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Australia’s glittering investments from China are not all gold – by Sarah Turner (U.S.A. Today – August 20, 2013)

http://www.usatoday.com/

SYDNEY, Australia – Massive investment from China in Australian coal, gas and metals was once something the Australian government highlighted as proof of exemplary economic stewardship. No longer.

The money that China and others have poured into the mineral fields of Western Australia and Queensland have made mine owners and miners wealthier. But it has also hurt longtime industries that rely on tourism and exports.

After an amazing 22 consecutive years of stable economic growth, Australians are experiencing a financial downturn. And some of the blame is being leveled on the political class that now runs from the Chinese model it once celebrated.

“The China resources boom is over,” said newly reinstated Labor Party leader Kevin Rudd, whose party forced out their prime minster, Julia Gillard, because polls showed she would be trounced by the conservatives in national elections in September.

“The time has come for us to adjust to the new challenges,” Rudd said. “New challenges in productivity. New challenges also in the diversification of our economy.”

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Old Economies Rise as Growing Markets Begin to Falter – by Nathaniel Popper (New York Time – August 14, 2013)

http://www.nytimes.com/

The balance of world economic growth is tipping in another direction. Just as economists have begun lowering their forecasts for China and many other developing economies, the American economy is bouncing back. Japan appears to have turned a corner and is ending almost two decades of grinding deflation. Economic data out of Europe on Wednesday provided the first solid indication that many countries in the euro zone may be escaping the clutches of recession.

The gross domestic product of the 17-nation euro zone grew at an annualized rate of about 1.2 percent in the second quarter. It is certainly not clear, based on only three months of data, that Europe’s recession has ended. But it is further evidence that the older engines of growth are revving into gear as the most recent sources of growth have been slowing down.

“The general proposition for much of the last generation has been that emerging markets grow faster. That’s what’s changed,” said Neal Soss, the chief economist at Credit Suisse. “The acceleration such as it is happening is in the first-world economy rather than the emerging markets.”

The growth of the BRIC countries — Brazil, Russia, India and China — has raised living standards in those nations and in others in Southeast Asia, Latin America and Eastern Europe.

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BURIED SECRETS: How an Israeli billionaire wrested control of one of Africa’s biggest prizes – by Patrick Radden Keefe (The New Yorker – July 8, 2013)

http://www.newyorker.com/

One of the world’s largest known deposits of untapped iron ore is buried inside a great, forested mountain range in the tiny West African republic of Guinea. In the country’s southeast highlands, far from any city or major roads, the Simandou Mountains stretch for seventy miles, looming over the jungle floor like a giant dinosaur spine. Some of the peaks have nicknames that were bestowed by geologists and miners who have worked in the area; one is Iron Maiden, another Metallica.

Iron ore is the raw material that, once smelted, becomes steel, and the ore at Simandou is unusually rich, meaning that it can be fed into blast furnaces with minimal processing. During the past decade, as glittering mega-cities rose across China, the global price of iron soared, and investors began seeking new sources of ore. The red earth that dusts the lush vegetation around Simandou and marbles the mountain rock is worth a fortune.

Mining iron ore is complicated and requires a huge amount of capital. Simandou lies four hundred miles from the coast, in jungle so impassable that the first drill rigs had to be transported to the mountaintops with helicopters. The site has barely been developed—no ore has been excavated. Shipping it to China and other markets will require not only the construction of a mine but the building of a railroad line sturdy enough to support freight cars laden with ore. It will also be necessary to have access to a deepwater port, which Guinea lacks.

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Shawn Ryan’s new Yukon vision – by Gwen Preston (Northern Miner – September 4, 2013)

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

DAWSON CITY, YUKON — Shawn Ryan could have retired. Ryan and his wife, Cathy Wood, are the Yukon prospecting team whose dedicated soil sampling led Underworld Resources to the million-ounce-plus White Gold deposit in 2009, a discovery that sparked a new Yukon gold rush. They also get credit for Kaminak Gold’s (TSXV: KAM; US-OTC: KMKGF) Coffee project, already at 3.2 million oz. and growing, and have at least another dozen soil anomalies on option to explorers across the White Gold district.

