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Day: August 5, 2014

Gold Industry Takeovers Climb to Highest in Three Years – by David Stringer (Bloomberg News – August 4, 2014)

http://www.bloomberg.com/

There’s no sign of a let up in gold industry takeovers as a surge in acquisitions by producers, led by Agnico Eagle Mines Ltd. (AEM) and Yamana Gold Inc. (YRI), has pushed deals to a three-year high.

Mid-sized and small producers are seizing on assets discarded by larger competitors as they trim portfolios to focus on their most profitable operations after gold last year notched up the biggest annual drop in more than three decades.

“The hunters have feasted for the last six months,” said Raleigh Finlayson, managing director of Saracen Mineral Holdings Ltd. (SAR), which in May completed a deal to buy OAO GMK Norilsk Nickel’s mothballed Thunderbox operations in Australia. “There are projects still out there and the field might have opened up for those that are left, so that’s an opportunity for some.”

Finlayson is among mining executives gathering this week in Kalgoorlie, the Western Australian town 595 kilometers (370 miles) east of Perth, for the annual Diggers & Dealers conference through Aug. 6. Former Bank of England governor Mervyn King addressed the forum ahead of presentations by executives from Fortescue Metals Group Ltd., AngloGold Ashanti Ltd. and Gold Fields Ltd. in coming days.

Deals worth about $14 billion have been announced or completed so far this year, according to data compiled by Bloomberg, the highest annual total in three years and led by Agnico Eagle and Yamana’s $3.44 billion acquisition of Osisko Mining Corp., the industry’s biggest deal since 2010.

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B.C. mine had issues with rising waste water ahead of breach, consultant says (The Canadian Press/Globe and Mail – August 05, 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.

Quesnel, B.C. — A tailings pond that breached Monday, releasing a slurry of contaminated water and mine waste into several central British Columbia waterways, had been growing at an unsustainable rate, an environmental consultant says.

Brian Olding, who operates Brian Olding and Associates Ltd., said Imperial Metals Corp. (TSX: III) had been working on fixing the problem with waste water from the mine. Olding said he was hired by the company as well as the Williams Lake and Soda Creek First Nations to review the company’s plans to treat and release water as part of the province’s effluent release permitting process.

“More water was coming in over the year than they could deal with,” Olding said. “They just kept building the walls up higher and higher every year and it got to the point where that was untenable.”

He said the firm was seeking a permit to treat and release some of the water to keep the size of the pond in check at its Mount Polley Mine, an open-pit gold and copper mine about 140 kilometres southeast of Quesnel.

The earthen dam at one end of the four-kilometre-long pond breached early Monday morning, sending a 45-metre-wide wall of water and mining debris into local creeks and lakes.

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NAN becoming more assertive – by Matt Vis (tbnewswatch.com – July 5, 2014)

http://www.tbnewswatch.com/

FORT WILLIAM FIRST NATION, Ont. — First Nations need to become more assertive in looking at ways to generate sustainable and independent economies, says the Nishnawbe Aski Nation grand chief.

That will be a primary focus of the 33rd Keewaywin Conference, which is being held on the Mount McKay Lookout, Harvey Yesno said in an interview shortly after the grand entry to kick off the gathering.

“We’re looking at the whole of the region and I think we need to partner with both senior levels of government to really address the infrastructure that will stimulate and foster investment,” Yesno said Tuesday.

“We’re looking not just at job creation but wealth creation and getting involved with some of these business enterprises.” Creating favourable economic conditions will play a significant role in solving challenges such as housing shortages and high unemployment rates, he added.

Ontario Regional Chief Stan Beardy echoed those views and said communities, many of which have an abundance of potential assets, need to become their own economic drivers. Treaty agreements put the responsibility on First Nations to financially prosper, he said.

“What we need to begin to understand is that handouts will never address our needs,” Beardy said.

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Quebec Innu upset with IOC’s deal with Labrador Innu (St. John’s Telegram – August 2, 2014)

http://www.thetelegram.com/

First Nations groups say they have claim to territory where the company is conducting mining operations

Two Innu First Nations groups in Quebec are claiming rights over lands in Labrador where the Iron Ore Company of Canada (IOC) has already concluded an agreement with Labrador’s Innu Nation.

The Uashat mak Mani-utenam and Matimekush-Lac John Innu First Nations in Quebec are objecting to IOC’s claims that the company has settled aboriginal issues regarding IOC’s projects on an area they say is their traditional territory. The groups are calling on the IOC to come to an agreement with them as well.

The request comes shortly after IOC signed an agreement with the Labrador Innu Nation, which the groups consider, “a curious development,” considering the fact their groups have rights to the area.

“We have never ceded nor otherwise lost our rights to our traditional territory, our Nitassinan, which territory we have possessed, occupied and administered since time immemorial,” Matimekush-Lac John Chief Réal Mckenzie stated in a news release issued Friday.

