Republic of Mining

Why miners aren’t panicking about the latest commodity drop – Peter Koven (National Post – March 13, 2014)

March 13, 2014

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

While steep declines in copper, iron ore and coking coal prices have spooked investors, they are not severe enough to disrupt the mining sector at this stage.

The vast majority of projects can generate decent margins at these price levels, according to experts. Though in the case of coal, there has been enough of a drop to make high-cost producers nervous.

Prices for all three commodities have been under pressure throughout 2014, but they plummeted over the last several days due to economic concerns out of China. Manufacturing activity has been weaker than expected, and a bond default by a solar company raised fears of tighter credit conditions. That hit the copper market in particular, as many Chinese companies use the red metal as collateral to raise money.

Chinese steel mills are also being threatened as the government tightens environmental standards. That is putting pressure on coal and iron ore.

Copper has sunk to near a four-year-low, falling below the psychological barrier of US$3.00 a pound.

Alan Coutts, President and CEO, Noront Resources (Global Business Report – March 12, 2014)

March 13, 2014

http://gbroundup.com/

What has changed for Noront Resources since Cliffs Natural Resources’ 20th of November announcement that it will suspend its Black Thor chromite project in the Ring of Fire?

AC: From Noront Resources’ perspective, not much has changed since Cliffs Natural Resources’ announcement. Our Eagle’s Nest project is fundamentally different from what Cliffs had envisaged for their open-pit, bulk-transportation model Black Thor Project: Noront is focusing on a high-grade nickel-copper-platinum group underground mine – from a logistics point of view, this means small volumes of high-grade concentrate.

Consequently, our project economics and infrastructure needs are completely different than those of Cliffs. Furthermore, during our permitting process, we developed our environmental assessment not only for the mine site itself, but also for our transportation corridor and we continue to believe that an East-West route is more appropriate for our needs at this time.

Obviously, having an industry participant leave the region is never a positive development but we are hoping that there is a silver lining to that and this event will underline the need for more timely-decision making regarding key issues such as environmental permitting and infrastructure. These questions cannot remain unresolved forever and we hope that Cliffs’ decision is going to galvanize the process and hopefully bring the federal government to the table as well.

SA platinum sector is dead, long live the new platinum sector – by Geoff Candy (Mineweb.com – March 13, 2014)

March 13, 2014

http://www.mineweb.com/

The future of South Africa’s platinum sector lies not in the deep-vein, shanty-town-lined mines of old but rather in the newer, shallower, more community-aware mines.

GRONINGEN (MINEWEB) – What was clear from the presentations and conversations in Toronto during this year’s Prospectors and Developers Association of Canada conference is that the long-term future of South Africa’s platinum sector lies not in the deep-vein, shanty-town-lined mines of old but rather in the newer, shallower mines that afford more opportunities to local communities and for mechanisation.

From a cost point of view, this, at least on paper, was obvious in a slide shown by Mike Jones, CEO of Platinum Group Metals, during his presentation.

As South Africa’s Minister of Mineral Resources, Susan Shabangu pointed out to Mineweb last week, “If you look at the new mines in SA, they are completely different from your traditional mines, especially the old gold mines in the West Rand of Johannesburg and the platinum mines in Rustenburg.

Engineer mines industry experience for first book – by Morgan Ian Adams (Enterprise-Bulletin – March 13, 2014)

March 13, 2014

http://www.theenterprisebulletin.com/

COLLINGWOOD — Engineer Tom McCavour has tapped into a lifetime of experiences in the mining industry to craft his first book. McCavour launched his book, Bloody Diamonds, in the third floor community room of the municipal building at Ste. Marie and Simcoe in November.

Bloody Diamonds follows the stories of Sarah and and Sam from childhood through to adulthood, and their experiences with the diamond mining industry in Africa and Canada’s north.

Sam escapes the civil war in Sierra Leone and is employed as a geologist by a South African diamond mining company, while Sarah is an Inuit and an environmentalist; while they meet as adversaries in the Northwest Territories, the two fall in love.

McCavour is a retired engineer whose career took him to Canada’s northern territories and to Africa. His work up north led to the development of the Diavik diamond mine in the North Slave Region of the Northwest Territories.

The mining aspect of his book “came naturally,” said McCavour, 83. “But it took a lot of (work) to make it chronologically and geographically correct.”

