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Day: September 19, 2013

Aluminium industry at odds over supply deals, warehouse reforms – by Emma Farge (Reuters U.S. – September 18, 2013)

http://www.reuters.com/

GENEVA, Sept 18 (Reuters) – The world’s top aluminium producers and consumers are at loggerheads over the thorny issue of what price, or premium, should be paid to secure metal deliveries, and will conclude fewer fixed term supply deals this year, industry sources said.

Producers Rusal , Alcoa and Rio Tinto are descending on Geneva for an industry gathering that marks the start of annual supply negotiations with aluminium product makers.

But unlike in recent years, top consumers like Novelis and Rexam have a strong hand to play thanks to U.S. regulatory scrutiny into claims big banks and trade houses artificially inflated aluminium premiums by building backlogs at London Metal Exchange (LME) warehouses. The scrutiny comes alongside a proposed overhaul of warehouse practices on the LME, which has already helped knock European spot premiums down some 20 percent off a June record high near $300 a tonne.

“I’m sure term premiums will be lower than $230-250 a tonne,” said a source who represents consumers. “Producers are getting nervous about the implementation of LME warehouse rules (and) I think most consumers are going to continue to live hand to mouth because they think the premiums are going to come down further.”

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Inquiry unearths police cover-up in South African Marikana mine massacre – Geoffrey York (Globe and Mail – September 19, 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.

JOHANNESBURG — An inquiry has found shocking evidence that South African police have lied and falsified documents to cover up the truth about their killing of 34 protestors at the Marikana platinum mine last year.

The explosive revelation of a police cover-up in the “Marikana massacre” has forced a halt to the official inquiry. The commission announced on Thursday that it is shutting down its public hearings temporarily while it investigates the cover-up.

The inquiry has already heard disturbing evidence that the police hunted down and killed fleeing protestors even after a first clash had ended. It also heard testimony that the police planted guns next to the bodies of dead miners in an attempt to justify the shooting.

The cover-up began to unravel last week in testimony by Duncan Scott, a lieutenant-colonel in the South African Police Services (SAPS). He agreed to give the inquiry a computer hard drive with videos and photos from the scene of the Marikana killings. The inquiry also obtained thousands of pages of police documents that it had not seen before.

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Ottawa accuses Cameco of multi-million dollar tax dodge – by Geoff Leo (CBC News Saskatchewan – September 19, 2013)

http://www.cbc.ca/saskatchewan/

Saskatchewan may have missed out on $300M in corporate tax

One of the largest companies in Saskatchewan is in the midst of a multi-million dollar tax court battle with Canada Revenue Agency (CRA). Cameco has publicly estimated that it could end up owing $800-850 million in Canadian corporate taxes for the years 2008 to 2012, if it loses the case.

CRA contends that the uranium giant set up a subsidiary in Zug, Switzerland for the purpose of avoiding taxes in Canada. However Cameco’s CFO, Grant Isaac, disputes that claim.

He says there’s a compelling business case for having a marketing arm in Europe, close to customers there. “We believe that it was established in accordance with sound business principles and in accordance with relevant laws and regulations,” Isaac told investors at the corporation’s first quarter update in May 2013.

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Fasken Martineau Mining Bulletin: Cliffs Denied Easement over Canada Chrome Mining Claims – by Neal Smitheman and Kimberly Potter – September 19, 2013

http://www.fasken.com/en/home/

Cliffs Natural Resources Inc. (“Cliffs”) lost its application for an easement over a series of mining claims held by Canada Chrome Corporation (“CCC”), a subsidiary of KWG Resources Inc. (“KWG”). The mining claims that were the subject of the application were staked along a series of linear sand ridges from the Big Daddy chromite deposit in the McFaulds Lake region of Northern Ontario, commonly referred to as the “Ring of Fire”, south to Exton, Ontario (the “CCC Claims”).

Background

In 2008, KWG discovered the Big Daddy deposit in a joint venture with Spider Resources Inc. (“Spider”). In 2009, KWG approached Cliffs to become a shareholder of KWG for the purpose of assisting with the development of Big Daddy. With Cliffs’ support, KWG staked the CCC Claims for the purpose of, among other things, building a railway that would connect the Big Daddy deposit with a distribution point in the south.

After CCC staked the CCC Claims and began performing assessment work, Cliffs acquired the Black Thor chromite deposit in the Ring of Fire through its acquisition of Freewest Resources Canada Inc. Cliffs then bought out Spider, which left KWG in a minority position with respect to the Big Daddy deposit.

