Fat profit margins make iron ore the apple of miners’ eyes – by James Regan (Reuters.com – January 24, 2013)

http://www.reuters.com/

SYDNEY – Jan 24 (Reuters) – Australian miners like to say iron ore is the new gold. How about the new iPhone?

Iron ore, needed to make steel, long ago replaced gold as the most profitable mineral to mine in the Australian outback. And while sales of iPhones have become a disappointment for Apple Inc, mega-mining companies such as BHP Billiton are projecting strong growth in iron ore sales for decades to come – at margins even an Apple or smartphone rival Samsung Electronics would drool over.

BHP and rivals Rio Tinto and Fortescue Metals are seeing profit margins often exceeding 100 percent on sales of hundreds of millions of tonnes of ore. Apple Inc earned gross margins of 49 to 58 percent on its U.S. iPhone sales between April 2010 and the end of March 2012, according to court filings obtained by Reuters.

Apple on Thursday missed Wall Street’s revenue forecast for the third straight quarter as iPhone sales came in below expectations, although earnings topped forecasts.

Production costs under $40 a tonne mean margins at Rio Tinto and BHP are comfortably above any of their other businesses with iron ore selling for nearly $150 a tonne, explaining why they continue to invest to expand their operations in Western Australia’s vast Pilbara iron ore belt.

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Asteroid-mining race heats up as Deep Space Industries joins the fray – by Dorothy Kosich (Mineweb.com – January 24, 2013)

http://www.mineweb.com/mineweb/

By exploring the potential riches of space rocks, would-be asteroid miner DSI hope to help humanity enlarge its footprint in the final frontier.

RENO (MINEWEB) – Santa Monica, California-based Deep Space Industries (DSI) says it has launched the first commercial campaign to inspect small asteroids which pass by earth as potential mining targets.

Deep Space will build a small fleet of 55-pound FireFlies, working with NASA and other companies and groups to identify potential exploration targets.

“My smartphone has more computing power than they had on the Apollo moon missions,” said Deep Space Chairman Rick Tumlinson. “We can make amazing machines smaller, cheaper and faster than ever before.”

The company intends to send a fleet of FireFly spacecraft into space beginning in 2015 by riding-sharing on the launch of larger communications satellites.

Beginning in 2016, Deep Space aims to launch 70-pound DragonFlies for round-trip visits that bring back geological samples. The DragonFly expeditions are expect to take two to four years, depending on the target, and will return with 60 to 150 pounds of cargo.

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India tries to temper the hunger for gold – by Stephanie Nolen (Globe and Mail – January 24, 2013)

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.

NEW DELHI — In the glinting showroom of the Gem Palace in the city of Jaipur, Sanjay Kasliwal surveys his family business: strings of rubies, pearls the size of grapes, collars of emeralds and, everywhere, bright yellow gold.

The Gem Palace has supplied princes, prime ministers, socialites and no small number of families preparing for weddings, for hundreds of years. But in the past decade, the price of gold has surged to unprecedented heights – fetching close to $1,700 (U.S.) an ounce on Wednesday. Yet Mr. Kasliwal’s business has not faltered.

“People have a budget, but they’ll still put it in gold,” the jeweller said. “If the price goes up, they buy 490 grams instead of 500 grams, that’s all. The Indian hunger for gold, you can’t change that.”

That hunger for gold has also warped the country’s economy. The Indian government is growing increasingly alarmed about a current account deficit in the July-to-September quarter that accounted for a record 5.4 per cent of gross domestic product. This week it raised taxes on gold imports in an attempt to curb a shopping habit that goes back centuries.

That will be no easy task. Gold purchases make a lot of sense for Indians. Inflation has run at or near 10 per cent annually, while the best rate on a savings product from a bank returns 8 per cent. The stock market has had returns far below that in recent years.

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Iamgold to cut back Mali exploration activity – by Pav Jordan (Globe and Mail – January 24, 2013)

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.

A move by Iamgold Corp. to reduce exploration activity in Mali marks the latest move by the Toronto-based company to protect itself from political risk in the region.