BHP upbeat on iron ore growth – by Mitchell Neems (Business Spectator – March 11, 2014)

March 12, 2014

http://www.businessspectator.com.au/

As the fall in the iron ore price continues to send shockwaves through global markets, mining giant BHP Billiton says its focus on productivity is starting to deliver value to its iron ore business and it expects demand for steel to grow over the next decade.

Speaking at the AJM Global Iron Ore and Steel Forecast conference in Perth, BHP’s iron ore president Jimmy Wilson said the group remains confident global demand for iron ore will continue to grow, though likely at a more moderate rate, driven by urbanisation and industrialisation.

“Our market outlook is for continued strong steel demand growth over the next 10 years,” he said. “Our view that Chinese crude steel production is expected to peak at 1.1 billion tonnes, around 2025, is unchanged.” Recent world iron ore growth had been driven by Australian production, he said.

Mr Wilson added that demand over the next 10 years would be maintained as 1.2 billion people globally moved to urban areas, including 240 million people in China.

In Ukraine’s coal-fired industrial east, some see a better past, and future, as part of Russia – by John-Thor Bahlburg (Associated Press/Montreal Gazette – March 12, 2014)

March 12, 2014

http://www.montrealgazette.com/index.html

LUHANSK, Ukraine – Lidia Gany had some tea and bread, all she can afford these days for most meals, put on her duffel coat with the fake purple fur collar, and came down to the main square of this down-at-the-heels industrial city at Ukraine’s eastern edge to join fellow ethnic Russians in urging Moscow to send troops across the border and protect them.

“Only Russia can save us,” said the 74-year-old pensioner, crossing herself.

Since Russian troops rolled into Crimea, and lawmakers there scheduled a referendum for Sunday on whether to join Russia, the world’s attention has focused on the fate of the lush peninsula that juts into the Black Sea. But here in Ukraine’s coal-fired industrial east, where huge numbers of Russians have lived for more than two centuries, a potent mix of economic depression, ethnic solidarity and nostalgia for the certainties of the Soviet past have many demanding the right to become part of Russia as well.

“I’m for living in one country, with no borders, like we used to. Like the fingers on one hand,” said 60-year-old Lyudmila Zhuravlyova, who signed a petition asking for Russian President Vladimir Putin’s military invention to stop “political persecution and physical annihilation of the Russian-speaking and Orthodox population.”

Vale Stares At $1 Billion Investment Loss If Guinea Panel Recommendation Implemented (Forbes Magazine – March 12, 2014)

March 12, 2014

http://www.forbes.com/

Vale might find $1 billion in investments at the Simandou iron ore deposit wiped out if the Guinean government accepts and implements the recommendations of a technical committee. This committee had been set up to review mining concessions awarded under previous administrations.

It has recommended that Vale and its partner BSGR should be stripped of the rights to exploit Simandou because BSGR obtained the concession allegedly through corruption. The committee wants the tendering process for the northern part of Simandou to be conducted again. The committee will submit its recommendations to a strategic committee which will take a final decision.

If the recommendations are accepted, Vale’s investments worth $1 billion will have to be written off. It is not clear whether the company will be compensated for the amount it has already paid to BSGR for acquiring a 51% stake in northern Simandou in the first place. A re-tendering process will also witness Vale’s competitors like Rio Tinto and BHP Billiton competing for the deposit.

However, a more immediate concern would be the possibility of international arbitration because BSGR has threatened to take this route if stripped of its ownership. This would mean a lengthy and protracted legal battle which will simply delay progress with mining the disputed deposit.

Canada’s mining industry supports new free trade agreement with S Korea – by Henry Lazenby (MiningWeekly.com – March 11, 2014)

March 12, 2014

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

TORONTO (miningweekly.com) – The Mining Association of Canada (MAC) on Tuesday voiced support for Canadian Prime Minister Stephen Harper’s announcement that Canada and the Republic of Korea had concluded negotiations for a bilateral free trade agreement that would significantly boost trade and investment ties between the two countries.

The free trade agreement, Canada’s first with an Asian market, was expected to create thousands of new jobs in Canada and provide Canadian businesses and workers with a gateway to Asia, enhancing their global competitiveness. It would also level the playing field for Canadian companies competing with South Korea’s other trading partners, including the US and the European Union, which already have free trade agreements with Korea.

