20th August 2014

RPT-COLUMN-Reliance on cost-cutting the real BHP story – by Clyde Russell (Reuters India – August 20, 2014)

http://in.reuters.com/

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

LAUNCESTON, Australia, Aug 20 (Reuters) – BHP Billiton’s plans to spin-off unwanted assets may have received a tepid welcome from investors, but the real news from the mining giant’s results is the limits to cost-cutting.

Delving into BHP’s results presentation on Tuesday shows the company has been successful in cutting expenses, with a 12 percent cut in cash costs at the flagship Western Australian iron ore operations, while the Queensland coal business recorded a 24 percent drop.

BHP said its productivity-led volume and cost efficiencies were $2.9 billion in the year to end June 2014, beating its target by $1.1 billion. Given the company’s net income for the period was $13.4 billion, the $2.9 billion in savings represents about 22 percent of the profit, which certainly looks impressive.

The problem comes when you start to look at the savings achieved, the potential for further cost-cutting and the likely trajectory of commodity prices.

BHP said it produced a record 225 million tonnes of iron ore in the 2014 financial year, which resulted in revenue of just under $23 billion, or roughly 34 percent of the group’s total revenue. Read the rest of this entry »

posted in Asia Mining, Australia Mining and History, BHP Billiton, International Media Resource Articles | 0 Comments

20th August 2014

Mexican government files criminal charges in copper mine acid spill – by Dorothy Kosich (Mineweb.com – August 20, 2014)

http://www.mineweb.com/

Mexico’s Environmental Secretary has estimated that the fine for the Buenavista copper mine spill could reach $3 million.

RENO (MINEWEB) – Mexico’s federal environmental protection regulator, Profepa, has filed criminal charges with the Federal Attorney General’s Office against Grupo Mexico’s Buenavista del Cobre and Minera Mexico over a leakage caused by defects in newly constructed leaching ponds, which contaminated two rivers and left thousands of people without drinking water.

Two days after the Mount Polley tailings dam breach in British Columbia, 40,000 cubic meters of copper sulfate acid solution from Grupo Mexico’s Buenavista mine spilled into the Bacanuchi River and, subsequently, the Sonora River in northern Sonora State.

Initially, Grupo Mexico blamed unseasonal rains for causing the acid solution to spill from a dam now under construction for a new leaching plant in the mining operation. The company said it would pay for all the damage from the accident.

Arturo Rodriguez, chief of industrial inspection for the Attorney General for Environmental Protection, suggested mine operators should have been able to detect the leak before such a large amount of drainage had leaked into the rivers.

However, Mexico’s Environmental Secretary Juan Jose Guerra Abud told a local radio station Tuesday Grupo Mexico’s claim that excessive rain caused the overflow was “totally false” because there was no rain on August 6th, the day the spill is believed to have occurred. Read the rest of this entry »

posted in International Media Resource Articles, Latin America Mining, Mining Environmental Accidents | 0 Comments

20th August 2014

Mining giant Glencore makes good on pledge with $1 billion buyback – by Sivia Antonioli (Globe and Mail – August 20, 2014)

http://uk.reuters.com/

LONDON – (Reuters) – Commodities group Glencore (GLEN.L) became the first of the large miners to honor promises to return cash to shareholders, announcing a share buyback program of up to $1 billion as it reported forecast-beating first-half profit.

Diversified mining companies have vowed to control their spending and reward shareholders more after being criticized for years of squandering money on risky projects that resulted in multibillion-dollar writedowns as metals prices started to fall.

However, rival BHP Billiton (BHP.AX)(BLT.L) failed to deliver when it held fire on an expected buyback announcement on Tuesday, while Rio Tinto (RIO.L)(RIO.AX) signaled a share buyback could come when it reports full-year results in February.

Expectation of Glencore making good on its promise was heightened with this month’s completion of the sale of Glencore’s Peruvian copper project Las Bambas to a Chinese consortium for $6.5 billion after tax, either through a buyback or special dividend.

Glencore, which completed a record-breaking acquisition of rival Xstrata a little more than a year ago, is the world’s largest producer of zinc, used to galvanize steel, and one of the top miners and traders of copper and nickel.

