Republic of Mining

Potash in our province – by Lori Wiens (Regina Leader-Post – September 28, 2013)

October 2, 2013

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

Potash mines 14 billion $investment in Saskatchewan

Potash has brought billions of dollars of investment to the province and is a fundamental part of the Saskatchewan economy, according to the minister responsible for energy and resources, Tourism Saskatchewan, and trade. “The current expansions at the existing potash mines have created almost $14 billion of investment in our province,” said Tim McMillan, whose portfolio falls under the ministry of the economy. “Many of those are completed, some are underway and some are still in the planning stages.”

He said the provincial government is also excited to see new mines being built for the first time in four decades. “For a lot of years, the policy choices were not conducive to development,” explained McMillan. “In fact, the CEO of K + S Potash has said they were upset for years about the way they were treated in Saskatchewan, but today they recognize our province is the best place in the world to do business. They are now investing $4 billion to develop the first new mine in Saskatchewan since the early 1970s.”

The intense focus on potash has been a welcome development for Saskatchewan, according to McMillan. “Ten years ago, potash was a sleepy commodity,” he said. “Now it is in the news on a regular basis.”

He attributes global interest to the demand for food as the world’s population continues to rise. “Countries like China and India, which have ever-increasing standards of living, want access to higher quality food,” he said.

Digging in: Saskatchewan poised to remain world leader in potash – by Ryan Hall (Regina Leader-Post – September 28, 2013)

October 2, 2013

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

For decades, potash has been a linchpin of the Saskatchewan economy. From the earliest mining efforts in the 1950s and ’60s, up to the high volume trading that takes place today, a significant part of the history of mining in Saskatchewan is tied to potash production. Among the many groups working to make sure potash continues to be a part of the province’s future is the Saskatchewan Mining Association (SMA), which is concerned with representing and supporting a safe, responsible and growing Saskatchewan mining industry, and encouraging research and training within Saskatchewan. These mandates prove to be a demanding job, as Saskatchewan’s potash industry continues to grow.

Much of this development can be attributed to the wealth of potash that exists within the province. The prairie evaporate unit, which hosts the potash deposits, stretches from an area west of Saskatoon, east to Rocanville, and southward to Moose Jaw. As a result, recent estimates indicate that, at the current rate of production, Saskatchewan’s reserves will last for hundreds of years and will continue to provide a stable foundation for expansion.

Within Canada itself, Saskatchewan stands as the leading producer of potash, with over 85 per cent of the nation’s total coming from the province’s 10 operational mines. From these mines, approximately 14 million tonnes (Mt) of KCl was produced in 2012, with future expansions looking to add another five to 10 Mt of production by 2020.

PoV: Responsibility for black bear management belongs to MNR – by Wayne Snider (Timmins Daily Press – October 2, 2013)

October 2, 2013

The Daily Press is the city of Timmins broadsheet newspaper.

The battle for Northern Ontario is heating up, even though a provincial election has yet to be called. A trio of Northern Progressive Conservative candidates were pushing pro-North policies at the party’s recent convention. One component of the proposed policy — which has not yet been endorsed by the party –would be to allow municipalities to reinstate the spring bear hunt in their areas.

If the Tories form the next government and legislate this change, it would reverse a decision made by the Mike Harris-led Conservatives in 1999 to cancel the spring bear hunt. The decision came after the Tories caved in to animal rights groups, which threatened a major advertising blitz in eight key swing ridings shortly before an election.

“When the spring bear hunt was removed, it was done for political reasons after a large lobby by southern special interest groups,” said Steve Black, Tory candidate for Timmins-James Bay. “A misguided campaign was launched to convince people that ending the hunt was the right thing to do.”

This proposal came on the heels of the Northeastern Ontario Municipal Association supporting a similar resolution being presented to the provincial government.

What’s with the bears [northern Ontario]? – Thunder Bay Chronicle-Journal (October 1, 2013)

October 2, 2013

Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

ANOTHER bear attack; another call for resumption of the spring bear hunt; another defence of bears that are baited by shooters sitting in tree stands. It’s been 14 years since Ontario banned spring hunting for bears hungry after winter hibernation. In that time there have been a remarkable number of bear attacks on humans.

Is there a direct connection? Hunting advocates insist it is obvious while the Ministry of Natural Resources points to variations in natural food sources and carelessness by humans increasingly living or travelling in the forest.

