COLUMN-Investors may be buying BHP, Rio cost-cutting story – by Clyde Russell (Reuters India – December 11, 2013)

http://in.reuters.com/

Dec 11 (Reuters) – It’s taken some time but there are signs that the cost-cutting efforts by major commodity producers such as BHP Billiton and Rio Tinto are starting to convince investors.

“My principle aim is to create value and free cash flow,” Andrew Mackenzie, the chief executive of BHP , said at an investor briefing on Dec. 10.

To this end he confirmed that capital expenditure at the world’s largest mining company has been too high in recent years, with the $23.3 billion spent last year poised to shrink by 25 percent in the 2013 fiscal year, and again in subsequent years. The presentation slides anticipate capital expenditure for major projects being a quarter of the 2013 level by 2016.

Rio Tinto , the world’s second-biggest miner, is also slashing spending, announcing plans to halve capital expenditure and slash debt.

Rio Tinto said on Dec. 3 that it will cut spending to $11 billion in 2014 from just under $14 billion this year, and sees capital spending at $8 billion in 2015, which would be less than half what it was in 2012.

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Return of fourth player shakes EU stainless steel recovery hopes – by Silvia Antonioli, Maytaal Angel and Tom Käckenhoff (Reuters U.S. – December 11, 2013)

http://www.reuters.com/

LONDON/DUESSELDORF, Dec 11 (Reuters) – Just as long-awaited consolidation in Europe’s stainless steel sector seemed to offer hope of recovery in prices and profits, Finnish producer Outokumpu’s surprise sale of two plants back to ThyssenKrupp threatens to undo such gains.

Outokumpu last month announced the sale of large Italian stainless steel mill Acciai Speciali Terni and of specialty high-performance alloy unit VDM to ThyssenKrupp , their previous owner.

The deal, part of a package of measures dictated mostly by Outokumpu’s financial needs, partially reverses its acquisition of Thyssenkrupp’s stainless steel business Inoxum in 2012, a move that gave a fillip to all major European producers’ shares.

It raises the number of major European players in the loss-making industry back to four from three, which is likely to create an even tougher market environment for them as they face low prices, heavy overcapacity and competition from determined Asian exporters.

While a big player like Outokumpu can cut capacity or mothball the least efficient of several operations, ThyssenKrupp, with only two plants in the stainless sector, is likely to make use of them to keep its foothold in the market.

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NEWS RELEASE: Golden Band To Suspend Mining Operations at La Ronge

Saskatoon, Saskatchewan, December 9, 2013 – Golden Band Resources Inc. (“Golden Band” or the “Company”) (TSX.V-GBN; OTCQX-GBRIF) reports that its mining operations, including its operations at the Roy Lloyd and Golden Heart mines and the Jolu mill, will be suspended for an indefinite time beginning January 1, 2014.

Further to the Company’s news release dated August 7, 2013 wherein the Company announced recommencement of operations having completed certain upgrades of infrastructure; and despite restructuring operations and significant cost cutting, declining gold prices and lower than anticipated ore grades from both the Roy Lloyd underground mine and the Golden Heart surface mine have hindered the Company’s ability to return to profitability. At the present time, the Company anticipates the shutdown period will be approximately 6 months although there is no assurance when mining operations may resume.

In order to preserve cash, the Company will place the operation into care and maintenance mode and mining and milling operations will be shut down in a systematic manner so that they are available for start-up in as short a time as possible. During the shutdown, the Company will be evaluating all of its options to return the mining operations to profitability. In order to improve our economic performance, the Company intends to engage external consultants with the necessary expertise to develop more effective mining plans. Engineering plans will focus on priority targets, specifically Decade, Komis, Golden Heart and Greywacke.

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Indonesia’s president to weigh into mineral export confusion (Reuters U.S. – December 11, 2013)

http://www.reuters.com/

JAKARTA – Dec 11 (Reuters) – Indonesia’s president will make the final decision in a furious debate over next month’s scheduled ban on the export of unprocessed metal ore, an issue that pits nationalist-minded lawmakers against officials desperate not to lose revenue.

