July 23, 2014 – Republic of Mining

EDITORIAL: Platinum miners at a tipping point (Business Day Live – July 23, 2014)

July 23, 2014

http://www.bdlive.co.za/

THE decision by Anglo American Platinum (Amplats) to put some of its Rustenburg mines on sale is hardly surprising. The market and industrial relations turmoil of the past few years was destined to reach a tipping point, and it looks like it has arrived.

In essence, the world’s largest platinum producer has decided to rid itself of its biggest headaches, and hopes someone has the appetite for the pain. The best mines are usually bought, not sold.

After the longest strike on record, driven by the Association of Mineworkers and Construction Union (Amcu), which often demonstrated a poor long-term game, Amplats must have had enough of managing a relationship in which trust seemed impossible to achieve. As counterintuitive as it may sound, the ability of unions and management to manage their sometimes adversarial partnership is a significant factor in staying invested.

The company’s relationship with Amcu is clearly frayed, and it is entirely possible that a way forward in light of further restructuring became a distant prospect.

With the sale of these assets, Amplats also would no longer have to deal with a historical migrant labour problem that requires a lot of funds to mitigate, including the possibility of building houses for all its employees.

Freeport Sees Indonesia Deal ‘Imminently’ on Export Curbs – by Liezel Hill (Bloomberg News – July 23, 2014)

July 23, 2014

http://www.bloomberg.com/

Freeport-McMoRan Inc. (FCX) expects to sign a deal with the Indonesian government “imminently” to resolve a dispute that has curbed production at the world’s third-biggest copper mine.

The largest publicly traded copper producer and the government have developed a memorandum of understanding under which the company would commit to help develop a smelter, Phoenix-based Freeport said today in a statement. The agreement includes reduced export taxes and higher royalties for copper and gold.

The agreement, which would enable the immediate resumption of exports, also states that Freeport and Indonesia would start negotiations immediately on changes to the company’s contract to operate in the country.

Freeport reduced operating levels this year at its Grasberg copper and gold mine after Indonesia introduced restrictions and duties on mineral exports in a bid to increase local processing. Exports of concentrates, a semi-processed raw material, have yet to resume after months of negotiations between the company and government officials.

Freeport has been able to run Grasberg at about half of normal rates because it sends some concentrate to a domestic smelter it helped build in the 1990s.

COMMENT: New standards for responsible mining proposed by IRMA – by Marilyn Scales (Canadian Mining Journal – July 22, 2014)

July 23, 2014

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

The Initiative for Responsible Mining Assurance (IRMA), has released a draft Standard for Responsible Mining for public comment. The draft is a proposed set of principles to improve social and environmental performance in the mining sector.

The draft was created over eight years by a group that includes members from the mining industry, organized labour, nongovernment organizations, impacted communities and businesses. IRMA said in a news release that the new standards seek to emulate for industrial scale mine sites what has been done with certification schemes in agriculture, forestry and fisheries.

Included in IRMA are representatives from Anglo American, IndustriALL Global Union, Earthworks, Tiffany & Co., United Steelworkers, Canadian Boreal Initiative, Jewelers of America, and Western Shoshone Defense Project.

Indeed the Standard is comprehensive. It includes guidelines on legal compliance as well as revenue and payments transparency. It addresses social responsibility including fair labour and working conditions, health and safety, human rights, informed consent, cultural heritage and communicable diseases. The section on environmental responsibility tackles not only water quality but water quantity, waste management, noise, air quality, biodiversity, plus the use and management of cyanide and mercury. Reclamation and closure are covered as well as management systems for assessment, monitoring and remedies.

Gibraltar a rock in stormy waters for Taseko – by James Kwantes (Vancouver Sun – July 22, 2014)

July 23, 2014

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

With New Prosperity on hold, central Interior mine could fund acquisitions

VANCOUVER — The battle over Taseko’s New Prosperity copper-gold project has played out in the media, corridors of political power and now, in court.

Out of the limelight, Taseko has sunk about $300 million into equipment that will increase production and reserves at its 75-per-cent owned Gibraltar copper-molybdenum mine in the central Interior, and the strategy appears to be paying off.

For the three months ended June 30, Gibraltar produced 38.5 million pounds of copper and 667,000 pounds of molybdenum — increases of 37 per cent and 100 per cent, respectively. Gibraltar is Canada’s second-largest open-pit copper mine and one of the largest employers in the Cariboo, with 700 workers.

