August 7, 2014 – Republic of Mining

New leadership at Cliffs Natural Resources – by Ian Ross (Northern Ontario Business – August 7, 2014)

August 7, 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.

Sudbury native Gary Halverson has been ousted as president and CEO of Cliffs Natural Resources. As expected, Lourence Goncalves was appointed Aug. 7 to the top job at the Ohio mining giant and was also named chairman of the board.

He replaces Jim Kirsch who served as chairman since July 2013, and Halverson who served as CEO since February. Halverson first appeared on the scene last fall when he was named president and chief operating officer (COO), replacing Joseph Carrabba who retired in November.

Halverson was serving as interim COO of Barrick Gold and had previously worked with Kinross Gold from 2000 to 2004 where he held the general manager role at the Hoyle Pond and Placer Dome Mines in Timmins.

Goncalves is the choice of Casablanca Capital, a New York hedge fund, which won a proxy battle with Cliffs at the company’s annual shareholders’ meeting in Cleveland, July 29.

Nickel Stockpiles at Record High as China Turns Exporter – by Agnieszka Troszkiewicz (Bloomberg News – August 6, 2014)

August 7, 2014

http://www.bloomberg.com/

Nickel inventories in warehouses monitored by the London Metal Exchange extended gains to a record after China, the biggest producer and consumer, shipped more metal out than it imported amid a financing scandal.

Stockpiles climbed to 317,874 metric tons, for a 21 percent increase this year, according to the LME data. Exports of refined nickel from China almost tripled in June to 16,737 tons, exceeding imports for the first time ever by 5,723 tons, customs data show. Nickel is used to make stainless steel.

“The recent build is probably attributable to the pick-up in refined nickel exports that came out of China,” Nicholas Snowdon, an analyst at Standard Chartered Plc in London, said by phone. “That is most likely related to some constraints on financing.”

Nickel has gained the most of the six main metals on the LME this year, rising as much as 56 percent after the largest miner Indonesia banned exports of unprocessed ore, a raw material used to make a lower-grade nickel substitute known as nickel-pig iron. Refined nickel production will exceed demand by 44,200 tons this year before turning into shortage of 97,100 tons in 2015, according to Morgan Stanley.

Prices have pared gains to 35 percent this year, to $18,730 a ton, on speculation that supplies are sufficient for now as stockpiles climbed to a record.

B.C. orders cleanup after mine waste discharged into waterways – by Andrea Woo (Globe and Mail – August 7, 2014)

August 7, 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.

VANCOUVER — Three months ago, the Mount Polley mine experienced a small, but notable, breach that was quickly corrected when the gold and copper operation “got itself into compliance,” according to the province’s mines minister.

But environmental advocates say the incident should have served as a warning to avert the massive tailings-pond failure this week that has spewed millions of cubic metres of potentially contaminated waste into central British Columbia’s waterways, a disaster believed to be the largest of its kind in Canadian history.

The Mount Polley tailings pond damn burst early Monday morning, spewing enough mining waste water into the Cariboo district’s waterways to fill 2,000 Olympic-sized swimming pools. The Cariboo Regional District declared a local state of emergency; up to 300 residents in the rural community of Likely remain without clean water for drinking or bathing.

On Wednesday, the B.C. government ordered Imperial Metals Corporation, which owns the mine, to undertake an environmental impact assessment and submit cleanup plans to the Ministry of Environment.

The exact cause of Monday’s rupture is under investigation. There are three inspectors on site and two consulting companies are working with the Ministry of Energy and Mines, Minister Bill Bennett said.

Tailings ponds in northern Ontario considered safe, scientist says (CBC News Sudbury – August 07, 2014)

August 7, 2014

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

David Pearson says what happened in B.C. is unlikely to happen here

A tailings pond breach in central British Columbia this week is raising questions about how mine waste is being taken care of in northern Ontario.

The recent disaster at the Mount Polley Mine released billions of litres of wastewater into river systems. But, according to Laurentian University professor David Pearson, the tailings ponds here in the North often aren’t built at all.

They’re existing lakes or wetland — and that’s what makes them safer. “It’s not like a pond on a parking lot where a break would cause a massive flood,” Pearson said.

Even so, companies that want to mine in Ontario must prove they can rehabilitate a site or pay for a cleanup before they begin production. And the Ministry of Northern Development and Mines makes inspections every few years.

Former Glencore scientist Lisa Leger said Ontario has strict protocols to prevent what happened in B.C. “I was heavily involved in risk management and know that the companies will definitely listen to all the concerns.” But environmental groups like Mining Watch Canada remain skeptical that full-site rehabilitation after such a disaster is ever possible.

