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Day: July 25, 2013

Congo Raises Tax on Copper, Cobalt Concentrates by Two-Thirds – by By Michael J. KavanaghJuly (Boomberg News – July 25, 2013)

http://www.businessweek.com/

The Democratic Republic of Congo’s Katanga province raised its tax on copper and cobalt concentrates to $100 per metric ton from $60 as the country prepares to ban their export at the end of this year.

“We needed a way to discourage companies from continuing to export concentrates, so we raised the tax,” Valery Mukasa, chief of staff for Mines Minster Martin Kabwelulu, said yesterday in an interview in Kinshasa, the capital.

The Central African nation is trying force mining companies to increase the value of their exports by fully processing minerals within the country’s borders, Mukasa said.

Congo was the world’s eighth-largest producer of copper and the biggest producer of cobalt last year, according to the U.S. Geological Survey. At least 13 companies exported concentrates of copper, cobalt, or a copper-cobalt concentrate last year, according to Katangan provincial Mines Ministry statistics.

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[Ring of Fire] Community input – by Jeff Labine (tbnewswatch.com – July 24, 2013)

http://www.tbnewswatch.com/

Eli Moonias says he believes the judicial review of the federal environmental assessment of the Ring of Fire won’t address all of his community’s concerns with the project.

The chief of Marten Falls First Nation as well as band councillors and members of his community were in the city to meet with officials with Cliffs. The meeting, which was held at the Prince Arthur Hotel Wednesday, is being hosted by the community and looking for direction on moving forward with the Ring of Fire project.

Moonias said they want to know how to approach the provincial environmental assessment. “What we’re trying to do is come up with a process that will work for both Ontario and the industry as well as our communities,” he said. “There are two processes; one is the (Canadian Environmental Assessment), which is before the courts, not the provincial one. The provincial one is being organized as we speak.

“We’re trying to get the process underway so that it will address our issues, which won’t be addressed in the CEA.” Earlier this year, Cliffs suspended its environmental assessment activities in the Ring of Fire.

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UPDATE 2-Teck profit falls on lower prices, delays new mines – by Julie Gordon and Allison Martell (Reuters India – July 25, 2013)

http://in.reuters.com/

(Reuters) – Teck Resources Ltd on Thursday reported a sharp drop in second-quarter earnings on lower copper and coal prices, and cut its capital spending plan through 2014, delaying new mining projects.

The company, Canada’s largest diversified miner, is slowing the restarting of its Quintette coal mine in British Columbia until the steelmaking coal market recovers, and it delayed development of its Quebrada Blanca Phase 2 copper expansion in Chile.

“I think it is the right move,” said Garrett Nelson, mining analyst at BB&T Capital Markets, on the Quebrada Blanca delay. “That was going to be a significant drain on free cash flow over the next few years.”

Shares rose 4 percent to C$24.64 on the Toronto Stock Exchange.

A feasibility study last year pegged the project’s capital cost at $5.6 billion, with Teck’s share at $4.8 billion. It had planned to complete a study on its social and environmental impact by the end of the second quarter, but now does not expect to finish before the fourth quarter of 2014.

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POSCO’s global expansion plan hits India roadblock – by Hyunjoo Jin (Reuters India – July 25, 2013)

http://in.reuters.com/

SEOUL – (Reuters) – Some investors in South Korean steelmaker POSCO are starting to sour on a long-delayed $12 billion project for a steel mill in Odisha that was once hailed as a profit driver.

The investment is part of a global expansion spree led by POSCO Group Chairman and Chief Executive Chung Joon-yang, a nearly decade-long strategy that was intended to capitalise on rapid emerging economy growth and help reduce the company’s reliance on its domestic market.

But a series of acquisitions left POSCO with a debt burden that has more than doubled over the past three years, while slowing growth in major markets such as China has hurt steel prices and margins. Last week, the steelmaker said it will bow out of a $5.3 billion steel mill development in Karnataka.

“The steel market is not in good shape, and we share investors’ concerns about the overall market conditions,” a POSCO executive told Reuters, speaking on condition of anonymity because he was not authorised to talk to the media. “The Odisha investment would be a burden to us.”

