Republic of Mining

The Trouble with Emerging Markets – by Nouriel Roubin (Project Syndicate.org – January 31, 2014)

February 3, 2014

Project Syndicate provides media outlets around the world with insightful commentaries by the world’s foremost economists, statesmen, and public intellectuals.

LAGOS – The financial turmoil that hit emerging-market economies last spring, following the US Federal Reserve’s “taper tantrum” over its quantitative-easing (QE) policy, has returned with a vengeance. This time, the trigger was a confluence of several events: a currency crisis in Argentina, where the authorities stopped intervening in the forex markets to prevent the loss of foreign reserves; weaker economic data from China; and persistent political uncertainty and unrest in Turkey, Ukraine, and Thailand.

This mini perfect storm in emerging markets was soon transmitted, via international investors’ risk aversion, to advanced economies’ stock markets. But the immediate trigger for these pressures should not be confused with their deeper causes: Many emerging markets are in real trouble.

The list includes India, Indonesia, Brazil, Turkey, and South Africa – dubbed the “Fragile Five,” because all have twin fiscal and current-account deficits, falling growth rates, above-target inflation, and political uncertainty from upcoming legislative and/or presidential elections this year.

On Moroccan Hill, Villagers Make Stand Against a Mine – by Aida Alamijan (New York Times – January 23, 2014)

February 3, 2014

http://www.nytimes.com/

IMIDER, Morocco — On a hilltop nearly 5,000 feet high in the Atlas Mountains here, a tiny outpost has taken shape over the past two years. The small stone buildings are decorated gaily with graffiti, and there is an open-air gallery. Many doors bear inspirational inscriptions from people like the Rev. Dr. Martin Luther King Jr. and Mother Teresa. On the dam of a nearby reservoir, someone has painted the face of a local activist, now in jail on what the locals regard as trumped-up charges.

It is an unlikely spot for a settlement, but it was established with a purpose: to protest a mining company’s expropriation of precious water supplies, as well as the pollution that results from the mining.

The inhabitants are drawn from the nearby municipality of Imider, 6,000 people scattered over seven villages and neighbor to the most productive silver mine in Africa. But while the area may be rich in silver, it is home to some of the poorest people in Morocco.

The people of Imider (pronounced ee-me-DER) say they have grown to resent the mine because they get nothing from it except pollutants. So two years ago, some of them climbed up the hill and cut the water supply to the mine. Since then, they have occupied the hill as they continue to fight the Imiter Mettalurgic Company and, by extension, the king of Morocco, its principal owner.

Barrick pulls off giant equity offering despite turbulent gold market – by Peter Koven (National Post – January 31, 2014)

January 31, 2014

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

The bankers behind Barrick Gold Corp.’s US$3-billion equity offering faced a tall order: sell the most shares ever issued in a Canadian bought deal; do it in a tough gold market; and do it for a company that was struggling to regain investor confidence after a series of writedowns and strategic blunders.

It was clear by last summer that Barrick, the world’s biggest gold producer, should do something about its over-levered balance sheet. Gold prices were down sharply from their highs in 2011, and analysts were warning the company could have liquidity problems if prices dropped below US$1,200 an ounce for a prolonged period.

Throughout this period, Barrick’s management was in touch with bankers from RBC Capital Markets on a potential plan to issue equity in order to retire debt. That Barrick turned to RBC was no surprise: the two firms have a longstanding relationship that dates back to the gold miner’s earliest days in the mid-1980s.

“They have done business with others. But if you look at who they have done business with over a long period of time, we’ve been privileged to have supported Barrick on a number of their milestone transactions,” said Jamie Anderson, deputy chairman of RBC Capital Markets.

New transparency recommendations to influence Canadian disclosure laws – by Simon Rees (MiningWeekly.com – January 30, 2014)

January 31, 2014

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

TORONTO (miningweekly.com) – One of the most searing indictments levelled against the mining industry is that it has consistently short-changed governments, particularly those in developing nations.

