Republic of Mining

Ukraine crisis threatens upheaval of global commodities trading – by Barry Fitzgerald and Sue Neales (The Australian – March 8, 2014)

March 7, 2014

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

The heavy geopolitical overtones to the flash point on the Crimean peninsula in Ukraine has global commodity markets working overtime on the consequences the crisis could serve up to global energy, minerals and agriculture trade flows.

The initial assessment of the escalating tension by commodity markets was that most (price) concern would be shown in oil and gas markets because of Russia’s dominant supply position to Europe, and Ukraine’s strategically important status as a major thoroughfare for the delivery of that energy.

But the resultant spike in prices did not last, with the prospect of a gas revenue-dependent Russia turning off the gas – or its gas being turned back under some yet to eventuate embargo by western Europe, considered a remote possibility. The threat of disruption nevertheless remains in what Deutsche Bank’s commodities desk described as a “new event risk for commodity markets”.

Europe relies on Russia for 30 per cent of its gas supply, of which 50 per cent has to make its way across Ukraine. The reliance is down from the 80 per cent level before the recent start-up of a new pipeline beneath the Baltic Sea, but remains sufficiently high for the potential for a loss of supply to be a cause of major concern in western Europe, most notably Germany.

Norilsk Nickel Turns its Attention to the Environment and Tier 1 Assets – by Vladislav Vorotnikov (Engineering and Mining Journal – February 2014)

March 7, 2014

http://www.e-mj.com/

Something happened on the road to the Voronezh project; environmental activists backed by Putin convinced Russian nickel miners to clean up their act

MMC Norilsk Nickel, the largest mining company in Russia and one of the world’s largest nonferrous base-metal miners, faces very serious pressure from the community and Russian environmental protection organizations. They claim that the company’s activity harms the health of surrounding citizens and nature. These pressures combined with weaker prices for metals are raising future performance standards for the company.

In terms of total world production, Norilsk Nickel mines palladium (41%), nickel (17%), platinum (11%), cobalt (10%, concentrate) and copper (2%). Domestically, the company accounts for all of the platinum production, most of the nickel (96%), cobalt (95%) and a majority of the copper (55%). As an industrial leader, it plays a crucial role in the Russian economy, accounting for about 4.3% of all Russian exports, 1.9% of GDP, 2.8% of total industrial output and 27.9% of output of the non-ferrous metallurgy industry.

Recently Norilsk Nickel updated its development strategy, which, as confirmed by top management, dramatically changes its course for the coming years. The primary focus of development in accordance with the new plan will be on large assets, possibly including Voronezh, the last large non-developed nickel deposit in Europe.

PDAC 2014: Neighbours demand share of mining cash – by Ashley Renders (National Post – March 6, 2014)

March 7, 2014

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

People living in communities near valuable mineral deposits often complain that they don’t receive enough of the economic benefits associated with them. But as the call for greater transparency in the mining sector gains momentum worldwide, they are increasingly holding their own governments responsible, rather than just the mining companies.

They say if miners want to operate in more stable investment environments, they need to encourage host governments to play by the rules and engage with local community members.

The Canadian mining industry seems to agree. Earlier this year, the Prospectors and Developers Association of Canada (PDAC) and the Mining Association of Canada (MAC) teamed up with transparency organizations to ask the provincial securities commissions to make it mandatory for companies listed on Canadian stock exchanges to disclose how much they pay governments.

Natural Resources Minister Joe Oliver told the PDAC convention on Monday that the federal government wants to work with the provincial and territorial securities commissions to implement mandatory reporting standards on a project-by-project basis. If the securities commissions don’t implement these standards, the federal government will put its own legislation in place by April 1, 2015.

Ontario serves up miner with Statement of Defence – by Ian Ross (Northern Ontario Business – March 6, 2014)

March 7, 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.

The Ontario government says it’s not liable for any damages incurred by a Sudbury-based junior miner after a dispute between the company and a First Nation forced it to abandon exploration work in northwestern Ontario.

