Republic of Mining

Mining’s Biggest Jobs Are Up for Grabs. Here Are the Contenders – by Thomas Biesheuvel, Jack Farchy and David Stringer (Bloomberg News – January 16, 2019)

January 16, 2019

https://www.bloomberg.com/

Who will lead BHP, Anglo American and Glencore into the next decade?

Some of the mining world’s top executives are starting to plan their departures, driving speculation about who will lead their companies into the next decade.

The changing of the guard raises the prospect of a strategic shift, as the industry searches for ways to enthuse investors after a belt-tightening era characterized by asset sales and cost control. Here, based on conversations with executives, investors and industry decision makers, are some of the key names to watch.

BHP Group

There has been near-constant speculation for years around the future of BHP Group CEO Andrew Mackenzie. By 2017, the chatter was so loud that the new chairman’s first meeting with the press was preceded by a statement backing his CEO.

Centre of Excellence for Indigenous Mineral Development set up – by Staff (Sudbury Star – January 16, 2019)

January 16, 2019

https://www.thesudburystar.com/

Ottawa will pump more than $3.4 million into Manitoulin Island to establish a Centre of Excellence for Indigenous Mineral Development.

The goal of the Centre for Indigenous Mineral Development is to enhance the participation of the Indigenous people in the mines industry, as well as to assist industry and government through information sharing and best practice protocols with Indigenous engagement, federal officials said in a release Tuesday.

Access to information will help employers and prospective employees fill or secure jobs, and facilitate networking and business development opportunities. The FedNor funding will support five initiatives that, among other things, will enable Waubetek Business Development Corporation to establish and operate a Centre of Excellence for Indigenous Mineral Development for four years.

Club Med: Israel, Egypt, and Others Form New Natural Gas Group – by Keith Johnson (Foreign Policy – January 15, 2019)

January 16, 2019

https://foreignpolicy.com/

Countries around the Eastern Mediterranean took a potentially important step toward realizing their dreams of boosting energy production with the creation Monday of a forum joining Israel, Egypt, Cyprus, and other neighbors to develop their new natural gas discoveries.

The Eastern Mediterranean Gas Forum, announced Monday in Cairo, formalizes growing energy ties among recent rivals and could spur much-needed development of energy infrastructure required to tap the region’s potential as a source of energy for Europe and beyond.

The forum in particular cements the growing commercial links between Israel and Egypt; Israel expects to start shipping natural gas to Egypt in the next few months as part of a landmark, $15 billion deal between the two countries.

Ebola Has Gotten So Bad, It’s Normal – by Laurie Garrett (Foreign Policy Magazine – January 15, 2019)

January 16, 2019

https://foreignpolicy.com/

Nearly 600 people have contracted Ebola since last August in eastern Democratic Republic of the Congo, making the ongoing outbreak the second largest in the 43-year history of humanity’s battle with the deadly virus.

And there is a genuine threat that this Congo health crisis—the 10th the African nation has faced—could become essentially permanent in the war-torn region bordering South Sudan, Uganda, Rwanda, and Burundi, making a terrible transition from being epidemic to endemic.

Despite having a tool kit at its disposal that is unrivaled—including a vaccine, new diagnostics, experimental treatments, and a strong body of knowledge regarding how to battle the hemorrhage-causing virus—the small army of international health responders and humanitarian workers in Congo is playing whack-a-mole against a microbe that keeps popping up unexpectedly and proving impossible to control.

Platinum price fall worsening plight of job-intensive mines – by Martin Creamer (MiningWeekly.com – January 16, 2019)

January 16, 2019

http://www.miningweekly.com/

JOHANNESBURG (miningweekly.com) – The latest fall of the platinum price is threatening to become the last straw that broke the camel’s back for some deep labour-intensive platinum group metals (PGMs) mines on particularly the western limb of the Bushveld Complex, Mining Weekly Online can today report.

Well ahead of the latest price decimation, platinum company CEOs were expressing concern about the lossmaking position of western limb PGMs mines, which account for 55% of South Africa’s platinum production and provide 136 000 direct mining jobs.

At the time of going to press, the platinum price was $801/oz, which even rand conversion is unable to embellish to an acceptable level. As long ago as February 2012, the then Anglo American Platinum CEO, Neville Nicolau, was unequivocal about $1 900/oz being essential for the capital investment required to maintain long-term production.