“We’re in the early stages of really starting to make it purr like a fine-tuned machine,” Taseko CEO Russ Hallbauer said during a recent interview. “It’s a big accomplishment for everybody involved, from the employees at the site to the corporate folks that worked on it.”

Gibraltar’s site costs — “what we can control” — are down to about $2 per pound of copper, putting the company on solid footing in case of a downturn in metals prices, according to Hallbauer. Copper now sells for about $3.16 a pound.

“We can withstand all the bottoms of the cycle, unless it becomes very, very extraordinary,” he said.

BHP boss urges [Australian] Senate to repeal MRRT (The Australian – July 22, 2014)

July 23, 2014

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

The chief of resources giant BHP Billiton has urged Labor and the minor parties to help the Abbott government repeal the mining tax, saying investment is being destroyed by “a lot of antics” in the Senate.

Andrew Mackenzie warned at a business panel that the minerals resource rent tax (MRRT) — which his company helped draft — remained a “massive” disincentive to investment flows into Australia.

The MRRT will survive until August 26 at the least after Labor, the Greens and crossbench senators, including from the Palmer United Party (PUP), blocked its repeal last week.

PUP founder and mining magnate Clive Palmer campaigned heavily against the MRRT before the federal election, but his senators joined Labor and the Greens last week to preserve $10 billion in spending linked to it, such as the Schoolkids and income support bonuses.

In what could be regarded as a message to Mr Palmer, Mr Mackenzie said there were “a lot of antics” going on in the Senate around the “highly volatile” MRRT.

“It’s not a big revenue raiser as a tax, which in itself makes it even worse, but it’s a huge disincentive to invest, massive,” he said.

Creating growth clusters: What role for local government? – by Julian Kirchherr, Gundbert Scherf, and Katrin Suder (McKinsey.com – July 2014)

July 23, 2014

http://www.mckinsey.com/

A systematic approach to implementation could help start-up ecosystems flourish.

Many governments in industrialized countries aim to encourage entrepreneurship and start-up activity to spur job creation and economic growth. To what extent governments are capable of doing so is uncertain. Nonetheless, policy makers at the regional and municipal levels are closer to the sources of innovation than those at the national level. For example, innovation in the form of start-up activity tends to occur in large metropolitan areas, initially without the involvement of policy makers. Take Berlin, where a vibrant ecosystem developed in the past several years without systematic government intervention.

While an enabling policy context might not be a precondition for seeding entrepreneurial activity, it may become more critical when taking a cluster to scale. To flourish, entrepreneurial activity requires a concentration of talent, infrastructure, capital, and networks—key success factors of a start-up ecosystem, as epitomized by Silicon Valley. Not all economic-policy instruments aimed at nurturing start-ups are at the city level. Still, local policy makers should think systematically about what it takes to support a start-up ecosystem. When doing so, their focus could be on tackling the bottlenecks and constraints that might otherwise inhibit a vibrant start-up ecosystem rather than picking winners by supporting investment in particular sectors or business models.

More specifically, such local initiatives can help link entrepreneurs to schools and universities, ease administrative matters for foreign workers and founders wishing to settle in a location, support development of suitable infrastructure and connectivity, and communicate and market the attractiveness of a location vis-à-vis other start-up centers. New York, for example, founded a tech campus for applied sciences; Tel Aviv built working spaces for entrepreneurs; Berlin is in the process of setting up a privately managed fund to raise capital for start-ups.

Escalating Ukraine crisis could blow gold sky high – by Lawrence Williams (Mineweb.com – July 23, 2014)

July 23, 2014

http://www.mineweb.com/

Conflicting aggressive rhetoric from both Russia and the West could be precipitating us into a new Cold War and the ensuing financial dangers could see gold skyrocket.

LONDON (MINEWEB) – Far from coming to an end the Ukraine crisis could be far from over and as the West and Russia are embroiled in accusation and counter-accusation over the downing of Malaysia Airlines Flight MH17, the potential for escalation is perhaps getting more serious by the day.

It has brought a safe-haven focus back into the gold market which is probably likely to remain given Ukraine is not the only major flashpoint of worry with Syrian, Iraqi and Israeli/Gaza (Hamas) conflicts all raging and building up deep-rooted concerns and polarisation amongst those affected. Violence may well not offer solutions to these deep-seated problems but can only intensify hatreds amongst those innocents affected.

