Republic of Mining

ANALYSIS-Commodity funds on track for big launch year in uncertain market – by Barani Krishnan (Reuters India – August 6, 2013)

August 7, 2013

http://in.reuters.com/

NEW YORK, Aug 6 (Reuters) – An ex-Glencore (GLEN.L) oil trader and a veteran grains merchant with futures broker R.J. O’Brien are among those behind the largest number of commodity fund launches in 3 years despite investor worries the multi-year rally in those markets is over.

A dozen hedge funds trading raw materials derivatives on discretion were launched in the first six months of this year, the same as in the whole of 2012, data from London-based research house Preqin showed. In 2011, only seven of such funds took off, the smallest number in 5 years.

The new funds are led by managers who are convinced they can be outliers in one of the toughest commodity markets in years. The funds typically begin trading with a few million dollars of the managers’ own money and cash from family and friends, before seeking outside capital.

The launches coincide with talk the commodities “supercycle” of the past decade has been thwarted by the slowing of China’s phenomenal growth.

Canadians still waiting on oilsands emissions targets – by Les Whittington (Toronto Star – August 7, 2013)

August 7, 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.

No date set for Harper government’s long-promised curbs on oilsands

TTAWA—Canada’s ability to control pollution from the oilsands will sway U.S. President Barack Obama’s high-stakes decision on building the Keystone XL pipeline. But Ottawa’s new regulations — due July 1—have been delayed again and federal officials won’t say when they’re expected. Late this year, Obama will give a yes-or-no ruling on the proposed $7.6-billion project to carry oilsands derived crude from Canada to the U.S. Gulf Coast.

The decision has huge political implications for Obama and Prime Minister Stephen Harper. The planned Keystone XL pipeline is the most prominent of a number of current proposals to give Canada’s oil and gas industry better access to export markets, which is crucial to the Harper government’s energy policies and the development of the oilsands in Alberta.

But Keystone has run into fierce opposition from environmentalists who say it will open the way for a vast expansion in oilsands production, which the greens say will increase the greenhouse gases contributing to global warming.

Energy East pipeline the oil sands’ last exit? – by Peter Foster (National Post – August 7, 2013)

August 7, 2013

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

With Energy South and Energy West mired in delay, or even dead, Energy East has appeared as something of a last resort

While not wishing to rain on anybody’s “nation building” parade, last week’s announcement by TransCanada Corp. of its $12-billion Energy East project is hardly cause for wild celebration. While the proposal — to pipe 1.1 million barrels per day of Alberta oil to Eastern refineries and to the East Coast for export — may represent a marvel of technology, in a rational world it would be a non-starter (as opposed to a “no-brainer”).

What Energy East really reflects is the extraordinary success of radical environmentalists in blocking more economic export routes. It also appears to embed dodgy Suzukinomics, such as the notion that domestic upgrading is always a “good thing.” Apparently support from the NDP and labour unions is conditional on this autarchic canard.

It is astonishing that so many Canadians remain enamoured of Barack Obama, although he is perhaps more inimical to Canadian interests than any president in history. He holds the ultimate veto on TransCanada’s Keystone XL project, to take more than 800,000 barrels of diluted bitumen from the Alberta oil sands to the refineries of the Gulf Coast.

Three bidders out as Rio faces lackluster Canadian sale: sources – by Anjuli Davies and Clara Ferreira-Marques (Reuters U.S. – August 6, 2013)

August 7, 2013

http://www.reuters.com/

LONDON – (Reuters) – Three big-name bidders for Rio Tinto’s (RIO.L) majority stake in Canada’s largest iron ore producer are now out of the running, sources familiar with the talks said on Tuesday, after offers came in well below the mining group’s targets.

The sources said private equity firm Apollo, which had been working with Canadian pension fund CPPIB, rival Blackstone (BX.N) and commodity trader and miner Glencore (GLEN.L) were no longer in the race after a second round of bids last month. The low offers, at a time when dozens of mining assets are for sale and demand for steelmaking commodities is uncertain, raise questions over the future of a sale that could still take months to tie up – should Rio decide to push ahead.

