Republic of Mining

RPT-COLUMN-China aluminium surplus likely to cap price rally – by Clyde Russell (Reuters India – July 22, 2014)

July 22, 2014

http://in.reuters.com/

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

LAUNCESTON, Australia, July 22 (Reuters) – Rising Chinese output is likely to act as a brake on aluminium’s 15 percent rally since May, even as the global outlook for the industrial metal improves.

It’s no secret that much of Chinese aluminium smelting capacity operates at a loss and is reliant on subsidies from local and regional governments to survive.

But the price gain in the second quarter resulted in capacity that was either idled, or about to be shut, remaining in operation, according to a July 17 report from Beijing-based consultants AZ China.

This is despite some 80 percent of Chinese smelters, representing some 20 million tonnes of annual capacity, operating at a theoretical loss, AZ China said.

The average cash cost for a Chinese aluminium smelter in the second quarter was 14,161 yuan ($2,282) a tonne, above the Shanghai Futures Exchange (SHFE) spot price of 13,435 yuan, the report said.

Still, the average cash cost for Chinese smelters was 2 percent lower in the second quarter than the first as inputs such as electricity and alumina decreased in price, allowing plants to remain in business.

Tanzania: Red Tape Dogs Tanzania’s Leading Gold Mining Firm – by Henry Lyimo (All Africa.com – July 22, 2014)

July 22, 2014

http://allafrica.com/

African Barrick Gold (ABG) is negotiating with the government to recover a whopping US$ 65 million (about 107.9bn/) as Value Added Tax (VAT) refunds accumulated over years due to overly bureaucratic procedures for refunding.

The firm enjoys special VAT relief as part of various tax incentives and exemptions extended to investors in the mining sector. ABG is Tanzania’s largest gold producer and one of the five largest gold producers in Africa.

It currently operates three producing mines in the country — Bulyanhulu, Buzwagi and North Mara, as well as several exploration projects at various stages of development in Tanzania and Kenya.

The company listed on the London Stock Exchange and Dar es Salaam Stock Exchange (DSE) and is a constituent of the FTSE 250 Index. ABG is a unit of Barrick Gold Corporation, the largest gold mining company in the world, with its headquarters in Toronto, Ontario, Canada.

Tanzania is currently the fourth largest gold producer after South Africa, Ghana and Mali. The ABG Chief Executive Officer, Brad Gordon said they were in negotiations with the government to address the problem that is making procurement of local supplies expensive.

“The amount accumulated is very high and it seems its recovery would take long time.

Documentary producer eyes the Ring of Fire – by Ian Ross (Northern Ontario Business – July 22, 2014)

July 22, 2014

http://insyncmedia.ca

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.

Lalita Krishna has no intention of following the same contrived script that’s evident in the mining reality shows currently being embraced by network television.

The award-winning Toronto producer of television documentaries intends to drill down to the essence of the multi-faceted world of mining by documenting the lives of the people who toil at the grassroots edge of the industry.

Krishna recalls spending four bone-chilling days with Barb Courte Elinesky, CEO of two Thunder Bay drilling companies, and her rugged crew shooting video in a remote exploration site in Greenstone last March.

The conditions were harsh, a vehicle became stuck on an access road, and they returned to their hotel in Beardmore one night after an exhausting day to find all the restaurants closed.

Australia could start uranium sales to India – by Shivom Seth (Mineweb.com – July 22, 2014)

July 22, 2014

http://www.mineweb.com/

Australian Trade Minister Andrew Robb told newspersons that Australian uranium sales to India were very close.

MUMBAI (MINEWEB) – With the International Energy Agency forecasting a doubling of nuclear power generation out to 2035, Australia has said it could soon start exporting uranium to India.

Australia holds about a third of the world’s recoverable uranium resources, and exports nearly 7,000 tonnes a year. Energy starved India is looking to nuclear power to supplement its existing options to fuel economic growth.

Australian Trade Minister Andrew Robb told newspersons that Australian uranium sales to India were very close, after he attended a G20 trade ministers meeting in Sydney last week, and held talks with an Indian trade delegation.

Prime Minister Julia Gillard had started talks on supplying uranium to India during a three day official visit to the country in 2012. Gillard had reversed the ban in 2011.

With a new government at the helm in Canberra in 2013, India and Australia were aiming to complete negotiations on a civil nuclear agreement for uranium supplies by the end of the year.

Metal ETFs Lure Investors at Fastest Pace in Five Years – by Agnieszka Troszkiewicz and Luzi Ann Javier (Bloomberg News – July 22, 2014)

July 22, 2014

http://www.bloomberg.com/

Investors are buying metals from zinc to aluminum at the fastest pace since 2009, betting demand gains will tighten supply, just as Citigroup Inc. and Macquarie Group Ltd. predict this year’s rallies will end.

