Republic of Mining

NEWS RELEASE: Vale obtains installation license for [Brazil iron ore project Carajás] S11D – (July/03/2013)

July 4, 2013

http://www.vale.com/en/Pages/default.aspx

Vale informs that it has obtained the installation environmental license (LI) to the iron ore project Carajás S11D, the highest grade and lowest cost world-class project in the industry. With the issuance of the LI, Vale’s Board of Directors approved the complete S11D program, comprised of investments in the mine, processing plant, railway capacity and port.

The LI was issued by Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis (IBAMA) and is part of the project’s second phase of licensing, which authorizes the plant construction. S11D is the largest project in Vale’s history and also in the iron ore industry, being a major lever for value creation, production capacity growth and for maintaining Vale’s undisputed leadership in the global market in terms of volume, cost and quality. A high value-adding project.

The total capex for S11D is US$ 19.671 billion, estimated at a 2.00 BRL/USD exchange rate, encompassing: the development of mine and processing plant (US$ 8.089 billion) and logistics (US$ 11.582 billion).

The project has a nominal capacity of 90 million metric tons per year (Mtpy) of iron ore with proven and proved reserves of 4.240 billion metric tons with an average ferrous content of 66.7%, low impurities and estimated cash cost (mine, plant, railway and port after royalties) of US$ 15.00 per metric ton (at a 2.00 BRL per USD exchange rate). S11D is expected to start-up in 2H16 and to deliver full capacity production in the 2018 calendar year.

Chinese demand to drive African iron-ore projects – by Natalie Greve (MiningWeekly.com – July 4, 2013)

July 4, 2013

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

An increasing dependency on iron-ore imports by China would present substantial opportunity for the intensified development of African iron-ore projects, the MSA Group geology operations manager Brendan Clarke said at the Geological Society of South Africa’s GeoForum conference on Thursday.

China’s iron-ore import ratio was set to rise from 70% of total consumption to 85%, as local grades declined and the costs associated with the mining and beneficiation of lower-grade ores increased.

While the Chinese government was a significant producer, Clarke believed that domestic producers offered an expensive, yet low-quality product. As a result, the country was the world’s largest importer of iron-ore, bringing in 58% of total production in 2012.

The bulk of these imports were from the Pilbara region of Australia, accounting for 45% of imports. South Africa accounted for 6% of the iron-ore China sourced from outside the country in 2012. “Aside from projects in South Africa, there is very little production elsewhere on the continent, as the mega-projects, such as Tonkolili, in Sierra Leone, Simandou, in Guinea, and Mbalam, in Cameroon, struggle to get over the line,” Clarke commented.

The Commodities Supercycle Is Over — Here’s What’s Next – by Ashley Kindergan (The Financialist/Business Insider – July 4, 2013)

July 4, 2013

http://www.businessinsider.com/

Sluggish global growth and a recent economic slowdown in resource-hungry China have hammered commodities markets this year, sending the price of everything from iron ore to copper tumbling. With those sharp reversals—as well as the Fed’s comments about tapering the size of the United States’ monetary stimulus—fresh in their minds, the 300 clients who convened last week at Credit Suisse’s New York headquarters for the bank’s third annual Commodities Day had plenty to talk about.

With few exceptions, the prices of commodities such as oil products, precious metals and industrial metals have been steadily rising over the past decade in what analysts have termed a “commodities supercycle.” That era is over, Credit Suisse experts say, and they expect prices to remain under pressure at least through the end of the year.

What’s more, the prices of individual commodities will no longer rise and fall together as they have for the last five years, Credit Suisse’s commodities team explained in a June 25 research note (“Commodities Forecast Update: The Return of Fundamentals”). As a result, investors and traders are going to have to focus on the specific supply and demand dynamics for individual commodities.

Copper and iron ore prices, for example, are expected to decline because supplies of both metals are becoming more plentiful at the same time that demand is declining.

Special Report: Why Brazil’s new middle class is seething – by Paulo Prada (Reuters U.S. – July 3, 2013)

July 4, 2013

http://www.reuters.com/

SÃO GONÇALO, Brazil (Reuters) – André Tamandaré isn’t supposed to be so angry. Over the past decade, the 33-year-old high-school dropout has moved into his own house, got a steady job and earned enough income with his longtime girlfriend, Rosimeire de Souza, to lead their two kids into Brazil’s fast-rising middle class.

