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Day: May 3, 2013

Glencore woos investors with promise of aggressive cuts – by Clara Ferreira-Marques (Reuters U.K. – May 3, 2013)

http://in.reuters.com/

(Reuters) LONDON – Glencore Xstrata (GLEN.L) told investors on Friday it would return excess cash, slash costs and might sell unwanted assets, raising expectations it would easily exceed planned synergies of $500 million from the deal that created the new group.

Unveiling a management team packed with veteran Glencore executives, the group promised to “cut bureaucracy and duplication”, vowing it would reduce administrative staff, cut divisional offices and underperforming projects to ensure success even at a time of cooling commodity prices.

Mining mega-deals have had a mixed record of success at best over the past decade, but a day after Glencore sealed the acquisition of Xstrata, the biggest ever takeover in the sector, its shares soared 6 percent, helped by a jump in the copper price. At current prices the group is worth $73 billion.

“If we can cut costs enough, get rid of these corporate head offices, we can cut a lot of fat out of the system. These synergies and overhead reductions – that figure can ensure this merger is a success,” CEO Ivan Glasenberg said in an interview.

“The target of $500 million is only the synergies on the trading operations. When we came up with that figure we had no idea what the overheads were in Xstrata … and it wasn’t a takeover at that time.”

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Cobalt firms on DRC ore uncertainty, tight supply – by Harpreet Bhal (Reuters U.S. – May 3, 2013)

http://www.reuters.com/

LONDON, May 3 (Reuters) – Uncertainty about the availability of cobalt concentrates from the Democratic Republic of Congo (DRC), the world’s largest ore producer, is pushing up prices for the metal at a time the market is already tight due to low supplies, traders said.

The price of high grade cobalt has risen steadily since the beginning of the year after hitting a 9-year low of $10 a pound in November and now stands at around $13.50/lb, up 30 percent from the lows and higher than $12/lb in March. .

Traders said the market was already tight, as producers were running low on stocks, when it emerged that the DRC planned to ban the export of raw materials of the metal used in batteries and in alloys for jet engines and gas turbines.

The African country in mid April banned exports of copper and cobalt concentrates to encourage miners to process and refine the red metal within its borders, according to an order from the Mines Ministry.

The order, seen by Reuters and dated April 5, provides companies 90 days to clear stocks before the ban is enforced, but a day later the governor of Katanga, Congo’s sole copper and cobalt mining province, said he would not enforce a new ban.

“Prices are nudging up due to the uncertainty and we’re seeing a bit of buying ahead of the ban coming into force in a market that is already tight,” said one physical trader.

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Ring of Fire missing [from Ontario budget speech]? – by Jeff Labine (tbnewswatch.com – May 3, 2013)

http://www.tbnewswatch.com/

The Ring of Fire was missing from this year’s provincial budget when it was presented to Queen’s Park, but Ontario’s mining minister says it hasn’t been forgotten.

The minority-led Liberal government revealed its $127-billion budget in Toronto Thursday. It’s the first budget to be tabled under the leadership of premier Kathleen Wynne. Having six main themes, Finance Minister Charles Sousa said the government sought to create a fair and prosperous Ontario.

But Sousa never mentioned the massive chromite deposit in the lower James Bay area, which is expected to bring further prosperity to the province’s North. MPP Michael Gravelle (Lib. Thunder Bay – Superior North) said the Ring of Fire is in the budget.

“We’re providing $5 million in enhanced funding to those First Nation communities closest to the Ring of Fire,” he said. “There’s no question that our commitment to the Ring of Fire is very strong. I’m pleased to see that there will be significant investments going towards related to the Ring of Fire. For many people, the future of the province’s economy will benefit with the North succeeding.”

Gravelle pointed out that the Ring of Fire has been repeatedly mentioned in previous budgets and in the throne speech. He called the budget fair and strong and said he was pleased to see the number of investments being made in the North.

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Northern Ontario is the next frontier [Ontario PC Policy for the North] – by Tim Hudak

Northern Ontario is the next frontier.

It is the expanding edge of Ontario’s economy, an area whose rich forest and mineral resources can fuel a reviving North American economy.Its colleges and universities provide leading research and technology training, and its aboriginal peoples are the cornerstone of Ontario’s history and a critical part of its culture. It’s a place where people know how to
work hard and make their own way.

And yet, northern Ontario is falling far short of its potential today. The Ring of Fire is the greatest mining discovery of a lifetime, but the project has gone nowhere. Our once-burgeoning forest industry has shrunk and mills have closed.

The entrepreneurial spirit that built the north has been crushed under the weight of government regulations and environmental rules that seem designed to stop development and keep industry away.