Exchange-traded funds in the U.S. backed by base metals took in new money this year equal to 18 percent of their market capitalization, more than any commodity group, data compiled by Bloomberg show. Hedge funds are the most bullish on copper in at least eight years, after spending March and most of April betting prices would drop. The Bloomberg Industrial Metals Subindex is heading for its biggest annual gain since 2010.

Pickups in global manufacturing and auto sales, and gains in U.S. housing, improved prospects for metals used in everything from appliances to building materials. While Citigroup and Macquarie say rising output of some metals and weaker Chinese demand may undercut prices, the biggest gains among 22 raw materials tracked by the Bloomberg Commodity Index since March have been nickel, zinc and aluminum.

“Base metals seem to have caught investors’ attention once again,” Vivienne Lloyd, an analyst at Macquarie in London, said in a telephone interview. “Probably the most eye-catching story has to be nickel. It’s got people talking, and the appearance of deficit has been bounded around the concept of deficit in several markets.”

Shaping the agenda for a sustainable mining industry – by Nigel Court (Australian Mining – July 22, 2014)

July 22, 2014

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

According to the UN Global Compact-Accenture CEO Study on Sustainability, 63 per cent of chief executives expect sustainability to transform their industry within the next five years. Mining and metals companies, in particular, have an important role to play in the evolution to a more sustainable world.

With operations on almost every continent, and materials integrated into most products and services, the sector is uniquely positioned to contribute to and influence this transition.

To successfully navigate this shift though, bold thinking is required, and those that look to shape the outcome rather than react to it will be best positioned for success.

But what defines “sustainability”? According to the World Economic Forum (WEF) Scoping Paper: Mining and Metals in a Sustainable World, developed in partnership with Accenture, a sustainable world will require the mining and metals sector to reliably and responsibly provide materials and products to global economies and communities.

By 2050, alternative measures of success will exist beyond profit and loss, where environmental and social costs, as well as their impacts, are considered and accounted for. The mining and metals sector has an opportunity now to strategically consider how these trends could affect both the demand for products and the means of providing sufficient supply.

Plan Nord roars back: Resurrection of billion-dollar Quebec development seen as boon to a beleaguered industry – by Jean-Philippe Buteau (The Lawyers Weekly.ca – July 25, 2014)

July 22, 2014

http://www.lawyersweekly.ca/index.php?section=main

Jean-Philippe Buteau is a partner at Norton Rose Fulbright’s office in Quebec. He acts for a variety of clients in the mining and oil & gas industries in Quebec and abroad and has been involved in a number of key Plan Nord projects.

The newly elected Quebec Liberal majority government recently tabled its first budget which, despite a series of measures to address a larger than expected deficit for 2013-14, followed through on a campaign promise to revive the Plan Nord, in an enhanced version.

The Plan Nord was originally introduced in 2011 as a long-term program for the economic and social development of Quebec’s territory situated north of the 49th parallel, through more than $80 billion in public and private investments over a 25-year period. The election of the Parti Québécois in September 2012 resulted in the Plan Nord being halted and then revised and rebranded as “The North for All.”

The implementation of the resurrected Plan Nord will be overseen by the Comité ministériel du Plan Nord, a newly created committee, with support from the Secrétariat au Plan Nord, whose functions will be taken over by the Société du Plan Nord, a new government corporation to be created over the next couple of months.

The Société du Plan Nord will play a key role in implementing the government’s strategy. It will be responsible for co-ordinating the territory’s development in consultation with all partners including local and aboriginal communities, to ensure their support and participation, and with sustainable development in mind.

Eastern Promise: Is Kazakhstan our new mining hotspot? – by Cole Latimer (Australian Mining – July 22, 2014)

July 22, 2014

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

Mining is full of quiet achievers; be it individuals, companies, or even countries.

Globally speaking Australia, Canada, South Africa, China, India and the US are in focus every day, but what about the countries that are the quiet achievers?

What about Chile, Ghana, Kazakhstan? Kazakhstan has been touted as one of world’s best endowed states when it comes to high class deposits, if perhaps one of the world’s most overlooked.

It is the world’s largest uranium producer under IAEA standards, the fourth largest copper producer (with 40 million tonnes in proven reserves), has the world’s ninth largest proven gold reserve and almost the same levels of zinc, but often fails to rate a mention.

As Austrade states “Kazakhstan is one of the world’s most promising emerging markets for natural resources”, and importantly for Australian operators it is looking to double mineral production within the next five years. Kazakh president Nazarbayev outlined a gold production goal of 70 million tonnes per year before 2015.

