1st October 2014

RPT-UPDATE 2-New rules to slash Indonesian coal exports in short term at least – by Wilda Asmarini and Yayat Supriatna (Reuters India – October 1, 2014)


JAKARTA, Sept 30 (Reuters) – Indonesia’s coal exports are expected to fall by between 15 and 20 percent in October from September and could decline 5 percent this year as firms scramble to obtain government export permits to comply with new rules due to come into effect on Oct. 1.

The new regulations, intended to stamp out illegal mining and ensure ample coal supplies for domestic power plants, require exporters to get approval from the mining and trade ministries.

But the industry says the rules are poorly timed and could push many firms out of business with coal prices at a five-year low. Unregistered firms will not be allowed to ship coal past the deadline.

Many miners and traders have encountered delays and a backlog of firms have yet to be registered, Pandu Sjahrir, chairman of the commercial committee at the Indonesian Coal Mining Association (ICMA), told Reuters.

“A lot of the backlog happens to be at the coal and minerals directorate level. Everything has to be done manually,” Sjahrir said, adding that firms needed to obtain the signature of each director at the department. Read the rest of this entry »

posted in Asia Mining, Coal, International Media Resource Articles | 0 Comments

1st October 2014

Investors Head for Exit as Commodities Extend Slump – by Luzi Ann Javier (Bloomberg News – September 30, 2014)


Investors are betting that the worst isn’t over for commodity prices that already are the lowest in five years.

About $907 million was pulled from U.S. exchange-traded products backed by raw materials this month, the most since April, data compiled by Bloomberg show. Expanding surpluses, a surging dollar and slowing growth in China helped send the Bloomberg Commodity Index to the lowest since 2009, reversing first-half gains fueled by a polar vortex and dead pigs in the U.S., and escalating tensions in Ukraine and the Middle East.

Banks from Societe Generale SA to Citigroup Inc. expect the losses for many raw material to continue. U.S. farmers are collecting the biggest corn and soybean crops ever, and global stockpiles of nickel are at an all-time high. Americans are producing the most oil since 1986, compounding a global surplus. China, the largest consumer of grains, energy and metals, is poised for its slowest expansion in two decades.

“The commodity complex as a whole did really well for a long time, and as a result, a lot of money poured in across the board and created oversupply and over-capacity,” said Peter Sorrentino, a Cincinnati-based fund manager who helps oversee $1.8 billion at Huntington Asset Advisors Inc. “It definitely has been an asset class that people have been withdrawing money from. Hedge funds congregate in momentum trades, and over the last two years, commodities have been sources of cash.” Read the rest of this entry »

posted in Commodity Super-Cycle, International Media Resource Articles | 0 Comments

1st October 2014

The great Canadian LNG poker game – by Peter Tertzakian (Globe and Mail – October 1, 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.

“They’re just playing poker, right?” asked an investor friend of mine who knows how to make a dollar. “Guys like Petronas, Shell and Chevron have already put a bazillion or two on the table,” he said with his furrowed face. “Aren’t their investments to date far too large to just walk away from their British Columbian LNG projects?”

I paused before answering. Petronas had just publicly announced that they were unhappy with Canada. It was a tap of the Malaysian company’s closely held cards signalling they might be willing to pack up their B.C. drill bits and go home in the absence of better liquefied natural gas investing odds.

It’s easy to believe that Petronas’s verbal shots in the public arena were a poker-faced “take-it-or-leave-it” bluff to get better terms on the eve of the B.C. government’s anticipated LNG tax announcement. But Canadians with a stake in the multibillion-dollar LNG business – for example, investors, governments and suppliers – should be cautious about interpreting such statements as hollow bravado.

Deferring to the wisdom of country singer Kenny Rogers, I replied to my friend, “Surely you know the lyrics to The Gambler?” Read the rest of this entry »

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

1st October 2014

UPDATE 1-Nickel miner Talvivaara gets debt cut plan, still lacks financing – by Jussi Rosendahl (Reuters U.S. – September 30, 2014)


HELSINKI, Sept 30 (Reuters) – Finnish nickel miner Talvivaara lacks the long-term financing it needs to avoid bankruptcy, it said on Tuesday after an administrator proposed an eight-year restructuring plan that includes slashing its debts by up to 99 percent.

