July 4, 2013 – Republic of Mining

Eviction notice adds to gloom in mining sector – by Martin Cash (Winnipeg Free Press – July 4, 2013)

July 4, 2013

http://www.winnipegfreepress.com/

These are not the best days to be in the mineral-exploration business in Manitoba.

Metal prices are low — gold prices are at their lowest level in 36 months; nickel, lowest in 48 months; copper, lowest in 30 months; and zinc, lowest in 18 months — investors’ appetite for risky (albeit tax-deductible) exploration plays is just about non-existent and starting this week in Manitoba, there is an additional one percentage point of sales tax on expensive equipment.

On top of that there is the potentially deal-breaking uncertainty over treaty land claims. One exploration company — Mega Precious Metals — that has been diligently working on a Manitoba gold property called Monument Bay for many years was surprised this week with an eviction notice from nearby Red Sucker Lake First Nation in northeast Manitoba.

In a news release, the band referred to the operation as “a mineral-exploration company operating illegally in Red Sucker Lake First Nation traditional territory.” But that same mineral-exploration company has been co-operating with the band for years and signed a memorandum of understanding (MOU) with Red Sucker Lake in 2010.

Manitoba First Nation evicts mineral-exploration company – by Staff (Winnipeg Free Press – July 2, 2013)

July 4, 2013

http://www.winnipegfreepress.com/

The Red Sucker Lake First Nation presented a stop-work order and eviction notice over the weekend to a mineral-exploration company that reserve officials say is operating illegally in its traditional territory.

Mega Precious Metals, a mineral-exploration company based in Thunder Bay, has been drilling and developing a potential gold mine for a few years at Monument Bay, about 60 kilometres northeast of Red Sucker Lake First Nation.

Red Sucker Lake is about 700 kilometres northeast of Winnipeg. A spokesman for the band said action was taken now because new permits were issued recently without appropriate consultation with the band.

“The permits and licences granted to Mega Precious Metals Inc. are unlawful due to the absence of adequate consultation and accommodation,” says a statement from the band.

A spokesman for the band said there has been no violence or aggressive action related to the eviction notice.

Export income dispute holds up Rio’s Oyu Tolgoi mine – Mongolia – by Terrence Edwards (Reuters India – July 4, 2013)

July 4, 2013

http://in.reuters.com/

ULAN BATOR, July 4 (Reuters) – The Mongolian government and Rio Tinto have not yet reached an agreement on whether the miner can repatriate earnings from the $6.2 billion Oyu Tolgoi mine, the country’s mining minister said, delaying first copper shipments.

The dispute could heighten investor concerns about the risks of mining in Mongolia and threaten Rio Tinto’s plans to grow its copper portfolio to ease dependence on iron ore.

Metals traders have been closely watching whether Rio gets official approval to export concentrate from Oyu Tolgoi amid a shortfall in shipments from the Grasberg mine in Indonesia, run by Freeport McMoRan Copper & Gold. The unlocking of ore shipments would increase supply in top copper consumer China and boost treatment and refining charges charged by smelters there.

Exports from the copper and gold mine were initially due to start on June 14, but were then postponed to June 21, before the Mongolian government told Rio to delay them again without setting a date. Uncertainty over the reasons for the delay has slashed the share price of other Mongolian miners.

Editorial: This is what a washout looks like [Barrick Gold] – by John Cumming (Northern Miner – July 3, 2013)

July 4, 2013

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. Editor John Cumming MSc (Geol) is one of the country’s most well respected mining journalists. jcumming@northernminer.com

Barrick Gold is the world’s leading gold company, and its Pascua-Lama gold-silver megaproject under construction on the Chilean-Argentine border is its leading development project. And so the gold industry watches in dismay as the major grapples with the project’s ballooning capital costs and construction delays, slumping gold prices, writedowns, job cuts and a pummelled share price.

At the time of writing, Barrick’s shares trade for only $15.29 — or US$14.69 — off 56% this year alone, and 74% since their peak in April 2011. Here again, Barrick is the leader of the gold sector that has seen overall share price declines around 50% this year.

