July 2, 2014 – Republic of Mining

Labrador Iron Mines suspends operations amid falling ore prices, high costs – by Canadian Press (St.John’s Telegram – July 2, 2014)

July 2, 2014

http://www.thetelegram.com/

Labrador Iron Mines Holdings Ltd. says it has suspended all operations at its mines for the year, due to the low price of iron ore and a refocus by the company to cut costs.

The company said 2014 will be a “development year” as it concentrates its efforts on developing its Houston Mine, located near Schefferville in northern Quebec. The project is slated to begin production in April 2015, pending the completion of financing.

Labrador Iron said it is also looking to lower costs by renegotiating with major contractors and suppliers, and has already put in place savings initiatives in various areas including mining equipment rates, rail car leasing rates and corporate and administration costs.

It said it has enough cash to continue operations over the next year, but is looking to obtain financing if the price of iron ore continues to decline.

“However, there are no assurances that LIM will be successful in obtaining any required financing, or in obtaining financing on a timely basis or on reasonable or acceptable terms and, as part of this process,” it warned in a statement.

“If LIM is unable to obtain adequate additional financing on a timely basis, the company would be required to curtail all operations and development activities.”

Cliffs Offers Casablanca Three Seats on Smaller Board – by Tess Stynes (Wall Street Journal – July 2, 2014)

July 2, 2014

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

Coal and Iron Ore Producer Cliffs Natural Resources Trying to Avoid Proxy Fight

Cliffs Natural Resources Inc. CLF +4.84% is proposing again a settlement that would give hedge fund Casablanca Capital LP three seats on a smaller nine-member board, the coal and iron ore producer’s latest attempt to avoid a proxy fight.

Later Wednesday, Casablanca, which has a 5.2% stake in Cliffs, contended that the mining company’s latest proposal in its view wasn’t a “a genuine attempt to reach a settlement.”

“We have no intention of negotiating through press releases but remain willing, as we have detailed in our public filings, to enter into a reasonable settlement that provides for real change,” Casablanca also said.

The activist hedge fund of Donald Drapkin has been urging Cleveland-based Cliffs to split its U.S. and international operations. Earlier this year, Casablanca rejected a previous settlement offer from the mining company and instead nominated six directors to the company’s 11-person board.

In a statement Wednesday, Cliffs said two of its current directors won’t stand for re-election at the company’s annual meeting. The company also said three additional board members wouldn’t seek re-election if Casablanca accepts its proposed offer.

Supreme Court ruling on native rights offers historic chance for progress – by Robin V. Sears (Toronto Star – July 2, 2014)

July 2, 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.

Now there is in an opportunity to fulfil the heady optimism of the Charter debates and respectfully resolve land claims and treaty implementation.

People were strewn exhausted across Ed Broadbent’s grand old parliamentary office on sofas, window ledges and desks. It was near the end of an intense four-hour negotiating session with some of Canada’s most important First Nations leaders and their lawyers. There was a sense that a consensus was finally, perhaps, possible.

Suddenly, one of the young lawyers stood up and said, “No, this is not good enough. Let’s take a break.” Many of the tired participants looked up in shock and then anger. I followed the young Vancouver lawyer into the hall. We stared angrily at each other in silence.

Then he said, slowly, “Look, I’m sorry, but all of a sudden I had this vision. I’m sitting on the porch with my granddaughter 30 years from now, and she’ll ask me ‘Grandpa, did you really do everything you could do to help our native people. Everything?!’”

The memories of that day, the powerfully emotional negotiations of the final wording of what became the First Nations rights section of the Charter came flooding back this week.

RPT-COLUMN-China’s iron ore mines won’t shut fast enough to offset global supply boost – by Clyde Russell (Reuters India – July 1, 2014)

July 2, 2014

http://in.reuters.com/

LAUNCESTON, Australia, July 1 (Reuters) – Iron ore prices rose the most in 10 months last week, but hopes that this marks the start of a new bullish phase are likely to be dashed.

Spot Asian iron ore .IO62-CNI=SI ended last week at $94.90 a tonne, a gain of 3 percent from the prior week, with prices bolstered by an improvement in the outlook for manufacturing in China following the June HSBC flash Purchasing Managers’ Index showing expansion for the first time in six months.

Iron ore prices are still down 30 percent from the $134.20 a tonne at the end of 2013, but they have recovered since briefly dropping to a 21-month low of $89 on June 16.

