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Metal bulls pin their hopes on zinc as mines close – by Martin Sandbu (Financial Times – October 22, 2013)

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

So you think the commodities supercycle is over? For zinc bulls, it may be just beginning.

The price of zinc has remained subdued since the financial crisis even as copper, gold and tin rose to record highs. But the metal, used to rustproof steel in everything from cars to building materials, is gaining an increasingly vocal following among analysts and investors who believe that it could witness a sharp rally in the coming years.

“Certainly when you compare it to other metals, I would say the outlook for zinc is one of the most constructive,” says George Cheveley, a metals and mining portfolio for Investec Asset Management.

Wood Mackenzie, a leading consultancy, predicts that zinc prices will average more than $3,500 a tonne from 2016-2018 – compared with just $1,940 so far this year.

After years of falling prices, a zinc boom could deliver sizeable profits to major miners such as Glencore Xstrata, the world’s biggest producer and trader of zinc; Canada’s Teck; as well as trading houses such as Noble Group which have carved out positions in the market.

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NEWS RELEASE: Canadian Federal Government Approves Gahcho Kué Diamond Mine Development

 YELLOWKNIFE, TORONTO and NEW YORK, Oct. 22, 2013 /CNW/ – De Beers Canada and Mountain Province Diamonds (TSX: MPV, NYSE MKT: MDM) are pleased to announce that the Minister of Aboriginal Affairs and Northern Development Canada, the Hon. Bernard Valcourt, has today approved the development of the Gahcho Kué diamond mine as recommended by the Mackenzie Valley Environmental Impact Review Board.

Tony Guthrie, Chief Executive Officer for De Beers Canada, commented: “The Minister’s approval confirms that the plans for the development and operation of the Gahcho Kué diamond mine meet the highest standards. The new diamond mine will benefit the economy and residents of the Northwest Territories and enhance Canada’s position as a premier diamond producer.”

Federal government approval allows the Mackenzie Valley Land and Water Board to commence processing of the applications for the Land Use Permit and Water License required to construct and operate the Gahcho Kué mine.

Patrick Evans, Mountain Province President and CEO, added: “Gahcho Kué has gone through the most comprehensive environmental review of any mining project in the Northwest Territories.

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Nickel Reaches 9-Week High as Export-Ban Prospect Spurs Buying – by Joe Richter (Bloomberg News – October 22, 2013)

http://www.bloomberg.com/

Nickel jumped to a nine-week high in London as investors purchased the metal to close out bets on mounting concern that ore exports will be halted next year from Indonesia, the world’s largest producer.

A government ban on shipments from Indonesia of ores including bauxite, used to make aluminum, and nickel may take effect next year to aid local processing. Nickel got a boost from investors who bought the metal to liquidate bets on lower prices, according to Citigroup Inc. Prices have tumbled 13 percent this year, the most among the six main metals traded on the London Metal Exchange.

There is “growing nervousness about a potential export ban on Indonesian ores that kicks in at the beginning of the new year,” Edward Meir, an analyst at INTL FCStone in New York, said in a report.

Nickel for delivery in three months climbed 3.4 percent to settle at $14,850 a metric ton at 5:51 p.m. local time on the LME. Prices reached $14,880, the highest since Aug. 19.

The metal slumped this year as stockpiles tracked by the LME expanded to a record, reaching 231,480 tons today, according to daily exchange data. Open interest, or the number of futures outstanding, fell 4.9 percent last week from a record on Oct. 11.

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Expect weak earnings from miners – and a glimmer of hope – by Rachelle Younglai (Globe and Mail – October 21, 2013)

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.

Canadian miners will report another set of lousy results for the third quarter, but there may be some light among the wreckage as companies take drastic steps to slash costs to stay alive in a lower commodity-price world.

For more than a year, miners have been in turmoil, trying to operate amid the downturn in metal prices. The country’s three largest gold companies, Barrick Gold Corp., Kinross Gold Corp. and Goldcorp Inc., have recorded billions of dollars in writedowns. Other producers have stopped developing projects and cut jobs and dividends.

