Republic of Mining

Broad transformation needed in global mining – EY – by Dorothy Kosich (Mineweb.com – July 2, 2014)

July 2, 2014

http://www.mineweb.com/

Given the right levels of investment, significant gains are possible through innovating mining and processing methods, says EY.

RENO (MINEWEB) – Global mining productivity has been declining on a volume and cost basis since 2000 as miners have chased production growth during the commodity boom, said EY Global Mining & Metals Advisory Leader Paul Mitchell.

Mining productivity in Australia has declined about 50% since 2001. Despite massive investment in new equipment and automation, Australian mining capital productivity has declined by 45% compared to 22% in all industries, says a new EY report, Productivity in mining: A case for broad transformation.

Labor productivity in the U.S. coal sector has declined nearly 30% from 2009-2012, while in the South Africa gold sector, labor productivity is estimated to have declined 35% since 2007.

Many companies have been dealing with the plunge in productivity through a series of cost-cutting exercises or point solutions, observed the EY report. “However, the size of the problem is too large for point solutions to solve on their own and often they have the effect of simply moving the problem further down the supply chain.”

“Real and sustainable productivity gains will only come from broad business transformation,” EY stressed.

X2 boss Davis calls next supply deficit – by David McKay (Miningmx.com – July 1, 2014)

July 4, 2014July 2, 2014

http://www.miningmx.com/

[miningmx.com] – THERE’S A MOMENT when X2 Resources founder, Mick Davis, can’t contain a smile. Asked whether there was any mischief in the naming of his new company, he replied: “Maybe just a bit of fun.”

The psychology of naming, however, runs deep. It’s no coincidence, for instance, that a year after completing the ‘merger’ of Glencore Xstrata, the combined company should resolve at its recent annual general meeting to rename the company Glencore plc. The merger of equals was long dead, but the name change sealed it.

Said Hanré Rossouw, who is head of commodities for frontier and emerging markets at Investec Asset Management of the decision to call Davis’s new venture ‘X2’: “I think the name says it. It’s the Xstrata model rebooted”.
Yet is the market similarly positioned for another Xstrata?

“I think Mick has got a good track record,” said Rossouw. “He brought change to the industry by introducing a more financial focus. Before that you still had mining engineers running companies.

“The only disadvantage is that because Mick has had success, so it may become more difficult to get the same kind of deals. In the past, he seemed to come out of nowhere”. Rossouw was a CFO of Xstrata Alloys before joining Investec in Cape Town.

Aboriginals play the long game – but who wins? – by Jeffrey Simpson (Globe and Mail – July 2, 2014)

July 2, 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.

If you had a plugged nickel or several hundred millions of dollars, among the worst places to invest that money would be across the parts of British Columbia affected by last week’s Supreme Court ruling.

It was difficult enough before to get the necessary aboriginal agreement to develop Crown land, or what had been thought to be Crown land. Now, those difficulties have grown immensely with the decision in the Tsilhqot’in case.

After the previous (and very vague) Delgamuukw ruling (1997), it was thought that aboriginal title applied in areas where groups had resided, and that their claims diminished in strength the farther they got from those settled areas. There was a kind of sliding scale of rights, from something approximating a veto to the need for consultation. This was how the B.C. Court of Appeal saw matters.

The Supreme Court, however, has ruled that title applies to all the areas nomadic or semi-nomadic aboriginals moved over before white settlement. “A culturally sensitive approach suggests that regular use of territories for hunting, fishing, trapping and foraging is ‘sufficient’ use to ground aboriginal title,” the court said.

Brazil suspends Belo Sun’s gold mine licence – by Stephanie Nolen (Globe and Mail – July 1, 2014)

July 2, 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.

RIO DE JANEIRO — A Brazilian court has suspended the environmental and provisional licences of Toronto-based gold miner Belo Sun Mining Corp., putting a significant new obstacle in the way of the company’s plans to develop Brazil’s largest gold mine on a tributary of the Amazon river.

Last November a federal court suspended the company’s environmental permit, saying Belo Sun had not taken necessary steps to analyze the mine’s potential impact on indigenous peoples who live within a few kilometers of the mine site.

In December, Belo Sun won temporary permission to keep operating while awaiting a final ruling on that case. But when the ruling came last week, the judge said that the mine stood to cause “negative and irreversible damage to the quality of life and cultural heritage” of the Juruna and Arara peoples and that Belo Sun must complete a study of this issue before it can proceed.

Mark Eaton, Belo Sun’s CEO, said the indigenous impact study is already under way and that the new ruling does not extend the company’s timeline for production. “It’s had an impact on market psyche as these things always do,” Mr. Eaton said in a telephone interview from Toronto. “But it hasn’t come completely out of the blue.”

