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Day: March 4, 2013

Rio Mongolian Mine Failure Would Be ‘Catastrophe,’ Minister Says – by Michael Kohn (Bloomberg.com – March 4, 2013)

http://www.bloomberg.com/

Mongolia’s businesses could face a “catastrophe,” if Rio Tinto (RIO) Group and the government cannot resolve a dispute over funding the Oyu Tolgoi copper and gold mine, the deputy minister for economic development said.

The two parties met last week to decide on financing the project through this year, yet disagreements on taxes, cost overruns and management control resulted in a one-month stop-gap budget. Rio in March will shoulder all the costs for a mine that at full production will account for 30 percent of Mongolia’s economy.

“Rio is funding the project for daily, weekly, monthly operations but not for the big structural investment,” said deputy minister Ochirbat Chuluunbat at a forum in Ulan Bator today. “It will be a catastrophe if it stops.”
Illtud Harri, a Rio Tinto spokesman in London, declined to comment on whether the company was providing all of the funding for the $6.6 billion Oyu Tolgoi mine this month.

Rio controls 66 percent of the project through its unit Turquoise Hill Resources Ltd. (TRQ) and the Mongolian government the rest. The shareholders are squabbling even as the mine is expected to start commercial production by June. Turquoise Hill rallied 10 percent to C$7.25 in Toronto on Friday after news of the month extension.

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Mining Minnows Burning Cash Signal More Mergers Coming – by Liezel Hill (Bloomberg.com – March 3, 2013)

http://www.bloomberg.com/

Prospectors and mine developers, the lifeblood of the wider $1.5 trillion industry, are running low on cash as funding dries up, increasing the chances they’ll need to consider sales and mergers to survive.

So-called juniors have enough cash to last 5.7 months, according to the median multiple among 1,273 companies with a market value of no more than $500 million, data compiled by Bloomberg show. That’s 25 percent less than a year earlier, according to the data.

The situation facing the juniors will be a hot topic for the 30,000 geologists, promoters and investors expected to attend the Prospectors & Developers Association of Canada convention, the world’s biggest mining gathering, which started yesterday in Toronto.

Smaller companies probably will seek to merge, or they may “just cease to exist,” said Dan Barnholden, a Toronto-based investment banker at Cormark Securities Inc. “We’ve been counseling guys to manage their treasury very carefully because there really isn’t a lot of money out there,” Barnholden said last week in a telephone interview. “It’s sort of desperate times here now.”

Stock sales, one of the few options available to smaller companies to cover costs and advance projects, fell in 2012 for a third straight year, according to Bloomberg data. Canadian mining companies raised $726.8 million in equity and equity- linked financings this year, 45 percent less than the year- earlier period.

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Finland ranked as #1 for global mining investment—Fraser Institute Survey – by Dorothy Kosich (Mineweb.com – March 1, 2013)

http://www.mineweb.com/

742 mineral exploration and development companies surveyed by Vancouver’s Fraser Institute say Indonesia is the worst place to do business out of 96 global jurisdictions.

RENO (MINEWEB) – The mining and exploration companies who responded to 2012/2013 Fraser Institute’s Annual Survey of Mining Companies ranked Finland as the best place to do business, while Indonesia was deemed the worst place for mining and exploration companies.

Along with Finland, the top 10-ranked jurisdictions are Sweden, Alberta, New Brunswick, Wyoming, Ireland, Nevada, Yukon, and Norway. All were in the top 10 last year except for Utah and Norway.

The 10 least attractive jurisdictions for investment are (starting with the worst) Indonesia, Vietnam, DRC (Congo), Kyrgyzstan, Zimbabwe, Bolivia, Guatemala, Philippines, and Greece. All of these jurisdictions except DRC Congo, Greece and Zimbabwe were in the bottom 10 last year.

The jurisdiction deemed to have the best current mineral potential assuming current regulations and land use restrictions is Greenland, followed by Finland, Sweden, Nevada and Saskatchewan. The worst is Bolivia.

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Survival name of the game as miners gather [PDAC] – by Pav Jordan (Globe and Mail – March 4, 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.

Plagued by the worst outlook in recent memory, global miners are thinking about one thing more than any other as they gather for the industry’s largest annual gathering: survival.

The Prospectors and Developers Association of Canada (PDAC) convention this week in Toronto is the largest international gathering of its kind. As the first of the calendar year, it is closely watched for signs of what’s to come for the next 12 months, especially for the junior mining sector, the lifeblood of majors that rely on it to discover assets for them to develop.