Rio has a handful of assets on the block as it battles to cut a $19 billion debt burden and meet cost cutting targets. Like other miners seeking to divest unwanted activities, however, it has found buyers unwilling to pay up and in June was forced to scrap the sale of its $1.3 billion diamond business, 15 months after it was first announced.

Rio appointed banks to sell its 59 percent stake in Iron Ore Company of Canada (IOC) earlier this year after deciding to focus its iron ore efforts on assets in Australia’s Pilbara region, where the world’s second-largest iron ore producer has lower costs and higher grades.

NEWS RELEASE: NORTHERN AND CONFEDERATION COLLEGES PARTNER TO DELIVER HAILEYBURY SCHOOL OF MINES MINING ENGINEERING TECHNICIAN PROGRAM IN NORTHWESTERN ONTARIO

August 7, 2013

FOR IMMEDIATE RELEASE – Tuesday, August 6, 2013

TIMMINS, ON: Northern College and Confederation College in Thunder Bay are collaborating to broaden educational opportunities and facilitate workforce development in northwestern Ontario. A newly established agreement between the two colleges allows Confederation to share delivery of the highly reputable Northern College Haileybury School of Mines (HSM) programming at its Thunder Bay campus enabling graduates of Confederation’s Mining Techniques certificate program to enter the third semester of the HSM Mining Engineering Technician diploma program at Confederation College.

The arrangement between Northern and Confederation stemmed from a pan-northern memorandum of understanding signed earlier this year involving six colleges in northern Ontario. The colleges collaborate in developing recruitment strategies to attract learners to career-specific programs with identified skill shortages to ensure graduates find meaningful work and employers in the north have access to a highly-qualified, competitive workforce.

“As exploration activities surge in northwestern Ontario, mining is quickly becoming a dominant economic driver. In order to meet the future workforce requirements of the rapidly growing mining sector, Northern and Confederation explored the possibility of making the HSM Mining Engineering Technician diploma program available in the region,” said Fred Gibbons, President of Northern College.

Xstrata-Glencore merger prompts name change (CBC News Sudbury – August 6, 2013)

August 7, 2013

http://www.cbc.ca/sudbury/

Sudbury’s Xstrata Nickel to become Sudbury Integrated Nickel Operations

One of Sudbury’s major mining companies is going through another rebranding exercise. Xstrata Nickel operations in Sudbury — formerly known as Falconbridge Ltd. before it was bought by Xstrata in 2006— will now go by the name Sudbury Integrated Nickel Operations, or Sudbury I-N-O.

The name change comes as a result of Xstrata’s merger with another Swiss mining company — Glencore. The vice president of Sudbury I-N-O said the takeover means more independence for local operations.

“The interesting thing about Glencore is that it really relies on its local management to develop the business opportunities, [and that’s reflected] in the naming nomenclature,” Marc Boissonneault said. The company’s short-term plans include revitalizing its Fraser Operations near Onaping and to work on a joint project with Vale.

Future rebranding will continue to take place for the next few months, Boissonneault added. “You’ll see our signs change in coming weeks, those are the more visible ones. Other things will just take weeks and, in some cases, maybe a couple of months.”

Chinese copper demand could catch short-sellers by surprise – by Eric Onstad (Reuters U.S. – August 5, 2013)

August 7, 2013

http://www.reuters.com/

LONDON, Aug 5 (Reuters) – Gloom over weaker economic growth in China has led some investors to miss signs of robust underlying copper demand, which may wrong-foot those betting on a further slide in prices.

Benchmark prices in copper, viewed by many investors as a proxy for global economic health, hit the lowest levels in nearly three years at $6,602 a tonne in late June.

The price on the London Metal Exchange (LME) slid 21 percent from a peak this year in February, mainly due to worries about China, which accounts for 40 percent of copper demand. It has since rebounded modestly to trade just under $7,000 a tonne.

Despite China’s weak factory data and a credit crunch, spending on the power grid and other areas has meant copper consumption is fairly buoyant in the world’s biggest metals consuming nation.

China’s apparent copper demand, after adjusting for changes in stocks, surged over 20 percent in the second quarter, Barclays analyst Gayle Berry said.

Partners look to powerful future – by Kyle Gennings (Timmins Daily Press – August 6, 2013)

August 7, 2013

The Daily Press is the city of Timmins broadsheet newspaper.