The latest incident occurred Sunday near Peterborough. A 53-year-old woman is recovering after being attacked and mauled by a bear while walking her dogs on a trail. The dogs were also injured when they came to the woman’s rescue.

Bear attacks, including many fatalities, have increased with North American population growth and recreational intrusion into the wilderness. Most of the deadly attacks — 86 per cent — have occurred since 1960. In more than a third of those cases, improperly stored food or garbage likely attracted hungry bears. Which leaves almost two-thirds of cases unexplained.

Northern MLA’s: Lead now or leave [northern Ontario stainless steel] – by David Robinson (Northern Ontario Business – October 2013)

October 1, 2013

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

Northern MP’s have come to a time of reckoning. They hold the balance of power in Ontario. The five NDPers and one conservative can change the North. In the next few months we get to see if they have the vision and the guts to act.

The provincial legislature has 107 members. There are 50 Liberals. Any four Northern members can make a deal with Catherine Wynne: Give us one really big win for the north and we’ll give you one more year of power.

There are several policies that are worth breaking party lines for. Leaving resource revenues in the north, creating a regional government, control of Ontario Northland and northern transportation policy, and especially the big one, creating a stainless steel industry for the North based on the Ring of Fire.

If Northern MLA’s deliver any one of these changes they will be heros. They will own their election seats for the next 100 years. If they don’t even try, northerners should throw the toothless pussycats out. They will have thrown away the North’s future.

Barrick Gold founder Peter Munk’s final play – by by Jonathon Gatehouse (MacLean’s Magazine – October 1, 2013)

October 1, 2013

http://www2.macleans.ca/

He’s fending off a shareholder revolt and fighting for a legacy

Back in 1996, Peter Munk sat down with one of his biographers and laid out his 34 “golden rules” for success in business. Some of them offer practical advice: “Always leave something on the table in a public issue. If you push for the last penny, it may hurt you the next time around.” While others border on fortune-cookie wisdom: “Time is short.

If you want to achieve much, you’ve got to run.” Taken all together, the list seems less like a coherent corporate philosophy than an odd mélange of exhortations to take risks and calls for fiscal prudence. But there was also an element of prophecy—at least when it comes to the current fortunes of the celebrated 85-year-old entrepreneur. “If you want to dream big, expect big problems,” states rule 30. “Big dreams challenge the fates.”

From its humble beginnings as an oil and gas play in 1983, Munk’s Toronto-headquartered Barrick Gold Corporation has grown into the world’s largest gold producer, with 24 mines operating on four continents, five more in development and ore reserves estimated at more than 140 million ounces. Characterized by the relentless pace and sheer scale of its acquisitions, including a 2011 foray into copper with the $7.66-billion takeover of Equinox Minerals Ltd., the company had been a darling of investors for more than two decades. At its peak in 2011, Barrick was trading at $53 a share and had a market capitalization of $54 billion.

Ex-Xstrata CEO Davis Raises $1 Billion From Noble, TPG – by Firat Kayakiran (Bloomberg News – September 30, 2013)

October 1, 2013

http://www.bloomberg.com/

Mick Davis, former chief executive officer of Xstrata Plc, raised $1 billion from Noble Group (NOBL) and private-equity fund TPG to start a resources company.

Noble, Asia’s largest raw-materials trader, and TPG agreed to each invest $500 million in the new company X2 Resources, according to a statement today from X2 Partners, founded by Davis and former Xstrata Chief Financial Officer Trevor Reid.

X2, also in talks with other potential investors, will use the funds to start a diversified mining and metals group. Davis, 55, and Reid, 52, were part of the team that set up Xstrata, a company that grew 100-fold to a market value of about $50 billion after 10 years of mergers, acquisitions and expansion.

“This is a great time to acquire assets in the mining sector,” said John Meyer, an analyst at London-based SP Angel Corporate Finance LLP. “The majors continue to offer sub-scale assets, including some better quality but smaller operations as they refocus on their larger cash generators.

Ned Goodman aims to boost CNSX exchange as alternative to TSX – by Peter Koven (National Post – October 1, 2013)

October 1, 2013

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

Ned Goodman has felt for years that the Toronto Stock Exchange and its venture counterpart are failing entrepreneurs. Now the chief executive of Dundee Corp. is doing something about it.

Mr. Goodman, 75, has acquired a third of CNSX Markets Inc., which operates the Canadian National Stock Exchange (CNSX) and Pure Trading, and joined its board as deputy chairman. He is teaming up with Tom Caldwell, a veteran investor in stock exchanges, to promote the CNSX as a viable alternative to the TSX. The dollar value of the deal was not disclosed.

