Twitter

Analysis: For the next round of gold deals, small is beautiful – by Allison Martell (Reuters U.S. – September 28, 2013)

http://www.reuters.com/

DENVER – (Reuters) – Gold miners may be tempted back into the takeover game by lower prices and the need to replace reserves, but they are likely to shy away from flashy mega-projects that require big capital expenditures.

Mining deals have slowed to a crawl, thanks to a volatile market and pressure from investors still angry about the steep premiums paid during boom times. The pause can’t last forever, but the excesses of the last cycle will cast a long shadow. “Everyone is really gun-shy of the high capex projects,” said Randy Smallwood, chief executive of Silver Wheaton Corp (SLW.TO), which provides miners with cash to finance mine construction in exchange for the right to buy future silver production at a set price.

Smallwood said projects that use relatively low-cost heap leaching could be more attractive than those with mills. In a heap leach, ore is crushed, stacked and irrigated with chemicals that separate out the valuable metals.

Across the industry, executives have vowed to chase profits rather than production, which often means focusing on higher-grade ore. But projects that require significant capital spending may take years to break even, a risky proposition when commodity prices or tax regimes are volatile.

Read more

Commentary: Surveying the landscape of Ontario’s new mining regime – by Madeleine J.M. Donahue and Jean Piette (Northern Miner – September 27, 2013)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. 

In Ontario, the new and amended regulations under the Mining Act described in our legal update in September 2012 have since come into force, and Ontario has developed four policies relating to Aboriginal consultation that further clarify the government’s expectations. Junior exploration companies have already experienced the effects and

challenges of this new regime more significantly than majors or companies with advanced exploration projects.

This is a transition period for Ontario’s regulatory regime — one that requires patience, goodwill, education and the ongoing co-operation of all parties if the reforms are to achieve the positive results the government is hoping for. These include greater clarity, less confrontation, enhanced respect for existing Aboriginal and treaty rights, protection of sites of Aboriginal cultural significance and improved prosperity for First Nations communities.

Let’s examine the most important aspects of the new regime:

Read more

Dirty politics unfairly singles out Canada’s oil sands – by Claudia Cattaneo (September 28, 2013)

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

Much like the Keystone XL debacle in Washington, the EU’s proposed Fuel Quality Directive illustrates the hypocrisy of climate change politics — tough to sell at home, the pain of reducing greenhouse gas emissions is pushed abroad to feign the appearance of progress.

How else to explain that of all the things the European Union and the United States could be doing to clean up their own carbon mess both seem so hung up on punishing Canada’s oil sands?

And so just like the U.S. is dragging its feet on approving the Keystone XL pipeline between Alberta and Texas to fan the illusion among the green classes that it’s doing something about the climate, the EU is attempting another vote later this year on a fuel quality directive (FDQ) that singles out the oil sands — and no other oil sources.

It’s dirty politics. The pending vote is such a worry to Alberta that two senior ministers are heading for another tour of European capitals, at a cost of $85,700 to taxpayers, to try yet again to expose the imbroglio. They are latest of many trips to European countries over the past few years by Alberta and federal government representatives.

Read more

PRESS RELEASE: Nickel An Essential Material To Address Sustainability Challenges

BRUSSELS, Belgium – 25 September 2013 – The Nickel Institute has today released a new report ‘Nickel in Tomorrow’s World: Tackling Global Challenges’ which highlights how nickel contributes to technologies for a more sustainable society and economy, one which meets the needs of a growing global population.

Nickel’s versatility and robustness mean that it is an ideal material to provide solutions for energy, transport, food and clean water as well as meeting other key sustainability challenges.

Nickel metal is tough, malleable and highly-resistant to corrosion. Nickel containing materials such as stainless steel have a long lifespan and require less maintenance than many alternative materials. Nickel is light and can reduce the overall weight of products, reducing the energy required for their production and operation. In addition, nickel retains its value at end-of-life, making it well-suited for recycling and reducing the wastestream.

Tim Aiken, Nickel Institute President said, “Some of society’s greatest challenges include reducing energy consumption and assuring access to safe food, clean water and advanced healthcare for citizens. The Nickel Institute’s latest publication is part of our ongoing commitment to educate and inform our stakeholders on the essential role nickel plays in industrial applications to address these grand challenges.”

