Anglo warns of ore price torpor – by Matt Chambers (The Australian – July 26, 2014)

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

MINING giant Anglo American says iron ore prices are set to remain depressed for the rest of the year as growing supply exceeds demand that is being tempered by a fragile Chinese housing market.

But the outlook is better for coking coal, with the British miner’s Wollongong-born chief executive Mark Cutifani expecting contract prices to rise from six-year lows of $US120 a tonne and change the fortunes of the company’s metallurgical coal unit, where first-half profits fell 86 per cent.

Anglo released first-half earnings last night, reporting a $US2.9 billion ($3.08bn) profit, in line with expectations. Net debt of $US11.5bn was lower than forecasts of $US12bn because of lower capital expenditure.

Anglo is the first of the big miners to deliver its June-half profit report and the first to offer its assessment of the global markets, with Rio Tinto and BHP Billi­ton both having stopped giving their views on economics and fundamentals in quarterly production reports.

“Uncertainty is likely to persist for the balance of 2014, though there are some encouraging signs that activity is strengthening in our key markets,” Mr Cutifani said. “Over the long term, we expect new supply to be constrained and to see tightening market fundamentals and a recovery in price performance.”

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Life reflected in BHP’s figures – by Terry McCrann (The Australian – July 26, 2014)

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

BHP Billiton’s production figures effectively fired the starter’s gun for the annual profit season. They also neatly captured in microcosm the big questions about the future course of the overall economy.

Indeed, they were a much better guide to the future and its uncertainties than the June quarter CPI figures, released on the same day, which sent sections of the economentariat into a frenzy of hyperventilating certainty.

That’s a certainty that will no doubt last until some other statistic sends them hyperventilating in the opposite direction.

There’s no great surprise in the significance of BHPB’s numbers — oh for the day when it returns to the simplified BHP, sloughing off the second “B” along with all the rubbish it bought with Billiton.

BHPB remains our biggest company by far. While it won’t generate a profit this year all-but equal to the profits of all the four big banks combined, as it did a few years ago, it will still post a 2013-14 profit which will put any individual bank profit in the shade.

BHPB is not just the resources boom in miniature, it all but is the resources boom. OK, perhaps in combination with Rio Tinto, given the latter’s edge in iron ore, the resource that really “is” the boom, both in terms of dollars generated and its dominant centrality in our role in the China story.

Then perhaps we should add Twiggy Forrest’s Fortescue as not just the third iron ore major but also more directly representative of the “boom” aspect of the “resources boom”.

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EPA moves to block Pebble as House moves to block EPA – by Elwood Brehmer (Alaska Journal of Commerce – July 24, 2014)

http://www.alaskajournal.com/

The Environmental Protection Agency is continuing its push to block the potential Pebble copper and gold mine.

EPA Region 10 Administrator Dennis McLerran said in a formal statement July 18 that the agency is moving to protect the robust salmon stocks of Bristol Bay from the possible impacts of a large mine in the region.

The 214-page proposed determination document calls for a ban of large-scale mining in the area of the Koktuli River and Upper Talarik Creek watersheds north and west of Iliamna, where the Pebble deposit is located. The watersheds are part of the larger Kvichak River and Nushagak River watersheds — the Pebble deposit sits nearly on the border of the two — which support some of the largest returns of sockeye salmon in the world each year.

“The science is clear that mining the Pebble deposit would cause irreversible damage to one of the world’s last intact salmon ecosystems. Bristol Bay’s exceptional fisheries deserve exceptional protection,” McLerran said. “We are doing this now because we’ve heard from concerned tribes, the fishing industry, Alaskans and many others who have lived and worked for more than a decade under the uncertainty posed by this potentially destructive mine.”

If developed, it is believed the Pebble mine would be one of the world’s largest surface copper and gold mines. Alaska U.S. Rep. Don Young called the determination a “jurisdictional power grab.”

During a July 16 House Transportation and Infrastructure Committee hearing on legislation to limit the EPA’s Clean Water Act authority, Young delivered a heated monologue in which he condemned the agency’s actions and called the Obama administration a “monarchy.”

