Republic of Mining

Andrew ‘Twiggy’ Forrest takes billion-dollar hit as iron ore tumbles – by James Thomson (Sydney Morning Herald – March 10, 2014)

March 10, 2014

http://www.smh.com.au/

Andrew ‘Twiggy’ Forrest knows better than most how movements in commodity prices can cause havoc with your bank balance. With iron ore prices falling to its lowest in close to a year, shares in Fortescue Metals Group tumbled 8.38 per cent to $4.98 in initial trade on Monday morning, wiping around $500 million off the value of Forrest’s stake.

Since February 21, when FMG’s shares broke through $6 for the first time since early 2012, the stock has dropped by almost 15 per cent, broadly in line with the fall in the iron ore price. That drop has wiped around $1.3 billion off the value of Forrest’s stake in a matter of 11 trading days. His stake is now worth $5.1 billion.

Calculating the impact of the iron ore price movement on other iron ore moguls such as Gina Rinehart and Angela Bennett isn’t as transparent, although given they both rely on royalties paid by Rio Tinto – which mines tenements owned by their fathers, Lang Hancock and Peter Wright – the share price of that company can be seen as a very rough proxy.

In morning trade, Rio shares dipped 4.23 per cent to $62.19. Since February 21, Rio’s stock is down 11.4 per cent. BHP Billiton shares lost 3.15 per cent this morning, to $36.53. The stock is down 6.7 per cent since February 21.

Expert Mining Panel Discusses Possibility Of Reaching ‘Peak Discovery’ – by Alex Létourneau (Kitco News – March 10, 2014)

March 10, 2014

http://www.kitco.com/

(Kitco News) – During the 82nd Prospectors and Developers Association of Canada convention in Toronto last week, Exploration Insights founder Brent Cook rounded up some mining heavyweights to look into the possibility of having reached peak discovery in the mining industry.

Kitco News’ informal panel included Catherine McLeod-Seltzer, chairman of Bear Creek, Alex Davidson, director with Yamana Gold, Miles Thompson, CEO of Lara Exploration.

While the guests covered a range of topics linked to where the mining industry is at, and where it could be heading, the idea that the mining industry will be a low-grade driven sector moving forward triggered a discussion.

“There’s always a change going on in the mining industry,” Davidson said. “We get smarter about where we explore, we can look from further away, we can look in different countries, our risk tolerance is a gazillion times more than it was 20 or 30 years ago.

“So I think we are going to find more deposits, they may be deeper which would require higher grade, or we’ll refine the mining methods to get cheaper mining methods, but I think there’s as much potential, in certain areas, as there ever has been.”

Glencore Xstrata mining merger produces $2.4bn in synergies – by Jana Marais (Business Day Live – March 9, 2014)

March 10, 2014

http://www.bdlive.co.za/

GLENCORE Xstrata has done an “excellent” job in finding synergies through the mining giants’ $29bn merger in May 2013, the combined group’s first set of annual results shows.

Releasing the results this week, CEO Ivan Glasenberg said the group had increased the synergy benefits of the merger from the original estimate of $2bn a year by 2014 to $2.4bn, and there was scope for further cost savings.

Despite a $7.5bn write-down on the value of Glencore Xstrata assets since the takeover on May 2 last year, the merger was a good decision and the additional realised cost savings show Glencore has done an excellent job, said Hanré Rossouw, head of commodities for frontier and emerging markets at Investec Asset Management.

“Because it was an all-share deal, the impairment is really an accounting issue related to the share price movements since the date the transaction was finalised and the allocation of fair value to Xstrata assets. It is not a cash-flow item,” Mr Rossouw said.

BHP workers brace for uncertainty – by Neale Prior (The West Australian – March 10, 2014)

March 10, 2014

http://au.news.yahoo.com/thewest/

Nickel West workers are bracing for a year of uncertainty as mining giant BHP Billiton embarks on a formal campaign to sell the underperforming mining and processing wing.