The province submitted its Statement of Defence with the Ontario Superior Court of Justice on Jan. 21 in response to a $110-million lawsuit filed against the Crown last October by Northern Superior Resources (NSR).

The company accuses the government of failing in its legal duty to consult with the Sachigo Lake First Nation after a series of disagreements with the band caused the company to suspend exploration on a promising gold property in late 2011.

In an 18-page document outlining its position, the government said the company’s claims for compensation are “exaggerated, excessive, remote” and should be dismissed. The government contends Northern Superior’s decision to stop exploration was their decision and the Crown is not responsible for any demands made on the company by Sachigo, or the company’s decision to reject them.

Mining Minnesota’s Canoe Country – by Greg Breining (Audubon Magazine – March-April 2014)

March 7, 2014

http://www.audubonmagazine.org/

A project could poison one of North America’s most important watersheds for years.

A mining company has set its sights on northern Minnesota’s fabled canoe country.

If PolyMet gets its way, the first open-pit copper-nickel mine in the region will begin operations later this year, raising fears that the mine will leak acid and toxic metals into wetlands and waterways that feed into Lake Superior.

PolyMet’s NorthMet mine would sit along the Mesabi Range in Superior National Forest, about a mile south of an existing taconite mine. The company would dig up nearly 1,000 acres of spruce-dominated wetlands to depths of 700 feet, stockpiling waste rock nearby. It would haul ore to a nearby refurbished taconite plant for processing, and jettison tailings in an existing taconite basin. Over 20 years it plans to excavate some 533 million tons of waste rock and ore. The project, PolyMet says, would create up to 500 jobs during peak construction and 360 during operations.

Miners have dug sprawling open pits in Minnesota for more than a century. But unlike most mined ore, the region’s copper-nickel is locked in a sulfide- containing matrix. Once exposed to oxygen and water, sulfides oxidize to produce sulfuric acid and release metals in soluble forms, including mercury, copper, iron, and nickel. Acidic and metallic drainage from the mine pit, waste-rock stockpiles, and tailings basin could continue to leach into ground and surface water long after the mine is closed.

First Nation businesses tap into potash opportunities – by Kim Smith (Global Regina – March 5, 2014)

March 7, 2014

http://globalnews.ca/regina/

REGINA – The plan was to create opportunities for First Nations in employment, business and community development – but according to BHP Billiton Potash, its success is less about recruitment and more about building relationships.

Last year, the company signed an agreement with three Saskatchewan First Nations – Kawacatoose, Day Star and Muskowekwan – to create employment opportunities.

“You have to be part of the community needs and work with them in addressing those needs,” said BHP Billiton Potash’s Alex Archila following a luncheon organized by the Canadian Council for Aboriginal Business.

“If you look at a business opportunity to just make money, we don’t believe that will be sustainable.”

UPDATE 2-Hedge fund names Cliffs directors, launches proxy battle – by Reuters India (March 7, 2014)

March 7, 2014

http://in.reuters.com/

(Reuters) – Activist investor Casablanca Capital LP on Thursday nominated six directors for election to the board of Cliffs Natural Resources Inc, setting in motion a proxy battle for the iron ore producer that it wants split into two companies.

The New York-based hedge fund said the director slate, named ahead of Cliffs’s annual meeting in May, includes Casablanca Chief Executive Officer Douglas Taylor as well as Lourenco Goncalves, former CEO of Metals USA.

Casablanca, which owns about 5.2 percent of Cliffs, first targeted the Cleveland-based company in January. It wants Cliffs, which was the second-worst performing stock in the S&P 500 Index last year, to spin off its “riskier” international operations from its cash-generating U.S. assets.

Last month, the fund named Goncalves as its preferred candidate for Cliffs’s CEO and said it would nominate a majority slate to the company’s 11-member board.

New Cliffs CEO visits Iron Range, predicts stable times for taconite – by John Myers (Duluth News Tribune – March 6, 2014)

March 7, 2014

http://www.duluthnewstribune.com/

VIRGINIA — In his first 100 days on the job, Gary Halverson closed Canada’s third largest iron ore mine, halted a chromite mining project in Ontario and worked to fend off a Wall Street demand that his company split up.