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Red Dog lead, zinc mine marks 25 years, $1B in royalties – by Tim Bradner (Alaska Journal of Commerce – July 24, 2014)

http://www.alaskajournal.com/

The Red Dog Mine in Northwest Alaska turned 25 years old July 17 after producing since 1989 and paying about $1 billion in royalties to NANA Regional Corp., the landowner.

NANA paid $608 million of that to other Alaska Native corporations under revenue-sharing provisions of the Alaska Native Claims Settlement Act and $199 million in dividends to its own shareholders.

The remaining $103 million was retained by NANA to help pay operations and for investments in other business, which has now helped NANA grow a diversified portfolio of assets that earned the corporation $1.7 billion in revenues last year.

To celebrate the July 17 anniversary, NANA invited guests to the mine including including former Gov. Bill Sheffield and Willie Hensley, NANA leaders and former legislators who played key roles in the original mine development.

Teck president and CEO Don Lindsay also attended. The mine is operated by Teck Alaska Inc. Teck Alaska’s parent, Canada-based Teck Resources, purchased Cominco, the Canadian company that developed Red Dog with NANA in the mid-1980s.

Red Dog is a surface mine that is one of the world’s largest zinc mines, producing 551,300 tonnes of zinc concentrates in 2013 (a tonne is approximately 2,200 pounds). The mine earned $874 million in total revenues that year, according to Teck.

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African Barrick Gold: Better as she goes! – by Lawrence Williams (Mineweb.com – July 25, 2014)

http://www.mineweb.com/

African Barrick has achieved a seventh successive quarterly fall in AISC and has improved its guidance on both gold output and costs after another positive quarter’s financial and operating results.

LONDON (MINEWEB) – The measures being taken to bring African Barrick Gold (ABG) – Barrick Gold’s London quoted African gold mining arm – back towards decent profitability seem to be working and while there are still some hiccups – notably a fall in grades at its flagship Bulyanhulu gold mine – its Q2 production results showed substantial further improvement beating most analysts’ consensus with gold output of 178,000 ounces at all in sustaining costs (AISC) of US$1105 an ounce.

This compares with production of 168,000 ounces in Q1 and 164,000 ounces in Q2 2013 – while AISC have shown the best improvements down from $1404 an ounce a year earlier. Consequently it is upping its production guidance for the year and maintaining its guidance on cash and all in sustaining costs.

CEO Brad Gordon was obviously pleased with the latest figures, commenting “We are pleased to report strong results for H1 2014, with increased production and continued cost discipline enabling the business to return to cash generation.. We have now delivered our seventh successive reduction in quarterly all-in sustaining costs (AISC) as we continue to drive operational improvements through the business”.

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India’s Uranium Boss Says Deformed Children May Be ‘Imported’ – by Rakteem Katakey and Tom Lasseter (Bloomberg News – July 23, 2014)

http://www.businessweek.com/

Confronted with reports villages near Uranium Corp. of India Ltd.’s mines have unusually high numbers of physically deformed people, Chairman Diwakar Acharya said: “I wouldn’t be surprised if a lot of those guys are imported from elsewhere, ok?”

A Bloomberg News report on July 9 highlighted the struggles of the locals with disease and early deaths — and the suspicion they shared with some environmental activists that the health conditions are linked to mining waste.

Acharya dismissed as biased any findings of a correlation between the mines and deformities in nearby villages.

Activists and doctors come with an agenda to Jadugora, a town of about 19,500 people in eastern Jharkhand state that’s home to the company’s main operations, he said in a July 14 interview.

“See, what happens is, you say you are a specialist and you’ll come and treat,” Acharya said at Uranium Corp.’s headquarters. “But all you do is, you are convinced UCIL is evil and you have come here only with the sole motive of finding reasons which would validate your preconceived notions.”

Uranium Corp. sends its security officers to monitor attempts by outsiders to examine villagers, Acharya said, explaining it was a necessary step for collecting information about alleged health problems.

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Coal India undermined by basic equipment flaws – by Krishna N Das (Reuters India – July 25, 2014)

 http://in.reuters.com/

NEW DELHI – (Reuters) – As Prime Minister Narendra Modi’s government looks to shape up Coal India Ltd (COAL.NS) for a potential major restructuring, the world’s biggest coal miner still faces basic problems: it does not have enough mechanical shovels, dumpers and explosives.