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Toronto Bankers Feel Pain From Mining Slowdown: Corporate Canada -by Liezel Hill and Doug Alexander (Bloomberg News – July 25, 2013)

http://www.businessweek.com/

The downturn in the mining industry is beginning to ripple through brokerage firms and investment banks in Canada.

One small brokerage firm, Fraser Mackenzie Ltd., closed earlier this year. Casimir Capital Ltd., a closely held investment bank, has cut jobs on its mining team and is shifting its focus to energy companies.

Bill Vlaad, a financial services recruiter, says requests to find bankers to work with mining and natural resources companies are drying up. Those searches now represent less than 10 percent of his business, down from half of his work three years ago. Mark Morabito, chairman of Canadian mining company Alderon Iron Ore Corp. (ADV), says he’s getting a steady stream of e-mails from bankers who are getting fired.

“I’m now dealing with the top guys, the global heads of mining, because the guys in between are all gone,” Morabito said in an interview. “Toronto is just a dead zone.”

Though the job cuts have been relatively small so far, many in the finance industry expect a bigger wave of reductions as well as consolidation, especially among boutique financial firms.

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As demand for resources moderates, the Canada-China ‘honeymoon is over’ – by Brenda Bouw (Globe and Mail – July 25, 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.

China’s leaders are positioning the country for a new era of lower, single-digit growth led more by consumer spending. That reshuffles the lineup of suppliers to the world’s second-largest economy and appears set to push Canadian commodities producers to the margins.

“The commodities super cycle – I don’t know if it’s over, but it’s not looking as good as it used to and it’s going to hurt a major part of our economy,” said Yuen Pau Woo, president and CEO of the Vancouver-based Asia Pacific Foundation of Canada. “We did less badly out of the global recession of 2008-09 on the back of Chinese demand for commodities. That honeymoon is over.”

As demand for resources moderates, Mr. Woo warns that Canada needs to strike a trade agreement with China and better promote its banks, automotive sector and other products that don’t depend on construction.

China’s leaders have been warning its companies for much of the past decade about their over-reliance on infrastructure investment and the need to prepare for a shift to consumer-led growth.

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Analysis: As Canada’s junior miners flounder, long-term damage looms – by Allison Martell and Euan Rocha (Reuters Canada – July 25, 2013)

 http://ca.reuters.com/

TORONTO (Reuters) – Hundreds of small mineral exploration companies may have their stock delisted by Canada’s TSX Venture Exchange in the coming months, choking off a development pipeline that has long supplied major miners with new projects.

As commodity prices boomed in the last decade, a flood of new issuers swelled the ranks of the Venture, TMX Group Inc’s exchange for small-capitalization companies, burnishing Canada’s reputation as the center of global mining finance.

But the money has dried up over the past two years, thanks to a slump in metal prices and a spike in costs. Hardest hit are the Venture-listed, exploration-stage companies that depend on equity financing to develop their properties to the point where they can build a mine or sell the asset to a major.

“There’s a crisis that’s looming,” said Joe Groia, a securities lawyer and former head of enforcement at Canada’s top securities regulator, the Ontario Securities Commission. “If we continue to not address it, what we’re going to end up with is literally hundreds of companies where boards are either going to walk away or hundreds of companies that are going to run out of money.”

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TransCanada touts major backing as premiers to discuss west-east pipeline – by Shawn McCarthy and Adrian Morrow (Globe and Mail – July 25, 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.

OTTAWA AND NIAGARA-ON-THE-LAKE, ONT. — TransCanada Corp. says it has garnered significant support for its quest to ship Western crude to refineries in the East, as premiers seek consensus on a politically charged cross-country pipeline.

The Calgary-based company told The Globe and Mail it has received major backing from producers who want to ship crude on its Energy East pipeline, and will make an announcement in the coming weeks.

Canada’s premiers will discuss the proposed pipeline – which has been championed by Alberta and New Brunswick – at the Council of the Federation this week in Niagara-on-the-Lake, Ont.