Northern Ontario is a unique part of our province, with greater distances, smaller communities, a harsher climate and a rugged land. Its people have a strong streak of independence, self-reliance and personal responsibility.

These Ontarians share a different kind of connection with the land, but increasingly their fate is being thrust upon them by a government that wants to impose a fantasy view of northern life. Politicians, bureaucrats and special-interest groups from the south have tried to turn this dynamic, natural area into a museum without jobs, hope or a future for the people who live there.

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Igniting Northern Ontario’s Economy – by Ontario PC Leader Tim Hudak (April 26, 2013)

This speech was given at the Northwestern Ontario Municipal Association (NOMA) on April 26, 2013 in Thunder Bay, Ontario.

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I want to start with a simple statement: Northern Ontario can do better. I’ve done about 100 town halls now, including several in the North.

And as I travel the province, people tell me things are tough. They ask: “Is this really the best Ontario can do?” I say to them, we can do better.

Ontario has everything we need to succeed. We have a hard-working and skilled workforce. Dedicated and driven entrepreneurs. Vast and valuable resources and fertile farmland the envy of the world over. We border the great North American markets – natural trading partners with millions of consumers.

We have all it takes to make our province the best place to find a good job, raise a family, start a business and see it grow. But to get started on the path to a revitalized Northern Ontario, we need to be honest about the depths of the problems we face across the entire province.

More than half a million people woke up this morning with no job to go to.We’ve lost 300,000 good manufacturing jobs – while at the same time adding 300,000 government workers to the bloated public sector payroll in Ontario.

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OMA NEWS RELEASE: Miners discover some gems in provincial budget

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

Some encouraging words for mining could be unearthed from the provincial budget “A Prosperous & Fair Ontario.” The first budget of the province’s Finance Minister Charles Sousa was presented yesterday at Queen’s Park.

One of the significant actions outlined in the document holds the potential to give mining companies a better opportunity to control electricity costs. “The government is moving forward on the planned extension of the Northern Industrial Electricity Rate (NIER) program, which assists Northern Ontario’s largest industrial electricity consumers – and key economic contributors – to reduce energy costs for large users, supporting their employees, families and communities and maintaining global competitiveness.”

“The program was first announced in March 2010 for a three-year period and the province is extending the NIER program by investing an additional $360 million over three years – starting in 2013-2014,” said the budget document. “Its three-year extension will continue to support growth and development in northern resource sectors such as forestry and mining.”

The Finance Minister also announced infrastructure investments of $35 billion over the next three years. These investments, which are to be in transportation, health care and education, will support 100,000 jobs each year. This included “a new dedicated fund to help small, rural and Northern municipalities address roads, bridges and other critical infrastructure.”

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Resource Rulers – required reading for mining execs – by Ellsworth Dickson (Resource World Magazine – May 2013)

http://www.resourceworld.com/

Ellsworth Dickson is the Editor-in-Chief of Resource World Magazine.

An excellent book recently written by Bill Gallagher entitled Resource Rulers details the rise of native empowerment in Canada and its effect on resource development. Gallagher was in a unique position to write the book as he is a lawyer, strategist, facilita- tor, energy regulator and treaty negotiator with 30 years experience in the area of gov- ernment, native and corporate relations. He attended and sometimes participated in a number of the events he describes.

The author did a meticulous job of assem- bling dozens of pertinent official documents from both the government and native side and provides a history of how Canadian First Nations peoples started with virtu- ally no power over what happened on their traditional lands, much of which was never ceded to Europeans, to the point where today they have won 179 court cases.

The reason so many cases ended up in court was not that First Nations peoples were overly litigious; it was the lack of or inadequate arrangements with the various provincial, territorial and federal govern- ments in dealing with their concerns over hydropower, petroleum, forestry, mineral projects as well as harvesting of maritime food resources.

The winning court cases were often based on treaties signed with England as far back as 1752 that stated the Crown had a fiduciary duty to permit First Nation peoples to hunt, fish and trade various resources on their traditional lands. In addition, First Nations should not suffer adverse effects of industrial development.

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UPDATE 2-Goldcorp profit drops more sharply than expected – by Julie Gordon (Reuters U.S. – May 2, 2013)

http://www.reuters.com/

TORONTO, May 2 (Reuters) – Miner Goldcorp Inc said on Thursday that its first-quarter profit dropped by a steeper-than-expected 35 percent as lower metal prices and higher costs outweighed a boost in gold sales.

Shares of the world’s largest gold miner by market capitalization fell 2.1 percent to C$28.46 on the Toronto Stock Exchange.