After slashing the book value of the operation by $US1.6 billion, BHP is believed to have appointed international investment bank Goldman Sachs to find a buyer.

The Goldman Sachs appointment leaked over the weekend via The Australian Financial Review after speculation building out of London last week that BHP was offloading its WA poor relation.

The nickel arm has been starved of capital and sits outside BHP’s favoured areas of iron ore, coal, petroleum and copper.

The sale push puts the jobs of up to 2000 employees and contractors in play and fans fears that BHP could close all or part of the division if it cannot reach acceptable sales terms.

Allana Potash opening Ethiopian mine in the hottest place on earth – by Stephanie Findlay (Canadian Business Magazine – March 6, 2014)

March 10, 2014

http://www.canadianbusiness.com/

Keeping costs low is key amid potash price slump

Lately, things haven’t been looking good for potash producers. Last summer, Uralkali, one of the biggest producers of the potassium fertilizer, killed its partnership with competitor Belaruskali in favour of boosting output, fuelling oversupply fears among investors and driving down prices. The situation has hardly improved since then. On Jan. 30, fourth-quarter profits at Potash Corp. of Saskatchewan, another large producer, dropped 46%, a result, said the company, of the “challenging pricing environment.”

Allana Potash Corp., the Canadian developer of a $718-million potash mine in Ethiopia, believes it can buck the trend. While other mines are shelving development projects because of the lower prices, Allana is going “full speed ahead” with its Ethiopian project, says Richard Kelertas, vice-president of corporate development at Allana.

The company’s secret? Kelertas says that the mine, set to begin producing in late 2015, will have easy access to the booming Chinese and Indian markets, and much lower production costs, making it profitable despite the price slump.

Allana’s mine is located in the remote Danakhil depression, a scorching-hot salt plain where temperatures often soar above 45°C, and where potash is close to the surface. Allana will do solution mining—cheaper than the open-pit or shaft mining done by its competitors.

RPT-UPDATE 1-Panel says Guinea should strip BSGR, Vale of rights to iron deposit – by Silvia Antonioli, David Rohde and Saliou Samb (Reuters India – March 10, 2014)

March 10, 2014

http://in.reuters.com/

LONDON/CONAKRY, March 7 (Reuters) – A technical committee in Guinea has recommended the government strip BSG Resources (BSGR) and its partner Vale of the rights to exploit a giant iron ore deposit because the panel alleges BSGR obtained the concession through corruption, sources close to the matter said.

The latest development in a saga surrounding one of the world’s largest mining deposits casts uncertainty over the future of the sought-after Simandou, a mine that could help one of Africa’s poorest countries to prosper.

It also raises concerns over the position of Brazilian miner Vale, which, according to a source close to the company, has spent more than $1 billion in its Guinean venture and risks seeing its investment and efforts wiped away.

BSGR vigorously denied the allegations of wrongdoing and said it believes the committee’s procedure is part of a predetermined and orchestrated plan to expropriate the company’s mining rights.

MTO in midst of pan-Northern transportation strategy – by Ian Ross (Northern Ontario Business – March 10, 2014)

March 10, 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.

A provincial plan to access the Ring of Fire may be lacking, but for almost three years the Ministry of Transportation (MTO) has been quietly working on a major pan-northern planning exercise to support future regional economic development.

Known as the Northern Ontario Multimodal Transportation Strategy, the multi-year study is directly tied into the Liberal government’s implementation of the Northern Growth Plan.

“It’s definitely a first for the MTO in Northern Ontario,” said Tija Dirks, the ministry’s director of transportation planning, of the comprehensive process which began in 2011. “The scope of the issues that we’re looking at is much broader. We’re truly looking at the transportation system and not just the highway network.”

The MTO hired consultants to interview more than 100 people from the mining, forestry, manufacturing, agriculture and tourism sectors, together with input from First Nation, Métis and municipal leadership.

