Republic of Mining

Ferrochrome: An Industry Moving Beyond South Africa – by Stuart Burns (Metal Miner – March 11, 2013)

July 25, 2013

Part One

When you think of ferrochrome, you traditionally think of South Africa. Indeed, power supply problems in South Africa have been a major source of volatility for FeCr prices over the last few years, as the state power utility Eskom has struggled to provide enough electricity for industrial and residential users.

Ten years ago, over half the world’s FeCr came from South Africa, but since then Kazakhstan, India and China have all risen in prominence, with China moving into top spot last year, as this graph from HSBC shows.

South Africa continues to face power problems; currently Eskom is engaged in a power buy-back agreement with FeCr producers resulting in the probable loss of about 100,000 tons of production, according to an HSBC metals & mining survey, as Xstrata–Merafe closes at least five of its 20 furnaces.

Even if this cutback is reversed in the second half of 2013, South Africa’s expensive winter tariffs will then kick in, further impacting utilizations rates.

NEWS RELEASE: OMA member profile: St Andrew Goldfields — production from its H-cubed operations

July 25, 2013

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

While the price of gold has slid recently, this doesn’t mean that precious metals producers and explorers have been operating in a holding pattern waiting for a price rebound. Companies have been making adjustments, striving to control costs, while producing to generate cash and build reserves. They know vagaries of gold price movements can be volatile both in going up and tumbling down.

The second quarter of 2013 saw a 13% decrease in average gold prices to US$1,414 per ounce. This marks the largest quarterly decline in gold prices since 1980. During that period, St Andrew Goldfields continued to make progress on its Taylor advanced exploration gold project about 50 kilometres east of Timmins.

An 8,500 tonne bulk sample from the Taylor project yielded 686 ounces of gold, which contributed to the 25,353 ounces of gold St Andrew Goldfields produced in the second quarter from its three operations. The company has advised that gold production from its Holt, Holloway and Hislop mines (“H3” cubed) is expected to be between 95,000 ounces and 105,000 ounces of gold in 2013.

“Our second quarter results remain strong with production at the 25,000 ounce level,” said Jacques Perron, President and Chief Executive Officer of St Andrew Goldfields.

Kathleen Wynne ‘involved all along’ in gas-plant cancellations, opposition says – by Sue-Ann Levy (Toronto Sun – July 25, 2013)

July 25, 2013

http://www.torontosun.com/home

A little more than six weeks ago at the committee hearing evidence into the gas plant scandal, Premier Kathleen Wynne denied — under oath — all involvement in the decision to cancel the plants or to delete key e-mails related to a move that could cost taxpayers as much as $1-billion.

“Those were decisions that were made by other people in other conversations and I wasn’t part of those conversations, I wasn’t in those rooms,” the premier said at the time.

At the time I was highly skeptical that she sat on the sidelines blissfully unaware of this evolving scandal considering she was co-chair of the 2011 Liberal election campaign.

But when a letter surfaced Wednesday — in response to a request from the gas plant committee to dig deeper for the supposedly deleted gas plant e-mails — it pointed to far more involvement by Ontario’s unelected premier than she’d care to admit.

In that letter, deputy minister of government services Kevin Costante confirms to the Standing Committee on Justice Policy that — poof! — as if by magic some 3,226 backup tapes have been suddenly been found for 13 Liberal politicians and staffers that could contain “potentially responsive” e-mails related to the cancellation of the two gas plants in Oakville and Mississauga, a.k.a Project Vapour Lock.

A cut above [Sudbury diamond cutting] – by Carol Mulligan (Sudbury Star – July 25, 2013)

November 3, 2015July 25, 2013

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

It pales in value to the 69.42-carat diamond Richard Burton famously gave to Elizabeth Taylor in the 1960s. But a 35-carat diamond mined in the James Bay Lowlands, and being processed in Sudbury, is setting a record for the largest diamond to be mined, cut and polished in Canada.

The unassuming stone, which uncut is about the size of a small wad of gum, will soon reveal its magnificent sparkle and brilliance under the skilled and gentle touch of a trusted, experienced diamond-cutter.

Uri Ariel, president and chief executive officer of Vancouverbased Crossworks, said the stone comes close in size to the famous Taylor-Burton diamond. While the latter was of a higher calibre, Burton wouldn’t have “offended” Taylor by presenting her with this stone, Ariel told a small group in the boardroom at Crossworks’ downtown Sudbury plant.

