivity in mining: A case for broad transformation describes the drop-off in productivity, on both a volume and cost basis, as a result of companies choosing to pursue production growth and headline revenue during the commodity price boom.

“Companies caught in the race to capitalize on high commodity prices are now facing a number of business model challenges,” says Bruce Sprague, EY’s Canadian mining and metals leader. “Operation expansion and inefficient use of labour and equipment are all compromising productivity.”

Many companies adapted processes, performance measures and corporate culture solely toward growth during the supercycle and are now paying the price.

“There’s no easy solution to solving these challenges,” says Sprague. “Cost-cutting exercises and minimal process and technology improvements aren’t enough.”

A narrow focus on continuous improvement will not solve the problem and could even be counterproductive by simply moving the problem along the supply chain, the report emphasizes.

COLUMN-New Indonesian president can bring certainty, consistency to mining: Russell – by Clyde Russell (Reuters India – July 24, 2014)

July 24, 2014

http://in.reuters.com/

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

LAUNCESTON, Australia, July 24 (Reuters) – The election of reformist Joko “Jokowi” Widodo as Indonesia’s new president has spurred hopes of a rapprochement with global miners and the scaling back of some of the nationalistic resource policies.

Certainly the new leader of the world’s fourth-most populous nation is making the right noises, telling Reuters in an interview published July 22 that he wants to sit down with mining companies and resolve differences.

And indeed this was followed by Freeport-McMoRan, which owns the giant Grasberg copper mine, saying it expects to “imminently” sign an agreement with Indonesia that will allow for the resumption of exports of copper concentrate.

Newmont Mining Corp also said it was close to a memorandum of understanding with the government that would allow it to resume exports of copper concentrate and re-open its Batu Hijau mine.

These negotiations with the two U.S. mining giants, which account for 97 percent of Indonesia’s copper output, have been ongoing for months, so it’s not clear that Jokowi had any influence on the talks, but equally his election victory may have provided momentum to the talks.

Jim O’Neill: What Jokowi’s Win Means For Jakarta’s Market? – by Shuli Ren (Baron’s Magazine – July 23, 2014)

July 24, 2014

http://online.barrons.com/home-page

The following is a guest post by my colleague Assif Shameen:

“Jokowi’s victory is potentially as important as Modi’s was for India,” says Jim O’Neill, former Chairman of Goldman Sachs Asset Management and the man who coined the term BRICs or the world’s largest emerging markets. O’Neill has long regretted not including Indonesia among the emerging giants.

As the world’s third largest democracy, O’Neill says Indonesia can’t just be dependent on the global commodities cycle. “Indonesia has huge potential and a guy like Jokowo could just be the one to unleash it but he has to be bold and take on vested interests and those that allow corruption as well as other forms of misallocation of capital,” he says.“Indonesia needs a Modi-type figure to galvanize its young dynamic population to deliver on its potential,” O’Neil says.

But the former Goldman Sachs economist notes “expectations in Indonesia are now as high, if not higher than they are in India” in the wake of Jokowi’s victory. “India and Indonesia now need to deliver or otherwise the scope for disappointment in both places is obvious, specially in the short term. If the changes are for real in Indonesia and India then the case for further re-weighting in both those markets is huge,” he says.

Year-to-date Jakarta Composite Index is up 21.1% . The market has risen 9.1% over the past 12 months. But stocks may have gotten ahead of themselves. Sam Le Cornu, Senior Portfolio Manager at Macquarie Funds Group who co-manages the Macquarie Asia New Stars Fund in Hong Kong says while the macro picture in Indonesia looks encouraging the only problem now is valuations.

Noront appeals Ontario Mining Recorder ruling – by Henry Lazenby (MiningWeekly.com – July 24, 2014)

July 24, 2014

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – Noront Resources, the proponent of what could possibly be one of the first projects to get off the ground in Ontario’s prospective Ring of Fire mining district, has launched an appeal to the province’s mining and lands commissioner to set aside the finding of the Provincial Mining Recorder that rival KWG Resources is the first to stake two 16-unit claims when they came open on the morning of June 17, 2011.

