Republic of Mining

SA continues to slide in ferrochrome stakes – by David McKay (Miningmx.com – March 11, 2014)

March 11, 2014

http://www.miningmx.com/

[miningmx.com] – SOUTH Africa’s share of the world ferrochrome market shrank further in 2013 despite efforts by the industry to have the country’s government consider protective trade measures.

Merafe Resources said in comments to its year-end results, in which comprehensive income increased more than 300% to R210.6m (2012: R48.9m), that South Africa’s share of world ferrochrome production fell to 32% from 34% in 2012.

“Chrome ore imports into China increased by 30% year-on-year to 12.1 million tonnes (mt), of which 6.7mt (2012: 4.5mt) was from a South African source,” said Merafe Resources. Global ferrochrome production was 10.2mt in 2013, 8% higher than in 2012. Ferrochrome is used in the manufacture of stainless steel and is therefore highly geared to industrial production growth.

As early as 2011, Merafe Resources raised concerns about the export of cheap supplies of chrome ore, partly by platinum producers which mine chrome as a by-product, to China. The contention was that this allowed the Chinese market to grow while the local market struggled, especially amid rising power and labour costs in South Africa.

RIP commodity supercycle, 2002-2014 – by Scott Barlow (Globe and Mail – March 11, 2014)

March 11, 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.

Metals prices in China were crushed Monday as the country’s economic numbers continued to drive nails into the coffin of a global commodity supercycle that has enriched so many Canadians since 2002.

Copper prices in Shanghai fell 5 per cent Monday after the government released trade statistics showing an 18.1-per-cent year-over-year decline in exports. The copper price now stands 8.6 per cent below highs hit on Feb. 17. Commodity price carnage was also apparent in iron ore. The spot price fell 8.3 per cent Monday, and is now lower by 20 per cent year to date.

The export data was extremely disappointing to economists who had predicted a 7.5-per-cent increase. Seasonal factors were definitely in play – Chinese New Year celebrations always skew the early-year data. Even so, the number is easily soft enough to confirm the economic weakness suggested by a March 2 PMI report that showed a contraction in manufacturing activity.

Economists expect that China’s gross domestic product growth will reach the government target of 7.5 per cent this year, so at first glance the recent volatility in commodity markets makes little sense.

COMMENT: Chilean court cancels Pascua-Lama fine, retains suspension – by Marilyn Scales (Canadian Mining Journal – March 10, 2014)

March 11, 2014

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

As we are used to hearing – there is good news and bad news. This time Toronto’s Barrick Gold is on the receiving end of both, thanks to the environmental court in Chile. At issue is the future of the expensive Pascua-Lama gold project that straddles the Chile/Argentina border.

Last week, Chile’s second environmental court annulled the fines imposed by a local environmental regulator (SMA). The amount is small – $16 million compared to the projected $8.5-billion cost of the project. The higher court cited “errors and illegalities” in the SMA’s resolution, and removed the fines. The SMA will now consider each of 23 charges separately, and readers can expect that the fines will be re-imposed.

That was the good news. Now the bad. At the same time the court upheld the suspension of work order imposed on the Chilean portion of Pascua-Lama. The only project Barrick has been allowed to work on is the water management system.

The Pascua-Lama project has been one of the most difficult any mining company tried to develop.

Rejected in 2008, Kemess gold-copper mine proposal on table again – by Wendy Stueck (Globe and Mail – March 10, 2014)

March 11, 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 — A mine rejected in 2008 on environmental grounds is back in play, with a different company at the helm and plans for an underground, rather than an open-pit, operation.

Toronto-based AuRico Gold filed a project description for the Kemess Underground Mine Project with the B.C. Environmental Assessment Office last month, reviving plans for a gold-copper deposit about 250 kilometres north of Smithers and about 6.5 kilometres north of former producer Kemess South Mine, which was in production from 1988 to 2011.

In the years leading up to Kemess South being depleted, former owner Northgate Minerals made plans to extend operations by developing the nearby Kemess North deposit. Plans at the time called for disposing of tailings and waste rock from expanded operations in Duncan Lake, also known as Amazay Lake.

