Disquiet in Québec as govt proposes tax, mining law changes – by Simon Rees (MiningWeekly.com – August 2, 2013)

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

TORONTO (miningweekly.com) – Like others across Canada, exploration and mining companies operating in Québec are suffering fierce economic headwinds and depressed metal prices, particularly so for gold. However, the gloom is doubly deep as concern mounts over the province’s newly proposed mining tax and Mining Act, both unveiled in May.

Under the current system, mining operations pay a 16% tax on net profits. The rate was pushed up from 12% during the previous Liberal government’s tenure. But for the Parti Québécois (PQ), led by Premier Pauline Marois, the increase was not extensive enough – it went on to call for a 5% tax on all mining activity and a 30% supertax on companies achieving profit margins over 8%.

“I think the PQ was looking towards the Australian model of increasing taxes on the mining sector, reasoning it could be applied to Québec . . . But most of our mines are smaller-scale operations. While some might have made good money, almost all reinvested profits into upgrading or expanding existing operations,” Institut de la statistique de Québec mining and natural resources specialist Raymond Beullac tells Mining Weekly.

“KPMG fairly recently released a report on Québec’s mining sector, highlighting the number of small-scale mines in production but unable to produce a taxable profit under the current mining tax regime,” Norton Rose Fulbright partner with specialist knowledge of the mining, oil and gas sectors Jean-Philippe Buteau tells Mining Weekly.

Read more


Tanzania: Kabanga Nickel Project – Light At the End of Long Tunnel – by Meddy Mulisa (All Africa.com – August 2, 2013)

http://allafrica.com/

Bukoba — THE much-awaited Kabanga Nickel Project will soon start its operations, bringing fresh hopes to many in terms of labour and employment, according to President Jakaya Kikwete during his recent tour of Kagera Region.

Kabanga Nickel is an active mine exploration project 130 kms south west of Lake Victoria in Ngara District, Kagera Region. The project is a joint venture between Barrick Gold and Xstrata Nickel.

The Minister for Energy and Minerals, Prof Sospeter Muhongo said the government would buy shares which would later be sold to wananchi. He also appealed to Tanzanians to grab the opportunity for their wellbeing. He said a total of 80 megawatts would be produced at Rusumo Falls to generate power at Kabanga Nickel.

“This is a joint project between three countries -Tanzania, Burundi and Rwanda with each country taking 27 megawatts. Kabanga’s 58 million tonne nickel resource is regarded as one of the best undeveloped greenfield nickel sulphide deposits in the world. Since 2005, there has been continued progress made in the development of the Kabanga Nickel Project with a significant investment to date of over US$205 million in drilling and evaluation studies.

Read more


Norilsk sees Indonesia ore ban supporting nickel price – by Fergus Jensen (Reuters U.S. – August 1, 2013)

http://www.reuters.com/

JAKARTA – Aug 1 (Reuters) – Nickel prices could recover next year, when Indonesia brings in a planned ban on unprocessed ore exports, said executives from Russia’s Norilsk Nickel, the world’s largest producer of the metal.

Indonesia is the world’s top exporter of nickel laterite ore, which is mostly shipped to China to be used as a cheap substitute for nickel in stainless steel.

A strictly enforced ban on exports of ore would support demand for refined nickel, said Pavel Fedorov, deputy chief executive of Norilsk Nickel, who met government and industry officials in Jakarta to assess how the policy would be implemented.

“We received high-level assurances that there is a game plan in place that would ensure restriction on export of ore would be in place by January and would be subject to very strict rules and regulations,” added Fedorov, who did not name the Indonesian officials he met.

Uncertainty over the policy was hindering investment and disrupting the nickel market, much of which believed the 2014 ban would be delayed “or somehow fudged”, he added.

Read more


Pipeline builders struggling to keep up with producers – by Shawn McCarthy (Globe and Mail – August 2, 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.

OTTAWA — As pipeline companies and railways race to add capacity for moving oil and natural gas around North America, two concepts are key: “plumbing” and “market options.”

Until about eight years ago, the North American industry faced a predictable, undramatic pathway, with steady declines in conventional oil and gas production and a measured growth in the oil sands that would require only incremental increases in pipeline capacity. But in a few short years, that picture changed dramatically, as drilling advances resulted in booming gas and tight oil production and triple-digit prices fuelled increasingly by ambitious expansion plans in the oil sands.