Talvivaara listed to great fanfare in London in 2007 when nickel peaked at around $51,000 per tonne.

But nickel prices have more than halved, and hurt by repeated production disruptions and environmental damage, the company last year suspended its mining operations and started a court-led debt restructuring process to avoid bankruptcy.

The administrator on Tuesday proposed Talvivaara’s unsecured debts of around 1.4 billion euros ($1.8 billion), including group internal debt, be cut by 97-99 percent. The plan could involve a share issue, which the administrator warned could dilute the company’s shares.

It shares fell as much as 24 percent on Tuesday. The company lamented on Tuesday that implementing the plan would need funds and creditor support, which is does not have.

“In order to ramp-up the Talvivaara group’s mining operations to full scale, a significant amount of new financing for the operative activities is required immediately,” it said in a statement. Read the rest of this entry »

posted in Europe Mining, International Media Resource Articles, Nickel | 0 Comments

1st October 2014

Metals and mining: Years of renewal – by David Miller and Alexei Lossan (Russia Beyond the Headlines – September 25, 2014)


Global metals and mining firms face a difficult operating environment amid falling commodity prices. Russian companies are cutting costs and refocusing on domestic assets.

Russia’s metals and mining industry, the country’s second-most important sector after oil and gas, has faced its share of adversity since the salad days of the past decade, when commodity prices were pushed skyward by a hike in demand from China and India.

Today, as lower commodity prices put pressure on resource-producers around the world, many Russian metals and mining companies are nevertheless showing respectable profit margins, after shedding non-core operations and taking difficult steps towards rebuilding.

Iron ore prices fell to a five-year low in September as Chinese demand slackened off and economic activity in Europe and Japan remained weak. Even so, for Russian firms, signs are emerging that, in some areas, the future may be looking a little brighter.

“The global aluminum industry has turned a corner,” declared Rusal CEO Oleg Deripaska in a statement this summer after the firm, which produces almost 9% of the world’s aluminum, posted an income of $116 million in the second quarter of 2014. Read the rest of this entry »

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30th September 2014

End of the Iron Age – by James Wilson and Neil Hume (Financial Times – September 29, 2014)


A collapse of ore prices throws miners’ strategies into doubt and threatens an industry shakeout

Iron is one of the most abundant elements on earth but pulling it out of the ground efficiently can be a daunting undertaking. Snaking through the low, green hills of southern Brazil is a 530km pipeline, the decisive link in Anglo American’s $8.2bn Minas-Rio project to extract iron ore in the Brazilian interior and ship it from a new Atlantic port. Way over its original $3.6bn budget and two years late, Minas-Rio is finally close to the point of “first ore on ship”.

For years, huge mining projects such as these have formed the backbone of global economic expansion. The world’s most important commodity after crude oil, iron ore has been devoured by Chinese steel mills, emerging as the raw material for an infrastructure-led growth spurt.

But Minas-Rio is about to deliver its first ore into a much less welcoming world. The price of iron ore has plunged more than 40 per cent this year, the worst performance across metals and bulk commodities in 2014. From an average price of $135 per tonne last year, the benchmark iron ore contract sank last week to less than $80 for the first time since the global financial crisis.

“The iron ore market is in the midst of a transition without precedent in recent commodity history,” says Macquarie, the Australian bank.

Behind the change is a big increase in iron ore exports – and not just the 26.5m tonnes that Minas-Rio will bring to market when fully operational in 2016. Read the rest of this entry »

posted in Anglo American, Australia Mining and History, BHP Billiton, International Media Resource Articles, Iron Ore, Latin America Mining, Rio Tinto, Vale | 0 Comments

30th September 2014

Juniors reap $1bn windfall from big miners’ ‘unloved assets’ – by Paul Garvey (The Australian – October 1, 2014)


ASSETS unloaded by some of the world’s biggest mining houses for less than $250 million created more than $1 billion in value in months for a handful of junior Australian mining companies.