“Our government recognises the importance of opening new markets for Canadian goods, services and investment, which is why we launched the most ambitious trade agenda in Canadian history. The Canada-Korea free trade agreement will create jobs and open the door to the lucrative Asia-Pacific market for Canadian businesses.

“The Canada-Korea free trade agreement not only reflects the input of all sectors of the economy, provinces and territories, it will deliver significant benefits for Canadians from coast to coast to coast,” Harper said.

Geopolitical tensions a reminder for the West to seek greater rare earths independence from China – by Alessandro Bruno (Investor Intel.com – March 11, 2014)

March 12, 2014

http://investorintel.com/

There are two geopolitical disputes that could have significant effects on the prices of strategic commodities. The first is in Crimea, involving Russia, the Ukraine and NATO; the second is in the Sea of Japan (also known as East China Sea) and it involves China, Japan and not so indirectly the United States. A mathematician might reduce the two issues to one geopolitical equation: Russia and China vs. the West (that is the USA, the European Union and Japan). The Crimean crisis will likely cause grain and other agricultural prices to increase, which will in turn strengthen mineral fertilizer prices.

The Sino-Japanese crisis over control of the Senkaku/Diaoyu islands, which intensified in 2012, when Japan decided to formally annex the territory, meanwhile has grown deeper and will inevitably affect Japan’s access to much needed rare earth products from China. China’s minister of foreign affairs stated, last week, that “there is no room for compromise” with Japan over the Islands.

He added that China would maintain a decisive stance in matter of territorial integrity and sovereignty and that it would defend “every inch of the territory that belongs to us”. China is also at odds with other Asian neighbors, triggered by spats over territorial control in the South China Sea. In the latter case, the triggers are both natural resources in the disputed sea areas and the control of important waterways.

Rising Chrome-Ore Demand Pressures Zimbabwe to Lift Export Ban – by Felix Njini (Bloomberg News – March 11, 2014)

March 12, 2014

http://www.businessweek.com/

Zimbabwe is facing “huge” external demand for chrome ore, renewing pressure on the government to relax a law that bans exports of the unprocessed material, Mines Minister Walter Chidakwa said.

There has been a “lot of pressure on us to lift the ban,” Chidakwa said by phone yesterday from the capital, Harare. “Everybody is looking for raw chrome on the market, the pressure on us is huge.”

Zimbabwe started an embargo on exports of chrome ore in April 2011 to try force companies to process the metal locally. The ban resulted in some producers, such as Harare-based Zimbabwe Alloys Chrome Ltd., shutting down mining operations completely because of the country’s inadequate smelting capacity. Ferrochrome, produces in smelters using chrome ore, is used to make stainless steel.

The nation has the world’s biggest platinum and chrome deposits after South Africa and has reserves of diamonds, gold, coal, nickel and iron ore. Companies that operate in the country include Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and Aquarius Platinum Ltd. Mining is the country’s biggest source of foreign exchange, with platinum group metals and gold leading tobacco as the nation’s biggest exports.

NEWS RELEASE: What is your number one event in Ontario mining history?

March 12, 2014

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

It may not match David Letterman’s late night television talk show top 10 lists on the humour scale but Stan Sudol’s top 10 list of events in Ontario mining history are thought provoking and worthy of discussion. The Sudbury-born/Toronto-based communications consultant and editor of the blog Republic of Mining has done the industry a service by creating his own top 10 list on the subject.

While the ranking of Mr. Sudol’s compendium is likely destined to be the subject of perpetual debate, we suspect fewer could argue with the specific events themselves. Narrowing the topics down to 10 was no easy task with more than 150 years of Ontario mining history to analyze. As Mr. Sudol himself noted “the list encompasses traditional discoveries as well as certain events or the creation of institutions that have had long-lasting provincial or global impact.”

“Parts of Ontario’s mining history are brutal and tragic but it is also filled with stories of hope, courage and sacrifice, of enormous wealth creation and technical and social innovation. Ontario’s modern 21st century mining sector is the culmination of this amazing past that has helped forge a distinct regional culture in the province’s north and contributed enormously to the wealth of the entire province and country.”