However, while it has noted cost overruns at its Koniambo project in New Caledonia, it was the balance-sheet improvement from the Las Bambas sale that allowed it to accelerate the return of capital to shareholders. Read the rest of this entry »

posted in Glencore-Xstrata PLC, International Media Resource Articles | 0 Comments

20th August 2014

Canadian sues Silvercorp over ‘false imprisonment’ in China – by Nathan Vanderklippe (Globe and Mail – August 20,2014)

The 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.

BEIJING — A Canadian man who spent years behind bars in China has filed a lawsuit accusing a mining company of conspiring with Chinese authorities to have him arrested and detained.

Kun Huang was an investigator for a hedge fund manager who in September, 2011, claimed that ore estimates at a Chinese mine owned by Vancouver-based Silvercorp Metals Inc. were too good to be true. Three months later, Chinese officials detained Mr. Huang at the Beijing airport, strip-searched him, seized his computer and placed him in a lengthy detention that culminated in a single-day closed-door trial and a two-year sentence for criminal defamation.

He was released on July 17, and returned to Canada the next day. Now, in a lawsuit filed Tuesday in the Supreme Court of British Columbia, Mr. Huang claims that Silvercorp masterminded his detention as a reprisal for his research, whose publication prompted a steep decline in the company’s share price.

Silvercorp, his court filing claims, effectively enlisted the local Chinese police as its “agent,” giving them money, encouragement and guidance “to falsely imprison and then later knowingly bring baseless criminal charges against Mr. Huang.” Read the rest of this entry »

posted in Asia Mining, Canada Mining, Canadian Media Resource Articles, Gold and Silver | 0 Comments

20th August 2014

Europe must do its bit to stop the trade in conflict minerals – by Ed Zwick (The Guardian – August 19, 2014)

http://www.theguardian.com/uk

We have to let our leaders know we do understand the link between products we buy and the suffering of others

Almost a decade ago, my film Blood Diamond told the story of the illicit diamond trade and its funding of the bloody civil war in Sierra Leone. The reaction was profound as consumers came to understand the sparkly ring they bought in their local jewellery store could have brutal implications elsewhere.

But this story was never just about diamonds. Throughout the world, the demand for all natural resources is soaring. Yet tragically, local populations – especially in poorer nations – rarely benefit. Instead, revenues continue to fund conflict rather than development. We have an opportunity to help change that.

Today, the sale of “conflict minerals” sourced from high-risk areas, such as parts of Colombia, the Democratic Republic of Congo and the Central African Republic, are funding armed groups that visit unimaginable suffering on helpless civilians. These minerals are then traded into global supply chains, where they end up in our mobile phones, laptops and automobiles.

Meanwhile, the EU is at risk of becoming a major trading hub for conflict minerals. It imports almost 25% of the global trade in tin, tantalum and tungsten. Despite this, there is no legislation requiring companies to source minerals responsibly. Read the rest of this entry »

posted in Africa Mining, Conflict Minerals, International Media Resource Articles | 0 Comments

20th August 2014

Africa’s middle-class boom is real, study shows – and it’s gaining speed – by Geoffrey York (Globe and Mail – August 20, 2014)

The 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.

JOHANNESBURG — The rise in Africa’s middle class has been over-hyped in recent years, but it is still a genuine phenomenon that is generating huge commercial and political opportunities, a new study says.

The analysis released on Tuesday by Standard Bank, a South African bank with operations across Africa, estimates that the African middle class has tripled in size over the past 14 years – and the boom is gathering speed.

The study analyzed 11 of the biggest economies in the region, accounting for about half of sub-Saharan Africa’s population and GDP. Those economies have grown tenfold since 2000, reaching a collective GDP of more than $1-trillion today, compared with a growth of just 25 per cent between 1990 and 2000.