But the plumbers have struggled to keep up. Until recently, there was a blockage at Cushing, Okla., that resulted in deep discounts for North American crude compared to international sources. While new pipelines and rail capacity have cleared that logjam, producers fear others will develop if new pipelines cannot be approved and built quickly enough.

The support for TransCanada Corp.’s Energy East proposal shows how desperate producers and refiners are to expand their market choices – for sellers to find potential buyers and for the customers to have as many sources of supply as possible.

Read more


Saint John to get much-needed jolt from TransCanada’s $12-billion Energy East pipeline plan – by Theresa Tedesco (National Post – August 2, 2013)

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

Canada’s oldest incorporated city will likely emerge the big winner in the wake of TransCanada Corp.’s decision to build a $12-billion pipeline to transport crude oil from Alberta to refineries and export terminals in Quebec and New Brunswick.

The 228-year-old city of Saint John, nestled along the north shore of the Bay of Fundy, clings stubbornly to its historic Maritime past of shipbuilding. Home to North America’s first deep-water oil terminal, the city named after the Biblical figure John the Baptist, once boasted Canada’s largest shipyard and one of the biggest dry docks on the planet, but it has seen far more traffic from cruise ship visitors than the industrial kind in recent decades.

That moribund existence will get a much-needed jolt if TransCanada secures the necessary regulatory and environmental approvals to forge ahead with building its Energy East pipeline that would deliver 1.1-million barrels of crude a day from Western Canada to the East, passing through Montreal, Quebec City and Saint John.

Under the plan, TransCanada would convert about 3,000 kilometres of existing natural gas pipeline in Ontario and Quebec and construct an additional 1,400 kilometres extending to an ice-free, deep-water port in Saint John owned by Irving Oil Corp. Built in the 1950s, the TransCanada natural-gas pipeline is currently operating at only half capacity.

Read more


Finding Chuqui’s lost ore – Lowell on tackling world-class mystery – by Kip Keen (Mineweb.com – August 1, 2013)

http://www.mineweb.com/

The massive Chuquicamata copper deposit has long been theorized to be missing ore, possibly faulted off to the south. Now exploration legend David Lowell is looking.

HALIFAX, NS (MINEWEB) – David Lowell, the famed octogenarian explorer credited with finding the Escondida copper deposit, among others, is now taking a crack at one of the world’s greatest exploration mysteries: finding lost – or believed to be lost – Chuquicamata copper ore. Forgive the superlative. For the known Chuquicamata copper-molybdenum deposit and mine in Chile, now owned by Codelco, is ranked by many as the greatest – or certainly one of the greatest – copper ore bodies in the world.

Chuquicamata, Chuqui for short, is big and, for its size, very high grade. A mid-2000s estimate tallied 2 billion tonnes @ 1.54 percent copper as having been mined. These days, a grade a third that is considered pretty normal – good even – for a large porphyry deposit like this. So Chuqui is abnormal. And many billion tonnes of ore remain at the known Chuqui deposit. As the massive Chuqui open pit wanes, Codelco aims to continue mining in a giant block cave mine it estimates will cost about $4.2 billion to build. The pit is reaching its limits, about 900 metres deep, and four kilometres long and three kilometres wide.

The Chuqui mystery is this: a fault, called the West Fault, cuts through the Chuqui ore body and appears to have moved a chunk – how much is not clear – of Chuqui ore elsewhere, where or exactly how far is uncertain.

Read more


Barrick looks to cut high-cost mines – by Tim Kiladze (Globe and Mail – August 2, 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.

After its second major writedown in just six months, Barrick Gold Corp. is trying to wooing back shaken investors by focusing on assets closer to home.

The world’s largest gold miner announced a hefty $8.7-billion (U.S.) after-tax impairment charge, leaving the company with a second-quarter loss of $8.6-billion.

Barrick also slashed its dividend by 75 per cent as part of its second quarter earnings. In response to the losses, the Toronto-based company plans to shed, suspend or shut high-cost mines and continue to cut costs.

Chief executive officer Jamie Sokalsky said he is considering changes to his lineup of high-cost mines, most of which are in Africa and Australia. On a conference call Thursday, he said is already “well-advanced in a process to sell certain Australian assets.”

The miner will also continue to slash expenses where possible, having already cut or deferred $4-billion in capital spending over the past year, half of which came in the first six months of 2013.

