Republic of Mining

Sudbury: Masters of the Underground – by David Robinson (Mining Solutions Journal – June 2013)

May 28, 2013

Dr. David Robinson is an economist at Laurentian University in Sudbury, Canada. His column is from Sudbury Mining Solutions Journal a magazine that showcases the mining expertise of North Bay, Timmins and Sudbury. drobinson@laurentian.ca

Management consultants quote Sun Tsu’s Art of War when they want to emphasize strategy and creative thinking. I plan to quote Wayne Gretzky about an idea that I think mining supply firms should be pushing.

Dr. Dougal McCreath has over 35 years of experience worldwide, teaching, consulting, doing research and managing projects. He is also the author of more than 50 technical publications, primarily in the field of rock engineering. Dougal’s crazy ideas are better than most people’s best work. This one isn’t crazy – it’s more like a very sneaky chess move.

Dougal wants to build an underground building. That’s not new, of course. The Gjøvik (pronounced Djuhveek) Olympic Cavern Hall, for example, seats 5,500 ice hockey fans under a mountain in Norway. Built for the 1994 Winter Olympics in Norway, it is still the world’s largest underground cavern for public use. The arena was more expensive to build than a surface structure, but as the assistant manager of the project said: “There are no windows to wash or fix, no outside walls to paint, no roof to repair and it costs about half as much to heat as a regular building.” There are a lot of underground sports and recreational halls in Norway, where they double as civil defense shelters.

[Saskatchewan] Uranium mine industry under scrutiny – by Shinoah Young (Regina Leader-Post – May 28, 2013)

May 28, 2013

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

Northerners are in dire need for further education and training when it comes to Saskatchewan’s economic “boom.”

A recent report called the Community Vitality Montoring Partnership Process (CVMPP) suggested that “uranium mining companies should target some education efforts and donations to invest in early childhood development” in northern Saskatchewan. The recent CVMPP report was suggested by northern leaders and put together by InterGroup Consultants Ltd., a company based in Winnipeg.

Thursday at the University of Regina, Thomas Sierzycki, mayor of La Ronge, presented the report regarding the socio-economic impacts of uranium mining in Saskatchewan.

Sierzycki said there needs to be more training and education towards the higher, non-entry level positions in order for northerners to fully benefit from the uranium mining industry.

“The number of people who have higher levels of education has increased (and) the number of people who have long-term, full-time employment have increased. Although because the population has grown so quickly, the proportion hasn’t necessarily (matched) with education,” said Erin Jonasson, a research consultant for InterGroup.

Kenya to form a mining corporation, says Balala – by Mwaniki Wahome ([Kenya]Daily Nation – May 26, 2013)

May 28, 2013

http://www.nation.co.ke/-/1148/1148/-/xvvu7uz/-/index.html

A national mining corporation will be formed to act as the investment arm of the government where joint venture with the private investors is involved. This is one of the recommendations in the envisaged mining Bill that is meant to spur growth in the industry.

This was disclosed as stakeholders got closer to striking a deal on contentious issues related to sharing the income realised from mining activities in the country.

Mining Cabinet Secretary, Mr Najib Balala, said after getting Cabinet approval, the public and other stakeholders’ views will be included before the proposed law is taken to Parliament for debate and adoption.

“The national mining corporation is a strategic vehicle through which the government will invest in the mining industry with the private sector,” said Mr Balala. An earlier recommendation was to form a mining authority, but the idea was shelved after it was found that it would not facilitate the commercial interests of the country in the mining industry.

Experts have faulted the current Mining Act, that was put in place by the British colonial regime for being rigid, hence stifling mineral exploration and, at the same time, failing to spell out how benefits of such wealth are to be shared especially with the communities where the resources are found.

REFILE-Glencore says Iran metals swap deals did not violate sanctions – by Louis Charbonneau (Reuters U.S. – May 24, 2013)

May 28, 2013

http://www.reuters.com/

UNITED NATIONS, May 23 (Reuters) – Swiss-based commodities giant Glencore Xstrata said on Thursday that it had done nothing wrong when it engaged in metal swaps with Iran, rejecting a suggestion by U.N. experts that such bartering could have been a way of evading sanctions against Tehran over its nuclear program.

A confidential U.N. Panel of Experts report seen by Reuters on Wednesday said alumina-for-aluminum swap deals with Iran by Switzerland-based commodities giants Glencore Xstrata and Trafigura could have been a way to bypass international sanctions.

A Glencore spokesman said the company broke no regulations and did not violate the sanctions. Trafigura did not immediately respond to Reuters’ request for comment.