This has created a high potential for Australian operators, with the potential to rate as highly as China, after it rated ahead of the major Australian trade partner, ranked at 59th according to the World Bank’s 2010 ‘Doing Business’ survey.

Chromite: ‘Go slow’ on Ring of Fire, say Greens – by Carol Mulligan (Sudbury Star – July 22, 2014)

July 22, 2014

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

A motion calling for responsible development of the Ring of Fire, passed at the Green Party of Canada’s biennial meeting in Fredericton, puts “the party in the game” and shows it has good ideas other parties might want to consider.

Sudbury’s Steve May attended the convention and was surprised to learn every person attending had heard about the rich chromite deposits 540 kilometres northeast of Thunder Bay — whether they were from British Columbia or New Brunswick.

May has been thinking of the Ring of Fire as a regional issue, “but had I lived in Alberta in the early ’80s, I might have thought the development of the tar sands was a regional issue.

“We know it’s not,” he said of the Ring of Fire. “It’s a national project.”

Before delegates to the convention met, they agreed to put a motion on the weekend agenda calling for a five-pillar policy to develop the area. It addresses community benefits, energy, transportation, value-added industry and lifecycle planning for extracted resources.

To maximize the Ring of Fire’s economic potential for Canada, the Greens’ policy is calling for the creation of a working group to assess the feasibility of a value-added stainless steel industry as a requirement of development.

UPDATE 1-UK watchdog upholds $770,000 fine on “king of mining” banker – by Kirstin Ridley (Reuters India – July 22, 2014)

July 22, 2014

http://in.reuters.com/

LONDON, July 22 (Reuters) – Britain’s financial watchdog has upheld a 450,000 pound ($768,000) fine on former JPMorgan banker Ian Hannam – a prominent dealmaker once dubbed the “king of mining” – for market abuse after a protracted court battle.

In an effort to clear his name, Hannam had fought to overturn the Financial Conduct Authority’s (FCA) initial findings and fine of 2012. But in May, he lost his appeal in a landmark case that fuelled a high-level debate about how confidential information should be treated during deals.

The former soldier, who became one of London’s most prominent investment bankers renowned for his bulging contacts book and knack for a new idea, was awaiting news about whether the original FCA fine would be upheld – one of the largest levied against an individual in Britain.

Imposing the penalty, the head of the FCA’s enforcement and financial crime division Tracey McDermott urged all financial professionals to pay close attention to a judgment that did not question Hannam’s integrity, but sought to bring clarity to the grey area of what constitutes acceptable business conduct.

“It (the Tribunal judgment) should leave market participants in no doubt that casual and uncontrolled distribution of inside information is not acceptable in today’s markets,” she said on Tuesday.

Sioux Lookout gears up for growth [Ontario] – by Ian Ross (Northern Ontario Business – July 21, 2014)

July 22, 2014

Sioux Lookout economic development manager Vicki Blanchard wants to make the town of 5,500 more “investment ready.”
Vicki Blanchard, Sioux Lookout’s economic development manager, is an admitted “map freak.”

When she started at her new position in early March with marching orders to make this town of 5,500 “investment ready” for development, Blanchard referred to her love of cartography to begin strategizing.

The town and its busy airport has always been a regional hub providing goods and services to 29 remote communities, including a few in the Ring of Fire.

Blanchard wants to grow out and enhance that capability with some social enterprise, mining and energy initiatives on her agenda.

A resident of nearby Dryden, she shifted over last winter from a development position with the municipality of Greenstone where she spent four years in “Ring of Fire boot camp.”

The rural municipality was knee-deep in the lobbying process, competing with Sudbury and Thunder Bay, in trying to convince Cliffs Natural Resources to site its proposed ferrochrome refinery in the village of Nakina.

Forty five years after man first walked on the moon, a new space race is beginning to take shape – by Peter Kavanagh, (National Post – July 22, 2014)

July 22, 2014

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

It was our first truly global village moment, and it didn’t even take place on the planet.

Forty five years ago this past weekend, July 20th, 1969, at 20:18 UTC (Coordinated Universal Time), half a billion people sat around radios or television screens, or stood, outside, eyes scanning the sky. I was one of them, moving back and forth between the TV in our living room and our front yard where I could stare straight into the sky and see the moon. I remember the moment — which I can (and do) relive on YouTube — and the incredible, quiet excitement when, while holding my breath and watching the slow, agonizingly descent, I heard the words, “Houston … Tranquility Base here. The Eagle has landed.”

