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Barrick Gold sells mines to Gold Fields as part of restructuring – by James Wilson and Andrew England (Financial Times – August 22, 2013)

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

London/Johannesburg – Barrick Gold has started its promised restructuring by selling a trio of Australian gold mines to industry rival Gold Fields.

The $300m sale will help the Canadian miner’s stretched balance sheet and will switch Gold Fields’ main production focus away from western Africa to Australia, where it will bundle assets with its existing mines to try to lower costs.

Barrick, the world’s largest gold miner by volume, flagged the possible sale of the Yilgarn South mines earlier this month, when it posted an $8.6bn quarterly loss. The loss was linked to writedowns to asset values because of the fall in the price of gold this year.

The three mines at Yilgarn South produce 452,000 ounces of gold annually, equivalent to about a quarter of Gold Fields’ annual output. Barrick said the sale would not change its plan to produce between 7m and 7.4m ounces this year.

Nick Holland, Gold Fields’ chief executive, said there was “considerable opportunity for cost synergies” between the Lawlers mine, one of the Yilgarn South group, and its adjacent Agnew mine.

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South Africa all but off BHP Billiton’s radar screen – by Martin Creamer (MiningWeekly.com – August 21, 2013)

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

JOHANNESBURG (miningweekly.com) – South Africa has all but fallen off the radar screen of BHP Billiton, the world’s biggest mining company, which on Tuesday reported an 8.7% fall in revenue to $65.9-billion for the year ended June.

The name of the country did not cross the lips of new CEO Andrew Mackenzie and one got the impression that this region’s aluminium, thermal coal and manganese interests are hanging on by a thin thread in a company dominated by iron-ore, oil, copper and coking coal.

When BHP and Gencor/Billiton of South Africa merged at the start of the new millennium, the South African assets helped to lift the chin of a then downcast BHP.

The performance of then standalone BHP, which in merged form has paid out more in dividends than the rest of the mining world put together, was so mediocre that the Economist of London scoffed that the letters BHP really stood for Broken Hearted People, and not Broken Hill Proprietary.

But the powers that be are clearly in no mood to return the favour; instead they are directing any tender, loving care they still have towards potash risk at Jansen in Canada, which is still a cost centre.

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RPT-INSIGHT-Barrick Gold’s Peter Munk seeks to regain his Midas touch – by Euan Rocha (Reuters U.S. – August 22, 2013)

http://www.reuters.com/

Aug 21 (Reuters) – Peter Munk has long driven the agenda for Barrick Gold Corp, the company he formed in 1983 and built into the world’s largest gold producer, but recent missteps have raised questions about the leadership of a man once seen as a visionary in the industry.

Munk, who owns a stake of less than a quarter of a percent in the company, still steers Barrick’s strategy from his position as chairman, and he is now attempting to shore up the miner’s position. But some investors, seizing on what they view as misguided decisions and problems at several mines, are questioning both the company’s direction, and Munk’s role.

In the last two years, gold miners across the globe have been stung by falling bullion prices and a surge in costs. Barrick has fared worse than its rivals, outlining about $13 billion in writedowns this year alone.

Its share price is down nearly 65 percent in two years, outpacing a 50 percent drop in the NYSE Arca Gold Bugs Index , and a 26 percent drop in the price of spot gold.

While environmental woes at its Pascua-Lama gold-mining project, high in the Andes, have been the biggest drag on Barrick’s share price, investors have taken the most issue with its disappointing push into copper and with a proposal to give Munk’s heir apparent, co-chairman John Thornton, an unusually large, $11.9 million signing bonus.

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NEWS RELEASE: OMA member-First Nation agreement opens employment and business opportunities

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.

An agreement between Ontario Mining Association member Goldcorp and Lac Seul First Nation opens training, employment, business and contracting opportunities in the Red Lake area. The Obishikokaang Collaboration Agreement, which was signed recently in a ceremony by both parties, establishes a framework for continued consultation to support existing and future gold mining operations of Goldcorp in the region.

The Lac Seul First Nation has about 3,200 band members, with about two thirds living off reserve. This First Nation has historic ties to the development of the Red Lake gold camp and many of its members live in the community.