And it is difficult nowadays to know who or what to trust in terms of media reporting. We in the West are programmed to believe the spin put on things by the majority of our media, despite that this version of events is in turn spun to the media by the various governments involved. Meanwhile in Russia, and Russian-leaning countries the populations are being fed completely different interpretations of what is going on.

Most of us in the West don’t trust or believe anything which comes out of Russia, assuming it just to be propaganda, while in Russia, no doubt, the reverse is true –

INTERVIEW-RPT-Indonesia’s new president says he will sit down with miners – by Randy Fabi and Wilda Asmarini (Reuters India – July 23, 2014)

July 23, 2014

http://in.reuters.com/

(Reuters) – Indonesia’s new president Joko “Jokowi” Widodo said he wants to sit down with mining companies and other parties in a bid to resolve a row over mining policies that has halted $500 million of metal exports a month in Southeast Asia’s biggest economy.

The comment by the former Jakarta governor, who has a reputation for tackling entrenched interests, appeared to be a positive sign after an increasingly bitter dispute between the mining sector and the outgoing government.

Until this year, Indonesia was the world’s top exporter of nickel ore and a major supplier of copper, iron ore and bauxite. But a ban in January on exporting unprocessed ore and an escalating tax on metal concentrates have paralysed shipments.

“First, I want to sit down with stakeholders, investors, regulators and with the people to know the problem and find a good solution for them. I want to know the details,” Jokowi said in an interview at his residence in Jakarta on Saturday, before he was declared winner of the presidential election on Tuesday.

Jokowi did not say specifically how he would handle the row over the ore ban, and when pressed on the issue an aide stepped in to say “too much detail”. But mining companies will be hoping the new president can help reanimate negotiations, which had run into trouble with the administration of outgoing President Susilo Bambang Yudhyono.

Dundee takes on high-profile mining banker in cutthroat court battle – by Rachelle Younglai (Globe and Mail – July 23, 2014)

July 23, 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.

It looked like a perfect match – a star mining banker joins a hungry Bay Street shop looking to raise its game in the resource sector. It ended in a nasty split, with accusations of stolen clients, incompetence and defamation.

The saga finds mid-tier dealer Dundee Securities in a tangled court battle with veteran Bay Street mining banker Bob Sangha, who joined the firm in 2010. Dundee alleges Mr. Sangha and one of his associates later secretly set up a competing firm and solicited Dundee clients, including Osisko Mining, which was embroiled in a high-profile takeover battle this year, according to a lawsuit filed in the Ontario Superior Court of Justice.

Mr. Sangha denies the allegations and accuses Dundee representatives, including one executive, of making false and defamatory statements against Mr. Sangha and his investment bank Maxit Capital Inc., according to the countersuit.

The bitter fight between Mr. Sangha and Dundee provides a window into the cutthroat battle for business in the mining industry. Mr. Sangha is seeking $50-million in damages from Dundee Securities. Dundee is seeking a total of $43-million in damages from Maxit Capital, Mr. Sangha and his associate.

Mr. Sangha was plucked from BMO Nesbitt Burns to serve as Dundee’s managing director of mining banking. Hired to beef up business and raise the profile of Dundee’s mining team, Mr. Sangha brought about two dozen of his mining clients.

Essar Steel Algoma staves off third round of bankruptcy protection – by Greg Keenan (Globe and Mail – July 23, 2014)

July 23, 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.

Essar Steel Algoma Inc., considered making its third trip through bankruptcy protection in a quarter-century before reaching a preliminary deal last week with a group of creditors to restructure its debt.

“The company’s current debt obligations of over $1.2-billion and annual interest expense of $113-million are unsustainable,” Algoma’s general counsel, Robert Sandoval, revealed in a court filing that said the steel maker rejected a proposal by one group of creditors that it file for protection under the Companies’ Creditors Arrangement Act (CCAA).

Such a move would have followed court-supervised restructurings in 1991 and 2001, which came before Algoma was bought in 2007 by India-based Essar Global Fund Ltd., in the global steel industry consolidation that led to the purchase of all of Canada’s major steel makers by foreign-based giants.

The court filings said Algoma – once Canada’s third-largest steel maker – plans to reach a final deal with holders of its 9.875 per cent unsecured notes by Sept. 30. The preliminary deal calls for holders of about $385-million worth of debt to receive 32 per cent of the value of their notes in cash and another 55 per cent in new notes.