Even though gold prices have plunged recently, the Vancouver-based miner said it was still committed to spending $2.8 billion this year as it brings three new mines into production through 2015.

With those new mines in Canada and Argentina, Goldcorp plans to boost its output by about 50 percent by 2017. That bucks a trend among many of the top gold miners of scrapping new projects to return cash to shareholders.

“Our shareholders can count on continued discipline as we advance our growth strategy and focus on execution and prudent cost management at our mines and projects,” Chief Executive Officer Chuck Jeannes said in a statement.

While long-term fundamentals should support a strong gold price, Jeannes said the company had put a “contingency plan” in place to defer spending should market conditions warrant.

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Guatemala declares emergency in four towns to quell mining protests – by Sofia Menchu and Mike McDonald (Reuters U.S. – May 2, 2013)

http://www.reuters.com/

(Reuters) – Guatemala declared an emergency in four southeastern towns on Thursday, suspending citizens’ constitutional rights in an area where deadly protests over a proposed silver mine have erupted in recent weeks.

Guatemalan President Otto Perez announced the move in an effort to quell protests targeting the mine belonging to Canadian miner Tahoe Resources Inc. Two people have been killed in the demonstrations.

The company’s security guards shot and wounded six demonstrators on Saturday, said Mauricio Lopez, Guatemala’s security minister.

The next day, protesters, who say the Escobal silver mine near the town of San Rafael Las Flores will contaminate local water supplies, kidnapped 23 police officers, Lopez said. One police officer and a demonstrator were killed in a shootout on Monday when police went to free the hostages, said Lopez.

“I am not going to allow this to continue,” Perez told reporters. “We have conducted a six-month investigation in this area with the attorney general’s office for various criminal activities.” Police and military raided the four towns on Thursday, arresting 15 people suspected of kidnapping, weapons theft and destruction of private property.

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Little for [Ontario] north, MPPs – by PJ Wilson (North Bay Nugget – May 3, 2013)

http://www.nugget.ca/

Northern Ontario got short shrift in Thursday’s provincial budget, according to opposition MPPs in the region.

“Northern Ontario was only mentioned twice, and that was in passing,” Nipissing MPP Vic Fedeli said after the minority Liberal government unveiled its $127.6-billion spending plan for the next fiscal year.

Fedeli said even the much-heralded Ring of Fire mining project in Northwestern Ontario, prominently mentioned in the last provincial budget, has totally fallen out of sight. “That means, to us, that it is no longer a priority for the government.”

Fedeli said also absent from the budget was any mention of Ontario Northland Transportation Commission, which the province announced it was divesting in March, 2012. “That really surprised me because it leaves a $500-million hole in the budget,” Fedeli said.

Among provisions in the budget are a $260-million boost for home care health services, a $295-million plan to fight youth unemployment, a 15% auto insurance rate cut and assistance for people on welfare and disability.

The budget projects an $11.7-billion deficit.

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Australia billionaire spends big on nickel even as glut worries persist – by James Regan (Reuters U.S. – May 3, 2013)

http://www.reuters.com/

Billionaire Clive Palmer earmarks $1 bln to upgrade nickel refinery

SYDNEY, May 3 (Reuters) – Australian mining magnate Clive Palmer is joining Vale, Xstrata and other sector heavyweights pouring money into nickel despite a dire near-term outlook for demand, as they plough on with projects bought on the cheap or as part of corporate takeovers.

Hopeful that appetite will pick up as the global economy improves, they are reluctant to shed assets after investing billions. But that risks deepening a supply glut in the short term and piling more pressure on nickel prices, which have fallen around 13 percent so far this year and were the worst performer on the London Metal Exchange in 2012.

Palmer, a self-described eccentric who is building a replica of the Titanic, plans to spend a hefty $1 billion this year upgrading an ageing nickel refinery in Australia, battling to reduce production costs through steps such as revamping equipment and waste disposal operations.

“The $1 billion … will help make the refinery more efficient in a time of low nickel prices,” said Andrew Crook, a business adviser to Palmer. He declined to give details on operating costs as the Yabulu plant is privately owned. Xstrata Plc, Vale SA, First Quantum Minerals Ltd, China Metallurgical Corp, Sherritt International and Sumitomo Corp are among companies spending heavily to build new nickel mines and processing plants.

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Minister says Ring of Fire will be next oilsands – by Shawn Bell (Wawatay News – May 2, 2013)

http://wawataynews.ca/

The Ring of Fire mining development could be Canada’s next oil sands, says federal minister of FedNor Tony Clement.