Reuters reported on March 1 that Glencore had supplied thousands of tons of alumina to an Iranian firm that has provided aluminum to Iran’s nuclear program. Afterward, Trafigura acknowledged it had also traded with the same Iranian firm.

Glencore has confirmed the deals with Iran but insisted it had no knowledge that the company it was supplying alumina to – the Iranian Aluminum Company (Iralco) – was in turn providing aluminum metal to Iran Centrifuge Technology Co (TESA), which the European Union sanctioned in December 2012.

Questions Remain in HD Mining Case – by Jeremy J. Nuttall (The Tyee – May 24, 2013)

May 28, 2013

http://thetyee.ca/

Key evidence was struck from the record in federal court, say unions. Earlier this week, a federal court justice dismissed an attempt by two British Columbia unions to have temporary foreign worker permits for 201 miners revoked.

The Construction and Specialized Workers Union and the International Union of Operating Engineers Local 115 launched their case after it came to light the company, HD Mining, had advertised mining positions listing Mandarin as a job requirement.

The unions contended the language requirement was meant to exclude Canadians so the company could bring workers from China and legally pay them 15 per cent less than market wages at its Murray River project near Tumbler Ridge, B.C.

After a months-long court battle Judge Russel Zinn ruled Tuesday HD Mining filed its applications properly according to the rules that were in place at the time.

But the unions said they lost because Zinn struck from the record key evidence that would have helped their case and, in their view, showed the company misrepresented its mining plans in the form of a notice of work application.

Africa could still benefit from resources boom – by Geoff Candy (Mineweb.com – May 28, 2013)

May 28, 2013

http://www.mineweb.com/

According to the African Economic Outlook 2013, while Africa failed to capitalise on the resource boom of the last decade, there still remains hope for growth.

GRONINGEN (MINEWEB) – While Africa failed to capitalise significantly on the resources boom of the last decade, there remains hope that agricultural, mining and energy resources could boost the continent’s economic growth in the future, says the African Economic Outlook 2013.

According to the report, produced annually by the African Development Bank,the OECD Development Centre, the Economic Commission for Africa (ECA) and the UN Development Programme (UNDP). “What has been holding back Africa is not the large share of its primary sector in itself, but the poor performance of this sector.”

That is not to say the continent has not benefitted at all from the boom in resource prices seen over the last ten years, indeed according to the report, Africa’s GDP grew by 64% between 2000 and 2011, of which, 35% was accounted for by natural resources – primarily fuelled by a tripling of prices for metals and fuels.

Editorial: Clash of the Titans [Glencore-Xstrata] – by John Cumming (Northern Miner – May 22, 2013)

May 28, 2013

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. Editor John Cumming MSc (Geol) is one of the country’s most well respected mining journalists. jcumming@northernminer.com

Canadians trying to make sense of what’s going on in the upper echelons of the newly merged Glencore Xstrata are getting a feel of what it must have been like to be an ancient Greek peasant looking up at his distant panoply of far-from-perfect gods, with all their petty battles, betrayals and all-too-human schemes, and with Mount Olympus as a proto-version of a head office in Switzerland.

Initially pitched as a merger of equals, Glencore’s takeover of Xstrata was completed on May 2 after 15 months and five delays. A pivotal moment was the demand last June by Xstrata shareholders, led by Qatar’s sovereign wealth fund, for a higher acquisition price.

In a judo-like move of redirecting an attacker’s energy against himself, Glencore used that monetary concession to win greater management control over the merged entity, culminating in a November shareholder vote that quashed lavish retention bonuses totalling £140 million that were to have been paid to 70 remaining Xstrata personnel, and forced Xstrata chairman John Bond’s dramatic resignation.

The final deal stands as the largest takeover or merger in mining history and the fifth-largest ever in the broader resources sector, after the megamergers in the oil patch in the 1990s and early 2000s that saw the coming together of Exxon and Mobil, BP and Amoco, Chevron and Texaco, and Total and Elf.

New uranium royalty incentives will encourage development in Saskatchewan – by Tony Playter (Regina Leader Post – May 25, 2013)

May 28, 2013

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

For L-P Specialty Products

In an effort to encourage new investments in uranium mining, the provincial government made changes to its uranium royalty structure earlier this year.

Tim McMillan, Minister Responsible for Energy and Resources, said the new royalty structure now recognizes actual costs incurred in development and mining.

“The old uranium royalty structure, which was put in place in 2001, presented a number of challenges,” said McMillan. “It was based on assumed costs and over the last 13 years we have seen the cost of construction far exceed assumptions that were put in the old model.”

The old royalty system had a very negative effect on mining in Saskatchewan. Over the years, many development and mine projects have been placed on hold because the structure would not recognize certain actual costs.

