Republic of Mining

COLUMN-China zinc output cuts; hazy details but the pain is real – by Andy Home (Reuters U.K. – June 29, 2018)

July 3, 2018

https://uk.reuters.com/

LONDON, June 29 (Reuters) – Will China’s zinc smelters cut production?If they make good on a proposal to take a collective 10 percent hit, it would remove at least 400,000 tonnes of metal from the market on an annualised basis.

The news has halted the slide in zinc prices, both in London and Shanghai, though it may have been little more than narrative wrapping for an overdue correction.

The London Metal Exchange (LME) three-month zinc price is this morning trading at $2,875 a tonne, still close to Tuesday’s 10-month low of $2,815 and a long way from February’s peak of $3,595.50. That tells you the market isn’t that impressed either.

Osisko Mining shareholders vote in favour of controversial stock-options package – by Niall McGee (Globe and Mail – June 29, 2018)

July 3, 2018

https://www.theglobeandmail.com/

Osisko Mining Inc.’s shareholders voted in favour of a controversial stock-options package Friday, while its chief executive officer says the company intends to move away from options as a form of compensation over time.

Ahead of Friday’s annual general meeting, proxy advisory firm Institutional Shareholder Services (ISS) advised shareholders of the junior mining company to vote against the package, citing concerns over its excessive cost, and criticizing the lack of performance-based criteria for receiving the options.

At Osisko, options are widely granted to officers, directors and employees, and often make up the lion’s share of compensation. For example, CEO John Burzynski made $3.15-million, with about $2.1-million in options, a $500,000 salary and a $590,000 bonus. Independent director Sean Roosen was paid $743,000 last year, $688,000 in options and a $55,000 cash fee.

Why Russia and Turkey Are Such Gold Bugs – by Leonid Bershidsky (Bloomberg News – June 27, 2018)

July 3, 2018

https://www.bloomberg.com/

Their moves out of U.S. debt and into the precious metal could be precursors of a bigger global shift.

Since December 2017, Russia has cut its holdings of U.S. foreign debt by more than half. Instead, it’s been increasing the share of gold in its international reserves. That’s understandable behavior for a country that has to deal with an unpredictable U.S. sanctions policy, but it’s also part of a trend.

Foreign governments and international organizations account for a decreasing share of outstanding U.S. debt, and some economies have in recent years aggressively upped the share of gold in their reserves instead.

The Russian reduction of Treasury holdings, to $48.7 billion in April 2018 from $102.2 billion in December 2017, has been nothing short of dramatic, though it wasn’t a huge blow to the U.S. Russia’s holdings of American government bonds have long been dwarfed by those of China and Japan, as well as Brazil and some European countries.

‘Accidental’ gold discovery in Ring of Fire prompts Noront Resources to seek exploration partner – by Gabriel Friedman (Financial Post – July 1, 2018)

July 3, 2018

https://business.financialpost.com/

Ring of Fire has good gold potential, CEO says: ‘It’s the right rocks, the right age, but we just really haven’t got around to dealing with the gold’

Noront Resources Ltd. is looking to partner with a gold company as it continues to lead exploration of the Ring of Fire, a vast isolated area in northwestern Ontario with untapped mineral resources.

The company has proven nickel and chromite deposits in the Ring of Fire, but those base metals are too heavy to transport out of the area, given the current lack of road access. Gold, on the other hand, is so valuable that it is often flown out of remote areas.

A road could take a minimum of five years to build, chief executive Alan Coutts said, so in the meantime the company has initiated discussions with several intermediate to senior gold producers, in Canada and elsewhere, about striking a joint partnership to explore for gold.

China’s firms are scouring the world for mineral ores in pursuit of nation’s electric dream – by Jane Li (South China Morning Post – June 30, 2018)

July 3, 2018

http://www.scmp.com/

Chinese companies are scouring the world’s mines for lithium, cobalt and other minerals that go into battery packs used in electric vehicles, resuming the kind of voracious hunt for resources that added to economic booms in exporting countries a decade earlier.

They were the first to get off the starting block in getting their hands on these vital minerals, crucial for China’s ambition to lead the world in the production and use of electric and new energy vehicles, where up to 2 million units are expected to ply the nation’s streets by 2020, according to government forecast.