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It may be time to step back on Keystone XL project – by Jeffrey Jones (Globe and Mail – September 19, 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 — Canada is winning the battle for U.S. market share in oil, and, under President Barack Obama, the United States has been cutting its reliance on imported crude – all at the same time and all without Keystone XL. It has been five years, one global financial crisis, two U.S. elections and countless shuttles to Washington by officials from Ottawa and Alberta since TransCanada Corp. filed its initial application with regulators in the United States to build the pipeline.

Today, with the project as uncertain and divisive as ever, it’s time for Canadians to ask if they want their elected officials to keep spending money, time, effort and diplomatic capital trying to persuade Washington that one pipeline is necessary for both economies.

With several alternative export proposals to the United States and elsewhere being floated, perhaps the federal and provincial governments should take a step back, push Keystone XL down on the public agenda and let TransCanada and its shippers take the lead on touting their proposal.

A year ago, many in the oil patch were confident Keystone XL was just a presidential vote away. If Republican candidate Mitt Romney won, the thinking went, the project was a sure thing: he had already served notice that “that pipeline from Canada” was a go.

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THE PRESIDENT AND THE PIPELINE – by Ryan Lizza (New Yorker Magazine – September 16, 2013)

http://www.newyorker.com/

The campaign to make the Keystone XL the test of Obama’s resolve on climate change.

On the day of his second Inauguration, in January, Barack Obama delivered an address of unabashed liberal ambition and promise. As recently as early April, before the realities of the world and the House of Representatives made themselves painfully evident, the President retained the confidence of a leader on the brink of enormous achievements. It seemed possible, even probable, that he would win modest gun-control legislation, an immigration-reform law, and the elusive grand bargain with Republicans to resolve the serial crises over the federal budget.

And he seemed determined to take on even the most complicated and ominous problem of all: climate change. The President, who had a mixed environmental record after his first term, vowed that he would commit his Administration to combatting global warming, saying that “failure to do so would betray our children and future generations.”

The President flew to San Francisco on April 3rd for a series of fund-raisers. He stopped in first at a cocktail reception hosted by Tom Steyer, a fifty-six-year-old billionaire, former hedge-fund manager, and major donor to the Democratic Party. Steyer lives in the city’s Sea Cliff neighborhood, in a house overlooking the Golden Gate Bridge. As the President’s motorcade headed to the party, several hundred activists were assembling along the route to his second event—a dinner hosted by Ann and Gordon Getty, in Pacific Heights, on a street known as Billionaires’ Row.

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U.S. House passes National Strategic and Critical Minerals Production Act – by Dorothy Kosich (Mineweb.com – September 19, 2013)

http://www.mineweb.com/

H.R. 761 faces an uphill battle in a Democratically-controlled U.S. Senate even if the measure manages to survive in the Senate Energy and Natural Resources Committee.

RENO (MINEWEB) – As the Republicans of the U.S. House of Representatives once again voted Wednesday to streamline mining permit approvals, the question remains as to whether the proposed National Strategic and Critical Minerals Production Act will again die in the Democratically-controlled U.S. Senate.

The House passed H.R. 761, the National Strategic and Critical Minerals Production Act, in a 246-178 vote with only 15 Democrats voting in favor.

This time around even House Majority Leader Eric Cantor (R-Virginia) issued a public statement applauding passage of the measure, introduced by Rep. Mark Amodei, R-Nevada, the former president of the Nevada Mining Association.

“The United States has abundant natural resources, including critical and strategic materials that are vital to our manufacturers, medical providers and military personnel; and that provides the basis for common household products.

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UPDATE 1-Koba Tin to seek arbitration if Indonesia scraps mining permit – by Niluksi Koswanage (Reuters India – September 19, 2013)

http://in.reuters.com/

KUALA LUMPUR, Sept 19 (Reuters) – PT Koba Tin, a subsidiary of the world’s second-biggest tin producer, will seek international arbitration if Indonesia’s government refuses to extend its permit to operate a mine, the chief executive of the Malaysian parent company said.

It is the latest corporate wrangle to raise questions over Indonesia’s openness to foreign investment. Southeast Asia’s biggest economy had pushed for more control over its natural resources, ranging from coal to gold, in the past few years but is rethinking the policy after a recent slide in its currency.

