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World copper statistics 2013 (International Mining – April 1, 2014)

http://www.im-mining.com/

The International Copper Study Group (ICSG) has released preliminary data for December 2013 world copper supply and demand in its March 2014 Copper Bulletin. In 2013 world apparent use is estimated to have increased by 4% (805,000 t) to 21.2 Mt. World mine production is estimated to have increased by 8% (1.3 Mt) to 18 Mt. World refined production is estimated to have increased by around 4.5% (879,000 t) to 21 Mt. According to preliminary ICSG data, the refined copper market balance for December 2013 showed an apparent production surplus of 34,000 t as, despite strong Chinese apparent demand, refined usage was weak in major consuming regions during the yearend holiday period.

When making seasonal adjustments for world refined production and usage, December showed a production deficit of 57,000 t. The refined copper balance for the full-year 2013, including revisions to data previously presented (including a major revision to India’s refined usage series), indicates a production deficit of 193,000 t (a seasonally adjusted deficit of 337,000 t). This compares with a production deficit of 266,000 t (a seasonally adjusted deficit of 419,000 t) in the same period of 2012.

In 2013 world apparent usage is estimated to have increased by 4% (805,000 t) to 21.2 Mt compared with that in 2012. Chinese apparent demand increased by 7% from that in 2012: a decline in net imports of refined copper of 216,000 t (that occurred mainly in the first half of the year) was more than offset by an increase in refined production of around 675,000 t. Actual demand in China in 2013 may have exceeded apparent demand as the lower net imports level was accompanied by a decline in unreported inventories held in bonded warehouses in China.

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Excerpt From: Boardroom Games: You’re Fired! – Mining and Country Risk – by Peter Crossgrove

To order a copy of From Boardroom Games: You’re Fired, click here: http://amzn.to/1pA7i7q or here: http://bit.ly/OYexer

For a three part BNN interview with Peter Crossgrove, click here:

http://watch.bnn.ca/#clip1071973

http://watch.bnn.ca/#clip1071974

http://watch.bnn.ca/#clip1071978

Sudbury-born Peter A. Crossgrove and another partner invested in Interior Door, a private company that became Masonite, a public company sold to KKR for $3.2 billion in 2004. Peter’s mining and boardroom experiences are indelibly etched real-life scenarios—humorous and thought provoking. Having served on close to seventy mining, corporate, and not-for-profit boards, armed with a sense of humour, dignity, dogged determination, and humility, Peter has challenged boardroom antics and relationship intricacies with the skill-sets and values he was raised with.

Excerpt from “Boardroom Games: You’re Fired!” – Mining and Country Risk

Investing in Canadian Mines

There is very little country risk in investing in mines in Canada. I am co-Chairman of Detour Gold, which is in pre-commissioning at the moment. Detour is being built on time, will open on time, and is on budget. It will be Canada’s largest gold mine. Every senior employee from the CEO down is an ex-Barrick employee. The mine is located north of Cochrane and south of James Bay—not an easy environment. Since they have 720 square kilometers of land that the mine sits on, I am sure the output and mine life will grow. This is the same mine that I was on the board of when it was a small fly-in-fly-out underground mine, and that was about thirty years ago. This is the same mine they wanted to close when I was running Placer Dome. I insisted they send in exploration geologists and they found more ore. About ten years later they did shut it down.

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PRESS RELEASE: Osisko Mining Corporation-Yamana Gold Inc. Announce Partnership

 April 2, 2014, 9:30 a.m. EDT

Superior Value for Shareholders Caisse de depot et placement du Quebec and Canada Pension Plan Investment Board to Invest $550 Million

MONTREAL, QUEBEC, Apr 02, 2014 (Marketwired via COMTEX) — Osisko Mining Corporation (“Osisko”) CA:OSK +4.80% (frankfurt:EWX) and Yamana Gold Inc. (“Yamana”) CA:YRI +1.24% AUY +1.48% are pleased to announce they have entered into an agreement (“the Agreement”) pursuant to which Yamana will acquire a 50% interest in Osisko’s mining and exploration assets for C$441.5 million in cash and 95.7 million common shares of Yamana having an aggregate value of C$929.6 million (the “Yamana Consideration”). Upon implementation of the Agreement, each outstanding Common share of Osisko will be exchanged for (i) C$2.194 in cash, (ii) 0.2119 of a Yamana common share, and (iii) a new common share of Osisko.