Using a more rigorous definition of “middle class,” the study concludes that earlier estimates were much exaggerated. But it still finds dramatic growth, from about 4.6 million households in 2000 to almost 15 million households today in the 11 focal countries, if the middle class and lower-middle-class categories are both included. Read the rest of this entry »

posted in Africa Mining, Canadian Media Resource Articles, Commodity Super-Cycle | 0 Comments

20th August 2014

Lax safety measures to blame for Lac-Mégantic tragedy, safety board says – by Allan Woods (Toronto Star – August 20, 2014)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

The Transportation Safety Board of Canada identified 18 distinct factors that led to the Lac-Mégantic rail crash, including mechanical problems, unsuitable tank cars carrying crude oil, the cost-conscious rail firm and human error.

MONTREAL — Blame a rule-breaking rail company, blame ineffective train inspectors, but don’t blame the federal government for the deadly Lac-Mégantic train disaster, says Federal Transport Minister Lisa Raitt.

In the wake of a scathing report into the July 2013 derailment that killed 47 people in the Quebec town, Raitt pointed the finger at three employees of the Montreal, Maine & Atlantic railway now charged with criminal negligence, and referred questions about lapses leading to the accident to bureaucrats under her command.

“We need to remember that in terms of safety, the government puts the rules in place. The companies are expected to follow the rules,” Raitt said in Ottawa. “The company did not follow the rules and that’s a very important fact here too.”

The Transportation Safety Board’s definitive account of the incident said the crash was caused by a marginal rail company that put profits before safety during more than a decade in business. Read the rest of this entry »

posted in Canadian Media Resource Articles, Mining Railway Issues, Oil and Gas Sector-Politics and Image | 0 Comments

20th August 2014

Mt Polley: Expert Panel Review – by Jack Caldwell (I Think Mining.com – August 18, 2014)

http://ithinkmining.com/

Jack Caldwell, P.E. has a B.Sc. in Civil Engineering, an M.Sc. (Eng.) in Geotechnical Engineering and a post-graduate law degree. He has over 35 years engineering experience on mining, civil, geotechnical and site remediation projects. He has worked on numerous projects throughout southern Africa, Europe, Canada and the United States.

We are heartened by today’s announcements re the Mt Polley tailings facility failure. I particular we applaud the choice of experts retained to do the engineering review.

CBC New reports as follows on this issue: “Minister of Energy and Mines Bill Bennett says the B.C. government is setting up two separate reviews following the Mount Polley tailings pond failure earlier this month.

Bennett said Monday that:

The first review by three independent experts will investigate the failure of the tailings dam at the Mount Polley mine.
The second review will require all mines in British Columbia that have tailings dams to have independent experts conduct a review of their facilities and submit them to the government.

The first review will be completed and submitted to the government and the Soda Creek and Williams Lake Indian bands by Jan. 31, 2015, and the recommendations will be implemented by the government “where needed,” Bennett promised. The minister said the reviews were necessary to restore public confidence in the mining industry. Read the rest of this entry »

posted in British Columbia Mining, Canada Mining, Mining Environmental Accidents, Northern Ontario/Canada Regional Media | 0 Comments

20th August 2014

NEWS RELEASE: Grand opening of first Remote Training Centre celebrated in Neskantaga

NESKANTAGA, ON, Aug. 19, 2014 /CNW/ – The grand opening of the Neskantaga Training Centre was celebrated today in Neskantaga Territory, Ontario, showcasing the new innovative facility and collaboration technology which delivers training directly to the remote community.

The Neskantaga Training Centre is a multi-purpose facility with construction components designed to be flown into remote communities and assembled on-site. The centre is outfitted with state of the art technology, including Cisco TelePresence, high-definition two-way video communication and collaboration technology, a 70-inch Smart Board, a 70-inch LED HDTV, high-speed satellite broadband connectivity, as well as individual laptops. The centre directly connects to e-learning tools and programs to offer a wide variety of curriculum including access to secondary and post-secondary institutions, safety training courses, trades and technical certifications. To see the Neskantaga Training Centre in action, visit: https://www.youtube.com/watch?v=ASjo4mFVOdQ&feature=youtu.be.