KWG on Wednesday said it was on Tuesday served with a notice of Noront’s appeal.

The two claims were next to the southern two claims of Fancamp Exploration’s Koper Lake claims, where KWG is assessing the economic potential of the Black Horse chromite deposit under an option agreement with Bold Ventures and Fancamp. Noront is developing the Eagle’s Nest nickel/copper/platinum/palladium deposit.

“Koper Lake is an important amphibious aircraft facility for the Ring of Fire and the area used for landing and docking is within the eastern boundary of these claims. In the past, our exploration crews have been blockaded there, or embargoed from landing there, or [have] been levied substantial landing fees,” said KWG president Frank Smeenk.

He stressed that the firm believed that this was a critical part of the area’s transportation assets and should be operated as a public facility, from which the concept sprang of a federally sponsored port authority.

Coherent national mineral policy a must for U.S. manufacturing, Congress told – by Dorothy Kosich (Mineweb.com – July 24, 2014)

July 24, 2014

http://www.mineweb.com/

The lack of U.S. mineral supplies is stifling U.S. manufacturing and discouraging new technology development by miners and manufacturing, witnesses told a Congressional subcommittee hearing.

RENO (MINEWEB) – “America’s dependence on foreign nations for minerals is a choice. Our solution to our dependence isn’t a lack of resource; it is a lack of courage and commitment to produce the resources here,” declared Rep. Doug Lamborn, R-Colorado, chairman of the House Subcommittee on Energy and Resources Wednesday.

During a subcommittee hearing to examine the domestic critical minerals supply and demand chain, U.S. rare earths advocate Lamborn declared, “It is a policy of the Obama Administration that is bent on destroying jobs in the mining industry, from vetoing approved coal mines in Appalachia, to pre-emptively vetoing mines which haven’t even been proposed in Alaska.”

“If we are legitimately concerned about rare earth minerals, we should be asking why it will take a decade to approve a mine in one of the world’s largest resources in Wyoming. Why are Obama Administration Forest Service employees actively lobbying communities in opposition to the rare earth mine?” Lamborn asked.

However, Rep. Eric Swalwell, D-California, said his Securing Energy Critical Elements and American Jobs Act of 2014 — which would have stepped up America’s exploration of critical elements — failed to pass a full vote of the U.S. House of Representatives Tuesday because of threats from what he called “extreme right-wing groups”. Nevertheless, Swalwell told Lamborn Wednesday he was willing to work with Lamborn and the subcommittee to get the U.S. “in the game” as far as having a domestic supply of rare earths.

Third party probes [Timmins mine] blast – by Len Gillis (Timmins Daily Press – July 24, 2014)

July 24, 2014

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – It could take as long as week for Goldcorp Porcupine Gold Mines (PGM) to find out what went wrong Tuesday when a blast threw a piece of rock into the company’s parking lot at the old Hollinger Mine building.

PGM Timmins mine general manager Marc Lauzier revealed Wednesday that a third-party consultant is being brought in to try to figure how the rock escaped the blast zone during a routine blast Tuesday morning at the Hollinger open pit.

“We had a small blast of about 13,500 tonnes or so, near surface. A piece of flyrock was expunged from the blast and landed in the parking lot on one our employee vehicles,” Lauzier explained.

“Immediately we suspended all blasting activities. Of course public safety is our No. 1 concern, so I want to understand what caused a piece of rock to land in the parking lot and what is going to be done to prevent this in the future.”

The consultant will be reviewing blasting procedures and video of the incident, since Goldcorp makes a video record of every blast at the new mine. This is the first known incident involving flyrock landing outside the mining zone since the first blast at the Hollinger pit occurred back in February.

“So until I get the results of that investigation and we are comfortable that we can blast without this reoccurring, we won’t be blasting,” Lauzier said. “And so it will take about a week to do the investigation properly.”