Republic of Mining

Nickel Enters Bull Market as Supply Concerns Mount After Crimea – by Maria Kolesnikova (Bloomberg News – March 18, 2014)

March 19, 2014

http://www.businessweek.com/

Nickel entered a bull market on speculation Russian supplies will be disrupted at a time when some shipments are already banned in Indonesia.

Last year’s worst performer among industrial metals trading on the London Metal Exchange is this year’s best, gaining 16 percent and on track for the first annual gain since 2010. Prices fell 24 percent in 2011 after touching $29,425 a metric ton in February that year, the highest since April 2008. Indonesia, the biggest producer of mined nickel, banned ore exports in January.

The U.S. and the European Union slapped sanctions on Russia after a disputed vote in Crimea paved the way for President Vladimir Putin to annex the region from Ukraine. Russia’s OAO GMK Norilsk Nickel is the world’s biggest producer of the metal used to make stainless steel. The price reached a record $51,800 in May 2007.

“Nickel has enjoyed the support from expectations that a potential supply deficit is building,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “Nickel suffered some of the biggest losses since the peak in 2011, and on that basis, many funds may view the upside potential as quite significant.”

Nickel prices affected in wake of Ukraine-Russia crisis – by (CBC News Sudbury – March 18, 2014)

March 19, 2014

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

A recent upswing in nickel prices is being attributed to Russian President Vladimir Putin’s policies towards Ukraine — and the threat of international sanctions against the Putin regime could have big ramifications for the commodity.

Monday’s sanctions by Canada and the United States were mostly aimed at individuals, but some observers suspect Russia’s nickel exporters, and other industries, will be next on the list.

Sudbury representatives for nickel mining companies like Vale declined a request for comment, but analyst Donald Rumball, a Toronto-based analyst who studies the Sudbury mining market, said the price fluctuation probably won’t last.

“Well, the problem with sanctions is very porous,” he said. “If Russia was stopped from selling nickel, what would stop it from selling to China and Indonesia and Vietnam and who else.”

Chilcotin Crossroads – by Bill Gallagher (First Perspective – March 19, 2014)

March 19, 2014

http://www.firstperspective.ca/

Bill Gallagher is a lawyer, strategist and published author of Resource Rulers: Fortune and Folly on Canada’s Road to Resources

B.C.’s road to resources traverses the Chilcotin, a vast central region that has now seen more political and project fallout than perhaps anywhere else in Canada. At its heart lies picture-perfect Fish Lake, the site of Taseko Mines (twice proposed / twice denied) gold-copper open pit mine project. It was just in the business news for all the wrong reasons: “Harper rips Taseko’s B.C. mine proposal: environmental report ‘damning’ Harper says” (Financial Post headline Mar 4 2014).

Four years ago, that proposed mine was ground-zero where the political careers of former B.C. premier Gordon Campbell and former federal environment minister Jim Prentice collided as they tried to navigate this treacherous intersection of aboriginal rights, determined miners, eco-activists and panel reviews. Campbell had wanted this project – but Prentice denied it – as a direct result both walked away from politics in the immediate aftermath. That happened in late 2010, after Prentice turned ‘thumbs-down’ on the (1st) Prosperity Mine because there was a ‘scathing’ joint panel review. Premier Campbell resigned 24 hours later; then Prentice did likewise.

It was strident native opposition to the proposed mine that was ‘the elephant in the room’ – then and now – more so than rampant eco-activism.

$3B potash mine possible for Sedley – by Bruce Johnstone (Regina Leader-Post – March 19, 2014)

March 19, 2014

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

Rio Tinto partners with North Atlantic

A brief mention of a joint venture project with North Atlantic Potash Inc. in Rio Tinto’s 2013 annual report has the potash industry buzzing about a large find of potash near Sedley, about 30 kilometres southeast of Regina.

As it turns out, Saskatoon-based North Atlantic internally announced the discovery of 329 million tonnes of potash on its website in December, but never released the information to the public, according to a North Atlantic employee.

In the annual report, Rio reported that the Sedley area discovery contained “encouraging potash grade and thickness,’ according to an article earlier this week in The Australian, the country’s largest national newspaper.

The joint venture between Rio Tinto Potash Management, a subsidiary of Rio Tinto, one of the largest mining companies in the world, and North Atlantic Potash, a subsidiary of JCS Acron, one of Russia’s largest mining companies, was formed in 2011.

