Republic of Mining

Potential Indonesian nickel export ban bodes well for prices, poorly for pig iron – by Freya Berry (Mineweb.com – October 18, 2013)

October 18, 2013

http://www.mineweb.com/

While it is not certain the ban will go ahead unchanged, if it does, analysts say, it would be a game-changer for prices.

LONDON (REUTERS) – A potential ban on nickel ore exports by Indonesia next year and production cutbacks could lift the price of this year’s worst-performing base metal by more than 20 percent off multi-year lows, analysts said.

Indonesia, the world’s top exporter of nickel ore, has said it plans to bring in a ban on unprocessed ore exports from Jan. 1, 2014. Its ore is currently shipped to China to produce nickel pig iron, a cheap substitute for higher grade nickel in stainless steel.

It is not certain that the ban will go ahead unchanged, but if it does analysts said it would be a game-changer for prices. Benchmark nickel on the London Metal Exchange has fallen by around a fifth since January to four-year lows, weighed down by over-supply, and was trading at $13,963 a tonne at 1529 GMT on Thursday.

“It’s such an important swing factor for the market that you could see a decent rally in the nickel market if a ban is strictly enforced – at least 20 or 30 percent,” said Daniel Smith, head of metals research at Standard Chartered.

Rio [Guinea iron ore] rail line will displace 10,000 – by Matt Chambers (The Australian – October 18, 2013)

October 18, 2013

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

RIO Tinto’s $US20 billion ($20.8bn) Simandou iron ore project in Guinea will see more than 10,000 people relocated to make way for a railway to move the raw material to the coast, raising potential issues over who will be responsible for their wellbeing.

The extent of the relocations were revealed yesterday by Rio’s iron ore counsel Philip Edmands in a talk to a resources and energy law association conference.

“We need to move in excess of 10,000 people and there is a patchwork quilt of titles that have to be acquired,” Mr Edmands told the AMPLA conference in Adelaide yesterday.

The complex, 670km multi-user railway to take iron ore from the Simandou concessions, which Rio hopes it will start building in 2018, will include two viaducts, 24km of tunnels and 29 bridges, and is expected to help open up the heavily populated hinterland.

The number of displaced people is larger than many were expecting, given the project’s latest social and environmental impact statement says 15 settlements, with a total of just “270 structures”, would need to be physically moved to make way for the railway.

Who monitors the oil sands monitors? – by Peter Foster (National Post – October 18, 2013)

October 18, 2013

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

Oil sands firms have been ‘woefully’ bad at defending industry

With defenders such as Ottawa, Edmonton and the oil industry, oil sands development at times hardly seems to need enemies. “Woeful” doesn’t begin to describe their performance in addressing environmental criticism, which is at the root of one of the most contentious issues in Canada/U.S. relations: presidential approval of the Keystone XL pipeline.

Government and industry long ago gave up on climate science, even if they still argue that the oil sands are statistically irrelevant, but they have been equally bad at countering criticisms of local environmental impacts.

Federal/provincial infighting over monitoring is preventing an effective response to opponents whose media savvy stands in inverse proportion to their objectivity. Industry — itself beset by communications and joint-action difficulties — is concerned that it is being asked to fund a biased monitoring system, but is scared openly to criticize its political masters, or activist “monitors.”

U.S. ‘over-fracked and over-drilled,’ Shell technology official says – by Yadullah Hussain (Financial Post/Vancouver Sun – October 18, 2013)

October 18, 2013

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

Hype ‘Dangerous’

The United States’ oil and gas industry has “over-fracked and over-drilled”, according to Matthias Bichsel, projects and technology director at Royal Dutch Shell Plc.

“The reservoirs don’t need that many wells. The reservoirs don’t need that many stages of fracks, because not all the pieces of the rocks are as good,” Mr. Bichsel said in a telephone interview from Vancouver last week, where he was speaking at a company event.