Door still open for mega-merger between Newmont Mining and Barrick Gold – by Peter Ker (The Age-Business Day – August 7, 2014)

August 7, 2014

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

A $US35 billion ($37.6 billion) merger of global goldmining companies Newmont Mining and Barrick Gold may not be dead, after the chief executive of Newmont told an audience in Melbourne that he would not “close the door” on a future deal.
The two North American gold companies conducted merger talks earlier this year but the deal fell over in April amid reports they had disagreed over how to handle their respective Australian assets.

While neither company is listed in Australia, a merged entity would wholly own the nation’s biggest goldmine, Boddington, and the nation’s second-biggest goldmine, Kalgoorlie’s Super Pit, as well as other smaller assets.
When asked if he had shut the door on the proposed deal, Mr Goldberg indicated a revival of the deal was not impossible.

“I wouldn’t shut the door on it – we are focusing on running our business as effectively and efficiently as we can going forward and we will see what happens,” he said.

“Clearly we overlap and we work together, [the Super Pit] is an example, and we have a joint venture in Nevada and I wouldn’t close the door on it at all.” But he said he had not heard from Barrick since April.

During a presentation to the Melbourne Mining Club on Thursday, Mr Goldberg said the deal had failed because there were not enough “redundancies” between the two companies.

First Nations fear the worst for B.C.’s salmon run following Mount Polley breach – by Sunny Dhillon (Globe and Mail – July 7, 2014)

August 7, 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.

VANCOUVER — The exact effect of the Mount Polley spill on B.C. salmon is not yet known, but with the sockeye just entering the Fraser River – and more than one million fish heading directly for the region hit by the mining waste – First Nations and conservation groups are fearing the worst.

Concern about the sockeye’s survival and whether the fish is safe to eat has emerged as another front in the resource battle between First Nations and governments, with aboriginal leaders charging the mining industry has lacked oversight, and questioning the point of the right to fish when the salmon is contaminated.

Bev Sellars, chief of the Soda Creek Indian Band, likened the area touched by the spill to a spiderweb. “When you disturb one part of the spiderweb, it affects all of it. That’s how this mine is going to affect everything,” she said in an interview Wednesday.

Ms. Sellars said test results and data have not yet come in, but the spill will certainly lead to some dead fish. “How could there not be?” she asked. She said members of her community have already seen dead salmon.

Approximately 1.5 million sockeye had been expected to head to the Quesnel region this year. About 20 per cent are believed to have already entered the Fraser River as part of their journey, with the rest expected to begin the trek north by the end of the month.

Moon First—Mine the Asteroids Later – by Paul D. Spudis (Air Space Magazine – August 6, 2014)

August 7, 2014

http://www.airspacemag.com/

Let’s learn how to extract space resources closer to home.

The UK Daily Mail recently published a piece extolling the benefits of asteroid mining (before lightly tripping over some mundane, yet critical, technical details). The article leads with the headline: Single asteroid worth £60 trillion if it was mined – as much as world earns in a year. Should we chide them for such blatant sensationalism? Then again, is it blatant, or are they merely following an established pattern?

Asteroid mining is a field with lots of hype but little sober consideration. To redeem the technique of in situ resource utilization (ISRU) from the realm of ridicule and science fiction and make it a routine aspect of space mission architectures, we must honestly discuss the difficulties of extracting useful product from raw asteroid debris.

As with every Solar System body of interest and potential use, I am firmly convinced we will eventually mine asteroids. In truth, if we do not take up these formidable technical challenges, there is little hope for any permanent and extensive human presence in space. As long as we confine ourselves to launching everything we need for spaceflight from the bottom of the deepest gravity well in the inner Solar System, we will remain mass- and power-limited and thus, capability-limited.

Essential, low-information density material – spaceflight’s “dumb mass” of propellant and consumables – should be obtained from sources in space, rather than long-hauled (at great cost) from Earth. Only complex, high-information density items not easily made in space should be brought up from Earth.

Mt Polley: The Cost of Moving Forward – by Jack Caldwell (I Think Mining.com – August 6, 2014)

August 12, 2014August 7, 2014

http://ithinkmining.com/

Jack Caldwell, P.E. has a B.Sc. in Civil Engineering, an M.Sc. (Eng.) in Geotechnical Engineering and a post-graduate law degree. He has over 35 years engineering experience on mining, civil, geotechnical and site remediation projects. He has worked on numerous projects throughout southern Africa, Europe, Canada and the United States.

In one of the many article I read on the Mt Polley tailings failure was an estimate of what it will cost to get the mine going again. A figure of $50 million was quoted as the cost to pick up all the tailings and return them to the tailings facility. I imagine that figure is based on five million cubic meters of tailings at about $10 a cubic meter to pick up. Here is why I suspect the figure is grossly low.

