March 13, 2013 – Republic of Mining

Canada sees decades of gains from Ring of Fire deposit – by Euan Rocha and Janet Guttsman (Reuters Canada – March 12, 2013)

March 13, 2013

http://ca.reuters.com/

TORONTO (Reuters) – Developing the Ring of Fire chromite deposit in northern Ontario could bring decades of economic benefits for the region and the rest of Canada, the federal government’s point man on the challenging and ambitious venture said on Monday.

“We understand the importance of developing this series of projects. We see how important it is not only to the region, but its significance ultimately to the province and the country,” Tony Clement, the minister responsible for leading the push to develop the region, told Reuters.

“We are talking about a 100 years of mining activity that will spin-off jobs and economic activity for generations,” he said in an interview in the government’s Toronto offices with views over Lake Ontario.

The Ring of Fire deposit, in the far north of Ontario some 1,000 miles northwest of Toronto, contains rich mineral resources that could transform the area much as the oil sands have transformed Alberta. But developing the deposit is fraught with challenges, given concerns with access, infrastructure, land rights and environmental issues.

The region will also need huge investments in power and transportation infrastructure to develop the deposit, and Clement insisted that business, rather than the cash-strapped federal government would have to take the lead.

Iron Ore Price Crash Looms, Signalling An End To The Commodities Super Cycle – by Tim Treadgold (Forbes – March 13, 2013)

March 13, 2013

http://www.forbes.com/

Three of the world’s biggest mining companies are heading for a rough ride over the next few years as the once heavily-promoted commodities super-cycle enters its end game. The price of iron ore is tipped to be the next mineral to suffer a sharp price correction as demand for steel in China dries up.

The glut of iron ore developing in the international market is good news for steel consumers such as car makers and builders but will hit the profits of BHP Billiton, Rio Tinto and Vale, the big three of the seaborne iron ore trade.

Between them those three miners account for about 70% of the iron ore imported by China, which has been both a prolific producer and consumer of steel during its hectic construction boom of the past 20 years.

But, over the past few days a string of gloomy steel production and iron ore price forecasts has trimmed the share prices of all iron ore miners with the potential for worse to come if the price projections are accurate. This seems likely given recent falls in the prices of other industrial minerals, including copper, nickel and zinc.

Rio Tinto, the London-based miner with its best assets in Australia, will be hit hardest by the prospect of the iron ore price falling by up to 50% if gloomy economists outside the industry are right, or a slightly less damaging 33% if one of Rio Tinto’s own senior staff is correctly reading his crystal ball.

Opinion & Analysis: Commodity supercycle is resting between courses – by Michael Power (Business Day Live – March 13, 2013)

March 13, 2013

http://www.bdlive.co.za/

Michael Power is a strategist with Investec Asset Management. This article was first published in China Daily.

IN THE world of commodities, the past couple of years should be viewed as an abrasive palate-cleanser between the first course of the supercycle — which ran from 2000 until 2008 — and the main course that is now being prepared.

To understand why, one first needs to re-examine the specifics of China’s recent nominal dollar growth in gross domestic product (GDP) — an extraordinary compound annual growth rate of 18.5% over the past decade. Even now, China’s nominal dollar GDP — that pool of demand that matters most to business — is still growing by about 13% a year.

One also needs to develop a proper understanding of the sheer scale of the compounding effect that is now happening on China’s ever-increasing economic base.

This means not being hypnotised by the annual growth rate, but rather focusing on the sheer quantum of new Chinese dollar demand for commodities that is likely to be created in each successive year over the coming decade. Last year, China added an Australia to its economy; by 2020, it could be adding a Germany every year.

First Quantum believes hostile bid for Inmet likely to succeed – by Henry Lazenby (MiningWeekly.com – March 13, 2013)

March 13, 2013

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

TORONTO (miningweekly.com) – Base-metals miner First Quantum Minerals on Tuesday said it expected to close its C$5.1-billion hostile takeover bid for Inmet Mining on March 21, after unveiling Inmet shareholders had tendered about 61.45% of the company’s outstanding shares to the offer as on Monday at 23:59 Eastern Daylight Time (EDT).

First Quantum on Tuesday changed the cash-and-stock offer to allow the minimum tender condition to be satisfied when more than 50% of the outstanding Inmet shares (on a fully diluted basis) had been validly deposited, before the newly extended expiry time of the offer closed at 23:59 EDT on March 21.

“We are delighted with the overwhelming support that Inmet shareholders have shown for our offer. We have varied our offer such that the minimum tender condition will now be satisfied if more than 50% of the Inmet shares have been tendered at the revised expiry time of the offer.

