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Brazil on cusp of domestic potash and phosphate revolution – by Simon Rees (MiningWeekly.com – April 25, 2013)

http://www.miningweekly.com/

TORONTO (miningweekly.com) – Fertilisers and their increased application will be vital in driving Brazil’s status as a global agricultural powerhouse. The country is already the world’s fourth-largest consumer, according to Reuters.

Rather than rely on imported raw material for fertiliser production, Brazil’s government is keen to facilitate the growth of a robust domestic potash and phosphate industry. Several significant projects are already in various stages of development, including those being advanced by MBAC, Brazil Potash and Verde Potash.

MBAC is close to bringing on stream its Itafós project, located in the vast Cerrado area, Brazil’s new agricultural frontier.

Construction work is just more than 90% complete, with proven reserves standing at 15.9-million tons and probable reserves at 48.9-million tons. Life of mine is estimated at 19 years, with an average ore grade of 5.08% P2O5 (phosphorus pentoxide). Yearly output is estimated at an initial 500 000 tons single super phosphate (SSP).

“We’ve accomplished a lot over the last four years: we’ve drilled over 75 000 m; obtained the necessary permits and filed the necessary technical reports; [and] secured financing in difficult market conditions,” MBAC VP corporate development Steve Burleton told Mining Weekly Online.

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Golden opportunities ahead: mining report – by Carl Clutchey (Thunder Bay Chronicle-Journal – April 26, 2013)

Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

Northwestern Ontario’s burgeoning mining sector is expected to create 10,000 full-time jobs over the next decade and bring in up to $1.7 billion in overall economic revenue each year over the same period, says an exhaustive report.

But Thunder Bay’s Mining Readiness Strategy also warns that the city, the province, outlying municipalities and Aboriginal agencies have a lot of work to do to prepare for the boom: energy needs, housing shortages, aging roads and sewers, and worker training are all areas that need to be quickly addressed.

The overall buoyant outlook in the report suggests that the region will not be left out when the province’s economic recovery kicks in, as was the case during the forestry crash.

Spearheaded by Thunder Bay’s Community Economic Development Commission, the study was deemed complete Thursday and posted to the city’s website.

The rosy forecast is based on 10 new mines or major expansions, nine of which are in the advanced stage of exploration, including the Ring of Fire, Stillwater Canada’s proposed copper and palladium mine near Marathon and Goldcorp’s Channel Gold project at Red Lake.

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Lower mineral, energy prices bound to hurt B.C., economist says – by By Gordon Hamilton (Vancouver Sun – April 25, 2013)

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

Analysts differ on timing and effect of the end of commodities ‘super-cycle’

Commodities, the lifeblood of the British Columbia economy, are at the beginning of a long, downward trend that is bound to affect both government and households, says a Simon Fraser University economist.

“We have seen the best days in terms of dramatic increases in commodity prices,” David Jacks, an economic historian at the university, said in an interview.

He said commodities, particularly minerals and energy, are characterized by long-term trends related to global industrialization and urbanization. That growth runs up against capacity constraints, particularly in minerals and energy, leading to rising prices. New capacity to meet the new demand then leads to prices easing.

The current cycle, which has been going on since 1998, is being driven by Asian, specifically Chinese, economic growth and urbanization. Jacks has written a paper, From Boom to Bust, on the super-cycle, which he prepared for a recent conference in Australia on commodity price volatility. Jacks said his is not the only voice warning that commodities are beginning to trend downward in price — investment bankers Goldman Sachs and Citybank have done the same.

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Sulawesi Mining to Invest $1.06b in Smelter – by Damiana Ningsih Simanjuntak (Jakarta Globe – April 26, 2013)

http://www.thejakartaglobe.com/

Sulawesi Mining Investment, an Indonesian-Chinese joint venture company, plans to invest $1.06 billion in a Central Sulawesi nickel mining operation, including a plan to build a smelter, an industry executive said on Thursday.

Alexander Barus, vice president of Bintangdelapan Mineral, the Indonesian firm in the venture, said that some $96 million would go toward the smelter and support the power plant in Morowali, Central Sulawesi, while $100 million would be for the mine and supporting facilities.

Halim Mina, vice president commissioner of Sulawesi Mining, said that the investment would be split into two stages. “For the first phase, the investment will stand at $340 million and the second phase at $640 million,” Halim said.

“The plan is for the first phase to become operational at the end of 2014,” he added, noting that about 30 percent of the first phase had already been completed.

He said the smelter’s output would mostly be exported to China, but gave no details, adding only that its products would be marketed domestically “in line with the demand” for nickel.