The dispute has been brewing since last year when Indonesian government officials said Koba Tin’s permit would not be renewed and that state-run PT Timah should take over the concession in the Bangka-Belitung islands off the east coast of Sumatra island. PT Timah is a minority shareholder in Koba Tin.

The government has since softened its stance, launching a review of the concession, which is eight times the size of New York’s Manhattan island. It was due to announce a decision this week.

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Pressure on Barrick Board Centers on Long-Time Directors – by Liezel Hill & Katia Dmitrieva (Bloomberg News – September 18, 2013)

http://www.bloomberg.com/

Investor pressure to change the board at Barrick Gold Corp. (ABX), the world’s biggest producer of the metal, is centering on long-serving directors, including former Canadian Prime Minister Brian Mulroney.

Canada’s biggest pension funds want new independent board members and say the miner should consider replacing directors who have been there longer than 20 years and are close to Co-chairman and founder Peter Munk, according to two investors briefed on the matter who asked not to be identified because the information hasn’t been made public.

Barrick said yesterday it will add new independent directors and strengthen its executive pay policies after investors criticized governance at the company. The gold miner took $8.7 billion of writedowns in the second quarter and cut its dividend 75 percent after gold prices fell the most in three decades.

“The tenure on the board is far too long and there are far too many non-independent directors,” said Robert Gill, a Toronto-based fund manager at Aston Hill Financial Inc. (AHF), which manages C$7.8 billion ($7.6 billion), including Barrick shares. “It’s time to change the board and we need to bring in more independence into the board,” he said by phone Sept. 11.

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Nolan, U.S. House vote for quicker mining permits – by John Myers (Duluth News Tribune – September 19, 2013)

http://www.duluthnewstribune.com/

U.S. Rep. Rick Nolan joined with other mining supporters Wednesday when the U.S. House passed legislation to streamline federal environmental permitting for mining projects.

U.S. Rep. Rick Nolan joined with other mining supporters Wednesday when the U.S. House passed legislation to streamline environmental permitting for mining projects on federal lands.

The Bill, HF 761, called the National Strategic and Critical Minerals Production Act of 2013, passed the Republican-controlled House by a 246 to 178 vote.

The bill declares most new mining projects as strategic for the nation, speeds up the federal agency review process and restricts efforts to file lawsuits to stop such projects. The bill essentially sets a 30-month limit for environmental review and a 60-day limit for any challenges.

Nolan, D-Crosby, was one of only 15 Democrats to vote in favor of the bill. He had said in recent weeks that he was undecided on the bill, and opponents of faster-paced mining projects in Minnesota bombarded Nolan with calls to vote no.

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Guest Post: Wisconsin Needs Iron Ore Mining to Grow the Economy and For a Better Tomorrow For All – by Brett Healy (Minerals Make Life.org – September 18, 2013)

http://mineralsmakelife.org/

Brett Healy is president of the MacIver Institute for Public Policy—Wisconsin’s free market voice.

Across a 22-mile-long stretch of Northern Wisconsin, lies more than 2 billion tons of iron ore— a key material in the production of American made steel. Wisconsin’s resources account for an estimated 15 percent of all recoverable iron ore in the United States, representing a deposit critical to U.S. economic competitiveness.

Much progress has been made in recent months to develop Wisconsin’s robust mineral wealth and provide the far-reaching economic benefits that come along with this development. After the passage of Wisconsin’s iron ore mining reform in March 2013, the industry worked swiftly to respond to the updated environmental regulation, which sets a 420-day limit for the state’s Department of Natural Resources to approve or deny a permit. Gogebic Taconite, the owner of the proposed mine in Ashland and Iron counties, spent the summer exploring the deposit and sharing with the public its plans for the project.

If progress continues, the proposed mine could provide more than 700 direct, well-paying jobs that will change the fortune of families in the area for generations to come. It will also indirectly support an additional 2,100 jobs— all in an economically depressed part of Wisconsin that needs help. The mine could also contribute more than $600 million to the state’s GDP, a boost that would positively affect all Wisconsinites.

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Inquiry into mining safety long overdue – by Brian MacLeod (Sudbury Star – September 19, 2013)

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

“Something’s wrong,” Sudbury Star mining reporter Carol Mulligan said upon returning from a Vale Canada press conference in January 2012 called to explain the deaths of two miners 3,000 feet underground the previous June. “We’re not getting the whole story.”

