Bougainville mine: locals who oppose its re-opening must have a voice – by Antony Loewenstein (The Guardian – December 19, 2013)

http://www.theguardian.com/uk

Deference to Bougainvilleans must be the priority – a position that remains anathema to diplomats, politicians and insider media

The mine lies like a scar across a bloody face. Guava village sits in a remote area in Bougainville, Papua New Guinea (PNG), above a copper mine which closed 25 years ago. Resistance to the Rio Tinto-owned pit exploded in the late 1980s and during a recent visit, I got to stand above the massive hole that caused the crisis. Human rights abuses were rampant back then, with locals missing out on the financial spoils. Opposition to the enterprise was inevitable and necessary.

Run by Bougainville Copper Limited (BCL) from the 1970s, the Panguna mine spewed unprecedented amounts of pollution into the ground, water and atmosphere. It lingers to this day but nature has begun to reclaim its rightful place across kilometres of land, dipping its ferns, grass and lush green trees across oily and rusting equipment. Guava, with its 400 inhabitants, is a peaceful place up a steep rocky incline. During the rainy reason, clouds dance around unpredictably and the hot sun shines on the moist and muddy soil. From there, the view above Panguna is breath-taking, the scope of the environmental damage visible, and the lack of clean-up criminally negligent.

The Bougainville civil war, which was sparked by conflicts over the mine, lasted 10 years and cost the lives of up to 15,000 people. The PNG government blockade, comparable to that imposed on Saddam Hussein’s Iraq, caused immense suffering amongst the civilian population.

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Chrome, Cliffs and Fire: how Ontario’s Ring of Fire started burning for all the wrong reasons – by Razvan Isac (Global Business Reports Roundup – December 18, 2013)

http://gbroundup.com/

TORONTO, CANADA – The Ring of Fire, named so in honor of Johnny Cash’ famous country ballad, is a mineral rich region situated in Ontario’s deep north, approximately 540 km northeast of Thunder Bay. Containing chromite, nickel, copper, platinum, zinc and gold resources equating over $60 billion in value, it is even said that the Ring of Fire alone could sustain Ontario’s mining industry for a century. However, nothing as good as this comes easy in life, and this particular James Bay Lowlands area is no exception.

While several issues have been on the development agenda since the Ring of Fire’s discovery in 2007, the most controversial and complex ones so far have been the establishment of proper infrastructure and finding the appropriate formula for collaborating with the Matawa First Nations of the region. Given its scale and projected economic benefits, the Ring of Fire has certainly been a topic of high political interest for the last couple of years. However, on November the 20th, this subject became a fiery-hot topic that has since sparked several weeks of intense national media coverage and debate.

Cliffs Natural Resources, probably the largest private player with a stake in the region, announced on the 20th of November that it would be suspending its $3.3 billion Black Thor chromite project indefinitely. The company quoted project timeline uncertainties and the unresolved infrastructure issue as the main reasons for taking the decision. The announcement took the general public by surprise, and subsequently caused immediate and heated political debates, in which the likes of Ontario’s premier, Kathleen Wynne, and Ontario’s Minister of Northern Development and Mines, Michael Gravelle, were put in the spotlight. However, a closer look into the evolution of Cliffs Natural Resources’ Black Thor project developments in 2013 reveals plenty of early signs that this suspension was bound to happen.

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Canada: Québec Finally Adopts Its Reform Of The Mining Act – by François Paradis, Hugo-Pierre Gagnon and Sophie Amyot Osler, Hoskin & Harcourt LLP (Mondaq.com – December 19, 2013)

http://www.mondaq.com/

On December 10, 2013, Bill 70 – An Act to amend the Mining Act (Bill 70), tabled by the Minister of Natural Resources (the Minister) on December 5, 2013, was adopted by the Québec National Assembly. Bill 70 is the current government’s second attempt to reform Québec’s mining legislation after Bill 43, tabled in June and which sought to replace the existing Mining Act, was blocked by the opposition on October 30.

