April 24, 2014 – Republic of Mining

Peter Munk to leave Barrick Gold having seen its highs and lows – by James Wilson (Financial Times – April 24, 2014)

April 24, 2014

http://www.ft.com/home/us

Peter Munk started Barrick Gold with $40m of his own money in 1982, knowing not much about mining.

Now 86, and after more than 30 years in the gold business, Mr Munk still talks about Barrick having been the entrepreneurial “young upstart” for much of its life – but it became a company worth $50bn, a Canadian national champion built by a Hungarian-born refugee and the largest producer of gold in history.

Yet the past two years have been tough on Mr Munk, Barrick and the rest of the gold industry, particularly 2013, when Barrick posted $11.5bn of writedowns, cut its dividend and had to raise $3bn in equity to try to cut its debt.

“I would not have chosen this particular year as my final one as chairman, but I don’t get to write the script,” a chastened Mr Munk wrote in the company’s annual report. Barrick is now worth about $21bn.

Mr Munk also acknowledged the damage wrought by Barrick’s acquisition of Equinox Minerals in 2011. The unexpected diversification into copper came at an inflated price, for cash, and sparked doubts last year over Barrick’s debt levels and liquidity.

Rio Tinto’s stance on Kakadu cleanup alarms Indigenous owners – by James Norman (The Guardian – April 24, 2014)

April 24, 2014

http://www.theguardian.com/uk

Giant says rehabilitation of uranium mine – site of a radioactive spill last year – is a matter for its Australian subsidiary

It’s a long way from central London to Kakadu national park in Australia’s Northern Territory. When Rio Tinto’s chief executive, Sam Walsh, addressed shareholders at the company’s annual general meeting last week, there was a strong sense of the distance.

Walsh refused to offer any guarantees that the mining giant would help its Australian subsidiary company Energy Resources of Australia (ERA) clean up the site of its Ranger uranium mine within the park.

“This is a public Australian company and clearly that is an issue for them,” Walsh said. When pressed on the point he added: “We are clearly shareholders, but it is a matter for all shareholders and a matter for the ERA board.” The Ranger mine was in the news in December last year when a leach tank containing 1.4m litres of acidic radioactive slurry leaked.

Walsh’s words were alarming for Mirarr traditional owners who live in the park and are no strangers to negotiating with mining companies. They are anxious about ERA’s commitment to the rehabilitation of the site.

ONTARIO GOVERNMENT NEWS RELEASE: Ontario and Matawa Member First Nations Celebrate Historic Framework for Negotiations on the Ring of Fire

April 24, 2014

Premier Joins First Nations Chiefs to Formalize Regional Framework

April 24, 2014 1:00 p.m. Office of the Premier

Premier Kathleen Wynne and the Matawa member First Nations Chiefs were in Thunder Bay today, where they joined Matawa community members, to officially celebrate the recent signing of a landmark regional framework agreement to develop the Ring of Fire.

The Regional Framework Agreement is a first step in the historic, community-based negotiation process that will bring together the nine First Nations and the Province of Ontario to discuss and negotiate an approach for development in the First Nations’ traditional territories. The process will help ensure that First Nations participate in, and benefit from, Ring of Fire developments.

The agreement ensures that First Nations and Ontario can work together on resource development opportunities. That includes: long-term, regional environmental monitoring; enhanced participation in environmental assessment processes; resource revenue sharing; social and economic supports; and regional and community infrastructure.

In attendance at the ceremony were Chief Sonny Gagnon of Aroland First Nation, Chief Fred Sackaney of Constance Lake First Nation, Chief Elizabeth Atlookan of Eabametoong First Nation, Chief Celia Echum of Ginoogaming First Nation, Chief Allen Towegishig of Long Lake #58 First Nation, Chief Elijah K. Moonias of Marten Falls First Nation, Chief Peter Moonias of Neskantaga First Nation, Chief Johnny Yellowhead of Nibinamik First Nation and Chief Cornelius Wabasse of Webequie First Nation.

Barrick invites Newmont to restart merger talks – by Rachelle Younglai (Globe and Mail – April 24, 2014)

April 24, 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. has formally asked Newmont Mining Corp. to resume merger talks after their negotiations hit an impasse late last week, according to a person familiar with the situation.

The North American-based gold miners had come close to agreeing on an all-stock deal, but their discussions broke down over which assets to spin out from the combined company, other sources have said.

The companies had aimed to make an announcement before their annual shareholder meetings this month. Colorado-based Newmont held its meeting in Delaware Wednesday morning, and Toronto-headquartered Barrick’s meeting is scheduled for April 30.

Barrick e-mailed the request to restart talks to Newmont, outlining the terms of their friendly proposal as well as issues that still must be resolved, according to the source familiar with what transpired.

China’s war on smog will put the reins on global coal demand – by Jeff Rubin (Globe and Mail – April 24, 2014)

January 15, 2015April 24, 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.

China’s pollution epidemic has finally spurred the country’s leadership to declare a war on smog. It’s about time. Chinese citizens are angry about what’s going into their lungs, while a recent government report says pollution has left 16 per cent of the country’s land unfit for use.