The United States is on course to become the world’s largest oil supplier, according to PIRA Energy Group, a New York-based energy consultancy. “The U.S. shale liquids growth of 3.2 million barrels per day over the last four years has been nearly unparalleled in the history of world oil; only Saudi Arabia in 1970-74 raised its production faster,” PIRA said in a statement.

But it has not translated into a boost in profits of all companies, especially as natural gas prices have slid amid a production surge. Shell came late to the U.S. shale boom and has been left disappointed by the performance of its Eagle Ford shale assets.

‘Nobody is leaving,’ N.B. native protesters vow after clash with RCMP turns violent [shale-gas protest] – Gloria Galloway and Jane Taber (Globe and Mail – October 18, 2013)

October 18, 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.

A native protest against a shale-gas project in New Brunswick has exploded in violence, sending dozens of people to jail and reducing five police cars to smouldering ruins.

The clash between the RCMP and the Elsipogtog First Nation, north of Moncton, began early Thursday morning when a large number of officers arrived at a compound where SWN Resources Canada stores equipment. The police intended to enforce an injunction against a native blockade that has prevented SWN, a natural gas and oil exploration company, from conducting seismic testing.

The protesters refused the demands to disperse, and the confrontation devolved into a melee of tear gas and rubber bullets. In the end, at least 40 people, including Elsipogtog Chief Arren Sock and several council members, had been arrested and five police cruisers had been set ablaze. The situation had calmed by early evening with news that Mr. Sock and some of the other protesters had been released.

“But nobody is leaving,” said Susan Levi-Peters, a former chief. “We don’t want shale gas here. We have been asking for consultations for three years now and nothing has happened. Instead they just put our people in jail.”

Rock hard opposition to quarry – by Mary Katherine Keown (Sudbury Star – October 18, 2013)

October 18, 2013

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

David Villard, a consultant with Bruce Tait Construction Ltd., was in the proverbial hot seat on Thursday night. The Wanup Community Hall played host to a packed house of more than 100 concerned citizens at an open house Tait’s firm organized to present plans for a proposed quarry, which will sit adjacent to Rock Lake, a picturesque recreational spot along Highway 69 surrounded by about 70 seasonal and permanent homes.

Thursday’s open house was an acrimonious affair and attendees expressed their opposition to the proposed quarry on a number of points. James Gomm, president of the Rock Lake Property Owners’ Association, and his wife, Catherine, are spearheading the opposition movement.

Of particular concern was the lack of information circulated to area residents, water quality and possible noise disruptions. Gillian Groves, a seasonal cottager, pointed out the industrial noise could disturb the lake’s residents, many of whom are retirees.

“These people worked for their lives to get these places and what you’re proposing is taking away time from what they’ve worked their lives to enjoy,” she said.

Fewer junior miners in BC could help spur sector – by Henry Lazenby (MiningWeekly.com – October 17, 2013)

October 18, 2013

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

TORONTO (miningweekly.com) – Having fewer junior firms in British Columbia’s mining sector could help to breathe new life into an ailing industry segment, a group of 15 senior executives told a study commissioned by the British Columbia Securities Commission (BCSC).

The report compiled by professional services firm KPMG and entitled ‘BC Junior Mining at a Crossroads: Executive Management’s Perspective’, found that senior mining companies should also clean up their balance sheets to increase investors’ confidence in the mining sector, after which a recovery of junior mining companies would follow.

From the start of the year to August, about 85, or 5%, of the 1 673 mining companies listed on Canada’s TSX and TSX-V failed, compared with about 6% in the oil and gas industry. These did not include companies taken off the exchanges owing to merger and acquisition activity, going-private transactions or those companies that have graduated to bigger exchanges.

Author of the Mercenary Geologist website Mickey Fulp recently told Mining Weekly Online it would take a lot of time to “wash out the bad” companies and many were, by now, merely hanging on, creating danger for the unsuspecting investor.

