Miners weigh in on billion-dollar Ring of Fire pledge – by Ian Ross (Northern Ontario Business – April 30, 2014)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. Ian Ross is the editor of Northern Ontario Business ianross@nob.on.ca.

The province’s billion-dollar promise to jump-start development in the Ring of Fire was not lost on the exploration companies operating in the James Bay region.

Earlier this week, the Wynne government announced it was earmarking $1 billion in its May 1 spring budget to develop transportation infrastructure to reach the Far North mineral exploration camp.

They challenged the federal government and Natural Resources Minster Greg Rickford to provide matching dollars on this “next great mining development” for Canada. “There’s an element of politics involved for sure, but ultimately no infrastructure gets built without funding,” said Alan Coutts, president and CEO of Noront Resources.

He called the funding a “logical next step” that dovetails with the province’s creation of a Ring of Fire development corporation and the signing of a framework agreement with the Matawa chiefs to begin negotiating how development will unfold.

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Strategist criticizes Ontario’s management of Ring of Fire – by Ian Ross (Northern Ontario Business – April 30, 2014)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. Ian Ross is the editor of Northern Ontario Business ianross@nob.on.ca.

The Ontario’s government’s handling of the Ring of Fire has been a “mismanaged file,” according to a Toronto lawyer, author and strategist specializing in mining and First Nations negotiations.

Bill Gallagher didn’t come away impressed with this week’s announcement by the Wynne government to pledge $1 billion toward its fledgling Ring of Fire development corporation, calling the province largely “missing in action” for the last five years.

With the provincial budget reveal only days away, he said political optics were obviously at play in the April 28 funding announcement. “It comes very late in the day where the track record would point to a fairly inept political handling of the Ring of Fire,” said Gallagher, a former federal negotiator at the director-general level in the resources sector.

With last fall’s stop-work decision by Cliffs Natural Resources in the Ring of Fire, various mining-related legal actions underway, and uncertainty over how the entire mining camp will come together, Gallagher isn’t convinced that a billion-dollar promise will expedite any real development progress in the Far North, which he sees as being 10 years away.

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Baffinland wins approval for scaled-down Nunavut iron mine (CBC News North – April 29, 2014)

http://www.cbc.ca/north/

Baffinland Iron Mines has won the go-ahead to proceed with a considerably scaled down version of its proposed iron mine on North Baffin Island.

In December of 2012, Baffinland was approved to move 18 million tonnes of iron ore each year, shipping it first by rail to the west coast of Baffin Island, then by ships that would travel year round through the ice-choked waters of Foxe Basin to markets in Europe.

Just weeks after winning approval for the plan, Baffinland changed it, proposing a phased approach that would move about 3.5 million tonnes of ore per year using an existing road and port on the eastern side of Baffin Island, and citing the poor economy as a reason for doing so.

To accommodate the change of the plans, the Nunavut Impact Review Board modified 44 of its initial 182 terms and conditions for the mine and added eight new ones.

In a letter to the Nunavut Impact Review Board today, Bernard Valcourt, minister of Aboriginal Affairs and Northern Development, accepted most of those changes, modifying nine and rejecting one.

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War of Titans: Rio Tinto suing Vale over iron ore rights in Guinea – by Cecilia Jamasmie (Mining.com – April 30, 2014)

http://www.mining.com/

In a new and unexpected twist in the battle to control Guinea’s rich Simandou iron ore deposits, the companies once operating in the area have began a series of billion-worth lawsuits, with iron ore miner No.2 Rio Tinto (LON, ASX:RIO), suing the world’s largest producer Brazil’s Vale (NYSE:VALE).

The first one to shoot was Vale, which filed Monday an action against his former partner in Guinea BSG Resources, the mining arm of Israeli tycoon Beny Steinmetz’s empire, before the London Court of International Arbitration, Swiss newspaper Le Temps reports (in French).

One of the paper’s sources said Vale is seeking a minimum compensation of US$1.1 billion, due to losses suffered because BSGR’s actions in Guinea. Last week, The West African nation concluded that BSG Resources obtained the Simandou and Zogota concessions through corrupt practices and decided to revoke all mining rights for both companies.