What we were all really waiting for, though, was the extreme rush that came six hours later when Neil Armstrong stepped down on to the surface of the moon and uttered that now famous phrase, “That’s one small step for man … one giant leap for mankind.” It was amazing, stunning, excruciatingly exciting. Every science-fiction story written had been made real, palpable and possible on that summer’s night. Everyone and anyone could dream about going to the stars, and no longer be dismissed as simply a dreamer. Having one’s head in the clouds lost its sting, briefly, as an insult.

And the world cheered … well, part of the world cheered. After all, despite the “We are all in it together” sentiment of Armstrong’s quote, landing on the moon was a key component of the space race, an adjunct of the Cold War. America’s accomplishment was, for the Soviets, a bitter defeat.

Atlas Copco, Sandvik Chiefs Signal End to Mining-Equipment Woes – by Niclas Rolander (Bloomberg News – July 18, 2014)

July 22, 2014

http://www.bloomberg.com/

Upbeat comments from Swedish mining-equipment makers Atlas Copco AB (ATCOA) and Sandvik AB (SAND) may be an early sign of a recovery for a business that’s been in a two-year decline as customers postponed investments amid slumping commodity prices.

“The downward pressure that we have experienced for quite some time is not there in the same way,” Sandvik Chief Executive Officer Olof Faxander said on a conference call with journalists yesterday. “There is stability at the current level, and that is a positive change.”

Faxander’s comments echo those of Ronnie Leten, CEO of Stockholm crosstown rival Atlas Copco, who said on July 16 he’s seen an improvement in demand for mining products late in the second quarter.

After a surge in mining investments, fueled by a decade-long boom in metal prices, BHP Billiton Plc (BLT), Rio Tinto Plc (RIO) and Vale SA (VALE3) are cutting investments, favoring cash handouts to shareholders instead. BHP, the world’s largest mining company, expects spending on new projects and exploration to have been $16.1 billion in fiscal 2014, 25 percent lower than in the previous year, and Rio Tinto last year lowered its capital expenditure by 26 percent to $12.9 billion.

“The fact that both CEOs feel a bit happier talking about it as a little more positive trend is clearly helpful, and it’s probably a bit earlier than I thought,” Alexander Virgo, an analyst at Berenberg in London, said in an interview. “We ought to be somewhere near the trough.”

Wary investors slow to warm to Barrick Gold’s latest shakeup – by Euan Rocha (Reuters U.S. – July 21, 2014)

July 21, 2014

http://www.reuters.com/

(Reuters) – Worried they are being given the cold shoulder by an imperious leadership, shareholders of Barrick Gold Corp, the world’s biggest gold miner, are taking a “show me” approach to the company’s latest management shakeup.

Barrick said last week that Chief Executive Jamie Sokalsky will leave the company in September. He will be replaced by two co-presidents, a move that concentrates power in the hands of Executive Chairman John Thornton, a man handpicked for the job by Peter Munk, who founded the company and ran it his way for decades.

“The concern in this situation is that the person setting the strategy does not listen to the shareholders, who are the real owners of the company,” said Chris Mancini, an analyst at Gabelli Gold Fund, which owns more than 2.4 million shares in Barrick according to Thomson Reuters data.

“There was a concern within the market that Mr. Munk was not listening to shareholders…And so if Mr. Thornton also doesn’t listen to shareholders that could be a problem again.”

Munk stepped down as chairman in April in the face of investor criticism, and with the exit of Sokalsky, Thornton is now both more free and under greater pressure to map out a clear strategy to cut Barrick’s lofty debt levels, boost profits and eventually raise dividends.

Mozambique trying to ease coal companies’ pain, but no tax breaks – by Pascal Fletcher (Reuters Africa – July 21, 2014)

July 21, 2014

http://af.reuters.com/

MAPUTO (Reuters) – Mozambique is discussing with its foreign coal mining partners ways to help them ride out depressed markets but will not be offering special tax breaks to ease the pain, its mineral resources minister said on Monday.

Esperanca Bias told Reuters the government understood that companies such as Vale of Brazil and Rio Tinto, which helped Mozambique to start up in 2011 as a coal producer and exporter, were feeling the pain of depressed global prices for coal used in steelmaking and generating power.

The southern African nation, which still bears the scars of a 1975-1992 civil war, has the world’s fourth-largest untapped recoverable coal reserves, estimated at over two billion tonnes.

Vale is investing billions of dollars on rail and port networks to bring greater volumes of coal to the market, up from a current export capacity of five million tonnes per year. It is targeting 22 million tonnes by 2017/2018.

But Vale, which announced an accumulated loss of $44 million for Mozambique operations in the first quarter, says it urgently needs to cut operating costs to remain competitive.

“We’re studying this,” Bias said on the sidelines of the 5th Mozambique Coal Conference in Maputo. “We are working on it to see what can be done from our side.” she added.