Data compiled by The Australian shows the recent acquisitions by companies such as Northern Star, Poseidon Nickel and Saracen Minerals have paid for themselves several times over given the share price gains since the deals were ¬announced.

Falling commodity prices and shareholder demands for greater financial discipline have prompted the mining giants to offload non-core assets as part of their efforts to rein in operating costs and reduce debt.

The smaller miners and explorers willing to step in and buy assets in a falling market have been richly rewarded. The Australian’s analysis shows the acquirers enjoyed a surge in market capitalisation that collectively totalled more than $1.3bn at its peak.

While share prices across the sector have fallen in recent months, the combined market capitalisation of the acquirers is still $730.8m higher than their pre-purchase levels.

The acquirers have all comfortably outperformed the ASX 300 Resources Index, which has fallen by 7.2 per cent this year. Read the rest of this entry »

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

30th September 2014

BHP Billiton Dispatches Top Manager to Much-Watched Potash Project – by ALISTAIR MACDONALD, RHIANNON HOYLE and ELENA CHERNEY (Wall Street Journal – September 29, 2014)


Industry Will Watch Closely for Clues to Company’s Next Move for Massive Mine

BHP Billiton BLT.LN -0.32% PLC. has sent its top project manager to run the giant Jansen potash development in western Canada, a move the potash market will scrutinize for clues to BHP’s plans for its Canadian mine. BHP Billiton’s Phil Montgomery, its head of group project management, last month arrived in Saskatchewan from Australia, a spokeswoman said.

At stake is a mine that—if producing today—would increase global supply of the key fertilizer ingredient by almost 15% according to Scotiabank. That would worsen an oversupply problem for potash. The price of potash, which is fixed through long-term contracts, has rallied by as much as 17% this year on better-than-expected demand, according to analysts. Analysts, though, and some BHP executives, believe that this rally will fade as the increase in demand fizzles.

BHP has already committed some $3.8 billion to a project that it says has no fixed completion date. Last December, work was halted for several months amid technical trouble.

“Jansen has become almost mythological in the industry,” said Matthew Korn, an analyst at Barclays, BARC.LN +0.64% said of the project and the prospects of it being finished. “We know it is there, we know it represents a load of volume, but in terms of timing I don’t think anyone believes this will happen before 2020, if at all,” Mr. Korn added. Read the rest of this entry »

posted in BHP Billiton, International Media Resource Articles, Potash/Phosphate, Saskatchewan Mining | 0 Comments

30th September 2014

Many months, probably years for nonferrous mining in Northern Minnesota – by Aaron Brown (Minnesota Star Tribune – September 29, 2014)


It’s been several months since the public comments period closed for the environmental review and permitting process for PolyMet, a controversial proposed nonferrous mineral mine in Hoyt Lakes, Minnesota. Most had hoped for news about the completion of the Environmental Impact Statement and a clearer timeline for the final permitting by this fall. However, a Marshall Helmberger interview of DNR commissioner Tom Landwehr in the Sept. 24 issue of the Timberjay shows that it could be years, not months.

For those following this issue closely, Helmberger’s story is a must-read.

The reason for the delay, according to Landwehr, is the unprecedented number of primarily critical comments, many of which involve unique and extremely detailed scientific questions and concerns. About 58,000 written comments were received, which raise between 7,000 and 8,000 unique concerns or questions about the massive Draft EIS document discussed last winter.

From the story:

Indeed, it’s by far the largest such undertaking in state history, and that makes it difficult for state officials to even estimate when the job might be completed. Landwehr was blunt: “We don’t know how long it will take. We can’t even say months.” Read the rest of this entry »

posted in International Media Resource Articles, Mining Conflict, Minnesota Duluth Complex and Iron Range | 0 Comments

30th September 2014

Commodity super cycle turning downward, says RBI – by Rajesh Bhayani (Business Standard – September 30, 2014)


In latest commodity super-cycle, inflation-adjusted prices of commodities rose 60-500% between 1999 and 2010

Mumbai – Global commodities prices have already reached inflexion points and are headed downward, according to the RBI (Reserve Bank of India). The central bank, as a part of its monetary policy announced today, published the analysis based on the last five decades’ data of prices of commodity both energy and non-energy, to show that commodity super cycle may be turning downwards.