Vale had a 51% stake in the project, which acquire from BSGR in 2010 in a $2.5bn deal.The company however only paid $500 to Steinmetz’s firm, suspending all instalments left as soon as it learned of the accusations against its partner.

Guinea’s President Alpha Conde said Wednesday it was clear the Rio de Janeiro-based firm did nothing wrong, adding the mining giant is free to reapply to acquire rights to one of the largest untapped iron ore deposits in the world.

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Gabriel may seek billions in arbitration over stalled Romanian mine – by Eric Reguly (Globe and Mail – April 30, 2014)

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.

The Toronto mining company whose 15-year effort to open Europe’s biggest gold project has gone nowhere is preparing an international arbitration case against the Romanian government that would seek billions of dollars in damages.

Gabriel Resources is making plans for the case, which probably would be heard in Vienna in the second half of the year, as it starts to wind down its activities in Romania’s Transylvania region to conserve cash. About 400 employees, or 80 per cent, of Gabriel’s Romanian subsidiary, Rosia Montana Gold Corp. (RMGC), have been suspended at three-quarters pay. The company has said it may fire them in May “if there is no progress in the advancement of the project.”

Gabriel, which is listed on the Toronto stock exchange but run from London, is not expecting a breakthrough any time soon. The Romanian parliament’s chamber of deputies is scheduled to vote on a bill that would give special legal status to the $1.5-billion (U.S.) project, allowing it to go ahead, on May 7.

But the company does not expect the vote to go in its favour, partly because public opposition to the mine and its cyanide-based extraction technology remains strong.

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Gold giants’ merger falls apart as Barrick-Newmont spat goes public – by Rachelle Younglai (Globe and Mail – April 29, 2014)

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.

A spat between Barrick Gold Corp. and Newmont Mining Corp. erupted into a public war of words, with the companies accusing each other of ruining their $13-billion (U.S.) merger.

Barrick said its American rival reneged on their deal and tried to change key provisions, including the location of the head office in Toronto. Newmont disagreed with Barrick’s version and faulted the Canadian company’s incoming chairman John Thornton for not being constructive.

Over the years, the world’s two largest gold producers have made several attempts to unite and cut expenses in Nevada, where they both own multiple mines. The slump in the gold industry fuelled their latest merger ambitions, with the companies identifying about $1-billion in cost savings.

But they ultimately could not overcome two decades of personality clashes and cultural differences, which exploded into the public domain on Monday and likely killed any future merger discussions.

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UPDATE 2-Guinea president – Vale did no wrong, can bid to reclaim mining permits – by Stephanie Nebehay (Reuters India – April 30, 2014)

http://in.reuters.com/

GENEVA, April 30 (Reuters) – Guinea’s President Alpha Conde said on Wednesday he hoped Brazilian miner Vale would bid to reclaim two iron ore permits, because the company had not been involved in the alleged corruption that led to their cancellation.

Guinea cancelled the two mining concessions jointly held by Vale and BSG Resources earlier this month, after a government-appointed technical committee accused BSGR of obtaining the rights through corruption.

BSGR, the mining branch of Israeli billionaire Beny Steinmetz’s conglomerate, has denied the allegations and said it will seek international arbitration. Conde told reporters during a visit to Geneva on Wednesday that Vale, the world’s largest iron ore producer, had done nothing wrong.

“We will launch an open and transparent bidding process … Vale was not involved in the corruption or aware of it and we strongly hope that Vale will participate,” Conde said.

“Vale can come back through the bidding process,” he added.

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Enigmatic former Xstrata boss seeks to build another mining giant – by Silvia Antonioli and Sonali Paul (Reuters India – April 30, 2014)

http://in.reuters.com/

LONDON/MELBOURNE, April 30 (Reuters) – Former Xstrata boss “Big Mick” Davis wants to build another mining giant, partly driven by what several sources say is a keen sense of rivalry with Glencore’s Ivan Glasenberg, but it won’t be easy even for someone with his proven track record.

Davis has been involved in some of global mining’s biggest and most formative deals, including the creation of BHP Billiton and its smaller rival Xstrata. He expanded Xstrata over a decade from a $500 million company to a $46 billion one taken over by Glencore, which was already its largest shareholder, last year.

