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Day: July 8, 2013

Fighting Mines in Wisconsin: A Radical New Way to Be Radical – by Mary Annette Pember (Indian Country Today Media Network – July 07, 2013)

http://indiancountrytodaymedianetwork.com/

A brand new tribe is emerging in Northern Wisconsin. Enrollment requirements for the Penokee tribe are stringent, according to Paul DeMain, co-founder of the Penokee Hills Harvest Camp—they require all members prove they are at least 70 percent water.

Water, the element that unifies all human life, is the binding force behind a surprising coalition of people and organizations near the Great Northern Divide in the Penokee Hills. Although many of these people have had opposing philosophies regarding economic development, they are united in their desire to ensure clean water. Public concern over the impact on the water and environment of a proposed 4.5 mile wide open-pit iron ore mine is creating a whole new tribe and new way to protest.

The fictitious, allegorical Penokee Tribe effectively includes all human beings since everyone needs water to survive. The Harvest Camp and inclusive nature of other groups protesting the mine underscores this binding fact. More than a simple protest by occupation, the residents and supporters of the camp demonstrate and include visitors in traditional plant gathering and preparation. The goal is to instill awareness of the natural resources of the area and how they would be affected by the mine.

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SocGen Bearish on Gold Sees Commodity Super Cycle Persisting – by Luzi Ann Javier (Bloomberg News – July 8, 2013)

http://www.bloomberg.com/

Gold will probably extend its decline through 2014, even as the commodity super cycle that’s brought longer-than-average rising prices may persist for a further two decades, according to Societe Generale SA.

Bullion may average $1,150 an ounce next year, said the head of commodities research, Michael Haigh, who in April correctly predicted the metal’s rout. That would be the lowest annual average since 2009, data compiled by Bloomberg show.

Gold is heading for its first yearly loss since 2000 as some investors lost faith in the metal as a store of value after the U.S. Federal Reserve said it may slow asset purchases this year if the economy continues to improve. While Societe Generale is bearish on bullion, it expects the decade-long bull market in commodities to extend for a further 15 to 20 years, driven by rapid urbanization and growing population in countries including China and India, said Haigh.

“It would take something dreadful to happen to make the super cycle suddenly end,” said Haigh, citing risks including a sharp slowdown in China, a scenario the bank doesn’t expect. “If you believe that the third super cycle is a function of population and urbanization, you’re looking at another 15 to 20 years. But it’s not going to be an upward price for all.”

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South Africa now only world’s sixth biggest gold producer – by (Mineweb.com/Reuters -July 8, 2013)

http://www.mineweb.com/

Thomson Reuters GFMS ranked South Africa sixth in global production in 2012, when it fell behind Peru and produced 177.8 tonnes of gold.

KROMDRAAI/JOHANNESBURG (REUTERS) – A hand drill lying in the hillside tunnel of a 19th-century South African gold mine testifies to the back-breaking labour by black miners that built what was once the world’s biggest bullion industry.

But even with basic tools and cheap labour, costs overran returns at the Kromdraai gold mine north of Johannesburg, which listed in London in 1893 and closed in 1914.

A century later, South African’s remaining gold mines, which still employ a mostly black and lowly paid workforce, look set to follow the same fate, as the sun sets on an industry that has produced a third of the bullion extracted from the planet.

Gold’s sliding price and surging costs are hitting an industry that laid the foundations for Africa’s largest economy but has been slowly dying for decades as ore grades decline and shafts reach depths of 4 kms, the world’s deepest.

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Commodities: Death of the ‘supercycle’ exaggerated – by Chris Flood (Financial Times – July 7, 2013)

http://www.ft.com/home/us

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An air of gloom appears to have descended on commodity markets. Gold, copper and iron ore prices have tumbled sharply from their post-financial crisis highs while returns to investors have proved disappointing.
The S&P GSCI, the most widely followed commodities benchmark, has delivered a -8.9 per cent total return over the two years to June 30.

Amid concerns about a possible slowdown in demand growth in China, the once popular theory that commodity markets would enjoy a “supercycle” of prolonged growth has been declared dead.

But interest among many institutional investors remains healthy, according to leading commodity managers. “We are seeing tremendous interest in commodities from a wide range of investors that want to enlarge their current holdings or to make new allocations,” says Jonathan Berland, managing director at Gresham, a specialist commodities manager with $16bn in assets.