COCHRANE – Tuesday marked a turning point for the Taykwa Tagamou Nation (TTN). The Cochrane-based First Nation signed an agreement with Ontario Power Generation (OPG) with full blessing from Liberal Minister of Energy Bob Chiarelli.

Through its corporation Coral Rapids Power, TTN entered into a partnership with OPG to develop a generating station capable of producing about 25 megawatts of hydroelectric power on New Post Creek as it enters the Abitibi River.

“Here as we announce this facility at New Post Creek and as we make our way to the Lower Mattagami Project, we are reminded of the very important role that Ontario’s First Nations and Metis community play in Ontario’s energy system,” said Chiarelli. “In transmission, in generation and in hydroelectric, and so it is truly exciting to be here today and celebrate this exciting new partnership between Ontario Power Generation and Coral Rapids Power.”

Chiarelli said this is the first of many steps towards creating a network of clean energy creation which will benefit Ontarians for decades to come.

Ontario Minister gets a charge from hydro project – by Kyle Gennings (Timmins Daily Press – August 6, 2013)

August 7, 2013

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Ontario Energy Minister Bob Chiarelli visited the Northeast on Tuesday. He was fully charged over plans for hydro generating improvements. The Ottawa West – Nepean MPP was named to the cabinet in February when newly elected Premier Kathleen Wynne dismantled the array longstanding McGuinty Ministers.

Chiarelli visited both Cochrane and the Lower Mattagami Project in an effort to shed light on the good clean energy projects being developed throughout the Northeast.

“What we are seeing here is capacity building for Northern Ontario,” said Chiarelli, while overlooking the expansion of the Smoky Falls Generating station, roughly 80 kilometres north of Smooth Rock Falls.

“This is 450 megawatts of hydroelectricity generation, 1,500 jobs at maximum, a significant number of which will be made available to First Nations members who have been trained and apprenticing on this particular site.” The energy being generated from the site will be distributed throughout the province. “This energy will be traveling all of the way down south,” said Chiarelli.

Zimbabwe to Seize Mines While Compensating Banks – by Franz Wild (Bloomberg News – August 6, 2013)

August 6, 2013

http://www.bloomberg.com/

President Robert Mugabe’s government plans to seize control of foreign-owned mines without paying for them as part of a program to accumulate $7 billion of assets following his July 31 election victory, a minister said.

The government will compensate bank owners as it takes control of their companies, Saviour Kasukuwere, the minister in charge of the program to compel foreign companies to cede 51 percent of their assets to black investors or the government, said in an interview in Harare, the capital, today. His comments echo a suggestion made by Mugabe earlier this year.

“When it comes to natural resources, Zimbabwe will not pay for her resources,” Kasukuwere said. “If they don’t want to follow the law that’s their problem.” Non-compliant mine owners risk losing their licenses, he said.

Anglo American Platinum Ltd. (AMS), Impala Platinum Holdings Ltd. (IMP), Barclays Plc (BARC) and Standard Chartered Plc (STAN) are among companies that operate in the country. Other industries may have to yield smaller stakes to black owners, Kasukuwere said. Metals and minerals, including platinum and gold, accounted for 71 percent, or $719.9 million, in exports in the first four months of this year, the state-controlled Herald newspaper said, citing the finance ministry.

Despite gloom, prices for commodities China consumes are up – by Clyde Russell (Reuters India – August 6, 2013)

August 6, 2013

http://in.reuters.com/

Clyde Russell is a Reuters market analyst. The views expressed are his own

LAUNCESTON, Australia, Aug 6 (Reuters) – It’s not hard to find bearish commentary on the outlook for China’s commodity demand, but every so often a little bit of information contrarian to the prevailing market views comes along.

Such a snippet is the latest China Commodity Index compiled by ANZ Banking Group, which shows the weighted average price for a basket of commodities imported by China rose to a three-month high last week.

The index gained 0.6 percent in the week ended Aug. 2, with only industrial metals detracting from the increase. It’s 0.4 percent higher than three months ago, but 2.7 percent below the level a year earlier.

