April 25, 2014 – Republic of Mining

Can private equity reboot the mining sector? – by David McKay (Miningmx.com – April 25, 2014)

April 25, 2014

http://www.miningmx.com/

ROUGHLY $8bn to $10bn has been raised by newly founded private equity companies, many of them started by former resources bankers or mining executives, in an effort to participate in an estimated $40bn worth of divestments by major mining companies such as BHP Billiton.

The question is, however, whether private equity has ‘the legs’ to remain a valid alternative to traditional forms of lending, such as banks. According to Glencore Xstrata CEO, Ivan Glasenberg, private equity will struggle. “Now there are a lot of private equity guys starting companies, a lot of guys who left the industry and started private equity groups. It’s never worked in the past,” he said.

“The problem with the commodities space if you have high gearing is that you are not running Boots pharmaceutical where you have a pretty constant earnings base,” said Glasenberg.

Another analyst said it was noticeable that private equity couldn’t compete in the big deals. The sale of Glencore’s $5.5bn Las Bambas copper project in Peru went to China’s part-state-owned group, Minmetals, suggesting that start-up companies are battling against sovereign funds for big mining deals.

Chinalco Mining sets sights on copper projects in Latin America – by Eric Ng (South China Morning Post – April 25, 2014)

April 25, 2014

http://www.scmp.com/business/commodities

Metal unit keen on copper projects in Peru with its huge potential and friendly environment

Chinalco Mining, the non-ferrous and non-aluminium metals unit of aluminium giant Chinalco, is seeking acquisition opportunities in Latin America for copper projects with long-term return rates of more than 10 per cent.

Chief executive Peng Huaisheng said the region presented more development potential, especially Peru, where the company has been developing the Toromocho copper project since 2007.

“Our understanding is that Peru offers greater potential within Latin America,” he said. “Peru has a strategy to catch up with Chile in metals and mining development, so it provides an overseas-investor-friendly investment environment.”

Chile is the world’s largest producer and resource holder of copper, which is used widely in the power distribution and construction sectors. China imports about 70 per cent of its raw copper ore needs. Hong Kong-listed Chinalco Mining’s US$3.5 billion Toromocho project, about 140 kilometres from Lima, started trial commercial production in December.

Red Lake area running out of power to feed mines (CBC News Thunder Bay – April 17, 2014)

April 25, 2014

http://www.cbc.ca/thunderbay/

Hydro One to consider solutions to allow production to begin at two new mines next year

The Northwest Energy Task Force is keeping a close eye on the power needs of two mines scheduled to open next year at Red Lake. Task force member John Mason said there’s a looming problem for two new mining projects that need a solution.

“Between the Rubicon operation and (Goldcorp’s) Cochenour Bruce Channel, I would estimate over $700 million has been spent, and yet could be hampered with power issues, which would be devastating to these new operations.”

Mason said the mines could be held up unless electricity infrastructure is upgraded. Rubicon’s Phoenix gold project is set to start up next spring, and mine maintenance superintendent Sylvain Talbot agrees there’s a challenge to overcome.

“There is nine megawatts available, and Goldcorp and Rubicon are maybe looking for 20 megawatts. And there is another junior company that’s coming, so Red Lake area is running out of power.” Talbot said he recently asked about options to enable Rubicon to start production at the new mine next spring.

Queen’s Park to make Ring of Fire announcement on Monday – by Staff (Northern Ontario Business – April 25, 2014)

April 25, 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.

The Ontario government will make an “important” announcement on the Ring of Fire mineral deposits on April 28. A press conference has been called for Monday at 10 a.m. at the Ministry of Northern Development and Mines offices in Thunder Bay.

Minister Michael Gravelle, municipal affairs minister Bill Mauro and natural resources minister David Orazietti, along with staff from the province’s Ring of Fire Secretariat, will be in attendance.

Gravelle said March 27 in Sudbury that the province was prepared to make a “very significant” infrastructure investment in the Ring of Fire, but declined to give specifics. “Our commitment to a major investment is locked in. It’s real,” said Gravelle.