The value of the interest in the Yamana share is C$2.06 (based on the closing price of the Yamana shares on the Toronto Stock Exchange as of April 1st, 2014), and the ascribed value of the new common share of Osisko is C$3.35(1), for an aggregate of cash and the implied share value equal to C$7.601 for each currently outstanding Common share of Osisko.

Under the Agreement, Yamana will become an equal partner in all of Osisko’s mining and exploration assets. Osisko will continue to operate the Canadian Malartic Mine and all other projects under the guidance of a joint operating committee, and will also maintain its head office in Montreal.

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Aboriginal talent pool central for Ring of Fire success – Noront – by Simon Rees (MiningWeekly.com – April 2, 2014)

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

TORONTO (miningweekly.com) – Engaging with the growing aboriginal talent pool is increasingly critical for those operating in Canada, Noront Resources VP for human resources Leanne Hall told members of the Canadian Institute of Mining’s Management and Economics Society on March 26.

“There are around 1 200 aboriginal communities in Canada currently located within 200 km of mineral properties. It’s estimated 60% of mining activity in Canada happens on aboriginal lands,” she said. “Aboriginal Canadians are the most accessible source of talent closest to our projects, so it makes sense to look to them for developing a workforce.”

Noront is developing its flagship Eagle’s Nest project in the Ring of Fire region, in northern Ontario, which it hopes to bring into commercial production in 2017. The project has just over 11.13-million tonnes proven and probable reserves grading 1.68% nickel, 0.87% copper, 0.89 g/t platinum and 3.09 g/t palladium.

Aboriginal people also represent one of the fastest-growing demographics in Canada. “Currently there are 652 000 aboriginal people in Canada of working age. By 2020, another 400 000 aboriginal youth will come on stream. So there will be a million aboriginal people available for work,” she said.

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Mining bosses doubt private equity investors can strike gold – by SILVIA ANTONIOLI AND DMITRY ZHDANNIKOV (Reuters U.K. – April 1, 2014)

http://uk.reuters.com/

LAUSANNE, Switzerland – (Reuters) – Private equity firms, which have been showing an increased interest in investing in the mining industry, will have a hard time even if they are betting on recovery in the longer term, the bosses of Anglo American (AAL.L) and Glencore Xstrata (GLEN.L) said on Tuesday.

Private equity firms such as Warburg Pincus have hired executives from the mining industry to start investing in the sector and some top industry veterans such as Vale’s (VALE5.SA) former chief executive Roger Agnelli and Mick Davies, head of Xstrata before its takeover by Glencore, have also lined up funding for new ventures.

X2, the investment vehicle run by Davies for example, said on Monday it now has $3.75 billion (2.25 billion pounds) backing his plans to create a new medium-sized diversified mining company.

But the chief executives of the two biggest diversified miners said choppy commodity markets and unpredictable returns will make it hard for the highly geared private equity firms to pay interest on their debt.

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Commodities Defy Citigroup ‘Death Bells’ With Quarter’s Best (3) – by Elizabeth Campbell (Bloomberg Business Week – April 01, 2014)

http://www.businessweek.com/

A year after Citigroup Inc. declared the decade-long run of commodity gains over, wacky weather, dead piglets and Vladimir Putin have gotten in the way.

While Citigroup rang “death bells” in April 2013 for the synchronized super cycle fueled by economic growth in China, extreme weather and supply squeezes led to surprise rallies in 2014’s first three months. Coffee hit a two-year high, cattle and hogs rose to records and nickel had its best quarter since 2010. Gold rebounded from the worst rout in 32 years after Putin’s incursion into Ukraine’s Crimea region set off the biggest standoff between Russia and the U.S. since the Cold War.