Barrick has also led in terms of corporate-suite excess, with the pink-slipped minions at head office bearing the brunt. Fired CEO Aaron Regent was paid US$12 million last year, mostly as severance, while the whole management team pulled in an astonishing US$57 million, up 148% year-over-year. In April, Barrick shareholders finally had enough, and there was heated opposition to the $17-million pay package offered to incoming co-chairman John Thornton, a former president of Goldman Sachs.

Barrick may yet prove to be a leader in accumulating unwieldy debt and tabling enormous writedowns as Pascua-Lama moves forward. At the end of the first quarter, Barrick had US$2.3 billion in cash and US$15 billion in debt.

Negotiators in Ring of Fire make big bucks – CBC News Thunder Bay (July 4, 2013)

July 4, 2013

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

Better governemnt policy would eliminate need for negotiators, First Nation policy analyst says

Ontario taxpayers are footing a bill in the hundreds of thousands of dollars for negotiations on the future development of the Ring of Fire region, and one First Nations policy analyst sees it as money poorly spent.

Former Supreme Court Justice Frank Iacobucci and former Liberal MP Bob Rae are being paid by the province to work out a mining deal between the province and nine First Nations, closest to the mineral reserves. But First Nations policy analyst Russell Diabo said that expense could be spared if governments imposed mining rules that respect treaty rights.

“So there are ways to streamline it if the political will is there. But often the economic interests are so great that they want to subjugate First Nations interests and make it complicated where they can,” Diabo said

The government hopes to see billions of dollars in investment in the mineral-rich area, investment it hopes will also benefit First Nations in the area.

NEWS RELEASE: Vale obtains installation license for [Brazil iron ore project Carajás] S11D – (July/03/2013)

July 4, 2013

http://www.vale.com/en/Pages/default.aspx

Vale informs that it has obtained the installation environmental license (LI) to the iron ore project Carajás S11D, the highest grade and lowest cost world-class project in the industry. With the issuance of the LI, Vale’s Board of Directors approved the complete S11D program, comprised of investments in the mine, processing plant, railway capacity and port.

The LI was issued by Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis (IBAMA) and is part of the project’s second phase of licensing, which authorizes the plant construction. S11D is the largest project in Vale’s history and also in the iron ore industry, being a major lever for value creation, production capacity growth and for maintaining Vale’s undisputed leadership in the global market in terms of volume, cost and quality. A high value-adding project.

The total capex for S11D is US$ 19.671 billion, estimated at a 2.00 BRL/USD exchange rate, encompassing: the development of mine and processing plant (US$ 8.089 billion) and logistics (US$ 11.582 billion).

The project has a nominal capacity of 90 million metric tons per year (Mtpy) of iron ore with proven and proved reserves of 4.240 billion metric tons with an average ferrous content of 66.7%, low impurities and estimated cash cost (mine, plant, railway and port after royalties) of US$ 15.00 per metric ton (at a 2.00 BRL per USD exchange rate). S11D is expected to start-up in 2H16 and to deliver full capacity production in the 2018 calendar year.

Chinese demand to drive African iron-ore projects – by Natalie Greve (MiningWeekly.com – July 4, 2013)

July 4, 2013

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

An increasing dependency on iron-ore imports by China would present substantial opportunity for the intensified development of African iron-ore projects, the MSA Group geology operations manager Brendan Clarke said at the Geological Society of South Africa’s GeoForum conference on Thursday.

China’s iron-ore import ratio was set to rise from 70% of total consumption to 85%, as local grades declined and the costs associated with the mining and beneficiation of lower-grade ores increased.

While the Chinese government was a significant producer, Clarke believed that domestic producers offered an expensive, yet low-quality product. As a result, the country was the world’s largest importer of iron-ore, bringing in 58% of total production in 2012.

The bulk of these imports were from the Pilbara region of Australia, accounting for 45% of imports. South Africa accounted for 6% of the iron-ore China sourced from outside the country in 2012. “Aside from projects in South Africa, there is very little production elsewhere on the continent, as the mega-projects, such as Tonkolili, in Sierra Leone, Simandou, in Guinea, and Mbalam, in Cameroon, struggle to get over the line,” Clarke commented.