“Only the strong will survive,” said Ioannis Tsitos, chief executive officer of Vancouver-based Eagle Mountain Gold Corp., which owns a small gold property in Guyana. “What’s happening now is part of natural selection.”

Metals producers have become accustomed in recent months to tough times, starting with ever-embattled share prices. Multibillion-dollar writedowns on assets touted just a few years ago in bold bets on growing global metals demand, add to the bleak outlook. Equally large cost overruns and massive asset divestitures by industry leaders show that the industry is in clear retrenchment.

The message was loud and clear at the the conference on Sunday, where prospectors Clayton and Sara Larche stood at the top of an escalator flogging mining claims the old-fashioned way.

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Hard-hit mining sector puts on brave face at annual conference – by Peter Koven (National Post – March 4, 2013)

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

TORONTO — Amid an extremely difficult period for the global mining industry, the Prospectors and Developers Association of Canada conference remains a source of cautious optimism for shell-shocked companies and investors.

The industry’s largest event, expected to draw more than 30,000 people, kicked off Sunday in Toronto. And while none of the speakers pretended that these are pleasant times for mining companies, they tried to remind everyone that some positive fundamentals are still in place.

“There’s still a long way to go in China’s urbanization story,” said Duncan Hobbs, a London-based analyst with Macquarie Group. He added that roughly 300 million Chinese people are expected to move to cities in the decades ahead, implying strong long-term demand for commodities.

But it doesn’t help mining companies right now. They are suffering from numerous wounds, some of which are self-inflicted. Senior companies have been forced to write down assets by tens of billions of dollars over the last year after they paid too much to acquire them. Cost inflation continues to be a huge industry concern, while metal prices are struggling amid an uncertain global economy.

The PDAC conference is mostly populated by junior companies, and they are doing much worse than the seniors. Raising capital has become almost impossible for smaller juniors, as investors have little-to-no interest in financing early-stage exploration.

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The Honourable Tony Clement Minister for FedNor PDAC [Ring of Fire] Speech March 3, 2013

(L to R) Ross Gallinger, Executive Director, Prospectors and Developers Association of Canada (PDAC); Tony Clement, President of the Treasury Board, FedNor Minister, Federal Ring of Fire Lead; Peter Kent, Minister of the Environment; Glen Nolan, President, Prospectors and Developers Association of Canada (PDAC)
(Photo by envisiondigitalphoto.com)

SPEECH TO THE PROSPECTORS AND DEVELOPERS ASSOCIATION OF CANADA (PDAC) International Convention, Trade Show and Investors Exchange (Toronto, Canada – March 3, 2013)

CHECK AGAINST DELIVERY

Like every region where mines have been developed across Canada and around the world, this
part of Northern Ontario is unique.Its marshy wetlands have been home to First Nations
for thousands of years. And their communities and their experience are unique to them.And
it is incumbent upon the mining industry to understand those circumstances, engage those
communities and be able to appreciate their perspective. (Federal Minister Tony Clement
– PDAC March 2013)

Thank you for that kind introduction and good evening. It’s a pleasure to join you here today at the start of Canada’s premier mining conference. In fact, this event is recognized right across the globe and for good reason.

With over 30,000 visitors expected to attend from 125 countries, the conference clearly demonstrates the importance of the sector to the global economy, but it also highlights Canada’s role as a world leader in mining innovation, technology and responsible environmental stewardship.

First, I wish to thank the organizers of the Prospectors and Developers Association of Canada for inviting me and for providing me this opportunity to speak with you this evening.

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Fantino talks foreign aid with mining industry – Kim Mackrael (Globe and Mail – March 2, 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.

OTTAWA — Canada’s foreign-aid agency is moving ahead on plans to work alongside the extractive industry, and International Co-operation Minister Julian Fantino will take the message directly to mining executives at a conference in Toronto this weekend.

In a sign that the Canadian International Development Agency views the industry as a key element of its push to deliver foreign aid in tandem with private sector activities abroad, Mr. Fantino will address a group on Saturday morning that is expected to include foreign ministers, non-governmental organizations and representatives of some of the biggest mining companies in Canada.

Speaking with The Globe and Mail on Friday, Mr. Fantino called the extractive industry “another area of strategic opportunity for us to key in on.” And he suggested Canada’s expertise in mining can help countries with mineral resources develop them in a more socially and economically responsible manner.