Bill 70 includes most of the changes proposed by Bill 43 (see our Osler Update of June 14, 2013, Plan Nord – Parti Québécois Advances Reform of Québec’s Mining Act) for the main provisions of Bill 43); however, in order to obtain the opposition parties’ support, the government had to make certain concessions, discussed below, on important aspects of the bill.

Conditions for granting a mining lease

First, with respect to the conditions for granting a mining lease, the ore processing feasibility study proposed in Bill 43 and which mining investors viewed as a major irritant, has been replaced by a scoping and market study, expected to be both less costly and less time consuming.

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BHP to close Perseverance nickel mine – by Oliver Probert (Australian Journal of Mining – December 19, 2013)

http://www.theajmonline.com.au/

BHP has ceased operations at its Perseverance mine in Leinster, WA, after the mine was shut following seismic activity in October.

Perseverance was closed on October 31 this year, after nine miners were trapped following a 3.7 magnitude earthquake. All nine were returned to the surface safely, and there were no injuries reported.

After further investigation, BHP has decided to formally cease operations at Perseverance, but will continue to maintain the underground mine – leaving the door open for the potential re-opening of the mine down the track.

BHP’s Leinster operations are part of its Nickel West business unit. “Since the [seismic] event, Nickel West technical and operational teams, supported by independent experts, have been assessing the technical data and risks on the sub-level cave operations and all the options available,” BHP said on Tuesday.

“Following this analysis BHP Billiton has decided it is unable to safely resume operations in the sub-level cave at Perseverance mine.”

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Australian bauxite miners are pinning their hopes on a new market in China – by Kathryn Diss (Australian Broadcasting Corporation – December 19, 2013)

http://www.abc.net.au/news/

Australian bauxite miners are pinning their hopes on a turnaround in the struggling industry, with a new market likely to open up in China.

Indonesia has long satisfied China’s growing hunger for bauxite to feed its aluminium smelters, which has prevented Australian companies from entering the market.

Now that might change, with Indonesia expected to endorse tough, new restrictions on exports from January. Peter Kopetz from Stockbroking agency State One Capital says he has been closely watching the bauxite price increase in recent months.

“Some of the projects which maybe were marginal beforehand are becoming more economic as the price goes up and we’ve seen a gradual price increase over the last 12, 24 months and we see that continuing,” he said.

“There’s a push for Australia to become a more prominent player in the bauxite industry; we’ve got the quality, we’re close to China and of course we can supply long-term the raw materials to whatever china needs.”

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COLUMN-China’s 2014 commodity demand subject to policy influences – by Clyde Russell (Reuters U.K. – December 19, 2013)

http://uk.reuters.com/

Clyde Russell is a Reuters market analyst. The views expressed are his own.

LAUNCESTON, Australia, Dec 19 (Reuters) – China’s commodity demand has been lumpy this year, with weakness in crude oil and copper being offset by robust gains in iron ore and coal, and this pattern is likely to continue into next year.

However, the relative winners may change. Much will depend on the track of economic reforms and how much success the world’s largest commodity user has in rotating its economy to be more consumer-led.

China’s official target for gross domestic product growth was 7.5 percent for 2013, and while the target for next year has not yet been announced, it’s likely to be maintained or perhaps lowered slightly. But more important than the overall target for GDP is how the growth is achieved.

The pattern for the past two years has been that China’s economy has seen momentum losses in the key industrial sector, followed by a re-acceleration in growth as policies are implemented to boost infrastructure and construction investment.

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Indonesia to Study Rules for Miners With Smelters as Ban Looms – by Yoga Rusmana and Agus Suhana (Bloomberg News – December 19, 2013)

http://www.bloomberg.com/

Indonesia, the world’s largest mined nickel producer, will study rules for mining companies operating smelters as a ban on mineral-ore shipments nears, said Coordinating Minister for the Economy Hatta Rajasa.

The government will seek legal advice on the regulations as interpretations differ, Rajasa said today. The law that bans shipments must be fully implemented and companies that don’t have smelters will have to comply, he said.

Freeport-McMoRan Copper & Gold Inc. (FCX), owner of the world’s second-biggest copper mine at Grasberg, said last week it intends to abide by the terms of its contract of work, which allow it to operate the mine and export concentrate. Indonesia is seeking to boost the value of shipments by promoting local processing and is set to prohibit all ore exports after Jan. 12.

