Drought of deals reflects low commodity prices, low quality of assets on the block
Miners across the world want to sell off their mines, but they have a problem: Almost no one wants to buy them.
Some veteran bankers in the mining industry say they are seeing the longest drought of deals in their careers. The rut is caused by a commodity price rout with little sign of recovery, low-quality assets on the block and a focus on shareholder returns—not acquisitions—from industry giants like BHP Billiton PLC and Rio Tinto PLC.
Deal volumes in 2014 fell 23% to 544 from the previous year, the lowest amount since 2003 and the fourth straight year of declines, according to Ernst & Young. Deals during the past decade peaked in 2010, when 1,123 were completed amid a China-fueled boom in prices. In the first quarter of 2015, the value of mergers and acquisitions in the mining industry globally fell 18% to $5.9 billion, from $7.2 billion a year ago, Ernst & Young said.
The paucity of mining deals, amid a broadly roaring M&A market, comes as prices for commodities such as iron ore, aluminum and copper are trading at near six-year lows. Other metals like nickel and zinc are being weighed down by lackluster demand. Read the rest of this entry »
posted in Africa Mining, Asia Mining, Barrick Gold Corporation, Canada Mining, International Media Resource Articles |
VANCOUVER/TORONTO – Barrick Gold Corp’s first step to long-promised partnerships with China, as well as progress in reaching an ambitious debt-cutting goal, are turning skeptical investors warmer toward the world’s biggest gold miner.
Barrick said on Tuesday it would sell a stake in its Porgera mine in Papua New Guinea mine to China’s Zijin Mining Group, and form a strategic partnership with Zijin. The moves marked an initial push in Executive Chairman John Thornton’s plan to forge closer ties with China, the world’s biggest producer and consumer of gold.
The former Goldman Sachs executive’s radical overhaul since taking Barrick’s reins a year ago, including eliminating the position of chief executive, had raised eyebrows among investors. Many also complained about his outsized signing bonus, lack of access, and most recently his 36 percent pay rise.
But a clearer strategy unveiled in February to slash Toronto-based Barrick’s mountain of debt, while seeking close links with China, looks to be winning approval. Read the rest of this entry »
posted in Asia Mining, Barrick Gold Corporation, Canada Mining, Canadian Media Resource Articles, Gold and Silver |
John Hancock, the estranged son of Australia’s richest person Gina Rinehart, has won an epic legal battle over control of the family’s multibillion-dollar family trust, with his sister and ally Bianca Rinehart appointed trustee.
On Thursday, NSW Supreme Court Justice Paul Brereton appointed Bianca, 38, trustee of the Hope Margaret Hancock Trust, which was set up by her late grandfather Lang Hancock and is thought to be worth about $5 billion.
Justice Brereton also ordered Mrs Rinehart to hand up documents and accounts relating to the trust that John and Bianca had claimed were withheld from them for many years.
The decision follows a bitter and public three-and-a-half-year war that saw Mrs Rinehart and her youngest daughter, Ginia, 28, pitted against her eldest two children, John, 39 and Bianca. Hope Welker, 29, who initially launched the legal action against her mother, settled in 2013 for $45 million because of the “high degree of distress” the litigation was causing her.
Justice Brereton said: “Mrs. Rinehart has demonstrated that she is prepared to go to extraordinary lengths to retain control, directly or indirectly, of the Trust, and that she is capable of exerting enormous pressure and great influence to do so”. Read the rest of this entry »
posted in Australia Mining, International Media Resource Articles, Iron Ore |
TORONTO, ONTARIO–(Marketwired – May 28, 2015) – KWG Resources Inc. (CSE:KWG)(FRANKFURT:KW6) reports that its subsidiary Canada Chrome Corporation (“KWG/CCC”) has filed the materials required to perfect its appeal at the Ontario Court of Appeal. A hearing date will be scheduled by the Court’s Registrar.
The respondent 2274659 Ontario Inc. and the intervenor the Minister of Northern Development and Mines will have until June 29, 2015 to file responding materials if they elect to do so. 2274659 Ontario Inc. was formerly a subsidiary of Cliffs Natural Resources Inc. (“Cliffs”) and is now wholly-owned by Noront Resources Ltd. (“Noront”).