“Governments and the mining industry allow other aboriginal groups with no legitimate claim to our territory to encroach on our lands at our expense. We can no longer tolerate such an attitude which aims to capture our resources and the benefits which derive from them.”

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Guinea’s Simandou iron ore trove: huge potential for the hugely patient – by Saliou Samb (Reuters India – August 5, 2014)

http://in.reuters.com/

BEYLA, Guinea, Aug 5 (Reuters) – In a remote, southeastern corner of Guinea, the mist-shrouded Simandou mountain range rises above the lush forest. Buried under its green slopes lies some of the planet’s finest iron ore, a treasure long coveted by the world’s mining giants.

But any profit, for Guinea or the firms, will remain locked in the russet ground until an export outlet to the coast is cleared, a task that will involve building 650 kilometres (400 miles) of railway, 35 bridges, and 24 km of tunnels.

Coupled with the need for a new port to load the ore onto ships, the initial price tag would be around $20 billion, making it Africa’s biggest mining project ever, to be carried out in one of the continent’s most unstable and rundown nations.

“The logistical challenge is such that the whole project remains on hold until the infrastructure can be put in place to get the ore out,” said Madani Dia, a Guinean mining analyst.

Lack of adequate infrastructure – ports, roads and railways – to expand the trade and export of Africa’s mineral riches is one of the biggest brakes on the continent’s faster growth.

Global firms including Rio Tinto and Brazil’s Vale have for years been eying Simandou, and most recently miner and commodity trader Glencore has expressed interest in Guinea’s iron ore, a presentation obtained by Reuters shows.

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COLUMN-Coking coal prices set for modest gains, thermal still marooned – by Clyde Russell (Reuters U.K. – July 5, 2014)

http://uk.reuters.com/

Clyde Russell is a Reuters columnist. The views expressed are his own.

LAUNCESTON, Australia, Aug 5 (Reuters) – Prices for thermal and coking coal appear poised to diverge, with the power-plant fuel remaining mired in the doldrums and the steel-making ingredient posting modest gains.

The halving of thermal coal prices since early 2011 has grabbed the most attention in the beleaguered industry, but coking coal has actually performed worse, dropping by almost two-thirds since its post-2008 recession peak in mid-2011.

The 2011 high was reached after severe flooding in Queensland state, the main coking coal producer in top exporter Australia.

Both types of coal have been plagued by oversupply, which has swamped the modest increases in demand in top importers China and India.

The problem for thermal coal has been supply hasn’t significantly been cut despite weak prices. Producers in the top two exporters Indonesia and Australia have been instead trying to cut costs and increase volumes in order to boost revenues.

Australian producers have another problem, the so-called “take-or-pay” contracts that commit them to paying for transport costs whether they actually ship coal or not.

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Manitoba looks to jump into potash industry, develop mine (CBC News Manitoba – July 23, 2014)

http://www.cbc.ca/news/canada/manitoba

The Manitoba government is hoping to develop a significant potash deposit in the western part of the province near Russell, Man. Chris Radford, Mayor of Russell, said having the potash industry present would be great for his community.

“Well this would be fantastic news for our area,” said Radford. “It’s something that obviously we’ve been looking forward to for a long time. There have been a lot of times that they have talked about this in the past and we certainly hope that this time things will be able to move forward.”

The province-owned Manitoba Potash Corporation has acquired the rights to a vast deposit of the mineral, used as a key ingredient in fertilizer. It has bundled together the mineral rights to much of the potash in the province.

The next step will be to ask major players in the industry to do a feasibility study on developing a mine, said Manitoba’s Minister of Mineral Resources Dave Chomiak

“We’ve gone to the market and asked people to look at it and see if they are interested in doing a feasibility, which if proved positive, would lead to a potash development,” he said.

Chomiak said It could take up to a decade to develop a potash mine, but it could generate as many as 600 jobs and provide hundreds of millions of dollars in royalties for the province.

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Cliffs’ boardroom shake-up presents buying opportunities for Canadian miners – by Peter Koven (National Post -August 5, 2014)

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

A boardroom shake-up at Cliffs Natural Resources Inc. has raised the likelihood that its international assets will hit the market, creating some intriguing buying opportunities for Canadian miners in their own backyard.

These assets include a large but troubled iron ore mine in Quebec, and a huge chromite deposit in Northern Ontario’s “Ring of Fire” that one company has already expressed interest in buying.

Cleveland-based Cliffs has been engaged in a vicious proxy war with hedge fund Casablanca Capital LP for the past six months. That battle ended in an apparently decisive victory for Casablanca last week, as the New York-based activist fund said it claimed six of the 11 seats on Cliffs’ board. Cliffs has not yet confirmed the final numbers.