The stone was mined three years ago at De Beers’ Victor Diamond Mine. Ariel put it aside until three or four months ago when he was confident his company could process it to its best advantage.

No quick fix as Anglo’s new boss prepares to woo investors – by Clara Ferreira-Marques (Reuters U.K. – July 24, 2013)

July 25, 2013

http://uk.reuters.com/

LONDON, July 24 (Reuters) – Anglo American’s new boss will lay out his stall on Friday after four months in the job and while investors are not counting on a quick fix, they are betting his plans will include cost cuts, more disciplined spending and potential asset sales.

Anglo, the smallest of the major diversified miners, has underperformed its peers, most recently battling labour unrest in South Africa, where it generates half its earnings, and multi-billion dollar cost overruns in Brazil.

Investors piling into BHP Billiton, Rio Tinto and Anglo in 2006 would have made more than one and a half times their money at BHP and seen returns of 65 percent at Rio. But they would have lost money at Anglo – a negative total return of around 16 percent, according to Reuters data.

Anglo posted its first loss in a decade in 2012, a year of hefty writedowns and CEO departures across the industry. According to Citi, last year Anglo’s return on equity, a measure of profitability, hit its lowest level since the 1930s.

So while the market may not be preparing for what some analysts called a “big bang” menu of asset splits or a radical and frequently debated platinum spin-off – all are demanding change from boss Mark Cutifani, an Australian former miner and engineer who joined from bullion producer AngloGold.

First Nations royalty tax regime called for – by Rick Garrick (Wawatay News – July 24, 2013)

July 25, 2013

http://www.wawataynews.ca/

Deputy Grand Chief Les Louttit is calling for a “First Nations royalty tax regime” for all developments within Treaty 9 and 5 territories.

“We don’t want to be at the local First Nation negotiating or tribal council-level negotiating table,” Louttit said. “(Nishnawbe Aski Nation is looking for) a resource revenue and benefits sharing agreement with Ontario, which would include mining, forestry, hydro or tourism — that’s where NAN’s role is.”

Louttit said NAN is not interested in being involved with the Ring of Fire negotiations that are scheduled to involve Matawa’s chief negotiator Bob Rae and Ontario’s lead negotiator Frank Iacobucci. Iacobucci was appointed on July 2 and Rae was appointed on May 10.

“We were not involved in Musselwhite; we were not involved in the Moose Cree OPG or Detour Lake project or any of the Wabun Tribal Council projects dealing with mining and hydro,” Louttit said. “The only time NAN has recommended professional advice is back in 2000 when the Victor Mine was being negotiated. I think the NAN executive at that time provided some or recommended some legal and professional advice to the First Nations.”

Iacobucci visits Matawa communities – by Shawn Bell (Wawatay News – July 24, 2013)

July 25, 2013

http://www.wawataynews.ca/

Ontario’s Ring of Fire negotiator, Justice Frank Iacobucci, made his first visits to Matawa communities last week in what he said was a chance to see the communities, meet community members and leaders and get a better sense of what the issues facing Matawa communities are.

“I want to show respect to the First Nations, by visiting and explaining what my mandate is, and also so they know who I am,” Iacobucci said. “We want to ensure we have good lines of communication.”

Iacobucci, who most recently completed a report on the underrepresentation of First Nations people on provincial jury rolls, was named Ontario’s Ring of Fire negotiator in June. The Matawa First Nations have contracted former Liberal leader Bob Rae to negotiate with Iacobucci on their behalf.

On July 18 Iacobucci and Northern Development and Mines Minister Michael Gravelle travelled to Neskantaga. They had previously visited Marten Falls and Eabametoong. Iacobucci said he hopes to be invited to visit all Matawa communities before formal negotiations start.

Financial, human toll of ‘horrific’ Big Gossan accident costs FCX dearly – by Dorothy Kosich (Mineweb.com – July 24, 2013)

July 24, 2013

http://www.mineweb.com/

28 fatalities, the loss of millions of pounds of copper and thousands of ounces of gold, as well as creating a new oil & gas subsidiary, slammed FCX’s 2Q.

