Twitter

Is China backtracking on attempts to control iron ore? – by Clyde Russell (Reuters India – June 17, 2013)

http://in.reuters.com/

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

LAUNCESTON, Australia, June 17 (Reuters) – It may be too early to start beating the drums of victory for free-market capitalism, but there are signs that China is stepping back from attempts to control the iron ore market.

Just three months after accusing major iron ore producers of manipulating prices, China plans to scrap it’s decade-old import licensing system, a move that may eliminate middlemen in the market, lower costs for steel mills and improve transparency.

It also looks like a strategic retreat for the world’s biggest buyer of iron ore in its battle to win pricing control from the big three producers, Brazil’s Vale and the Anglo-Australian pair of Rio Tinto and BHP Billiton .

The planned end of the licensing system will happen in the second half of the year, according to a Reuters report on June 13 that cited a source with knowledge of the matter. The current system requires import qualification licences to be granted by government-backed industry bodies like the China Iron & Steel Association.

It was designed to eliminate speculative traders from driving up prices and force the steelmaking industry to present a united front against the producers.

Read more

Insecurity in Congo copper province a “serious concern” -UN – by Jonny Hogg (Reuters India – June 17, 2013)

http://in.reuters.com/

Rebels attack Congo Katanga mining province

KINSHASA, June 17 (Reuters) – Security in Congo’s copper-mining heartland of Katanga is a “very serious concern” that must be tackled politically and militarily, the outgoing head of the U.N. peackeeping mission said on Monday. The province, which sits on some of the world’s largest copper reserves, last year exported 600,000 tonnes. Miners including Freeport McMoRan and Glencore already operate there.

In March, hundreds of rebel fighters attacked the Katangan capital of Lubumbashi and then surrendered following bloody clashes with security forces. On Sunday, a soldier was killed during fighting between the army and insurgents 20 km (12 miles) from the city.

“It’s a quite significant problem, and I think it has all the prospects of becoming worse,” Roger Meece, the head of the U.N.’s peacekeeping mission in Congo, known as MONUSCO, said.

“One can do what is possible militarily and or with a police force but … the real solutions have to be found in these political factors,” Meece, who is leaving his post later this month, said in an interview.

Read more

NEWS RLEASE: KWG Comments On Ring Of Fire Developments

Montreal, Canada – June 17, 2013 – KWG Resources Inc. (TSXV: KWG) wishes to update stakeholders on its position concerning the development of its interests in the Ring of Fire.

Chromite development: KWG is studying the feasibility of utilizing low cost natural gas with the Ring of Fire’s high-grade chromite to facilitate the production of direct-reduction iron and ferro-chrome products for export. A sufficient export market share would enable the achievement and maintenance of profitable mining production rates.

Road vs. Railroad: KWG declined a previous proposal from Cliffs Natural Resources Inc. (“Cliffs”) for consent to an easement over the mineral claims held for the construction of a railroad from Nakina to the Big Daddy deposit, because the easement was desired for the construction of a roadway to mine the Black Thor deposit. KWG has a 30% interest in the Big Daddy deposit, but no interest in the Black Thor deposit. Cliffs then made application to the Mining and Lands Commissioner for an Order that the easement be granted without KWG’s consent. A two-week trial concluded on February 12, 2013 and the Commissioner’s decision has not yet been rendered.

ONR “New Deal”: After the Province’s announcement of the proposed liquidation of the Ontario Northland Transportation Commission, the leadership of its unionized employees developed a plan to avert the divestiture of the ONTC by extending the ONR railroad network to serve the development of the Ring of Fire (the “New Deal”). KWG responded with indicative terms on which its railroad right-of-way might be transferred under such a plan.

Read more

Excerpt: From Meteorite Impact to Constellation City: A Historical Geography of Greater Sudbury – by Oiva W. Saarinen

To order a copy of “From Meteorite Impact to Constellation City”, please click here: http://www.wlupress.wlu.ca/Catalog/saarinen-meteorite.shtml

Sudbury: A Union Town? (Part 1 of 5)

While Sudbury’s history has been intimately associated with the corporate aspect of resource extraction, this linkage also brought with it another aspect of the mining spectrum—unionism. Indeed, Sudbury has long had the reputation of being a union town. While most Sudburians have traditionally taken pride in this image, for others it has been regarded as a dubious distinction. The latter view, for instance, is explicit in the book For the Years to Come, a history of International Nickel of Canada written by one of the company’s chairmen in 1960, where the existence of Mine Mill did not even warrant mention in the book’s index.

When viewed in the context of Inco’s traditional hegemony in Sudbury and its influence in the corridors of power in Toronto and Ottawa, and the lack of interest shown by other Canadians to Sudbury’s woes related to hazardous working conditions, mining assessments, and environmental issues, it was inevitable that some counterforce to this capitalism would appear.