Iraq conflict has oil companies on ‘knife’s edge’ – by Yadullah Hussain (National Post – July 2, 2014)

July 2, 2014

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

Oil executive David Horgan yearns, almost, for the good old days of former Iraqi dictator Saddam Hussain.

“Saddam was reasonably effective — obviously a dictator and unjust. [Current prime minister] Nour al-Maliki has not even had the efficiency of the Ba’ath party,” said Mr. Horgan, managing director of Petrel Resources Plc., which has operations in the country. “They have been arbitrary, corrupt and ineffective. The net result is that it was an event waiting to happen.”

An insurgency that has been simmering for months boiled over this week when Sunni militia groups took control of vast tracts of land in Iraq, effectively erasing the Iraq-Syria border and declared a caliphate in the area it controls.

Dublin-based Petrel Resources has been unable to access its block located in a desert in western Iraq, potentially a “multi-billion barrel oil and gas field,” according to the company.

“It is in a desert area, so nobody really controls it. But the access areas are in the control of Sunni militia,” Mr. Horgan said in a telephone interview from his Dublin office.

Petrel, which has invested US$10-million in the country, was planning to send contractors into the field for seismic work before the insurgency put paid to those plans.

Supreme Court ruling holds no bearing for Northern First Nations, says strategist – by Ian Ross (Northern Ontario Business – June 30, 2014)

July 2, 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.

A landmark Supreme Court of Canada ruling recognizing a First Nation’s title to a large tract of land in the B.C. interior doesn’t hold much relevance to any future development in Ontario’s North, especially the Ring of Fire, said a strategist, lawyer, and author on Native involvement in the resource sector.

This “seismic event” on the West Coast that granted the Tsilhqot’in Nation formal title to 1,700-square-kilometres of its traditional territory, said Bill Gallagher, likely won’t apply in Ontario since the issue of title was already settled when the numbered treaties were signed.

There is key wording in these treaties, stretching from the Quebec border to the Rocky Mountains, that has decided ownership in the eyes of the Crown. “If your forebears signed a treaty with the phrase: ‘cede, release and surrender’ in it, this case will not help, it will not even be of interest to you because the Aboriginal title issue here is settled,” said Gallagher.

But even that really shouldn’t matter, he added, considering the unprecedented string of legal wins by First Nations across Canada and their growing business and labour involvement in resource development projects across Ontario.

Boardroom battle leaves Cliffs on edge – by Barry Fitzgerald (The Australian – June 30, 2014)

July 2, 2014

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

OWNERSHIP of the $1 billion-plus Koolyanobbing iron ore operation in Western Australia could be up for grabs as a result of a bitter boardroom proxy battle at Cliffs Natural Resources.

The ownership issue for the 11 million-tonne-a-year Koolya¬nobbing operation — 50km north of Southern Cross — comes to a head on July 29 at the annual meeting of owner Cliffs, which is based in Cleveland, Ohio.

New York activist hedge fund and 5.2 per cent Cliffs shareholder Casablanca Capital is behind a boardroom shake-up push at the meeting which, if successful, would see Cliffs move to quit its Australian operation. Casablanca wants Cliffs, which is also a coal producer, to focus on its larger and domestic market-based US iron ore business. It wants the seaborne market-exposed Australian assets, and Cliff’s Canadian assets, to go.

The hedge fund argues that Cliffs is too small to compete head to head with the iron ore majors of Rio Tinto, BHP Billiton and Brazil’s Vale in the seaborne markets for iron ore. It has said there are many potential mechanisms for an exit, including a spin-off and a partial or total sale.

The Australian operation should be sold now, it said, as it held the greatest strategic value “today’’ because of its relatively short mine life of about seven years, based on current reserves.

NEW CALEDONIA: Is a Vast Marine Sanctuary Any Use if You Can’t Police It? – by Ian Lloyd Neubauer (Time Magazine – June 29, 2014)

July 2, 2014

http://time.com/

Tiny New Caledonia relies on a handful of French ships to patrol a marine reserve twice the size of Texas

For the first half of June — until the U.S. declared an even bigger one — the tiny, French semiautonomous territory of New Caledonia boasted the largest nature reserve on earth.

Covering a vast 1.3 million-sq-km region of the South Pacific, the Natural Park of the Coral Sea was established on May 28 to protect the world’s second largest coral reef and its attendant lagoon. Already safeguarded in parts by a UNESCO World Heritage listing, this wonderland is a nursery for 25 kinds of marine mammals (including sea cows and humpback whales), 48 species of shark and five different marine turtles. It also spawns vast numbers of pelagic fish, 3,000 tons of which make it into the Pacific every year – an important food source for tens of millions, and a source of employment for thousands of people living in the region.

But before most people had even heard of the creation of the Natural Park of the Coral Sea, U.S. President Barack Obama went one better by using his executive powers to create an even larger marine park in the south-central Pacific on June 17. Known as the Pacific Remote Islands Marine National Monument, it protects 2 million sq km of ocean and a smattering of islands and atolls between Hawaii and American Samoa from commercial fishing.