“The partnerships formed to build this facility, along with all of the hard work, have culminated in a facility that will have a positive impact on the people of Neskantaga for many years to come,” said Chief Peter Moonias of Neskantaga First Nation during the opening ceremonies. Read the rest of this entry »

posted in Aboriginal and Inuit Mining, Ontario's Ring of Fire Mineral Discovery | 0 Comments

19th August 2014

Diversified mining giants becoming less so – by Lawrence Williams (Mineweb.com – August 19, 2014)

http://www.mineweb.com/

Confirmation that BHP Billiton is planning to demerge what it considers its non-core assets into a new company continues the trend for the world’s biggest miners to simplify their structures.

LONDON (MINEWEB) – The big post 2008 fallout in the global mining sector has been a major influence on corporate policy since. It has already seen the culling of the chief executives who had the misfortune to be in place as metal prices slumped and profits collapsed. They had previously been exhorted by their institutional shareholders to go for growth almost at any cost.

But once it became apparent that some of the huge capital programmes involved were actually having a negative impact on the bottom line, helped by the fact that the concentration on growth had led to management’s eyes being taken off controlling costs at existing operations, then institutional pressures changed and heads started to roll. CEOs became an endangered species

Now it looks as though there is something of a different tack coming into play. For the single commodity players – e.g. those in the precious metals sector there has also been a move to demerge, or just sell what are considered to be non-core assets – those that had appeared to be taking up too much management time and effort, but without complementary returns. A typical example of this has been Barrick Gold’s floating off of African Barrick which now at least seems to be turning itself around, but still probably falls short of its parent’s return requirements. Others have been divesting of so-called non-core projects piecemeal.

But while the gold miners were relatively quick to act – the big diversified miners perhaps took a little more time over their moves to do likewise. Read the rest of this entry »

posted in BHP Billiton, International Media Resource Articles, Iron Ore, Rio Tinto, Vale | 0 Comments

19th August 2014

UPDATE 4-BHP announces spin-off plan, no share buyback for now – by Sonali Paul and Silvia Antonioli (Reuters India – August 19, 2014)

http://in.reuters.com/

MELBOURNE/LONDON, Aug 19 (Reuters) – The world’s biggest mining company, BHP Billiton , announced plans to spin off businesses worth an estimated $16 billion, most of them acquired in a 2001 merger, to focus on its most profitable activities.

But it held off on a share buyback, disappointing investors who had hoped to receive around $5 billion. BHP’s London-listed shares fell 4.5 percent on Tuesday.

Chief Executive Andrew Mackenzie said the widely expected move to simplify BHP around the “four pillars” of iron ore, copper, coal and petroleum – with potash as a potential fifth pillar – would spur cashflow growth and boost returns.

These assets generated 96 percent of the group’s underlying core profit in the 2014 financial year.

“A demerger is a logical next step for other high quality assets also in our portfolio that don’t have a scale of those in our major business,” Mackenzie said in a call with investors.

The spin-off company, dubbed NewCo for now, will bundle BHP’s aluminium, manganese, Cerro Matoso nickel in Colombia, South African energy coal, some Australian metallurgical coal assets and the Cannington silver, lead and zinc mine. It will not include Nickel West in Australia, for which a separate sale process was continuing, Mackenzie said. Read the rest of this entry »

posted in BHP Billiton, International Media Resource Articles | 0 Comments

19th August 2014

Australia rebukes mining tycoon over abusive attack on China – by Jane Wardell and Ben Blanchard (Reuters India – August 19, 2014)

http://in.reuters.com/

Aug 19 (Reuters) – Australian mining mogul and politician Clive Palmer was rebuked by the government on Tuesday for a tirade against China, in which he described its government as “bastards” who shoot their own people and want to take over the country’s resources.

Treasurer Joe Hockey said the remarks aired on Australian television on Monday were “hugely damaging”, noting that Palmer had benefited personally from doing business with China.

“Do not bring down the rest of Australia because of your biases,” he said. “They are a business partner for Australia, they’re our biggest trading partner, they buy a lot of our produce, and in doing so they help to lift the quality of life for everyday Australians.”

China is Australia’s biggest trade partner with two-way trade approaching $150 billion, representing more than 20 percent of Australia’s total trade.