This resistance came in the form of the only option available to workers: unionism, notably via the International Union of Mine, Mill and Smelter Workers (IUMMSW), known locally as Mine Mill. For three decades, Mine Mill had an honourable tradition of supporting its union members and the wider community through cultural programs and fundraising activities. Its presence was sufficiently strong in the 1950s to encourage the rise of unions in other sectors of the community.

Read more

G8 shines world spotlight on mining transparency, or lack thereof – by Dorothy Kosich (Mineweb.com – June 17, 2013)

http://www.mineweb.com/

International and domestic mining’s penchant for secrecy may finally be coming to an end, as fed-up world leaders demand more public scrutiny of miners and their transactions.

RENO (MINEWEB) – As UK Prime Minister David Cameron launched the G-8 Summit at Lough Erne in Northern Ireland, he stressed the summit themes of Tax, Trade and Transparency, specifically the improvement of transparency in the use of natural resources.

During a panel session with African leaders at the Open for Growth event Sunday, Cameron announced that the G8 and 15 developing countries have agreed to work together to make sure the world’s poorest people benefit from the natural resources of their various countries by improving the transparency of their extractive industries and land rights.

The G8 members and their partners are Burkina Faso (France), Colombia (EU), Ghana (UK), Guinea (USA), Mongolia (Germany), Burma/Myanmar (USA), Peru (Canada), and Tanzania (Canada). Ironically, Rio Tinto, which is currently selling mining operations and properties in a number of nations, is backing partnerships in Peru and Mongolia.

“Many developing countries have vast extractive resources like oil, gas and minerals but they are often sold at below market prices, or the money made is misused or poorly invested,” said the Prime Minister’s Office.

Read more

Minnesota’s next mining boom has picturesque Ely divided – by Josephine Marcotty (Minneapolis Star Tribune – June 16, 2013)

http://www.startribune.com/

ELY, Minn. – Every year Randy Stender and his family spend Memorial Day weekend at Birch Lake Campground, a tradition that ties him to the wild, unspoiled lands here on the edge of the Iron Range where he grew up. There was a time, he says, when he and his wife would have moved back — if there had been a job like the one his father once had at Reserve Mining.

So when he heard that Birch Lake’s shoreline could become the site of one of the largest copper mines in the country, he immediately grasped the conflict gripping this charming tourist town and spreading across Minnesota. “That’s the catch,” he said, opening his arms wide to the lake that shimmered in the morning light. “Because I kind of like it like this.”

The prospect of a massive new mining industry here is igniting long-simmering tensions — between those who long for the surge in prosperity it could bring and those who say it threatens the splendor of the North Woods and the tourism that relies on it.

At least a dozen companies are exploring for copper, nickel, gold and other precious metals in a vast geological formation called the Duluth complex, which stretches from Tamarack, Minn., to the nearby Kawishiwi River that feeds the Boundary Waters Canoe Area Wilderness. Company officials say hard-rock mining can — and will — be done safely, while creating thousands of jobs and spawning a new industry that could someday dwarf the state’s taconite and frac sand mining operations.

Read more

Northern Gateway pipeline review panel to hear final arguments – by Kelly Cryderman (Globe and Mail – June 17, 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.

CALGARY — The proposed Northern Gateway pipeline project has spurred fierce national debate about whether heavy oil spilled in sea water floats or sinks, how much disaster insurance pipeline projects should carry and the economic rewards of shipping oil sands bitumen across the ocean to foreign markets.

On Monday, forces for and against the $6.5-billion project will gather at a hotel in Terrace, B.C., for the beginning of two weeks of final arguments.

While it’s by no means the end to the wrangling, it’s the last opportunity for arguments to be heard before the joint review panel – an independent body mandated by the Environment Minister and the National Energy Board – withdraws to write a report that will recommend for or against the project.

The report, due by the end of year, will help shape a federal cabinet decision on whether to green light the project. But even Ottawa’s approval, if eventually granted, could simply mean the beginning of years of legal appeals by First Nations and environmental groups trying to stop the project.

Northern Gateway lies at the centre of broader debates about treaty rights, the relationship between provinces and whether oil supertanker traffic will become part of the view in the coastal city of Kitimat, B.C.

Read more

The repercussions of a shale revolution on oil-exporting nations – by Eric Reguly (Globe and Mail – June 17, 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.

ROME — In sweeping terms, the economic model of countries in North Africa, parts of West Africa and the Middle East comes down to this: Trading hydrocarbons for carbohydrates.

The oil-out, wheat-in formula has worked rather well for decades, the odd land war and revolution notwithstanding. Egypt is the world’s biggest single buyer of imported wheat. Saudi Arabia is giving up on its gruesomely expensive experiment to grow wheat in the desert; it is happy to swap oil for much of its food consumption. Ditto Nigeria, whose population is exploding and which produces almost no wheat itself.

