Republic of Mining

Barrick Gold says Newmont Mining ends merger talks – by Rachelle Younglai (Globe and Mail – April 28, 2014)

April 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.

Barrick Gold Corp. said on Monday that Newmont Mining Corp. has decided to end their merger talks, a development that could lead Barrick to launch a hostile bid for its American rival.

The Toronto-based Barrick had been trying to renew talks with Colorado-headquartered Newmont last week, a source had said. But Newmont’s board of directors decided to “terminate” their discussions, Barrick said.

“Although Barrick believes the interests of shareholders are best served through the completion of this business combination, Newmont’s board has determined that the interests of Newmont’s shareholders are best served by remaining independent,” Barrick said in a statement. Newmont had no immediate comment.

The companies, the world’s two largest gold producers, have discussed merging at least two other times over the last two decades.

The rout in the gold industry led to their recent discussions, with the miners identifying about $1-billion in cost savings.

COLUMN-Asian coal miners pursuing self-defeating output gains – by Clyde Russell (Reuters India – April 28, 2014)

April 28, 2014

http://in.reuters.com/

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

LAUNCESTON, Australia, April 28 (Reuters) – Coal producers in Asia are currently their own worst enemies, raising output in a bid to boost revenue in order to compensate for lower prices.

Economic logic would suggest that when the product you make is in oversupply, eventually prices will fall to the point where output becomes loss-making and is shut down. However, this logic isn’t applying to Asian coal markets, with miners ramping up output by more than demand is increasing.

The short-term impact has been that spot prices have tumbled, with benchmark Australian thermal coal at Newcastle Port dropping to $73.12 a tonne in the week to April 25. That is not far from a four-and-a-half-year low of $72.98 hit last month.

The price is also down 15 percent so far this year and has almost halved since the post-2008 recession peak of $136.30 a tonne, reached in January 2011. The response to this collapse in pricing has resulted in some production leaving the market, most notably in China and the United States.

Election violence flares in South Africa’s platinum belt – by Ed Stoddard (Reuters U.K. – April 27, 2014)

April 28, 2014

http://uk.reuters.com/

JOHANNESBURG – (Reuters) – Police used water cannon and stun grenades to disperse rioters in South Africa’s strike-hit platinum belt on Sunday after a government minister was attacked by rock-throwing protesters while campaigning for the May 7 election.

Police spokesman Thulani Ngubane told Reuters a community hall, municipal centre and the house of a councillor for the ruling ANC were burnt down. He would not identify the rioters but local media and union leaders said the minister had been attacked by members of the striking AMCU miners’ union.

Ngubane confirmed sports minister Fikile Mbalula had to be whisked away under police protection after he and the ANC activists he was campaigning with were confronted by a crowd in the shanty town of Freedom Park northwest of Johannesburg.

It was after this that the protest erupted into a full-scale riot, Ngubane said. Sydwell Dokolwana, the regional secretary for the National Union of Mineworkers (NUM), a key ANC ally and AMCU’s arch rival, told Reuters he was with the minister at the time and that several people were hurt in the scuffle.

News Release: Ontario Investing in the Ring of Fire

April 28, 2014April 28, 2014

MNDM Press Conference April 28 2014 Minister Gravelle by netnewsledger

Province Moving Forward with Support for Strategic Infrastructure

April 28, 2014 10:25 a.m. Ministry of Finance

The Ontario government is prepared to commit up to $1 billion to develop strategic all-season industrial and community transportation infrastructure in the Ring of Fire.

Ontario needs a partner and is calling on the Federal government to equally match this funding to build the infrastructure required for this important project in the north that will create jobs and boost the northern economy.

The approach and priorities with respect to this investment will be established in partnership with First Nations, governments and industry partners through the development corporation.

The province is currently facilitating the creation of a development corporation to accelerate strategic infrastructure development in the region. The corporation will bring together key mining companies, First Nations, and the provincial and federal governments to develop, construct, finance, operate and maintain infrastructure supporting access to strategic resources in the mineral rich Ring of Fire.