Casablanca has been very open about its plans for Cliffs: It wants the company to focus on its core U.S. iron ore operations and look at divesting everything else, including assets in Canada and Australia.

The fund had plenty of shareholder support for this strategy, because Cliffs’ recent international forays have simply not worked out. In Canada, the company spent a staggering $4.9-billion in cash to buy the Bloom Lake iron ore mine in the 2011 takeover of Consolidated Thompson Iron Mines Ltd.

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NEWS RELEASE: Cliffs Natural Resources Inc. Announces Results of Annual General Meeting of Shareholders

Aug 05, 2014

CLEVELAND – Aug. 5, 2014 – Cliffs Natural Resources Inc. (NYSE: CLF) today announced that, based upon the preliminary report of the Inspector of Elections, IVS Associates, Inc., five Cliffs’ directors have been re-elected to the Board – Mark E. Gaumond, Gary B. Halverson, Janice K. Henry, Richard K. Riederer and Timothy W. Sullivan. The preliminary report also indicates that they will be joined by six newly elected directors, Lourenco Goncalves, Robert P. Fisher, Jr., Joseph Rutkowski, James Sawyer, Gabriel Stoliar and Douglas Taylor. The Cliffs Board will not contest the preliminary voting results and, as such, these results will be final once certified by the inspector of elections.

Cliffs issued the following statement:

“Over the past several months, a number of different perspectives were conveyed and our shareholders had the chance to express their views on a variety of points. We appreciate the consideration and support of our shareholders, as well as the valuable insights they have offered our Board and management team throughout this process. We welcome our new directors to the Board and look forward to working with them.

We would like to thank Susan M. Cunningham, Barry J. Eldridge, Andrés R. Gluski, Susan M. Green, James F. Kirsch and Stephen Johnson for their service on Cliffs’ Board of Directors and their many contributions to the Company.”

Cliffs noted that the voting results also indicated that shareholders approved all of the other proposals submitted for a vote at the Annual General Meeting. As previously announced, the newly constituted Cliffs’ Board will elect a new Chairman as soon as practicable.

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Residents calling it an environmental disaster: tailings pond breach at Mount Polley Mine near Likely, BC – by Paula Baker, Marlisse Silver Sweeney and Justin McElroy (Global News – August 4, 2014)

http://globalnews.ca/toronto/

Local residents are calling it an environmental disaster. A breach of the tailings pond on Mount Polley Mine sent five million cubic metres of toxic waste into Hazeltine Creek, Quesnel Lake and Polley Lake, with fears it could spread far and wide in the coming days.

Residents in the area, along with visitors to waterways near the Mount Polley Mine close to Likely, B.C., have been issued a complete water ban. Affecting close to 300 homes, it extends to the entire Quesnel and Cariboo River systems up to the Fraser River, including Quesnel Lake, Cariboo Creek, Hazeltine Creek and Polley Lake.

People in Quesnel are also being asked to avoid using water from the Quesnel River, and late in the day the Cariboo Regional District extended the water advisory right to the Fraser River – although they said that was a precautionary measure.

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UPDATE 2-Brazil’s Vale profit falls; prices undermine record output – by Stephen Eisenhammer (Reuters India – July 31, 2014)

http://in.reuters.com/

(Reuters) – Brazilian miner Vale SA posted a sharp decline in profit from the previous quarter as lower iron ore prices undermined record production of the steel-making ingredient.

Vale, the world’s largest producer of iron ore, reported second-quarter net income of $1.43 billion, down 43 percent on the previous quarter and below the average analyst estimate of $1.89 billion in a Reuters survey.

“It was a very challenging environment where the price of our most important product has dropped by 15 percent,” Chief Financial Officer Luciano Siani said in a video accompanying results.

Net income was more than three times higher than the year-ago quarter, when a one-time foreign exchange charge slashed profit to $424 million. Prices for iron ore .IO62-CNI=SI have dropped by nearly 30 percent this year, hitting a 22-month low in June.

Iron ore production rose 12.6 percent to 79.45 million tonnes from a year earlier, as better weather conditions combined with ramp-ups at its two main mine sites in Brazil.

Mega miners Vale and Australia’s Rio Tinto Ltd and BHP Billiton Ltd are ramping up output and slashing costs in an attempt to increase market share.

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What is the role of rail in Ontario? – by Greg Gormick

http://northernpolicy.wordpress.com/

Greg Gormick is a Toronto transportation writer and policy adviser. His clients have included CN, CP, VIA and numerous elected officials and government transportation agencies. This column was originally posted on the Northern Policy Institue website.

That question was at the heart of the work of a provincial task force appointed in 1980 by Premier Bill Davis and headed by MPP Margaret Scrivener. The group’s appointment was a response to many then-current issues and trends in railroading. VIA Rail Canada had just been launched by the federal government to take over the crumbling passenger services operated by CP and CN.