“We have not spoken about that figure specifically and I’m not in a position to do that right now.” On the same day, at the same time, the Ontario government will be appearing in a Toronto courtroom in on a legal matter concerning the Ring of Fire.

Anglo to Move Away From Labor-Intensive Platinum Mining – by Firat Kayakiran (Bloomberg News – April 24, 2014)

April 25, 2014

http://www.bloomberg.com/

Anglo American Plc (AAL), the world’s biggest platinum producer, plans to switch to mechanized open-pit mining from labor-intensive underground output, as its South African operations remain crippled by a three-month strike.

The company aims to make the transition in five to 10 years to improve productivity, Chief Executive Officer Mark Cutifani said at the company’s annual general meeting in London yesterday. The change would have to be carried out in a way that’s “sensitive to its social ramifications,” he said.

A third day of talks between producers and union officials ended yesterday without a resolution or plans for further negotiations. Output at Anglo American Platinum Ltd. (AMS) dropped 39 percent in the first quarter because of the walkout over pay, Anglo said yesterday. The company reduced its forecast for full-year production by as much as 13 percent, with more cuts possible if the deadlock persists.

Cutifani “is bang on,” Paul Gait, an analyst at Sanford C. Bernstein Ltd. in London, said in an e-mail. “The only way to get safe platinum is to get people out of the stope.

Timing mining of Asia food boom – by Stirling Larkin (The Australian – April 26, 2014)

April 25, 2014

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

THE so-called “mining to dining’’ boom is expected to be a significant driver of deal flow in the Asia-Pacific not only for the next decade, but also quite possibly through to 2030 at least. Such changes as a move from minerals to food take a while for many commentators and investors to get used to, as the evidence of previous changes shows.

For instance, some of the most successful international investments made around 2004 spotted how important massive capital expenditure in China was going to be to mining and energy companies in Australia and Canada.

The sectors had underperformed in the 1990s and in 2004 commentators were looking the wrong way, failing most particularly to recognise this sea change and the imminent correlation between Australian and Canadian supply, and Chinese demand.

Those who did see this opportunity yielded strong returns in those following years. The Australia in China’s Century conference, hosted by The Australian, will discuss how important these investments were for the economy and how they have advantageously positioned us for future Chinese and regional opportunities.

Northerners want training for careers in mining, energy – by Canadian Press (MACLEAN’s Magazine – April 24, 2014)

April 25, 2014

http://www.macleans.ca/

Polar Commission calls ‘job-readiness’ most significant development issue

Northerners want scientists to help them prepare for sweeping changes expected in the years ahead from resource development and climate change, suggests feedback collected from across the Canadian Arctic.

In dozens of interviews from all three territories, the Canadian Polar Commission found northerners want researchers to focus more on issues relevant to their daily lives — from better education to get aboriginals into high-paying jobs to ways that communities can wean themselves off expensive diesel electricity generation.

“Northerners themselves are becoming more engaged in asking the questions and in working to help answer the questions,” said commission director David Scott. The survey grew out of 2007′s International Polar Year, a multinational research effort that channelled hundreds of millions of dollars into research across the circumpolar world. It attempts to assess what was learned as well as to consider what still requires study — especially from the point of view of those who live in the Arctic.

Genomic tools offer vision of a cleaner industry – by Randy Shore (Vancouver Sun – April 24, 2014)

April 25, 2014

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

Bacteria may be small, but they do heavy lifting in remediation and extraction

A few key microbes are on the verge of becoming key players in B.C.’s mining industry. Engineering professor Sue Baldwin has spent much of the past 15 years farming various combinations of anaerobic bacteria that have the ability to consume or remove heavy metals from mine tailings.

Tailings are ground up rock and chemical pollutants left over from the extraction of metals from ore. Baldwin has her toes in the water of several important cleanup projects, including the Teck Resources smelter near Trail, the Imperial Metals Mount Polley Mine, and analysis of the selenium-contaminated run-off from coal mine waste in the Elk Valley.

Imperial Metals has been operating a 450-litre-a-minute anaerobic biological reactor at Mount Polley since 2009, according to project engineer Luke Moger. The researchers are working to find the optimal environment and combination of microbes in which sulphate-reducing bacteria mitigate acid mine drainage and metal pollution by consuming sulfates in the tailings pond and water that has come in contact with waste rock. This creates sulphides that react with metals in the water to form harmless solids.