His view is that it has become too expensive, time-consuming and burdensome for start-up companies to raise small amounts of money on the TSX. They can face absurd legal bills to get a deal done, he said in an interview.

“Virtually ever issuer on the Venture exchange is not happy with it,” he said. “Once we get one or two companies [to switch to the CNSX], lots will follow.” The move comes as small-cap resource companies, a group that Mr. Goodman knows well, have fallen completely out of favour with investors. They are struggling to raise money or generate any trading in their stocks on the Venture exchange.

Steel firm Outokumpu should help itself: Finland’s state fund – by Jussi Rosendahl (Reuters U.S. – September 30, 2013)

October 1, 2013

http://www.reuters.com/

HELSINKI – (Reuters) – Steel company Outokumpu (OUT1V.HE) should try to solve its own problems even though its heavy debts have raised the prospect it might need more money from shareholders at some stage, the head of Finland’s state investment fund Solidium said.

While Finland is often listed among the most innovative economies and remains triple-A rated, government funding is still badly needed in the country of 5.4 million people which has a limited pool of private capital. Kari Jarvinen, Solidium’s managing director, told the Reuters Nordic Investment Summit that the fund was making its long-term investment decisions independent of political pressure to help out troubled Finnish companies.

“It is better that the company tries to sort out its problems by itself. The company already had a 1 billion (euros) rights issue only one-and-a-half years ago,” Jarvinen said when asked about Outokumpu’s finances. “It is paramount that these companies find ways to be profitable in the future.”

Solidium holds stakes worth in total 7.7 billion euros in 11 Finnish listed companies including paper maker Stora Enso (STERV.HE) and investment and insurance group Sampo (SAMAS.HE).

Australian tycoon Rinehart wants to end family feud to focus on business – by James Regan (Reuters India – October 1, 2013)

October 1, 2013

http://in.reuters.com/

SYDNEY, Oct 1 (Reuters) – Australian mining magnate Gina Rinehart, one of the world’s richest women, wants to relinquish control over a $4 billion family trust, after several years of legal wrangling with her children over who gets what and when.

Lawyers for Rinehart, 59, told a court that the legal battle with two of her four children, which has been played out in public and captivated Australia, had placed huge pressure on their client but was now “effectively over”.

Bruce McClintock, one of Rinehart’s lawyers, said the two-year legal fight between the tycoon and her children, John Hancock and Bianca Hope Rinehart, had created “untenable risk” of damage to Hancock Prospecting Group, the mining company established by her late father and the source of her wealth.

“The increased demands on her time in dealing with the … plaintiff’s issues has taken valuable time away from her responsibilities,” he told the New South Wales Supreme Court.

Hancock Prospecting is in the midst of funding negotiations to develop a $10-billion dollar iron ore project in Australia. Rinehart nor her children attended the hearing.

Silicosis claims and the gold mines: To settle or not? – by Sarah Evans (Mail and Guardian – October 1, 2013)

October 1, 2013

http://mg.co.za/ [South Africa]

A recent settlement between miners and Anglo American could be a precedent as the gold industry prepares for a looming silicosis class action suit.

Despite being a landmark case, the confidential nature of a recent settlement between Anglo American and silicosis sufferers means there is little legal precedent for future cases, at least in terms of financial compensation.

But the agreement has other implications: as the number of silicosis damages claims against the gold mining industry piles up, and in the face of a looming class action suit, out-of-court settlements could become the norm as mining companies try to avoid bank-breaking court rulings.

In the weeks to follow, the high court in Johannesburg will decide whether to collate three class action claims against 30 of South Africa’s gold mines.

This comes on the back of a landmark settlement between Anglo American and 23 silicosis sufferers, seven of whom died waiting for the case to be finalised. Their claim was instituted in 2004 and was due to go to arbitration in 2014.

‘Big Mick’ returns to mining – and he’s hungry for acquisitions – by Eric Reguly (Globe and Mail – October 1, 2013)

October 1, 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.

LONDON — Mick Davis is back in the mining game. Known as “Big Mick” because of his imposing size and voracious appetite for acquisitions, Mr. Davis transformed Xstrata PLC from a grab-bag of second-tier assets into a global resources powerhouse, bolstered by the takeover of Canada’s Falconbridge Ltd.