The bullish case for a recovery is largely based on expectations that Chinese domestic production will drop as high-cost mines are forced to close on unsustainable losses. The loss of domestic output will open the door to increased imports, thus absorbing the extra supply being brought online by the major mining houses.

This view is bolstered by the improving outlook for steel demand on the back of faster investment in railway and other infrastructure spending as the authorities undertake what’s been characterised by several analysts as a “mini-stimulus” to ensure economic growth remains above 7 percent per annum.

Who Is Responsible for Industrial Parks In Sudbury? – by Dick DeStefano

July 2, 2014

Dick DeStefano is the Executive Director of Sudbury Area Mining Supply and Service Association (SAMSSA). destefan@isys.ca

Municipal elections are forthcoming and we need to hear the Mayoral candidates tell us what their plan is to attract new business enterprises to Greater Sudbury. I have heard the expression continually that “Sudbury is open for business” over the past years but I fail to see any clear public strategies that will increase the capacity for industrial space for new mining supply and service enterprises.

North Bay is very aggressive and our community may never catch up. Timmins has also grown its inventory of land and industrial space in the past few years.

I have been told that a number of private tracts are available on the Kingsway and Walden. A new 33 acre park called Silver Industrial Park recently announced its opening in Walden and said it will be serviced by 2014, but we as a community need to search for new clients. A concerted effort should be made in cooperation with the Greater Sudbury Development Corporation (GSDC). A task force of qualified individuals to spearhead the push to bring more sophisticated industries to Sudbury should be formed.

Sudbury is facing a number of challenges with a number of mergers and closures that are impacting the mining supply and service sector and this activity is slowing Sudbury’s ability to create new jobs and to replace displaced technical and professional experts needed in our community.

Broad transformation needed in global mining – EY – by Dorothy Kosich (Mineweb.com – July 2, 2014)

July 2, 2014

http://www.mineweb.com/

Given the right levels of investment, significant gains are possible through innovating mining and processing methods, says EY.

RENO (MINEWEB) – Global mining productivity has been declining on a volume and cost basis since 2000 as miners have chased production growth during the commodity boom, said EY Global Mining & Metals Advisory Leader Paul Mitchell.

Mining productivity in Australia has declined about 50% since 2001. Despite massive investment in new equipment and automation, Australian mining capital productivity has declined by 45% compared to 22% in all industries, says a new EY report, Productivity in mining: A case for broad transformation.

Labor productivity in the U.S. coal sector has declined nearly 30% from 2009-2012, while in the South Africa gold sector, labor productivity is estimated to have declined 35% since 2007.

Many companies have been dealing with the plunge in productivity through a series of cost-cutting exercises or point solutions, observed the EY report. “However, the size of the problem is too large for point solutions to solve on their own and often they have the effect of simply moving the problem further down the supply chain.”

“Real and sustainable productivity gains will only come from broad business transformation,” EY stressed.

X2 boss Davis calls next supply deficit – by David McKay (Miningmx.com – July 1, 2014)

July 4, 2014July 2, 2014

http://www.miningmx.com/

[miningmx.com] – THERE’S A MOMENT when X2 Resources founder, Mick Davis, can’t contain a smile. Asked whether there was any mischief in the naming of his new company, he replied: “Maybe just a bit of fun.”

The psychology of naming, however, runs deep. It’s no coincidence, for instance, that a year after completing the ‘merger’ of Glencore Xstrata, the combined company should resolve at its recent annual general meeting to rename the company Glencore plc. The merger of equals was long dead, but the name change sealed it.

Said Hanré Rossouw, who is head of commodities for frontier and emerging markets at Investec Asset Management of the decision to call Davis’s new venture ‘X2’: “I think the name says it. It’s the Xstrata model rebooted”.
Yet is the market similarly positioned for another Xstrata?

“I think Mick has got a good track record,” said Rossouw. “He brought change to the industry by introducing a more financial focus. Before that you still had mining engineers running companies.

“The only disadvantage is that because Mick has had success, so it may become more difficult to get the same kind of deals. In the past, he seemed to come out of nowhere”. Rossouw was a CFO of Xstrata Alloys before joining Investec in Cape Town.

Aboriginals play the long game – but who wins? – by Jeffrey Simpson (Globe and Mail – July 2, 2014)

July 2, 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.