The bad news is not expected to stop when companies start reporting their quarterly results this week. Potash Corp. of Saskatchewan Inc. warned it will earn less because its customers are waiting for the price of the fertilizer to drop further before making their purchases. Other miners, including the world’s biggest gold producer, Barrick, could write down more assets as they try to mitigate the drop in metal prices and high cost of fuel, analysts say.

And if metal prices do not lift during the final quarter of the year, miners will be forced to write off some of their reserves because it will be too expensive to dig resources out of the ground.

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Nuclear suppliers still hope for new Ontario reactors – by John Spears (Toronto Star – October 22, 2013)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Companies that supply Canada’s nuclear industry still hope Ontario will build new reactors

Canada’s nuclear industry isn’t taking the province’s decision to scrap plans for two new reactors as final, says the spokesman for nuclear suppliers. “I think the province will, in a year or two years time, once again open the file and look at new construction,” said Ron Oberth of the Organization of Canadian Nuclear Industries.

Oberth expressed the hope in an interview after speaking to the Toronto Star’s editorial board. Energy minister Bob Chiarelli said earlier this month that Ontario won’t proceed with two new reactors at Ontario Power Generation’s Darlington nuclear station.

“It is not wise to spend billions and billions of dollars in new nuclear when that power is not needed,” Chiarelli said.
Over-all demand on Ontario’s power grid dropped 10 per cent from 2005 to 2012. (The figures don’t capture power supplied from some renewable energy projects).

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Outokumpu asks EU to let it keep Italian steel plant: sources – by Silvia Antonioli and Maytaal Angel (Reuters India – October 22, 2013)

http://in.reuters.com/

LONDON, Oct 22 (Reuters) – Finnish stainless steel maker Outokumpu has asked the European Commission to let it keep the Italian steel plant the company agreed to sell to gain approval for its purchase of ThyssenKrupp’s Inoxum unit.

The Acciai Speciali Terni plant has been valued at more than 500 million euros ($677 million) by Outokumpu, but is now expected to sell for less than that due to weakness in the global steel market.

Two sources familiar with the matter told Reuters that Terni, one of Europe’s biggest and most modern plants, will lose 80-100 million euros this year, and that Outokumpu believes it is not anti-competitive to keep it under current conditions.

The Terni plant, about 100 km (62 miles) north of Rome, was valued by one analyst at up to $1 billion over a year ago. “They have been trying to convince the EU that they should keep Terni since the market situation has completely changed from last year – the sector got much worse,” an industry expert said.

Refraining from selling the plant could allow more flexibility in valuing it, the expert said, leading to a lower writedown in the company’s books.

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BHP raises iron ore target as Australian expansions accelerate – by James Regan (Reuters India – October 22, 2013)

http://in.reuters.com/

SYDNEY – (Reuters) – Global miner BHP Billiton (BHP.AX) upgraded its iron ore production target for fiscal 2014 while petroleum output hit a quarterly record, as it ramps up output to capture more of a slower-growing market for raw materials.

Iron ore benefited from multi-billion-dollar expansion work underway in Australia that will lift fiscal 2014 output to 212 million tonnes, up from a previous target of 207 million, BHP (BLT.L) said in its fiscal first-quarter production report.

In petroleum, liquids output rose 16 percent, helped by a shift in focus at its U.S. shale holdings to focus more on oil production as U.S. gas prices sag.

BHP has warned mining companies face slowing demand growth for raw materials from China and elsewhere requiring greater emphasis on economies of scale to keep costs down.

The world’s biggest mining company has already cut planned spending for 2013/14 by 25 percent to $16 billion, and has earmarked a further decline for the following year.

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Is copper really in surplus? – by Geoff Candy (Mineweb.com – October 21, 2013)

http://www.mineweb.com/

While many assume the red metal either to be already in surplus or very nearly there, French bank Natixis believes the level of Chinese stocks tells a different story.