Amur Will Use Zeppelins to Ship Ore From Remote Siberia Mine – by Firat Kayakiran (Bloomberg News – March 10, 2014)

March 10, 2014

http://www.bloomberg.com/

Amur Minerals Corp. (AMC), a copper and nickel explorer in Russia’s Far East, plans to fly equipment to its Siberian operation by zeppelin to bypass snow-clogged roads.

Amur will use two airships from Worldwide Aeros Corp. to carry loads of as much as 250 metric tons, the company said today in a statement after signing a memorandum of understanding with the U.S. manufacturer. The aircraft will also be used to transport production from the mine.

Zeppelin manufacturers need mining contracts to revive their business, 77 years after the U.S. Hindenburg airship crash ended most buyer interest for decades. With better designs and a buoyant gas that can’t ignite, makers such as Aeros and Hybrid Air Vehicles Ltd. are hammering out their first sales deals with the mining industry to complement truck and rail transport.

The airships can be used on rough terrain because they take off and land vertically. For Amur, their use will reduce the estimated $140 million expense of building a 320-kilometer (200-mile) road to the nearest rail station, as well as “substantially” cutting freight costs, it said.

NEWS RELEASE: Metals in the modern world – silver

March 10, 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.

The Ontario Mining Association’s info-graphic “Mining Builds a Better World,” which is available on the website www.oma.on.ca, illustrates how various minerals mined in Ontario contribute to a better world in technology, agriculture, the environment and health. With a little help from the Washington D.C.-based Silver Institute, we would like to show how some recent advances in applications of this metal indeed make our lives better.

Checking in at number 47 on the periodic table of elements sandwiched between palladium and cadmium, silver has many unique characteristics, which do support the OMA info-graphic claim. “Mining’s value is not limited solely to the resources it extracts from the ground. Did you know that minerals and metals are essential, irreplaceable components of modern technology? Mining makes countless products we use everyday possible and it is integral to the next generation technologies that will make our world greener, safer, healthier and more connected.”

How about the glass on the touchscreens of your smartphones and tablet devices? One company is now adding silver ions to this type of glass. The silver ions inhibit the growth of mold, mildew, algae and bacteria. They provide a built-in antimicrobial property. Sounds like safety and health gains.

JSE still a world-class market, investment paradigm shift needed – by Henry Lazenby (MiningWeekly.com – March 7, 2014)

March 10, 2014

http://www.miningweekly.com/page/north-america

TORONTO (miningweekly.com) – The Johannesburg Stock Exchange (JSE) is still by any measure a world-class stock exchange, and should be the mining mecca of the mining industry, Sasfin Capital head of corporate finance Noah Greenhill said this week.

Speaking to Mining Weekly Online in his capacity as official JSE representative during the Prospectors and Developers Association of Canada’s recent convention, Greenhill pointed to several of the exchange’s strengths, such as well established regulations, excellent clearing and settlement systems, and plenty of available capital in South Africa – once a mining investment powerhouse.

The latest World Economic Forum ‘Global Competiveness Report’ ranked South Africa first out of 148 countries for regulation of securities exchanges for the fourth consecutive year. This, together with several other elements of the report, pointed to the country’s exchange as a sound environment in which to invest.

“It’s a no-brainer. It is not that there is no capital for investment, there is rather a lack of the propensity to take investment risk,” he said.

Global bourses challenge TSX’s junior mining supremacy – by Rachelle Younglai (Globe and Mail – March 10, 2014)

March 10, 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.

South Africa, Australia and London are trying to convince more mining companies to list on their exchanges, an effort that poses a threat to Canada’s dominance with junior miners.

Hundreds of explorers and small miners have flocked to the Toronto Stock Exchange and the Toronto Stock Exchange Venture because they are friendly to the industry and an easy place to raise capital. But the landscape is shifting as Canada’s competitors make a bigger effort to attract mining companies.

“For a long time there was a perception that if you listed in North America, you would attract a higher multiple. But that’s not the case anymore,” said Eddie Grieve, senior manager of the Australian Securities Exchange’s listings business development.