The new government, which has a 90 percent stake in the company whose total market value is about $40 billion, is exploring a break up and opening up the sector to foreign investment to boost output and cut imports, sources have said.

But the firm, which accounts for more than 80 percent of India’s production and employs 350,000, has not met its output target for years, ensuring the country remains the world’s third-largest coal importer despite sitting on huge reserves.

A failure to boost efficiency could threaten long-run plans to spin off some of the seven units of the coal miner, a vital part of the government’s reform strategy. [ID:nL3N0O6458]

Two units produced less in the last fiscal year than a year ago, partly due to lack of basic equipment and ageing machinery, Power and Coal Minister Piyush Goyal told parliament this week.

The minister did not provide data but according to a top official at one Coal India unit this issue could be cutting Coal India’s annual output by more than 10 percent. The official declined to be identified due to its policy on talking to media.

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Meliadine gold mine’s environmental impact statement short on traditional knowledge: KIA (Nunatsiaq News – July 25, 2014)

http://www.nunatsiaqonline.ca/

“Inuit communities of the Kivalliq region have many generations of accumulated observation”

While Agnico Eagle Mines has made efforts to incorporate Inuit Qaujimanituqangit in the research and development of its Meliadine gold project, the Kivalliq Inuit Association has asked the company to consider using more traditional knowledge as the company seeks approval to open its second gold mine in Nunavut.

The KIA is one of a handful of organizations that have submitted comments this month in response to Meladine’s final environmental impact statement (FEIS), which AEM released this past spring.

In a report prepared by Brenda Parlee, an associate professor in the University of Alberta’s department of Resource Economics and Environmental Sociology, the KIA suggests the mining company could benefit from traditional knowledge to identify what parts of the ecosystem are most valued by Inuit, and to better analyze past, current and future trends in the region.

“Inuit communities of the Kivalliq region have many generations of accumulated observations and consequent insights about the local study area and the regional study area,” reads KIA’s submission.

“In addition, Inuit land users, elders and youth have many relevant skills and capacities that can be key to successful long term monitoring.”

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Feeling the Ring of Fire’s Burn – by Jason Unrau (Unpublished – January 2014)

This unpublished article was originally written for Canadian Business Magazine in January 2014.

Black Thor, Big Daddy and Thunderbird, unearthed between 2007 and 2008, put a place called Ring of Fire on the mining map. Sounding more like comic book gods than incredible mineral discoveries – chromite their dominant feature and crucial for stainless steel manufacture – by the end of 2013 they had roused nearly one billion dollars to the exploration altar.

Frank Smeenk was among the group of six mining execs and geologists who discovered the Ring. Located deep inside Ontario’s north, its riches are vast enough for a century of mining, yet dispersed in a 5000 square km crescent of muskeg so remote, the place might as well be celestial.

“It’s inaccessible for all practical purposes, except by air, and to sell chrome you’ve got to get it to market and its steel mills of the world,” says Smeenk, CEO of KWG Resources, the plucky junior with a 30 per cent stake in Big Daddy, one of the biggest deposits of them all.

It was DeBeers’ quest for new diamond sources after the Second World War that eventually ushered the first mine into this corner of the James Bay Lowlands. But it was Asia’s insatiable economy, emerging fast and furious in the last decade, that turned sights toward the region’s metal potential.

While Ring of Fire is just 90 kilometres west of DeBeers’ Victor Mine, producing diamonds and mining metal are not analogous, says Smeenk, because “… you can put diamonds in your pocket and walk on the plane.”

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UPDATE 2-Brazil’s Vale hits iron ore record, base metals output lags – by Stephen Eisenhammer (Reuters U.K. – July 24, 2014)

http://uk.reuters.com/

(Reuters) – Brazil’s Vale SA produced record amounts of iron ore in its latest second quarter, rising to the task of battling Australian rivals for market share, but weaker performance at other divisions fanned some concern ahead of results next week.

Iron ore production rose 12.6 percent to 79.45 million tonnes from a year earlier, Vale said on Thursday, as better weather conditions combined with ramp ups at its two main mine sites in Brazil. The Brazilian company is the world’s largest producer of the mineral.