Province providing $1 billion for Ring of Fire – by Lindsay Kelly (Northern Ontario Business – April 28, 2014)

April 28, 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.

The Ontario government is providing $1 billion to develop transportation infrastructure in the Ring of Fire. Northern Development and Mines Minister Michael Gravelle made the announcement on April 28 in Thunder Bay with Bill Mauro, MPP for Thunder Bay-Atikokan, and David Orazietti, MPP for Sault Ste. Marie.

Gravelle said the province was committed to “make a very significant investment in transportation infrastructure,” but made it clear he expected the feds to pony up their share as well.

“That is absolutely a commitment we expect to be matched by the federal government,” he said. “We’re coming to table with our best offer and we need the prime minister and his team to join us there.”

Calling the Ring the “next great mining development, not just for Ontario, but across the entire country for Canada,” Gravelle said because the Ring is in a remote part of the province never before developed, infrastructure development would be a “complex undertaking.” He did not specify which transportation mode—road or rail—the government favours.

Big-name lawyer takes on Ontario’s law society [Bre-X and Joe Groia] (MACLEAN’S Magazine – April 27, 2014)

April 28, 2014

http://www.macleans.ca/

Judges said that Joe Groia was “unprofessional” in his successful defense of Bre-X vice-president John Felderhof against fraud charges in the late 1990s

The Canadian Press – TORONTO – A prominent securities lawyer and the society that regulates the legal profession in Ontario are bound for court in the latest round of an epic battle started in the aftermath of the billion-dollar Bre-X mining fiasco in the late 1990s.

Closely watched by the legal profession, the contest pits Joe Groia, who successfully defended the only person charged in the history-making securities scandal, against the Law Society of Upper Canada.

“There have been few cases, if any, where the (society) has been so dogged and determined to maintain a position that was so damaging to the public and profession as a whole,” Groia argues in court documents.

How he behaved during the tumultuous Bre-X courtroom odyssey is what’s at issue. The society maintains Groia misbehaved to such an extent in defending Bre-X vice-president John Felderhof that he warranted a two-month suspension and ordered him to pay $247,000 in costs — reduced on initial appeal in March to one month and $200,000.

At helm of Anglo American, consummate miner digs deep for savings – by Eric Reguly (Globe and Mail – April 26, 2014)

April 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.

LONDON — Mark Cutifani and I meet in the strangest places. My first encounter with the CEO of Anglo American, one of the world’s biggest mining companies, came last September at a Vatican mining conference in Rome. He and other mining bosses were learning how to inject a bit more of the Holy Spirit into their digging activities.

The second time was two months later at a gold mine in Chelopech, Bulgaria, of all places. The little mine wasn’t Anglo’s. It belonged to Toronto’s Dundee Precious Metals and Mr. Cutifani was there to learn how the Canadians had reduced costs by some 50 per cent through a range of technologies, such as novel underground WiFi and data networks. “This is where the innovations are, in the small mines,” he said at the time, decrying the lack of technology in Anglo’s own mines.

The third meeting came in March, at Anglo’s headquarters in London, near Trafalgar Square, at the heart of what used to be world’s greatest empire. The location is appropriate. Anglo American was founded in 1917 by Sir Ernest Oppenheimer with £1-million ($1.85-million) in capital from British and American sources (hence the name Anglo American). Like Britain, it would establish outposts around the world. From its foundation in South Africa – home to its vast gold, platinum and diamond operations – it would expand into base metals in Canada, coal and manganese in Australia and iron ore, ferronickel and copper in Latin America. At one point, Anglo was the world’s mightiest mining company.

Kids eye career in mining – by Carol Mulligan (Sudbury Star – April 28, 2014)

April 28, 2014

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

Claudine Beausoleil is a woman of her convictions. The vice-chair of Modern Mining and Technology Week can’t think of a better career for a young person than mining.

The co-ordinator at the Bharti School of Engineering at Laurentian University says becoming a mine engineer will allow a young person to get a good-paying job and work at locations all around the world. There are plenty of other opportunities in mining whether in computers, robotics, construction, maintenance or human resources.