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Quebec Disaster Spurs Rail-Versus-Pipelines Debate on Oil – by Jeremy van Loon & Gerrit De Vynck (Bloomberg News – July 8, 2013)

http://www.bloomberg.com/

A train disaster that killed five people in Quebec promises to touch off debate over the safety of shipping crude oil by rail or pipelines such as TransCanada Corp. (TRP)’s Keystone XL. As authorities began investigating the explosion of refinery-bound tank cars hauled by Montreal, Maine & Atlantic Railway Ltd., Quebec’s Green Party demanded stricter regulations and an energy industry association predicted tough scrutiny ahead for rail carriers.

“People think rail is costless until something like this happens,” said John Stephenson, fund manager with First Asset Investment Management Inc., said from Toronto, where he helps manage C$2.70 billion ($2.65 billion). “This is another data point that shows how much costlier and riskier rail is compared to pipelines and will probably move Canada closer to having an energy strategy.”

The July 6 accident forced the evacuation of 2,000 near the town of Lac-Megantic as Montreal, Maine & Atlantic moved oil to Irving Oil Corp.’s Saint John refinery in New Brunswick. The cargo was part of Canadian producers’ growing use of rail amid tight pipeline capacity.

“It’s been a real shame that a lot of the public and especially the activists have pushed the public to sway so much from pipelines which are likely much, much safer over time,” said Arthur Salzer, chief executive officer of Northland Wealth Management, which oversees C$225 million. “It is going to be something that’s going to weigh on the public’s mind.”

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Debate flares up over Northern Ontario’s Ring of Fire – by Josh Wingrove (Globe and Mail – July 6, 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.

THUNDER BAY, ONT. – This is familiar turf for Michael Gravelle. He is in his second stint as Ontario’s point man on northern mining, an increasingly high-stakes gig rooted in his own backyard.

His hometown of Thunder Bay is the gateway for the Ring of Fire, which he bills as the biggest Ontario mining project in a century. Governments at all levels are eyeing the potential of Northwestern Ontario’s vast untapped resource deposits, while mining services companies set up in the city hoping to catch a multibillion-dollar boom.

But slumping commodity prices, environmental questions and delays threaten the Ring of Fire, which lies about 500 kilometres north of Thunder Bay, and hopes of a windfall in the region. One company has halted its environmental review, while First Nations and Thunder Bay’s mayor say the province has been slow to act.

Cue Mr. Gravelle, the local MPP who, five months ago, was shuffled back to the job of Minister of Northern Development and Mines. He is optimistic despite setbacks and tensions.

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JIM ROGERS: Gold Mining Stocks Face Two Major Headwinds – by Mamta Badkar (Business Insider – July 7, 2013)

http://www.businessinsider.com/

As gold prices plunged, gold mining stocks have taken a beating too. We saw a brutal sell-off on Friday, and the Market Vectors Gold Miners ETF has been down 49.5% year-to-date.

In the second of our two-part interview with Jim Rogers, the commodities guru told us about the biggest headwinds for gold miners.

Also, he’s not convinced that the commodities supercycle has ended just yet. Business Insider: What’s next for gold miners and mining stocks? Jim Rogers: I don’t own gold mining stocks. There’s so many other easy ways for people to buy gold now that the miners have stiff competition. And there’s lots and lots of competitive situations in mining.

30 years ago if you wanted to buy gold, you were almost restricted to gold mining shares. That’s not true anymore. You can buy all sorts of coins. In those days only Krugerrands were available, 30 years ago. Nobody even made gold coins except Krugerrands. Now many countries have them. All sorts of ETFs, ETNs, futures, now there’s many ways to buy gold. So the miners have a serious competitive situation and of course there’s hundreds of them.

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Jim Rogers Correctly Predicted Gold Would Fall To $1200, And Now He Thinks It Could Go As Low As $900 – by Mamta Badkar (Business Insider – July 6, 2013)

http://www.businessinsider.com/

The price of gold peaked at just over $1,900 per ounce in the fall of 2011. And it was right around that time that commodities guru Jim Rogers began warning investors that the yellow metal could hit a low of $1,200 before the sell-off was over.

He was right. Gold prices entered a bear market (down 20% from its high) in April. And on June 27, they touched $1,200.