Iamgold has operations in Canada, South America and Africa, but half its output comes from mines in Mali, and neighbouring Burkina Faso. In Mali it is a 41-per-cent owner in the Sadiola gold mine and a 40-per-cent owner in Yatela, also a gold mine.

“Although it is business as usual at the Sadiola and Yatela mines operated by the company’s joint venture partner and which are approximately 1,300 kilometres by road from the regions of conflict, the company is reducing its exploration activity in the region at this time as a precautionary measure,” Iamgold stated in a news release on Tuesday.

The company said, however, that production at the joint venture operations had not been disrupted by the conflict in Mali, where Islamic militants have taken over a large swath of the territory.

Iamgold, one of the largest mining companies operating in Mali, has been shifting its focus away from the African continent for the past two years, selling stakes in mines in Ghana in early 2011.

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Whatever happened to global warming? – by Margaret Wente (Globe and Mail – January 24, 2013)

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.

Are you freezing? Join the crowd. Arctic air is sweeping across Canada. Snow and ice are wreaking havoc on Britain. Russians are dying from the cold. And Germans are sneaking into forests to cut down trees because their fuel bills are so high.

Hey! Whatever happened to global warming?

That’s a naive question, of course. Everybody knows there’s little or no connection between daily weather events and climate change (except when there’s a heat wave, a hurricane or some other natural disaster, in which case global warming is invariably to blame). Experts will tell you that our bitter winter weather proves nothing about climate change – that the world is still warming up at an alarming rate.

Well, maybe not so alarming. Global temperatures have now held steady for 16 years. They levelled off around 1997. The latest data come from Britain’s weather and climate agency, the Met Office, which says you can’t draw any conclusions from such a short span of time. Still, the data are proving awkward for leading climatologists, who are reluctantly admitting that their projections have their limits. Nor is the news likely to increase support for activists such as NASA scientist James Hansen, who warned, in an interview with The Guardian back in 2009, that Barack Obama had only four years to set an example for the world and avert disaster.

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Declaration lets Spence save face, end protest after failing to secure meeting with PM and Governor General – by Jesse Kline (National Post – January 24, 2013)

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

Theresa Spence Wednesday night officially ended her six-week-old protest, which saw her subsisting on a liquid-only diet. It followed intense behind-the-scenes bargaining that allowed her to save face in the eyes of the government, her people and the general public.

Ms. Spence did a great job of publicizing her issue, but as a politician, she leaves much to be desired. With Assembly of First Nations National Chief Shawn Atleo also announcing Wednesday he will return to work Thursday after a medical leave, future negotiations will hopefully be a little less chaotic, and a little more productive.

From the beginning, it has been clear that Ms. Spence was in way over her head. When the Attawapiskat Chief first set up camp on an island in the Ottawa River on Dec. 11, Prime Minister Stephen Harper was faced with a serious dilemma: Meeting personally with Ms. Spence would have set a dangerous precedent, and could have led to every Canadian who has a grievance with the federal government (there are many) threatening to kill themselves, should they not get the ear of the prime minister. On the other hand, if he let her die, he would forever be known as the prime minister who was too stubborn to save a life.

Neither was a good option for Mr. Harper, who expertly organized a meeting that included representatives of the AFN and other aboriginal leaders.

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Is the iron ore rally overdone? – Northern Miner Editorial (January 10, 2013)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

Spot prices for iron ore fines delivered to China touched a three-year low in September 2012 of US$87 per tonne before rebounding to US$119 per tonne in December and to the US$158-US$160 per-tonne level of recent days. The question is, where will prices for the metal move from here?

John Goldsmith, deputy head of equities at investment management firm MontruscoBolton in Toronto, says they have nowhere to go but down. “Iron ore has had an absolutely phenomenal rally but I think it’s time to take money off the table,” he says. “The rally has been long in the tooth.”

In Goldsmith’s view, GDP growth in China over the next three years will average about 6%, down from the 7.8% the country clocked last year and the 9.2% of 2011. That estimate, he explains, is a function of the average 7% GDP growth rate set out in China’s last five-year plan in 2010. And a growth rate of 6%, he says, will have an impact on iron ore demand and prices, given that the economic juggernaut produces nearly 50% of the world’s steel and makes up more than 60% of global demand for seaborne iron ore.