On June 8, 2011, Jason Chenier, 35, a father of two young children, and Jordan Fram, 26, were crushed under 350 tonnes of wet, broken ore, known as muck, that had become stuck in a tunnel known as an ore pass.

The nature of the press conference — reporters were allowed to look at information presented, but were not given copies — and the demeanour of the presenters, was odd. Reporters in Sudbury are accustomed to procedures in mining deaths. The report made 30 recommendations to improve safety and the company was acting on them, officials said.

Yet Mulligan’s instincts were right. On Monday, Vale Canada pleaded guilty to three charges under the Occupational Health and Safety Act. The company was fined $350,000 on each charge, plus a 25% surcharge. It was, Crown attorney Wes Wilson said, the largest ever fine levied under the act for health and safety issues. Six other charges were dropped, as were charges against a mine official.

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Push for mine safety inquiry continues – by Jonathan Migneault (Sudbury Star – September 19, 2013)

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

Vale Canada Limited’s plea bargain with the Ministry of Labour Tuesday, regarding deaths of two Stobie Mine employees in 2011, has created a stronger case for a provincial inquiry on mine safety, said Nickel Belt MPP France Gelinas.

“Now that we’re not going to have our day in court it creates one more argument for an inquiry,” said Gelinas. Vale pleaded guilty to three charges under the Ontario Occupational Health and Safety Act Tuesday, and was charged $1.050 million as a deterrent. The company made a joint submission with the Crown that it be fined $350,000 per charge.

Gelinas said the families of Jason Chenier, 35, and Jordan Fram, 26, who were crushed by a 350-ton run of muck at the 3,000-foot level of the Stobie Mine on June 8, 2011, would never have the chance to hear the full story surrounding their deaths.

“A trial is an opportunity for many people to gain closure because you get to the bottom of the story,” Gelinas said. The provincial NDP and the United Steelworkers have long called for an inquiry into the province’s mining deaths.

Mike Bond, chair of health, safety and environment for the United Steelworkers Local 6500, said he was disappointed with Tuesday’s outcome.

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Japan’s JX to develop its mines, eyes stake buys in upstream copper push – by Yuka Obayashi (Reuters India – September 19, 2013)

http://in.reuters.com/

TOKYO, Sept 19 (Reuters) – JX Nippon Mining & Metals Corp will focus on development of its own copper mines in South America but may also look at buying stakes in other projects as Japan’s top smelter aims to cut its dependency on major miners for ore, a senior executive said.

Japanese copper smelters are stepping up acquisitions of upstream metal assets and development of copper mines to hedge against any increase in ore prices as their profit margins on smelting declines.

JX Nippon Mining is aiming to raise the volume of copper content coming from its own mine interests for refining to an annual 250,000 tonnes in 2015 and then to 350,000 tonnes by around 2020, its parent JX Holdings Inc had said in March. Around 100,000 tonnes of in-house copper content in concentrate was used to refine metal in 2012.

“We want to achieve our 350,000 tonnes goal first, then move further into upstream where we expect higher profit return,” Keiichi Goto, deputy chief executive officer of JX Nippon Mining, told Reuters in an interview earlier this week.

JX’s rival Sumitomo Metal Mining Co Ltd also plans to boost annual volume of copper content procured from its own mining interests to 300,000 tonnes by the 2021 business year from 120,000 tonnes now.

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Conservatives endorse mining tax royalties for First Nations – by Bryan Phelan (Wawatay News – September 18, 2013)

http://www.wawataynews.ca/

Ontario Progressive Conservatives say a share of the mining tax royalties should go to First Nations and other communities that build and support new mines.

Tim Hudak, the PC leader, introduced a policy “white paper” outlining his party’s position on the North during a visit to Thunder Bay on Sept. 17.

“The Ring of Fire is the greatest mining discovery of a lifetime but the project has gone nowhere,” Hudak stated in the introduction to the policy paper, titled Paths to Prosperity: A Champion for Northern Jobs and Resources.

To ensure mining development moves ahead, “As a first step, we need to work with business and Aboriginal communities to expedite the construction of an all-season transportation link to the Ring of Fire deposits,” the paper suggests.

The policy release comes one week after the Ontario Mining and Lands Commissioner dismissed an application from Cliffs Natural Resources for an easement that would allow the company to build an all-weather road to the Ring of Fire over mining claims staked by another company.

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