If you had a plugged nickel or several hundred millions of dollars, among the worst places to invest that money would be across the parts of British Columbia affected by last week’s Supreme Court ruling.

It was difficult enough before to get the necessary aboriginal agreement to develop Crown land, or what had been thought to be Crown land. Now, those difficulties have grown immensely with the decision in the Tsilhqot’in case.

After the previous (and very vague) Delgamuukw ruling (1997), it was thought that aboriginal title applied in areas where groups had resided, and that their claims diminished in strength the farther they got from those settled areas. There was a kind of sliding scale of rights, from something approximating a veto to the need for consultation. This was how the B.C. Court of Appeal saw matters.

The Supreme Court, however, has ruled that title applies to all the areas nomadic or semi-nomadic aboriginals moved over before white settlement. “A culturally sensitive approach suggests that regular use of territories for hunting, fishing, trapping and foraging is ‘sufficient’ use to ground aboriginal title,” the court said.

Brazil suspends Belo Sun’s gold mine licence – by Stephanie Nolen (Globe and Mail – July 1, 2014)

July 2, 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.

RIO DE JANEIRO — A Brazilian court has suspended the environmental and provisional licences of Toronto-based gold miner Belo Sun Mining Corp., putting a significant new obstacle in the way of the company’s plans to develop Brazil’s largest gold mine on a tributary of the Amazon river.

Last November a federal court suspended the company’s environmental permit, saying Belo Sun had not taken necessary steps to analyze the mine’s potential impact on indigenous peoples who live within a few kilometers of the mine site.

In December, Belo Sun won temporary permission to keep operating while awaiting a final ruling on that case. But when the ruling came last week, the judge said that the mine stood to cause “negative and irreversible damage to the quality of life and cultural heritage” of the Juruna and Arara peoples and that Belo Sun must complete a study of this issue before it can proceed.

Mark Eaton, Belo Sun’s CEO, said the indigenous impact study is already under way and that the new ruling does not extend the company’s timeline for production. “It’s had an impact on market psyche as these things always do,” Mr. Eaton said in a telephone interview from Toronto. “But it hasn’t come completely out of the blue.”

Iraq conflict has oil companies on ‘knife’s edge’ – by Yadullah Hussain (National Post – July 2, 2014)

July 2, 2014

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

Oil executive David Horgan yearns, almost, for the good old days of former Iraqi dictator Saddam Hussain.

“Saddam was reasonably effective — obviously a dictator and unjust. [Current prime minister] Nour al-Maliki has not even had the efficiency of the Ba’ath party,” said Mr. Horgan, managing director of Petrel Resources Plc., which has operations in the country. “They have been arbitrary, corrupt and ineffective. The net result is that it was an event waiting to happen.”

An insurgency that has been simmering for months boiled over this week when Sunni militia groups took control of vast tracts of land in Iraq, effectively erasing the Iraq-Syria border and declared a caliphate in the area it controls.

Dublin-based Petrel Resources has been unable to access its block located in a desert in western Iraq, potentially a “multi-billion barrel oil and gas field,” according to the company.

“It is in a desert area, so nobody really controls it. But the access areas are in the control of Sunni militia,” Mr. Horgan said in a telephone interview from his Dublin office.

Petrel, which has invested US$10-million in the country, was planning to send contractors into the field for seismic work before the insurgency put paid to those plans.

Supreme Court ruling holds no bearing for Northern First Nations, says strategist – by Ian Ross (Northern Ontario Business – June 30, 2014)

July 2, 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.

A landmark Supreme Court of Canada ruling recognizing a First Nation’s title to a large tract of land in the B.C. interior doesn’t hold much relevance to any future development in Ontario’s North, especially the Ring of Fire, said a strategist, lawyer, and author on Native involvement in the resource sector.

This “seismic event” on the West Coast that granted the Tsilhqot’in Nation formal title to 1,700-square-kilometres of its traditional territory, said Bill Gallagher, likely won’t apply in Ontario since the issue of title was already settled when the numbered treaties were signed.

There is key wording in these treaties, stretching from the Quebec border to the Rocky Mountains, that has decided ownership in the eyes of the Crown. “If your forebears signed a treaty with the phrase: ‘cede, release and surrender’ in it, this case will not help, it will not even be of interest to you because the Aboriginal title issue here is settled,” said Gallagher.

But even that really shouldn’t matter, he added, considering the unprecedented string of legal wins by First Nations across Canada and their growing business and labour involvement in resource development projects across Ontario.

