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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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COLUMN-Diversified miners’ short-term challenges at odds with long-term views – by Clyde Russell (Reuters U.S. – August 21, 2013)

http://www.reuters.com/

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

LAUNCESTON, Australia, Aug 21 (Reuters) – The world’s top diversified mining companies are starting to resemble choir boys singing the same hymn about cutting projects and costs.

The recent financial results of BHP Billiton, Rio Tinto, Glencore Xstrata and Anglo American were remarkably similar, as were the accompanying comments by their chief executives.

All reported lower earnings, but not dramatically so, which may be a bit of a surprise given weaker commodity prices in the first half of 2013 and widespread concern of worse conditions to come.

And all four also repeated the mantra of cost cutting and slashing capital expenditure, while at the same time trying to give equity investors more of what they want in the form of dividends and higher share prices.

The question is whether this unanimity is the right path or whether the diversified miners are going too far in a bid to boost share prices.

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Harper trumpets N.W.T. mining jobs program – by CBC News North (August 20, 2013)

http://www.cbc.ca/north/

Prime Minister Stephen Harper talked about a northern mining jobs program for the second time in as many days on Tuesday, highlighting $5.8 million in federal funding over two years to train 400 aboriginal workers for mining jobs across Northern communities.

Continuing his six-day Northern Tour, the prime minister was in Hay River, N.W.T., on Tuesday, drawing attention to funding announced in the government’s 2013 budget. The government will provide $5.8 million over two years to the Northwest Territories Mine Training Society for a new mining sector-skills training program.

“The North’s rapidly growing extractive industry is driving prosperity and creating demand for local skilled workers,” Harper said.

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Glencore takes $7.7-billion writedown as mining industry woes continue – by Eric Reguly (Globe and Mail – August 21, 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.

ROME — The falling fortunes of the global mining industry were again put on display Tuesday morning when Glencore Xstrata, the Swiss mining company and commodities trader that owns Canada’s Falconbridge Ltd. and Viterra Inc., wrote down the value of its mining assets by $7.7-billion (U.S.).

The writedown came three months after the completion of Glencore’s all-share purchase of Xstrata for $29-billion (U.S.), a deal that created a mining and trading giant capable of competing with industry heavyweights BHP Billiton, Rio Tinto, Vale and Anglo American.

Tuesday’s results, for the six months to the end of June, were the first for the combined group.

In deciding to write down the purchase price on Xstrata, Glencore took a more conservative approach to valuing early-stage and greenfield projects. It also took into account a lower commodity price outlook since the deal closed on May 2.

“We wanted to value them [Xstrata’s greenfield projects] a little bit more conservatively, noting that Glencore has no intention to develop them in the near future,” Glencore Xstrata chief excutive Ivan Glasenberg told journalists on a conference call.

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Michael Den Tandt: Harper sets up the 2015 campaign in the most unlikely spot – by Michael Den Tandt (National Post – August 21, 2013)

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

Hay River, NWT — As campaign launch pads go, it would be difficult to find one less likely than this low-slung, sprawling agglomeration of bungalows and shops clinging to the south shore of Great Slave Lake, on the southern fringe of the northern wilderness.

Hay River’s one sports bar, two grocery stores, hardware store, arena and weathered town hall have not seen the circus of a prime ministerial visit before and, quite likely, never will again.

But there it is: From this isolated outpost, more than a thousand kilometres and 12-hours drive north of Red Deer, Alta., Prime Minister Stephen Harper’s plan to win a fourth term and join the pantheon of Canada’s longest-serving leaders will unfold as night follows day. At least, that must be his hope — as his government places unprecedented emphasis on boosting economic growth in a territory whose entire population would fit inside one small central Ontario city.

Hay River, population 3,648, is, quite literally, the end of the line — the northernmost point in the North American continental rail network and the departure point to all parts northward. The village bills itself “The Hub of the North.” It is also, as of Tuesday, the epicentre of a Conservative plan to train an aboriginal workforce to match the growing need for skilled workers in the burgeoning northern mining industry.

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Miners Buying Hugo Boss Perfume as Chile’s Copper Booms – by Matt Craze & Javiera Quiroga (Bloomberg News – August 20, 2013)

http://www.bloomberg.com/ 

Since starting work at the Esperanza copper mine in northern Chile two years ago, Erick Moreno has tripled his salary and is preparing to buy his first home. The pay, he says, is so good that he’d never take a job elsewhere.

“I am going to die in this industry, I don’t see myself anywhere else,” Moreno said by phone from Antofagasta, a city on the edge of the mineral-rich Atacama desert. “When you start working in a mine, everything changes and in a very little period of time.”

While Moreno, 27, completed his engineering course at Antofagasta University, he says many fellow students dropped out to start work at the mines without graduating. Most of them already own their homes and drive sports cars, while many older miners have five or more houses, some far from the mines that litter the northern desert, he said.