The Commodities Supercycle Is Over — Here’s What’s Next – by Ashley Kindergan (The Financialist/Business Insider – July 4, 2013)

July 4, 2013

http://www.businessinsider.com/

Sluggish global growth and a recent economic slowdown in resource-hungry China have hammered commodities markets this year, sending the price of everything from iron ore to copper tumbling. With those sharp reversals—as well as the Fed’s comments about tapering the size of the United States’ monetary stimulus—fresh in their minds, the 300 clients who convened last week at Credit Suisse’s New York headquarters for the bank’s third annual Commodities Day had plenty to talk about.

With few exceptions, the prices of commodities such as oil products, precious metals and industrial metals have been steadily rising over the past decade in what analysts have termed a “commodities supercycle.” That era is over, Credit Suisse experts say, and they expect prices to remain under pressure at least through the end of the year.

What’s more, the prices of individual commodities will no longer rise and fall together as they have for the last five years, Credit Suisse’s commodities team explained in a June 25 research note (“Commodities Forecast Update: The Return of Fundamentals”). As a result, investors and traders are going to have to focus on the specific supply and demand dynamics for individual commodities.

Copper and iron ore prices, for example, are expected to decline because supplies of both metals are becoming more plentiful at the same time that demand is declining.

Special Report: Why Brazil’s new middle class is seething – by Paulo Prada (Reuters U.S. – July 3, 2013)

July 4, 2013

http://www.reuters.com/

SÃO GONÇALO, Brazil (Reuters) – André Tamandaré isn’t supposed to be so angry. Over the past decade, the 33-year-old high-school dropout has moved into his own house, got a steady job and earned enough income with his longtime girlfriend, Rosimeire de Souza, to lead their two kids into Brazil’s fast-rising middle class.

Now a public health worker in a sprawling suburb east of Rio de Janeiro, Tamandaré is the kind of citizen that Brazil’s government thought was fulfilled. Instead, he is one of the more than one million people across Latin America’s biggest country who have hit the streets in a wave of mass protests.

Brazilians are railing against poor public schools, hospitals and transport. They are protesting soaring prices, crime and corruption. They are lambasting a political class so self-satisfied that it failed to see, much less address, the mounting dissatisfaction that led to the protests.

Combined, the concerns reflect growing unease among Brazil’s nearly 200 million people that the country’s long-promised leap into the developed world has fallen short once again.

Ring of Fire Negotiators Pay – CBC News Thunder Bay (July 4, 2013)

July 4, 2013

http://www.cbc.ca/superiormorning/ Morning radio show Superior Morning highlights what’s happening now in Thunder Bay and Northwestern Ontario. Rae vs Iacobucci. Those are the two high profile negotiators for the Ring of Fire mining development. But First Nation policy analyst Russel Diabo wonders who will really benifit. Hear what he has to say. Click here for radio …

Oil at new high raises Canadian oil sands prospects – by Jeffrey Jones (Globe and Mail – July 4, 2013)

July 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.

CALGARY — Oil prices surged to a 14-month high on Wednesday, triggered partly by unrest in Egypt, a factor that may pull some investor interest back into a Canadian energy sector that has been pressured for months by uncertainty over obstacles to increasing oil sands crude exports.

Canadian oil companies such as Suncor Energy Inc. and Imperial Oil Ltd., which produce and refine the fuel, may surprise investors with strong second-quarter results in the coming weeks as world crude prices climb and Canadian prices follow suit.

Strong oil prices have not translated into share gains recently, though that has less to do with oil market fundamentals than the way large investors are allocating their money, said Chris Feltin, analyst at Macquarie Capital Markets Canada Ltd.

“The equities haven’t really responded,” Mr. Feltin said. “The Canadian institutional investors are largely positioned where they want to be, but the U.S. and international investors have been walking away over the past couple of years because they saw increasing risk with Canada in terms of its ability to grow, with reduced visibility for getting any pipelines built, like [Keystone] XL and Northern Gateway.”

Gas pipeline struggle heats up [in Toronto] – by John Spears (Toronto Star – July 4, 2013)

July 4, 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.

A $623.7 million gas pipeline proposal in the GTA by Enbridge has sparked a struggle with rival pipeline firms and conservationists.

Conservationists and rival pipeline companies are challenging a $623.7 million proposal by Enbridge to build a big new natural gas pipeline in the Greater Toronto Area.