That plan did not sit well with aboriginal groups that had historic and cultural connections to the lake. In 2007, a federal review panel concluded Kemess North as it was then designed was not in the public interest “because of significant adverse environmental, social and cultural effects, some of which may not emerge until many years after mining operations cease.”

NASA is offering $35,000 in awards to asteroid hunters – by Cecilia Jamasmie (Mining.com – March 10, 2014)

March 11, 2014

http://www.mining.com/

The US space agency, in partnership with asteroid-mining firm Planetary Resources, said Monday it will give away $35,000 in awards over the next six months to citizen scientists who can develop improved algorithms to find space rocks that could pose a threat to our planet — or at least be of interest to scientists and cosmic mineral prospectors.

The first contest in the series will kick off on March 17. Prior to the kick off, competitors can create an account on the contest series website and learn more about the rules and different phases of the competition.

Managed by the NASA Tournament Lab, the entire contest series runs through August and is the first contest series contributing to the agency’s Asteroid Grand Challenge.

“For the past three years, NASA has been learning and advancing the ability to leverage distributed algorithm and coding skills through the NASA Tournament Lab to solve tough problems,” said in a statement Jason Crusan, NASA Tournament Lab director. “We are now applying our experience with algorithm contests to helping protect the planet from asteroid threats through image analysis.”

REFILE-Lower iron ore prices here to stay – Citi – by James Regan (Reuters U.S. – March 11, 2014)

March 11, 2014

http://www.reuters.com/

(Reuters) – Iron ore prices are set to remain at lower levels given increased supplies of the steel-making ingredient, although the speed of their recent slump has taken the market by surprise, Citigroup said on Tuesday.

Spot iron ore prices posted their biggest one-day fall in more than four years on Monday after China’s trade balance swung into deficit and amplified fears of a slowdown in the world’s second-biggest economy.

“The broad move lower is here to stay,” Ivan Szpakowski, commodities strategist at Citi Research, said at an iron and steel conference in Perth.

“Prices are moving on a cyclical basis due to the increase in supply. The question had been the timing of it, and the rapidity of the fall, that’s something that had not been expected,” Szpakowski said. Iron ore for immediate delivery to China .IO62-CNI=SI fell 8.3 percent, its largest one-day percentage fall in 4-1/2 years, to $104.70 a tonne, its weakest since October 2012, according to data compiled by The Steel Index.

First Nation takes proactive approach with mining companies – by Jonathan Migneault (Northern Ontario Business – March 10, 2014)

March 10, 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.

Wahnapitae First Nation has taken a proactive approach to promote environmental sustainability in its dealings with mining companies like Vale, Glencore and KGHM. Since the early 1990s, the First Nation, located northeast of Sudbury, has worked to develop relationships with mining industry partners.

Cheryl Recollet, Wahnapitae First Nation’s environmental coordinator, said her department has developed in-house capacity over the past 15 years to conduct environmental assessments for mining companies who work near their reserve boundaries.

In 2012, Wahnapitae First Nation’s sustainable development department founded Tahgaiwinini Technical and Environmental Services Group. The company has four technicians and two advisers on staff, who provide mining companies with a variety of environmental management services.

The technicians are trained to use geographical information systems to map the low of groundwater, plumes of air pollution, and provide information on the First Nation’s territory, species at risk, and traditional hunting territory.

Andrew ‘Twiggy’ Forrest takes billion-dollar hit as iron ore tumbles – by James Thomson (Sydney Morning Herald – March 10, 2014)

March 10, 2014

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

Andrew ‘Twiggy’ Forrest knows better than most how movements in commodity prices can cause havoc with your bank balance. With iron ore prices falling to its lowest in close to a year, shares in Fortescue Metals Group tumbled 8.38 per cent to $4.98 in initial trade on Monday morning, wiping around $500 million off the value of Forrest’s stake.

Since February 21, when FMG’s shares broke through $6 for the first time since early 2012, the stock has dropped by almost 15 per cent, broadly in line with the fall in the iron ore price. That drop has wiped around $1.3 billion off the value of Forrest’s stake in a matter of 11 trading days. His stake is now worth $5.1 billion.