Boardroom battle leaves Cliffs on edge – by Barry Fitzgerald (The Australian – June 30, 2014)

July 2, 2014

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

OWNERSHIP of the $1 billion-plus Koolyanobbing iron ore operation in Western Australia could be up for grabs as a result of a bitter boardroom proxy battle at Cliffs Natural Resources.

The ownership issue for the 11 million-tonne-a-year Koolya¬nobbing operation — 50km north of Southern Cross — comes to a head on July 29 at the annual meeting of owner Cliffs, which is based in Cleveland, Ohio.

New York activist hedge fund and 5.2 per cent Cliffs shareholder Casablanca Capital is behind a boardroom shake-up push at the meeting which, if successful, would see Cliffs move to quit its Australian operation. Casablanca wants Cliffs, which is also a coal producer, to focus on its larger and domestic market-based US iron ore business. It wants the seaborne market-exposed Australian assets, and Cliff’s Canadian assets, to go.

The hedge fund argues that Cliffs is too small to compete head to head with the iron ore majors of Rio Tinto, BHP Billiton and Brazil’s Vale in the seaborne markets for iron ore. It has said there are many potential mechanisms for an exit, including a spin-off and a partial or total sale.

The Australian operation should be sold now, it said, as it held the greatest strategic value “today’’ because of its relatively short mine life of about seven years, based on current reserves.

NEW CALEDONIA: Is a Vast Marine Sanctuary Any Use if You Can’t Police It? – by Ian Lloyd Neubauer (Time Magazine – June 29, 2014)

July 2, 2014

http://time.com/

Tiny New Caledonia relies on a handful of French ships to patrol a marine reserve twice the size of Texas

For the first half of June — until the U.S. declared an even bigger one — the tiny, French semiautonomous territory of New Caledonia boasted the largest nature reserve on earth.

Covering a vast 1.3 million-sq-km region of the South Pacific, the Natural Park of the Coral Sea was established on May 28 to protect the world’s second largest coral reef and its attendant lagoon. Already safeguarded in parts by a UNESCO World Heritage listing, this wonderland is a nursery for 25 kinds of marine mammals (including sea cows and humpback whales), 48 species of shark and five different marine turtles. It also spawns vast numbers of pelagic fish, 3,000 tons of which make it into the Pacific every year – an important food source for tens of millions, and a source of employment for thousands of people living in the region.

But before most people had even heard of the creation of the Natural Park of the Coral Sea, U.S. President Barack Obama went one better by using his executive powers to create an even larger marine park in the south-central Pacific on June 17. Known as the Pacific Remote Islands Marine National Monument, it protects 2 million sq km of ocean and a smattering of islands and atolls between Hawaii and American Samoa from commercial fishing.

Obama’s announcement made world news, while New Caledonia’s barely received a mention. Perhaps that’s because the U.S., while sketchy on the details, has the hardware and manpower to enforce the no-take rule at the core of any national park.

Northern Ontario has many exciting mining stories – by Dieter Buse

July 2, 2014

Dr. Dieter K. Buse, Professor Emeritus, History, Laurentian University

Thanks to Stan Sudol for presenting “Klondike gets the glory” (Sudbury Star May 30-31) on the main mining stories and the rich history of northern Ontario. Who could disagree with his claim about the “collective obsession over the Klondike Gold Rush while Northern Ontario’s rich and vibrant mining history is completely ignored by the Toronto media establishment”? Perhaps not completely, because at least one such outlet, the Toronto Star (Aug 11, 2013; reprinted in Sudbury Living Fall 2013) published my lengthy piece “The Hole in Canadian History.”

In it I argued, very similar to Sudol, that the Yukon and Newfoundland have six taxpayer-funded national historical interpretive sites while northeastern Ontario has only two. I also pointed out that the special aspects of Ontario’s northeastern history have been recognized by only a few commemorative plaques.

Indeed, many of the stories and some of the information that Sudol presents can be found in the book I co-authored with Dr. Graeme S. Mount, Come on Over: Northeastern Ontario, A to Z (Scrivener Press). In the Afterword to that book one can read “Arguably, Cobalt’s history is as exciting as that of Dawson City, and its silver rush led to the Porcupine gold rush which was far more important. In all, the Porcupine Camp has produced over 70 million ounces of gold and continues to add to that total while the Klondike produced all of 12 million ounces.”