Other than that, it was mostly uneventful for the new president and chief executive officer of Cliffs Natural Resources.

Halverson spent Thursday on the Iron Range, where his company operates three of Minnesota’s six major taconite iron ore operations, saying his company is “shrinking to grow’’ but predicting a good year for its part of the state’s taconite industry.

Halverson, speaking to Iron Range business and community leaders, said he expects U.S. automakers to build 16.5 million vehicles in 2014, 1 million more than 2013; that new construction should increase 6 to 8 percent this year; and that U.S. steel demand should increase 4 percent this year over last, creating a good market for his company’s taconite iron ore.

“We’re about back to full production at NorthShore (mining) and we expect to produce between 22 and 23 million tons of pellets this year’’ at U.S. operations, Halverson said, noting that’s up from 21 million tons in 2013.

Greenland building closer US relations, prime minister says – by Philip Stephens (Financial Times – March 6, 2014)

March 7, 2014

http://www.ft.com/home/us

Greenland is building closer ties with the US as the international scramble for mineral and energy resources in the Arctic turns the region into an area of great strategic importance, according to its prime minister.

Aleqa Hammond told the Financial Times that the opening in January of a representative office in Washington was part of her strategy to deepen Greenland’s relations with the US.

Ms Hammond, who last year became Greenland’s first female prime minister, said she was committed to building on the Nuuk government’s direct ties with Washington.

The “pivot” towards the US forms part of wider geostrategic manoeuvring in the Arctic region as melting ice sheets reveal large deposits of oil, gas and minerals.

By US estimates, the Arctic may hold 13 per cent of the world’s undiscovered oil and 30 per cent of its untapped gas as well as untold mineral resources including iron ore, zinc and gold.

B.C. Government Support for New Prosperity Mine Sends Confusing Message To First Nations – by Adam Olsen (Huffington Post – March 7, 2014)

March 7, 2014

http://www.huffingtonpost.ca/

Adam Olsen is the interim leader of the BC Green Party.

The Canadian government has rejected the New Prosperity Gold & Copper Mine southwest of Williams Lake, B.C. for the second time. Federal Conservative Environment Minister Leona Aglukkaq announced that she, like her predecessor Jim Prentice, had turned down the mine proposal concluding the “project is likely to cause significant adverse environmental effects that cannot be mitigated.”

No doubt the announcement caused a collective sigh of relief from the Tsilhqot’in and Secwepemc Nations who have spent more than two decades opposing the project. The Federal Review Panel’s final report to the government last October found New Prosperity would “adversely affect” the local First Nations way of life and that the impact would be “significant” and “could not be mitigated.”

Despite the fact that the Tsilhqot’in and Secwepemc are opposed to the New Prosperity mine, the B.C. Liberal government continues to support the project. This is both profoundly troubling and inconsistent with their commitments to First Nations.

In the last few weeks alone there has been no shortage of B.C. Liberal rhetoric about the importance of building relationships and partnerships with First Nations that are founded on respect:

Line 9 pipeline approval comes with conditions for Enbridge, harsh words to activists – by Claudia Cattaneo (National Post – March 6, 2014)

March 7, 2014

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

The National Energy Board handed a conditional approval to a proposal to reverse the flow and expand Enbridge’s controversial Line 9 so it can move western oil to refineries in Ontario and Quebec, and doled out harsh words to activists who disrupted its hearings.

In a 141-page ruling released Thursday, the board said the decision “enables Enbridge to react to market forces and provide benefits to Canadians, while at the same time implementing the project in a safe and environmentally sensitive manner.”

The federal regulator said the 30 conditions imposed on Enbridge would enhance the pipeline’s integrity and environmental protection, improve emergency response and require continued consultation. The regulator turned down a request by Enbridge to exempt it from a final check to ensure all conditions are met.

The approval is final. It involves a 639-kilometre stretch between North Westover, Ont., and Montreal, Que., as well as an increase of the pipeline’s capacity to 300,000 from 240,000 barrels per day. Enbridge also won permission to move heavy oil. The NEB had already approved the reversal of the western portion of Line 9, a 194-kilometre segment linking Sarnia to North Westover.