Although it doesn’t have a long history, the ANZ index is useful as it tracks 22 major commodities and is weighted to reflect China’s consumption. The idea that prices of commodities most commonly used in the world’s largest consumer are at a three-month high appears at odds with other recent evidence that economic growth is stalling.

The rise in the official Purchasing Managers’ Index to 50.3 in July from 50.1 in June has been about the only significant recent Chinese economic data that has surprised on the upside.

The Price Of Gold Is Dropping Like A Brick – by Mark Williams (WBUR Boston NPR – August 6, 2013)

August 6, 2013

http://www.wbur.org/

Watch out for that shiny pendulum because it’s swinging back fast. Investors are chasing stocks and real estate and fleeing gold. The two former asset classes have experienced solid returns since 2012 while gold has suffered double-digit declines.

Large cracks in the “go-long-gold” strategy are evident. Economic weaknesses in Europe remain but no financial Armageddon has emerged. Keynesian economics remain the drug of choice, Japan being the latest user, yet inflation is non-existent. The strength of the dollar and the increased willingness of the Fed to taper quantitative easing undermine higher gold prices. Investor support is crumbling and gold bugs, those believing it is a stable investment, should be nervous.

Since the historic highs of 2011, gold has dropped by over 30 percent. In 2013 alone, investors have begun to give back several years of gains. Recent paper losses for hedge funder John Paulson have topped $1 billion. In just the last six months, gold has dropped by 22 percent, the worst fall since modern trading commenced in early 1970s. Gold is locked in a bear strangle and prices have plenty of room to fall still further.

It has taken over a decade but the bubble has finally been pricked. The pin that popped this most recent asset swelling is not complicated.

Mining a challenging career for Vale manager – Women in Mining: Samantha Espley – by Lindsay Kelly (Northern Ontario Business – August 2013)

August 6, 2013

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.

At her first summer mining job, while an engineering student at the University of Toronto, Samantha Espley was one of four women—of 10 students—hired on at Falconbridge’s Keno Gold Mine in Val d’Or, Que. It wasn’t until later that it dawned on her how unique it was to work with that many other women.

“I didn’t really think much of it at the time until after I realized how few women there really were to choose from,” said Sudbury-based Espley, who was the only woman in her engineering class. “So it was quite a neat experience.”

After graduating, Stan Bharti, who would later bestow Laurentian University’s engineering school with a $10-million endowment, interviewed Espley for her position at Falconbridge, where she remained for a few years before hiring on at Inco (now Vale). Since then, she’s worked in research, been a general foreman underground, acted as superintendent of business systems, and served as manager of nickel services for mining operations. She’s currently the general manager for mines and technical services.

Mining engineer an “oddity” in Canada – Women in Mining: Imola Götz – by Liz Cowan (Northern Ontario Business – August 2013)

August 6, 2013

Imola Götz’s choice to study mining engineering wasn’t an unusual one while growing up in Romania. “There were many mines around my home town and I knew the possibilities and thought this was a very interesting career,” said the chief engineer at Goldcorp’s Porcupine Gold Mines in Timmins.

It was not unusual to find women working in the industry, with many filling technical positions. However, when she immigrated to Canada more than two decades ago, she was surprised there were not as many women working in the industry or pursuing engineering.

“When I got to Canada I was an oddity and I often got asked why I chose mining,” said Götz. She has been with Goldcorp for nearly 10 years and previously spent about 15 years in Manitouwadge. Her husband, Laszlo Götz, also works for Porcupine Gold Mines as its environmental manager. The couple decided to leave Romania early in their careers since the communist regime was “getting more and more intolerable.”

NEWS RELEASE: OMA member profile: Brigus Gold — expanding quantity and quality of reserves

August 6, 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 explorers and developers have been operating in a holding pattern waiting for a price rebound. Companies have been making adjustments, striving to control costs, advancing projects and building 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, Brigus Gold stayed on course for its exploration program, announcing increases in the quantity and quality of its ore reserves, and production targets.

The company recently updated the resource estimated of its Grey Fox discovery, which was first identified in December 2011. It announced a 31% increase in open pit indicated grade and a 14% improvement in its underground indicated grade. This increase in ounces of gold in the ground enhances the prospects of future production.