But the project’s critics have opposite objections. The conservationists say the pipeline is unnecessary, and will bring more environmentally questionable shale gas into Ontario. The rival pipelines, meanwhile, want to gain access to the Enbridge line precisely so they can bring more shale gas to customers in eastern Ontario and Quebec.

Enbridge’s plan for the new 47-kilometre pipeline through the GTA is now before the Ontario Energy Board. The company declined to talk about the proposal while it’s before the board. But in written material filed with the board, Enbridge says it needs more pipe because it has doubled the number of customers in the GTA over the past 20 years, when it last boosted its pipeline capacity in the region.

Battle over workplace drug tests just heating up following court ruling – by Ian Mulgrew (Vancouver Sun – July 3, 2013)

July 4, 2013

htp://www.vancouversun.com/index.html

More and more Canadians are being asked to prove, in the name of safety, that they are sober and not addled before clocking in at work. Earlier this month, the Supreme Court of Canada issued its first ruling on this incredible invasion of personal privacy and opened the discussion about when it can be allowed.

The high bench confirmed that drug-and-alcohol testing is lawful only under certain circumstances and it gave unions a means by which to challenge some of these policies by demanding better evidence of an existing problem.

In a case watched closely across the country, a majority of six justices on June 14 agreed random workplace drug tests at a New Brunswick pulp mill were unreasonable.

They said Irving Pulp and Paper Ltd. had no right to unilaterally impose mandatory, random alcohol breathalyzer testing. The court said an employer must establish a substance-abuse problem in a safety-sensitive work environment before such random screening can occur.

Mining boom sparks a clash over sex worker rights in small-town Australia – by Rod McGuirk (Associated Press/Huffington Post – June 28, 2013)

July 4, 2013

http://www.huffingtonpost.ca/

MORANBAH, Australia — A lone woman checking into a motel in the Australian mining town of Moranbah can expect some blunt questioning from the owners: “Are you a working girl?” Turning on a heel and storming away indignantly will be taken as an admission to prostitution.

“That sort of reaction is really positive proof as far as I’m concerned,” said Joan Hartley, the 67-year-old owner of the Drover’s Rest Motel and champion of motel operators who want to rid their businesses of sex workers cashing in on a mining boom.

Moranbah in the coal-rich Bowen Basin is part of the new landscape of Australian mining. Workers are increasingly leaving their homes and families for weeks on end to earn big money in distant mines in the Outback. It’s a workforce known as fly-in, fly-out, or FIFO (feye-foh) for short.

Where the FIFO miners go, the FIFO prostitutes follow. With miners earning 110,000 to 160,000 Australian dollars ($100,000 to $150,000) a year, many sex workers find working the remote mining towns more lucrative than the economically moribund cities in which they live, despite the travel costs and a recent slowdown that has seen the mothballing of some inefficient mines.

In La Rinconada, Peru, searching for beauty in ugliness [gold mining] – by Marie Arana (Washington Post – February 28, 2013)

July 4, 2013

http://www.washingtonpost.com/

Gold. The Aztecs killed for it. The Inca enslaved whole populations for it. Spain sent legions of marauding conquistadors up and down the Americas in a hallucinatory hunt, believing that gold was so abundant that chieftains rolled in it, washing away the glittering residue in their daily morning swims.

Down the centuries, the quest for El Dorado has held the South American continent in thrall, luring generations of fortune hunters to its far reaches, from 1st-century warlords to 21st-century adventurers. The earth beneath them has not disappointed. The geologic exuberance known as the Cordillera of the Andes has yielded a fount of treasure: the emeralds of Boyaca, the silver of Potosi, the gold of Cajamarca.

Indeed, when Pizarro conquered Cajamarca in 1532, he demanded a roomful of gold from the emperor Atahualpa; when it was produced, he chopped off the Inca’s head and established a new kind of Golden Rule. So it was that a mineral became king and a craze began.

Nowhere has Peru’s frenzy for gold been so fevered as in the mountains that surround Lake Titicaca. And nowhere has that fever been so intemperate as in a town tucked into a glacial aerie: La Rinconada, the highest human habitation in the world.