June 13, 2013 – Republic of Mining

After 10 years of effort, Rio Tinto clips Eagle Project’s wings – by Dorothy Kosich (Mineweb.com – June 13, 2013)

June 13, 2013

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

The controversial Kennecott nickel-copper mine destined to usher in a new mining era and more jobs for Michigan’s economically hard hit Upper Peninsula is being sold.

RENO (MINEWEB) – After more than a decade spent studying, permitting and developing the first U.S. primary nickel mine to be built in years, Rio Tinto has decided to sell Kennecott’s Eagle Mine to Lundin Mining for US$325 million in cash.

Since Rio Tinto announced in 2010 that it would invest US$469 million in the development of the Eagle Mine, which was supposed to become the biggest nickel mine in the country, the $325 million-price tag at first appears to be a bargain for Lundin.

Nevertheless, in addition to the total acquisition price of $325 million, remaining investment of Lundin Mining for the balance of 2013 and 3014 to bring the Eagle Mine into production is estimated at $400 million.

Located northwest of Marquette, in the historic mining region of the Upper Peninsula of Michigan, Eagle was to be the first new mining operation to be built in Michigan in years. The “world class” underground nickel-copper mine was also supposed to boost the fortunes of an economically hard-hit region with 500 construction and 220 mining jobs. Rio Tinto had pledged to give 75% of those jobs to local residents.

Ernst & Young Press Release: Capital allocation risk threatens miners’ future growth Sydney, 12 June 2013

June 13, 2013

Click here for the PDF document: Business risks facing mining and metals 2013–2014

Capital allocation and access to capital have rocketed to the top of the business risk list for mining and metals companies globally, up from number eight in 2012, in Ernst & Young’s annual Business risks facing mining and metals 2013-2014 report released today.

Ernst & Young’s Global Mining and Metals Leader Mike Elliott says these “capital dilemmas” threaten the long-term growth prospects of the larger miners at one end of the sector, and the short-term survival of cash-strapped juniors at the other end.

Margin protection and productivity improvement (two, up from number four) and resource nationalism (three, down from one) round out the top three risks, while the threat of substitutes is a new entry in the rankings at number 10.

“The rising business risks that are top of mind with mining and metals CEOs and Boards today are being driven by the need to protect returns and manage the interests of varied and often competing stakeholders. This is in stark contrast to just 12-18 months ago when fast-tracking production was still top of the agenda and capacity constraints defined the key business risks,” says Elliott.

For larger miners, the rapid decline in commodity prices in 2012, rampant cost inflation and falling returns have created a mismatch between miners’ long-term investment horizons and the short-term return horizon of new yield-hungry shareholders in the sector.

More delays in the Ring of Fire mining project – Minister Michael Gravelle and Mining Analyst Stan Sudol (CBC News Sudbury/Morning North – June 13, 2013)

June 13, 2013

Cliffs Natural Resources has put the brakes on environmental assessments around it chromite project in the Ring of Fire mineral deposit. We have reaction from the Minister of Northern Development and Mines and an industry analyst Stan Sudol. For Morning North Radio Interview click here: http://www.cbc.ca/video/news/audioplayer.html?clipid=2391133725

Sudbury smelter plans hinge on Cliffs’ stalled chromite project – CBC News Sudbury (June 13, 2013)

June 13, 2013

http://www.cbc.ca/sudbury/

Cliffs Natural Resources VP says proposed smelter will be located in Sudbury, but issues need to be resolved first

The future of a ferrochrome smelter in Sudbury is in question after some grim news from Cliffs Natural Resources. The company announced Wednesday it is temporarily suspending the environmental assessment on its northwestern Ontario chromite project in the James Bay lowlands’ Ring of Fire.

Cliffs points to unfinished agreements with the province and unresolved land rights issues as two of the reasons for the delay. The vice president of Cliffs Natural Resources overseeing the project said he’s frustrated with the lack of progress on the chromite project, which directly affects plans for the smelter.

“When we get the momentum back we’ll be moving back again and the furnace will be located in Sudbury,” Bill Boor said.

“[But] none of that’s settled before we advance beyond these issues.”