The Contest with Cliffs for access to the Ring of Fire:
At a hearing before the Mining and Lands Commissioner (“MLC”) in early 2013, Cliffs sought an order to dispense with the consent of KWG/CCC for the granting of an easement for Cliffs to build a road on top of mining claims staked by KWG/CCC along a 340 kilometer corridor of high ground. KWG/CCC had spent some $15 million to explore the claims and assess their profiles and aggregates to provide a means of egress for the Big Daddy chromite deposit in which KWG/CCC has a 30% joint venture interest with Cliffs then holding the 70% interest. The MLC declined to grant the order sought by Cliffs and Cliffs then appealed the MLC decision to the Divisional Court of the Ontario Superior Court. Read the rest of this entry »
posted in Ontario Mining, Ontario's Ring of Fire Mineral Discovery |
SINGAPORE, May 28 (Reuters) – There appears to be an outbreak of “cautious optimism” in the Asian commodities sector.
It was easy to lose track of the number of times the phrase popped up in presentations and conversations at four major commodities conferences in the region in the past two weeks.
However, defining what people meant by being cautiously optimistic was somewhat more challenging, although the common thread was a view that the worst is over for commodity prices, and the sector is once again worth looking at from an investment perspective.
Of course, it’s easy to dismiss participants at the SGX Iron Ore Forum and the Asia Mining Congress in Singapore, the Asia Oil & Gas Conference in Kuala Lumpur and the LME Week Asia in Hong Kong as talking their books, or at least to their hopes.
But what will be key is how the expectations of better times ahead translates into action. From a pricing perspective, there was widespread acknowledgement that the likelihood of strong rallies was very low, rather what producers, traders, buyers and investors are forecasting is a gradual grind higher as rising demand eats away the supply overhang created by over-investment in mines. Read the rest of this entry »
posted in Asia Mining, Commodity Super-Cycle, International Media Resource Articles |
May 28, 2015 – Vancouver, B.C. – Teck Resources Limited (TSX: TCK.A and TCK.B, NYSE: TCK) (“Teck”) announced today it will be implementing temporary shutdowns in the third quarter at its six Canadian steelmaking coal operations in order to align production and inventories with changing coal market conditions.
Each of Teck’s steelmaking coal operations will be temporarily shut down for approximately three weeks in the quarter. Shutdowns will be staggered over the summer months among the operations. Teck will continue to meet all contracted and committed coal sales for its entire suite of products.
Third quarter production will be reduced by approximately 1.5 million tonnes (Mt) to 5.7 Mt, a reduction of 22% for the quarter, with expected sales in the range of 6.0 – 6.5 Mt. Annual coal production is now estimated at 25 – 26 Mt. Additional coal production adjustments will be considered over the course of 2015 as market conditions continue to evolve.
Guidance for unit operating and distribution costs for the year is unchanged. Capitalized stripping is expected to be about $65 million lower than original guidance reflecting lower coal production and reduced stripping costs this year due to lower diesel costs and productivity improvements since the start of the year. Read the rest of this entry »
posted in British Columbia Mining, Canada Mining, Coal |
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.
As Brazil’s Vale SA figures out what to do with its fertilizer business, the mining giant is thought to be testing the waters on a potential sale, according to people familiar with the matter.
In addition to potash mines in South America, the Brazilian mining company owns a big potash development project and slew of fertilizer concessions in Saskatchewan, the world’s biggest producer of potash – a crop nutrient.
“There has been a lot of chatter that Vale is possibly considering selling their fertilizer business. If you are preparing your assets for sale, you want to increase the value of your portfolio,” said Joel Jackson, an analyst with Bank of Montreal.
Vale, the world’s biggest iron ore supplier and a major producer of other metals, is under pressure to sell assets amid a nearly $20-billion (U.S.) expansion of its iron ore complex in Brazil. People familiar with the matter said it has been trying to gauge how much its fertilizer business could fetch. Read the rest of this entry »
posted in Canada Mining, Canadian Media Resource Articles, Potash/Phosphate, Saskatchewan Mining, Vale |
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.