“Goldcorp’s commitment to working with First Nations is once again demonstrated with this agreement, ensuring both the sustainable development of the area in which we operate and long-term economic benefits for communities,” said Chris Cormier, Mine General Manager at Goldcorp’s Red Lake Gold Mines. “We look forward to working in partnership with Lac Seul First Nation to foster continued dialogue and to implement the initiatives set out in the agreement.”

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FEATURE-North Nigeria’s poor beat path to nascent mining boom – by Tim Cocks (Reuters India – August 22, 2013)

http://in.reuters.com/

BAGEGA, Nigeria, Aug 22 (Reuters) – Like almost everything else in Nigeria’s economy, mining of metals and other solid minerals fell by the wayside when the West African nation discovered oil.

In the two decades to 1954, foreign companies produced around 360,000 ounces of gold in total, according to government statistics – tiny by today’s standards, but not insignificant for a country approaching independence with high hopes.

By 1964 – post-independence and less than a decade after oil was found in the creeks of the southern Niger Delta – gold production had largely ground to a halt.

Now much of the digging up of Nigeria’s minerals is done by artisanal miners in the largely Muslim north, bereft of the high-tech machinery that makes it safe and brings economies of scale.

“The sector was left in the hands … of untrained and ill-equipped artisans … making negligible contributions to GDP,” was how a government policy brief summed it up last year.

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BHP’s sales plan latest blow to Canpotex pricing power – by Brent Jang (Globe and Mail – August 22, 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.

VANCOUVER — BHP Billiton Ltd. is honing its strategy to sell Saskatchewan potash on its own to Asian customers, sidestepping Canada’s export marketing agency for the farming commodity.

The Australian mining giant, which this week announced a $2.6-billion (U.S.) investment in its Jansen mine southeast of Saskatoon, is crafting detailed plans to transport potash by rail. The company will use Canadian Pacific Railway Ltd. across Western Canada, then connect to Burlington Northern Santa Fe Corp.’s train system through Washington State, say BHP officials.

BHP is still working out the logistics of shipping potash from the Port of Vancouver in Washington, where a sprawling U.S. property has been set aside for a new export terminal that would be built in time for the company to launch sales in 2020.

The company’s plans highlight the new pressure being placed on Canpotex Ltd., Canada’s export agency for potash, one of two groups that together control roughly 70 per cent of global supplies of the fertilizer ingredient, used to boost crop yields on farms. Potash Corp. of Saskatchewan Inc., Mosaic Co. and Agrium Inc. are the agency’s members.

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For potash juniors, the pressure’s on – by Brenda Bouw (Globe and Mail – August 22, 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.

Junior potash companies, already suffering from tight financing conditions, will start to feel more pain following an industry shakeup that has increased competition among suppliers of the crop nutrient.

The dismantling of the world’s largest potash oligopoly last month has already hit stock prices for potash companies, and is expected to lead to a drop in potash prices, which would lower margins for producers and make new projects less viable.

BHP Billiton Ltd.’s decision this week to push ahead with its Jansen project in Saskatchewan, expected to be the world’s largest potash mine, also threatens to create a glut of the mineral. BHP’s announcement follows a move by Russia’s OAO Uralkali to drop out of Belarusian Potash Co. (BPC), a joint venture with rival Belaruskali of Belarus.

Only those potash projects with low-cost projects as well as money and time to spare are expected to survive the next few quarters, analysts say.

“Even before Uralkali’s announcement last month and BHP’s Jansen update this week, the junior potash projects were already in trouble.

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When BC Cancer Foundation seeks sponsorship, Big Oil need not apply – by Jonathan Kay (National Post – August 22, 2013)

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

Are oil companies the new tobacco companies — grudgingly tolerated for the sake of the associated tax revenue, but too disreputable to have their brands associated with charitable events and sports competitions? This month’s developments in B.C. suggest anti-oil demagoguery may be driving the country in that direction.

Earlier in August, The Ride to Conquer Cancer — which organizes a two-day cycling-themed fundraising event every year — posted the following notice on its website:

“The Ride to Conquer Cancer, benefiting the BC Cancer Foundation, announced an exciting new commitment from Silver Wheaton. The Vancouver-based precious metal streaming company is the Presenting Sponsor of the B.C. Ride to Conquer Cancer in 2014 through to 2016 — supporting the largest cycling fundraiser in B.C. history … ‘Silver Wheaton is proud to become the lead sponsor for the B.C. Ride to Conquer Cancer,’ said Randy Smallwood, president and CEO of Silver Wheaton. ‘With a staggering one in three British Columbians diagnosed with cancer in their lifetime, this cause is quite personal for many of our employees and their families. Our company is honoured to be supporting the BC Cancer Foundation’s vision for a world free of cancer.’ ”

Good for Silver Wheaton, I say. But its honour is another company’s dishonour.