UPDATE 2-Outotec to cut up to 500 jobs as miners slash spending – by Ritsuko Ando (Reuters India – October 17, 2013)

October 18, 2013

http://in.reuters.com/

HELSINKI, Oct 17 (Reuters) – Finnish mining technology company Outotec lowered its full-year sales and profit margin forecasts and said it planned to cut up to 500 jobs as a sluggish global economy forces miners to rein in spending.

In a further sign of tough times for Finland’s industrial firms, its warning on Thursday came just after engineering company Metso said it faced a fall in sales and profit due to weakness in its pulp, paper and power unit.

Shares in Outotec, whose job cuts represent 10 percent of the workforce, slid 15 percent by 0930 GMT while Metso lost 6 percent.

Outotec said it was seeing delays in customer payments. One project, worth 30 million euros ($40.5 million) in its order backlog, was cancelled in September.

Mining companies have over the past year been pulling back on spending in the face of weaker prices as many boom-year projects turned sour, and many have scrapped or delayed plans.

AFRICA INVESTMENT-South Africa’s migrant mine labour conundrum – by Ed Stoddard (Reuters U.S. – October 17, 2013)

October 18, 2013

http://www.reuters.com/

LUSIKISIKI, South Africa – Oct 17 (Reuters) – South Africa’s system of migrant mine labour has come under renewed scrutiny, with government and company officials blaming it for a host ills bedeviling the industry and the country, including last year’s wave of violent wildcat strikes.

But there is no easy fix for such an entrenched feature of the social fabric and the cure is proving as bad as the disease as it means job losses on a grand scale with devastating consequences for what are now called the “labour-sending areas.”

This migrant labour force, which built a gold industry that has produced a third of the bullion ever mined, was sourced from “homelands” far from the shafts where most black South Africans were forced to to eke out an existence under apartheid.

Many have also come from neighbouring countries such as Lesotho and Swaziland. It generated vast profits, not least because migrants were paid bachelor wages even if they had families to feed, and controlled the movement of Africans as the workers were confined to hostels on mine property.

5 Endangered Elements That America Needs – by Michael Silver (Huffington Post – November 29, 2012)

October 18, 2013

http://www.huffingtonpost.ca/

Michael Silver is the CEO of American Elements

2012 marks the second year American Elements has published its annual Endangered Elements List (EEL12): a list of elements which by their scarcity and technological importance threaten America’s long-term prospects. America is about to face a crisis that will determine whether it will hold its place as the largest economy and most powerful nation in the world.

Today it is a constant refrain that the way out of our present fiscal difficulties is for America to get back in the business of making things. Manufacturing generates the needed jobs and resulting prosperity that have pulled us out of each recession for the last 150 years.

American innovation, particularly in the area of green technology, it is said will foster whole new industries, jobs and economic growth at the beginning of the 21st century similar to the impact made at the beginning of the 20th century by the inventions of Alexander Graham Bell (telephones), Thomas Edison (electricity) and Henry Ford (cars).

While much of this is true, innovation is in fact only the starting point. To manufacture the products flowing from great ideas, a nation must also have access to the critical materials on which the discoveries are based.

Stephen Harper ignores Canada’s First Nations at own peril – by Thomas Walkon (Toronto Star – October 17, 2013)

October 17, 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.

The prime minister must curry favour with Canadian aboriginals if his resource agenda is to succeed. Why then is he so obdurate?

Historically, the Canadian government has catered to aboriginals only when it needed them. It needs them now. Specifically, Prime Minister Stephen Harper needs First Nations on side if his government is to push through its ambitious resource development plans and reap the requisite political awards.

British Columbia’s native communities have the capacity to tie up — perhaps indefinitely — Harper’s proposed oil pipeline to the Pacific Coast. They have promised to do just that. Mining development in northern Ontario’s so-called ring of fire can take place only if First Nations there agree.

So far, the Ontario government has been carrying out the ring-of-fire negotiations. But Ottawa too wants those minerals developed and the federal government’s approach to native people is bound to have an effect on any final deal.