Ring of Fire will depend on business case, not government: FedNor – by Jonathan Migneault (Sudbury Northern Life – March 18, 2014)

March 19, 2014

http://www.northernlife.ca/

FedNor playing quiet role setting building blocks for development

Future development of the Ring of Fire will depend more on the business case for companies to develop the rich mineral deposit, than the role government has to play in the region, said Aime Dimatteo, director general of FedNor.

Dimatteo addressed the Greater Sudbury Chamber of Commerce Tuesday, and echoed Bob Rae, now the chief negotiator for the Matawa First Nations in the Ring of Fire, regarding the government’s role in the region.

“It is a business decision,” Dimatteo said. “Bob Rae is very right, in that at the end of the day the businesses will make the decisions on whether they’re going to go forward with these projects.”

But in late 2013, Cliffs Natural Resources halted its $3.3-billion Ring of Fire development due to a number of hurdles including delays in the environmental assessment process and negotiations with the province of Ontario.

How Europe is turning to North America to wean itself off Russian energy exports – by Yadullah Hussain (National Post – March 19, 2014)

March 19, 2014

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

As Russia moved at lightning speed to annex Ukraine’s Crimea region, a hapless Europe continued to move at an oil tankers’ pace to wean itself off Moscow’s formidable energy resources.

A handful of EU nations, however, are waking up to the energy abundance of their NATO allies in North America. Ambassadors from Czech Republic, Hungary, Slovakia and Poland sent a letter to U.S. House Speaker John Boehner this month to help expedite approval for liquefied natural gas export licences to their countries, and help reduce their dependence on Russia.

Joe Oliver, Canada’s Minister of Natural Resources, said he has not received a similar request from the countries, but noted that Canada can be part of the solution by exporting energy products to the European Union.

“Europe’s strategic need to diversify its sources of energy points to Canada and complements our strategic imperative to diversify our markets,” the minister said in a statement sent to the Financial Post.

B.C.’s LNG tax could bomb – by Jack M. Mintz (National Post – March 18, 2014)

March 19, 2014

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

What purpose does the LNG tax have besides being a revenue-grab?

The BC proposal for a new tax on proposed Liquefied Natural Gas plants certainly galvanized negative reaction from some producers. Project proponents like Shell and Chevron expressed concerns over its economic feasibility (Imperial Oil, of which I am director, said less). On the other hand, the B.C. government claims that the projects will be tax competitive with the U.S. and Australia, resulting in large employment gains to the province.

The BC government also forecasts that the projects will yield substantial new provincial revenues – the new LNG tax as well as corporate, personal, and sales tax revenues ranging from $4-billion to $11-billion annually (2012 prices) depending on prices and capacity. So lots at stake for the BC economy in terms of jobs and revenues.

Yet, I think the new LNG tax proposed by BC raises critical issues that go beyond questions of competitiveness and revenues. The new LNG tax could create a policy precedent that could lead to poor tax policy in the coming years in Canada and not necessarily in the interests of British Columbia itself.

Jeb Handwerger: China Isn’t Slowing Down, It’s Buying Up (Resources, that Is) – Interview by Tom Armistead (The Energy Report – March 18, 2014)

March 19, 2014

http://www.theaureport.com/

Headlines about a Chinese economic slowdown may get good web traffic, but the real story is that China is buying up uranium and other resources around the world, says Gold Stock Trades writer Jeb Handwerger. Meanwhile, tensions in Russia highlight the massive country’s resource dominance in natural gas, oil, uranium, platinum group metals, rare earths and nickel. Handwerger tells The Mining Report that North America is already acting to develop resources that can meet both domestic and international demand—and this global geopolitical uncertainty is an investment opportunity.

The Mining Report: Jeb, how will the companies you follow be affected by the crisis in the Ukraine and the growing tensions in East Asia over China’s claims on islands held by Japan and the Philippines?

Jeb Handwerger: This is really all about natural resources and the ability to control the trade. There’s a whole list of 10 to 15 strategic minerals that come from China almost exclusively. Russia, on the other hand, has a major control on palladium, platinum group metals and nickel, as well some of the agricultural fertilizers, such as potash. Russia also has a critical supply of uranium; it produces about 3,000 tons of uranium, close to double United States production of uranium. Not only that, but Russia has strategic ties with Kazakhstan, which produces close to 20,000 tons of uranium—over 36% of global supply.