Eyes on Newcrest as gold dealmaking heats up – by Nichola Saminather (Reuters U.S. – January 14, 2019)

January 16, 2019

https://www.reuters.com/

TORONTO (Reuters) – Two recent large M&A deals in the gold sector have prompted speculation that Newcrest Mining (NCM.AX), Kinross Gold Corp (K.TO) and B2Gold Corp (BTO.TO) may be among the next gold companies to combine with a rival, bankers and analysts said.

On Monday, Newmont Mining (NEM.N) announced a $10 billion takeover of Goldcorp Inc (G.TO), close on the heels of Barrick Gold’s (ABX.TO) purchase of Randgold Resources.

Deal-making had largely been dormant in the gold sector in recent years, as companies focused on cutting costs amid investor criticism of inadequate management of capital. But the need to bolster shrinking gold reserves to boost growth and take advantage of rising gold prices are now providing the impetus for consolidation.

OPINION: Is history repeating itself? A tale of two territories – by Terry Dobbin(Nunatsiaq News – January 15, 2019)

January 16, 2019

https://nunatsiaq.com/

Terry Dobbin is the Nunavut general manager for the NW.T. and Nunavut Chamber of Mines.

“We need healthy exploration today to find the mines that will carry on the jobs and benefits”

They say that history repeats itself, and that’s not a good thing if it’s negative. Some of us are afraid that’s where we are headed. Let me explain.

Mining in the Northwest Territories has been a tremendous success story, with four diamond mines over the past 20 years generating 58,000 person years of employment, $20 billion in spending, training of seven per cent of the total workforce, significantly reduced social assistance payments, significant IBA [impact and benefit agreement] payments, and billions paid in a pile of taxes and royalties to governments to help them look after their residents.

However, in 2007 the N.W.T. began to lose focus on keeping mineral exploration strong. Exploration is the very work that is needed to find new mines and their great benefits. Since 2007, the N.W.T. has missed out on at least $1.4 billion in lost investment.

Hudbay Investor Seeks to Replace CEO and Most of its Board – by Scott Deveau (Bloomberg News – January 16, 2019)

January 16, 2019

https://www.bloomberg.com/

Hudbay Minerals Inc.’s second-largest investor is seeking to oust the Toronto miner’s chief executive officer and replace most of its board.

Waterton Global Resource Management will nominate eight new directors at Hudbay’s upcoming annual meeting with a slate that includes former mining executive Peter Kukielski and financial services industry veteran Richard Nesbitt, according to a letter to shareholders Wednesday.

Waterton, which owns about 12 percent of Hudbay, will propose that Kukielski be named CEO of Hudbay and Nesbitt chairman. Kukielski was most recently CEO of Nevsun Resources Ltd. Nesbitt was previously the CEO of CIBC World Markets Inc., as well as the parent company of the Toronto Stock Exchange.

Commentary: Flash LME nickel squeeze may be a taste of things to come – by Andy Home (Reuters U.K. – January 16, 2019)

January 16, 2019

https://uk.reuters.com/

LONDON (Reuters) – Nickel bears have been sent running for cover by this week’s ferocious squeeze on the London Metal Exchange (LME). Short-dated time-spreads have flexed out to levels not seen in many years as a long-running decline in LME nickel stocks translates into cash-date tightness.

The resulting bear rout has halted a six-month downtrend in the outright nickel price. Bulls, however, should not get overly excited. There is as yet scant evidence this was anything other than a flash squeeze rather than a signal for higher prices.

But that is not to say there won’t be more such spread tension in the nickel market going forward. That nickel should be squeezed this week is no accident. Today is the LME’s “third-Wednesday” prime prompt date, the monthly clear-out of outstanding positions.

INTERVIEW-‘Adapt to new era’ – Mexico lawmaker seeks tougher rules for miners – by Noe Torres (CNBC/Reuters – January 15, 2019)

January 16, 2019

https://www.cnbc.com/

MEXICO CITY, Jan 15 (Reuters) – Mexico’s mining companies, including copper giant Grupo Mexico, should prepare for new labor rules and new regulations over their operations, including the prospect of higher taxes, a veteran labor leader now in the Senate told Reuters on Tuesday.

Senator Napoleon Gomez Urrutia, who heads the labor committee and sits on the mining committee, unleashed epic union battles a decade ago before he left Mexico to fight corruption charges he says were politically motivated.

Asked whether Grupo Mexico and other miners run by Mexican billionaires should be more tightly controlled, Gomez Urrutia said years of loose regulation by such companies had led to inequality and a severe concentration of wealth in Mexico.