‘Unlike the Maple Leafs, mining always bounces back,’ says Mining Association of Canada president
Mining is more resilient than the Toronto Maple Leafs, but Canada risks being shut out as a top global player as the commodity slump drags on, warns the president of the Mining Association of Canada. “It’s been tough,” Pierre Gratton told the Economic Club of Canada Wednesday.
He emphasized that the last six months have been “generally dismal” for miners and commodity prices, particularly iron ore and coal, and their near-term prospects aren’t great either, he said.
Mineral exploration financing was also “grim” in 2013 as global budgets to discover new projects dropped by 30 per cent, he noted, adding: “This decline is as worrisome as it is dramatic.”
And last year, after an eight-year reign as the top country for global exploration spending, Canada dropped to second place behind Australia. Read the rest of this entry »
posted in Canada Mining, Canadian Media Resource Articles |
The Daily Press is the city of Timmins broadsheet newspaper.
TIMMINS – A Northern geologist who represents one of the key players in the Ring Of Fire mining project, says Ontario needs a friendlier investment climate to reboot the mining exploration industry.
Without continued exploration and the discovery of new mineral deposits, the mining industry in Ontario will eventually fail according to Moe Lavigne who spoke at the opening of The Big Event on Wednesday.
Lavigne, a Timmins native, is the vice-president of exploration and development for KWG Resources Inc. which has a large stake in the Ring Of Fire.
Lavigne is taking part in an exploration forum at The Big Event and said Wednesday he was pleased to be part of the Timmins mining show, but somewhat disappointed that there were fewer exploration companies on site, compared to past years.
“Exploration or grass roots exploration in Ontario has come to a grinding halt,” Lavigne told the audience. Read the rest of this entry »
posted in Northern Ontario/Canada Regional Media, Ontario Mining, Ontario's Ring of Fire Mineral Discovery |
REGINA — Mosaic Potash’s recently announced $1.7-billion expansion project at its K3 potash mine at Esterhazy will increase production capacity from three million tons to 21 million tons by 2024, according to Lawrence Berthelet, director of capital expansion for Mosaic Potash.
“(This project) will make K3 the largest, most competitive potash mine in the world,” Berthelet said Tuesday at a Saskatchewan Mining Week presentation in Regina.
Following his presentation, Berthelet said “the expanded project will allow us to … expand capacity to give us more miners at the (mine) face and more infrastructure to deliver more tons. It allows us … to maximize the capacity of that K3 facility.’’
Begun in 2009 at a cost $1.5 billion, K3 was designed to be expanded through several stages. In March, Mosaic announced that the expansion project would go ahead, bringing total investment at the K3 site to $3.2 billion.
The expansion project will create more than 300 construction jobs a year — 600 at peak construction — during the eight-year development period. Read the rest of this entry »
posted in Canadian Media Resource Articles, Potash/Phosphate, Saskatchewan Mining |
Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.
The Ring of Fire may appear to be a garden of agony for the mining companies involved, but Ontario’s lead negotiator charged with working out a crucial and historic agreement with affected First Nations assures all that real progress is being made to advance development in the Far North.
Former Supreme Court justice Frank Iacobucci talked at length before a Greater Sudbury Chamber of Commerce lunch crowd on May 26 about Canada’s evolving relationship with Aboriginal people in righting the wrongdoings of the past with a new partnership based on mutual respect.
But he didn’t reveal much about what progress has been made since a much ballyhooed regional framework agreement was signed by Premier Kathleen Wynne and the Matawa chiefs in 2014, except to confirm that a second round of negotiations is coming up. “A lot of work has been going on. We don’t work in the public arena. We work behind the scenes.”
In July 2013, Iacobucci was appointed Ontario’s lead negotiator in discussions with the chiefs of the Matawa First Nations, a tribal council of communities closest to the mineral deposits in the James Bay lowlands. Matawa’s negotiator is former Ontario premier Bob Rae. He reports to Northern Development and Mines Minister Michael Gravelle. Read the rest of this entry »
posted in Aboriginal and Inuit Mining, Northern Ontario/Canada Regional Media, Ontario's Ring of Fire Mineral Discovery |
Peter Major on how management has lost control of their mines.