Now he has set up a fund, X2 Resources, which is looking to buy up mines again and is reportedly targeting some of the very assets he traded more than a decade ago.

Unlike then, when miners rode a boom powered by double-digit growth in China, coal prices now languish near four-and-a-half-year lows and the outlook for coal demand growth is uncertain.

Yet armed with $3.75 billion and rising, and planning to raise three times as much in debt, Davis was reported this week to be lining up a bid for BHP’s thermal coal assets, along with aluminium, manganese and nickel assets that BHP wants to jettison.

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Peter Munk’s career comes to end as Newmont firestorm envelops Barrick – Peter Koven (National Post – April 29, 2014)

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

It wouldn’t be in Peter Munk’s nature to go out quietly. But no one expected this.

As Mr. Munk, 86, officially retires at Barrick Gold Corp.’s annual meeting on Wednesday, he does so in the midst of an appalling public feud between Barrick and Newmont Mining Corp., which went from eager merger partners to mortal enemies in a matter of days. It will take years to rebuild the bridges between these companies, if indeed that ever happens.

Mr. Munk was not closely involved in the Newmont negotiations — he left that to his hand-picked successor John Thornton. But he still found a way to stick himself in the middle of the dispute. In a detailed interview with the Financial Post last week, just as talks were collapsing, he ripped Newmont’s corporate culture and said the company is “not shareholder friendly.” Newmont was not amused.

Remarkably, that was one of the less incendiary things Mr. Munk said about his U.S. rival over a lengthy conversation that touched on many aspects of his career. He has always spoken his mind and never worried too much about what people think of it. But as his time in Canadian business comes to a close, he was even more candid, thought-provoking and entertaining than usual.

For example, if Newmont didn’t like the “not shareholder friendly” line, it certainly won’t appreciate his description of how Barrick found its flagship gold mine and became the dominant player in Nevada:

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Barrick needs a deal maker, not a deal breaker – by Boyd Erman (Globe and Mail – April 29, 2014)

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.

Barrick Gold Corp. co-chairman John Thornton has laid out a vision for creating a diversified miner – a vision that is going to be more difficult to realize after a nasty end to talks in his first major transaction.

Mr. Thornton has stated he wants Barrick to be a leader “in a range of minerals.” To do that, he is going to have to be a buyer, adding companies that produce other metals to complement Barrick’s output of gold and copper. So it’s all the more problematic that would-be merger partner Newmont Mining Corp. singled out Mr. Thornton as a particular obstacle to getting a deal done. Even if it’s not true (and it’s hard to know what is fact in any such situation), the statement is out there now and will be attached to Mr. Thornton’s name.

Negotiations break down all the time, between all types of companies. But rarely do supposedly secret talks spill into the public sphere quite so comprehensively as they have in the past week, as seemingly every detail of the talks between Barrick and Newmont landed in the press. Since the first reports that merger talks between the two had hit a snag, the premium, the timing, the consideration, the executive structure and other key terms all made their way to the press even though neither side ever publicly confirmed the negotiations.

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Ring of Fire – Good timing, good politics (Thunder Bay Chronicle-Journal Editorial – April 29, 2014)

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

THE timing of Monday’s provincial offer of $1 billion to access the Ring of Fire just three days before the budget is entirely political, of course.

It could have come months ago. Instead it is designed for maximum leverage against opposition parties who will be accused by the Liberals of blocking Northern economic development if they vote against Thursday’s budget.

The Liberals will say they’ve been trying to get Ottawa to agree to partner in building an essential transportation corridor into the mineral-rich region around James Bay.

It took regional cabinet ministers Michael Gravelle for Ontario and Ottawa’s Greg Rickford months to agree to a meeting and not much came out of it except to agree to the obvious — that this is a remarkable economic opportunity that must not be passed up.

Here, too, Ontario’s political initiative Monday is timely, coinciding with the resumption of Parliament where the governing Conservatives remain intent on jobs and prosperity that are in relatively short supply in Northern Ontario. The message is clear: if you’re serious, match our offer.