And then came the shale revolution. Shale oil and gas production in the United States is soaring and American oil imports are falling fast. Oil and gas prices are down and the forecasts are bearish, a remarkable turnaround from 2007 and 2008, when $200 (U.S.) a barrel oil seemed somewhere between possible and likely (the benchmark Brent price is now about $104). The shale revolution is about to hit Britain and other parts of Europe.

What is good for the United States and Europe – less imported oil and gas and lower prices for both – is bad news for some of the one-product wonders in Africa, the Middle East and Latin America.

Read more

Tempers flare at mine as leaders dither – by Loni Prinsloo (South Africa Business Day Live – June 16, 2013)

http://www.bdlive.co.za/

AS HIGH-level leaders of government, business and labour met on Friday to stabilise the troubled mining environment, tempers flared at one of South Africa’s biggest platinum mines in Rustenburg.

Chris Griffiths, CEO of Anglo American Platinum (Amplats), met Deputy President Kgalema Motlanthe, Finance Minister Pravin Gordhan and other senior stakeholders while about 2,400 workers were prevented by other employees from exiting underground operations at Amplats’ Thembalani mine near Rustenburg by shop stewards of the Association of Mineworkers and Construction Union (Amcu).

Amplats said this followed the suspension of four shop stewards “for inappropriate behaviour that is against our behavioural procedure”.

The battle between the National Union of Mineworkers (NUM) and Amcu that boiled over in August 2012 has not died. Tensions are running high with the first round of wage negotiations due in about two weeks. Amcu is determined to gain majority recognition at the platinum mines.

“While it is a positive move for leaders from different spheres to come together to address the issues, it will ultimately be the buy-in from workers that determines whether such a framework will make any difference. Therein lies the real challenge,” said Solidarity general secretary Gideon du Plessis.

Read more

Green light for Cigar Lake uranium mine – by Jessica Brown (Global News – June 15, 2013)

http://globalnews.ca/toronto/

SASKATOON – Canada’s Nuclear Safety Commission has given Cameco’s Cigar Lake uranium mine the green light. It’s a significant step for the Saskatoon-based mining giant after eight years constructing the $1.1 billion project.

The company says they are pleased to have finally cleared the last hurdle. “This allows us to move from a construction phase to a production phase and that’s a significant step for Cameco, also the fact that it’s a sign of confidence from our regulator is very encouraging,” said Rob Gereghty, a spokesperson for Cameco.

After construction kicked off in 2005 the mine was struck by inflow in 2006 and again in 2008. “The geology is probably the most significant challenge we face at Cigar Lake, being mindful of water and inflows, but we believe we have that well under control,” said Gereghty.

Premier Brad Wall welcomed the announcement. “Cameco is a big part of our economy and this particular mine will be very, very significant. I think the increased production capacity is good for jobs and it’s good overall for Saskatchewan’s position in the world,” said Wall.

Jet boring for ore is due to start up this summer with 300,000 pounds of uranium expected to be produced by the end of 2013. That number will be ramped up to 8.2 million pounds by 2017, while creating 250 new jobs.

Read more

Which Way to Ring of Fire? As Cliffs stands down, Noront and KWG propose alternate transport routes – by Stockhouse.com (June 14, 2013)

http://www.stockhouse.com/

Which Way to Ring of Fire? As Cliffs stands down, Noront and KWG propose alternate transport routes

It’s a suspension, not a cancellation. Yet the June 12 announcement from Cliffs Natural Resources dumped cold water all over Ontario’s Ring of Fire. By putting the region’s largest project on hold, the company has also shelved plans for an all-weather road to the south, a vital link some other companies were counting on to develop the McFaulds Lake area about 540 kilometres northeast of Thunder Bay. But Noront Resources [V.NOT] quickly responded that its own projects are “still good to go” thanks to a proposed east-west road. Not to be outdone, KWG Resources [V.KWG] pursues the feasibility of north-south rail.

Seemingly a Plan B, Noront’s east-west corridor was actually the company’s first idea. It would link the Eagle’s Nest project to Highway 808, roughly 230 kilometres southwest. But in May 2012, the Ontario government conditionally agreed to help finance the north-south route, part of Cliffs’ $3.3-billion proposal to build the Black Thor mine with road access to a new processing facility near Sudbury. On that basis, Noront used the north-south route in the base case for the September 2012 Eagle’s Nest feasibility study. Noront retained the east-west route as back-up.

Prudently, it now seems. Explaining the suspension of what would have been North America’s first major chromite mine, Cliffs’ senior vice-president of global ferroalloys Bill Boor said, “Certain critical elements of the project’s future are not solely within our control and require the active support and participation by other interested parties such as government agencies and impacted first nation communities.”