After years of scraping by on government grants and prospecting contracts, Ryan and Wood made it to the big leagues when Kinross Gold (TSX: K; NYSE: KGC) acquired Underworld for $138 million. With that payday, plus a steady stream of option payments, the team could easily have stepped back from the grind and enjoyed their just rewards.

Instead, Ryan and Wood spent the last 18 months figuring out how to make exploring for gold in the Yukon less expensive and more reliable. “I could see the crash coming and I could see there was so much money being wasted up here,” Ryan says in an interview in Dawson City. “So we took a step back and thought, ‘If we’re going to keep this momentum alive, we need to add something new — we need to figure out some simple new tools that will increase drilling confidence without costing millions.”

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EXPLORING for GOLD: Lac Seul holds shares in junior explorer AurCrest Gold; Webequie part owner of Cyr Drilling – by Bryan Phelan (Onotassiniik – Fall 2013)

 Onotassiniik is Wawatay’s new mining quarterly.

Ian Brodie-Brown’s first contact with Lac Seul First Nation stood out. Then CEO of Tribute Minerals, a junior exploration company, Brodie-Brown hadn’t just sent a letter to the band. He had sent it voluntarily. “He was the first guy that I’d ever seen – the first company representative – approach a First Nation without being told to by the Crown,” recalls Chris Angeconeb, Lac Seul’s lands and resources co-ordinator at the time.

The introductory letter arrived almost seven years ago. Exploring for base metals at Confederation Lake, in Lac Seul’s traditional territory, Tribute was “basically trying to drum up support for a micro-mine with small output; a little underground project,” Angeconeb says.

Brodie-Brown says he expected new provincial rules for mineral exploration and consultation with First Nations would come eventually (regulations for exploration plans and permits, under a modernized Mining Act, finally took effect this spring). Instead of waiting, “We just decided to take a proactive role,” he says.

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Potash prices head for 20 pct drop after cartel disintegrates – by Ron Bousso (Reuters U.S. – September 6, 2013)

http://www.reuters.com/

LONDON, Sept 5 (Reuters) – Potash prices are poised to drop some 20 percent after the surprise breakup of the world’s largest producer cartel sent buyers and sellers scrambling to establish new valuations, traders said.

Global trade in the material – one of three nutrients vital for agriculture – remains largely on ice after Russia’s Uralkali in July quit the partnership Belarusian Potash Co (BPC), which together with a rival North American cartel controlled some 70 percent of the market.

Belarus’ retaliatory arrest of Uralkali’s chief executive Vladislav Baumgertner in Minsk last week further highlighted the deep rift between the Russian and Belarusian producers.

“As a cartel, producers were able to cut supplies in order to control prices. As competitors, producers will reduce prices rapidly to gain business,” an industry source said.

BPC co-founder Belaruskali appears to be particularly keen to secure new supply deals after the split left it with limited global trading infrastructure, which had been dominated by its Russian partner, traders and industry sources said.

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Glencore to vaunt successes of $46 billion Xstrata deal one year on – by Clara Ferreira-Marques (Reuters India – September 6, 2013)

http://in.reuters.com/

LONDON (Reuters) – Almost a year after winning the battle for Xstrata, Glencore (GLEN.L) is set to show investors evidence of early successes, with costs to come down more than targeted, asset sales in hand and key staff retained.

Glencore Xstrata, which has yet to shed a reputation for opacity, will bring its entire management team to London on Tuesday to outline progress after four months in control of Xstrata, following the $46 billion takeover that became the mining sector’s largest to date.

In its first major presentation on the deal since it was completed, analysts expect the trading and mining conglomerate to impress with tougher cost cutting targets. These are likely to include a significant improvement on the $500 million per year synergy goal provided at the time of the acquisition.

That covered only marketing benefits – not costs to be squeezed out of Xstrata’s mines – and Glencore has already said it expects a final number “materially in excess” of that. Analysts at RBC Capital Markets said this week they expected marketing synergies of $600 million – as more Xstrata products go through the Glencore trading machine.