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UPDATE 2-S.Africa’s AMCU says striking miners reject platinum wage offer – by Zandi Shabalala (Reuters India – April 29, 2014)

http://in.reuters.com/

MARIKANA, South Africa, April 29 (Reuters) – Members of South Africa’s striking mining union AMCU have rejected the latest wage offer from the world’s top three platinum producers, its president said on Tuesday, extending a crippling 14-week stoppage.

“The members have rejected the offer from the employer,” Joseph Mathunjwa told reporters after addressing a rally of workers near Lonmin’s Marikana mine.

The Association of Mineworkers and Construction Union (AMCU) held similar rallies in recent days at Anglo American Platinum and Impala Platinum. It now plans to meet this week with the companies to inform them in person of the rejection, Mathunjwa said.

Marathon wage talks collapsed last week, dashing hopes for an imminent end to South Africa’s longest and most costly mining strike, which has hit 40 percent of global platinum production and threatens growth in Africa’s most advanced economy.

The companies say they are taking their offer directly to the workers via cellphone text messages and radio and newspaper spots in a bid to circumvent AMCU’s leadership, setting the stage for a grinding showdown between capital and labour.

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New calls for Canadian mining ombudsman so far unanswered – by Marion Warnica (CBC News Edmonton – April 28, 2014)

http://www.cbc.ca/edmonton/

Federal mining watchdog spot empty for seven months

A group of South American advocates wants Canada to appoint an ombudsman to regulate its mining activities outside its borders.

The group says the federal government, which has yet to release the results of its long-awaited review into its foreign mining policies, should be more involved in the monitoring and management of its foreign operations.

“A great deal of economic development that Canada enjoys, a lot of that results in human rights violations that we cannot tolerate,” said Archbishop Pedro Barreto, the president of the Solidarity and Justice Department in the Latin American Episcopal Council based in Huancayo, Peru.

Barreto spoke to CBC News as part of a larger investigation into water stress in Peru. He has joined a growing number of advocates and NGOs who want Canada to appoint a legislated mining ombudsman to oversee Canadian extraction activities around the world.

“The government of Canada is decisively supporting mining enterprises, without caring for lives or their social responsibility – and we are severely concerned about this,” said Barreto. Critics await improvements to failed complaints process

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Barrick-Newmont merger collapses into toxic war of words – by Peter Koven (National Post – April 29, 2014)

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

TORONTO — A much-anticipated merger between Barrick Gold Corp. and Newmont Mining Corp. has collapsed into a toxic public feud between leaders of the two firms that simply could not get along.

Talks between the two companies are finished, and sources said there is no chance they will start again anytime soon. That is bad news for shareholders, who stood to benefit if the miners combined their highly complementary Nevada operations.

It would have been the biggest deal in the history of the gold mining sector. Its failure demonstrates that clashing personalities can destroy a transaction that seemingly makes sense in every other way.

The two firms have tried to merge numerous times over the years, but personality clashes got in the way each time. This time was no different, though this was as close as they ever got to a deal. Newmont initiated the latest round of negotiations.

“They’re like two kids in the sandbox,” said John Ing, president and gold analyst at Maison Placements Canada. “The logic of the merger is there, but when you get down to board seats and personalities, it’s a different kettle of fish.”

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Province pledges $1 billion to Ring of Fire – by Lisa Wright (Toronto Star – April 29, 2014)

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.

But funding only available if Ottawa matches it.

The provincial government says it’s prepared to pump up to $1 billion into all-season access to the mineral-rich Ring of Fire deposit in Northern Ontario — provided Ottawa matches the funding.

Calling the $60 billion site Canada’s next great mining development, Northern Development and Mines Minister Michael Gravelle announced Monday that the funding would go toward a much-needed transportation and power corridor to the remote site located in the James Bay lowlands.

“The Ring of Fire represents one of the most significant mineral regions in the province, and includes the largest deposit of chromite ever discovered in North America,” said Gravelle. He added that mine development will create thousands of jobs for generations to come and boost Northern Ontario’s struggling economy.

While a Toronto-based company poised to open a nickel mine in the Ring called the potential financing a “vital milestone” to development, critics called it part of the Liberal government’s pre-election spending spree that comes just days before the Ontario budget is announced.

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