Commodity super-cycles are long and rapid rises in prices across commodities, propelled by persistent increases in demand that outstrip supply. The policy statement said that, “since 1894, four super-cycles have been identified, with the last one starting from the late 1990s and attributed to rapid and sustained industrialisation and urbanisation in China and other emerging economies”.

During this latest commodity super-cycle, inflation-adjusted prices of commodities rose in the range of 60 to 500 per cent between 1999 and 2010, the year in which they peaked. Oil price rose by 467 per cent, metals by 202 per cent and agricultural prices by 77 per cent — the largest price increases among all the four commodity super-cycles. The sharp rise in prices are after adjusting for inflation and hence the issue of whether the super cycle is ending arises.

Nic Brown, Head of Commodities Research at London based Natixis said, “We would agree that weak global growth (“stable but secularly lower levels of growth”) is one of the key characteristics behind the relative weakness of commodity prices over the past few years.” Read the rest of this entry »

posted in Asia Mining, Commodity Super-Cycle, International Media Resource Articles | 0 Comments

30th September 2014

Environmental Disturbance and the Emergence of Tropical Disease: Lessons From the Gold Fields of Ghana – by Mario Machado (Huffington Post – September 29, 2014)


Mario Machado is a recently returned Peace Corps volunteer (RPCV) and Independent Scholar.

This forest feels like an eternity as our four-wheel drive vehicle plods down yet another washed-out dirt road. This is the Central Region of Ghana and the lack of infrastructure only adds the ambiance as groups of women pass by with their loads of firewood balanced effortlessly on their head, their babies dozing comfortably in tow.

Abruptly, the trees stop and a barren dirt-scape throws the equatorial sun back into our faces. Compared to the shade of the canopy, this feels like the surface of the sun. And yet, despite the devastating heat, I can easily make out the distant silhouettes of people shoveling and sifting and working through this terrible hole in the earth.

As we get closer, the figures assume the faces and nuances of the tired men and women that they are. Holes in boots; tattered, stained clothing; knee deep in stagnant water with shovels or pick-axes or buckets of mud in hand. All for a paltry daily bounty of gold and the eternal promise to strike it rich someday. It’s enough to keep them busy and fed for now, but at a terrible cost to their bodies and the land. This is the face of unregistered small-scale mining in Ghana, called “galamsey” by the locals.

Ghana, the proverbial “Gold Coast”, has furnished the world with the gold for hundreds of years and although the mechanisms have changed — a colonial administration has been replaced by economic structures that are equally exploitative — the fundamental ethos remains the same: the wealth contained within this land does not belong to those that live and work it, but to those with the might to control it. Read the rest of this entry »

posted in Africa Mining, Gold and Silver, International Media Resource Articles | 0 Comments

30th September 2014

Glencore, Rio Tinto could save $500m by merging coal operations – by Sarah-Jane Tasker (The Australian – October 1, 2014)


DIVERSIFIED miners Rio Tinto and Glencore could target $500 million in annual savings if they merge their NSW coal operations, analysts on a site tour of the Swiss giant’s assets have flagged.

Glencore, rumoured to be eyeing acquisitions, highlighted the significant synergy potential with Rio Tinto in the Hunter Valley region given the two miners had many adjacent assets.

“These have not been quantified but could total close to $500m per annum pretax, and relate to overhead reduction, mining efficiencies, logistics and blending,” Credit Suisse analyst Liam Fitzpatrick said. “Despite this, there appears to have been very limited progress between the two companies.”

Recent media reports have suggested Glencore chief Ivan Glasenberg has Rio on his acquisition wish list, but neither company has weighed in on market speculation.