I’ve written for years that these metals and these materials are at risk of critical supply shortfall.

New tech to help gold miners tackle tough veins – by Geoff Candy (Mineweb.com – March 19, 2014)

March 19, 2014

http://www.mineweb.com/

As mines get deeper and costs and safety concerns ratchet upwards so, increasingly, gold and platinum miners are looking for new technological ideas to help solve their problems.

GRONINGEN (MINEWEB) – New technologies look set to provide some solace to deep level gold and platinum miners that continue to struggle with rapidly increasing costs, narrow veins and significant safety issues.

Speaking to Mineweb on the sidelines of this year’s the Prospectors and Developers Association of Canada Conference earlier this month, Jean-Yves Therien, VP Development at Rocmec Mining, said that right now is the “best time” for the company, because its patented thermal fragmentation process solves many of the problems currently being faced by the sector.

“This technology has the potential to have the same impact on the mining sector as shale gas fracking has had on the oil and gas sector,” he says. Adding, “We will be the Apple of the mining industry, I think one day everyone will be proud to have a Dragon [the name of the machine that actually does the thermal fragmentation] in their mine, it is just a matter of time and I think that right now is the best time for it.”

Australian Nickel Processor Eyes Indonesian Ore Piles – by James Regan (Jakarta Globe – March 18, 2014)

March 18, 2014

http://www.thejakartaglobe.com/

Perth. At a small plant on the outskirts of Perth, metallurgists have been turning raw ore shipped from top Indonesian nickel miner Aneka Tambang (Antam) into a concentrate to meet the country’s new export guidelines.

After a year of tests, Australia’s Direct Nickel says it has now entered into a joint venture with Antam for a feasibility study on building a full-scale plant on Indonesia’s Halmahera island using its new nitric acid-based technology.

The agreement comes as Antam struggles to meet Indonesia’s tough new export rules, which prevent the company from shipping raw mineral ore to Chinese nickel pig iron producers and instead demand it processes the ore before export.

“We could not have asked for a better time to start planning our first commercial plant in Indonesia,” said Direct Nickel Chief Executive Russell Debney. Antam has warned its nickel ore production could fall by as much as 87 percent this year as sales to China dry up due to the ban.

“What they want now is cheaper alternatives to enable them to apply to the government for concessions to keep exporting,” Debney said.

Mysterious Canadian’s life in the fast lane fuelled by penny stock scam: SEC – by Joe O’Connor (National Post – March 18, 2014)

March 18, 2014

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

The 700,000 emails were sent at about 2:30 p.m. EDT on Feb. 23, 2012. The senders were AwesomePennyStocks.com and PennyStocksUniverse.com, a pair of affiliated stock promotion websites that touted penny stocks to potential investors.

The must-buy on this day was America West Resources Inc., a small coal-mining outfit headquartered in Salt Lake City, Utah. Its shares typically traded for about 29 cents each. The company seldom attracted much investor interest.

But Feb. 23, 2012, was different, according to documents filed last week by the United States Securities and Exchange Commission in a federal court in Manhattan. The America West promo was an alleged scam. Its mastermind: John Babikian, a 26-year-old Montrealer with multiple passports and whose whereabouts, at present, are unknown.

Mr. Babikian, a scourge among regulators, revenue collectors, investors and securities watchdogs, was, among stock promoters, something of a celebrity, albeit a mysterious one.

The young stock pusher fled Canada in 2012 after being charged with tax evasion. He is believed to possess passports from Guatemala, Lebanon and Nevis and was last reported — by his wife’s divorce lawyer — to be in Monaco.

Short-term investment focus has to go, Franco-Nevada’s Harquail tells PDAC – by Alisha Hiyate (Mining Markets – March 3, 2014)

March 18, 2014

http://www.miningmarkets.ca/

David Harquail, president and CEO of gold royalty company Franco-Nevada (TSX:FNV; NYSE: FNV), first started coming to the Prospectors and Developers Association of Canada convention when he was a kid in the ’60s. His job was to transport rye and scotch from his dad’s car to the suite the exploration geologist had booked at the Royal York.

As potential investors examined the targets on the hand-coloured geological maps spread out over the bed in the smoky suite, Harquail remembers the tinkling of ice in their glasses.

He also remembers that before they left, quite a few of those investors would actually hand over a cheque to the elder Harquail, James, who had worked for mining legend Thayer Lindsley before going on to form a number of exploration syndicates.