Mr. Grieve describes the rivalry between the Canadian and Australian exchanges as friendly, as the two countries have similar resource-based economies and histories of mining.

The Australian exchange started targeting Africa about five years ago and it has paid off.

Commentary – Do Ontarians really want the Ring of Fire? – by Wendy Parker (In Support of Mining.com – March 8, 2014)

March 10, 2014

http://insupportofmining.wordpress.com/

Recent news reports tell us that people are becoming frustrated with the glacial pace of development of Ontario’s Ring of Fire mineral zone. Do tell.

Truth be known, sensible folk became frustrated with Ring of Fire drama some time ago. Many packed up their attention — and their investment dollars — several moons ago. Momentum has stalled. Activity has slowed. The “Wild West” show has moved on.

In fact, the Ring of Fire has become a wet blanket. Instead of generating excitement about Ontario’s mineral potential, it whispers of our many shortcomings. It insinuates that we may be “all hat, no cattle” when it comes to undertaking big-time developments.

Of course, all is not lost. There is talk of some progress on two critical fronts — First Nations participation in the development and infrastructure priorities. A breakthrough on either could rekindle enthusiasm.

But time is running short. We are often reminded that the Ring’s minerals won’t rot in the ground. That’s true. But they may not remain “ores” worth mining. And the opportunity to exploit them will wax and wane over time. As the Mackenzie Valley pipeline taught us, the “waxing” can be short-lived; the “waning” can span generations.

Canadian miner’s quest for gold meets politics in the Amazon jungle – by Stephanie Nolen (Globe and Mail – March 8, 2014)

March 10, 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.

RESECA, BRAZIL — Brazil, Mark Eaton likes to say, will be the place where he builds something – where he has an impact, where he leaves a legacy. Standing on the grassy riverbank in the Amazon basin where he hopes to build Brazil’s largest gold mine, he foresees a brilliant future.

The Brazilian present, however, is somewhat less appealing.

Mr. Eaton is red-faced and sweating in the damp midday heat. He struggles to make himself heard over the pounding music at his staff Christmas party, then frowns dubiously at the heavily salted grilled meat heaped on a plate in front of him. He cannot follow the Portuguese conversation bubbling around him. When a huge rain-forest wasp stings his hand, his jovial façade crumbles for a moment. He emits half an expletive before managing to restore the tight smile to his face.

A few days before the Christmas party, Mr. Eaton’s company, Belo Sun Mining Corp., obtained an environmental licence to work here, two hours by boat down the Xingu River from the city of Altamira. Obtaining that licence, after a bureaucratic process that dragged on over three years, gave Mr. Eaton and his colleagues something to celebrate.

Tesla battery plant will need 6 new flake graphite mines – by Simon Moores and Andy Miller (Industrial Minerals – March 7, 2014)

May 13, 2016March 10, 2014

http://www.indmin.com/

$5bn ‘gigafactory’ to spark EV uptake; battery graphite demand could double in 6 years with no growth elsewhere

US automotive giant, Tesla, has revealed plans to build a new $5bn lithium-ion battery (Li-ion battery) ‘gigafactory’ which could potentially increase natural graphite demand by up to 37% by 2020.

The factory, which is forecast to start production by 2017, is expecting to have an output of 35 gWh/year by as early as 2020, which would over double the size of the current market. Its important to stress that the plant is in the planning stage and capacities depend strongly on market demand, but Tesla believes it can be the market leader by producing low cost batteries in the USA.

In IM Data’s calculations, Tesla’s plant – which is set to be based in the south-west USA – will consume at least 28,000 tonnes of spherical graphite every year if operating at capacity. This equates to 93,000 tonnes of flake graphite if produced to today’s standards which sees raw material wastage of up to 70%.

If achieved, battery demand for natural graphite will increase 112% from today’s levels of 83,000 tpa. This is assuming no other growth in regions such as Asia which is today’s primary consuming region.

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.