Read more


NEWS RELEASE: KGHM International Enters Into Agreement With Vale, Becoming Sole Operator of the Victoria Project

2013-08-02

VANCOUVER, BRITISH COLUMBIA–(Marketwired – Aug. 2, 2013) –KGHM International Ltd., formerly Quadra FNX Mining Ltd. (the “Company” or “KGHM International”), is pleased to announce that an agreement between KGHM International and Vale Canada Limited, a wholly-owned subsidiary of Vale S.A. (“Vale”), the global mining company, has been reached regarding the development of the Victoria project as well as the ore off-take to Vale’s processing facilities in Sudbury, Canada.

The Victoria project, located in Sudbury, Ontario, Canada, is a great discovery and world-class project in the Sudbury Basin. The deposit containing ore rich in copper, nickel and precious metals will be extracted as an underground mine.

Under the new arrangement with Vale, KGHM International will build and operate Victoria as the sole owner of the project and Vale will receive a royalty and off-take on all future production from the project.

KGHM International and Vale also re-negotiated the off-take arrangement for all of KGHM International’s production from its mines in the Sudbury Basin in Ontario, Canada. Vale will purchase polymetallic ore from KGHM International and process it at Vale’s Clarabelle mill in Sudbury. The contract is valid for the full life of all KGHM International’s Sudbury mines, including future production from Victoria.

Read more


COLUMN-More mines open, making rare earths less rare – by John Kemp (Reuters India – August 1, 2013)

http://in.reuters.com/

Aug 1 (Reuters) – The United States has resumed mining rare earths after more than a decade, ending its total reliance on imports, mostly from China, for raw minerals Washington says are critical for the economy and national security.

Responding to a quadrupling of prices between 2005 and 2011 and growing anxiety about supplies from China, Molycorp’s Project Phoenix has sought to resurrect domestic production.

In 2009, the company started processing stockpiled concentrate. Last year it resumed mining at Mountain Pass in California’s Mojave Desert, which it had suspended in 2002.

Molycorp plans to raise output to 19,050 metric tonnes of rare earth oxide per year by the middle of this year, enough to satisfy more than 10 percent of worldwide demand. The resumption of domestic production comes after a period when shortages stoked tensions between the United States, the European Union and Japan and their main supplier, China.

In March 2012, the three consumers complained to the World Trade Organization (WTO) about China’s export restrictions on rare earths, tungsten and molybdenum, which they claimed were intended to reserve scarce elements for its manufacturers, discriminating against users in their own countries.

Read more


PotashCorp N.B. unfazed by potash stock slump – (CBC News New Brunswick – August 1, 2013)

 

http://www.cbc.ca/nb/

Changes to the global potash market threaten Canadian price stability

The collapse of a potash cartel in Eastern Europe earlier this week caused panicky selling in the stock market, and raised fears about potash revenue and royalties in New Brunswick. However, the general manager of PotashCorp in New Brunswick appears unfazed.

Shares of major North American potash producers fell sharply Tuesday on word that the Russian company, OAO Uralkali is pulling out of a marketing group and is expected to undercut competitors’ prices for the fertilizer.

The company announced it was withdrawing from a joint venture with another company from Belarus that set the price for about a third of the world’s potash supply. Instead, it plans to sell more potash to China, which buys about one fifth of the world’s supply of the fertilizer.

Read more


Gold miners Barrick, Kinross report huge losses as prices fall (CBC News Sudbury – August 1, 2013)

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

Barrick Gold will slash its quarterly dividend to 5¢ US per share

Barrick Gold Corp. and Kinross Gold Corp. have both taken billions of dollars of writedowns and taken an axe to their dividends as they struggle with lower metals prices that have savaged their bottom lines.

On Thursday, Barrick Gold reported an $8.56-billion US loss and slashed its quarterly dividend by 75 per cent to five cents a share as bullion and copper prices languish far below their previous highs.

It also signalled plans to cut jobs and lower capital spending. Barrick recognized an $8.7-billion impairment in the second quarter, mainly due to lower metal prices. The gold mining giant has also run into major delays in its efforts to build a big mine in South America.

“Over the past year, we have taken and are continuing to take a series of steps to reduce costs as part of our disciplined capital allocation framework, which allowed us to respond quickly to the new metal price environment,” said Jamie Sokalsky, Barrick’s president and CEO.

Read more


COLUMN-China’s moves to cut metal capacity just getting started – by Clyde Russell (Reuters U.S. – August 1, 2013)

http://www.reuters.com/

Aug 1 (Reuters) – China’s plans to force more than 1,900 companies to cut excess capacity in bloated industries including aluminium, steel and copper have met with an underwhelming response from the market.