Read more

Inuit employment in Nunavik mines still weak – by Sarah Rogers (Nunatsiaq-on-line.ca – September 27, 2013)

http://www.nunatsiaqonline.ca/

Only 175 Inuit work at the Raglan nickel mine

Nunavik Inuit still make up only 13 per cent of the work force at the region’s only fully operational mine. At the Raglan nickel mine complex, in operation since 1998, only 175 of 1,292 workers are Inuit — well under the 20 per cent initially targeted for the region.

And those numbers haven’t changed much since 2012. “The data for Xstrata mine site is very similar to last year,” said Margaret Gauvin, director of the Kativik Regional Government’s sustainable employment department, during a regional meeting earlier this morning.

“Contract companies have a harder time getting Inuit workers, and that brings the percentage down.” A number of companies like Katinniq Transport, Iglu Construction and Nunavik Construction are contracted to work at the Xstrata site. But increasing Inuit employment in the mining sector remains a priority for the KRG, which wants to encourage students to stay in school or return to school in areas related to mining, Gauvin said.

More than $10 million over the next two years is targeted at mine training in Nunavik — to respond to a growing number of mining projects in development and to address fears among Nunavimmiut that they are being left out of the process.

Read more

Commentary: Resource nationalism and mining reforms: An increased potential for international disputes – by Harry Burnett, Caline Mouawad and Louis-Alexis Bret (Northern Miner – September 26, 2013)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. 

Ernst & Young listed resource nationalism as the number one risk threatening the mining sector in 2013, a sharp increase over five years ago when resource nationalism appeared at the bottom of Ernst & Young’s top 10 list of business risks facing the mining and metals sector.

Amidst a struggling global economic context, increasing mineral and metal prices over that period have fueled host governments’ efforts to seek a greater take from the mining sector. These efforts have translated into a new wave of mining reforms imposing or increasing royalties and mining taxes, introducing local beneficiation requirements under penalty of increased export levies, or limiting foreign ownership of mining assets.

These contemplated or newly-enacted mining reforms have generated uncertainty and have caused mining projects around the world to be deferred or cancelled altogether. These reforms — with their dramatic impact on existing projects’ risk/reward equation — have caused, and are likely to continue to cause a significant number of international disputes between international mining companies and resource-rich host governments including Peru, Bolivia, Venezuela or Mongolia.

Read more

Blood diamonds and do-gooders – by Dustin Benton (New Statesman – September 26, 2013)

http://www.newstatesman.com/

Tim Worstall on conflict minerals – good economics, bad politics.

Earlier this week, Global Witness, the organisation behind restrictions on blood diamonds, called for an EU law to restrict the use of conflict minerals. This would match a US law, called the Dodd-Frank Act, which requires companies to trace the origin of certain metals through their supply chain to ensure they don’t come from known conflict zones.

To be clear, conflict minerals are both horrible and, unfortunately, in most of our electronics. Few would defend them, but the call for a new law was immediately met by criticism. “There are times when the actions of do-gooders makes [sic] me want to kneel down and weep bitter tears of pain,” exclaimed Tim Worstall in Forbes, who wrote a riposte to the call for the new law.

This isn’t because Worstall supports conflict minerals – he doesn’t – but because he thinks that we can prevent conflict minerals from being used for 300-400 times less money. Fundamentally, this is a debate about how best to create supply chain transparency, an essential component of resource resilience.

In essence, Worstall’s solution is to regulate smelters rather than manufacturers. Because the mineral ores used to create metals have a unique “fingerprint”, they can be tested prior to smelting to ensure the fingerprint doesn’t match that of mines from known conflict areas.

Read more

Beneficiation lip service as hands-on-hips South Africa watches China usurp global ferrochrome edge – by Martin Creamer (MiningWeekly.com – September 27, 2013)

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

South Africa preaches beneficiation but it is certainly not practising it in the chrome mining space. Instead, with its hands on its hips, it is watching the Chinese ascend to the top spot in ferrochrome, which forms the beneficiation baseline of the chrome-mining value chain.