Much of that pollution can be traced back to the billowing smoke stacks attached to China’s fleet of coal-fired power plants. If Beijing is indeed sincere about taking the fight to pollution, then these ageing plants will be on the front line. Global coal producers are already sitting up and taking notice.

China relies on coal for roughly three-quarters of its power generation. Its coal-fired power plants combust nearly as much coal as the rest of the world put together. Coal prices, for their part, are already tumbling in part due to a slowdown in China’s economic growth. Spot prices at Newcastle, Australia, the world’s largest thermal coal exporting terminal, have plunged from a monthly average high of $142 a tonne in January 2011 to $78 a tonne last month.

BHP still sees [Pilbara] greenfields – by Andrew Burrell (The Australian – April 23, 2014)

April 24, 2014

http://www.theaustralian.com.au/business

BHP Billiton iron ore boss Jimmy Wilson has dismissed suggestions that the era of multi-billion-dollar greenfields iron projects in the Pilbara has come to an end, even as the mining giant focuses on extracting efficiencies rather than building new mines.

Mr Wilson also refused to be drawn into forecasting the iron ore price amid fears it could tumble in response to patchy Chinese economic data. He said few ¬people had any idea about the outlook for Australia’s most valuable export commodity.

Speaking at the opening of BHP’s $US3.6 billion ($3.9bn) Jimblebar mine near the town of Newman, Mr Wilson said he and his team had “impressed ourselves” by boosting production forecasts from its West Australian operations from 207 million ¬tonnes per annum to 217mtpa for this financial year.

The improved outlook had been achieved through operational improvements, productivity gains and technological innovation rather than any major capital spending. But Mr Wilson rejected suggestions that Jimblebar, along with Gina Rinehart’s $10bn Roy Hill project, could be the last greenfields mines of the Pilbara iron ore boom.

He said the reluctance by miners to allocate billions of dollars towards new mines was driven by the fact that Chinese raw steel production had slumped from a growth rate of 24 per cent almost a decade ago to as low as 3.4 per cent in coming years.

Editorial: Diamonds a lodestar in Canadian mining firmament – by John Cumming (Northern Miner – April 23, 2014)

April 24, 2014

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. Editor John Cumming MSc (Geol) is one of the country’s most well respected mining journalists. jcumming@northernminer.com

While much of the global mining industry has been limping along under sagging commodities prices and looming oversupply, one of the brightest spots has been the Canadian diamond-mining industry, which has weathered its wild, rocky youth and settled into its role as a reliable discoverer, developer and miner of top-quality diamonds.

It remains one of the most difficult, long-shot tasks in mining: finding and developing an economic diamond deposit. And it takes a special kind of investor to embrace diamond miners’ extreme risk–reward ratios and extra-long time horizons. But taking a look across Canada, we see all kinds of positive developments in the next generation of diamond companies and their assets.

This month Dominion Diamond — formerly Harry Winston Diamond — is heading into its second year as owner and operator of the prized Ekati open-pit and underground diamond mine in the Northwest Territories, picked up for US$553 million from BHP Billiton on April 10, 2013.

On a 100% basis, Ekati is home to 18.8 million carats in reserves in four pipes, plus an eye-popping 127 million carats in the measured and indicated category and 19 million carats in the inferred category, all in eight pipes.

Platinum strike highlighting huge potential opportunity loss for economy – by Martin Creamer (MiningWeekly.com – April 23, 2014)

April 24, 2014

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

JOHANNESBURG (miningweekly.com) – The prolonged strike of the Association of Mineworkers and Construction Union in the platinum belt is highlighting the colossal potential opportunity loss to the South African economy should the country lose out on its platinum patrimony, which has an amazingly bright latent future.

Platinum has the potential to tick all the important economic boxes for a South Africa that is striving to add maximum value to its metals and minerals. A fuel cell industry, with platinum at its heart, would support South Africa’s drive for economic growth and jobs. Early projections point to massive future global demand for platinum, but blurring the metal’s great potential future are concerns around security of supply.

Hydrogen South Africa (HySA)/Catalysis, a project backed by the South African taxpayer and co-hosted by the University of Cape Town and the State-owned Mintek, estimates that future global demand for platinum catalysts in fuel cells – at only 0.1 g for every kilowatt of output – would absorb South Africa’s entire current platinum mining capacity.

“When the fuel cell technology industry takes off, it’s going to be a multibillion-dollar market,” says HySA/Catalysis Centre of Competence director Dr Olaf Conrad, who, with HySA/Catalysis key programme manager Dr Sharon Blair, spoke to Mining Weekly Online from Cape Town.

Transport Canada orders 5,000 most dangerous tanker cars off rail system – by Jeff Lacroix-Wilson (National Post – April 24, 2014)

April 24, 2014

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

OTTAWA – Transport Canada has announced new regulations tightening safety on Canada’s railways, beginning with ordering the 5,000 most dangerous tanker cars off the rails.

The new rules also cover speed limits, route assessments, emergency response plans and the phasing out of tens of thousands of dangerous railcars.