GRONINGEN (MINEWEB) – In a note out late last week, French bank, Natixis, queries the assumption that the copper market is already in surplus. While it doesn’t dispute that the copper market could move into surplus over the next few years, the bank maintains that saying it is already in surplus could be premature.

The reason for the dispute is the level of stocking or destocking in China that has taken place over the last few months – an issue that caused problems for copper price predictions previously.

According to Natixis, if one goes only by the level of copper stocks held in exchange warehouses, which it defines as those belonging to the LME, SHFE and Comex, then it does look decidedly like the market is in surplus, as these stocks have risen by about 110,000 tonnes since the beginning of the year.

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‘New day’ for Canada’s uranium market as free trade deal pushes industry past Cold War era – by Peter Koven (National Post – October 22, 2013)

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

More than 20 years after the Cold War ended, Saskatchewan’s uranium sector is finally moving past it.

Following years of lobbying from Premier Brad Wall, the federal government has agreed to strike down foreign ownership restrictions on uranium mining in its proposed free trade deal with Europe. It opens the door for eager foreign companies like Areva SA and Rio Tinto Ltd. to make much larger investments in Saskatchewan’s uranium-rich Athabasca Basin.

“From the moment we were elected [in 2007], we’ve been working with the federal government on this,” Mr. Wall said in an interview. “In terms of uranium mining, it’s certainly a new day.”

The investment restrictions have been in place since 1970, when Ottawa introduced the non-residential ownership policy (or NROP). The law prevents foreign companies from owning more than 49% of a uranium mine in Canada, unless they cannot find a Canadian partner. It is a direct result of Cold War-era concerns about nuclear proliferation, and has looked increasingly dated in the years since then. Saskatchewan is the only province with producing uranium mines, so it is the only one affected by the law.

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Why analysts are suddenly bullish on Canadian stocks – by John Shmuel (National Post – October 22, 2013)

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

Call it the Great White Bull if you want, but analysts are increasingly optimistic that Canadian stocks are where investors should be putting their money.

Sentiment for the beleaguered S&P/TSX Composite Index, which in 2012 was one of the worst performing in the world, has been steadily turning this year. Canadian stock bulls last week received a big boost in confidence as the index moved above 13,000 for the first time since July 2011. It closed Monday up 50.53 points or 0.38% at 13,186.53.

“The decisive move above the 13,000 level is putting the index on the expedited route toward 14,000 and higher,” said Ron Meisels, technical analyst and founder of Phases & Cycles in Montreal.

The TSX has even managed to edge the S&P 500 in the past three months, with a 3.9% return versus the latter’s 3.1%. It’s an encouraging sign for Canadian stock investors who have become accustomed to seeing U.S. stocks post much better returns.

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All-weather roads under consideration – by Rick Garrick (Wawatay News -October 21, 2013)

http://wawataynews.ca/

Discussions about all-weather roads and winter roads are ramping up across Nishnawbe Aski Nation territory.

“We’ve had tons of resolutions regarding winter roads over the years, 20-30 years,” said NAN Deputy Grand Chief Les Louttit during the Sept. 27 Winter Roads and All-Weather Roads First Nations Forum in Thunder Bay.

“But recently, in the past three or four years, First Nations are now starting to talk all-weather roads because of the difficulties they are encountering due to shorter seasons caused by climate change, warmer weather and thinner ice.”

Louttit said the changing conditions are putting winter-road workers’ lives at risk as well as increasing costs for construction. “We had two deaths last year in northwestern Ontario,” Louttit said. “It’s hard to predict the weather, but in order for the winter roads to be viable, we need cold weather and thicker ice.”

Louttit said NAN is looking at developing a NAN-wide strategy on the transportation issue, noting the changing weather conditions and upcoming resource industry transportation requirements need to be considered.

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Off Brazil’s coast, a national oil dream suffers a setback – by Stephanie Nolan (Globe and Mail – October 22, 2013)

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.