Obama’s announcement made world news, while New Caledonia’s barely received a mention. Perhaps that’s because the U.S., while sketchy on the details, has the hardware and manpower to enforce the no-take rule at the core of any national park.

Northern Ontario has many exciting mining stories – by Dieter Buse

July 2, 2014

Dr. Dieter K. Buse, Professor Emeritus, History, Laurentian University

Thanks to Stan Sudol for presenting “Klondike gets the glory” (Sudbury Star May 30-31) on the main mining stories and the rich history of northern Ontario. Who could disagree with his claim about the “collective obsession over the Klondike Gold Rush while Northern Ontario’s rich and vibrant mining history is completely ignored by the Toronto media establishment”? Perhaps not completely, because at least one such outlet, the Toronto Star (Aug 11, 2013; reprinted in Sudbury Living Fall 2013) published my lengthy piece “The Hole in Canadian History.”

In it I argued, very similar to Sudol, that the Yukon and Newfoundland have six taxpayer-funded national historical interpretive sites while northeastern Ontario has only two. I also pointed out that the special aspects of Ontario’s northeastern history have been recognized by only a few commemorative plaques.

Indeed, many of the stories and some of the information that Sudol presents can be found in the book I co-authored with Dr. Graeme S. Mount, Come on Over: Northeastern Ontario, A to Z (Scrivener Press). In the Afterword to that book one can read “Arguably, Cobalt’s history is as exciting as that of Dawson City, and its silver rush led to the Porcupine gold rush which was far more important. In all, the Porcupine Camp has produced over 70 million ounces of gold and continues to add to that total while the Klondike produced all of 12 million ounces.”

CA Aboriginal title judgment has serious mining implications – by Dorothy Kosich (Mineweb.com – June 27, 2014)

June 27, 2014

http://www.mineweb.com/

Canadian Supreme Court decision granting unprecedented authority to First Nations may mean trouble for mining on traditional lands.

RENO (MINEWEB) – Tsilhqot’in Nation v. British Columbia, 2014 SCC 44, a ground-breaking decision by the Canadian Supreme Court on a 20-year old dispute over Aboriginal communities land claims in British Columbia, has staggering implications for Canadian mining, especially for miners and explorationists who have failed to establish meaningful and positive working relationships with various First Nations groups.

The Tahltan Central Council of Dease Lake B.C. has already announced that it will prepare an Aboriginal title and rights claim against the Province of British Columbia and Fortune Minerals against the Arctos Anthracite Coal project for Mt. Klappan.

As of Mineweb’s deadline early Friday, Fortune Minerals had not published a comment regarding the Tahltan Nation’s decision to file an Aboriginal title and rights claim against the mining company.

The Supreme Court rendered its judgment on an appeal by Chief Roger William on behalf of the Tsilhqot’in Nation concerning 1990-1998 legal dispute which sought a declaration of Aboriginal title over 438,000 hectares in B.C.’s Cariboo-Chilcotin region after the BC government granted Carrier Lumber a license to cut trees in Tsilhqot’in territory. The trial on the matter convened in November 2012 and was heard over 339 trial days.

RoFATA trainees aiming for Ring of Fire careers – by Rick Garrick (Wawatay News – June 26, 2014)

June 27, 2014

http://www.wawataynews.ca/

Better career options are the goal for many of the Matawa First Nations trainees currently pursuing Ring of Fire Training Alliance (RoFATA) Tier 2 and 3 training.

“(My goal is) to eventually get a really good career where I can support my family and move out of Thunder Bay into a different community,” said Caitlin Cheechoo, mother of a three-year-old son and one of about 60 Tier 3 RoFATA trainees who have completed about three weeks of their 12-week program at Confederation College in Thunder Bay.

“Right now, all together, we’re learning the math and English components and then we branch out to our own individual (pre-trades program).”

Cheechoo is focusing on the Pre-Trades Carpentry program, one of five programs offered through the Tier 3 RoFATA training. The other programs are: Pre-Trades Electrical, Pre-Trades Plumber, Pre-Trades Heavy Duty Equipment Mechanic and Pre-Trades Construction Craft Worker.

“I just like the hands-on working with everything,” Cheechoo said. Cheechoo’s long-term goal is to work in the Ring of Fire when it opens up for mineral development. “For now though, after the pre-trades program, hopefully (I will get) a job with carpentry and learn more,” Cheechoo said.

Glencore tax bill on $15b income: zip, zilch, zero – by Michael West (Sydney Morning Herald – June 27, 2014)

June 27, 2014

http://www.smh.com.au/

Australia’s largest coalminer, Glencore, paid almost zero tax over the past three years, despite income of $15 billion, as it radically reduced its tax exposure by taking large, unnecessarily expensive loans from its associates overseas.