“I think those investors, because they were getting a one-on-one with the fellow that was coming up with the project and executing on the project, they had a pretty clear view of what their odds of success were and what they were buying in terms of the prospect that summer,” Harquail told an audience at PDAC yesterday.

“That was a different era and none of those things that they were doing there you could probably do today.”

PUTIN’S POWER PLAY – by James Surowiecki (The New Yorker – March 24, 2014)

March 18, 2014

http://www.newyorker.com/

Vadimir Putin, in his campaign to restore Russian dominance over post-Soviet states, has an unconventional weapon in his arsenal: vast supplies of natural gas. In 2006 and 2009, Gazprom, the Russian gas company, cut off supplies to Ukraine (the second time, this created shortages in Europe, too). In 2010, it reduced supplies to Belarus, and last fall Russia threatened Moldovans with the same if they didn’t abandon plans to sign a free-trade accord with the European Union. “We hope that you will not freeze,” a Russian deputy foreign minister said ominously.

During the current crisis in Crimea, Putin’s readiness to use natural resources for strategic ends has made it difficult for Europeans to take a hard line against him, since Europe gets roughly thirty per cent of its gas from Russia, mostly via pipelines running through Ukraine. “One big difference between the U.S. and Europe on this issue is energy,” Jeffrey Mankoff, a Russia expert at the Center for Strategic and International Studies, told me. “The assumption that, because of the energy relationship, Europe was not going to risk a major confrontation over Ukraine was surely part of Russia’s calculations.”

You might take Putin’s brandishing of the gas weapon as a shrewd geopolitical move. But it’s a classic case of putting short-term interests ahead of long-term gain. Although the region’s need for Gazprom supplies may strengthen his hand in the present, the strategy is forcing Europe to end its reliance on Russia. After the crises of 2006 and 2009, Europe increased imports from Norway and Qatar.

INTERVIEW-Congo PM says economy to boom in 2014, reassures investors – by Peter Jones (Reuters India – March 18, 2014)

March 18, 2014

http://in.reuters.com/

KINSHASA, March 17 (Reuters) – A sharp increase in mining production will drive economic growth in Democratic Republic of Congo to around 9.5 percent this year, one of the highest rates in Africa, Prime Minister Augustin Matata Ponyo said in an interview.

Congo, a country the size of Western Europe in the heart of Africa, has rich reserves of gold, diamonds, copper, cassiterite and coltan but development of its resources has been hampered by poor infrastructure, corruption and decades of conflict.

Ponyo, a technocrat who took over as prime minister in April 2012, is credited with taming inflation, curbing government debt and boosting economic growth on the back of a mining bonanza. Congo’s roughly $20 billion economy grew by 8.5 percent last year, according to the IMF, as copper production hit a record 942,000 tonnes – making it the largest producer in Africa.

“Mining production is practically exploding and it’s forecast that in 2014 we’ll see much higher production than in 2013,” Ponyo told Reuters. “For 2014, we predict economic growth of around 9.5 percent … among the highest on the continent.”

His forecast topped the IMF’s estimate that Congo’s economy would grow by 8.7 percent this year. Despite robust growth in recent years, most of Congo’s 65 million people live in poverty.

World Bank scornful of Indonesia’s mineral ore ban – by Jonathan Thatcher (Reuters India – March 18, 2014)

March 18, 2014

http://in.reuters.com/

JAKARTA – (Reuters) – The World Bank delivered a blunt assessment of Indonesia ban on mineral ore exports on Tuesday, warning that it would hit trade and government revenue and risked undermining already weak investor sentiment towards Southeast Asia’s biggest economy.

Implemented in January, five years after the law was initially passed, the ban has been met with confusion in the mining sector.

It was introduced to encourage mineral processing in Indonesia in order to increase the value of exports. But, one group of mining companies has mounted a legal challenge, warning that the ban on exports will force them out of business.

“The long term gains are at best uncertain,” Jakarta-based World Bank economist Jim Brumby said, adding there were no success stories elsewhere in the world where countries had tried to impose similar bans.

Brumby was speaking at the launch of the Bank’s quarterly economic report. The World Bank estimated that for the period 2014-2017, the negative impact on net trade could be $12.5 billion because of the loss of export revenue while capital goods imports, to build smelting capacity, will have to rise.