“We will look at regulations but they cannot contradict the law,” Rajasa told reporters in Jakarta. “We must pay attention to business concerns.”

Three-month nickel advanced 0.2 percent to $14,165 a metric ton on the London Metal Exchange at 8:39 p.m. in Singapore.

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Go short gold, long nickel – Barclays – by Geoff Candy (Mineweb.com – December 19, 2013)

http://www.mineweb.com/

The bank expects 2014 to be another tough year for commodities but sees good things to come from a move out of structural surplus.

GRONINGEN (MINEWEB) – 2014 is likely to be another difficult year for Commodities, writes Barclays, in a note out earlier this week. But, it expects base metals to out perform both oil and precious metals in the early parts of the year.

The main reasons for this are twofold. Firstly, on the base metals side, Barclays expects 2014 to mark the end of a period of structural surplus that has afflicted base metal markets to a greater or lesser degree since 2007/2008.

“Markets such as aluminium and lead are expected to move into deficit, while surpluses in nickel and zinc are likely to shrink dramatically. Even in copper, the one exception, where we expect supply to grow faster than demand, the surplus next year is likely to be very modest indeed,” the bank writes.

This, Barclays says is primarily a result of an acceleration in demand growth that is currently running at an annualised rate of around 8%, which it points out is double the level of the first quarter of 2013.

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In the wake of 2011 Vale deaths, Ontario launches full mine safety review – by Henry Lazenby (MiningWeekly.com – December 19, 2013)

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

TORONTO (miningweekly.com) – The Ontario provincial government of Wednesday launched a comprehensive mining safety review to improve the health and well-being of workers in the sector, heeding calls for reform after two miners died at Brazilian diversified mining group Vale’s Sudbury operations in 2011.

Starting early in the New Year, the province’s chief prevention officer would lead an advisory group of industry, labour, health and safety representatives to begin a sweeping review on a wide range of areas within the sector.

The review followed months of intense persuasion by several unions, families and friends of the two men – Jason Chenier (35) and Jordan Fram (26) – killed in a June 8, 2011 accident at Vale’s Stobie underground mine, near Sudbury.

Toronto-based Vale Canada, which owns and operates the operation, was in September fined a record C$1.05-million for the death of the men after Vale Canada pleaded guilty to three charges in a plea bargain, which some had billed as a betrayal of workers and their families by the provincial government.

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End of boom? Not for Australia’s iron ore miners – by James Regan (Reuters U.K. – December 18, 2013)

http://uk.reuters.com/

VALLEY OF THE KINGS, Australia – (Reuters) – A fleet of charter flights ferry thousands of workers to and from this outback mine site. The resort-like housing offers gourmet food, cheap alcohol, swimming and well-equipped gymnasiums.

Australian iron ore mining seems immune from the spending crunch afflicting other commodities as a slowdown in Chinese growth cools a decade-long mining boom.

Rio Tinto (RIO.AX), BHP Billiton (BHP.AX) and Fortescue Metals Group (FMG.AX) are bulking up in Western Australia’s iron-rich Pilbara desert as if the mining boom had never ended. A place where capital expenditure is still measured in the billions.

The miners are speeding up transformation of an area the size of Peru into a moonscape of rust-red pits linked via thousands of kilometres (miles) of rail lines to giant iron ore ports perched on the easternmost edge of the Indian Ocean.

“All this discussion about the end of the mining boom, we don’t see it,” said Fortescue Chief Executive Nev Power, before leading uniformed workers through dawn exercises at the company’s King’s mine. “We sell all we mine.”

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UPDATE 1-Vale seeks fertilizer partner; potash to top 4 mln T/yr – by Jeb Blount and Sabrina Lorenzi (Reuters U.S. – December 18, 2013)

http://www.reuters.com/

RIO DE JANEIRO, Dec 18 (Reuters) – Brazilian miner Vale SA expects to more than replace the 4 million tonnes a year of potash it stands to lose from the cancellation of its Rio Colorado project in Argentina as it opens mines in Brazil and Canada, its top executive said on Wednesday.