Barrick is the best buy: Dundee’s Goodman (Business Network News Interview – October 16, 2013)

October 17, 2013

http://www.bnn.ca/

Click here for the Ned Goodman interview: http://www.bnn.ca/News/2013/10/16/Dundees-Goodman-Barrick-is-the-best-buy.aspx

Long-time mining financier Ned Goodman says a controversial $11.9-million signing bonus paid to Barrick Gold (ABX-T 19.16 0.93 5.1%) co-chairman John L. Thornton was fair.

Goodman, who is president and CEO of Dundee Corporation (DC.A-T 19.81 -0.04 -0.2%), told BNN that Thornton is “an unbelievably capable guy,” and is worth the money.

“He got paid what he deserves,” Goodman said. Back in April, leaders of several investment groups signed a letter criticizing Thornton’s compensation, including the CEOs of Ontario Teachers’ Pension Plan, Caisse de Depot et Placement du Quebec and OMERS, the Ontario Municipal Employees Retirement System.

“This amount for a signing bonus for a co-Chairman of the Board is, to our knowledge, unprecedented in Canada and is in addition to other compensation for the year for a total package of $17 million in 2012,” the letter said.

Wildlands League wants freeze on Ring of Fire development – by Carol Mulligan (Sudbury Star – October 17, 2013)

October 17, 2013

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

The Wildlands League is calling on the Ontario government to undertake a region-wide environmental assessment of lands in the Ring of Fire, rather than allow piecemeal assessments by companies that have staked claims in the area.

The environmental organization has published a 12-page newsletter, urging Ontarians to insist the provincial and federal governments not issue any more approvals to companies such as Cliffs Natural Resources, Noront Resources and KWG Resources until a thorough environmental assessment is complete.

It wants that assessment to include consultation with members of First Nations and other communities who will be impacted by mining in the Ring of Fire — and that includes Sudburians.

Cliffs Natural Resources has chosen the former Moose Mine site north of Capreol as the location for its $1.8-billion ferrochrome processing plant to process ore from its Black Thor deposit.

Friedland’s Ivanhoe pulls 90m good grade platinum metals intersection – by Lawrence Williams (Mineweb.com – October 16, 2013)

October 17, 2013

http://www.mineweb.com/

The latest drilling results from Robert Friedland’s Ivanhoe Mines’ Platreef project in South Africa include a huge 90 m intersection of medium grade platinum group metals.

LONDON (MINEWEB) – Readers of Mineweb may recall a recent article in which we highlighted some of the thick medium grade platinum group metals deposits currently being drilled to the north of the Bushveld Complex geological formation in South Africa, which currently is the source of over 70% of the world’s newly mined platinum output.

However, current production nearly all arises from the very narrow Merensky reef and the slightly wider, but still narrow, UG2 reef which underlies it. These reef horizons run from a few centimetres to around a little over a metre in thickness. Most of this production comes from underground mining in exceedingly difficult conditions where the narrow, shallow dipping, reef structures have proved so far to be unsuitable for significant mechanisation, meaning the operations are labour intensive, with many areas becoming uneconomic to mine at current platinum prices.

‘A financial buyer’s market’: Private equity firms continue to circle mining sector – by Peter Koven (National Post – October 17, 2013)

October 17, 2013

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

TORONTO – During the past couple of years, private equity firms have quietly grown into key players in the mining industry. And with mining valuations in the gutter and equity financing all but dried up, their role could soon get bigger.

In a presentation in Toronto on Wednesday, private equity insiders noted that the firms are raising huge dollars for mining investments. They argued that it is a potential source of financing for many distressed companies.

“It’s a financial buyer’s market,” said Peter Gordon, a managing partner at Brookfield Asset Management Inc. He pointed out that there is very little competition from strategic buyers right now.

Howard Burshtein, a partner at Baker & McKenzie LLP, said private equity firms could raise $10-billion to $15-billion for mining investments in 2013. That builds on the $8.5-billion that eight mining-focused funds raised in 2012. By comparison, Canadian miners are expected to raise roughly $2-billion on the equity markets this year, down from a five-year average of $9.3-billion.