RIO DE JANEIRO — A strange-bedfellows consortium of Chinese and European firms bought the rights to exploit Brazil’s biggest-yet oil discovery with the national oil company, in a highly anticipated auction that fell flat and exposed international misgivings about the government’s management of the energy sector.

Anglo-Dutch energy giant Royal Dutch Shell PLC and France’s Total SA each bought 20 per cent of the consortium to develop the huge Libra offshore oil find, while China National Petroleum Co. and China National Offshore Oil Corp. each took 10 per cent. Brazil’s national oil producer Petrobras added 10 per cent to its 30 per cent mandatory share.

Only 11 foreign companies signed up to bid, far fewer than the 40 that Brazil’s oil agency had originally expected, and in the end only these four were part of the sole offer.

The poor turnout signalled international concerns about the government of Brazil’s heavy role in Libra, and may be seen a setback for the country’s vision for the project to kick-start its flagging economy and provide widespread social benefits to its citizens.

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Ring of Fire developer says Ontario must act to save project – by Maria Babbage (iPolitics.com – October 21, 2013)

http://www.ipolitics.ca/

TORONTO – A major player in developing the much-touted Ring of Fire project in northern Ontario says it will consider pulling out if the Ontario government doesn’t ensure the company has access to the chromite deposit.

Cliffs Natural Resources Inc., a U.S.-based company that is prepared to spend billions of dollars on the massive mining project, has been unable to build an all-weather road to the site because it would cross land staked by a rival company.

If it can’t build the road, Cliffs will have to consider shutting down operations, said Bill Boor, vice-president of ferroalloys.

“I guess it would be fair to say that we have to think about it,” he said in an interview with The Canadian Press. “We haven’t made any decision along those lines and we hope we don’t get to that point.”

But the project is in a “tenuous state,” he said. If the company doesn’t have a transportation route, it doesn’t have a project, he said.

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Canada to push for resource development at helm of Arctic Council – by Josh Wingrove (Globe and Mail – October 21, 2013)

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.

OTTAWA — After a Throne Speech that pledged a focus on the North, Environment Minister and Nunavut MP Leona Aglukkaq is Yukon-bound to kick off Canada’s term at the helm of the international Arctic Council. She’ll use it to push for expanded resource development and more indigenous involvement in research on subjects such as climate change.

Representatives of the world’s eight Arctic countries are gathering in Whitehorse, beginning Monday, as Canada’s two-year term begins with a focus on development, safe shipping and sustainable communities, and with plans to create a circumpolar business forum.

“Our overarching theme for Canada’s chairmanship is development for the people of the North,” Ms. Aglukkaq told The Globe and Mail. “My meeting with them is to launch that, to talk about the priorities, the importance of working together moving forward,” she added.

Research and environmental protection of the North are pillars of the council’s mandate, and the meeting comes after Ms. Aglukkaq this month said there’s “debate” about the effects of climate change, a subject not mentioned in Wednesday’s Throne Speech.

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30%-50% of junior miners not expected to survive – BCSC report – by Dorothy Kosich (Mineweb.com – October 21, 2013)

http://www.mineweb.com/

“Retail and institutional markets have virtually disappeared for the financing of junior mining companies,” a senior mining executive recently told a B.C. Securities Commission survey.

RENO (MINEWEB) – A report recently released by the British Columbia Securities Commission found some senior mining executives feel the market is at its lowest and should slowly start to recover in one to two years. However, other executives felt the market has yet to hit its lowest point and don’t expect conditions to significantly improve for another three to five years.

Of the in-depth interviews conducted with 15 mining executives, the participants agreed that there “will be an eventual exodus of mining companies and exploration endeavors,” said the report, BC Junior Mining at the Crossroads: Executive Management’s Perspective, which was authored by KPMG and commissioned by the B.C. Securities Commission.

“Between 30% and 50% of junior are not expected to survive,” said one participant in the interviews. “30% is fine, and perhaps required, but 50% is not.”

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