At least 2 million tonnes a year of potash output is expected from its Carnalita project in Brazil’s northeastern state of Sergipe and 3 million to 5 million tonnes a year could be mined from its Kronau project in Canada’s Province of Saskatchewan, Chief Executive Officer Murilo Ferreira told reporters on Wednesday.

Vale canceled plans to build the $6 billion Rio Colorado project in Argentina in March on concerns the country’s currency-exchange policies made the mine, rail and port project unprofitable and after being denied legal tax breaks. It is now trying to sell shares of its fertilizer unit or stakes in specific fertilizer projects, Ferreria said.

“We are looking for partners in our fertilizer business,” he said at an annual holiday lunch with reporters. “But if the partner takes a stake in our fertilizer unit, we don’t want someone who is just a financial partner, we want someone who has their own production already.”

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Struggling fertilizer makers search for next great crop product – by Rod Nickel (Reuters U.S. – December 18, 2013)

http://www.reuters.com/

WINNIPEG, Manitoba – Dec 18 (Reuters) – Fertilizer makers are boosting output of branded niche products, drawing from the playbook of plastics producers, just as the volatile crop nutrient industry endures its worst slump since the recession.

The products from companies like Mosaic Co, Intrepid Inc and Agrium Inc may have relatively small markets, but their unique nature leaves them somewhat buffered from the volatility of widely produced commodity forms of potash, phosphate and nitrogen.

Chicago corn futures are trading at about half their record high of mid-2012, dragging down fertilizer values, and last summer’s breakup of Belarusian Potash Co has upended the once tightly controlled potash trade.

But while conventional potash producers have cut back production, output of specialty products is on the rise. Some generate larger profit margins than traditional products, while others benefit from tapping markets with limited or no competition.

It is a strategy long followed by makers of polyethylene, the most common plastic. These companies have increased their profits through innovation, by developing such now-commonplace products as garbage bags with drawstrings and packaging designed to keep mixed salads fresh.

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Bigger battles await even if Northern Gateway panel endorses pipeline – by Claudia Cattaneo (National Post – December 19, 2013)

The National Post is Canada’s second largest national paper.

When a joint review panel of the National Energy Board hands down its recommendation Thursday on whether the Northern Gateway oil pipeline is in the public interest, it will bring to a close a four-year, $500-million-plus regulatory process, paid for by proponent Enbridge Inc. and 10 oil companies supporting it.

The panel is expected to approve the project to move oil from Alberta to the British Columbia coast — with conditions — after 18 months of public hearings in Northern communities along the pipeline route and reviewing evidence from 221 interveners, 13 government participants and 1,100 oral statements. The three-member panel also grilled 63 Northern Gateway technical experts for 69 days.

As Enbridge president and CEO Al Monaco put it last month: “We are confident that we have done a very thorough job, based on our application and the process we have gone through, and yes we think we will get regulatory approval.”

Anyone who complains the review wasn’t good enough can only be motivated by a desire to obstruct new pipelines. Only the Mackenzie Gas Pipeline Project review rivalled Northern Gateway in scope and intensity, and that one took so long that, by the end of it, the Mackenzie pipeline was no longer needed.

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Vale CEO talks ‘consortium’ with Glencore – by Staff (Sudbury Star – December 19, 2013)

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

A comment by Vale chief executive officer Murilo Ferrira, reported by Reuters on Wednesday, will have people talking again about a potential merger, or partial merger, between Vale and Glencore Xstrata operations in Sudbury.

Reuters reported Ferreira as saying he expects Vale’s “consortium” with Glencore in Sudbury nickel projects to be defined by the first quarter of 2014 and for the venture to operate as a single unit.

Vale spokesman Cory McPhee said Ferreira’s statement was made at an end-of-the-year luncheon with reporters in Rio de Janeiro on Wednesday at which Ferreira answered several questions.

His answer to the one about a Sudbury merger was a repetition of what he said during Vale Days at the New York and London Stock Exchanges a few weeks ago when he told reporters he expected to conclude the discussions in the first quarter of 2014, said McPhee.

“He’s speaking very broadly to potential outcomes,” said McPhee.

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