China Molybdenum, a partly state-owned producer of the chemical element, paid US$2.65 billion in 2016 for the Tenke Fungurume Mine in the Democratic Republic of Congo, one of the world’s largest known reserves of copper and cobalt resources.

Critical Minerals Alaska – Chromite – by Shane Lasley (North of 60 Mining News – June 28, 2018)

July 3, 2018

https://www.miningnewsnorth.com/

Essential stainless-steel ingredient mined in Alaska during both World Wars

A vital ingredient in stainless steel and superalloys, chromium is considered by the United States Geological Survey as “one of the Nation’s most important strategic and critical materials.”

“Because there is no viable substitute for chromium in the production of stainless steel and because the United States has small chromium resources, there has been concern about domestic supply during every national military emergency since World War I,” the USGS explains.

Rich chromite deposits on Alaska’s Kenai Peninsula were able to ease some of these concerns by providing a domestic supply of chromite, the only mineral of chromium metal, to help fill America’s increased demand for chromium during both World Wars.

SIBERIA: Will the Once-Frozen Wilderness Give Up its Riches? – by Molly Lempriere (Mine Magazine – June 2018)

July 3, 2018

https://mine.nridigital.com/

Few doubt the potential for world-class mining discoveries in Siberia, but even fewer have been prepared to look. Now, as the climate warms, interest is growing and exploration is increasing, but what challenges remain? Molly Lempriere investigates

Siberia in the north of Russia is one of the coldest, harshest places on earth. Famed for its inhospitable climate, it is also mineral-wealthy and unexploited – a true frontier region. Although it has attracted mining companies for decades, the challenging landscape and conditions have meant they have only just begun to scratch the surface of the area’s potential.

This could now be changing, as climate change leads to warmer temperatures, ice and permafrost are melting and potentially easing the mining process. The mining sector is the second-biggest contributor to GDP in Russia and is expected to continue to play an important role in its economy.

Bankers Have Gone AWOL in the Race to Build More Lithium Mines – by David Stringer and Mariko Ishikawa (Bloomberg News – July 3, 2018)

July 3, 2018

https://www.bloomberg.com/

After clinching a deal with a Chinese battery maker in 2016, James Brown figured bankers would be eager to fund his new lithium mine. Altura Mining Ltd. was racing to ship the raw material from Australia to the world’s biggest electric vehicle market as demand was surging.

Instead, while lithium prices kept rising, Brown spent a Christmas holiday cold-calling lenders and jetted around the globe to raise the money. Eventually, Minneapolis-based Castlelake LP, a private equity firm, helped arrange $110 million in bonds. But there was a catch: an interest rate as high as 15 percent, or almost double what banks normally charge for more conventional mining ventures.

“We’d been trying banks we’d known for years,” said Brown, Altura’s managing director, who previously spent 22 years with coal producer New Hope Corp. “They said: Guys we love it, we just don’t have a mandate (for lithium). If you came to us with coal, gold or iron ore, you’d have no worries.”

GRAPHIC-Inventory draws highlight nickel shortages, buttress prices – by Pratima Desai (Reuters U.K. – June 28, 2018)

July 3, 2018

https://uk.reuters.com/

LONDON, June 28 (Reuters) – Two years ago the chances of a nickel price recovery seemed remote, but that mindset has changed as shrinking stocks and falling supplies have created a bullish backdrop for the stainless steel ingredient.

Benchmark nickel on the London Metal Exchange recently hit $16,690 a tonne, the highest since December 2014, after falling to 13-year lows below $8,000 a tonne in February 2016.

A retreat to around $15,000 a tonne was triggered by fears of a trade war between the United States and China, the world’s two largest economies. However, prices are still up about 70 percent since June 2017 when expectations of deficits began.

African Chrome Fields: Game changer along the Great Dyke (Mining Review Africa – July 2, 2018)

July 3, 2018

Mining Review Africa

Privately-owned mining company African Chrome Fields is proving its commitment to Zimbabwe by expanding its already impressive alluvial chrome mining operations along the Great Dyke of the Southern African country with the aim of establishing a long and prosperous future.