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The duty to consult [in Ring of Fire] needs support – by Shawn Bell (Wawatay News – April 25, 2013)

http://wawataynews.ca/

The tragedies of multiple suicides in Neskantaga, and the First Nation’s declaration of a state of emergency, should be a wakeup call for everyone involved in trying to push the Ring of Fire ahead.

If there ever is a time for people working in government and in the mining industry to step back and look at the big picture, this is it. Seven tragic deaths have shaken the community of 420 people over the past year. Another 20 people tried to end their own life but failed. Everyone is exhausted, emotionally and physically.

Meanwhile, as councilor Roy Moonias said, Neskantaga is under “overwhelming pressure” from mining companies and governments who want to negotiate with the community on the Ring of Fire mining development.

The situation taking place now is a repeat of what happened in December. At that time Neskantaga was also dealing with youth suicides. A crisis intervention team was in the community. Meanwhile the deadline to respond to the terms of reference on Cliffs’ Natural Resources environmental assessment was coming up quick.

At that time Neskantaga’s only option, if it wanted to respond to an environmental assessment on a project that could profoundly change northern Ontario, was to ask for an extension in light of “exceptional circumstances”.

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Kasabonika pondering economic development opportunities – by Lenny Carpenter (Wawatay News – April 25, 2013)

http://wawataynews.ca/

Although the community of Kasabonika Lake First Nation recently celebrated the grand opening of a new Northern Store, it finds itself struggling to identify economic opportunities due to a lack of electricity.

“There’s no room for growth,” said Ken Albany, a band councillor with the First Nation. “It goes back to the capacity of the power plant. It’s basically holding us back.”

The power station in the community reached its maximum capacity in 2007. Kasabonika secured funding from Aboriginal Affairs and Northern Development of Canada (AANDC) to upgrade the generators to 2 MW, but then the federal government pulled the funding and told the community not to expect funds until 2015.

“The federal government has failed us,” said Mitchell Diabo, manager of special projects for the First Nation. “They say we’re on their top priority list but we have no idea when that is.”

The lack of power capacity has severely limited construction of any houses or projects, including a business centre the First Nation had hoped to build in the community. The proposed business centre would have housed the Northern Store and offered space for any potential entrepreneur to start up a business such as a coffee shop or deli.

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Dix’s pipeline flip-flop is a resource chiller – by Gary Mason (Globe and Mail – April 26, 2013)

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.

The B.C. election was proceeding along fairly uneventfully until NDP Leader Adrian Dix decided to make it interesting.

Mr. Dix used Earth Day to reverse his previously held position on the proposed $5.4-billion Kinder Morgan pipeline expansion. As recently as two weeks ago, Mr. Dix was saying that – as a matter of principle – he would not prejudge the pipeline builder’s plans until they’d been filed as part of the federal environmental review process later this year. Suddenly, he couldn’t wait any longer.

Now Mr. Dix is against the project, saying he doesn’t believe Vancouver should become a major oil exporting port. Kinder Morgan wants to triple its current pipeline capacity, from 300,000 barrels a day to 890,000 – a move that would significantly increase tanker traffic in the port of Vancouver.

While surprising, the NDP Leader’s position isn’t the roll of the dice it might seem. There are plenty of people in the province who agree with his position, and not just those who make up the enviro brigade. Support for the expanded pipeline is particularly low in the Vancouver area. Many First Nations groups don’t want it, either. That said, it’s widely accepted that Mr. Dix jumped off his earlier stand because of the threat an ascendant Green Party poses for him.

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Greenpeace activists board Australian coal ship in reef protest – by Thuy Ong (Reuters U.K. – April 24, 2013)

http://uk.reuters.com/

(Reuters) – Six Greenpeace activists boarded a coal ship bound for South Korea near Australia’s Great Barrier Reef on Wednesday, protesting against the expansion of the rich Australian coal industry and its impact on the World Heritage site.

Environmentalists say the Great Barrier Reef, a popular tourist site worth about A$6 billion (4 billion pounds) a year to the Australia economy, is threatened by dredging, sedimentation and coal port and shipping development.

UNESCO will decide in June whether the reef should be listed as a World Heritage Site in danger. The ship MV Meister was carrying thermal coal from Abbot Point in northern Queensland state, a port that falls within the Great Barrier Reef heritage area, and was still in Australian waters in the Coral Sea when it was boarded en route to Donghae in South Korea.

“They have established a peaceful occupation of the ship,” said Georgina Woods, a climate campaigner on board Greenpeace’s flagship, the Rainbow Warrior.