“Accordingly, with all regulatory approvals already received, it is our expectation that we will be in a position to complete the offer and begin taking up and paying for shares shortly, following the expiry of the offer on March 21,” First Quantum chairperson and CEO Philip Pascall said.

Death of Commodities Super-Cycle? Not Quite – by Ansuya Harjani (CNBC Asia – January 25, 2013)

March 13, 2013

http://www.cnbc.com/

The slowdown in the world’s largest economies last year, particularly in China, led to warnings that the end of the commodities super-cycle was near, as prices of key resources plummeted.

However, a flood of government stimulus unveiled in recent months has reversed that trend, prompting one expert to say the commodities bull run that began in 2002 is here to stay.

“(The super cycle) is still intact. The combination of the economic recovery, especially with China powering ahead, and continuing support from central banks…It’s going to be a good year for commodities,” Eugen Weinberg, global head of commodities research at Commerzbank told CNBC on Friday, pointing to the Bank of Japan’s commitment to open-ended easing this week.

Junior Focus – Horizonte developing major nickel project in Brazil – by Lawrence Williams (Mineweb.com – March 13, 2013)

March 13, 2013

http://www.mineweb.com/

Nickel junior Horizonte Minerals is defining a significant lateritic nickel project in Brazil’s Carajás area where there is great local infrastructure and very low power costs.

LONDON (MINEWEB) – There are hundreds of gold junior explorers – many of them in deep trouble at the moment – but if nickel is your thing then there aren’t many serious junior players in the nickel sector, not least juniors with a great resource in terms of tonnage and grade in an area surrounded by successful nickel operators with currently profitable projects, good infrastructure and a market on their doorstep.

One that does tick these boxes is AIM and TSX main board quoted Horizonte Minerals which is concentrating its efforts on its Araguaia nickel project in Brazil’s Carajás region in Pará state– a deposit which it describes as a world leading asset in terms of size and grade – but it would say that wouldn’t it!

However Horizonte does have the figures to, at least partially, back this claim up, if not the money to develop it, although it has sufficient capital (around US$9 million in cash) to keep it going through its next stage of producing a Prefeasibility study on the back of a recent encouraging Preliminary Economic Assessment (PEA), and some good backing – notably Teck, which owns just short of 42%.

The Araguaia deposit is a saprolitic nickel laterite located in the same area as Vale’s Onça Puma nickel mine as well as some other significant nickel projects including Xstrata’s Serra do Tapa only 60 km away.

NEWS RELEASE: Unigold Strengthens Executive Team

March 13, 2013

March 12, 2013 15:28 ET

TORONTO, ONTARIO–(Marketwire – March 12, 2013) – Unigold Inc. (“Unigold” or the “Company”) (TSX VENTURE:UGD) is pleased to announce Wes Hanson, P.Geo., has joined the Company as Chief Operating Officer and Technical Director. Mr. Hanson is a Professional Geologist with over 30 years’ experience devoted towards the exploration and development of both precious metals and base metals deposits.

Mr. Hanson’s experience includes regional exploration, resource definition drilling and resource estimation, engineering design and cost estimation (first principles), mine and plant site development supervision, surface and underground mine, mill and maintenance supervision and executive management. Mr. Hanson brings technical, operational and corporate management experience to the Company and will be instrumental our initial NI 43-101 compliant mineral resource and focusing on advancing metallurgical studies and exploration to make new discoveries at Neita.

“We are delighted that Wes has joined Unigold,” commented Andrew Cheatle, President and CEO. “He brings with him extensive technical and operational experience in the management of exploration. Wes will play an important role in advancing our exploration, definition and development activities as Unigold grows the value of our exploration assets. He will be focused on delivering our initial NI 43-101 compliant mineral resource and successfully establishing a strong project pipeline from the many areas of gold, copper and zinc anomalies identified over the entire 22,600 Ha Neita property.”

Chief sets out demands for Rae to negotiate – by Jody Porter (CBC News Thunder Bay – March 12, 2013)

March 13, 2013

http://www.cbc.ca/thunderbay/

Interim Liberal leader Bob Rae considers representing First Nations in mining talks

The Chief of Neskantaga First Nation is already outlining what he wants Bob Rae to negotiate, even though the interim Liberal leader hasn’t officially declared he’s taking the job of representing northern Ontario First Nations in the Ring of Fire.

