Republic of Mining

What Humphrey Bogart Can Teach the Gold Diggers – by David Fickling (Bloomberg News – March 5, 2019)

March 5, 2019

https://www.bloomberg.com/

Barrick and Newmont have far more to gain from cooperating than bickering with each other. Here’s one way to get past their squabbles.

In the classic John Huston film “Treasure of the Sierra Madre,” a group of gold prospectors strike it rich before squandering their good fortune in a tangle of greed, distrust, murder and paranoia.

Something similar is happening to Barrick Gold Corp. and Newmont Mining Corp. in Nevada. Disagreements about how to manage and develop what’s arguably the world’s best-endowed area of gold deposits look set to ensure that both companies continue in an awkward and bad-tempered cohabitation, rather than growing rich together.

Every parent who’s dealt with siblings yelling “Mine!” at each other knows the way to end this sort of squabble: Take away the toys. As it happens, that might be a way to solve this fight.

Codelco’s lithium push fades in favor of copper – by Dave Sherwood and Fabian Cambero (Reuters Canada – March 5, 2019)

March 5, 2019

https://ca.reuters.com/

SANTIAGO (Reuters) – With the global race to secure lithium heating up in 2016, Chile’s president Michelle Bachelet wanted to be sure her country seized the moment. Home to half the world’s lithium reserves, Chile tapping its state-run miner Codelco to ramp up production seemed a sure bet.

Chile’s most trusted public enterprise, she said, could hunt for private partners to help it mine its own lithium for the good of all Chileans, and take part in the global boom for the battery metal used to power electric vehicles.

A review of regulatory filings, court documents and interviews with Codelco officials shows the strategy was deeply troubled from the start. Dwindling support inside Codelco to prioritize lithium projects over copper, company insiders said, was compounded by legal and regulatory hurdles that stalled development of the company’s two flagship salt flats known as Pedernales and Maricunga.

OPINION: Newmont’s combative counterattack does not mean Barrick Gold is defeated – by Eric Reguly (Globe and Mail – March 5, 2019)

March 5, 2019

https://www.theglobeandmail.com/

Barrick Gold’s lunge for Newmont Mining has officially gone hostile, extremely so, with Newmont formally rejecting the Canadian company’s US$17.8-billion offer and blasting its executive chairman, John Thornton, for shabby performance. But this is not the end of the story – don’t count Barrick out just yet.

On Monday, as expected, Newmont, America’s biggest gold company, told Barrick to hit the road. Its all-share, nil-premium offer, revealed on Feb. 25, was a non-starter, Newmont said in its presentation, arguing that Newmont’s proposed US$10-billion takeover of Vancouver’s Goldcorp was less risky and would create ample value for shareholders.

Newmont and its CEO, Gary Goldberg, lashed out at both Mr. Thornton and Barrick CEO Mark Bristow, though it was Mr. Thornton, the former Goldman Sachs boss who replaced the late Peter Munk as Barrick chairman in 2014, who took the most criticism.

Chile set to revive its dormant cobalt sector (Resource World – March 4, 2019)

March 5, 2019

http://resourceworld.com/

Already a major producer of copper and lithium, Chile is gearing up to join the electromobility revolution by reviving its dormant cobalt sector.

During an interview with Resource World Magazine, Chilean Mines Minister Baldo Prokurica said the ultimate goal is for Chile to become a supplier of lithium ion batteries to the global auto sector

In order to achieve that goal, Chile is hoping to become a producer of cobalt in the near future, a move that would enhance the Latin American country’s ability to supply so-called battery metals, including lithium and copper, which are vital ingredients in the production of mobile consumer devices and electric vehicles.

‘Significant first step’: Feds fund new road to mineral-rich Arctic – by Bob Weber (CTV News/Canadian Press – March 4, 2019)

March 5, 2019

https://www.ctvnews.ca/business/

TORONTO — Northern leaders are cheering a federal funding announcement for a long-awaited all-weather road into the heart of Canada’s mineral-rich Arctic. “This is a significant first step,” said Wally Schumann, minister of industry and infrastructure in the Northwest Territories.

The $5.1 million outlined at a mining conference in Toronto is a small fraction of the total cost that is expected to exceed $1 billion.

But Schumann said the money will pay for planning and development of the first part of the road, which could be under construction within five years. “It’s one of the richest regions in North America,” he said.