CIDA’s approach to mining has been controversial since Mr. Fantino’s predecessor, Bev Oda, announced in 2011 that the agency would finance three NGOs to run aid projects alongside Canadian mining companies in Burkina Faso, Peru and Ghana. The current projects focus on areas such as skills training and encouraging small-business development.

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Dented by aluminum, Rio Tinto aims to unload Iron Ore Co. – by Andy Hoffman, Boyd Erman and Pav Jordan (Globe and Mail – March 2, 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.

VANCOUVER AND TORONTO – More than five years after pulling off the largest takeover in Canadian corporate history, Rio Tinto PLC is still dealing with the pain.

The multinational miner never truly recovered from the massive debt load it took on to buy Alcan in 2007, paying $38.1-billion (U.S.) for the Montreal aluminum producer at the peak of the commodities market.

Burned by a bad bet on the prospects of the metal used to make pop cans, Rio has had to sell billions worth of mining assets to repair its balance sheet. In January, Tom Albanese, the chief executive officer responsible for the Alcan deal and about $14-billion in acquisition-related writedowns during his tenure, resigned and was replaced by the former head of Rio’s iron ore operations, Sam Walsh.

With aluminum prices still failing to recover as much as many of the other commodities Rio produces and with production costs for most operations continuing to increase, Rio and its new CEO are now putting more assets on the block, including the company’s Canadian iron ore operations in Labrador.

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Group takes [mining deaths] probe pitch north – by Carol Mulligan (Sudbury Star – March 4, 2013)

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

The Sudbury committee struck to lobby the province to conduct an inquiry into mining practices in Ontario will take its campaign on the road next month.

MINES (Mining Inquiry Needs Support) has been invited by United Steelworkers speak to its members in Timmins on March 24. Local 7850 members work for Goldcorp Porcupine and Hollinger mines.

Everyone’ Local 7850 The MINES committee formed after a United Steelworkers investigation into the June 8, 2011, deaths of two men at Vale’s Stobie Mine called for an inquiry to review an industry that hasn’t been under the microscope in 30 years.

Jason Chenier, 35, and Jordan Fram, 26, were killed while working at the 3,000-foot level of the century-old mine when they were overcome by a run of 350 tons of muck. The USW investigation found that excess water was a problem in the mine and that safety warnings by Chenier a day or two before the accident were not addressed.

Briana Fram, Jordan’s sister, is secretary of the committee chaired by her mother Wendy. MINES launched a postcard campaign last year to convince then Labour Minister Linda Jeffrey to order a mining inquiry.

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Get certainty into [northern Ontario] mining – Thunder Bay Chronicle-Journal Editorial (March 3, 2013)

Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

CITY, regional, Ontario and national officials are almost giddy over the prospects of mining development here in Northern Ontario. All levels of government are dealing with economic challenges that result in political challenges due to financial difficulties faced throughout society. Particularly in the North where opportunities for success are relatively limited, the prospect of a new mining boom has rightly got everyone thinking about the good times to come. Well, almost everyone.

If there is one thing that business doesn’t like it is uncertainty. In another time, mining interests would stake wilderness territory, test for minerals and, if the results were good, plan a mine. They got their permissions from the province and maybe dealt with Ottawa on environmental issues.

Today, First Nations are demanding a say in where and how mines are developed and how their communities can participate and profit in mining development. And so they should. This represents an unprecedented opportunity to lift First Nations out of poverty, providing employment and economic stability. But turning this opportunity into reality is proving most difficult.

There is no template to negotiate agreements among mining companies, First Nations and governments. In fact, First Nations don’t want one. Most band councils appear intent on making their own arrangements in their own time and many resent government trying to intervene to move parties toward agreements.

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Spirit of Schumacher still lingers – by Benjamin Aubé (Timmins Daily Press March 2, 2013)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – The landscape of Schumacher may have changed over the years, but the community’s vibrant spirit and heritage is being kept alive and well.

Like those of F. Scott Fitzgerald’s Dr. TJ Eckleburg in The Great Gatsby, legendary philanthropist Frederick Schumacher’s eyes still watch over the town that bears his name.

A party honouring 101 years of the community’s existence and heritage was held at the McIntyre Arena, the building where Schumacher’s portrait is mounted on the exterior. Friday, Mar. 1 was Mr. Schumacher Day, and the Schumacher Arts, Culture and Heritage Association (SACHA) celebrated in style.

“It’s a committee that’s been together for a year now,” said Rob Knox, a member of the SACHA committee. “Our focus has been the preservation of Schumacher arts, culture and architecture, and celebrating the citizenry of Schumacher and the diverse and wonderful history of this small mining community.