RENO (MINEWEB) – The tunnel collapse in a Freeport-McMoRan Copper & Gold training facility in Indonesia “was an incredibly horrific convergence of events that came together because of the geology of the rock and the influence of water and air on our ground support facilities, and unfortunately just happened as we were having this training meeting,” CEO Richard Adkerson told analysts during a conference call Tuesday.

On May 14th, the accident occurred at PT Freeport Indonesia, which resulted in 28 fatalities and 10 injured when the rock structure above an underground ceiling for a training facility collapsed in an unprecedented and unexpected event. While the accident occurred outside of mining operations, mining and processing activities at the Grasberg complex were temporarily suspended as Indonesian government authorities also conducted inspections.

“In the quarter, we lost roughly 125 million pounds of copper and 125,000 ounces of gold,” said Adkerson. “The full year impact will be greater than that. We estimate 230 million pounds of copper and 250,000 ounces of gold.”

William Boor, Cliffs Natural Resouces Senior VP-Global Ferroalloys, Ring of Fire Thunder Bay Speech (June 20, 2013)

July 30, 2013July 24, 2013

http://www.cliffsnaturalresources.com/

William Boor, senior vice president — global ferroalloys, spoke at the 3rd Annual Ontario Mining Forum, held in Thunder Bay in June 20-21, 2013. During his keynote address, Mr. Boor talked about Cliffs Chromite Project and the potential impacts and opportunities mineral resource development projects can have for the communities of the Ring of Fire region of Northern Ontario.

Third Ontario Mining Forum Speech – by William Boor, Senior Vice President Global Ferroalloys

This evening I’m very happy to be here, happy to have the opportunity to speak to such a great room and a wonderfully captive audience as well. I’m excited about the opportunity because I think we have come to a time that will prove to be really critical in the history of the Ring of Fire development.

I wanted to start out by saying that I stand here talking tonight as a face of “industry.” We talk about Government, First Nations and industry and I am the face of industry. I know what comes with that. As “industry” I am expected to be self-interested for my company’s shareholders only, interested in keeping as much as possible, and by inference, giving as little as possible.

Ring of Fire talks between First Nations, province to start soon – by Alisha Hiyate (Mining Markets Magazine – July 23, 2013)

July 24, 2013

http://www.miningmarkets.ca/

Bob Rae on his new gig as chief negotiator for the Matawa Tribal Council

Talks between First Nations and the Ontario government regarding development in the remote Ring of Fire area are set to start soon, now that both sides have appointed lead negotiators.

In May, the Matawa Tribal Council, which is made up of nine First Nations communities that would be most affected by potential development in the Ring of Fire, announced that lawyer and politician Bob Rae will be their chief negotiator. Rae was the leader of the federal Liberal party until mid-April, and premier of Ontario from 1990-1995. He will step down as MP for Toronto-Centre at the end of July, freeing him to work on the negotiations full time.

Earlier this month, the province named its own chief negotiator — retired Supreme Court Justice Frank Iacobucci.

While commodities prices have seen a big pullback since 2011, it might actually be a good time for such negotiations — the scope of which is yet to be defined, but will likely include investments in education and health, as well as infrastructure, and will clearly take time to conclude.

Japan has vision for California-style ‘platinum valley’ in SA – by Helmo Preuss (Business Day Live – July 23, 2013)

July 24, 2013

http://www.bdlive.co.za/

JAPAN plans to encourage a “platinum valley” in South Africa similar to the US’s Silicon Valley, minister in the Japanese embassy in Pretoria Ken Okinawa told BDlive in an exclusive interview last week.

“What we want to do is encourage South Africa to establish a kind of platinum valley here similar to Silicon Valley in California. This facility would aim to find new uses for platinum, while also addressing issues such as job creation and beneficiation,” he said.

To promote this, a senior Japanese expert in fuel cells would shortly come to South Africa, he said.

Government-led projects have supported the commercialisation of fuel cells for many years in Asia, Europe and North America, and this has led to cost reduction, technological advancements and customer acceptance.

Yoshinori Tanaka of the national policy unit in Japan said in 2012 that the need for platinum group metals was likely to increase as more fuel cells that used platinum as a catalyst were installed in cars and homes.

Mark Cutifani to set out his vision for Anglo American – by James Wilson and Andrew England (Financial Post – July 22, 2013)

July 24, 2013

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

Metals prices are under pressure. Costs remain sky-high. And disgruntled shareholders want more money back. Yet still there is a consolation for most mining chief executives: their problems are not as bad as Mark Cutifani’s.