Transport Minister Lisa Raitt announced the moves Wednesday, accepting major safety recommendations of the Transportation Safety Board following last summer’s tragedy in Lac-Megantic, Que., in which a train carrying 113,000 litres of crude oil derailed, exploded and killed 47 people.

About 5,000 DOT-111 tanker cars are to be removed from Canadian railways within 30 days. Another 65,000 DOT-111 cars must be removed or retrofitted within three years, a timeframe rail industry experts are calling “ambitious.”

The measures didn’t fully satisfy NDP leader Tom Muclair. “What happens in the meantime in all those communities where this very dangerous material is being transported today?” he asked. “You can’t tell us you know that they’re dangerous and yet you’re going to continue to allow them to roll through these communities.”

Pyhäsalmi Mine Oy: Bringing ore to the surface – by Will Daynes (BE Mining – April 23, 2014)

April 24, 2014

http://www.bus-ex.com/mining

Located in the town of Pyhäjärvi in the south of Oulu province, in central Finland, the Pyhäsalmi mine is an underground copper and zinc mine, owned by Canadian mining corporation First Quantum Minerals.

With a depth measuring 1,444 metres, or 4,738 feet, it is the deepest metal mine in Europe and among the continents oldest. It origins date back to 1958, when a local farmer came across gossan ore during a well construction. A sample of this ore was soon delivered to Outokumpu Corporation, which, following analysis of the sample ordered a more thorough geological survey to be conducted on the area. Said survey revealed a rich volcanogenic massive sulphide (VMS) deposit rich in copper and zinc, and come 1959 the decision was taken to open up a new mine at the site of the ore discovery.

The Pyhäsalmi mine opened on 1 March 1962. For the first five years it existed as an open cast pit, before underground mining operations commenced in 1967. Outokumpu was responsible for designing an underground development plan for the mine and in 2001 completed the construction of a 1,450 metre deep automated hoisting shaft. A year later the mine was acquired by Inmet Mining, who continued forward with the underground development plan. Fast forward to 2013 and the company found itself being acquired by First Quantum Minerals as part of its purchase of the Inmet Mining group.

About 40,000 illegal miners ignore Peru’s deadline to formalize status – by Cecilia Jamasmie (Mining.com – April 23, 2014)

April 24, 2014

http://www.mining.com/

Peru’s government has began legalizing tens of thousands of informal gold miners this week, in an effort to restrict an activity that has cost the country millions of dollars in lost fees and severely damaged the environment.

However, about 40,000 of roughly 110,000 illegal miners ignored the Saturday deadline to legalize their status, evading government efforts to bring them into the formal economy.

Over the past five years unregulated mineral extraction in the South American nation, especially gold mining, became an industry of its own, to the point experts calculated it was bringing more profit into the country than drug trafficking. The activity has also led to violence, pollution and the destruction of over 40,000 hectares of the country’s Amazonic rainforest.

In response to those challenges, Peru’s government launched in 2012 a program to incorporate illegal and informal miners into the system by April 2014. Minister of Energy and Mines Jorge Merino justified the measure saying Peru had reached a point of “no return” in the fight against the fly-by-night activity.

Deadly Illegal Mining Booms Below South African City of Gold – by Kevin Crowley (Bloomberg News – April 24, 2014)

April 24, 2014

http://www.bloomberg.com/

Smoke rises from a derelict mine shaft 25 miles east of Johannesburg, where illegal miners cook, work and sleep below ground for weeks at a time.

They have broken through a slab of concrete covering the entrance to the shaft, one of 6,000 abandoned mines, many around Johannesburg, known as “eGoli,” or “City of Gold” in Zulu. At least 40 unlawful prospectors have died in South Africa this year as mines collapse, workers succumb to poisonous gases and gangs wage turf wars underground.

“Any mistake and you feel you’re going to be killed,” said Joseph Sithole, 23, an undocumented Mozambican migrant, as he stood among corrugated-iron shacks and rubbish-strewn paths near the mine. He recounted how last year he dashed to one side of a shaft after hearing a crack, narrowly avoiding being buried by falling rocks. He felt his way to the surface through clouds of dust.

Sithole is one of 14,000 people the government estimates are now involved in illegal mining, which comes as a drop in gold prices and aging ore bodies shut South African shafts. The practice has grown to create a complex criminal industry valued at 6 billion rand ($566 million) a year, Mineral Resources Minister Susan Shabangu said in February.

The government now plans to block up entrances to abandoned mines, compel owners to heighten security and increase convictions for illegal mining.

Barrick’s Munk: Newmont Deal ’Always Made Sense’ (Bloomberg TV – April 23, 2014)

April 24, 2014

http://www.bloomberg.com/tv/ April 23 (Bloomberg) — Peter Munk, founder and chairman of Barrick Gold Corp., talks about a possible merger with Newmont Mining Corp., gold prices, and Barrick’s acquisition of Equinox Minerals Ltd. Munk speaks with Erik Schatzker on Bloomberg Television’s “Market Makers.” (Source: Bloomberg)