Spending by high-earning miners is spreading through the economy, fueling a consumer boom and driving unemployment to its lowest since 1973. The nation, squeezed between the Andes Mountains and the Pacific Ocean, has become the wealthiest in Latin America, according to the International Monetary Fund, with gross domestic product per capita rising to about $16,300 this year from $4,780 ten years ago. World Bank President Jim Yong Kim last month congratulated the country on earning “high-income” status.

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Feds should pursue stronger EA on Ring of Fire – by Steve May (Sudbury Star – August 21, 2013)

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

Letter to the Editor

Kenora MP Greg Rickford, minister of Science and Technology, with responsibilities for FedNor and the Ring of Fire, was in Greater Sudbury last week to discuss resource development in northwestern Ontario.

Rickford says he wants to push partisan politics aside and begin a process of “thorough consultation”. This new approach from Stephen Harper’s Conservative government is long over due.

The extraction of mineral resources in the remote Ring of Fire represents a multibillion-dollar enterprise, potentially creating thousands of jobs throughout the North. The challenges are significant –but the boost to the North’s economy (and the province) may be worth the investment of public dollars on capital projects, such as a rail or road access.

With comparisons being made between the Ring of Fire and Alberta’s oil sands, it’s no wonder that environmentalists and First Nations communities are wary of runaway development decisions being made by governments without due consideration of future impacts.

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BHP plans $2.6-billion potash investment in Saskatchewan – by Brent Jang (Globe and Mail – August 21, 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 — Australia’s BHP Billiton Ltd. is strengthening its commitment to a multibillion-dollar potash investment in Saskatchewan even as an industry shakeup has increased competition in the market for the key crop nutrient.

BHP announced Tuesday that it will pour another $2.6-billion (U.S.) into its Jansen project over the next three years, earmarking funds to build, with other investors, what might become the world’s largest potash mining operation.

Melbourne-based BHP has already spent $1.2-billion so far on the Jansen mine, about 140 kilometres southeast of Saskatoon. But speculation about the company’s commitment to the Saskatchewan project arose three weeks ago, when one of the potash industry’s two main marketing groups abruptly disbanded, raising the prospect of a prolonged period of low prices for the resource.

Despite today’s gloomy market conditions, BHP chief executive officer Andrew Mackenzie said his company envisages demand growth for potash will average 2 to 3 per cent a year until 2030, bolstered by population growth and the consequent need to bolster food production.

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An African gold rush slows to a crawl – by Iain Marlow (Globe and Mail – August 21, 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.

ACCRA, GHANA – On a shaded patio off a large pink and yellow building in central Accra, Kweku Boohene, a Ghanaian goldsmith with a stubbly grey beard, is watching the glowing coals of his makeshift smelter turn to white ash.

A colleague has just melted down a bit of gold, poured it into an ingot mould and returned inside to a cluttered workshop where five of them usually shape the precious metal into rings and chains with hammers and rolling mills. But for now, there is only one person working. As Mr. Boohene stands there in sandals and a loose-fitting green shirt, two others lounge in patio chairs.

“I used to make 10 rings a day, but now it’s not even one,” said Mr. Boohene, a 35-year veteran in the jewellery business.

In Ghana, Africa’s second-largest gold producer, the yellow metal is big business: Gold currently accounts for about 40 per cent of export earnings. As global gold prices have plummeted – 26 per cent in the first half of 2013 alone – the small-scale miners who supply this workshop have stopped coming by to sell the gold dust and tiny nuggets dug out of Ghana’s red earth.

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Another gold CEO bites the dust – this time at African Barrick – by Lawrence Williams (Mineweb.com – August 21, 2013)

http://www.mineweb.com/

African Barrick Gold’s CEO Greg Hawkins has resigned and has been replaced by Bradley Gordon, formerly with Intrepid Mines, to try and improve the fortunes of the African gold miner.

LONDON (MINEWEB) – African Barrick Gold (ABG), which has seldom seemed able to meet its operating objectives since its spin-off from parent Barrick Gold and listing on the London Stock Exchange three years ago, has announced the resignation of its Chief Executive Officer, Greg Hawkins ‘to pursue other opportunities’, and his replacement by Australian Bradley Gordon who takes over with immediate effect. Gordon resigned from his previous position as CEO of Intrepid Mines last month – presumably with the ABG appointment already settled.

Thus, Hawkins is the latest gold mining company CEO to be ousted, in this case to see if new blood can revitalise the ailing African gold miner. African Barrick stock has lost 73% of its value since its launch in 2010 and, although part of this fall is attributable to the plunging gold price and so outside management control, Hawkins is seemingly carrying the can for the company’s continual underperformance.

ABG operates three mines in Tanzania and is that country’s largest gold miner. The flagship mine is the Bulyanhulu underground operation and the others are Buzwagi (open pit) and North Mara, also an open pit operation. A fourth mine, Tulawaka, was closed down earlier this year as it was uneconomic.