Now Mr. Davis, older, leaner but still hungry, along with a few former Xstrata executives, has launched X2 Resources, a private company that has raised $1-billion (U.S.) and plans to raise more. The goal is to give it the firepower to pounce on mining assets that the X2 executives consider undervalued in a market that has lost its love for commodities.

In interview in London, Mr. Davis, 55, and Trevor Reid, 52, who was Xstrata’s finance director, said they are talking to Canadian investors, among others. “We’re still in the fundraising mode and we’d like some more investors,” Mr. Reid said, adding that Canadian names are on the potential investor list.

Noble Group Ltd. and TPG are each contributing $500-million to X2, with an undisclosed amount from Mr. Davis and his colleagues.

Why Miners Walked Away From the Planet’s Richest Undeveloped Gold Deposit – by Brad Wieners (Bloomberg Business Week – September 27, 2013)

October 1, 2013

http://www.businessweek.com/

Before pulling out of the Pebble Mine project last week, Anglo American (AAUKY), one of the world’s biggest mining companies, had invested six years and at least $541 million—in a partnership with Vancouver-based Northern Dynasty Minerals (NAK)—to develop the site in southwestern Alaska. Wait, pause on that number for a sec: $541 million.

That’s right, the London-based multinational and its U.S. subsidiary (AA Pebble) just forfeited a return on more than half a billion dollars of its shareholders’ money. By the end of its 60-day withdrawal from the project (mid-November), that figure will probably end up closer to $580 million. Anglo American has also indicated it will write down a $300 million loss (misreported as a “penalty” elsewhere) to remove the proposed mine as an asset from its books.

Although a far smaller player, Northern Dynasty will soon own 100 percent of the project, thought to be worth $300 billion or more, and vows to carry on. Having completed more than a million feet of exploratory, diamond-core drilling in 1,200 holes, the former partners also amassed a 27,000-page study of the terrain, but had not begun the formal permitting process. In fact, Northern Dynasty has plowed $180 million into Pebble since it first secured the rights to the region in 2001.

Huge mining consortiums frequently seed nine-figure projects, but $760 million-plus is still a large sum, so why did Anglo American bail now?

PRESS RELEASE: Outokumpu introduces new industrial plan in Europe to improve financial performance

October 1, 2013

Outokumpu announced today plans for further structural changes in its European operations aimed at improving its financial performance and efficiency, and ultimately returning the company to profitability.

While Outokumpu has already implemented significant cost savings as a result of the merger between Outokumpu and Inoxum at the end of 2012, the company’s cost structure continues to be unsustainably high in the current market environment.

Stainless steel market has remained challenging during 2013, mainly driven by the continued economic weakness in Europe and the global overcapacity in the industry. Outokumpu has continued to be heavily loss making in 2013, with a net debt of 3.0 billion euros at the end of June 2013. Industry overcapacity and imports from Asia continue to put pressure on prices and profitability and there are no signs of a material improvement in the market environment. For example, in Europe alone, there are more than 1,500,000 tonnes of overcapacity in cold rolled production. In addition, as previously stated, the Terni remedy requirement by the European Commission resulted in lower synergy potential than originally planned.

Therefore, Outokumpu is now introducing a new industrial plan and efficiency measures for its operations in Europe. Specifically, the planned changes include:

Newmont bids for Las Bambas to beef up copper assets – CEO Goldberg – by Dorothy Kosich (Mineweb.com – October 1, 2013)

October 1, 2013

http://www.mineweb.com/

Newmont, which began as a copper-gold miner in the early 1900s, is seeking to increase its copper mining operations as “pure gold plays” appear to be losing favor with investors.

RENO (MINEWEB) – In seeking to increase its copper holdings, Newmont Mining is apparently returning to its historic copper roots under the leadership of new CEO Gary Goldberg, a former copper mining executive for Kennecott Utah and Rio Tinto.

In an interview with the Financial Times published Monday, Goldberg said the company had expressed interest in the hotly sought after Las Bambas copper project in Peru. Mineweb was told of Newmont’s potential Las Bambas acquisition by a former top Newmont executive at last week’s Denver Gold Forum in Denver.

Newmont Founder, William Boyce Thompson, accumulated a large fortune by buying undervalued copper and gold claims through Newmont Mining. By the 1940s Newmont would become one of the world’s largest copper producers, eventually becoming a major shareholder in Magma Copper, which would be acquired by Australian uber miner BHP in the mid-1990s. By the 1960s, the company’s Carlin Trend discovered in northeastern Nevada would issue a new era for Newmont as a gold producer.