Instead of using the CCAA to restructure, Algoma has filed a restructuring proposal under the Canada Business Corporations Act (CBCA) and has been granted protection from creditors in the United States under chapter 15 of the U.S. bankruptcy code.

Fifty years on, Big Nickel shines brightly -by Ryan Byrne (Sudbury Star – July 23, 2014)

July 23, 2014

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

Arguably Sudbury’s most iconic image, the Big Nickel, celebrated its 50th birthday Tuesday, drawing hundreds of people to the monument to welcome in its golden anniversary.

The event kicked off at noon with a full day of live music, activities for all ages, and celebrations of what it means to be a Sudburian.

At 1 p.m. Mayor Marianne Matichuk decreed July 22nd to henceforth be Big Nickel Day. People young and old celebrated with face painting, gold panning, live music from local artists including Chicks with Picks and Larry Berrio and more, with the event wrapping up with a fireworks display late last night.

The Blue Saints Drum and Bugle Corps performed at the start of the event, in honour of their group, which performed at the unveiling of the nickel 50 years ago.

“Commemorating the 50th anniversary of the Big Nickel was really important to us, it’s a big milestone and we’re the keepers of this iconic landmark in Sudbury,” said Dynamic Earth senior manager Julie Moskalyk. “We’re pretty proud to be able to celebrate the Big Nickel like this with the entire community.”

“Fifty years ago, the Sudbury region was a pretty black, barren rock area so the Big Nickel was one of the first ways that Sudbury started to draw tourists,” Moskalyk said. “Today it’s one of the top 10 roadside attractions and it’s a part of a significant tourism draw to the Greater Sudbury region.”

First Nickel’s plan for Sudbury mine draws praise – by Carol Mulligan (Sudbury Star – July 23, 2014)

July 23, 2014

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

The owners of First Nickel Inc. have gone “over and above” standard in determining a method to allow workers to safely re-enter and return to work in the area of Lockerby Mine in which two drillers were killed May 6.

Normand Charles Bisaillon, 49, and Marc Methe, 34, were killed by a fall of material, preceded by seismic activity

The men worked for Taurus Drilling, and were not members of Mine Mill Local 598/Unifor, which represents about 150 production and maintenance workers at the mine. But Mine Mill has been involved in the company investigation into the men’s deaths.

First Nickel released a statement Tuesday saying it has been actively cooperating with the Ministry of Labour to determine a method to safely allow workers to re-enter the 65-2 level, an underfill heading, which has been closed since the tragedy.

“Although not ordered by the ministry, First Nickel suspended its underfill operations in all areas of the mine after the accident until satisfied that workers would not be put at risk,” First Nickel said in the statement.

After consulting with outside engineers, FNI developed a plan to resume work on the 65-2 level and in underfill headings, which ensures the safety of workers.

Much longer version of “This Magazine” article on Ring of Fire “Our home and golden land” – by Andrew Reeves (This Magazine – May/June 2014)

July 23, 2014

http://this.org/

This is a much longer and more detailed version of Andrew Reeves’ article on the Ring of Fire which was originally published in the May/June 2014 issue of This Magazine. http://this.org/magazine/2014/06/09/our-home-and-golden-land/?utm_source=thismag&utm_medium=header&utm_campaign=skybar

The on-line version is roughly 6400 words versus the original 3500 words in the print edition of the magazine. This detailed account will be of interest to many and special thanks to journalist Andrew Reeves and This Magazine for giving RepublicOfMining.com permission to post the extended version.

Please note, “Our home and golden land” was written between February and March 2014 and would not reflect the many new issues that affect the continiously evolving story about the Ring of Fire.

OUR HOME AND GOLDEN LAND

“The North is not a quiet place.” Linda Kamerman, Ontario’s Mining and Lands Commissioner Linda Kamerman used that statement to open her September 2013 report on a turf war between rival companies over access rights to a remote crescent of minerals, tucked in the province’s far north where few but local Aboriginals could say they knew where they were. The report sparked yet another round of sabre-rattling and political hand-wringing, the latest in what a labyrinth of competing claims, high-level negotiations and First Nations assurances the project would move forward on their timetable or it wouldn’t.

This is Ontario’s Ring of Fire, an as-yet undeveloped cluster of mining stakes held by 25 combinations of claim holders independently or in partnership. At its best, the Ring is a $60 billion, multi-generational opportunity for provincial, federal and First Nations governments to reap mineral riches from Ontario’s far north, spurring investment in well-paying jobs to replace those lost after the 2008-09 recession.