In a phone interview this week, Rogers explained to us how he arrived at the $1,200 figure. He also offers his outlook for gold as it continues its complicated bottoming process. Business Insider: Two years ago, you told us you could see gold going to $1,200. How did you arrive at that level?

Jim Rogers: I’m sure it was all based on intuition from Business Insider, but gold had been up at that point 11 – 12 years in a row which is an anomaly.

I don’t know any asset that’s gone up 12 years without a down year, and gold needed and deserved a correction. And, if it’s going to happen where would it go? $1,200 was between 35% – 40% and 35% – 40% reactions are commonplace, so that was the first number. I wish I could tell you I had a formula.

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CBC The House interviews Minister Tony Clement on the Ring of Fire challenges – (July 6, 2013)

http://www.cbc.ca/thehouse/ This week on The House, guest-host Susan Lunn interviews Tony Clement, the federal government’s minister responsible for the Ring of Fire. The proposed mining development in the massive Ring of Fire in Northern Ontario could, according its proponents, transform some of Canada’s most disadvantaged native communities. But an internal government briefing note obtained by …

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Unrest, and hope, for developing economies – by David Olive (Toronto Star – July 6, 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 alarming social unrest in emerging economies worldwide has a common thread: a sharp slowdown in once-torrid economic growth. The disturbances so graphically depicted in the media often appear to be ethnic or religious clashes or uprisings against autocracy. Those elements are playing a role. But the real driver of discontent in emerging economies is the failed promise of ever-increasing middle-class prosperity.

Most of the estimated 800 daily riots and public demonstrations in China result from factory layoffs. Striking miners in South Africa and street protests against the rule of Russia’s Vladimir Putin had become commonplace even before the recent weeks of rioting in São Paulo and Rio, and the military ouster this week of Egyptian president Mohammed Morsi in a Cairo stricken by blackouts, food shortages and rampant unemployment.

Hero status was once conferred by grateful new middle classes on Vladimir Putin; on Dilma Rousseff, successor to the immensely popular Brazilian president Luiz Inacio Lula da Silva; and on the Turkish president, Recep Tayyip Erdogan. They all are now struggling to regain their political credibility only a year or so since winning electoral mandates.

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Booms, busts and protests – normal life in emerging countries – by Ruchir Sharma (Financial Times – July 1, 2013)

http://www.ft.com/home/us

Unrest and slowdowns mark the end of a placid decade, writes Ruchir Sharma

Protests erupt in the formerly happy middle classes of Turkey and Brazil. A credit crisis threatens the Chinese economic juggernaut. Money flees the stocks, bonds and currencies of emerging nations. Is this the end of the emerging world miracle? Not exactly. This marks a return to the normal postwar cycle of recession and recovery, political unrest and calm, after a misleadingly placid decade.

This age is chaotic only in comparison to the brief “Goldilocks” era that began in 2003. Before that year, the emerging world’s share of global economic output had been stagnant for half a century and in decline for a decade, undermined by debt crises that struck from Thailand to Russia. By the late 1990s, these emerging nations were turning to a new generation of leaders, headed by the likes of Luiz Inácio Lula da Silva in Brazil and other giants, including Vladimir Putin in Russia and Recep Tayyip Erdogan in Turkey.

These leaders laid a stable economic foundation for the boom that began in 2003 after the US Federal Reserve and other central banks cut interest rates sharply to engineer a recovery from the technology bust. Much of the resulting easy money flowed into the emerging world, doubling the average annual gross domestic product growth rate to about 7.5 per cent from 3.6 per cent in the previous two decades.

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NEWS RELEASE: Glencore announces acquisition of 31,756,979 common shares of PolyMet and repayment of Bridge Loan

BAAR, Switzerland, July 5, 2013 /CNW/ – Glencore Xstrata plc announces that its indirect, wholly-owned subsidiary, Glencore AG (“Glencore”) has acquired 31,756,979 common shares of PolyMet Mining Corp. (“PolyMet”) at US$0.66 per common share pursuant to its basic subscription privilege and additional subscription privilege under PolyMet’s previously announced rights offering (“Rights Offering”), representing approximately 11.6% of PolyMet’s issued and outstanding common shares following the Rights Offering.