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Key Arctic naval facility delayed by budget cuts despite being announced with much fanfare by PM in 2007 – by Lee Berthiaume (National Post – August 22, 2013)

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

National Defence is hoping it can finally start moving on an already diminished and delayed plan for establishing a key naval facility in Canada’s Arctic after submitting a new environmental impact assessment to the Nunavut government this week.

The creation of a deep-water port and naval resupply facility at an old lead-zinc mine in Nanisivik, Nunavut, was announced to much fanfare by Prime Minister Stephen Harper in 2007 as part of his government’s promise to protect Canadian sovereignty in the North.

“With its sheltered harbour, nearby jet-capable airstrip, and proximity to the Northwest Passage, Nanisivik offers an ideal location for the docking and refuelling facility,” the prime minister said at the time.

Estimates at the time put the total cost of getting Nanisivik up and running at about $100 million, with construction expected to start in 2010 and the deep-water port fully operational by 2015.

But budget cuts, regulatory snags and an apparent bout of shortsightedness have significantly reduced the project’s scope while causing delays and uncertainty about when construction can actually start.

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After cost cuts, miners need to do more with less, BHP says – by Clara Ferreira-Marques (Reuters U.S. – August 21, 2013)

http://www.reuters.com/

LONDON – Aug 21 (Reuters) – Mining firms are wooing investors with aggressive cuts after years of profligate spending, but BHP Billiton says the greater challenge will be improving productivity, if major producers are to ride an eventual recovery.

BHP, Rio Tinto and others big and small have promised shareholders they will slash billions of dollars of spending, shedding jobs, reining in wages and cutting back on fringe costs, such as staff travel.

Rio says it tells employees in its iron ore unit to use low-cost airlines or teleconferencing – a far cry from a time when chartering flights to remote mines were the norm and tales abounded of truck drivers on six-figure annual dollar salaries.

But that was the easy bit, the chief financial officer of BHP Billiton, the world’s largest miner, told Reuters. “When you talk about costs there are two elements. One is how you tighten your belt and make the easy changes,” said Graham Kerr, a BHP veteran put in charge of finance last year.

“The second is productivity,” he said in an interview. “Getting more out of your existing people, your equipment and your infrastructure. Productivity will deliver more benefits over time, but takes a little more time to be done.”

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Nuclear waste disposal site closer to reality – Shawn Bell (Wawatay News – August 21, 2013)

http://wawataynews.ca/

A location is yet to be set and the timelines stretch 25 years in the future, but one thing seems certain: nuclear waste will be buried in the Canadian shield.

As the Nuclear Waste Management Organization (NWMO) – a not-for-profit organization established by the federal government – starts analyzing communities as part of the process of selecting a site to bury used nuclear rods, details continue to sharpen on how the project will one day look.

The first big decision – one that is well underway – is where the burial of used nuclear rods will happen. Geologists with the NWMO are looking for a specific slate of geologic features, including stable bedrock and little flowing water underground. But equally important, according to NWMO director of communications Mike Krizanc, is finding a host community willing and able to handle the growth that will come from the site.

“You can’t impose this on anyone,” Krizanc said during a recent media tour of the Darlington Nuclear Facility in Pickering, Ontario. “You need an informed and willing community before you go about doing it.” So far 21 communities across Ontario and in Saskatchewan have expressed interest in learning more about the facility. The NWMO is now working on both social and geological assessments of those communities in order to narrow the list.

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Aboriginal women offer solution to northern Canada’s skilled worker shortages – by Daniel Bland (Vancouver Sun – August 21, 2013)

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

Daniel Bland is lead instructor for the Eeyou Mining Skills Enhancement Program, an initiative of Cree Human Resources Development, in Mistissini, Quebec.

While economists and labour market researchers agree one of Canada’s greatest challenges over the next decade will be how to solve skilled worker shortages, there seems to be no consensus about just how to do that.