Pimco Favors ‘Unloved’ Platinum That’s Looking Cheap Versus Gold – by Ranjeetha Pakiam (Bloomberg News – January 16, 2019)

January 16, 2019

https://www.bloomberg.com/

Platinum could be the dark horse among precious metals, according to a money manager at Pacific Investment Management Co.

Nic Johnson, Pimco’s managing director and portfolio manager for commodities, says he prefers the metal over gold. Used in autocatalysts of diesel engines and jewelry, it’s near the cheapest ever relative to both bullion and palladium, after tumbling 14 percent last year.

While investors have poured into gold funds, they’ve deserted platinum, which has fallen out of favor amid shrinking demand and excess supply. The possibility the trend reverses even slightly represents a buying opportunity, Johnson said in an interview from Newport Beach, California. With $1.72 trillion under management as of September, Pimco is one of the world’s largest bond managers.

Indigenous Energy Summit to tackle pipeline ownership, leadership issues – by Geoffrey Morgan (Financial Post – January 16, 2019)

January 16, 2019

https://business.financialpost.com/

First Nations will hear presentations on how they might take ownership of major energy projects, including the Trans Mountain pipeline

CALGARY — First Nations that produce oil and gas in Canada will tackle some of the most contentious issues facing the sector at the Indigenous Energy Summit on Wednesday, including potential ownership bids for, and protests about, pipelines.

One of the biggest issues in the Canadian energy sector is the ongoing fight between hereditary chiefs and elected chiefs over the the $6.2-billion Coastal GasLink pipeline in British Columbia, which has opened wounds for current and former northern B.C. chiefs.

Meanwhile, First Nations will hear presentations on how they might take ownership of major energy projects, including the Trans Mountain pipeline.

Anglo American begins quest to unearth next CEO – by Clara Denina and Barbara Lewis (Reuters U.K. – January 15, 2019)

January 16, 2019

https://uk.reuters.com/

LONDON (Reuters) – Anglo American (AAL.L) has promoted a section head it considers to have CEO potential, focusing its attention on internal talent as it begins searching for a successor to the man who steered the mining company through the 2015-16 commodities price slump.

CEO Mark Cutifani has won plaudits for his stewardship since taking the helm in 2013, though his strategic ability has been questioned in some quarters despite Anglo shares climbing around 12 percent last year, outperforming London-listed peers including Glencore (GLEN.L) and Rio Tinto (RIO.L)(RIO.AX).

Analysts say that Cutifani deserves credit for driving efficiency but some remain critical of a decision to halt debt-reducing asset disposals, even though this helped the company to benefit from the upturn in prices for commodities such as iron ore and coal.

Gold Veteran Says Bigger May Not Be Better as M&A Blitz Hits – by David Stringer and Ranjeetha Pakiam (Bloomberg News – January 15, 2019)

January 16, 2019

https://www.bloomberg.com/

The $15 billion flurry of deal-making that will super-size the gold industry’s leading producers is no guarantee of better performance, according to an Australian miner who’s been outpacing larger competitors.

Rising gold prices and a hunt to boost additional reserves of the precious metal have spurred Newmont Mining Corp. and Barrick Gold Corp. to acquire rival companies and add more operations. Their moves have stoked expectations that other producers will now also look to combine.

“The thesis being offered is that bigger is better, and historically in the gold sector that hasn’t proven to be value creating for shareholders,” Jake Klein, executive chairman of Sydney-based Evolution Mining Ltd., said by phone on Tuesday. “This time it may be different, but certainly the past has not demonstrated that.”

Newmont CEO defends Goldcorp deal amid speculation rival bidders could emerge – Gabriel Friedman (Financial Post – January 16, 2019)

January 16, 2019

https://business.financialpost.com/

One analyst downgraded Newmont from outperformer to neutral ‘until the company provides additional clarity on its strategic plans’

Gary Goldberg, chief executive of Colorado-based Newmont Mining Corp., started off Tuesday morning feeling upbeat.

One day after announcing his company’s US$10 billion bid for Vancouver-based Goldcorp Inc., his company’s stock was trading down, again, falling three per cent at one stage on Tuesday, after falling 8.89 per cent on Monday; and now Goldcorp was also trading down more than three per cent.

Reaction to the deal looked decidedly mixed. One analyst was raising questions about the rationale for the deal and another was suggesting the price was too low and Goldcorp could attract other bidders; and yet Goldberg insisted none of it was surprising or unnerving in the slightest.