Jim O’Neill interview: Making a MINT in the new BRICs (Grant Thornton – March 6, 2014)

March 7, 2014

http://www.grant-thornton.co.uk/

Ed Nusbaum, Global CEO at Grant Thornton International, talks to leading economist Jim O’Neill, about where the world’s next economic powerhouses will be.

When economist Jim O’Neill coined the term ‘BRIC’ in 2001 to group together the fast-growing economies of Brazil, Russia, India and China he couldn’t have known that the insight would prove so powerful. In our exclusive interview, he reviews how the BRICs are performing, presents a new acronym and reveals who he thinks will win the economic race to export growth: Germany or the UK.

From a business investment point of view, which markets excite you most over the next decade?

The markets which excite me from an investment perspective depend – and vary –according to the price and actual growth compared to expectations. So today, for example, even though Chinese growth is slowing, its markets have fallen so much that the implied price of the equity market compared to earnings is quite low. At current prices at the time of writing, most BRIC markets are quite cheap, both relative to the rest of the emerging world and the developed world. So for me, China, Brazil and Russia look interesting.

Ring of Fire: Matawa chiefs want to be in centre of talks – by Carol Mulligan (Sudbury Star – March 6, 2014)

March 7, 2014

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

Many Ontarians are frustrated with the slow pace of development in the Ring of Fire, but the Matawa Chiefs Council represented by former Ontario premier Bob Rae feels that way for a different reason.

The chiefs, who represent nine first nations located near the chromite deposits, want greater recognition of the need for human and social development on reserves in remote communities and the need to get moving on that, said Rae.

They’re frustrated the Ontario and federal governments are suddenly interested in their region “not because of the appalling social conditions on reserves,” said Rae, “but because of the possibilities of major mining development.”

His clients are telling him, “if you’re going to discuss mining development, you’re going to discuss our development,” Rae said Thursday afternoon, before he was to deliver a talk that evening at Laurentian University for the Goring Family Lecture Series.

Rae was to speak on the topic Mining and First Nations: Sustainability is the Only Option. Earlier in the day, Rae met with aboriginal and other community leaders to discuss related issues.

PDAC delegates optimistic despite mining downturn (CBC News Sudbury – March 06, 2014)

March 7, 2014

http://www.cbc.ca/sudbury/

Junior mining companies are feeling the brunt of a tough stretch on the metal and mineral markets — and of stalled development in the Ring of Fire.

That’s according to Garry Clark, the executive director of the Ontario Prospectors Association. Clark just attended the annual Prospectors and Developers Association Convention this week in Toronto.

He said investors are shying away from putting money into junior companies. “They’re struggling greatly. I think part of that is trying to raise money,” he said.

“It’s hard to find the money we need to do the exploration or even just to keep the junior companies alive. You see that in the fact that there’s lots of mergers and acquisitions and … partnering of junior companies.”

Clark said this is the worst down-turn in the industry he’s ever seen, however this year’s PDAC event was more uplifting than the one before. The industry lull means surviving junior companies will face less competition for investment dollars.

Crossroad Policy: The Canadian mining industry in 2014 – video – by James Munson (iPolitics – March 1, 2014)

March 7, 2014

http://www.ipolitics.ca/

The mining world finds itself at the intersection of multiple often contentious strands of federal government policy. It’s where the economic development, aboriginal communities, environmental protection and foreign assistance cross paths in sometimes conflicting ways.

This crossroads landscape comes into especially sharp focus at the annual Mecca of Canada’s extractive sector — the Prospectors and Developers Association of Canada’s conference in Toronto, where stories from the front lines of one of the most fascinating industries can be heard.

To kick off our week-long coverage PDAC 2014, iPolitics.ca set out to explore some of the key issues facing miners today by bringing them to three experts in the sector.

From left to right as you see them in the thumbnails below, Guy Freedman is the founding partner and president of the First Peoples Group and a former employee with a mining company himself. He provides advice to companies and governments alike on how to work with aboriginal communities.