Commodities are “still a powerful hedge,” Rob Haworth, a Seattle-based senior investment strategist at U.S. Bank Wealth Management, which oversees $115 billion, said in a telephone interview. “Things happen that we don’t anticipate, whether it’s an invasion in Ukraine or twice as much snow in the middle of America as we normally get. Our clients benefit from having a little exposure to protect against the unanticipated.”

Commodities topped returns for stocks, bonds and currencies, the first quarterly outperformance against all asset classes since 2012. New York-based Citigroup and Goldman Sachs Group Inc. say the rally won’t last as supply surpluses start to emerge in everything from sugar to zinc.

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The Most Dangerous Coal Mine In The World: Mongolia’s Illegal Nalaikh Pits – by Jacopo Dettoni (International Business Times – April 01 2014)

http://www.ibtimes.com/

ULAANBATAAR, Mongolia — Deep inside the earth, the eyes of blackened miners shimmer under spotlights as they hammer endlessly upon rock, tapping the vein of Mongolia’s largest illegal coal mine. The Nalaikh mine, 40 kilometers (25 miles) from the capital, Ulaanbaatar, is both a vision from the past and a rogue operation from the present.

Coal dust streaks the miners’ cheeks, their hands, their worn clothes. In many cases, whether they know it or not, their lungs are being ruined by coal and nicotine. They risk their lives every time they go into the pits.

Frequently, theirs is a losing bet. The miners here are part of a booming complex of illegal mining in Mongolia, the seamy underside of an expansion of legal mining in the past several years. Fatal accidents take place at a higher rate here than in the infamously deadly China mines, as private operators seek to maximize profits by skimping on safety gear.

The miners crawl in the darkness for hundreds of meters through narrow, rambling passages before reaching the working face, where the new coal is cut. Dug with shovels and picks, the tunnels have few timber supports — a minimum safety standard in any coal mine, and the walls crumble as carts loaded with coal slide up, pulled from the outside by trucks.

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The Monumental Copper Disconnect – by Christopher Pollon (TheTyee.ca – March 28, 2014)

http://thetyee.ca/

Click here for the entire series about copper: http://thetyee.ca/News/2014/03/24/Travels-with-Copper/

Billions to mine, refine and assemble into products that last maybe a year or so? Last in a series.

LANGLEY, B.C. — Not long ago this industrial park was farmland: now it’s home to a virtual mine harvesting metal, plastic and glass from all the electronics British Columbians throw away.

For anyone who has ever disposed of a cell phone, hair dryer or appliance at a B.C. drop-off box, this is where some of it goes: a graveyard of sorts, where “end-of-life” products take the first step toward life anew. In any given month, a million pounds of “e-waste” comes through this plant alone.

Cindy Coutts is the President of Sims Canada, a subsidiary of the biggest urban “mining” company on earth. Walking through the Walmart-sized plant (which will double to 60,000 square feet this year), she grabs a printed circuit board the size of a coffee table book and holds it up. Gold and copper gleam against a green backing.

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Welcome to Peak Copper – by Christopher Pollon (TheTyee.ca – March 28, 2014)

http://thetyee.ca/

Click here for the entire series about copper: http://thetyee.ca/News/2014/03/24/Travels-with-Copper/

It’s not far off. So, why aren’t there more operations like this one in BC’s north? Fifth in a series.

FORT ST. JOHN, B.C. — The stretch of Highway 97 in the northeastern B.C. Interior between Dawson Creek and Fort St. John is an odd place for a two-kilometre traffic jam — until you consider that this roadway straddles a resource boom.

Gregg Drury is idling his pick-up on a July morning amid logging trucks, oil field suppliers and RVs, trying to get to the metal salvage yard he operates for ABC Recycling near Fort St. John. He’s doing a huge business these days buying all the metal discarded from old farms, local residents, and more than anything else, the oil patch.