Rush of gold mining M&A reflects a return to ‘bigger is better’ thinking – by Niall McGee (Globe and Mail – March 4, 2019)

March 5, 2019

https://www.theglobeandmail.com/

The world’s biggest gold miners have done a 180. After the failure of past blockbuster mining deals, such as Barrick Gold Corp.’s $7.3-billion purchase of copper producer Equinox Minerals Ltd. in 2011, the industry mostly abandoned size as a measure of success, in favour of profitability.

Over the past seven years, Barrick and others preached the gospel of the need to generate free cash flow, rather than increase production. But all of a sudden, the “bigger is better” mantra is back.

This time around, deal making among the world’s biggest gold companies is being spurred at least in part by the need to be as big, liquid and as geographically diversified as possible, to appeal to a wider investor base.

Barrick’s assets more ‘damaged’ than the company has disclosed: Newmont CEO – by Gabriel Friedman (Financial Post – March 5, 2019)

March 5, 2019

https://business.financialpost.com/

Newmont Mining Corp. officially rejected a US$17.8 billion hostile bid from Barrick Gold Corp. on Monday, and its chief executive Gary Goldberg went on the offensive.

In a call with investors and an interview with the Financial Post, Goldberg questioned why Barrick has not issued guidance beyond 2019, and suggested the company’s assets are in worse shape than has been publicly disclosed.

“Barrick has a problem and that’s why they need to push this,” he told the Financial Post. The bid by Barrick, which represents an eight per cent discount to the value of Newmont’s shares on the day it was proposed, has the potential to reshape the gold mining industry by creating an estimated US$42 billion company — which would be multiple times larger than its next nearest competitor.

Mining activists storm PDAC during sustainability talk (Mining Journal – March 4, 2019)

March 5, 2019

https://www.mining-journal.com/

The mining industry is constantly striving to balance evolving stakeholder and shareholder expectations, but calamitous environmental disasters such as Vale’s latest tailings dam burst in Brazil, can massively set back those efforts.

It was therefore imperative for the industry to innovate and look at new ways to create stronger social contracts and pursue technological advances to ensure mines of the future achieve permitting and development, a PDAC 2019 panel session on sustainable mining practices heard this week.

“We need to start building mines we the people want to look at. We need to better strike a balance between growth and green imperatives,” Environmental Resources Management global head Louise Pearce said in Toronto.

The measured panel discussion stood in stark contrast to events outside the convention centre where Toronto-based nongovernmental organisation Mining Injustice Solidarity Network and MiningWatch Canada led a demonstration against Vale and the PDAC on Monday. The group wanted to draw attention to what they called “Vale’s crimes” and the “PDAC’s complicity”.

NEWS RELEASE: U.S. Mines Produced an Estimated $82.2 Billion in Minerals During 2018 (March 4, 2019)

March 4, 2019

U.S. mines produced an estimated $82.2 billion of raw mineral materials in 2018 – a 3 percent increase over the revised total of $79.7 billion in 2017– the U.S. Geological Survey announced in its annual Mineral Commodity Summaries published Feb. 28.

The report from the USGS National Minerals Information Center is the earliest comprehensive source of 2018 mineral production data for the world. It includes statistics on more than 90 mineral commodities that are important to the U.S. economy and national security. It also identifies events, trends and issues in the domestic and international minerals industries. This report covers the full range of nonfuel minerals monitored by the center, not just critical minerals which were highlighted in May by the Department of Interior.

“The Mineral Commodity Summaries provide crucial, unbiased statistics that decision-makers and policy-makers in both the private and public sectors rely on to make business decisions and national policy,” said Steven M. Fortier, the center’s director. “Industries – such as steel, aerospace and electronics – processed nonfuel mineral materials and created an estimated $3.02 trillion in value-added products in 2018, which is a 6 percent increase over 2017.”

Global miners flock to Toronto as buyout buzz spreads – by Nichola Saminather (Reuters U.K. – March 4, 2019)

March 4, 2019

https://uk.reuters.com/

Barrick Gold Corp’s $18 billion (£13.6 billion) hostile bid for rival Newmont Mining Corp last week came shortly after the former’s acquisition of Randgold Resources and the latter’s friendly offer for Goldcorp Inc.

These deals, their expected outcomes and the impact on the broader gold mining industry are expected to dominate the conversation at the annual conference of the Prospectors and Developers Association of Canada, when tens of thousands of participants from around the world – from executives to investors to regulators – descend on Toronto.

But given questions over which Newmont deal will proceed, and which assets the final combinations could shed, investors and analysts see other miners waiting out the uncertainties before making any moves for rivals.