The skills shortage will be particularly acute all across northern Canada, where natural resource development and mining projects are projected to grow the northern economy over 90 per cent from 2011 to 2020. Led by northern B.C.’s mining output, which will increase by a whopping 300 per cent, that is more than four times the growth rate forecast for the Canadian economy over that same period.

And while that is good news on many fronts, the fact that many of the largest mining projects are close to remote First Nation communities without particularly well skilled or educated populations, is cause for growing concern. Our work in essential skills assessment and training for mining jobs with the James Bay Cree First Nation in northwestern Quebec has taught us some valuable lessons about what employers can do to maximize human resources in remote aboriginal communities.

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Ring of Fire makes Northern voices louder – by Darren MacDonald (Sudbury Northern Life – August 20, 2013)

http://www.northernlife.ca/

Province listening as mayors join forces to push their priorities

The mayors of the five biggest cities in Northern Ontario hope speaking with one voice will convince the province to act on some of the longstanding issues they say has held the region back for decades.

And with the Ring of Fire representing the biggest single economic development opportunity in the province, the government is listening, says Greater Sudbury Mayor Marianne Matichuk.

Matichuk, Al MacDonald of North Bay, Debbie Amoroso of Sault Ste. Marie, Tom Laughren of Timmins and Joe Virdiramo, acting mayor of Thunder Bay, unveiled their Northern Priorities document Tuesday at the Association of Municipalities of Ontario meeting in Ottawa.

The annual event offers Ontario’s 444 municipalities access to provincial cabinet ministers, opposition leaders – and even representatives from the federal government. Local politicians normally schedule one-on-one meetings with ministers and make a pitch for their city’s priorities.

But in an unprecedented move, the leaders of the North’s five biggest cities made a collective pitch, calling on the province to focus on six areas they say are key to economic development.

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Uranium miners face new hurdles as Fukushima disaster worsens – by James Regan (Reuters U.S. – August 21, 2013)

http://www.reuters.com/

SYDNEY – (Reuters) – Revelations of more toxic leaks from Japan’s Fukushima Daiichi nuclear power plant will raise second-thoughts about Japan’s nuclear future, but won’t halt the long-term global expansion of the industry, the head of a uranium mining company said.

“It reinvigorates the heightened state of nervousness, it surely will make the Japanese government and nuclear regulatory authorities more cautious and conservative in the decisions about the restart,” said Vanessa Guthrie, managing director of Australia’s Toro Energy Ltd (TOE.AX), which expects to start mining uranium in Australia in 2016.

Japan is set to raise the severity rating of the leak to level 3, or “serious incident”, on an international scale for radiological releases, underlining a deepening sense of crisis at the site.

The price of uranium, used mainly as fuel for nuclear reactors, plunged after the March 2011 meltdown at the Fukushima plant 240 km (150 miles) from Tokyo and has struggled to recover ever since. August uranium futures stood at $35.15 per pound on Wednesday compared with $68 per pound before the earthquake and tsunami that triggered the disaster.

However, Guthrie said contract prices between uranium miners and buyers standing at around $58-$59 a pound more accurately reflect the supply and demand balance than the spot price.

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Miners at ’30-year lows’ could bounce as rates rise – by Jenny Cosgrave (CNCB.com – August 20, 2013)

http://www.cnbc.com/

Mining stocks slipped on Tuesday, as weak earnings from BHP Billiton and Glencore Xstrata sent the sector lower. Analysts said miners were now the cheapest they have been in 30 years, relative to the market, and were set to bounce back when interest rates begin rising.

The majority of global miners are in correction territory year-to-date, due to the slowdown in the Chinese economy and the slump in commodity prices. However, this “severe de-rating” has not hit earnings to the same extent as share prices, making mining stocks a compelling buy, according to Henry Dixon, fund manager at Matterley Asset Management.

“Miners had a torrid time in the first half. Mining has been the worst performing sector this year, leaving it as cheap relative to the market as we can find,” said Dixon, who was confident mining stocks would be the first to benefit from the climb in bond yields that will follow the Federal Reserve’s tapering off of its stimulus program.

Dixon said he had increased his exposure to mining stocks in recent weeks. “Obviously a lot has been made of the move we have seen in bond yields, and with history in mind, and rising bond yields, it is actually the mining sector that stands tall as one of the best under this environment, with the key being a little bit more growth in the system,” he said.

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