Calculating the impact of the iron ore price movement on other iron ore moguls such as Gina Rinehart and Angela Bennett isn’t as transparent, although given they both rely on royalties paid by Rio Tinto – which mines tenements owned by their fathers, Lang Hancock and Peter Wright – the share price of that company can be seen as a very rough proxy.

In morning trade, Rio shares dipped 4.23 per cent to $62.19. Since February 21, Rio’s stock is down 11.4 per cent. BHP Billiton shares lost 3.15 per cent this morning, to $36.53. The stock is down 6.7 per cent since February 21.

Expert Mining Panel Discusses Possibility Of Reaching ‘Peak Discovery’ – by Alex Létourneau (Kitco News – March 10, 2014)

March 10, 2014

http://www.kitco.com/

(Kitco News) – During the 82nd Prospectors and Developers Association of Canada convention in Toronto last week, Exploration Insights founder Brent Cook rounded up some mining heavyweights to look into the possibility of having reached peak discovery in the mining industry.

Kitco News’ informal panel included Catherine McLeod-Seltzer, chairman of Bear Creek, Alex Davidson, director with Yamana Gold, Miles Thompson, CEO of Lara Exploration.

While the guests covered a range of topics linked to where the mining industry is at, and where it could be heading, the idea that the mining industry will be a low-grade driven sector moving forward triggered a discussion.

“There’s always a change going on in the mining industry,” Davidson said. “We get smarter about where we explore, we can look from further away, we can look in different countries, our risk tolerance is a gazillion times more than it was 20 or 30 years ago.

“So I think we are going to find more deposits, they may be deeper which would require higher grade, or we’ll refine the mining methods to get cheaper mining methods, but I think there’s as much potential, in certain areas, as there ever has been.”

Glencore Xstrata mining merger produces $2.4bn in synergies – by Jana Marais (Business Day Live – March 9, 2014)

March 10, 2014

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

GLENCORE Xstrata has done an “excellent” job in finding synergies through the mining giants’ $29bn merger in May 2013, the combined group’s first set of annual results shows.

Releasing the results this week, CEO Ivan Glasenberg said the group had increased the synergy benefits of the merger from the original estimate of $2bn a year by 2014 to $2.4bn, and there was scope for further cost savings.

Despite a $7.5bn write-down on the value of Glencore Xstrata assets since the takeover on May 2 last year, the merger was a good decision and the additional realised cost savings show Glencore has done an excellent job, said Hanré Rossouw, head of commodities for frontier and emerging markets at Investec Asset Management.

“Because it was an all-share deal, the impairment is really an accounting issue related to the share price movements since the date the transaction was finalised and the allocation of fair value to Xstrata assets. It is not a cash-flow item,” Mr Rossouw said.

BHP workers brace for uncertainty – by Neale Prior (The West Australian – March 10, 2014)

March 10, 2014

http://au.news.yahoo.com/thewest/

Nickel West workers are bracing for a year of uncertainty as mining giant BHP Billiton embarks on a formal campaign to sell the underperforming mining and processing wing.

After slashing the book value of the operation by $US1.6 billion, BHP is believed to have appointed international investment bank Goldman Sachs to find a buyer.

The Goldman Sachs appointment leaked over the weekend via The Australian Financial Review after speculation building out of London last week that BHP was offloading its WA poor relation.

The nickel arm has been starved of capital and sits outside BHP’s favoured areas of iron ore, coal, petroleum and copper.

The sale push puts the jobs of up to 2000 employees and contractors in play and fans fears that BHP could close all or part of the division if it cannot reach acceptable sales terms.

Allana Potash opening Ethiopian mine in the hottest place on earth – by Stephanie Findlay (Canadian Business Magazine – March 6, 2014)

March 10, 2014

http://www.canadianbusiness.com/

Keeping costs low is key amid potash price slump

Lately, things haven’t been looking good for potash producers. Last summer, Uralkali, one of the biggest producers of the potassium fertilizer, killed its partnership with competitor Belaruskali in favour of boosting output, fuelling oversupply fears among investors and driving down prices. The situation has hardly improved since then. On Jan. 30, fourth-quarter profits at Potash Corp. of Saskatchewan, another large producer, dropped 46%, a result, said the company, of the “challenging pricing environment.”