Now a public health worker in a sprawling suburb east of Rio de Janeiro, Tamandaré is the kind of citizen that Brazil’s government thought was fulfilled. Instead, he is one of the more than one million people across Latin America’s biggest country who have hit the streets in a wave of mass protests.

Brazilians are railing against poor public schools, hospitals and transport. They are protesting soaring prices, crime and corruption. They are lambasting a political class so self-satisfied that it failed to see, much less address, the mounting dissatisfaction that led to the protests.

Combined, the concerns reflect growing unease among Brazil’s nearly 200 million people that the country’s long-promised leap into the developed world has fallen short once again.

Ring of Fire Negotiators Pay – CBC News Thunder Bay (July 4, 2013)

July 4, 2013

http://www.cbc.ca/superiormorning/ Morning radio show Superior Morning highlights what’s happening now in Thunder Bay and Northwestern Ontario. Rae vs Iacobucci. Those are the two high profile negotiators for the Ring of Fire mining development. But First Nation policy analyst Russel Diabo wonders who will really benifit. Hear what he has to say. Click here for radio …

Oil at new high raises Canadian oil sands prospects – by Jeffrey Jones (Globe and Mail – July 4, 2013)

July 4, 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 — Oil prices surged to a 14-month high on Wednesday, triggered partly by unrest in Egypt, a factor that may pull some investor interest back into a Canadian energy sector that has been pressured for months by uncertainty over obstacles to increasing oil sands crude exports.

Canadian oil companies such as Suncor Energy Inc. and Imperial Oil Ltd., which produce and refine the fuel, may surprise investors with strong second-quarter results in the coming weeks as world crude prices climb and Canadian prices follow suit.

Strong oil prices have not translated into share gains recently, though that has less to do with oil market fundamentals than the way large investors are allocating their money, said Chris Feltin, analyst at Macquarie Capital Markets Canada Ltd.

“The equities haven’t really responded,” Mr. Feltin said. “The Canadian institutional investors are largely positioned where they want to be, but the U.S. and international investors have been walking away over the past couple of years because they saw increasing risk with Canada in terms of its ability to grow, with reduced visibility for getting any pipelines built, like [Keystone] XL and Northern Gateway.”

Gas pipeline struggle heats up [in Toronto] – by John Spears (Toronto Star – July 4, 2013)

July 4, 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.

A $623.7 million gas pipeline proposal in the GTA by Enbridge has sparked a struggle with rival pipeline firms and conservationists.

Conservationists and rival pipeline companies are challenging a $623.7 million proposal by Enbridge to build a big new natural gas pipeline in the Greater Toronto Area.

But the project’s critics have opposite objections. The conservationists say the pipeline is unnecessary, and will bring more environmentally questionable shale gas into Ontario. The rival pipelines, meanwhile, want to gain access to the Enbridge line precisely so they can bring more shale gas to customers in eastern Ontario and Quebec.

Enbridge’s plan for the new 47-kilometre pipeline through the GTA is now before the Ontario Energy Board. The company declined to talk about the proposal while it’s before the board. But in written material filed with the board, Enbridge says it needs more pipe because it has doubled the number of customers in the GTA over the past 20 years, when it last boosted its pipeline capacity in the region.

Battle over workplace drug tests just heating up following court ruling – by Ian Mulgrew (Vancouver Sun – July 3, 2013)

July 4, 2013

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

More and more Canadians are being asked to prove, in the name of safety, that they are sober and not addled before clocking in at work. Earlier this month, the Supreme Court of Canada issued its first ruling on this incredible invasion of personal privacy and opened the discussion about when it can be allowed.

The high bench confirmed that drug-and-alcohol testing is lawful only under certain circumstances and it gave unions a means by which to challenge some of these policies by demanding better evidence of an existing problem.

In a case watched closely across the country, a majority of six justices on June 14 agreed random workplace drug tests at a New Brunswick pulp mill were unreasonable.

They said Irving Pulp and Paper Ltd. had no right to unilaterally impose mandatory, random alcohol breathalyzer testing. The court said an employer must establish a substance-abuse problem in a safety-sensitive work environment before such random screening can occur.