“We corrected that system, which was no longer reflecting the true costs of building a new mine or bringing new projects forward,” said McMillan.

International Minerals Innovation Institute – by Robyn Tocker (Regina Leader Post – May 25, 2013)

May 28, 2013

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

For L-P Specialty Products

In Saskatoon, a unique, non-profit institute funded by Saskatchewan’s mining industry and government that brings “market pull” to the design of education and training (E&T) programs and research and development (R&D) projects has been developed. International Minerals Innovation Institute (IMII) “is focused on enhancing mining technology, processing technology, environment and safety management, exploration, social license and policy research, and economics of global commodities,” said Rodney Orr, executive director of IMII.

The goals are simple: to support the attraction and retention of educated and skilled people; facilitate research and development; and provide leadership and capacity-building in the development of programs, technical certificate and undergraduate and post-graduate programs. IMII has already begun their work to meet the mining industry’s needs by entering into an agreement with the University of Saskatchewan to provide $1.68 million over a three-year period for the start-up costs of developing Mining Option classes for engineering students and to explore the delivery of an undergraduate mining engineering degree.

IMII was designed to fill the gap for skill development through industry-driven education and training programs and R&D within [the Saskatchewan] mineral industry. It is a unique approach.

SIMSA – promoting Saskatchewan solutions to the global resource industry – by Tony Playter (Regina Leader Post – May 25, 2013)

May 28, 2013

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

For L-P Specialty Products

The Saskatchewan Industrial and Mining Supply Association (SIMSA) is a new organization representing Saskatchewan based companies that provide goods and services to mining, oil and gas, and industrial projects.

With Saskatchewan’s strong resource base and growing economy, SIMSA – which was officially launched at the 2013 Saskatchewan Mining Supply Chain Forum – will play an important role in providing world-class opportunities and solutions to members of the industry. SIMSA assists its members by promoting the capabilities and capacity of its members who represent Saskatchewan industrial manufacturers and service suppliers.

“Our mandate is to represent the interests and concerns of our members who are Saskatchewan industrial equipment and service suppliers,” said Tom Foster, chairman of SIMSA’s board of directors. “We look to promote our members and create lasting partnerships within the industry and other associations.”

SIMSA will also promote its members and their services to global companies working in Saskatchewan as well as globally. The organization will also provide one voice when reviewing new policies and regulations that may affect their members.

[Timmins] Hollinger pit project ‘on track’ – by Benjamin Aubé (Timmins Daily Press – May 28, 2013)

May 28, 2013

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Representatives from Goldcorp gave Timmins city council a tiny glimpse into the future of the Hollinger Mine open-pit project on Monday.

A handful of conceptual renderings of eventual Hollinger Lake were presented by general manager Marc Lauzier and mine superintendent Paul Miller as part of the report.

But the news everyone at council really wanted to hear was that the goals surrounding the Hollinger Project haven’t changed, despite nervous times in the gold market.

“I’m not going to lie to you, there’s a lot of questions around the community about what’s going on, with the price of gold declining,” said Lauzier. “Of course, it’s been steadily around $1,380, $1,400, $1,350 (per ounce), so people have been worried about that.

“I had a conference call with our COO and our VP of operations on Friday night, and I’m proud to report that after that call, we remain committed to doing this project,” he said. “We’re committed to returning it for safe public use, however, we’re going to do so in a fiscally responsible manner because we have to. Nothing’s changed, really. We’re going to keep our guys employed until we get our permit.

Company hopes to usher in new era of Yellowknife gold mining – by CBC News North (May 27, 2013)

May 28, 2013

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

TerraX Minerals exploring same gold belt Giant Mine is located on

A junior exploration company — TerraX Minerals — hopes to bring a new era of gold mining to Yellowknife. The last gold mine close to the city shut down almost a decade ago, and exploration in the Yellowknife gold belt has been stagnant, until now.

In February, TerraX has acquired a site along the lucrative belt, located about 15 kilometres from Yellowknife. The Northbelt site is about 13 kilometres in length and 36 square kilometres in size, and sits just north the Giant Mine. It once belonged to Royal Oak, the last company to run Giant Mine.

“It’s the most promising expansion of mineralization that was mined in the past,” said company president Joe Campbell. TerraX Minerals is starting a small exploration program this summer. It’s doing geological surveys and combing through old drilling records.

But down the road, a big hurdle could be selling a project that neighbours one of the most toxic mine sites in Canada. The federal government is spending almost a billion dollars to clean up the Giant Mine and store 237,000 tonnes of arsenic trioxide, dust produced during gold production.

“Anyone that mentions gold mining in Yellowknife is obviously going to associate it with the gold mining that occurred in the past, and therefore the question that will come out is, ‘is this going to be another environmental disaster in 40 years like Giant’,” said Campbell.