At Anglo American, the diversified miner he has led since April, Mr Cutifani does not merely have to pep up the company’s financial performance. In South Africa, where Anglo’s roots date back nearly 100 years, he has to show political savvy to negotiate a sometimes violent environment of labour unrest and government anger. In Brazil, Anglo’s flagship iron ore project is wildly over schedule and budget.

This week Mr Cutifani, one of a cohort of recently anointed chief executives at the world’s largest mining groups, has promised his first public explanation of how he intends to improve Anglo, which underperformed its peers during the mining boom. Since 2008 Anglo’s total shareholder return has halved compared with a fall of 24 per cent for Rio Tinto and a 44 per cent increase for BHP Billiton.

“The company has not been delivering on shareholder expectations,” he acknowledges. “We need a much more commercial, value-focused mindset.” Rivals including BHP and Rio have promoted insiders to their top jobs, arguably giving them a head start in addressing a markedly more pessimistic environment for the sector.

Guatemalans can sue HudBay in Canada, judge rules (CBC News Business – July 23, 2013)

July 24, 2013

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

Miner faces lawsuits over alleged rapes and violence at Guatemalan mine unit

An Ontario court has cleared the way for a group of Guatemalans to sue mining company HudBay Minerals Inc. in Canadian courts over alleged shootings and gang rapes at a mining project. The ruling, handed down Monday, means that the claims of 13 Mayan Guatemalans can proceed to trial in Canadian courts, according to a lawyer for the plaintiffs.

The Guatemalans are attempting to sue over gang rapes by security personnel and military personnel at the Fenix project nickel mine near El Estor, Guatemala in 2007 and 2009. The indigenous group have also alleged a shooting at the same mine paralyzed one victim, while a local community leader who voiced opposition to the mine was beaten and killed.

Lawyers for the plaintiffs called it a “wake-up call” for Canadian miners, saying the Toronto-based company could potentially be held legally responsible at home for actions by its subsidiary in Guatemala.

“As a result of this ruling, Canadian mining corporations can no longer hide behind their legal corporate structure to abdicate responsibility for human rights abuses that take place at foreign mines under their control at various locations throughout the world,” said Murray Klippenstein, lawyer for the 13 indigenous Mayans, in a press statement.

B.C. aboriginals entering mining industry in large numbers, report says – by Brian Morton (Vancouver Sun – July 23, 2013)

July 24, 2013

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

B.C. aboriginals are entering the mining profession in growing numbers and a growing number of them are women, according to a report released Tuesday.

The PwC report conducted for the B.C. Aboriginal Mine Training Association also found that the dollars invested in training an aboriginal job candidate for a mining career resulted in a nearly 300-per-cent increase in annual wages for the employee, from an average of $13,754 to $52,959.

“So, for about a $15,000 investment in our employed candidates, they are contributing about $108,000 to the provincial GDP,” said association chief executive Laurie Sterritt on Tuesday. “That’s pretty impressive. There’s also a 280-per-cent increase in their salary levels, on average. “In addition to the obvious financial benefits, it provides them with confidence, empowerment, hope and possibilities, which changes lives.”

The report found that an investment of $14,808 trains one candidate and generates approximately $106,804 on average for the provincial economy through higher wages and increased spending. As well, each employed graduate generates about $20,000 in government revenue.

Energy has risks. We learn to manage them – by Kenneth Taylor (Globe and Mail – July 24, 2013)

July 24, 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.

Kenneth Taylor retired in 2012 after a 35-year career as an environmental-social planner in the natural gas pipeline industry. He lives in Calgary.

The recent tragic events in Lac-Mégantic, Que., have brought a well-deserved sharper focus to the public discourse on the risks of transporting and handling the fuels that power our everyday world. After several years in which pipeline transport of oil has been the fashionable target for those who are inclined to protest elements of our modern world, railways have now moved into the crosshairs. This gives us an opportunity to reconsider how our society assesses and manages the relative risks of transporting and handling energy.

Each form of the energy we rely on has inherent characteristics that result in risks we must manage for our everyday safety. After long periods of usage, society learns what these risks are and, considering the consequences, develops strict codes of safe use. For example, electricity has its dangers, but in its household power or battery forms, it works beside nearly every one of us virtually 24 hours a day.