Mining boom sparks a clash over sex worker rights in small-town Australia – by Rod McGuirk (Associated Press/Huffington Post – June 28, 2013)

July 4, 2013

http://www.huffingtonpost.ca/

MORANBAH, Australia — A lone woman checking into a motel in the Australian mining town of Moranbah can expect some blunt questioning from the owners: “Are you a working girl?” Turning on a heel and storming away indignantly will be taken as an admission to prostitution.

“That sort of reaction is really positive proof as far as I’m concerned,” said Joan Hartley, the 67-year-old owner of the Drover’s Rest Motel and champion of motel operators who want to rid their businesses of sex workers cashing in on a mining boom.

Moranbah in the coal-rich Bowen Basin is part of the new landscape of Australian mining. Workers are increasingly leaving their homes and families for weeks on end to earn big money in distant mines in the Outback. It’s a workforce known as fly-in, fly-out, or FIFO (feye-foh) for short.

Where the FIFO miners go, the FIFO prostitutes follow. With miners earning 110,000 to 160,000 Australian dollars ($100,000 to $150,000) a year, many sex workers find working the remote mining towns more lucrative than the economically moribund cities in which they live, despite the travel costs and a recent slowdown that has seen the mothballing of some inefficient mines.

In La Rinconada, Peru, searching for beauty in ugliness [gold mining] – by Marie Arana (Washington Post – February 28, 2013)

July 4, 2013

http://www.washingtonpost.com/

Gold. The Aztecs killed for it. The Inca enslaved whole populations for it. Spain sent legions of marauding conquistadors up and down the Americas in a hallucinatory hunt, believing that gold was so abundant that chieftains rolled in it, washing away the glittering residue in their daily morning swims.

Down the centuries, the quest for El Dorado has held the South American continent in thrall, luring generations of fortune hunters to its far reaches, from 1st-century warlords to 21st-century adventurers. The earth beneath them has not disappointed. The geologic exuberance known as the Cordillera of the Andes has yielded a fount of treasure: the emeralds of Boyaca, the silver of Potosi, the gold of Cajamarca.

Indeed, when Pizarro conquered Cajamarca in 1532, he demanded a roomful of gold from the emperor Atahualpa; when it was produced, he chopped off the Inca’s head and established a new kind of Golden Rule. So it was that a mineral became king and a craze began.

Nowhere has Peru’s frenzy for gold been so fevered as in the mountains that surround Lake Titicaca. And nowhere has that fever been so intemperate as in a town tucked into a glacial aerie: La Rinconada, the highest human habitation in the world.

Mining’s who’s-who leave AMCU out to dry as accord is signed – by Martin Creamer (MiningWeekly.com – July 3, 2013)

July 3, 2013

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

PRETORIA (miningweekly.com) – The who’s who of the South African mining sector on Tuesday went ahead and signed the framework agreement for sustainable mining without waiting any longer for the emerging Association of Mineworkers and Construction Union (AMCU) to do so, providing a formidable potential bulwark against any errant behaviour during the upcoming wage talks.

Deputy President Kgalema Motlanthe, himself a former mineworker and union leader, led a top table of government, labour and business ratification of the document that AMCU helped to draft 19 days ago, and urged the absent AMCU to do the same as soon as it had consulted fully with its members.

Motlanthe told a media conference that at the Presidential Guest House in Pretoria that there was overwhelming agreement that the framework captured the correct approach to addressing the South African mining industry’s niggling problems.

“It also provides a roadmap,” he said of the framework’s stipulation of issues that had to be tackled forthwith and those that would be tacked in the medium and long term, with inputs from AMCU, the National Union of Mineworkers, Solidarity, UASA, the Chamber of Mines, the South African Mining Development Association and government.

The declaration at the foot of the document signed lays down swift action, no abrogation of responsibilities and immediate meetings to deal with problems.

Top 10 gold miners face 2013 earnings nightmare – by Lawrence Williams (Mineweb.com – July 2, 2013)

July 3, 2013

http://www.mineweb.com/

The tribulations of the world’s No. 1 gold miner, Barrick, are a sign of huge difficulties ahead for the other gold majors too.

LONDON (MINEWEB) – Barrick Gold’s latest announcement of yet a further delay in the hugely costly Pascua Lama gold mine, high in the Andes makes one wonder if the company will ever bring it on stream – however the huge amount of money spent so far suggests the world’s No.1 gold miner has gone too far to can the project now and maintain any kind of shareholder confidence.