Clement, who was appointed earlier this year as the federal government’s point man on the Ring of Fire, told the Huffington Post that the mining development will change northern Ontario for the better.

“It has the potential to transform what was hitherto a very poor, underdeveloped area of Ontario and give people who live there, particularly First Nations people, a chance for a decent life,” Clement said.

Clement, also Treasury Board president, said the Ring of Fire could eventually be worth $120 billion, including the smelter and additional economic activity tied to mining.

“You’re looking at $120 billion, right in line with the oil sands or some of these other major developments,” Clement said. Clement is not the first Conservative politician to compare the Ring of Fire to Alberta’s oil sands. Provincial Conservative leader Tim Hudak made similar claims in 2012 after visiting the mining area.

“In many ways, the Ring of Fire is Ontario’s oil sands – an enormous wealth beneath the earth that can break open a new frontier for job creation and investment in our province,” Hudak said in June 2012.

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In Indian mining town, the barons are back – by Rama Lakshmi (Washington Post – May 2, 2013)

http://www.washingtonpost.com/

Bellary, India — Until recently, this iron-ore mining district in southern India was a byword for cronyism and plunder. Now it represents redemption, though not everyone is cheering.

It was steel that made Bellary a boomtown; steel sought by China in the run-up to the 2008 Olympic Games. As demand soared, prices leapt 15-fold. Indians who cut corners and mined illegally while the government looked away got rich, including a modern-day robber baron named Gali Janardhana Reddy, whose 60-room mansion stood out among his spoils.

A government crackdown in 2011 shuttered the mines in the name of lawbreaking and corruption, and led to a prison sentence for Reddy, accused of treating Bellary like his private fiefdom.

But now other barons are back and unapologetically so. Their rebound reflects complicated attitudes about ambition, corruption and the law in an India where uneven enforcement of rules has fueled the rise of a new wealthy class in fields such as mining and real estate.

In a district election campaign underway here in the southern state of Karnataka, the candidates include a millionaire named Anil Lad, whose mining licenses were recently canceled for irregularities, as well as dozens of candidates fielded by a new political party launched by Somashekar Reddy, the mansion builder’s older brother.

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Uranium – poised for another boom? – by Lawrence Williams (Mineweb.com – May 1, 2013)

http://www.mineweb.com/

Uranium investment has proved to be a risky business, but the nuclear metal could again be poised for a substantial price rise as a projected supply deficit kicks in over the remainder of the decade.

LONDON (MINEWEB) – Only a short time ago it seems (five or six years actually) the uranium price was riding high, uranium explorers were springing up everywhere and uranium producer and explorer shares were among the strongest in the mining sector. The spot price soared to close on $140/lb in 2007, but then collapsed to the $40 or so level by early 2009 before making something of a recovery up to around $70/lb by early 2011, and seemed to be progressing upwards again with all kinds of predictions of huge growth in nuclear power leading to shortages ahead. Investors were beginning to climb in again – and then came Fukushima!

The earthquake and subsequent tsunami of March 11th 2011 resulted in a series of equipment failures, nuclear meltdowns and releases of radioactive materials. Wikipedia describes it as the largest nuclear disaster since Chernobyl in 1986 and only the second disaster (along with Chernobyl) to measure Level 7 on the International Nuclear Event Scale.

Indeed, much of the area around the plant remains uninhabitable due to high radioactivity levels, even now. However there have so far been no reported deaths due to radiation as a result, although long-term effects may change this. By way of comparison, it is thought that only 68 deaths have occurred to date as a direct result of the nuclear accident at Chernobyl, but again some longer term factors could raise this figure. In both cases population relocation will have been devastating for those who called the area around the respective plants home.

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Growth in mining exports predicted for Canada in 2013 – by Liz Cowan (Northern Ontario Business – May 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.

As the world economy recovers from the recent downturn, Canada is well positioned for growth, thanks to its abundance of resources and services that are in demand around the world.

That’s the word from Peter G. Hall, chief economist with Export Development Canada (EDC), who spoke to an April 30 lunchtime crowd during a visit to Sudbury, an event sponsored by Northern Ontario Business.

Canadian exports are expected to rise by eight per cent in 2013 and five per cent in 2014. The largest segment to see growth is metals and ores, followed by forestry products, due to a rise in U.S. housing starts.

With 600 projects worth $650 billion requiring 800,000 net new workers expected to come online in the next 10 years—figures supplied by the Ministry of Natural Resources—Ontario will experience a “phenomenal amount of growth,” Hall said.

He called the province’s metals and mining sector Canada’s “new export star,” suggesting Sudbury in particular can cash in on the largesse.

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