The industry’s failure to collectively address this accusation has caused lasting and deep damage to the public’s perception of mining; it has also allowed numerous governments – again, mainly in the developing world – to accrue earnings without having to declare them. At its worst, it has had the potential to facilitate corruption.

MAKING IT MANDATORY

In response, there is now a willingness among many in the Canadian mining sector to make transparent the payments made to governments at all levels.

The US already requires mandatory disclosure by mining companies of payments to government bodies under the Dodd-Frank Act, specifically Section 1504, while the European Union’s (EU’s) legislation in this regard is ongoing. The Extractive Industries Transparency Initiative has also helped point the way.

Kivalliq mine workforce worth its weight in gold – by Sarah Rogers (Nunatsiaq-online.ca – January 31, 2014)

January 31, 2014

http://www.nunatsiaqonline.ca/

Agnico Eagle training programs growing Inuit hires

OTTAWA — With its Meadowbank mine expected to produce nearly 400,000 ounces of gold this year, and its Meliadine project contemplated to go into production for the next two years, Agnico Eagle has a good reason to invest in Nunavut.

But the Canadian-based gold producer wants that investment to produce more than just gold — the mining company wants to create a local workforce. Of the 800 people employed at Meadowbank outside of Baker Lake, 31 per cent are Inuit.

And even then, those Nunavummiut employees, who hail from nearby Kivalliq communities, haven’t come easily. The more than 200 Inuit workers at Meadowbank have been coaxed with training and support progams — efforts that Agnico Eagle and regional partners continue to build on.

“We want to be in Nunavut for a long time,” said Krystel Mayrand, who works in human resources for Agnico Eagle.

[Ontario Miners] Not paying the rent – by David Robinson (Northern Ontario Business – January 29, 2014)

January 31, 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. Dave Robinson is an economist with the Institute for Northern Ontario Research and Development at Laurentian University. drobinson@laurentian.ca

One of the best things about teaching is that you actually learn more than your students do. I teach Natural Resource Economics at Laurentian University and I’ve learned a few strange things about Ontario’s mining policy.

I’d like to share a couple discoveries with my friend, Minister of Northern Development and Mines Michael Gravelle, and with his deputy minis ter, George Ross. In fact, I’d like to share the lessons with everyone in Northern Ontario.

The most shocking lesson came from one of Canada’s leading economists, Jack Mintz. Last year Mintz and Duanjie Chen, at the University of Calgary, looked at how Canadian provinces tax the mining industry. “Ontario’s system,” they concluded, “is redundant, expensive and wasteful.” “Redundant, expensive and wasteful” is pretty strong language coming from the most respected tax analyst in Canada, but there is more: Ontario has the second-lowest level of provincial taxes in the mining industry. BC basically pays companies to take its resources. Ontario seems just to give the resources away.

Barrick recognized for youth technical education in Papua New Guinea (Beyond Borders – January 30, 2014)

January 31, 2014

http://barrickbeyondborders.com/

A vocational training organization has recognized Barrick as a major supporter in the drive to expand on-the-job training opportunities in the remote highlands of Papua New Guinea.

The Laigam Appropriate Technology Centre (LATC) presented an award to Barrick at the school’s ninth graduation ceremony, held in late 2013. Barrick provides on-the-job training to LATC students at the Porgera mine through the company’s Operations Education Sponsorship program. Since 2007, the company has provided placements for a total of 71 students from the LATC, now one of the Porgera district’s most thriving vocational technical institutions.

The organization’s connection to Barrick dates back to 2004 when a former Porgera mine manager donated four second-hand computers to the LATC, whose inaugural class had just five students.

LATC principal Ronaldo Diaz commended Barrick and several other companies for providing on-the-job training for LATC students over the years. “An on-the-job training program is useless without the assistance of companies such as Barrick,” Diaz says.

MP John McKay resigned to ‘glorious death’ of mining transparency bill – by Trinh Theresa Do (CBC News Politics – January 31, 2014)

January 31, 2014

http://www.cbc.ca/news/politics

PM agreed to G8 initiative for mandatory reporting regime for extractive sector in mid-2013

Liberal MP John McKay will finally get his chance to stand in the House of Commons Friday to debate his private member’s bill calling for Canadian mining, oil and gas companies to be more financially transparent and disclose payments made to foreign governments.