Activists launched inflatable boats from the Rainbow Warrior and boarded the coal vessel early on Wednesday. A letter was handed to the captain of the ship detailing their reasons for the occupation.

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Alberta exploring at least two oil pipeline projects to Northwest Territories – by Yadullah Hussain (National Post – April 26, 2013)

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

Hemmed in by unco-operative jurisdictions to the south, west and east, Alberta is looking upward, exploring at least two new northern projects that would help the province get its oil to tidewater, making it available for export to overseas markets.

The Alberta government says it is in “serious talks” with the Northwest Territories to build an oil pipeline connecting the oil sands to the northern hamlet of Tuktoyaktuk, near the Beaufort Sea.

“We have been approached by the government of the Northwest Territories and we are engaged in a conversation with them because they have immense resources as well and are about to take responsibility for their own resources,” Ken Hughes, Alberta’s Minister of Energy told the National Post.

Alberta has hired Canatec Associates International to assess the project’s feasibility, at a cost of $50,000. The Calgary-based consultancy, which specializes in the offshore and Arctic petroleum business, is expected to submit its findings before the end of the year.

Frustrated by Washington’s continuing delays in approving proposals for the U.S.-bound Keystone XL pipeline, Alberta is also getting negative signals from its western border.

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[Ring of Fire] Be Canada’s Next Oil Sands – by Daniel Tencer (The Huffington Post – April 26, 2013)

http://www.huffingtonpost.ca/

Ontario’s “Ring of Fire” mining project promises to be the economic equivalent of another oil sands, Treasury Board President Tony Clement says.

Clement, who was recently appointed the federal government’s point man on Northern Ontario development, said the giant mining project — which faces delays and opposition from some First Nations groups — would eventually expand to be worth $120 billion, when taking into account all the economic activity the planned mine and smelter would generate.

Clement made the comments at an editorial board meeting at The Huffington Post Canada on Thursday, during which he also discussed the controversy over the temporary foreign worker program, the Conservatives’ negative ads and what it means to be a politician in the age of social media (see below).

But it was his comments on the Ring of Fire — the name given to a massive planned chromite mining project some 400 kilometres north of Thunder Bay — that caught many at the meeting by surprise.

“You’re looking at $120 billion, right in line with the oil sands or some of these other major developments,” Clement said of the project, noting that other minerals besides chromite (an ingredient in stainless steel) have been found in the area, including nickel and copper.

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[Wyoming and Montana] Coal exports in the north-west: Dirty war (The Economist – April 20, 2013)

http://www.economist.com/

A rancorous scrap over plans to send American coal to Asia

BELLINGHAM AND SEATTLE, WASHINGTON – MITT ROMNEY’S charge that America had declared “war on coal” may not have won him last year’s presidential election. Yet this once-mighty industry is struggling, squeezed by the plummeting cost of natural gas and a torrent of tough new environmental rules.

Last year 37.4% of American electricity production came from coal, down from 48.5% in 2007. The Energy Information Administration expects a slight rise this year as gas prices begin to creep up. But further restrictions on power-station emissions are expected, and the shale revolution is marching on. If coal has a future, it is surely elsewhere.

For many, that means Asia. Demand for coal imports is growing in post-Fukushima Japan, as it decreases its reliance on nuclear power; in India, where domestic supplies cannot keep up with the growing economy; and, most tantalisingly, in China, which burns almost half the world’s coal, and which became a net importer of the stuff in 2009.

Such facts make mouths water in the Powder River Basin, straddling Wyoming and Montana (see map), where more than 40% of America’s coal is mined. Some already makes its way to Asia, mainly via Canadian ports. But exporters want to build four new terminals on the western shores of the United States—two apiece in Oregon and Washington—to send up to 130m tonnes more a year.

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Mining in Chile: Copper solution (The Economist – April 27, 2013)

http://www.economist.com/

The mining industry has enriched Chile. But its future is precarious

ANTOFAGASTA – TOURIST shops sell polished copper trinkets. Building after building sports a bit of copper cladding. Even the taxi-drivers in Santiago, Chile’s capital, know the price of copper. It is not hard to guess what the country’s biggest export is.

Copper has been kind to Chile. It provides 20% of GDP and 60% of exports. Thanks to it, Chile’s economy is expanding by nearly 6% annually, while inflation and unemployment are enviably low. Poverty rates have tumbled; public services are mostly good. Chile has other strengths, such as agriculture, tourism and even high-tech. But small shifts in the copper price make headlines.