South Africa has a mature chrome value chain, the 2010 socioeconomic benefits of which were 200 000 jobs and a contribution of R42-billion to this country’s gross domestic product (GDP). However, South African ferrochrome’s rapidly declining market share is putting 60 000 to 80 000 of those jobs at risk, along with more than half of that GDP contribution.

Driving this home last week was the MetalBulletin Event’s chromite and ferrochrome conferences in Johannesburg. Instead of at least maintaining the credence it constantly gives to local value addition, it is watching ferrochrome exports decline and raw chrome exports soar.

For decades, South Africans have been urging miners to refrain from exporting raw ore and to add value to it before it leaves the country.

Read more

Commentary: Quebec’s evolving mining regime – by Madeleine J.M. Donahue and Jean Piette (Northern Miner – September 26, 2013)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. 

Quebec has been making further strides in updating its mining regime to reflect the province’s needs, realities and political priorities.

The Quebec government recently took three major steps towards this goal by: tabling a proposal in May 2013 to change the mining royalty regime; introducing Bill 43 on May 29, 2013, to replace the current Mining Act, which dates back to 1987; and passing amendments on July 23, 2013, to the Regulation to amend the Regulation respecting mineral substances other than petroleum, natural gas and brine in order to set new rules concerning the financial guarantees required for the restoration of mining sites.

Mining royalties

In May, the government tabled its proposal to change the mining royalty regime to increase the return on mining royalties for Quebec. It decided to require all mining operators to pay a minimum mining royalty, called the minimum mining tax, and a progressive tax on mining profits. The minimum mining tax will be 1% of the total output at the shaft head below or equal to $80 million and 4% of each dollar in excess of the $80 million threshold. The minimum mining tax paid can be carried forward and applied against the tax on future mining profits.

Read more

Norilsk Sees Nickel Surplus Shrinking Next Year on Idled Plants – by Yuliya Fedorinova & Marina Sysoyeva (Bloomberg News – September 27, 2013)

http://www.bloomberg.com/

OAO GMK Norilsk Nickel, the world’s largest producer of the metal, urged producers to start idling unprofitable operations to fight a surplus that has damped prices and caused losses.

Consecutive quarters of losses should push companies to cut output, which may narrow the nickel surplus 30 percent to 70,000 metric tons in 2014 from 100,000 tons this year, according to Anton Berlin, marketing director at ZAO NormetImpex, a unit of Norilsk Nickel.

Nickel, used in stainless steel, tumbled into a bear market in May and is set for a third yearly loss, as demand waned and China increased output of a substitute derived from lower-grade ores. Additions to Chinese nickel pig iron capacity outstrip closures, creating a third consecutive annual surplus in 2013, according to a Deutsche Bank AG report in August.

“Unfortunately, we don’t see significant changes on the nickel market yet compared with what we had at the start of the year,” Berlin said in an interview Sept. 25. “From 35 to 40 percent of producers are still loss-making and the gap between supply and demand remains high.” Nickel traded at about $13,887 a ton on the London Metal Exchange by 10:35 a.m. local time, down 19 percent this year, making it the worst performing industrial metal.

Read more

Will silicosis be SA gold’s next big trial? – by Geoff Candy (Mineweb.com – September 26, 2013)

http://www.mineweb.com/

Wage negotiations may have concluded but South Africa’s gold sector still faces a number of challenges, not least of which is a looming class action suit.

GRONINGEN (MINEWEB) – Having only barely dispensed with the plummeting gold price, increasingly demanding shareholders and some of the tensest wage negotiations in memory, the South Africa’s gold producers were probably hoping for a little respite. But, instead, find themselves staring at the looming presence of a silicosis class action suit that seems to be growing inexorably larger with each passing month.

Right now, there are three separate class action matters pending against the country’s gold miners but, the three teams of lawyers have just applied to the courts to consolidate these various claims into a single one that will be defended by 31 companies, which include all of the country’s gold miners and their various operating entities as well as Anglo American South Africa and African Rainbow Minerals, who no longer operate gold mines but did so when some of the claimants contracted the lung disease in question.