Under the proposed act, firms would be required to submit annual transparency reports to the federal government or face the risk of fines. The legislation, also referred to as “the Sunshine Bill,” is intended to combat corruption and increase corporate accountability in the extractive sector. If this sounds vaguely familiar, it’s because it is.

Indonesia’s export ban to curb China aluminium expansion – by Melanie Burton (Reuters India – January 31, 2014)

January 31, 2014

http://in.reuters.com/

SYDNEY, Jan 31 (Reuters) – China has found an inadvertent ally in its efforts to slim down a bloated aluminium sector, with Indonesia’s ban on exporting metal ores set to boost costs of the raw material bauxite and pile more pressure on struggling smelters.

Beijing has been issuing broadbrush rules aimed at reining in overcapacity in sectors such as aluminium and steel for about a decade, but plans have usually been thwarted by resistance from local governments anxious to boost growth.

In the aluminium sector, ageing and inefficient smelters are already grappling with rising power prices, but now face potential bauxite shortages after Indonesia halted ore shipments on Jan. 12, as part of efforts to make miners process minerals at home.

China is the world’s biggest aluminium producer and curbing expansion could ease a global surplus of the metal and even lead to the country resuming sizeable imports of refined aluminium. It is also likely to provide support to the price of a metal that has been depressed for years.

“(Indonesia’s ban) will have a huge impact on the Chinese aluminium industry in the medium term,” said Citi China commodities analyst Ivan Szpakowski.

Getting the details behind copper-nickel mining in Minnesota – by Renee Richardson (Brainerd Dispatch – January 30, 2014)

January 31, 2014

http://brainerddispatch.com/

Is it a decision between jobs or the environment or is the technology there to protect both? Mining for copper and nickel offers to create jobs, but can it be done without causing environmental harm affecting generations of Minnesotans?

That was part of the discussion during a Rosenmeier Center forum at Central Lakes College (CLC) in Brainerd Wednesday night. The topic was copper-nickel mining in the state’s Arrowhead, centered on the proposed PolyMet mine on what is now public land in Superior National Forest. It’s an issue that has gripped attention across the state with voices in favor of the economic development and others worried about potentially toxic repercussions.

The proposal represents the first copper-nickel-platinum group elements mining in Minnesota. The precious metals go into such things as computers, cellphones and cars.

Kathryn Hoffman, staff attorney with the Minnesota Center for Environmental Advocacy, said the proposed PolyMet mine represents the tip of the iceberg. Besides Canada-based PolyMet, other mining companies are exploring options in northern Minnesota.

S. Africa Mining Unrest Overshadows Major Conference – by Anita Powell (Voice of America – January 30, 2014)

January 31, 2014

http://www.voanews.com/

JOHANNESBURG — Unrest in South Africa’s mining sector is overshadowing the nation’s largest mining event, scheduled for next week in Cape Town. Investors are worried that a union leading a platinum mining strike has failed to reach a deal, and economic justice activists say the system is flawed.

The annual Mining Indaba — the Zulu word for “gathering” — is undoubtedly the biggest mining sector event in the nation. It brings together industry leaders, government officials and investors to discuss billion-dollar deals in an industry that claims the lion’s share of South Africa’s economy. But this year’s Indaba is overshadowed by strife in the mining sector.

South Africa’s most powerful platinum mining union launched an indefinite strike on January 23. The Association of Mineworkers and Construction Union, AMCU, is demanding to almost double the minimum wage for entry-level miners, to about $1,200 per month.

Negotiations are ongoing as some 70,000 workers in the nation’s “platinum belt” have stopped work. The three largest platinum producers — Anglo American Platinum (Amplats), Impala Platinum (Implats) and Lonmin – say the wage demand is unsustainable, and say the strike is costing them more than $17 million per day combined.