NEWS RELEASE: Building a better mining workforce for the future

April 25, 2014

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

More than 80 practitioners convened yesterday to tackle and make progress in dealing with the mining industry’s main human resource issues. The Canadian Human Resource Mining Leadership and Professionals Conference was held at York University’s Schulich School of Business in Toronto. Joining industry leaders and expert panelists in the seminars were students from the Schulich Global Mining Management MBA program.

“This symposium was held for mining sector human resource leaders and professionals to share ideas and work on solutions to workforce specific issues in the mineral sector,” said conference organizer Geoff Ramey, Vice President Human Resources & Business Technology Solutions for St Andrew Goldfields. The event combined the use of keynote speakers, expert exchanges, roundtable discussions, comedy and networking to work on important topics.

Key issues examined included retention of vital personnel, leadership gaps, cost containment, career promotion, workforce planning and competing cultures in joint ventures and merger and acquisition transactions. Other topics involved diversity of the workforce, change management, attracting skilled workers, knowledge transfer and the expectations of the next generation of mining industry employees.

NEWS RELEASE: Harper Government Promotes Responsible Resource Development in Northern Saskatchewan

April 25, 2014

LA RONGE, SASKATCHEWAN–(Marketwired – April 25, 2014) – Western Economic Diversification Canada

Today, Rob Clarke, Member of Parliament for Desnethé-Missinippi-Churchill River, on behalf of the Honourable Michelle Rempel, Minister of State for Western Economic Diversification, announced a $350,000 federal investment toward the monitoring of caribou herds in northern Saskatchewan. Data collected from tracking Woodland Caribou will help mining and construction firms, as well as local and provincial governments, to cost-effectively prepare responsible resource development plans that include measures to protect the herds.

The Saskatchewan Mining Association (SMA) is partnering with Western Economic Diversification Canada (WD) and the University of Saskatchewan (U of S) to conduct the comprehensive five-year study. In March, researchers with the U of S Department of Biology ‘collared’ 120 Woodland Caribou, outfitting them with the latest global positioning satellite (GPS) technology.

Under Environment Canada’s Species at Risk Act, Canada’s Woodland Caribou population is considered ‘threatened’. Until now, limited data on Woodland Caribou prevented industry from developing appropriate plans to alleviate disturbances to the animals’ habitat. Information collected from this tracking program is expected to close this data gap, allowing mining and construction companies, as well as government, to develop strategies to protect the herds.

Behind Barrick’s meltdown in the Atacama desert – by Stepanie Nolen (Globe and Mail – April 25, 2014)

April 25, 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.

In the violet light of a February Sunday afternoon, Padre Nelson Barrientos led his flock along the road that winds up Chile’s Huasco River Valley. The congregation of Our Lady of Lourdes of Conay was conveying a new statue of the Blessed Virgin to its home in the parish church, nestled in the shadow of the Andes. A half-dozen young people in traditional indigenous costumes—feathers, beads—drummed and danced, and their parents and neighbours followed in the procession. The mayor, Carmen Bou, was there, walking arm-in-arm at the front with Alicia Páez Campillay, the wife of the man whom everyone calls the valley’s richest businessman.

Many of the other marchers wore jeans and work shirts that hinted at a life spent in vineyards and orchards. Making their way to the village, the mayor, the dancers, their parents and the priest scrabbled up the loose gravel of the hillside, past a road sign almost swallowed by shrubbery, pointing up the mountain. On it, faintly visible despite someone’s best efforts with a can of spray paint, were the words “Pascua Lama.”

The Virgin was installed in the tiny blue chapel. There was dancing, poems, and an offering of the valley’s fat green grapes. As dusk fell, the white-haired priest tugged off a sweaty cassock; he, too, wore a plaid shirt and jeans.

In platinum’s war of attrition, capital has labour out-gunned – by Ed Stoddart (Reuters U.S. – April 25, 2014)

April 25, 2014

http://www.reuters.com/

(Reuters) – Labour brought a machete to a gunfight with management in South Africa’s platinum belt. Small wonder it looks set to lose.