The discussions take place as Quebec Premier Pauline Marois grapples with the fallout from the catastrophic train derailment in Lac-Mégantic, which has raised questions about the safety of transporting oil. Alberta Premier Alison Redford and New Brunswick’s David Alward will highlight the proposal as a nation-building project as the premiers gather for the annual meeting.

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Ferrochrome: An Industry Moving Beyond South Africa – by Stuart Burns (Metal Miner – March 11, 2013)

http://agmetalminer.com/

Part One

When you think of ferrochrome, you traditionally think of South Africa. Indeed, power supply problems in South Africa have been a major source of volatility for FeCr prices over the last few years, as the state power utility Eskom has struggled to provide enough electricity for industrial and residential users.

Ten years ago, over half the world’s FeCr came from South Africa, but since then Kazakhstan, India and China have all risen in prominence, with China moving into top spot last year, as this graph from HSBC shows.

South Africa continues to face power problems; currently Eskom is engaged in a power buy-back agreement with FeCr producers resulting in the probable loss of about 100,000 tons of production, according to an HSBC metals & mining survey, as Xstrata–Merafe closes at least five of its 20 furnaces.

Even if this cutback is reversed in the second half of 2013, South Africa’s expensive winter tariffs will then kick in, further impacting utilizations rates.

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NEWS RELEASE: OMA member profile: St Andrew Goldfields — production from its H-cubed operations

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.

While the price of gold has slid recently, this doesn’t mean that precious metals producers and explorers have been operating in a holding pattern waiting for a price rebound. Companies have been making adjustments, striving to control costs, while producing to generate cash and build reserves. They know vagaries of gold price movements can be volatile both in going up and tumbling down.

The second quarter of 2013 saw a 13% decrease in average gold prices to US$1,414 per ounce. This marks the largest quarterly decline in gold prices since 1980. During that period, St Andrew Goldfields continued to make progress on its Taylor advanced exploration gold project about 50 kilometres east of Timmins.

An 8,500 tonne bulk sample from the Taylor project yielded 686 ounces of gold, which contributed to the 25,353 ounces of gold St Andrew Goldfields produced in the second quarter from its three operations. The company has advised that gold production from its Holt, Holloway and Hislop mines (“H3” cubed) is expected to be between 95,000 ounces and 105,000 ounces of gold in 2013.

“Our second quarter results remain strong with production at the 25,000 ounce level,” said Jacques Perron, President and Chief Executive Officer of St Andrew Goldfields.

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Kathleen Wynne ‘involved all along’ in gas-plant cancellations, opposition says – by Sue-Ann Levy (Toronto Sun – July 25, 2013)

http://www.torontosun.com/home

A little more than six weeks ago at the committee hearing evidence into the gas plant scandal, Premier Kathleen Wynne denied — under oath — all involvement in the decision to cancel the plants or to delete key e-mails related to a move that could cost taxpayers as much as $1-billion.

“Those were decisions that were made by other people in other conversations and I wasn’t part of those conversations, I wasn’t in those rooms,” the premier said at the time.

At the time I was highly skeptical that she sat on the sidelines blissfully unaware of this evolving scandal considering she was co-chair of the 2011 Liberal election campaign.

But when a letter surfaced Wednesday — in response to a request from the gas plant committee to dig deeper for the supposedly deleted gas plant e-mails — it pointed to far more involvement by Ontario’s unelected premier than she’d care to admit.

In that letter, deputy minister of government services Kevin Costante confirms to the Standing Committee on Justice Policy that — poof! — as if by magic some 3,226 backup tapes have been suddenly been found for 13 Liberal politicians and staffers that could contain “potentially responsive” e-mails related to the cancellation of the two gas plants in Oakville and Mississauga, a.k.a Project Vapour Lock.

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A cut above [Sudbury diamond cutting] – by Carol Mulligan (Sudbury Star – July 25, 2013)

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

It pales in value to the 69.42-carat diamond Richard Burton famously gave to Elizabeth Taylor in the 1960s. But a 35-carat diamond mined in the James Bay Lowlands, and being processed in Sudbury, is setting a record for the largest diamond to be mined, cut and polished in Canada.