Glencore kicked off a sell-side analysts tour of its Australian ¬assets this week with a visit to its coal operations, and the head of coal assets, Peter Freyberg, told those on the trip the company had a “synergistic and targeted acquisition strategy”. Read the rest of this entry »

posted in Australia Mining and History, Coal, Glencore-Xstrata PLC, International Media Resource Articles, Rio Tinto | 0 Comments

30th September 2014

New Caledonian, Chinese companies plan Vanuatu nickel partnership – by James Regan and Cecile Lefort (Reuters India – September 30, 2014)


SYDNEY, Sept 30 (Reuters) – The South Pacific islands of New Caledonia and Vanuatu are studying a plan to jointly mine and process nickel ores into refined metal to help produce stainless steel in China.

The acting prime minister of Vanuatu, Ham Lini, has expressed interest in the proposal and has asked the partners to lodge a formal application to construct the smelter in his country.

The move comes as Chinese steel mills scour the Asia-Pacific region for alternative supplies of nickel after top supplier Indonesia imposed a ban on such exports in January.

Under the proposed partnership, New Caledonian company MKM Group and China’s Jin Pei Century Investment (Group) Co Ltd plan to mine low-purity nickel ore in the French Pacific territory and ship it to Santo in northern Vanuatu for smelting.

Media reports in New Caledonia said the project would be owned 51 percent by MKM and 49 percent by Jin Pei. The head of MKM, Wilfried Mai, told New Caledonian television he had advised the Chinese investors to build the plant in Vanuatu. Read the rest of this entry »

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

30th September 2014

In risk-averse mining sector, innovation begins with taking the guesswork out of sorting rock – by Peter Koven (National Post – September 30, 2014)

The National Post is Canada’s second largest national paper.

The mining industry is not always synonymous with innovation. Extraction methods have been entrenched for decades, and many companies are happy to stick with the same mining and milling processes that are standard across the sector.

“There’s a monolithic barrier to anybody trying to do anything new, because everybody’s the same and everybody thinks the same,” says Andrew Bamber, chief executive of MineSense Technologies Ltd.

Mr. Bamber, 43, believes there is an untapped billion-dollar market for innovation and new technologies within the broader industry. With Vancouver-based MineSense’s latest invention, a unique ore-handling technology for optimizing metal recovery, Mr. Bambler hopes to help prove his case.

The technology has nothing to do with finding new mines. It is about identifying valuable ore in existing mines that he believes companies are foolishly throwing away. Conversely, it is about making sure companies do not waste time and money processing low-quality ore.

When mining firms design their mine plans, they spend hours poring over the drill holes on a property and carefully assigning value to blocks of material in the ground. Rock that gets assigned a high value goes to the mill for processing, and low-value material gets shipped to the waste pile. Read the rest of this entry »

posted in Canada Mining, Canadian Media Resource Articles | 0 Comments

30th September 2014

COMMENT: Tackling the confusion between reserves, resources – by Marilyn Scales (Canadian Mining Journal – September 29, 2014)

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

I had my knuckles rapped last week for sloppy reporting. Okay, I deserved it. I failed to read a news release closely enough and confused “reserves” and “resources” as the company reported. I find it confusing that sometimes resource numbers include reserves and sometimes they don’t. So I asked a knowledgeable reader to clarify the NI 43-101 requirement on this issue.

He responded: The NI 43-101 requirement is to state which way the company is doing it (reserves within resources, or disclosed separately). I find most of the big producers quote reserves and resources separately, while juniors tend to go the other way. That might be because juniors are often looking at development projects rather than producing mines, and so the question they’re answering to themselves is ‘how much of this resource is mineable?’

But it also seems that there are a lot of companies out there that simply assume they’re doing it right because they’ve always done it that way.

CIM definition and best practice standards leave it up to the qualified person to decide whether to report reserves and resources together or separately, but best practices recommends reporting them separately. CIM reiterates the requirement for a clear statement about which practice is being followed. Read the rest of this entry »

posted in Canada Mining, Canadian Media Resource Articles | 0 Comments

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