From next month, mining companies must process their ore before shipping it overseas, in a measure that aims to boost the value of exports from Indonesia, the world’s top exporter of nickel ore, thermal coal and refined tin. But smelting capacity is nowhere near ready, which means much of Indonesia’s output of metal ore will grind to a halt unless the processing requirements are relaxed.

And the law is kicking in just as a yawning current account deficit, exacerbated by waning global demand for commodities, is undermining investor confidence, leading to a drop this year of nearly a quarter in the rupiah’s value against the dollar.

“The president will decide it,” Trade Minister Gita Wirjawan told reporters on Wednesday, noting that Yudhoyono would make an announcement after consultations with the chief economic minister, the energy and mineral resources minister, the trade minister, the industry minister and parliament.

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B.C. mines minister to lobby for New Prosperity project – by Derrick Penner (Vancouver Sun – December 10, 2013)

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

Environmental review found long list of concerns, but Bill Bennett says B.C. economy needs the mine

Mines Minister Bill Bennett is heading to Ottawa to support the contentious New Prosperity mine proposal in the Cariboo, the minister said Tuesday.

Bennett, speaking to project boosters brought together by the B.C. Chamber of Commerce in Vancouver, said he will go to the national capital Thursday to tell his federal counterparts that the province considers the $1.5-billion New Prosperity mine an important piece in its economic plan.

“I’m going to seek to influence the decision, of course,” Bennett said to reporters. “I want them to say yes because they can say yes. I want to make sure they have all the information to do that.”

A decision on whether the open-pit copper-gold mine goes ahead rests with federal Environment Minister Leona Aglukkaq. She is studying a second review by the Canadian Environmental Assessment Agency, which concluded the mine would have significant environmental impacts. Taseko Mines Ltd. is disputing a major element that went into that conclusion.

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BHP Billiton CEO Looks to Cut Annual Spend Below US$15 Bln – by Rhiannon Hoyle (Wall Street Journal – December 10, 2013)

http://online.wsj.com/home-page

SYDNEY–BHP Billiton Ltd. (BHP) signaled it would try to limit annual spending to US$15 billion, highlighting a newly found commitment to thrift in the face of weaker commodity prices.

For the world’s largest mining company, this expenditure goal represents a deep cut on the US$21.7 billion it spent last financial year on projects from huge iron-ore deposits in Australia’s arid Pilbara region to deep-sea oil-and-gas fields in the U.S. Gulf of Mexico.

Melbourne-based BHP isn’t alone in tapering spending plans. Companies across the resources spectrum have been tightening the purse strings amid a sharp fall in the value of commodities like coal and gold as China’s economy cools. Rio Tinto PLC (RIO) recently unveiled plans for a marked cut in spending in the years’ ahead as it focuses on reducing a hefty debt pile accumulated in a massive expansion of its own operations.

BHP has already made swingeing cuts to expenditure in the current fiscal period to June 30, 2014, and is likely to report further reductions in subsequent years as it aims to be “more clever with capital,” Chief Executive Andrew Mackenzie told an investor briefing in Houston.

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Companies Need to Step Up to Meet New Conflict-Minerals Reporting Rule – by Robert Bowman (Forbes Magazine – December 10, 2013)

http://www.forbes.com/

Time is running out for manufacturers to begin reporting on the presence of conflict minerals from the Democratic Republic of the Congo in their supply chains.

Beginning May 31, 2014, publicly traded companies will be required to declare to the U.S. Securities & Exchange Commission whether or not their products or components contain tin, tungsten, tantalum or gold — dubbed “3TG” materials — from mines in the DRC that are engaged in human rights abuses.

The requirement was included in the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Obama in July of 2010. It has taken nearly four years, however, for the SEC to gather public comments and clarify the rule. And the May 31 deadline is just the beginning of a two-year phase-in.