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Obama blaming Canada for Keystone delay is just more fence-sitting – by Claudia Cattaneo (National Post – September 6, 2013)

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

As the latest, realistic decision point on whether the Keystone XL pipeline gets a United States permit slips toward the spring of 2014, the new excuse bandied about is that the delay is Canada’s fault because it has failed to deliver greenhouse gas regulations for the oil and gas industry.

It’s an excuse that needs to be exposed for what it is: a continuation of the U.S. administration’s leadership by avoidance on a grossly mishandled project.

Indications are that Canada will be well on its way to implementing regulations for oil producers by next spring that will be more stringent than anything Obama has been able to deliver in his own country.

The regulations will put Canada’s oil and gas industry at a disadvantage versus U.S. oil producers and all other suppliers of oil to the United States, yet the odds are Obama will still sit on the fence because he will by then be facing mid-term elections in November 2014, when he will need the support of his insatiable green base.

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So-called ‘Dutch Disease’ has actually left Canada’s economy much stronger, economist says – by Jen Gerson (National Post – September 6, 2013)

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

A Quebec-based economist is trying to squelch the “Dutch Disease” theory long touted by New Democratic Party leader Thomas Mulcair, claiming the phenomenon has actually left Canada’s economy much stronger.

“The increase in commodity prices is a good news story for Canada. It means there is increased world demand for something Canada produces,” said Stephen Gordon, author of a report released Thursday by the University of Calgary School of Public Policy.

“What happened is that we shifted workers away from a declining sector and into an expanding sector. That’s exactly what you’d expect, and it’s what you’d want because it results in higher wages.”

The economic premise of Dutch Disease has long pinned the decline of central Canada’s manufacturing sector to growing oil production in Alberta.

The term is an economic shorthand that describes the hollowing out of a country’s manufacturing sector after the discovery of natural resources; the subsequent increase in the value of currency makes exporting manufactured goods uncompetitive.

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Feathers fly as officials cry fowl on fed’s Chicken gold miners raid – by Dorothy Kosich (Mineweb.com – September 6, 2013)

http://www.mineweb.com/

Did the EPA need to send in a federal-state SWAT-type team to enforce the Clean Water Act in Alaska’s Fortymile Mining District? Alaska officials say, “No!”

RENO (MINEWEB) – Outraged by what his office called a “needless show of force,” Alaska Gov. Sean Parnell Thursday ordered an investigation into the practices of the Alaska Department of Environmental Conservation’s Environmental Crimes Unit and the U.S. Environmental Protection Agency’s Criminal Investigation Division after armed government agents, wearing body armor, swooped in on 30 placer gold mining operations along the Fortymile River near Chicken, Alaska.

“With a mere last minute notification to our DEC commissioner, Alaska’s attorney general, and the Department of Public Safety, the EPA, BLM and a DEC investigator took it upon themselves to swoop in on unsuspecting miners in remote Alaska,” said Parnell. “This level of intrusion and intimidation of Alaskans is absolutely unacceptable. I will not tolerate any state agency’s participation in this sort of reckless conduct.”

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Commentary: Understanding [Quebec’s] Bill 43 – by Pascal de Guise, Yaël Lachkar and Misha Benjamin (Northern Miner – September 4, 2013)

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

Bill 43 is the third attempt to reform Quebec’s Mining Act in the last five years. The first two bills were tabled by the Liberal government, but were not passed. This latest bill (Bill 43), tabled by the minority Parti Québécois (PQ) government, would be a major overhaul of the Mining Act, and its importance should not be understated. The prices of metal are falling and mining investments are slowing around the world. At a time when Quebec’s reputation as a mining-friendly jurisdiction is being questioned and critics from all sides are calling for a reform, Bill 43 could have an adverse impact on mining investment in the province.

It is in this context that the government of Pauline Marois has proposed a PQ version of the Mining Act and an overhaul of the way in which mining royalties are collected. The plan, which was referred to during the election period as the “North for All” plan, is a remodelling of the Liberals’ Plan Nord.

During the election period and the following months, drastic measures were proposed by the Minister of Natural Resources, Martine Ouellet, which were heavily criticized on the fiscal front. At the time, the PQ was criticized for aggressively seeking to maxi¬mize royalties from ex¬ploiting natural resources, affecting the industry’s ability to properly function.