At up to 9 per cent, the interest rates on these $3.4 billion in loans were double what the company would have had to pay had it simply borrowed the money from the bank.

As it was claiming tax breaks in Australia on these inflated interest payments, the secretive Swiss-based multinational actually increased its lending to other related parties interest free. This may include its executives. Nobody from Glencore, which used to be called Xstrata, was available for comment despite repeated requests.

The aggressive tax avoidance tactics of Glencore Coal International Australia Pty Ltd have been identified in an independent analysis of the company’s accounts for Fairfax Media by an expert in multinational financing.

Along with the blatant irregularities in its borrowing and lending, the study also found a hefty increase in Glencore’s coal sales to related companies (up from 27 per cent to 46 per cent of total sales, with no explanation), indicative of transfer pricing – also known as profit-shifting – and an activity that appears to breach Section IVA of the Income Tax Assessment Act – the part that deals with schemes designed to comply technically with the law but whose ”dominant purpose” is really to avoid tax.

Big boost for fights, leaders say – by Carol Sanders (Winnipeg Free Press – June 27, 2014)

June 27, 2014

http://www.winnipegfreepress.com/

Ruling upholds need for firms to get consent: chief

First Nations leaders in Manitoba fighting for their fair share of the land hailed Thursday’s Supreme Court of Canada decision as a victory. “This landmark decision only bolsters what we’ve been saying,” said Chief Arlen Dumas of Mathias Colomb Cree Nation.

In 2013, the First Nation issued stop-work orders to HudBay Minerals Inc. to stop the mining on band territory at Lalor Lake and Reed Lake and blockaded the road to the Lalor site. The First Nation, formerly known as Pukatawagan, issued a public declaration to all resource companies that its consent is required for any activity in its territory. On Canada Day, it issued a moratorium against all resource extraction in its territory to both the federal and provincial governments.

“We’re going to reissue stop-work orders and issue a declaration to HudBay and everyone else who’s operating illegally in our territory and remind them they are in violation of a Supreme Court decision and legalities need to be adhered to,” Dumas said by phone from the First Nation. “We’re going to continue to put pressure on them.”

HudBay later won a court injunction to stop aboriginal protesters from blocking access to two of its remote mines. The high court’s decision could have a huge impact in Manitoba for the Dakota and Sioux, who don’t have treaties and for Treaty 1, 2 and 3 First Nations, says a University of Manitoba law professor with 10 years’ experience in aboriginal law.

RPT-After 125 years, Alcoa looks beyond aluminum – by Allison Martell (Reuters India – June 27, 2014)

June 27, 2014

http://in.reuters.com/

(Reuters) – Alcoa Inc, the company that helped create the aluminum industry more than a century ago, is reinventing itself as a manufacturer of specialized components for aerospace and automotive customers, including some that contain no aluminum at all.

The company’s deal for jet engine part maker Firth Rixson, which uses little aluminum, is its biggest move yet to escape the terrible primary aluminum market by crafting the parts its customers need, even if they are made of nickel or titanium.

It announced the proposed $2.85 billion deal to buy Firth Rixson earlier on Thursday. Alcoa talks constantly about expanding its downstream businesses, which sell truck wheels, aircraft parts and other goods. Now it is rebranding itself in ways that would have seemed unthinkable just a few years ago.

“We are really material-agnostic,” Chief Executive Officer Klaus Kleinfeld said in an interview on Thursday. “We love, internally, that we have fights over what is the right material, in front of our customers, together with our customers.”

From an upstart, this would be one thing. But Alcoa has been synonymous with aluminum since 1888, and it has a role in every part of the sector: mining bauxite, refining it into alumina and smelting alumina to create aluminum.

Sudbury icon turning 50 – by John Lappa (Sudbury Star – June 27, 2014)

June 27, 2014

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

One man’s vision and tenacity to create an iconic landmark was revealed at a book launch at Dynamic Earth in Sudbury on Thursday.

Ted Szilva and his son, Jim, launched their book, The Big Nickel: The Untold Story, at the same location where the Big Nickel was erected and eventually shown to the public 50 years ago on July 22, 1964.

Ted Szilva’s dream to create the Big Nickel attraction was opposed by a number of people and groups, including the old City of Sudbury. “It was a constant fight with the city at the time,” Szilva recalled. “The bureaucrats were against it 100%.”

Then Sudbury Mayor Joe Fabbro, The Sudbury Star and the television station “backed me, so I overcame those obstacles day by day.” Szilva said he overcame his detractors because of his spirituality.

“I consider myself a spiritual man and I prayed on every obstacle that came about. I prayed on it and everything worked out,” Szilva said. Szilva said he came up with the idea of the Big Nickel as part of a centennial project for the city. His idea was rejected, but he continued on his own.