Chief Peter Moonias said he wants Rae’s help to convince the province of Ontario to respect the treaty rights of First Nations that will be affected by the massive mining development, 500 km northeast of Thunder Bay.

He added he wants to make sure his community isn’t any worse off than it is now, especially after the mine is built. There is no safe drinking water in Neskantaga, and a severe shortage of housing on the reserve, but people are able to rely on the land to hunt and fish and provide for their basic needs.

“We’re asking for a standard of living as good as anywhere in Ontario,” Moonias said. “Because [when the mine comes] we’re going to lose our way of life and we’re going to have to adjust to a new way of life.”

Moonias is among nine chiefs from the Matawa First Nations who have tapped Rae as their choice for lead negotiator if they can convince the province to engage in talks before the mining development proceeds.

BHP Billiton faces corruption probe over Beijing Olympics – by Sonali Paul and Lucy Hornby (Reuters Canada – March 13, 2013)

March 13, 2013

http://ca.reuters.com/

MELBOURNE/BEIJING (Reuters) – The U.S. government is investigating top global miner BHP Billiton Ltd for possible corrupt practices, the company confirmed, after media reports said it was being probed for its sponsorship of the 2008 Beijing Olympics.

Australia’s Fairfax Media reported that the U.S. Department of Justice and the Australian Federal Police (AFP) were investigating allegations that BHP provided inducements, hospitality and gifts to Chinese and other foreign officials.

The U.S. Justice Department told Fairfax, in response to a freedom of information request, it was conducting “law enforcement proceedings” involving BHP, which supplied the materials for gold, silver and bronze medals used in Beijing. The Department of Justice declined to comment after U.S. office hours on Tuesday.

Australian police confirmed they had been working with foreign counterparts and local regulators on Australian aspects of the U.S. investigation, without providing further details.

BHP said it had been cooperating with “relevant authorities”, and in response to media queries said it believed it had complied with all applicable laws in regards to its Olympics sponsorship.

“BHP Billiton is fully committed to operating with integrity and the Group’s policies specifically prohibit engaging in bribery in all its forms,” BHP said in an emailed statement.

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

March 13, 2013

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/

WYOMING THE GIANT COAL PRODUCER

For most of its history the most important economic activity of the state of Wyoming has been farming and ranching, although coal was first discovered in the early 1800s and the first coal mined in 1859. Anthracite was the main coal product for many years. The coal seams of Wyoming, including those of the Powder River Basin, were formed from huge peat bogs that over millions of years have been compressed and altered to become coal. The first commercial mines in the state established in 1868 were at Carbon near Medicine Bow and nearby Rock Springs.

These were owned by Wyoming Coal and Mining which was taken over in 1874 by Union Pacific Railroad which already controlled the company as well as transporting the coal. By the turn of the century the mines had closed but not before severe labour disputes had led, as seems always the way in the coal mining industry, to tragedy. This came in the form of the 1885 massacre of low-wage Chinese miners by white miners at Rock Springs following a wages dispute with Union Pacific.

First Quantum takeover of Inmet crosses finish line Pav Jordan (Globe and Mail – March 13, 2013)

March 13, 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.

First Quantum Minerals Ltd. has gained control of Inmet Mining Corp. after a drawn-out hostile bid, charting a course to the major leagues of copper mining as it takes on the massive Cobre Panama project.

Vancouver-based First Quantum said on Tuesday that holders of just over 61 per cent of Inmet stock had tendered to the $5.1-billion cash-and-stock bid. First Quantum also lowered the minimum threshold for acceptance to 50 per cent and extended the deadline another 10 days.

In winning Inmet, First Quantum will get Cobre Panama, one of the world’s largest undeveloped copper projects. When it is up and running some time in 2016, the project will add around 300,000 tonnes a year of copper production for the next 40 years.

The First Quantum deal could in theory still be scuppered by a surprise white knight bidder, but that is seen as increasingly unlikely at a time when the mining world is facing some of its grimmest times since the financial crisis of 2008. The anticlimactic outcome of the deal, with no higher offer made by First Quantum, reflects the sombre state of the mining industry, which is coping with lower prices, uncertain demand and a string of recent writedowns due to overpriced deals done in the industry’s high-flying days a few years ago.

As clouds gather in Quebec, tax talk adds to miners’ pain – by Sophier Cousineau (Globe and Mail – March 13, 2013)

March 13, 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.

MONTREAL — The Pointe-Noire iron ore pellet plant will go silent by next summer, and 165 workers will be out of a job. In the boom town of Sept-Îles, Cliffs Natural Resources Inc.’s decision to idle its plant shouldn’t be a tragedy. But it is an omen of the bad days to come for a Quebec mining industry that has been hit by setbacks.