Following completion of the Rights Offering, Glencore holds 78,724,821 common shares representing approximately 28.6% of PolyMet’s issued and outstanding common shares. The Rights Offering triggered the customary anti-dilution provisions of PolyMet’s convertible debenture exchange warrant and purchase warrants held by Glencore. The numbers of common shares issuable to Glencore under the convertible debenture exchange warrant and purchase warrants have been adjusted to 24,083,366 and 6,458,001, respectively, which, if exercised, would result in Glencore holding 109,266,188 common shares representing approximately 35.8% of the outstanding common shares of PolyMet on a partially diluted basis.

In connection with the closing of the Rights Offering, PolyMet repaid the principal amount and all outstanding accrued and unpaid interest thereon of the previously announced US$20 million loan (“Bridge Loan”) advanced by Glencore to PolyMet on April 11, 2013.

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The huge potential of Congo potash – by Lawrence Williams (Mineweb.com – July 5, 2013)

http://www.mineweb.com/

The Republic of Congo (ROC), not to be confused with the neighbouring DRC, has the potential to develop into one of the world’s biggest potash miners over the next decade.

For those who are unaware there are two Congos. The former Belgian colony of the Democratic Republic of Congo – the DRC – is the one which is mostly in the news, with its huge and rich base and other industrial metals, gold and diamond resources. However, lying immediately to the west of much of the DRC on the northern side of the Congo river is the former French colony of the Republic of Congo (ROC – also known as Congo Brazzaville to more easily differentiate itself from its neighbour to the south.)

The ROC, like many African nations has had its own share of difficulties since it cast off its colonial yoke in 1960, but these have not been quite as violent as the problems which have continually beset the DRC over the years and there has been a relatively stable government in place under President Denis Sassou Nguessa since a bloody civil war in 1997. While certainly not exactly a model modern democracy, the ROC has been relatively stable for the past decade and President Sassou has won succeeding Presidential elections, although with suspiciously high percentage majorities!

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Equals go toe-to-toe over Ring of Fire – Thunder Bay Chronicle-Journal Editorial (July 5, 2013)

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

Let’s all say a prayer for former federal Liberal leader Bob Rae and former Supreme Court Justice Frank Iacobucci. These two individuals, so highly regarded in their respective fields, are stepping into the ring of negotiations to help clear a path for the development of the Ring of Fire.

It’s a colourful name applied to a huge swath of land some 500 kilometres northeast of Thunder Bay, which is home to massive deposits of minerals, and with it, wealth. Although prospectors and mining companies have been pecking away at this virgin region for many years, it has been the arrival of Cliffs Natural Resources and the discovery of a massive deposit of chromite that has really drawn attention to the bounty of the James Bay lowlands.

As the estimates of development and wealth started to soar, so did the interest of neighbouring aboriginal communities. The result has been a frustrating and sometimes dangerous confrontation between First Nations interests and those of the companies wishing to set up a base there.

It’s a simple set of questions when you unravel the rhetoric. Do exploration and mining companies and their investors and the Canadian public at large deserve a compensating share of the wealth the ground will yield?

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Northern Manitoba First Nation tells mining company to stop work and get out – by Ian Graham (Thompson Citizen – July 5, 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 chief, councillors and some citizens of Red Sucker Lake First Nation in northeast Manitoba near the Ontario border issued a stop work order and eviction notice at Mega Precious Metals Inc.’s Monument Bay Project mineral exploration camp 60 kilometres north of the community on July 1.

“This STOP WORK ORDER is issued because: Mega Precious Metals Inc. and affiliated companies have breached the Customary Laws of Mithkomaybin Thakaykun Ininiwak as represented by Red Sucker Lake First Nation by constructing, operating and extracting resources from Twin Lakes without the expressed permission of the owners Mithkomaybin Thakaykun Ininiwak as represented by Red Sucker Lake First Nation,” read the stop work order. “WARNING: The failure to stop work, the resumption of work without permission from the Mithkomaybin Thakaykun Ininiwak as represented by Red Sucker Lake First Nation is punishable by the Customary Laws of Red Sucker Lake First Nation.”

“On April 13, 2013, our people voted unanimously to halt all mineral exploration activity in our territory by whatever means possible,” said Red Sucker First Lake Nation Chief Les Harper in a press release. “It doesn’t matter how long it takes, we will abide by our people’s wish to enforce the Stop Work Order and the Eviction Notice.”

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