Palmer, who holds the balance of power in the Australian parliament’s upper house, is currently locked in a legal battle with Chinese firm CITIC Pacific over cost blowouts and disputed royalty payments at an iron ore port in Cape Preston in Western Australia. Read the rest of this entry »

posted in Asia Mining, Australia Mining and History, International Media Resource Articles | 0 Comments

19th August 2014

Rio and BHP tighten grip on world iron ore – by John Addis (Sydney Morning Herald – August 18, 2014)

http://www.smh.com.au/

Mexican drug cartels have been diversifying into the iron ore business, smuggling ore worth about $US1 billion a year into China. But it’s the emergence of a more legitimate cartel – one run largely by Australians – that should worry China more.

Rio’s latest result shows how powerful the big three global producers have become. The company’s results for the six months to June 30, with underlying earnings rising 21 per cent to $US5.1 billion ($5.47 billion), are remarkable given that iron ore prices actually fell 20 per cent over the period.

After slashing costs, capital expenditure and debt, management hinted at higher dividends and more buybacks. If the mining boom is supposed to be over, no one told Rio Tinto.

The really interesting element to the result concerned production increases. Although lower iron ore and coal prices stripped $US1.4 billion from underlying earnings, volume increases, particularly in iron ore, offset that fall by more than $US900 million. All up, iron ore contributed more than 90 per cent of total profit.

With China slowing and the country’s government frantically shifting spending away from capital expenditure towards consumption, which dampens demand for ore, Rio Tinto and BHP are expanding output. Read the rest of this entry »

posted in Asia Mining, Australia Mining and History, BHP Billiton, International Media Resource Articles, Iron Ore, Rio Tinto | 0 Comments

19th August 2014

Will the mine of the future be a mine at all? – by W.Scott Dunbar (Globe and Mail – August 18, 2014)

The 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 Globe and Mail has sought out columns from thought leaders in Western Canada, people whose influence is shaping debate, but whose names may not be widely recognized. Scott Dunbar is the head of the Department of Mining Engineering at the University of British Columbia.

Metals to support our way of life are extracted by mining and processing large quantities of rock. The basic extraction paradigm is “drill, blast, load, haul, dump, crush, grind, separate, process.” There are many variations, but fundamentally, the paradigm has not changed since ancient times.

Innovations have made operations in the paradigm safer, more efficient, automated and even autonomous. Rock containing very small quantities of metal can be economically mined and processed and it is tempting to think that further innovations will allow mining and processing of rock containing even smaller amounts of metal.

However, some constraints are having a significant effect on the feasibility of mining. First, economic metal deposits are very difficult to find. Some deposits exist at depths of one kilometre or more, but heat and rock-mass stability at these depths make their exploitation difficult. Also, the waste-rock dumps and tailings generated by mining and mineral processing pose significant engineering challenges, environmental concerns and financial liabilities. Read the rest of this entry »

posted in British Columbia Mining, Canada Mining, Canadian Media Resource Articles, Mining Education and Innovation | 0 Comments

19th August 2014

B.C. mine’s breached tailings pond one of 98 to undergo independent investigation – by Sunny Dhillon (Globe and Mail – August 18, 2014)

The 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.

VANCOUVER — The B.C. government has ordered independent investigations into the spill at the Mount Polley mine and at every other tailings pond in the province, saying the disaster has shaken public confidence and threatens to undermine other resource-sector projects as well.

The province – which has been criticized by First Nations near the spill for a perceived lack of industry oversight – has also signed a letter of understanding with two bands, whose leaders say they’ll push for meaningful mining reform.

The hiring of an outside panel of experts to investigate the Mount Polley spill is a shift from the province’s earlier stance that probes by the chief inspector of mines and the Conservation Officer Service would suffice. Each of the three experts on the panel has decades of engineering experience, with one having worked on the investigation into the New Orleans levee failures during Hurricane Katrina.

At a news conference Monday, Bill Bennett, B.C.’s Minister of Energy and Mines, stressed that the province must do whatever it takes to restore public confidence in mining in particular and the resource sector in general. Read the rest of this entry »

posted in British Columbia Mining, Canada Mining, Canadian Media Resource Articles, Mining Environmental Accidents | 0 Comments

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