The unassuming stone, which uncut is about the size of a small wad of gum, will soon reveal its magnificent sparkle and brilliance under the skilled and gentle touch of a trusted, experienced diamond-cutter.

Uri Ariel, president and chief executive officer of Vancouverbased Crossworks, said the stone comes close in size to the famous Taylor-Burton diamond. While the latter was of a higher calibre, Burton wouldn’t have “offended” Taylor by presenting her with this stone, Ariel told a small group in the boardroom at Crossworks’ downtown Sudbury plant.

The stone was mined three years ago at De Beers’ Victor Diamond Mine. Ariel put it aside until three or four months ago when he was confident his company could process it to its best advantage.

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No quick fix as Anglo’s new boss prepares to woo investors – by Clara Ferreira-Marques (Reuters U.K. – July 24, 2013)

http://uk.reuters.com/

LONDON, July 24 (Reuters) – Anglo American’s new boss will lay out his stall on Friday after four months in the job and while investors are not counting on a quick fix, they are betting his plans will include cost cuts, more disciplined spending and potential asset sales.

Anglo, the smallest of the major diversified miners, has underperformed its peers, most recently battling labour unrest in South Africa, where it generates half its earnings, and multi-billion dollar cost overruns in Brazil.

Investors piling into BHP Billiton, Rio Tinto and Anglo in 2006 would have made more than one and a half times their money at BHP and seen returns of 65 percent at Rio. But they would have lost money at Anglo – a negative total return of around 16 percent, according to Reuters data.

Anglo posted its first loss in a decade in 2012, a year of hefty writedowns and CEO departures across the industry. According to Citi, last year Anglo’s return on equity, a measure of profitability, hit its lowest level since the 1930s.

So while the market may not be preparing for what some analysts called a “big bang” menu of asset splits or a radical and frequently debated platinum spin-off – all are demanding change from boss Mark Cutifani, an Australian former miner and engineer who joined from bullion producer AngloGold.

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First Nations royalty tax regime called for – by Rick Garrick (Wawatay News – July 24, 2013)

http://www.wawataynews.ca/

Deputy Grand Chief Les Louttit is calling for a “First Nations royalty tax regime” for all developments within Treaty 9 and 5 territories.

“We don’t want to be at the local First Nation negotiating or tribal council-level negotiating table,” Louttit said. “(Nishnawbe Aski Nation is looking for) a resource revenue and benefits sharing agreement with Ontario, which would include mining, forestry, hydro or tourism — that’s where NAN’s role is.”

Louttit said NAN is not interested in being involved with the Ring of Fire negotiations that are scheduled to involve Matawa’s chief negotiator Bob Rae and Ontario’s lead negotiator Frank Iacobucci. Iacobucci was appointed on July 2 and Rae was appointed on May 10.

“We were not involved in Musselwhite; we were not involved in the Moose Cree OPG or Detour Lake project or any of the Wabun Tribal Council projects dealing with mining and hydro,” Louttit said. “The only time NAN has recommended professional advice is back in 2000 when the Victor Mine was being negotiated. I think the NAN executive at that time provided some or recommended some legal and professional advice to the First Nations.”

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Iacobucci visits Matawa communities – by Shawn Bell (Wawatay News – July 24, 2013)

http://www.wawataynews.ca/

Ontario’s Ring of Fire negotiator, Justice Frank Iacobucci, made his first visits to Matawa communities last week in what he said was a chance to see the communities, meet community members and leaders and get a better sense of what the issues facing Matawa communities are.

“I want to show respect to the First Nations, by visiting and explaining what my mandate is, and also so they know who I am,” Iacobucci said. “We want to ensure we have good lines of communication.”

Iacobucci, who most recently completed a report on the underrepresentation of First Nations people on provincial jury rolls, was named Ontario’s Ring of Fire negotiator in June. The Matawa First Nations have contracted former Liberal leader Bob Rae to negotiate with Iacobucci on their behalf.

On July 18 Iacobucci and Northern Development and Mines Minister Michael Gravelle travelled to Neskantaga. They had previously visited Marten Falls and Eabametoong. Iacobucci said he hopes to be invited to visit all Matawa communities before formal negotiations start.

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