Beausoleil and several other people staffed booths at the New Sudbury Centre on Saturday at the MMTS Showcase to kick off Modern Mining and Technology Week. The purpose of the week is to educate young people about mining, said Beausoleil.

That is done with fun activities such as Mine Opportunity Mining Games April Monday and Tuesday at Dynamic Earth, where 300 students will be engaged in a game that’s a combination of Monopoly and a scavenger hunt.

On Wednesday and Thursday, 600 Grade 4 students and their teachers are expected to participate in Mining Matters workshops at Dynamic Earth. Grade 4 is a good age to interest students in mining as a career, said Beausoleil.

Up to $1B could go toward Ring – by Carol Mulligan (Sudbury Star – April 28, 2014)

April 28, 2014

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

An industry insider, who did not wish to be identified, said he wouldn’t be paying
attention to Monday’s announcement because the amount of money pledged by the Liberals
– three days before it delivers a spring budget that could trigger an election –
is irrelevant.

Algoma-Manitoulin MPP Michael Mantha travelled to Thunder Bay for a Monday morning news conference at the Ring of Fire Secretariat to find out if what his Queen’s Park sources were telling him was true.

That Northern Development and Mines Minister Michael Gravelle was to announce a provincial investment of up to $1 billion to develop infrastructure for the Ring of Fire, but only if the federal government matches it.

Mantha, the New Democrats’ mining critic, said figures ranging from $770 million to $1 billion were being bandied about as the amount the province was going to announce last week and, if they’re accurate, it’s good news.

Neskantaga First Nation News Release: Fourth World Living Conditions in the Ring of Fire: Call to Action

April 28, 2014

“I have to do something because my people live in poverty, my people are killing themselves,
my people don’t have clean drinking water…I want to make a change for the betterment of the community
and the people and the generations to come.” – Chief Peter Moonias

Neskantaga First Nation is an isolated fly-in Oji-Cree First Nation community located in northern Ontario along Attawapiskat Lake in the Ring of Fire. The community itself covers approximately 831 hectares of vast northern Ontario landscape and has an estimated population of 420 residents, 60 percent of whom are youth. In this small community, there were seven youth suicides (7) and twenty seven suicide attempts (27) over a twelve-month period, which forced Chief Peter Moonias to declare a state of emergency in the spring of 2013.

Since that time, the community has been calling on all levels of government, health providers, the justice community, social service agencies, and families to collectively support Neskantaga during their time of crisis. While a number of initiatives were started to assist the community in dealing with their grief, suicides of young people continue. Regrettably, since the summer of 2013, three (3) more youth have taken their lives, with the most recent suicide of a 16-year-old girl on April 2, 2014.

These suicides are directly linked to the deplorable living conditions in the community. For example, the residents of Neskantaga have had no clean drinking water since 1995, lack access to fresh and affordable food, and inhabit homes that are dangerously overcrowded and infested with black mould.

Can private equity reboot the mining sector? – by David McKay (Miningmx.com – April 25, 2014)

April 25, 2014

http://www.miningmx.com/

ROUGHLY $8bn to $10bn has been raised by newly founded private equity companies, many of them started by former resources bankers or mining executives, in an effort to participate in an estimated $40bn worth of divestments by major mining companies such as BHP Billiton.

The question is, however, whether private equity has ‘the legs’ to remain a valid alternative to traditional forms of lending, such as banks. According to Glencore Xstrata CEO, Ivan Glasenberg, private equity will struggle. “Now there are a lot of private equity guys starting companies, a lot of guys who left the industry and started private equity groups. It’s never worked in the past,” he said.

“The problem with the commodities space if you have high gearing is that you are not running Boots pharmaceutical where you have a pretty constant earnings base,” said Glasenberg.

Another analyst said it was noticeable that private equity couldn’t compete in the big deals. The sale of Glencore’s $5.5bn Las Bambas copper project in Peru went to China’s part-state-owned group, Minmetals, suggesting that start-up companies are battling against sovereign funds for big mining deals.