South Africa’s big platinum strike has highlighted issues ranging from cash reserves to changing market dynamics that have curtailed labour’s ability to influence prices. The result has been to expose the weakness of the country’s miners in any confrontation with producers.

As it marked its 13th week, the showdown took a dramatic turn on Thursday when marathon wage talks collapsed. The world’s three top producers now say they will take their latest offer directly to employees.

They are effectively forcing the hand of the hard-line Association of Mineworkers and Construction Union. The AMCU’s leaders were reluctant to take the latest offer back to their members – probably because they feared the rank and file would accept it after three months with no pay.

A typical South African mine worker has eight dependants and often two families, one in his home village and the other near the shafts. That means many of them are now near the breaking point, especially as domestic inflation accelerates.

In destabilising economic war over Ukraine, gold the winner – by Lawrence Williams (Mineweb.com – April 25, 2014)

April 25, 2014

http://www.mineweb.com/

U.S. data and the escalating Ukraine crisis have seen gold Yo-Yo down and back up again.

LONDON (MINEWEB) – Some very volatile trading in gold and silver yesterday. The former dived to its lowest price since February to around the $1,270 mark before almost immediately rebounding sharply to a little below $1,300 before settling above $1,290, a position it held overnight.

Silver, living up to its more volatile general role at one stage dipped down below $19.00, its weakest level since its December lows before it too revived sharply jumping back to close the day at around the $19.60 level before settling back to around $19.55 where it was sitting this morning as Europe opened.

Analysts put the price movements to factors such as U.S. economic data, but in this writer’s view the downturn was largely due to a loss in confidence by traders in the prospects for short term precious metals price growth following gold and silver’s lacklustre performance as it drifted downwards – but then the recovery came on the back of the deteriorating situation on the ground in the Ukraine. Ukrainian forces started to move in to quell the demonstrations and government building occupations in the Donetsk region in the east of the country.

DST, NRF launch holistic collaborative mining research centre at University of Johannesburg – by Natalie Greve (MiningWeekly.com – April 24, 2014)

April 25, 2014

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

JOHANNESBURG (miningweekly.com) – Advancing South Africa’s ambitions of evolving from a resource-based economy to a knowledge-based economy, the Department of Science and Technology (DST) and the National Research Foundation (NRF) on Thursday launched a specialised academic institute that will focus on holistic research into the country’s profusion of mineral resources and look to stimulate the creation of a cohort of skilled South African economic geologists.

The Centre of Excellence (CoE) for Integrated Minerals and Energy Resource Analysis (Cimera) would be hosted by the University of Johannesburg (UJ) and would see the collaboration of South African economic geology research units the Palaeoproterozoic Mineralisation Centre, at UJ, and the Economic Geology Research Institute, at the University of the Witwatersrand (Wits).

This was the fifth DST-NRF CoE to be launched this month, following the official opening of four other research units focusing on food security, scientometrics and science, technology and innovation policy, mathematical and statistical sciences, and human development respectively.

Barrick chair Peter Munk blasts Newmont’s company culture as miners struggle to reach deal – by Peter Koven (National Post – April 25, 2014)

April 25, 2014

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

TORONTO – Barrick Gold Corp. chairman Peter Munk levelled a pointed criticism of Newmont Mining Corp. on Thursday, saying he has struggled to strike a merger with his U.S. rival because the company is extremely bureaucratic and not shareholder-friendly.

Mr. Munk, 86, hoped to reach a deal to buy Newmont before he officially retires at Barrick’s annual meeting next month. But Toronto-based Barrick has been frustrated over years of negotiations by what he calls “cultural differences.”

He said that Newmont is an extremely conservative and risk-averse company, which makes negotiations very difficult. As one example, he pointed out that Newmont shut reporters out of its annual meeting this week after news of the talks leaked. He said Barrick would never consider doing that.

“That’s the cultural difference. That’s the kind of people they are, and that’s why it’s so difficult to make a deal,” he said in an interview. “They are not shareholder-friendly.” Even though they operate next to each other in Nevada, Barrick and Newmont are like oil and water.