A month ago, Canadian National Railway Co. shelved the feasibility study it undertook to build a $5-billion railway. The 800-kilometre line would have shipped iron ore from the new mines developed in the Labrador Trough to Sept-Îles and its deep water port on Quebec’s Lower North Shore. The uncertainty surrounding those mining projects has for now killed what was to become one of the province’s biggest infrastructure projects.

Uncertainty is also hanging over Iron Ore Co. of Canada and its Montreal headquarters. Its controlling shareholder, Rio Tinto PLC, is looking to sell its 58.7-per-cent stake in the country’s biggest iron ore producer to lighten the massive debt load it took on when it acquired the ultra-expensive Alcan.

It is against this grim backdrop that the Quebec government will hold a forum on Friday to discuss how to change the province’s mining regime. The Parti Québécois feels that Quebeckers have historically gotten a raw deal – and few people outside the mining industry would dispute this.

Collapse of oilsands boom will scramble Canadian economy – by Earle Gray (Toronto Star – March 13, 2012)

March 13, 2013

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.

Earle Gray is the former editor of Oilweek magazine and author of seven books about Canada’s petroleum industry.

Slower growth in world oil demand, increasing energy efficiency, alternative fuels and possible caps on carbon dioxide emissions will negatively affect Alberta’s oilsands.

Disregarding global warming and the risk of putting all your eggs in one basket, the Harper government has bet Canada’s economic future on the oilsands. But do we want to return to a time when Ontario consumers paid half a billion dollars to subsidize an imperilled Alberta oil industry, with two-thirds of its capacity shut in for lack of sales?

At risk are hundreds of billions of dollars in jobs, government and industry revenue, and capital investment. Essential to diminishing hopes for an oilsands bonanza are three proposed pipelines, costing $17 billion, to move oil to the U.S. Gulf Coast and to the West Coast for tanker shipment to China. There is no certainty they will be built — even assuming government authorizations.

A fortune from the oilsands was foreseen as recently as the middle of last year. In a study last June, the Canadian Association of Petroleum Producers (CAPP) predicted an increase in oilsands output from 1.8 million barrels per day to 5 million by 2030, plus another million barrels a day of conventional crude oil.

Corrosive accusation – by Brenda Kenny (National Post – March 13, 2013)

March 13, 2013

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

Brenda Kenny is chief executive of the Canadian Energy Pipeline Association.

No truth to claim bitumen more damaging to pipelines

There is no doubt that public persuasion and influence are powerful tools. But with that knowledge comes responsibility. Fact-based evidence and scientific studies are the way in which our association chooses to engage Canadians about pipeline matters.

However, there are others who prefer to create myths about our industry’s safety performance. It seems the intent, or the tactic, is to instill fear in the public and paint our industry as irresponsible operators of critical energy infrastructure.

For the past two years, there has been a manufactured myth circulating that diluted bitumen is corrosive in pipelines. It began with a report created by the New York-based Natural Resources Defense Council (NRDC). This report tried to “prove” diluted bitumen is more corrosive than conventional crude. We know that this is not true, but it is easy for the public to believe this myth when the report appears to be genuine and scientific. The reality is, many of the allegations in the NRDC report are completely false, including the one about diluted bitumen.

For over 60 years, pipelines have been safely transporting oil and gas products underground with very few incidents. Most of the time, people don’t even realize that they are operating beneath our feet.

Mulcair likes oil sands except when he doesn’t – by Matt Gurney (National Post – March 13, 2013)

March 13, 2013

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

“You’ll never hear me speaking against the development of the oil sands,” federal NDP leader Thomas Mulcair told the Toronto Star last year.

It’s a theme he returned to last month, telling the Calgary Chamber of Commerce that, “the NDP will be a partner with the development of energy resources … we will be there with you.”

And he means it. So long as the oil industry doesn’t want to actually extract any petroleum and then export it to foreign markets in exchange for billions of dollars. That, obviously, is totally unacceptable.

This bit of mixed messaging came to us during Mr. Mulcair’s trip this week to Washington, D.C. Addressing political and business leaders there on Tuesday, Mr. Mulcair slammed the Harper government’s environmental track record.

“[Americans] know that Canada is the only country that has withdrawn from Kyoto,” he said. “They know that the Conservatives can’t possibly meet their Copenhagen [greenhouse gas emission] targets precisely because of the oil sands. They have to stop playing people for fools.”