The energy crises of 1973-1974 and 1979 had caused many people to recognize the fuel efficiency of rail compared with cars, trucks and planes. The derailment and explosion of a CP freight train carrying dangerous commodities in Mississauga in November 1979 raised serious questions about rail safety and investment.

Thirty-three years after the Scrivener task force delivered its final report, The Future Role of Rail, it’s appropriate to again ask many of the same questions. The world has changed greatly in ensuing years and so has railroading, particularly in northern Ontario. But many of the issues explored by the task force are hauntingly familiar – and still unresolved.

Today, the symptoms indicating our once proud and efficient rail system is stressed include:

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The 800 Pound Gorilla in the room for rare earth sustainability in North America – thorium – by Alessandro Bruno (Investorintel.com – August 3, 2014)

http://investorintel.com/

The West must deal with thorium content limits before it can hope to become rare-earths independent…

James Kennedy works closely with the Thorium Energy Alliance to promote US legislation for the commercial development of thorium energy systems and rare earths. And when he asked me to review a video where he presents a paper entitled “Creating a Multinational Platform, Thorium, Energy and Rare Earth Value Chain – a Global Imbalance in the Rare Earth Market” – it occurred to me that Tracy’s frequently referenced ‘800 lb. gorilla’ in the proverbial rare earth room was overdue for discussion: thorium.

Kennedy’s essential argument is that the rare earth imbalance is largely the result of regulations with unintended consequences: “Rare earths and thorium have become linked at the mineralogical and geopolitical level.” In other words, thorium should be considered as a rare earth mineral.

There is, in fact, a close relationship between thorium and rare earths; they often come together. In fact, monazite, was first mined to produce thorium and rather than rare earths. In the 19th century, thorium was used to make gas mantles. Later, with the development of technology that required rare earths to function, monazite started to be mined for elements other than thorium. Meanwhile, monazite itself is a by-product.

It is separates easily, through gravity and at almost no cost, in the mining of titanium or zirconium, such that the monazite can be said to be produced practically free of charge. The United States was the leading supplier of monazite – which was in the main source of rare earths – in the first decades of the rare earths industry (the post WW2 period).

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Zimbabwe Sees $1.6 Billion Platinum Pact With Russia – by Godfrey Marawanyika (Bloomberg News – August 04, 2014)

http://www.businessweek.com/

A group of Russian partners will next month sign an agreement with the Zimbabwean government to develop a mine on a platinum deposit requiring total investment of about $1.6 billion, the African country’s mines minister said.

OOO VI Holding and state corporations Rostec and Vnesheconombank plan to confirm their participation in the Darwendale project at an event in Harare, the capital, Walter Chidakwa said in an interview.

“The project will naturally involve mining, putting up concentrators to concentrate the ore and they will then put up a smelter, a PGM smelter,” Chidakwa said yesterday.

Darwendale will be developed in phases, the first of which will be the construction of a mine, without a smelter, at a cost of $400 million to $500 million, the minister said. Mining would start next year, initially as an open-pit operation for two-to-three years. Chidakwa and Finance Minister Patrick Chinamasa were in Russia last week for a visit that ended Aug. 2.

“The visit was mainly to go and see members of the consortium, including the bank, and we had very useful discussions, very successful discussions,” Chidakwa said.

Russian Natural Resources Minister Denis Khramov last week met Chidakwa and Chinamasa to discuss possible cooperation in Zimbabwean mining projects, the Moscow-based ministry said in a statement today.

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A sunny Ontario experiment gone wrong – by Konrad Yakabuski (Globe and Mail – August 4, 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.

That glare coming off selected southern Ontario farmlands these days is not the result of some secret state experiment with atomic vegetables. No, it’s the product of another form of state-sanctioned mad science that is costing Ontarians dearly without doing diddly to improve the environment.

After Germany and California, Ontario is “enjoying” its day in the sun as a global hot spot for solar power. Photovoltaic panels are carpeting fertile and fallow farmlands at a furious rate this summer as solar power promoters rush to complete projects before the subsidy gusher slows.

By the end of 2015, more than 2,000 megawatts of solar power will be connected to the Ontario grid as developers take advantage of the province’s feed-in-tariff, guaranteeing them a heady two-decade return on their investment, courtesy of the weary Ontario electricity consumer.

The newly re-elected Liberal government scaled down the FIT program last year, but not before a small group of savvy operators hit the sweet spot by locking into its risk-free cash flow. One 10MW solar farm under construction in eastern Ontario’s cottage country will get 44 cents for every kilowatt-hour of electricity it produces over 20 years.

Compare that to the average 8.55 cents per kWh that Ontario’s Independent Electricity System Operator says it cost to produce power in the province in 2013.

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