“They’re generating incredible amounts of waste up here,” he says. “From pipelines, I get all that steel, but when they tear a plant down for instance, there’s lots of aluminum, stainless steel, and excess copper and wire.”

The metal salvage yard buys thousands of pounds of copper each day. It’s a tiny part of the business by volume, but huge in dollar value. Steel fetches about eight cents a pound, aluminum about 40 cents; copper, anywhere from $2 to 2.40.

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Cell Phones, Brought to You by BC Copper via China – by Christopher Pollon (TheTyee.ca – March 27, 2014)

http://thetyee.ca/

Click here for the entire series about copper: http://thetyee.ca/News/2014/03/24/Travels-with-Copper/

Home to Apple’s Foxconn plant, Kunshan is China’s Silicon Valley. But for how long? Fourth in a series.

KUNSHAN, CHINA — The kid standing outside the barbed wire fence at Unimicron’s electronics factory near Shanghai is feeling anxious. “Is the work hard?” he asks a middle-aged man, a private recruiter who brought the youth here.

The man tells him to relax. “It’ll be easy. Don’t worry.” It’s a Wednesday morning in September, and I’m standing with a crowd of recent high-school grads gathered to submit resumes at Unimicron, one of the world’s biggest electronics manufacturing companies, and a destination for copper mined 9,000 kilometres away near Princeton, B.C.

These kids are gathered here hoping to land an entry level factory job. High-school grads with no formal training are being offered up to CDN$680 (4000 Renminbi) per month to start, with medical insurance, room and board included (no tattoos allowed, see the translated job ad they are responding to here.)It’s a package that would have been unthinkably rich even five years ago, when Shanghai was booming as a low-cost workshop to the world, drawing millions of migrant labourers from across rural China.

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Where Copper Meets Fire – by Christopher Pollon (TheTyee.ca – March 26, 2014)

http://thetyee.ca/

Click here for the entire series about copper: http://thetyee.ca/News/2014/03/24/Travels-with-Copper/

Naoshima Island in Japan is a surreal melting pot of BC metal and fine art. Third in a series.

From the deck of a private ferry racing across the Seto inland sea, Naoshima Island appears as a tower of yellow rock on the horizon, tipped in a lush emerald. As we approach, blue-uniformed figures appear, darting in tiny vehicles around an imposing industrial complex bearing the red insignia of Mitsubishi, one of the world’s most powerful corporate conglomerates.

If this were a James Bond movie, Naoshima would be the island lair of an arch-villain. Instead it’s home to one of Japan’s oldest operating copper smelters, in almost continuous use since 1917. It’s also the first destination for the raw copper produced at the Copper Mountain mine near Princeton, and much of the rest of the copper mined today in British Columbia.

I came expecting Mordor, only to find the world’s oddest fine art display, with a 230-metre smokestack rising from the northern tip. In a surreal twist that is uniquely Japanese, Naoshima is also a world famous art gallery “park,” covering most of the island’s 17 square-kilometres. It’s home to three major art galleries featuring works by Pollock, Warhol and Monet.

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Betting at the Copper Casino – by Christopher Pollon (TheTyee.ca – March 25, 2014)

http://thetyee.ca/

Click here for the entire series about copper: http://thetyee.ca/News/2014/03/24/Travels-with-Copper/

That would be Vancouver’s mining district, where BC’s future is low-grade and high-risk. Second in a series.

VANCOUVER, B.C. — British Columbia copper ends up in smartphones, in the cars we drive, in our plumbing and electrical systems, as well as in our scrap yards and landfills. But to understand how it gets there, you need to visit a nondescript office tower on Pender Street in Vancouver’s financial district. Or perhaps more aptly put, Vancouver’s mining district.

If mining capital were mineral ore, Vancouver would be the mother lode of all mother lodes. More publicly-traded mining companies are headquartered here (and in Toronto) than anywhere else on earth: 60 per cent of all mining corporations on the planet are found in Canada. Their collective market value in 2012 approached half a trillion dollars: an estimated $449 billion. (See sidebar.)