Chinalco Mining sets sights on copper projects in Latin America – by Eric Ng (South China Morning Post – April 25, 2014)

April 25, 2014

http://www.scmp.com/business/commodities

Metal unit keen on copper projects in Peru with its huge potential and friendly environment

Chinalco Mining, the non-ferrous and non-aluminium metals unit of aluminium giant Chinalco, is seeking acquisition opportunities in Latin America for copper projects with long-term return rates of more than 10 per cent.

Chief executive Peng Huaisheng said the region presented more development potential, especially Peru, where the company has been developing the Toromocho copper project since 2007.

“Our understanding is that Peru offers greater potential within Latin America,” he said. “Peru has a strategy to catch up with Chile in metals and mining development, so it provides an overseas-investor-friendly investment environment.”

Chile is the world’s largest producer and resource holder of copper, which is used widely in the power distribution and construction sectors. China imports about 70 per cent of its raw copper ore needs. Hong Kong-listed Chinalco Mining’s US$3.5 billion Toromocho project, about 140 kilometres from Lima, started trial commercial production in December.

Red Lake area running out of power to feed mines (CBC News Thunder Bay – April 17, 2014)

April 25, 2014

http://www.cbc.ca/thunderbay/

Hydro One to consider solutions to allow production to begin at two new mines next year

The Northwest Energy Task Force is keeping a close eye on the power needs of two mines scheduled to open next year at Red Lake. Task force member John Mason said there’s a looming problem for two new mining projects that need a solution.

“Between the Rubicon operation and (Goldcorp’s) Cochenour Bruce Channel, I would estimate over $700 million has been spent, and yet could be hampered with power issues, which would be devastating to these new operations.”

Mason said the mines could be held up unless electricity infrastructure is upgraded. Rubicon’s Phoenix gold project is set to start up next spring, and mine maintenance superintendent Sylvain Talbot agrees there’s a challenge to overcome.

“There is nine megawatts available, and Goldcorp and Rubicon are maybe looking for 20 megawatts. And there is another junior company that’s coming, so Red Lake area is running out of power.” Talbot said he recently asked about options to enable Rubicon to start production at the new mine next spring.

Queen’s Park to make Ring of Fire announcement on Monday – by Staff (Northern Ontario Business – April 25, 2014)

April 25, 2014

The Ontario government will make an “important” announcement on the Ring of Fire mineral deposits on April 28. A press conference has been called for Monday at 10 a.m. at the Ministry of Northern Development and Mines offices in Thunder Bay.

Minister Michael Gravelle, municipal affairs minister Bill Mauro and natural resources minister David Orazietti, along with staff from the province’s Ring of Fire Secretariat, will be in attendance.

Gravelle said March 27 in Sudbury that the province was prepared to make a “very significant” infrastructure investment in the Ring of Fire, but declined to give specifics. “Our commitment to a major investment is locked in. It’s real,” said Gravelle.

“We have not spoken about that figure specifically and I’m not in a position to do that right now.” On the same day, at the same time, the Ontario government will be appearing in a Toronto courtroom in on a legal matter concerning the Ring of Fire.

Anglo to Move Away From Labor-Intensive Platinum Mining – by Firat Kayakiran (Bloomberg News – April 24, 2014)

April 25, 2014

http://www.bloomberg.com/

Anglo American Plc (AAL), the world’s biggest platinum producer, plans to switch to mechanized open-pit mining from labor-intensive underground output, as its South African operations remain crippled by a three-month strike.

The company aims to make the transition in five to 10 years to improve productivity, Chief Executive Officer Mark Cutifani said at the company’s annual general meeting in London yesterday. The change would have to be carried out in a way that’s “sensitive to its social ramifications,” he said.

A third day of talks between producers and union officials ended yesterday without a resolution or plans for further negotiations. Output at Anglo American Platinum Ltd. (AMS) dropped 39 percent in the first quarter because of the walkout over pay, Anglo said yesterday. The company reduced its forecast for full-year production by as much as 13 percent, with more cuts possible if the deadlock persists.

Cutifani “is bang on,” Paul Gait, an analyst at Sanford C. Bernstein Ltd. in London, said in an e-mail. “The only way to get safe platinum is to get people out of the stope.