Sudbury Mayor Marianne Matichuk said she’s not surprised Cliffs’ environmental assessment has been put on hold, but said she’s not worried about the impact this may have on the local economy or jobs.

“There’s other plans in place, there are other mines that are opening, there’s a lot of activity,” she said. “It’s the cycle of mining, that’s what mining’s all about.”

Canada signs on to tighter rules on companies’ foreign payments – by Paul Waldie, Brent Jang (Globe and Mail – June 13, 2013)

June 13, 2013

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.

LONDON and VANCOUVER — Canada is joining a list of countries pushing resource companies for more disclosure about payments to foreign governments. But there is a growing debate about how complex the global system will become, how measures will be implemented, and whether they will provide enough useful information.

International development organizations have been demanding greater disclosure of these payments for years, arguing it’s a way of fighting corruption in developing countries. They also hoped the information would offer insights into the actual contributions these companies make to the countries where they operate.

The U.S. and the European Union have already adopted measures requiring extractive firms to report taxes, royalties and other fees paid to foreign governments. The U.S. rules have only recently taken effect and the EU’s directive has yet to be fully implemented.

Prime Minister Stephen Harper announced Wednesday that Canada plans to develop similar reporting standards for Canadian mining and energy companies.

Cliffs delays Ring of Fire project – by Sebastien Perth (Sudbury Star – June 13, 2013)

June 13, 2013

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

Its ambitious US$3.4-billion plan to open a mine in northwestern Ontario and a smelter in Sudbury by the middle of the decade is in tatters, Cliffs Chromite Ontario Inc. announced Wednesday.

The company is temporarily suspending its environmental assessment activities in the Ring of Fire. With the delay comes the loss of close to 1,000 new jobs, including 400 to 500 at a chromite smelter that was to be built near Capreol.

Cliffs Chromite Ontario — a subsidiary of Cleveland-based Cliffs Natural Resources — cited difficulty in resolving a number of issues with the provincial government for the delay.

Bill Boor, senior vice president of global ferroalloys for Cliffs, said the company has done as much as it can and it’s now up to the Ontario government to get the project going again.

“What we did this morning was acknowledge where we are in the process,” Boor said. “It’s a lot less a decision on the part of Cliffs than an acknowledgment that we’ve run out of things that we can do without resolutions of these items.” The Ring of Fire is a mineral-rich area located in the James Bay Lowlands of Northern Ontario that is now being extensively explored.

ONTC sale not certain – by Ron Grech (Timmins Daily Press – June 12, 2013)

June 13, 2013

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – The sale of Ontario Northland Transportation Commission is no longer a sure thing for the provincial Liberals. The party, which announced in March 2012 plans to divest the ONTC of its assets, has softened its position on the proposed sale.

“On the surface, it’s better than what we had in the past which was a fist in the face,” said Cochrane Mayor Peter Politis, who is also the Progressive Conservative candidate for Temiskaming-Cochrane. However, Politis remains sceptical.

“Where I’m a little fatigued as a mayor is listening to the government drop a few seeds of hope” and then proceeding to disappoint Northerners, said Politis. “If the party in power was serious about other options, why haven’t they stopped the divestment process while we explore these other options?

“They haven’t changed anything … Bids are still being accepted and analyzed. Sure the discussion is more cordial but the facts concerning divestment of the ONTC remain the same.” Politis told The Daily Press he has told the PC leadership, “As an elected member, I would push to stop the divestment of the ONTC immediately.”

However, MPP Gilles Bisson (NDP – Timmins-James Bay) suggested the Tories are more committed to forcing an election they think they can win, than trying to derail the sale of the ONTC.

Stainless steel sector to benefit in the long term – by Suzan Uzel (Yorkshire Post – June 13, 2013)

June 13, 2013

http://www.yorkshirepost.co.uk/

THE stainless steel industry is facing “a challenging short-term outlook” but demand will continue to grow in the long term, according to the CEO of Finnish steel giant Outokumpu Group.

Mika Seitovirta, who is also president of Outokumpu, the largest stainless steel maker in the world, said that global megatrends such as urbanisation, increased mobility and the demand for food, energy and water, will ensure continued growth of stainless steel consumption in the future.