Allana Potash Corp., the Canadian developer of a $718-million potash mine in Ethiopia, believes it can buck the trend. While other mines are shelving development projects because of the lower prices, Allana is going “full speed ahead” with its Ethiopian project, says Richard Kelertas, vice-president of corporate development at Allana.

The company’s secret? Kelertas says that the mine, set to begin producing in late 2015, will have easy access to the booming Chinese and Indian markets, and much lower production costs, making it profitable despite the price slump.

Allana’s mine is located in the remote Danakhil depression, a scorching-hot salt plain where temperatures often soar above 45°C, and where potash is close to the surface. Allana will do solution mining—cheaper than the open-pit or shaft mining done by its competitors.

RPT-UPDATE 1-Panel says Guinea should strip BSGR, Vale of rights to iron deposit – by Silvia Antonioli, David Rohde and Saliou Samb (Reuters India – March 10, 2014)

March 10, 2014

http://in.reuters.com/

LONDON/CONAKRY, March 7 (Reuters) – A technical committee in Guinea has recommended the government strip BSG Resources (BSGR) and its partner Vale of the rights to exploit a giant iron ore deposit because the panel alleges BSGR obtained the concession through corruption, sources close to the matter said.

The latest development in a saga surrounding one of the world’s largest mining deposits casts uncertainty over the future of the sought-after Simandou, a mine that could help one of Africa’s poorest countries to prosper.

It also raises concerns over the position of Brazilian miner Vale, which, according to a source close to the company, has spent more than $1 billion in its Guinean venture and risks seeing its investment and efforts wiped away.

BSGR vigorously denied the allegations of wrongdoing and said it believes the committee’s procedure is part of a predetermined and orchestrated plan to expropriate the company’s mining rights.

MTO in midst of pan-Northern transportation strategy – by Ian Ross (Northern Ontario Business – March 10, 2014)

March 10, 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 provincial plan to access the Ring of Fire may be lacking, but for almost three years the Ministry of Transportation (MTO) has been quietly working on a major pan-northern planning exercise to support future regional economic development.

Known as the Northern Ontario Multimodal Transportation Strategy, the multi-year study is directly tied into the Liberal government’s implementation of the Northern Growth Plan.

“It’s definitely a first for the MTO in Northern Ontario,” said Tija Dirks, the ministry’s director of transportation planning, of the comprehensive process which began in 2011. “The scope of the issues that we’re looking at is much broader. We’re truly looking at the transportation system and not just the highway network.”

The MTO hired consultants to interview more than 100 people from the mining, forestry, manufacturing, agriculture and tourism sectors, together with input from First Nation, Métis and municipal leadership.

Amur Will Use Zeppelins to Ship Ore From Remote Siberia Mine – by Firat Kayakiran (Bloomberg News – March 10, 2014)

March 10, 2014

http://www.bloomberg.com/

Amur Minerals Corp. (AMC), a copper and nickel explorer in Russia’s Far East, plans to fly equipment to its Siberian operation by zeppelin to bypass snow-clogged roads.

Amur will use two airships from Worldwide Aeros Corp. to carry loads of as much as 250 metric tons, the company said today in a statement after signing a memorandum of understanding with the U.S. manufacturer. The aircraft will also be used to transport production from the mine.

Zeppelin manufacturers need mining contracts to revive their business, 77 years after the U.S. Hindenburg airship crash ended most buyer interest for decades. With better designs and a buoyant gas that can’t ignite, makers such as Aeros and Hybrid Air Vehicles Ltd. are hammering out their first sales deals with the mining industry to complement truck and rail transport.

The airships can be used on rough terrain because they take off and land vertically. For Amur, their use will reduce the estimated $140 million expense of building a 320-kilometer (200-mile) road to the nearest rail station, as well as “substantially” cutting freight costs, it said.