Vale is expected to post an annual decline in second-quarter net income of more than 40 percent when it reports on July 31, according to an average of analyst forecasts compiled by Reuters.

Giants Vale, Rio Tinto Plc and BHP Billiton Plc are all increasing iron ore capacity in a move expected to squeeze higher-cost producers out of the market. But with iron ore prices .IO62-CNI=SI languishing near 22-month lows during the period, analysts had been looking to Vale’s nickel division to pick up some of the slack.

Some of those analysts were subsequently disappointed as nickel production fell 5.2 percent to 61,700 tonnes due to maintenance at the Sudbury mine in Canada. Its VNC project on the French Pacific island of New Caledonia also suspended operations after an acid spill in May.

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UPDATE 2-Potash Corp boosts outlook as profit tops expectations – by Rod Nickel (Reuters U.S. – July 25, 2014)

http://www.reuters.com/

(Reuters) – Potash Corp of Saskatchewan raised its full-year earnings outlook on Thursday after second-quarter profit fell less than expected due to improving global fertilizer demand.

Earnings have declined year over year for four straight quarters as the price of the crop nutrient hit a six-year low earlier this year. The breakup last year of global trading partnership Belarusian Potash Co accelerated the price slide, as it created more competition among producers.

Lower prices have recently rekindled demand, however, and cost-cutting has also improved Potash Corp’s bottom line.

Shares of Potash Corp jumped 4 percent to $37.62 in premarket trading. “The key question is, ‘Is this just pent-up (potash) demand finally being satisfied, or is it going to continue into 2015,'” said Peter Prattas, analyst at Cantor Fitzgerald. “Our view is that demand has room to increase slightly in 2015, but we’re not going to continue with the momentum we’ve had to start the year.”

The company said it has a strong potash order book from U.S. buyers for the second half, and Canpotex Ltd – its offshore trading partnership with Mosaic Co and Agrium Inc – is fully committed through the third quarter.

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Cold Lake heats up as oil boom beckons – by Yadullah Hussain (National Post – July 25, 2014)

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

Osum Oil Sands Corp. CEO Steve Spence says he used to call Cold Lake the “unknown story in the oil sands”.

Not any more. While the city of Fort McMurray further north has garnered all the attention for its rapid growth, Cold Lake city has been an oil boomtown in its own right with production in its vicinity ramping up to half a million barrels per day.

“It is actually the most understood region [in terms of geology],” Mr. Spence said, although the Athabasca basin in Fort McMurray produces the bulk of Canada’s oil output.

Osum made a big move in Cold Lake in June, picking up Royal Dutch Shell Plc.’s assets in the region for $325-million. The Orion project produces about 6,700-bpd and is located close to the company’s Taiga facility, which is yet to start production. Mr. Spence expects the Orion transaction to close by the end of the month.

Mayor Craig Copeland says his city is ripe for a new boom.

“In the past few years, we have really seen a ramp up in development in our city. We have had several small booms before, but all of a sudden a lot of people have been coming to work on construction sites,” Mr. Copeland said in an interview. “This past winter —the winter that was so cold —we had approximately a good 3,000 people embedded in the community in rentals; houses and hotels were full.”

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What’s Behind Canada’s Troubled Relationship With Its Aboriginal Peoples –by Jake Flanagin (New York Times – July 24, 2014)

 

https://news.vice.com/

http://www.nytimes.com/

They call it “Murderpeg.” With 6,222 instances of violent crime reported in 2012, the city of Winnipeg, Manitoba consistently ranks among the most violent cities in Canada.

It’s also host to one of the highest concentrations of Aboriginal peoples (indigenous North Americans) in the country – 11.7 percent and growing faster than any other area in Canada, according to the Canadian National Household Survey.

Aboriginal Canadians – First Nations, Inuits, and the Métis (descended from mixed marriages between Europeans and indigenous peoples) – are arguably the most underserved segment of Canadian society. “One in five Aboriginal Canadians live in dilapidated and often overcrowded homes,” reports Nilo Tabrizy for Vice News. Those in Winnipeg are no exception.

Ms. Tabrizy traveled to Winnipeg to shoot a documentary for Vice, highlighting the plight of the city’s Aboriginal population, and unpacking the seedy history of Canada’s relationship with its indigenous communities.

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