“We are living as if there is another planet at our disposal,” Mr Seitovirta told an audience in South Yorkshire. “By 2030, even two planets won’t be enough to sustain our consumption.” But he said that “unfortunately the weak economic outlook will continue in Europe this year”.

He was speaking in Sheffield as part of a conference celebrating 100 years since Harry Brearley discovered stainless steel.

Earlier this year, Outokumpu, which employs 16,200 people, said it expects to reduce up to 2,500 jobs globally between 2013 and 2017 as part of efforts to reduce its operating expenses and return the company to profitability. Outokumpu said that its 2012 financial year was marked by “a weak market environment”, especially during the second half, leading to an underlying operational loss of 168 million euros.

Chromite mine plans on hold – by Carl Clutchey (Thunder Bay Chronicle-Journal – June 13, 2013)

June 13, 2013

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

Though Cliffs Natural Resources spooked a lot of Ring of Fire watchers Wednesday with its surprise announcement to temporarily stop work on an environmental assessment for the project, the company emphasized that it’s not pulling out.

“That is the furthest from our minds,” Cliffs global ferroalloys vice–president Bill Boor said Wednesday from the company’s Cleveland headquarters. “The bottom line is that we still very much believe in the project, and strategically, it remains as important to the company as it ever has been.”

Boor said 2017 remains the target for the chromite mine to begin production 500 kilometres northeast of Thunder Bay.
When a Sudbury smelter is factored in, the $3.3-billion project is slated to create about 1,200 direct jobs over a 30-year mine life.

Despite his assurances, some believed the project was in jeopardy Wednesday when Boor formally expressed the company’s frustration with the environmental assessment process.

He said the company has hit a roadblock on being able reach an agreement with the province about what the assessment’s terms of references should be.

Cliffs Natural Resources puts Ring of Fire project on hold, cites unresolved issues – by Peter Koven (June 13, 2013)

June 13, 2013

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

The message from Cliffs Natural Resources Inc. couldn’t be any clearer: until crucial issues involving Queen’s Park and First Nations groups are resolved, development of the Ring of Fire is not going anywhere.

The Cleveland-based miner halted all environmental assessment (EA) work on the mega-project on Wednesday, saying it cannot go any farther because of delays that are outside its control.

“It feels like the only thing we can do,” Bill Boor, Cliffs’ senior vice president of ferroalloys, said in an interview. “The company can only drive the project so far without other people keeping up with us.”

Cliffs wants to build the first of what could be many mines in the Ring of Fire, a vast resource in Ontario’s James Bay Lowlands that could hold as much as $50-billion of minerals. Both the provincial and federal governments have stressed that developing the region is a priority.

But Cliffs cited a number of unresolved issues that forced it to suspend environmental work. They include a delay in provincial approval for the EA process, an ongoing judicial challenge to the process by First Nations groups, unresolved land surface rights covering a proposed road to the project, and the lack of definitive agreements with the Ontario government.

U.S. miner suspends environmental assessment work in Ring of Fire — for now – by John Spears (Toronto Star – June 13, 2013)

June 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.

The giant Ring of Fire chromite mining venture in northwestern Ontario has bogged down, with one of the mine developers calling a halt to its environmental assessment.

Cliffs Natural Resources gave a laundry list of unresolved issues with both provincial and federal governments as the reason for suspending the work on the $3.3 billion project.

One mining industry insider said failure to nail down a long-term electricity price is one of the big stumbling blocks.
A smelter for the mine would be among the biggest users of electricity in the province. Cliffs has been planning a $1.85 billion processing facility in Capreol, near Sudbury.

Quebec and Manitoba, with abundant hydro-electric power, can both offer lower rates that Ontario for the smelter.
Another sticking point may be negotiating royalty payments to the province. Chromite is the ore used to produce chromium, a component used in stainless steel, and for plating items such as auto parts and appliances.

Bill Boor, senior vice president of Cliffs, said in an interview that project “is still a very important part of Cliffs’ strategy; that hasn’t changed.”