Many in the mining industry view this global cluster as proof that we are the unrivalled masters of mining on the planet. This has some basis, but the reality is a lot more complex.

“The single largest reason for the concentration of head offices here,” says Alan Young, former executive director of the watchdog group Environmental Mining Council of B.C., “is that stock exchanges like the TSX Venture Exchange or TSX [Toronto Stock Exchange] have been developed to promote venture capital that mid-level and small exploration companies require to exist.”

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REVIEW: Bre-X – Dead Man’s Story – by Marilyn Scales (Canadian Mining Journal – April 1, 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.

You don’t have to be an industry insider to remember the story of Bre-X – the 200 million oz of gold in the jungles of Borneo that disappeared overnight. The story of the company’s rollercoaster ride – propelled by enormous greed – made headlines all over the world and severely damaging the reputation of Canada’s stock exchanges and mining community.

The facts should be familiar. A junior explorer sets out in a remote part of Indonesia to make a gold mine. They drilled, and released promising results. Investors invested, driving up the Bre-X stock price, and the company suddenly had no shortage of investors. More drilling was done, and even better results were released. The analysts loved the project. Bre-X management made higher and higher contained gold estimates – 20 million, 30 million, 100 million, and finally 200 million oz of gold just waiting to make everyone rich.

Of course, promises of huge riches attracts huge appetites. Bigger companies considered buying out Bre-X and gaining control of the Busang gold. The head of the Indonesian government, Suharto, wanted the pot of gold enough to usurp Bre-X’s claim to the property and asked an American miner to develop the project.

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Glencore Xstrata blocking progress at Donkin coal mine – by Roger Taylor (Halifax Chronicle Herald – March 31, 2014)

http://thechronicleherald.ca/

In hindsight it may have been a mistake for the Nova Scotia government to allow mining giant Xstrata plc to win control of the mothballed Donkin coal mine.

It seemed like a good idea at the time to have a company of the stature of Xstrata, with the know-how and financial backing to get the job done, to take over management of the underground mine.

But now, after several years of waiting, the market for coal has changed and so has the makeup of Xstrata, which was acquired by a major competitor, Glencore, in 2012. It didn’t take long for the new company, Glencore Xstrata plc, to realize the Donkin mine was too small for a corporation of its scale and that the return on investment couldn’t possibly meet its expectations.

So Glencore Xstrata announced it would instead sell its 75 per cent stake. But until a buyer could be found it would lay off the few workers looking after the site and would allow the mine to flood.

Although Glencore considers the Cape Breton project small, its 25 per cent minority partner in the Donkin mine, Morien Resources Corp. of Dartmouth, believes the development of the mine is still a winning proposition.

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The Resurrection of Copper Mountain – by Christopher Pollon (TheTyee.ca – March 24 2014)

http://thetyee.ca/

Click here for the entire series about copper: http://thetyee.ca/News/2014/03/24/Travels-with-Copper/

PRINCETON B.C. — The “cradle” of this copper story lies here, about 300 kilometres east of Vancouver near Princeton, B.C., a boom-and-bust mining and logging town that by the late 20th century seemed used up and ready to die.

Between 1927 and 1996, some US$6-billion worth of copper had been dug from the mountains south of town, extracted by at least five corporations, now all long gone. What was left, most traditional assays concluded, wasn’t worth the cost of pulling out of the ground.

But by 2011, change was on the horizon, driven by both new technologies and distant market forces 9,000 km to the east (see sidebar). Under new management, Copper Mountain again began producing raw copper for export, putting 380 people to work full time, and supporting about 1,500 other jobs indirectly.

“I’ve died and gone to mining heaven,” Princeton town councillor Frank Armitage gushed at the mine’s official re-opening. A 40-year veteran of the industry, Armitage is now both Princeton’s mayor and Copper Mountain’s human resources manager.

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