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Chris Verbiski Turned A Nickel Mine Discovery Into Two Of The Finest Fishing Lodges In The World – by Monte Burke (Forbes Magazine – September 4, 2013)

http://www.forbes.com/

This story appears in the September 23, 2013 issue of Forbes.

The best Atlantic salmon fishing outfit in Labrador–and just possibly in all of North America–was born in the gloaming of Sept. 16, 1993, when two mineral prospectors made the discovery of a lifetime. Chris Verbiski, then 25, a college dropout from Newfoundland with an obsession for rocks, had teamed up with a man named Albert Chislett, then 45, to scour the wild, windswept crags of Labrador for diamonds on behalf of a small mining company.

It had been a rough summer. The two men were sun-blistered and swollen with bug bites. They’d burned through their advance money and were nearly broke. Worse: Only a few weeks remained before the weather shut down prospecting in this harsh, beautiful region on the northeast coast of Canada.

On that early evening, as they headed back to camp in the Inuit community of Nain, they spotted something from their helicopter: a thick stripe of rust-colored rock on a hill above Voisey’s Bay. They hovered over it. Verbiski marked the spot on his survey map. But they were low on fuel and couldn’t descend. It seemed promising–perhaps the indicator of a surge of metals that had been pushed to the earth’s surface a billion years ago. After the fruitless summer that hope was all they had.

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Mining subsidising inefficient beneficiation beggars belief – chamber president – by Martin Creamer (MiningWeekly.com – September 5, 2013)

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

JOHANNESBURG (miningweekly.com) – The possibility of the South African mining industry providing effective subsidies to underpin inefficient mineral beneficiation beggars belief in a modern country trying to assert its regional economic credentials.

That is the view of Chamber of Mines of South Africa president Mark Cutifani, who adds that it is critical that the economics of mining are clearly understood, along with the conditions required to invest in an uncertain outcome.

“In mining we know very little about the resources we mine and we have to make large capital decisions on limited knowledge. If we then have to be the supporter of downstream inefficiency, we are setting ourselves up for failure.

“The possibility that the mining industry will provide effective subsidies to support inefficient industries beggars belief in a modern country trying to assert its regional economic credentials.

“Let me be clear: it is not that the mining industry does not support beneficiation, but the laws of economics are simple and all-powerful.

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PwC Global Mining Deals: 2013 Mid-year report: Deals in the dumps

 

http://www.pwc.com/ca/en/index.jhtml

Click here for the full report: http://www.pwc.com/ca/en/mining/publications/pwc-m-a-industry-briefing-2013-09-en.pdf

Despite a recent prolonged stretch of growth, the mining industry is fundamentally a cyclical business. It is especially during the downturns that companies are forced to remember this reality, and adjust to the risks.

So far in 2013, there have been a number of reminders — from falling commodity and equity prices to multibillion-dollar write downs across the sector. Neither gold’s reputation as a haven nor China’s steady hunger for commodities have been able to hold back the bears, as the global economy continues to try to find a solid footing.

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NEWS RELEASE: Miners switch M&A roles & decrease traditional takeovers so far in 2013: PwC

http://www.pwc.com/ca/en/index.jhtml

Click here for the full report: http://www.pwc.com/ca/en/mining/publications/pwc-m-a-industry-briefing-2013-09-en.pdf

TORONTO, September 5, 2013 — A loss of confidence due to write-downs, market uncertainty, and falling commodity and equity prices across the mining sector dampened M&A activity in the first half of 2013 with deal volume dropping 31% from the same period in 2012, and deal values down 74% from January –June 2013, according to PwC’s Mining Deals Report.

“Even with the industry facing a confidence crisis and large mining companies delivering little profitability, limited deals are still getting done,” says John Gravelle, Global and Canadian Mining Leader, PwC. “Traditional takeovers of entire companies are taking a back seat to joint ventures and spinoffs. Expect more of these non-traditional and creative deals to round out M&A activity during the second half of 2013.”

As well, the mining industry’s major public companies have taken on different M&A roles in recent months — switching from buyers to sellers. Rio Tinto plc’s unloading its 80% stake in the Northparkes copper mine in Australia to a Chinese buyer is an example of this, according to the deals report.

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