“We’ve undertaken a few various community events in an efforts to elevate the notion of Schumacher as a community and its history and its overall contribution to the city of Timmins and the Porcupine Mining Camp.”

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Vale and Hudbay: Mining under the microscope – Thompson Citizen Editorial (February 27, 2013)

The Thompson Citizen, which was established in June 1960, covers the City of Thompson and Nickel Belt Region of Northern Manitoba. The city has a population of about 13,500 residents while the regional population is more than 40,000. editor@thompsoncitizen.net

The fat is in the fire, as the old saying, dating back to at least the 16th century, goes. “I’m not surrendering my sovereignty for any more beads and trinkets. When mining companies come to our communities, the beads and trinkets of the past, jobs and training, that’s over,” aboriginal rights lawyer and academic Pam Palmater told about 100 people at an Idle No More – Northern Manitoba forum, co-sponsored by Churchill riding NDP MP Niki Ashton and the Thompson Neighbourhood Renewal Corporation (TNRC) at the USW Local 6166 Steel Centre Feb. 16. “We’re talking about sharing management ownership of the resource that belong to both treaty partners.”

The forum also featured speeches by NDP Minister of Infrastructure and Transportation Steve Ashton, and Clarence Pettersen, NDP MLA for Flin Flon. Palmater, a Mi’kmaq lawyer whose family originates from the Eel River Bar First Nation in northern New Brunswick, is an associate professor in the Department of Politics and Public Administration at Ryerson University in Toronto.

Palmater and Pettersen spoke of Pukatawagan Chief Arlen Dumas’ struggle with Hudbay over Lalor Mine near Snow Lake. Pettersen says while he supports Dumas and Idle No More – Northern Manitoba, he supports negotiations between Mathias Colomb Cree Nation and Hudbay over constructing, operating, and extracting resources from Lalor Mine at Snow Lake and does not support the self-styled “stop-work order” or any blockade, such as the one Jan. 28, of Lalor by Mathias Colomb Cree Nation or Idle No More – Northern Manitoba.

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Aboriginal excellence to be honoured at PDAC – by Lindsay Kelly (Northern Ontario Business – March 1, 2013)

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.

In the early days of the Klondike Gold Rush, Tagish prospector Skookum Jim was known for his perseverance and tenacity. The same attributes could easily be bestowed on Windigo Catering, which will receive an award named for the 19th-century miner at the Prospectors and Developers Association (PDAC) in March.

Windigo is the 2013 recipient of the PDAC’s Skookum Jim Award, which acknowledges Aboriginal achievement in the mining industry. It’s the first such accolade for the catering and janitorial service company based in Sioux Lookout, but likely won’t be the last.

In the last year, the company has continued to excel in its role providing catering and janitorial services at Goldcorp’s Musselwhite Mine northwest of Thunder Bay. Now the company is poised for growth, an exciting prospect, but one that’s slightly daunting, said Debbie Korobanik, general manager of Windigo’s parent company, Windigo Ventures General Partner.

“We’re just trying to keep the growth at a level where it’s still manageable,” Korobanik said. “Sometimes I worry about that. There’s lots going on.”

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Children Toil in India’s Mines, Despite Legal Ban – by Gardiner Harris (New York Times – February 25, 2013)

http://www.nytimes.com/

KHLIEHRIAT, India — After descending 70 feet on a wobbly bamboo staircase into a dank pit, the teenage miners ducked into a black hole about two feet high and crawled 100 yards through mud before starting their day digging coal.

They wore T-shirts, pajama-like pants and short rubber boots — not a hard hat or steel-toed boot in sight. They tied rags on their heads to hold small flashlights and stuffed their ears with cloth. And they spent the whole day staring death in the face.

Just two months before full implementation of a landmark 2010 law mandating that all Indian children between the ages of 6 and 14 be in school, some 28 million are working instead, according to Unicef. Child workers can be found everywhere — in shops, in kitchens, on farms, in factories and on construction sites. In the coming days Parliament may consider yet another law to ban child labor, but even activists say more laws, while welcome, may do little to solve one of India’s most intractable problems.

“We have very good laws in this country,” said Vandhana Kandhari, a child protection specialist at Unicef. “It’s our implementation that’s the problem.”

Poverty, corruption, decrepit schools and absentee teachers are among the causes, and there is no better illustration of the problem than the Dickensian “rathole” mines here in the state of Meghalaya.

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