Wabauskang to attack Ontario’s ability to delegate aspects of aboriginal consultation to industry at Supreme Court (Kenora Daily Miner and News – March 11, 2014)

March 12, 2014

http://www.kenoradailyminerandnews.com/

Wabauskang First Nation has decided to use its hearing with the Supreme Court of Canada to challenge the Province of Ontario’s ability to delegate the carrying out of aboriginal consultation to mining companies, rather than having the Ministry of Mining and Northern Development deal with First Nations themselves.

Wabauskang was granted a hearing at the Supreme Court in October to settle its long-standing fight with Rubicon Minerals over a proposed mining project inside the First Nation’s territory. With the hearing set for sometime during the week of April 14, Wabauskang, the provincial government and Rubicon have all submitted outlines of their arguments to the court for the justices to consider.

The aboriginal community will still be making the argument that the federal government’s approval is required before treaty land can be appropriated for development use, something the Crown is allowed to do according to Treaty 3. But the First Nations lawyers have also added another argument which says the provincial government went too far when it delegated the responsibility for conducting mandatory consultations with them, and so, the plan for the mine project which has been approved by Ontario is invalid.

Copper’s freefall is freaking out world markets – by Marc Jones (National Post/Reuters – March 12, 2014)

March 12, 2014

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

LONDON — A dizzying fall in copper to a near four-year low compounded increasing concern in China over its economic slowdown on Wednesday to send a wave of unease sweeping through world markets. World shares fell for fourth day, but it was copper, often seen as a proxy for China’s fortunes, that grabbed the headlines as Shanghai futures fell by their 5% daily limit again and benchmark prices of the metal slumped to their lowest since 2010.

In Europe, bourses from London to Lisbon tumbled in early deals and safe-haven German government bonds were in demand as the jitters compounded the geopolitical tug-of-war between Russia and Kiev and the West over Crimea.

“Markets are watching what is happening in copper, with awe and trepidation,” said Societe Generale head of currency strategy Kit Juckes. “It’s partly ongoing concern about Chinese growth (or lack thereof) and nagging worries about the Ukraine. And partly it is just that the commodity bubble burst last year and not everyone noticed.”

Copper’s plunge comes in the wake of China’s first domestic bond default which has sparked concerns about the potential unravelling of loan deals where the industrial metal has been used as collateral.

Indonesia’s next leader unlikely to ease tough mineral export rules – by Rieka Rahadiana and Randy Fabi (Reuters India – March 12, 2014)

March 12, 2014

http://in.reuters.com/

(Reuters) – Indonesia’s next president is unlikely to make major changes to the country’s controversial mining rules, after major political parties backed an export ban that has led miners to halt $6 billion in annual mineral exports.

The broad political support will disappoint miners, like Freeport-McMoRan Copper & Gold, Newmont Mining Corp , that may have been hoping the tough new rules were only temporary measures imposed by a lame duck administration.

Political parties representing presidential front runners for the July election told Reuters they support the current government’s moves to ban mineral exports and tax concentrate shipments, aimed at forcing miners to build smelters in Indonesia.

Freeport has cut copper output by 60 percent due to a prolonged dispute over the export tax imposed by President Susilo Bambang Yudhoyono, who is barred from running for a third term.

Opinion polls show Jakarta Governor Joko Widodo of the Indonesian Democratic Party-Struggle (PDI-P) as the most popular presidential pick.

The Borealis Initiative: Mining dialogue is democratic, not damaging – by Pierre Gratton and Alan Young (National Post – March 12, 2014)

March 12, 2014

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

Merely satisfying regulatory requirements won’t always meet the needs of future generations

With the world’s largest mining convention officially over in Toronto, we are reflecting on some differing views regarding the Canadian mining industry’s relationship with NGOs. What we have discovered is that there are some misconceptions that should be cleared up.

Peter Foster’s column (Mining in an ENGO hole, March 5) is one such example. It totally misconstrues how the Canadian mining industry and NGOs cooperate with each other on social and environmental issues. Instead of recognizing the important role of dialogue among different actors in earning and maintaining the privilege to operate, Foster characterizes NGOs as troublemakers that currently have the mining industry at the mercy of their whims by “breathing down industry’s necks.”

This misleading view paints the industry as purely reactionary to the actions of NGOs, which is far from the truth. A good many in both of our sectors recognize that real progress can be made by working constructively with people from different backgrounds and areas of expertise. For its part, the Canadian Boreal Initiative has embraced this approach in its work to protect and sustainably develop Canada’s boreal forest.