Vancouver researchers help exploration companies search for the next big mine – by Derrick Penner (Vancouver Sun – January 29, 2014)

January 31, 2014

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

Geologists are constantly looking for better ways to ‘see through rock’

In the old days, geologists would scrape up soil samples looking for traces of the copper, gold, molybdenum or other minerals they were looking for in deposits close to the surface. More recently, they’ve discovered more definite signals that come from much deeper – sometimes hundreds of metres below the dirt and glacial till.

They don’t exactly know how the trace elements make it to the surface, but the science of figuring it out is at the cutting edge of mining exploration and something scientists at Vancouver’s Mineral Deposit Research Unit are taking on in a bigger way.

“We don’t understand it very well,” said MDRU director Craig Hart, but they know ore bodies do give off volatile components that show up in surface soils.

“It might be gases, it might be things that are attaching to hydrogen ions streaming to the surface. It could be microbes digesting and coming up through the column of material, but there is a big push on right now to try to (understand the process),” he added.

Mining the Moon: Plans Taking Off, but Rules Lacking – by Joshua Philipp (Epoch Times – January 29, 2014)

January 31, 2014

http://www.theepochtimes.com/

Just two years before Neil Armstrong set foot on the moon, a treaty was signed by the United States, the United Kingdom, and the Soviet Union. Signed even as the race to get to the moon was well underway, the 1967 Outer Space Treaty declared that no nation-state could ever own the moon.

The treaty, however, was written at a time when current threats were too real and visions of the future were too dim. Concepts like space tourism, orbital hotels, and companies mining the moon for minerals would have been written off as science fiction.

Fast-forward to today and you’ll find companies like Virgin Galactic ferrying wealthy tourists into space, a man skydiving from low orbit for a Red Bull advertisement, and companies like Planetary Resources and Deep Space Industries looking to mine the moon for its resources.

While the 1967 Space Treaty governs what countries can and cannot do on the moon, it leaves private companies unregulated. For countries like China, where many large companies are state-owned, the line separating the interests of government and business is unclear.

How Russia’s energy sector is eyeing a bigger game beyond the Olympics – by Yadullah Hussain (National Post – January 31, 2014)

January 31, 2014

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

The roads to Sochi are paved with oil and natural gas receipts. Winter Olympians striving for medals at Sochi next week can expect to stay at the Mountain Olympic Village, visit the Mountain Tourist Centre and practice their gold-medal performances at the Biathlon and Ski Complex, all built by Gazprom OAO, Russia’s largest natural gas producer.

Meanwhile, the country’s largest oil producer, Rosneft, pledged US$180-million for the privilege of becoming a top-tier sponsor at the XXII Winter Olympics, and Lukoil OAO is the main sponsor of the country’s cross-country ski team, as Russian President Vladimir Putin’s favourite holiday resort prepares to host the world’s top athletes.

Mining and other Russian oligarchs in Mr. Putin’s inner circle have all chipped in to foot the US$51-billion bill to prepare the Black Sea resort — easily the most expensive Olympics. And even before Hayley Wickenheiser steps into the spotlight as Canada’s flag bearer at the Fisht Olympic Stadium on Feb. 7, Sochi has already had the dubious reputation of being labelled as “the most corrupt Olympics in history.”

Keystone XL pipeline project primed for Obama’s approval, ambassador says – by Claudia Cattaneo (National Post – January 31, 2014)

January 31, 2014

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

As anticipation builds over the imminent release of two major reports that could seal the fate of Keystone XL pipeline, Gary Doer, Canada’s ambassador to the United States, remains confident the long-delayed project is primed for presidential approval.

“I think the president is going to make the decision on the basis of science and facts, and if he does that, that means it goes ahead,” the former Manitoba premier said in an interview Thursday.

CNN reported that the final environmental impact review will likely to be announced on Friday afternoon, citing two senior administration officials and another unidentified source familiar with the timing.

Once the results are out, eight U.S. agencies will examine them, then send their observations to Secretary of State John Kerry. President Barack Obama would then decide whether or not to approve the pipeline.

A final decision may not come for several months, but this study is seen as a critical step in determining whether the project will go ahead.