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Mayors want Northern Ontario summit – by Laura Stricker (Sudbury Star – August 21, 2013)

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

In an effort to put life into Northern Ontario’s economy, the region’s five largest municipalities will host a summit with the province later this year. “We’re looking towards the end of the year (for the Northern Ontario Summit). We’re just looking at the logistics now,” Mayor Marianne Matichuk said Tuesday from Ottawa, where she’s at the annual Association of Municipalities of Ontario (AMO) conference.

The three-day conference brings together 1,600 people from across Ontario. Councillors Fabio Belli, Claude Berthiaume, Doug Craig, Evelyn Dutrisac, Terry Kett and Andre Rivest are there as well.

Matichuk, along with the mayors of Timmins, North Bay, Sault Ste. Marie and Thunder Bay, presented their Northern Priorities Document to seven provincial government ministers.

The document includes six items the mayors believe are necessary for Northern Ontario to thrive: A cohesive relationship between municipalities and all government ministries, reliable infrastructure funding, affordable energy, workforce development with a focus on immigration, more money for research and resource revenue sharing.

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FedNor minister optimistic about Ring of Fire “legacy” project – by Lindsay Kelly (Northern Ontario Business – August 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.

Greg Rickford has only been in his new role a month, but he vows he will do things differently as minister of state, science and technology, FedNor and the Ring of Fire. But FedNor’s mandate will stay the same.

“With respect to FedNor, we will continue to remain focused on our core principles: community economic development, business growth and innovation, and economic development initiatives,” said Rickford, who was appointed to his new role after a July cabinet shuffle, during a stop in Sudbury at a Chamber of Commerce luncheon.

By a show of good faith, he’s hired on a Northerner in the newly created role of senior policy advisor, who will answer directly to Rickford’s chief of staff. Mark Wright, a Lakehead University grad and the former director of the Thunder Bay Port Authority, will be exclusively focused on Northern Ontario, FedNor and the Ring of Fire, which Rickford deems “a legacy project.”

With a value of $93 billion in 2012, products from Canada’s mineral industry make up more than a fifth of the country’s exports, Rickford said. Projects like the development of the Ring of Fire chromite deposit, located in the James Bay Lowlands, are poised to add even more value to that sector.

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Amplats to cut 7,000 South African jobs, union ‘shocked’ – by Sherilee Lakmidas and Ed Stoddard (Reuters U.S. – August 19, 2013)

http://www.reuters.com/ 

JOHANNESBURG – (Reuters) – Anglo American Platinum (Amplats) said it planned almost 7,000 job cuts at its South African operations including thousands of compulsory lay-offs, drawing an angry response from a labor union and raising the risk of renewed unrest at its mines.

Amplats (AMSJ.J), the world’s top platinum producer and a unit of Anglo American (AAL.L), had aimed for 14,000 job cuts after posting its first loss last year, but lowered the target after a backlash from the government and the unions, which organized a series of strikes.

After months of consultations with government officials and worker representatives, the company said 6,000 mining jobs would go and that “approximately 900 corporate and overhead employees will also be affected”.

The addition of white-collar job cuts might alleviate some criticism of the lay-off plan, since not only blue-collar workers would be affected. But at least one union saw the decision by Amplats as a betrayal, saying the company had committed only last week to avoiding forced lay-offs.

“We are shocked. Our agreement with Amplats was to cut 3,000 jobs and those jobs would not be forced retrenchments but voluntary severance packages.

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NEWS RELEASE: PM [Stephen Harper] announces support for Northern Innovation in Mining

19 August 2013 – Whitehorse, Yukon

Prime Minister Stephen Harper today announced support for the creation of a new Centre for Northern Innovation in Mining (CNIM) at Yukon College, which will create jobs and stimulate economic growth throughout the region. The Centre will help Northerners acquire the skills they need to fill local jobs in the rapidly growing mining and exploration sectors, while conducting applied research and enhancing Yukon’s attractiveness for mining investment. The Prime Minister was accompanied by Leona Aglukkaq, Minister of the Environment, Minister of the Canadian Northern Economic Development Agency (CanNor) and Minister for the Arctic Council, Joe Oliver, Minister of Natural Resources, Bernard Valcourt, Minister of Aboriginal Affairs and Northern Development, Senator Daniel Lang and Ryan Leef, Member of Parliament for Yukon.

“Our Government is taking action to create the right conditions for continued growth in the Northern mining sector, and to ensure that Northerners derive maximum benefit from the abundant natural resources in their territories,” said Prime Minister Harper. “Our Government’s investment in this new Centre will address critical skills shortages facing the region, while providing the citizens of Yukon and the North with better access to the education and training that can lead to high quality jobs.”

The CNIM will be a one stop state-of-the-art education, training and research facility for people looking to begin a career in the mining industry as well as for those who want to improve their skills. Through the Centre, thousands of Yukoners will have access to accredited career training opportunities, helping provide a solution to current and future skilled labour shortages in the territory.

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