Agnico Eagle CEO wary of ‘bigger is better’ mergers – by Gabriel Friedman (Financial Post – March 4, 2019)

March 4, 2019

https://business.financialpost.com/

His company wants nothing to do with the merger mania suddenly sweeping the gold mining sector

Speaking to a packed house on Sunday at the Prospectors and Developers Association Conference in downtown Toronto, Sean Boyd, chief executive of Agnico Eagle Mines Ltd., delivered a simple message: His company wants nothing to do with the merger mania suddenly sweeping the gold mining sector.

“The recent M&A is just competitive positioning among the biggest players in this business — not wanting to be left behind,” Boyd told a room of several hundred people.

The comments came as tens of thousands of mining investors and executives flock to Toronto for a conference that runs through Wednesday and has historically provided an opportunity for dealmaking, and for reflection on industry trends.

This commodity is hitting record highs. Here’s how Canadian investors can profit from it – by Brenda Bouw (Globe and Mail – March 4, 2019)

March 4, 2019

https://www.theglobeandmail.com/

A recent surge in the price of palladium, a precious metal primarily used to help lower vehicle emissions, has investors looking at how to play the sector to potentially reap future gains.

The spot price for the metal hit a record high of US$1,565.09 on Tuesday amid threats of a strike at a number of mines in South Africa, one of the world’s top palladium-producing countries. A work stoppage would further reduce the supply of the commodity which is already tight as demand for the metal continues to increase. While the price of palladium has retreated from its high earlier in the week, it has increased by more than 20 per cent so far this year.

About 85 per cent of palladium production goes toward manufacturing catalytic converters, which help to reduce emissions from automotive exhaust. Demand has soared amid tightening emissions standards around the world, particularly in emerging markets.

Billionaires Are On the Hunt for New Underground Cobalt – by Jack Farchy (Bloomberg News – March 4, 2019)

March 4, 2019

https://www.bloomberg.com/

A coalition of billionaires led by Bill Gates has thrown its financial weight behind a startup hoping to build a “Google Maps for the earth’s crust” to hunt for new sources of cobalt.

The startup, Kobold Metals, is using data-crunching algorithms to scour the globe for cobalt, in a bet that there may still be significant undiscovered sources of the metal that has become one of the world’s hot commodities thanks to its use in electric vehicle batteries.

The company has raised money from Silicon Valley venture capital firm Andreessen Horowitz and Breakthrough Energy Ventures, a fund backed by Gates and a dozen other tycoons including Jeff Bezos, Ray Dalio and Michael Bloomberg, owner of Bloomberg LP, the parent company of Bloomberg News.

Deep impact: Newfoundland and Labrador’s Mining the Future 2030 programme – by Julian Turner (Mining Technology – March 4, 2019)

March 4, 2019

https://www.mining-technology.com/

The provincial government of Newfoundland and Labrador plans to kick-start the province’s mining sector through envisioning five new mines, revamping decades-old legislation and creating 1,400 jobs by 2030. Julian Turner reports on the drive to put this far-flung corner of Canada on the mining map.

The province of Newfoundland and Labrador (NL) is renowned for its fishing industry, the rugged, uncompromising beauty of its coastline and weather, its unique dialect and the warmth of its people, all of it immortalised in E. Annie Proulx’s Pulitzer Prize-winning novel The Shipping News.

Less well publicised is that the most easterly province of Canada is home to a sporadic mining sector. Ground was broken on the first mine in the small town of Tilt Cove in 1864 and more than 150 years later a total of 11 mines produce 14 separate commodities, including iron ore, nickel, copper, cobalt and gold, while the industry in NL directly employs 4,800 people.

NEWS RELEASE: Canada’s Mines Ministers Unveil the Canadian Minerals and Metals Plan, A Visionary Plan to Inspire and Shape the Future of Canadian Mining (Natural Resources Canada – March 3, 2019)

March 4, 2019

Canada’s Minister of Natural Resources, the Honourable Amarjeet Sohi, together with his provincial and territorial counterparts, today unveiled the Canadian Minerals and Metals Plan, a milestone in Canada’s mining history.

Underpinned by strong engagement with Canadians, it includes a vision, principles and strategic directions that governments, industry and stakeholders can pursue to drive industry competitiveness and long-term success.

This generational initiative will raise Canadians’ awareness of the importance of the minerals and metals sector, respond to ongoing and emerging challenges, and help position Canada to play a pivotal role in supplying minerals and metals that will power a cleaner global economy.