Nevertheless, many businesses have been dragging their feet on preparations for complying. According to a survey conducted by PricewaterhouseCoopers LLC in the spring of 2013, at least a third of executives were still unsure as to whether it applied to their operations.

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Ontario’s Ring of Fire a national opportunity – Ottawa Citizen Editorial (December 10, 2013)

http://www.ottawacitizen.com/index.html

It would be quite an understatement to say that the Ring of Fire mineral project in northern Ontario is the most significant economic development opportunity for Ontario First Nations the province has ever seen.

The huge chromite mining project, whose importance federal cabinet minister Tony Clement likened to the Alberta’s oilsands, would bring between $60 billion and $120 billion in economic benefits to Ontario, and particularly some of the poorest areas of the province. Clement called it a “once-in-a-life” opportunity to generate long-term prosperity for not only for the First Nations, but the province and the nation. The file has now passed to Clement’s colleague, Minister of State Greg Rickford.

“It has the potential to transform what was hitherto a very poor, underdeveloped area of Ontario and give people who live there, particularly First Nations people, a chance for a decent life,” Clement said in a media interview.

That is why Ontario Premier Kathleen Wynne is calling for federal government help to pay for the infrastructure to get the project off the ground.

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Taxpayers run over by Liberals’ Ontario Northland boondoggle – by Christina Blizzard (Toronto Sun – December 11, 2013)

http://www.torontosun.com/home

TORONTO – So, you say you’re seeing a light at the end of the long, dark gas plant tunnel? I have bad news. It’s an Ontario Northland ghost train coming at you. And it’s burning your dollars just as fast as the gas plants did. Shutting down the Ontario Northland Transportation Commission (ONTC) is turning into the next $1-billion boondoggle.

In its 2012 budget, then-finance minister Dwight Duncan announced the government would sell off ONTC — shutting down a northern Ontario transportation lifeline. At the time, the government said they’d save nearly $266 million over the next three years. Provincial auditor general Bonnie Lysyk released her annual report Tuesday.

Turns out that we were being — how shall I put it — oh, railroaded. Like a scene from an old movie, taxpayers were tied to the tracks and run over by a slow-moving train. It’s not going to save any money. In fact, we’re going to be on the hook for some rich buyout packages.

“The known costs may be as high as $820 million, and recouping this amount by the government no longer paying the ONTC the normal annual operating and capital subsidies it has been providing could well take a decade or longer,” the report says.

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Our view: Input critical to ensure safe mining – Duluth News Tribune Editorial (December 10, 2013)

 http://www.duluthnewstribune.com/

The last time a massive report dropped to detail just how copper-nickel mining could be done on the Iron Range in accordance with strict state and federal environmental laws and standards, it got blasted.

The last time a massive report dropped to detail just how copper-nickel mining could be done on the Iron Range in accordance with strict state and federal environmental laws and standards, it got blasted. The largest environmental agency in the land, the U.S. Environmental Protection Agency, led the way, saying PolyMet’s plans for a type of mining with a less-than-stellar track record could lead to “adverse environmental impacts” on Northeastern Minnesota. Others weren’t as kind with their language or criticism.

So what was called a “Draft Environmental Impact Statement,” or DEIS, went back for more work, more thought, and better, safer plans — just as it should have. The lengthy environmental-review process was working and working well, helping to ensure, in the end, a project that’s safe, lawful and sensitive to the environment and an industry with hundreds of good-paying jobs and a multibillion-dollar boon for our region.

Nearly three years later, another massive report has dropped, an updated report, this one called a “Supplemental Draft Environmental Impact Statement, or SDEIS.

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Northern Forum nice, but major issues unresolved – by Peter Politis (Timmins Daiy Press – December 10, 2013)

The Daily Press is the city of Timmins broadsheet newspaper.

Peter Politis is the Mayor of Cochrane

TIMMINS – Last week’s Northern Leaders’ summit which brought together First Nations, ministers and Northern leaders from across the entire region to exchange on issues, was another good step forward for the North. My congratulations to the Northern Ontario Large Urban Mayors’ Association, FONOM President Mayor Spacek, along with the province for bringing the group together. Hopefully there is more to come.