See also: Barrick’s huge Pascua-Lama gold mine start-up now delayed to mid-2016

Even so, the project could yet be delayed beyond its new projected start-up date of mid-2016 given continuing local hostility on both sides of the Chile and Argentina borders and one has to anticipate that overall capital costs to bring the mine into production may end up to be yet substantially higher – perhaps in excess of $10 billion when the money is finally counted.

Nowadays Barrick says costs have escalated from around $2 billion, when the initial development plans were set, to the current $8 billion plus and a revised capital cost update has been promised for Q3 this year when the re-sequenced construction schedule has been finalised.

World Bank says mining can make double digit contribution to Nigeria’s GDP – by Luke Ajulo (World Stage Group – July 3, 2013)

July 3, 2013

http://www.worldstagegroup.com/worldstagenew/index.php

WorldStage Newsonline—From the current 0.5 per cent contribution of mining to Nigeria’s Gross Domestic Product (GDP), the World Bank believed that a duble digit figure can be achieved through proper planning.

Speaking at Stakeholders Workshop on the Australian and Canadian Externally Financed Output (EFO) Programme for Mining Sector Development in Nigeria, the World Bank Country Director, Marie Franciose Marie-Nell, said that in partnership with the Canada International Development Agency (CIDA) and the Australian Agency for International Development (Aid), the World Bank was launching a two-year mining sector intervention Programme as a continuation of the Sustainable Management of Mineral Resources Programme which ended last year.

Represented by Mr.Mr. Michael Wong, he said that “it is a stepping stone for a further programme and a wider engagement in the mining sector. As we know, the contribution from the sector is 0.5% GDP, and it can be increased to double digit if possible and we hope that contribution are needed and the Australian government will assist the ministry in developing the roadmap towards the development of the sector.”

He said the Programme is financing timely integrated infrastructural development, adding that the Programme fits into the country’s new system framework for development partners such as DFID, the African Development Bank and others.

Nishnawbe-Aski Nation wants in on Ring of Fire talks – by Jody Porter (CBC News – July 3, 2013)

July 3, 2013

http://www.cbc.ca/thunderbay/

Ontario can’t ignore other First Nation concerns, NAN deputy chief says

One day into his new role and fresh challenges are cropping up for the province’s negotiator in the Ring of Fire. Ontario appointed former Supreme Court Justice Frank Iacobucci on Tuesday as it’s negotiator in talks with the nine Matawa chiefs whose communities are closest to the proposed mining development.

Former Ontario Premier Bob Rae is representing those chiefs in the planned talks. But the Nishnawbe Aski Nation says it needs a seat at the table too. “This is not just a specific regional project, in fact it is a treaty-wide impact and I think that’s what the province needs to recognize,” NAN deputy chief Les Louttit. “We would like to see a broader negotiation framework.”

Lessons from Attawapiskat

Nishnawbe Aski Nation represents 49 First Nations in Northern Ontario. Louttit said communities on the James Bay coast, downstream of the proposed mining development, are especially concerned about environmental impacts.

That’s also the area that has learned hard lessons about the mining industry from its experience with the diamond mine near Attawapiskat, he said. “We cannot simply keep going the way we have in the past,” Louttit said.

Beware dire predictions on Obama’s war on coal – by Steve Hargreaves (CNN Money – July 3, 2013)

July 3, 2013

http://money.cnn.com/

When President Obama announced steps to rein in greenhouse gases last week, the condemnation was swift and fierce.

“It is astonishing that President Obama is unilaterally imposing new regulations that will cost jobs and increase energy prices,” House Speaker John Boehner said of Obama’s plan, which would heavily target emissions from coal-fired power plants.

How steep of a cost do critics fear? Some 500,000 jobs lost and $1.65 trillion shaved off the national income by 2030 if all coal plants have to close, according to a Heritage Foundation report released the day after Obama announced his plan.
Yet there’s reason to doubt these and similarly dire predictions.

Environmental clean up is a difficult thing to measure. Early estimates on how much it would cost to clean air or water have often turned out to be way off. The debate over acid rain is a good example. In the late 1980s, the nation was considering tough new rules on coal-fired power plants and other industrial emitters to curb what was then a major problem.

The Environmental Protection Agency estimated the new rules would total $6 billion in both retrofit costs and in knock-on effects to the economy — such as higher energy prices that cause manufactures to set up shop elsewhere — according to Robert Stavins, director of the Environmental Economics Program at Harvard University.