The copper mines themselves are far from the capital. Escondida, the world’s biggest (and the source of over 5% of global supplies) is a 1,300km (800-mile) trek north, in the middle of the Atacama desert. BHP Billiton, the world’s biggest mining company, operates two gigantic pits there.

The deeper one is 3.9km from side to side and 650 metres from brim to bottom. Trucks as big as houses, working non-stop, haul 1.5m tonnes of rock out of Escondida each day. Managers may drive 150km in a shift. Last year the mine disgorged 1m tonnes of metal. Overall, Chile produces a third of the world’s copper.

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Gold Rout for Central Banks Buying Most Since 1964: Commodities – by Debarati Roy, Maria Kolesnikova & Phoebe Sedgman (Bloomberg.com – Apr 25, 2013)

http://www.bloomberg.com/

Central banks bought the most gold since 1964 last year just before the collapse in prices into a bear market underscored investors’ weakening faith in the world’s traditional store of value.

Nations from Colombia to Greece to South Africa bought gold as prices rose for an 11th year in 2011, highlighting the reversal of a three-decade-long bout of selling that diminished the world’s biggest bullion hoard by 19 percent. The World Gold Council says they added 534.6 metric tons to reserves in 2012, the most in almost a half century, and expects purchases of 450 to 550 tons this year, valued now at as much as $25.3 billion.

Central banks are the biggest losers, with about $560 billion of value erased since gold reached a record $1,921.15 an ounce in September 2011. The metal was already in the eighth year of its longest bull market since the end of World War I when reserves started expanding again in 2008. They were also buying in 1980 when bullion peaked at the equivalent of $2,400 in today’s money, and selling in 1999 as prices slumped to a 20- year low.

“They sell at the wrong time and buy at the wrong time,” said Walter “Bucky” Hellwig, who helps manage $17 billion of assets at BB&T Wealth Management in Birmingham, Alabama. “They aren’t traders.

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Vale Gains as Cost Cuts End Two Years of Profit Disappointment – by Juan Pablo Spinetto – (Bloomberg.com – April 25, 2013)

http://www.bloomberg.com/

Vale SA (VALE) rose the most among major iron-ore producers after profit beat analysts’ estimates for the first time in two years on cost reductions and higher copper sales that offset lower prices for the steel ingredient.

Shares in the world’s third-largest mining company rose for a fifth straight day, gaining 2.2 percent to 32.82 reais at 10:41 a.m. in Sao Paulo. BHP Billiton Ltd. and Rio Tinto Group, the largest miners, both rose 0.7 percent in London.

First-quarter net income of $3.11 billion, or 60 cents a share, compared with a loss of $2.7 billion, or 52 cents, in the previous three-month period, according to a statement after the close of trading yesterday. Vale was expected to post per-share profit excluding items of 55.8 cents, the average of 13 analysts’ estimates compiled by Bloomberg. Vale, the worst- performing major mining stock this year, is seeking to bolster investor confidence by putting lower-return projects on hold, selling assets and cutting costs.

“Vale reported a much stronger-than-expected 1Q13, driven by lower costs and expenses and a stronger performance from the base metals business,” Goldman Sachs Group Inc. analysts Marcelo Aguiar and Diogo Miura wrote in a note to clients. “These drivers should provide a strong catalyst to consensus earnings upgrades and reduce the bearish sentiment towards Vale.”

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Vale Says Some Progress Made on Contract Talks – by Muhamad Al Azhari (Jakarta Globe – April 24, 2013)

http://www.thejakartaglobe.com/home/

Vale Indonesia, the local unit of the global nickel giant, says it has made progress in mining contract renegotiations with the Energy and Mineral Resources Ministry.

“There are four items that we continue to discuss,” Vale president director Nico Kanter told reporters after a shareholders meeting in South Jakarta on Tuesday, declining to reveal more specific details on the talks. “We are optimistic. … If the government has good intentions, we also have good intentions.”

Nico said the company’s $2 billion nickel smelter plan will depend on the outcome of the renegotiations. “We have plans to boost the capacity of the smelter that we already have. Our target is to produce 120,000 tons of nickel in 2017,” Nico said.

Several miners are currently renegotiating their contracts after the passage of a 2009 mining law designed to elicit more local benefits from the sector, by increasing the royalties paid by miners and adding value to mineral commodities exports.

The 2009 law included an obligation for miners to submit plans to process raw materials domestically before 2014, limits on concession areas, higher royalties for the government and an obligation for foreign miners to gradually divest their shares to local entities five years after production commences.

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