It was good to get past the proverbial “hand in the face” approach we’ve been getting from the province up to now, to actually engaging in the intelligent dialogue and issues themselves. It was evident that while there remains diversity in opinion and needs, Northern Leaders are coming together in unity to represent our region together which can only be a good thing.

What continues to concern me is that the major issues remain unresolved. For example: The ONTC passenger rail has been completely divested and the government made it clear they will not bring back passenger rail as they believe standing room only buses are good enough for Northern families, medical patients and students; parks remain closed and will going forward; the provincial caribou policy that sees recovering caribou where they don’t exist at the expense of Northern families and entire town’s remains as it was two years ago despite scientists, environmentalists and mayors coming together to offer a better option;

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Court overturns B.C. government’s ruling that rejected mine – by Matthew Robinson and Derrick Penner (Vancouver Sun – December 10, 2013)

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

Ministers’ decision to stop $2.5-billion project failed test of ‘procedural fairness,’ judge says

VANCOUVER — Prospects for a proposed open-pit gold and copper mine in northern B.C. improved this week after a B.C. Supreme Court justice turfed a previous decision by two senior provincial government ministers to reject the project.

Pacific Booker Minerals Inc. asked the B.C. Supreme Court in April to overturn Environment Minister Terry Lake and Energy, Mines and Natural Gas Minister Rich Coleman’s rejection last September of its $2.5-billion mining project, located 65 km north of Smithers at Morrison Lake. In a decision released Monday, Justice Kenneth Affleck set aside the ministers’ decision, raising the possibility the mine could yet proceed.

“(The) ministers’ decision refusing to issue the certificate failed to comport with the requirements of procedural fairness,” wrote Affleck in his decision, which awarded costs to the company.

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ONTC selloff costs pegged at $820 million – auditor – by Gord Young (North Bay Nugget – December 11, 2013)

http://www.nugget.ca/

The costs associated with selling off the Ontario Northland Transportation Commission could be more than $820 million, something the provincial government was unaware of when it announced plans to divest itself of the Crown agency.

In a report released Tuesday, Auditor General Bonnie Lysyk confirmed that the costs and liabilities associated with divestment far outweigh the projected savings of $265.9 million over three years. And she said the province did not clearly or fairly communicate the full impact of selling off the ONTC.

“The government made the divestment announcement before doing a comprehensive business-case analysis,” Lysyk said, in a release after tabling the report. “As a result, the government did not initially have an accurate picture of the possible costs and impacts of the ONTC divestment.”

Lysyk said the estimated known costs and liabilities could be as high as $820 million and that the price could soar even higher when coupled with as-yet-unknown costs of environmental clean-up of ONTC properties and the duty to consult with aboriginal peoples.

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China’s solar bubble bursting – by Ezra Levant (Toronto Sun – December 11, 2013)

http://www.torontosun.com/home

When Justin Trudeau said he admired China more than any other foreign country “because of their basic dictatorship,” it was a shock and a reminder that most Canadians know nothing of Trudeau’s policy beliefs.

By praising China’s government — specifically its dictatorship, not its people or its history or culture — Trudeau showed how outside the mainstream he is, and how cavalier when it comes to human rights. Trudeau lacks his father’s intellectual curiosity or accomplishment, but he seems to have inherited his father’s worst trait — an affection for totalitarian strongmen from Moscow to Beijing to Havana.

But Justin Trudeau made a second comment that received less attention. China’s “basic dictatorship is allowing them to actually turn their economy around on a dime and say we need to go green, we need to start, you know, investing in solar.” To Trudeau, China’s brutality is offset by the fact that they are “investing in solar.” As in solar panels.

Pierre Trudeau passed away in 2000, so this solar idea isn’t likely something Justin got from him. More likely it’s from Trudeau’s surrogate father — his campaign strategist, chief organizer and policy guru, Gerald Butts. Butts is Trudeau’s age, but much more grown up. And he’s an environmental extremist.

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