It should be noted that Anglo American SA announced yesterday it has just settled 23 silicosis claims brought against it for an undisclosed sum and no admission of liability.

Read more

REUTERS SUMMIT/-Polish entrepreneurs come of age with global acquisitions – by Christian Lowe and Marcin Goclowski (Reuters India – September 27, 2013)

http://in.reuters.com/

WARSAW, Sept 27 (Reuters) – Polish companies are buying into foreign markets long dominated by Western multinationals, driven by growth at home and a hunger to prove they are no longer Europe’s poor relations.

Twenty-four years after Communist rule ended in Poland, its companies now have the scale, knowledge and self-belief to expand abroad, chief executives and government officials said at a Reuters Eastern Europe Investment Summit this week.

“We are building our economic power as a country,” said Zbigniew Jagiello, chief executive of PKO BP, Poland’s biggest bank. “I hope that … before 2025 we’ll see a Polish company which will be a multinational, known worldwide.”

Two or three years ago Polish firms had almost no significant presence abroad. Executives from Canadian firm Quadra FNX recalled that when Polish copper miner KGHM approached them about a takeover, they had never heard of the Polish firm and doubted they were serious. Since then, there has been a run of foreign acquisitions, and there are more on the way.

Read more

Iran’s return to the oil market could send prices diving – by Yadullah Hussain (National Post – September 27, 2013)

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

Iran’s return to the oil market could trigger a “positive supply shock,” sending oil prices plunging by as much as US$20 per barrel, although Saudi Arabia will probably move swiftly to ensure a softer, $10-drop in crude prices.

Increasingly crippling sanctions imposed by Western countries to punish Tehran for pursuing a nuclear program has limited Iran’s ability to export its primary production over the past few years.

But in recent weeks, both Tehran and Washington have replaced their sabre rattling with a softer tone, raising hopes of a diplomatic solution, especially as the Iranian government hopes to resolve the nuclear dispute within three to six months.

U.S. Secretary of State John Kerry was to meet Iranian foreign minister Javad Zarif on Thursday in what is billed as the first direct contact between the U.S. and Iran in six years. Foreign ministers from the U.K., China, France, Germany and Russia also were to join in the discussion.

Read more

Harper ‘won’t take no for an answer’ from U.S. on Keystone XL – by Joanna Slater (Globe and Mail – September 27, 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.

NEW YORK — Prime Minister Stephen Harper warned that Canada would not take no for an answer from the United States on the Keystone XL pipeline and declared that political calculations were the only obstacle blocking the project.

In pointed remarks to an audience in New York, Mr. Harper asserted that the arguments in favour of the proposed pipeline were “overwhelming” and vowed to continue his campaign to win approval for the project until it succeeds.

“My view is that you don’t take no for an answer,” Mr. Harper said. “We haven’t had that [from the U.S.], but if we were to get that, that won’t be final. This won’t be final until it’s approved and we will keep pushing forward.”

Mr. Harper didn’t spell out what Canada would do if Keystone were rebuffed, but did point to demand for Canadian energy around the world and to proposals for eastern and western pipelines. “If I were an American the last thing I would want to see is Canada selling its oil anywhere else.”

Read more

Oil find boosts Nfld. offshore prospects – by Jeffrey Jones (Globe and Mail – September 27, 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.

CALGARY — Newfoundland’s government is touting a major offshore discovery as the start of a new chapter in the province’s oil industry, and a reason for international energy companies to consider investments there.

Statoil ASA of Norway said Thursday its discovery in the Flemish Pass Basin, called Bay du Nord, could hold 300 million to 600 million barrels of light oil. The upper end of that range would be Newfoundland’s third-largest discovery. Statoil’s partner in the project is Calgary-based Husky Energy Inc.

Bay du Nord represents the partners’ third oil discovery in that area. The find is in deeper North Atlantic water and farther off the coast from the Jeanne d’Arc Basin, where the Hibernia, Terra Nova and White Rose fields produce, and the $14-billion Hebron field is under development.

“That’s good news for us and it certainly will encourage increased offshore exploratory activity. It’s one of the largest offshore oil fields to be discovered off Canada,” Tom Marshall, Newfoundland’s Natural Resources Minister, said in an interview.

Read more