“People are realizing that China will not grow to the moon, it will not have GDP growth north of 8% for the next ten years, and people that think that are dreaming,” he continues. “The risk for the iron ore trade right now is that there is a slowdown in infrastructure spending in China and it will have an impact on steel consumption usage and that will cascade down to the iron ore price.”

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Excerpt from “The History of Mining: The events, technology and people involved in the industry that forged the modern world” – by Michael Coulson

To order a copy of The History of Mining please click here: http://www.harriman-house.com/products/books/23161/business/Michael-Coulson/The-History-of-Mining/

COAL IN THE UK and THOMAS POWELL (1779-1863)

The first nation to fully embrace the Industrial Revolution was Great Britain, the leading military power in the world at the start of the 19th century, and also a leader in industrial innovation. However, coal had been mined in Britain since, and possibly even before, the coming of the Romans in the 1st century. Originally it had been used in fires and forges for working metal, a role that it had held for many centuries in other parts of the world.

Mining in these earlier times was quite crude, favouring surface accumulations of coal, and when these were exhausted shallow drifts would be driven into the coal to allow mineworkers to mine it at shallow depth. As long as the British economy remained primarily agrarian, the use of coal was not widespread. Gradually, a number of significant engineering advances stimulated interest in coal mining and provided the Industrial Revolution with the means to materially quicken the pace of development.

Coal and the invention of machines, to both improve coal mining and to utilise the power that coal could generate, drove the early decades of the Industrial Revolution. Thomas Savery and Thomas Newcomen were credited with inventing the steam engine in the 18th century, which allowed pumping to take place in the mines to remove water as coal mining moved to new depths.

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Iamgold lifts Ontario project’s indicated resource by 114% – by Henry Lazenby (MiningWeekly.com – January 23, 2013)

 http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – Canadian miner Iamgold on Wednesday said it had lifted the National Instrument 43-101-compliant indicated resource at its Côté gold project, in northern Ontario, by 114% from the previous resource estimate reported in October 2012. The company said most of the mineral resources at the project had now been upgraded to the indicated category.

The new Côté gold resource estimate incorporated assay results from 85 additional drill holes, comprising 47 325 m since the October 4, 2012 estimate, and now entails 269-million tons grading 0.88 g/t for 7.61-million ounces and an inferred resource of 44-million tons averaging 0.74 g/t for 1.04-million ounces.

The estimate used a cutoff grade of 0.30 g/t of gold, similar to the cutoff used in the previous resource estimate.

The company said a positive attribute of the Côté gold deposit is its accessibility for openpit mining. The deposit locally outcrops at surface and, based on the drilling to date, the depth of the barren overburden averages 5.8 m.

Meanwhile, Iamgold also reported the fourth quarter of 2012 was its strongest, during which it produced 214 000 attributable ounces, which brought its 2012 attributable gold production to 830 000 oz, below the low end of its revised guidance of 840 000 oz to 910 000 oz.

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Most Podolsky miners to be transferred – by Carol Mulligan (Sudbury Star – January 24, 2013)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

A joint union-company committee has saved the jobs of 65 production and maintenance workers at KGHM’s Podolsky Mine, which is scheduled to cease production on March 29.

The mine will go on care and maintenance for at least a year, and dozens of members of United Steelworkers Local 2020 will be transferred to KGHM’s McCreedy and Levack mine operations.

When the production halt was announced earlier this month, it was expected 70 people would lose their jobs. That number rose to 85 because there were workers at other KGHM operations doing jobs related to Podolsky.

As it stands, a maximum of 20 people will receive notices of layoff or potential layoff before Feb. 1, said Wess Dowsett, USW staff representative and area co-ordinator. “That’s pretty awesome,” said Dowsett, “and they’re still working to reduce that number even more yet.”

None of the 65 people being transferred will have their job classifications or their wages downgraded. While KGHM and the union may experience “a few bumps and burps,” both sides are committed to reducing the impact of the Podolsky closure, said Dowsett.

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