Read more

Serbia may be on cusp of mining revival after years of decline – by Aleksandar Vasovic and Stephen Eisenhammer (Reuters U.S. – June 13, 2013)

http://www.reuters.com/

Reuters) – Serbia’s mining sector, stagnant since the wars that tore Yugoslavia apart in the early 1990s, looks set for a revival as volatile commodity prices increase the allure of countries in Europe with established infrastructure and skilled labor.

Once home to a core copper and gold mining facility for the former Yugoslavia, the town of Bor in the north-eastern corner of Serbia has a history of mining dating back to Roman times.

Canadian major Freeport and its smaller partner Reservoir Minerals are exploring the area’s underground reserves. Early results have impressed investors and analysts. “The grades they’re drilling are exceptional… These come around once a decade,” said Brent Cook, a geologist and private investor who writes an investment newsletter.

International mining firms are under pressure from increasingly cautious investors to move away from projects in non-traditional mining countries where a lack of good roads, railways, water and power, as well as skilled workers, can hike costs.

Eastern Europe, along with Spain and Greece, has emerged at the forefront of this shift, with governments that are eager to help boost jobs and growth.

Read more

Cliffs puts Ring of Fire project on hold – by Shawn Bell (Wawatay News – June 13, 2013)

http://wawataynews.ca/

Citing a list of holdups with its proposed Ring of Fire chromite project, Cliffs Natural Resources announced on June 12 it has suspended its environmental assessment (EA) for the $3.3 billion mine project.

Bill Boor, Cliffs senior vice president, told Wawatay News that the uncertainty over the federal EA process – given Matawa First Nations’ ongoing legal case calling for a Joint Review Panel assessment – played a significant role in Cliffs decision to halt the project.

“Cliffs wants to work with First Nations on how we’ll cooperatively make sure we have an assessment that works for all of us, so we can assess this project in the best possible way,” Boor said. “We haven’t reached an agreement on that, and one of the issues is the judicial review.”

Boor emphasized that the uncertainty over the federal EA process was only one reason Cliffs decided to temporarily suspend work on the project. He noted that Ontario has still not approved Cliffs’ terms of reference for the provincial EA, and that a number of agreements with the provincial government remain unfinished.

Cliffs’ has also not been granted access to land it requires for an all-weather road to the mine site, another issue that has stalled the project. A land dispute between Cliffs and KWG Resources is currently awaiting ruling from Ontario’s mining commissioner.

Read more

NEWS RELEASE PDAC APPLAUDS THE FEDERAL GOVERNMENT’S SUPPORT FOR REVENUE TRANSPARENCY

 FOR IMMEDIATE RELEASE – Wednesday, June 12, 2013

TORONTO (June 12, 2013) – The Prospectors & Developers Association of Canada (PDAC) applauds Prime Minister Stephen Harper’s announcement today that the Government of Canada will be establishing new mandatory reporting standards for Canadian extractive companies with a view to enhance transparency on payments that they make to governments. The announcement confirms the Government’s support for a made-in-Canada framework developed by the PDAC, Mining Association of Canada (MAC), Publish What You Pay – Canada (PWYP), and Revenue Watch Institute (RWI) through industry and civil society consultation since September 2012.

“We believe our efforts on transparency provided the groundwork for the Prime Minister’s announcement today,” says Ross Gallinger, Executive Director, PDAC. “PDAC now looks forward to building on the success of its activities through collaboration with the Government of Canada to establish new mandatory reporting standards.”

In September 2012, the PDAC, MAC, PWYP and RWI established the Resource Revenue Transparency Working Group to create a made-in-Canada framework for mandatory reporting of payments to governments. The Working Group undertook months of cross-sector collaboration and consultation with companies, industry experts, investors, government officials, and civil society groups across Canada. The Working Group’s draft framework received broad support from Canadian mining companies, along with investors and civil society, and can now serve as a roadmap for the Government of Canada’s action on revenue transparency.

Read more

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

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/

Stock market cycles

We have talked earlier about mining shares in relation to stock market cycles for industrial equities. I now want to look at mining share cycles over the last thirty years or so to see where they sit in terms of overall market cycles, and whether there are any pointers we can find that could be applied in the future.

The situation that any investor wants to avoid is tying too much of his money up for long periods of time in a sector which is underperforming. Having said this, I am not backtracking on my view that every portfolio should have a core of gold shares because of their counter-cyclical role when industrial shares come under pressure. In that context the gold content acts as insurance against a general equity bear market, and the gold core, when the general industrial market is in a bull phase, will in any case represent only a small percentage of the portfolio’s value.

Australia, late 60s – the first modern mining boom

The first modern mining boom was that which ‘infected’ the Australian market in the second half of the 60s, and which eventually ran out of steam following the rise and fall of Poseidon. The bull market lasted from 1966 until 1970, and until the last year or so marched in step with strong industrial bull markets, particularly in the US, the UK and South Africa.

Read more