Zimbabwe has garnered a lot of attention recently, this time for the right reasons, as former president and long-time ruler Robert Mugabe was ousted and replaced by his deputy, Emmerson Mnangagwa.

As a result of decades of economic degradation Zimbabwe has been left with a skeleton of an economy and a cash crisis that impedes any major company from doing business in the country.

Philippines’ Duterte says to end mining ‘one of these days’ Manolo Serapio Jr (Reuters U.S. – July 2, 2018)

July 3, 2018

https://www.reuters.com/

MANILA (Reuters) – Philippine President Rodrigo Duterte said on Monday he would soon halt mining in the Southeast Asian nation because of the environmental damage it has caused, renewing his threat made nearly two years ago to shut down the industry completely.

Mining has been a contentious issue in the Philippines, the world’s No. 2 nickel ore supplier after Indonesia, due to cases of environmental mismanagement.

“I will decide one of these days, I will end mining,” Duterte told a public event in central Philippines, after citing destruction caused by mineral extraction. “It is a very destructive activity though you would call it economic activity.”

Bolivia offers its lithium reserves to India (Gulf News – July 1, 2018)

July 3, 2018

https://gulfnews.com/

Ambassador says country willing to sign a Preferential Trade Agreement with India for select goods

New Delhi: Bolivia, known to have the largest reserves of lithium, has offered the metal — used in making batteries of electric vehicles, laptops and smart phones — to India.

The South American nation’s ambassador to India, Sergio Dario Arispe Barrientos, said the country has the largest deposit of Lithium and India could explore this opportunity.

Barrientos said his country is willing to sign a Preferential Trade Agreement (PTA) — a pact between countries that provides preferential access to certain products by lowering tariff and other conditions — with India for select goods.

Jean-Sebastien Jacques is redesigning Rio Tinto for the new world order – by Matthew Stevens (Australian Financial Review – July 1, 2018)

July 3, 2018

https://www.afr.com/

Jean-Sebastien Jacques is a leader well-suited to the now routine tempests of the Trump era. If there is a theme consistent through the fluid narrative of his opening years as Rio Tinto chief executive it is that the practices of the past are now no guide to the needs of the present and future.

Jacques is not prepared to take anything for granted – free trade, social licence, the way we work, trust in sovereigns or the relationships between corporations and the social orders it inhabits.

Rio’s boss was at his free-speaking, free-thinking entertaining best before an audience gathered for that annual oddity, the Melbourne Mining Club’s London dinner. Jacques subsequently garnered headlines by once again warning that miners faced a return of double-digit inflation.

Tata Steel and Thyssenkrupp merger welcomed by unions (BBC News – June 30, 2018)

July 3, 2018

https://www.bbc.com/

Unions have welcomed a merger between Tata Steel and Thyssenkrupp which will create Europe’s second-biggest steelmaker. The deal will mean Indian-owned Tata’s UK plants are merged into a pan-European venture, which includes the UK’s biggest steelworks at Port Talbot.

Tata said its “ambition” was to not have any compulsory redundancies in the UK as part of the joint venture. The steelworkers’ union said the deal may secure jobs and lead to investment.

Community general secretary Roy Rickhuss said it had “the potential to safeguard jobs and steel-making for a generation”. But he also warned the venture would only succeed if there was strategic investment to make sure the business thrived.

The difficulties of enforcing regulations on the dangerous nickel ore trade – by Marcus Hand (Seatrade Maritime News – July 3, 2018)

July 3, 2018

http://www.seatrade-maritime.com/

The extreme danagers of the nickel ore trade, where liquefaction of the cargo can cause a vessel to sink in a matter of minutes are well known, but enforcing regulations on this valuable business has proved difficult in remote mining and loading locations.

One is reminded that the DHL advert where goat farmers in a remote mountainsare shown as the start of a global supply chain for cashmere sweaters, but the reality of the nickel ore trade from the southern Philippines, mainly for export to China, is a far grittier one that would challenge even the most creative advertising agency.

This is despite nickel ore being a key compoment in one of the key green technologies – rechargable batteries. Although its largest use is in stainless steel.