Certainly, the moves to make China’s heavy industries more efficient will have little immediate market impact, but what analysts and investors may be shrugging off a little too lightly is that once trends and processes start, they tend to gather momentum.

The edict to close some capacity by September will do very little to end surpluses in aluminium and steel production in China, as they will impact less than 1 percent of capacity.

In aluminium, about 260,000 tonnes of annual capacity may be shut, a fraction of the existing capacity of about 27 million tonnes, which is already about 28 percent higher than demand of about 21 million tonnes.

For steel, the ruling may result in about 7 million tonnes of annual output being idled, but the China steel association says there is 300 million tonnes of surplus capacity. In copper, some 654,000 tonnes of production may be closed, which is insignificant when compared with the existing idle capacity of more than 7 million tonnes.

Read more


Why Canada can, and must, pull off nation-building Energy East pipeline – by Claudia Cattaneo (National Post – August 2, 2013)

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

The $12-billion Energy East pipeline announced by TransCanada Corp. Thursday is the third nation-building project proposed by the Canadian energy industry in the past dozen or so years. The Mackenzie gas pipeline that would have opened and enriched the North failed, and the Northern Gateway oil pipeline to usher new trade with Asia is in trouble.

Many lessons were learned. Big losses were suffered. Changes were made. Today, Canada can and must pull off Energy East, which would truly make the country oil rich.

Started as an after-thought after the United States delayed approval of Keystone XL, the Alberta-to-New Brunswick pipeline promises the biggest benefits yet to Canadians from its energy patrimony, while ensuring the best environmental protection that can be had.

“This is a historic day for TransCanada and a historic day for our country,” said CEO Russ Girling said, comparing the project to other nation-building projects such as the Canadian Pacific Railway, the Trans-Canada Highway and the company’s own cross-country natural gas mainline, which will be the foundation of Energy East.

With the project gearing up to deliver up to 1.1 million barrels per day to refineries and export terminals in Quebec in late 2017 and New Brunswick in 2018, Alberta and Saskatchewan would get a new home for their growing production.

Read more


The promise and the perils of a pipe to Saint John – by Shawn McCarthy and Jeffrey Jones (Globe and Mail – August 2, 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.

OTTAWA and CALGARY — TransCanada Corp. and Irving Oil Ltd. are joining forces to market Canada’s crude oil to the world, officially launching the proposed $12-billion Energy East pipeline and a $300-million deep-water marine terminal to be built off Saint John, N.B.

The Energy East pipeline, subject to regulatory approval, promises to unlock new markets for landlocked Western Canadian suppliers by giving them access to eastern refineries and global export markets through ports at Quebec City and Saint John.

TransCanada chief executive Russ Girling said the company expanded its original plan to 1.1-million barrels per day of capacity – about a third of current Canadian oil production – after Irving Oil successfully promoted the ambitious export option to energy producers.

Echoing politicians backing the plan, Mr. Girling described Energy East – the largest project ever undertaken by TransCanada – in nation-building terms, comparing it to the construction of the Canadian Pacific Railway or the Trans-Canada Highway.

“Each of these enterprises required innovative thinking and a strong belief that building critical infrastructure ties our country together, making it stronger and more in control of our own destiny, and this is true of Energy East,” he said.

Read more


The [British Columbia] New Prosperity battle begins again – by Gwen Preston (Northern Miner – July 31, 2013)

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

WILLIAMS LAKE, BC — Two very different scenes played out on opposite sides of the building hosting the public hearing on the proposed New Prosperity mine in the hours before the hearing got started.

On one side, the City of Williams Lake put on a barbecue for project proponent Taseko Mines (TSX: TKO; NYSE-Arca: TGB). Wearing blue scarves to show their allegiance, supporters chatted with each other and the media about what the huge copper-gold mine would mean for the small town. Taseko executives, representatives from the city’s business community and employees from Taseko’s nearby Gibraltar mine spoke of cautious optimism, quiet but strong support, and crucial economic benefits.

In the park on the other side of the building, chiefs and members of a dozen First Nations drummed and sang before a roster of speakers railed against the proposed mine. They spoke of the irreparable devastation the mine would bring to an area heavy with spiritual and cultural significance. They spoke of poisoned salmon, displaced grizzlies, disrespect for established First Nations’ rights, even of “cultural genocide.”

Then the two sides met. Carrying placards with messages like: “Chilcotin gold is more valuable in the ground,” and “Our fish equal our wealth,” the anti-mine group slowly and deliberately made its way into the quiet auditorium.

Read more