The South African mining industry is in trouble. That is not in question. The only debatable point is exactly how much trouble it is in.
The industry on which this country’s modern economy was built has been stuttering since the global financial crisis. What investors and anyone else with an interest in mining’s role in the economy wants to know, is where this is headed.
Are we nearing a point where we will start to see a turnaround? Or is there a chance that things will simply continue to deteriorate?
Speaking at the JSE’s Power Hour in Cape Town, Peter Major, mining specialist at Cadiz Corporate Solutions, warned that one must be wary of thinking that things will always revert to an historically established mean. The mining environment in South Africa has changed so much over the last few decades that “the old rules no longer apply”.
“South Africa is the world’s richest country in terms of mineral resources,” said Major. “We have more resources than Russia and the US combined. This was the greatest mining country in the world for 100 years, but it’s not anymore.” Read the rest of this entry »
posted in Africa Mining, Gold and Silver, International Media Resource Articles |
Peru tightened security and closed schools in the country’s south as unions began a 48-hour protest as part of the biggest wave of mining opposition in three years.
A contingent of riot police guarded the main square of Arequipa, the biggest southern city, and shop windows were partially shuttered, Radio Programas reported. Police and army officers patrolled the Tambo Valley, the site of Southern Copper Corp.’s Tia Maria copper project.
Peru’s goal of becoming a copper powerhouse is being threatened by violent protests against Tia Maria in the past two months, according to Carlos Galvez, president of Peru’s National Society of Mining, Petroleum and Energy. The upheaval could reduce mining investment to “very close to zero” by 2018, down from a record $9.7 billion in 2013, unless the government defends new projects, he said in an interview in Lima Tuesday.
Peru, the world’s third-biggest copper producer, is poised to increase output of the metal 73 percent in the next three years on new capacity from Freeport-McMoRan Inc. and MMG Ltd. Investment needed to sustain the expansion is on hold because of protests by local groups opposed to mining, Galvez said. Read the rest of this entry »
posted in Copper, International Media Resource Articles, Latin America Mining, Mining Conflict |
How Mike Bloomberg, red-state businesses, and a lot of Midwestern lawyers are changing American energy faster than you think.
The war on coal is not just political rhetoric, or a paranoid fantasy concocted by rapacious polluters. It’s real and it’s relentless. Over the past five years, it has killed a coal-fired power plant every 10 days. It has quietly transformed the U.S. electric grid and the global climate debate.
The industry and its supporters use “war on coal” as shorthand for a ferocious assault by a hostile White House, but the real war on coal is not primarily an Obama war, or even a Washington war. It’s a guerrilla war. The front lines are not at the Environmental Protection Agency or the Supreme Court.
If you want to see how the fossil fuel that once powered most of the country is being battered by enemy forces, you have to watch state and local hearings where utility commissions and other obscure governing bodies debate individual coal plants. You probably won’t find much drama. You’ll definitely find lawyers from the Sierra Club’s Beyond Coal campaign, the boots on the ground in the war on coal.
Beyond Coal is the most extensive, expensive and effective campaign in the Club’s 123-year history, and maybe the history of the environmental movement. Read the rest of this entry »
posted in Coal, International Media Resource Articles, United States Mining |
2nd collapse at mine in 4 months, likely caused by seismic activity
After being trapped for nearly 18 hours, nine miners have been rescued and are back on the surface following a collapse at a gold mine in the Abitibi region of Quebec.
The miners became trapped around 3:30 a.m. ET on Tuesday in the Westwood Mine in Preissac, after a collapse that appears to have been caused by seismic activity.
Sylvain Lehoux, the mine’s general manager, said everyone had made it safely to the surface by 9:30 p.m. Union spokesman Marc Thibodeau said the miners were in “good spirits” — but also hungry, as they had no food while underground.
3rd seismic event at mine
The mine’s owners, IAMGOLD Corp., recorded two seismic events, with magnitudes of 1.2 and 1.7 on Monday. The Westwood mine is located over the Cadillac fault. Read the rest of this entry »
posted in Canadian Media Resource Articles, Quebec Mining |