Excerpt from “An Insider’s Guide to the Mining Sector: An in-depth study of gold and mining shares”– by Michael Coulson

May 28, 2013

To order a copy of An Insider’s Guide to the Mining Sector, please click here: http://www.harriman-house.com/book/view/66/investing/michael-coulson/an-insiders-guide-to-the-mining-sector/

United Kingdom: Little mining activity left

One of the most interesting business developments in recent years has been the relocation to and re-incorporation in the UK of a number of major mining companies. This has meant that four of the largest mining companies in the world – Rio Tinto, Anglo American, Xstrata and BHP Billiton – have UK incorporation; all are part of the FTSE100 share index. It is important to appreciate, however, that any UK mining operations that these companies have are very small. Indeed, mining in the UK is itself confined to speciality minerals such as china clay, sand and gravel and a rapidly contracting (though once powerful) coal mining industry.

The financial attractions of London

Therefore, with little mining activity in the UK the reasons for the presence of these companies in London is primarily financial. The banking system is seen as sophisticated and experienced in financing mining developments. Operating as a UK company means that the cost of capital can be much lower than in countries like South Africa. The historic links between the City of London and the mining industry mean that there is understanding of the risks and rewards of financing mining companies.

Gold Bets Cut to Five-Year Low as Prices Whipsawed: Commodities – by Tony C. Dreibus (Bloomberg News – May 27, 2013)

May 27, 2013

http://www.bloomberg.com/

Hedge funds are the least bullish on gold in more than five years as speculation about the pace of money printing by central banks whipsawed prices, driving volatility to a 17-month high.

Money managers cut their net-long position by 9 percent to 35,686 futures and options as of May 21, the lowest since July 2007, U.S. Commodity Futures Trading Commission data show. Holdings of short contracts rose 6.7 percent to a record 79,416. Net-bullish wagers across 18 U.S.-traded commodities slid 2.1 percent, as investors became more bearish on coffee and wheat.

Gold’s 60-day historical volatility touched the highest since December 2011 last week and a gauge of price swings for the SPDR Gold Trust, the biggest bullion-backed exchange-traded fund, surged 73 percent this year. Bullion see-sawed as Federal Reserve Chairman Ben S. Bernanke testified before Congress on May 22. Two days later, Bank of Japan Governor Haruhiko Kuroda said he’s done enough to spur growth.

“Gold has so many drivers that it leads to a lot of getting pushed around by one thing or another,” said Dan Denbow, a fund manager at the $1 billion USAA Precious Metals & Minerals Fund in San Antonio. “It makes it impossible to determine a direction.”

May Returns

Futures dropped 5.4 percent in May, poised for a second monthly decline. The Standard & Poor’s GSCI Spot Index of 24 commodities fell 0.1 percent and the MSCI All-Country World of equities also declined 0.1 percent. A Bank of America Corp. Index shows Treasuries lost 1.3 percent.

Why everyone wants a piece of the Arctic – by by Luiza Ch. Savage (MacLean’s Magazine – May 27, 2013)

May 27, 2013

http://www2.macleans.ca/

In temperature and politics, the Arctic has never been hotter. As other nations try to get in on the action, Canada is gearing up for a fight.

Ólafur Grímsson, the jovial, globe-trotting president of Iceland, likes to tell the story of his first state visit to Russia 11 years ago, when he asked to meet with Vladimir Putin to talk about the Arctic. The snow-haired Icelander was told that such esoteric matters would be best discussed with local authorities in Kamchatka and Murmansk, thousands of miles from the Kremlin. These days, says Grímsson with a chuckle, Putin himself gives speeches at Arctic conferences—and sends emissaries to Iceland to personally invite Grímsson to attend.

In temperature and in geopolitics, the Arctic has never been hotter. The ice cap is melting rapidly; new shipping lanes are opening up, as are previously inaccessible reserves of oil, gas and minerals. It is estimated that one-fifth of the world’s petroleum reserves lie in the Arctic. Whether these riches will be developed and transported, under what conditions and by whom, are high-stakes questions that are growing in urgency for governments and industry around the world.

Some projections say a nearly ice-free Arctic Ocean could occur by mid-century. “For the first time in human history we will witness the creation of a new ocean,” Grímsson told a conference in Washington last month. And the rest of the world wants in. Last summer, a Chinese-owned icebreaker, the Snow Dragon, sailed from Shanghai to Iceland. The purpose of that expedition was ostensibly to research how the melting of the sea ice creates extreme weather patterns in China. But China is also building cargo ships to sail across a polar route this decade using the ice-free summer months, cutting the distance to Europe and America.