In conventional civil or mining earthworks $10 a cubic meter would be generous. But the material to be picked up is still a near-fluid. It will slosh around in the truck and spill out through the opening in the truck bed. Also the bottom of the creek now covered with tailings is by no means uniform. It is probably rough and rugged and teaspoons will be required to pry the tailings out of every nook and cranny. So let us double the cost of picking up the tailings and taking them back to the facility.

While it will not be easy to pick up the tailings strewn along the creek, it may be impossible to get back the tailings in the lake. Do you dredge the lake? Of course you can dredge, but then you will pick up a lot of clean bottom sediment along with the tailing. Inevitably they will have to consider placing a subaqueous cover on top of the tailings in the lake. This was done off the coast of Los Angeles to cover PCB sediment on the ocean floor, so it could be done in BC. But at what cost? Say another $100 million.

Next the tailings facility breach has to be repaired so that the returned tailings will stay there. That means plugging the breach. I am not sure I would let a workman go near those steep slopes that subtend the failure zone.

Bottom reached for coal, iron ore? – by Oliver Probert (Australian Journal of Mining – August 07, 2014)

August 7, 2014

http://www.theajmonline.com.au/

An ANZ commodities expert says iron ore and coking coal prices may have reached their bottom, and he’s singing from the same hymnbook as at least one mining executive.

A report from Mark Pervan, global head of commodity strategy for ANZ, this week said that with the stabilisation of the overall macro environment, commodity markets are entering the second half of 2014 on a positive note.

While an increase in commodity prices is likely to occur, the report says, it will be a modest one, however.

“Overall, the backdrop looks accommodating for commodity markets in H2 2014,” Pervan’s report states. “But the upside looks limited over the next month or two until we see this supported by a pick-up in physical demand, which is expected later in the year.”

Commenting specifically on mined bulk commodities, Pervan wrote: “Supply-side issues remain, but the bottom appears to have passed for coking coal and iron ore. Seasonal drops in power demand will cap any thermal recovery.”

Pervan’s confidence in iron ore was echoed by Atlas Iron chief executive Ken Brinsden, who was referenced in a number of mainstream media outlets for his comments at the Diggers & Dealers conference in WA this week.

Supply Shortfalls Send Nickel Higher – by Laura Clarke (Wall Street Journal – August 7, 2014)

August 7, 2014

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

Market is Still Reacting to the Ban on Ore Exports Imposed by Indonesia

Nickel prices leapt higher Thursday, as traders fretted about supply shortfalls, while other metals traded on the London Metal Exchange were steady.

The nickel market is still reacting to the ban on nickel ore exports imposed by top producer Indonesia earlier this year. That changed the landscape of the global nickel market, constricting supply to the biggest consumers in countries such as China, and sending prices soaring.

Still, some analysts say there may be some signs of some easing in Indonesia, which could dent nickel prices.

“We are not as enthralled by nickel, as there seems to be some ‘looser talk’ coming out of Indonesia with respect to the export bans, along with rising LME stockpiles,” said INTL FCStone analyst Edward Meir, in a monthly metals report.

At 0926 GMT, LME three-month nickel traded 1.7% higher on the day at $19,050 per metric ton. The metal was changing hands at highs not seen since July 28. Copper rose 0.3% to $6,988.75 per ton, while aluminum fell 0.5% to $2,013.75 per metric ton, and three-month zinc slide 1.6% to $2,320 per ton.

Elsewhere, three-month lead fell 0.8% to $2,225.75 per metric ton, while tin climbed 0.45 to $22,380 per ton.

NEWS RELEASE: Lourenco Goncalves Appointed Chairman, President and Chief Executive Officer of Cliffs Natural Resources Inc.

August 7, 2014

CLEVELAND – Aug. 7, 2014 – Cliffs Natural Resources Inc. CLF -1.23% today announced that the Company’s Board of Directors has appointed Lourenco Goncalves to the positions of Chairman, President and Chief Executive Officer, effective immediately.

“I am honored by the opportunity to lead Cliffs into its next chapter, with a keen focus on improving performance and restoring shareholder value,” said Mr. Goncalves. “Cliffs has a unique position of strength in iron ore in the Great Lakes region, many valuable assets in other sectors elsewhere in the US and around the world, and talented employees at all levels of the company.

I look forward to working closely with all of my fellow Directors to refocus Cliffs on a new strategic path that builds on those strengths, and I am grateful to my fellow shareholders for the vote of confidence they have placed in us. While there is much to be done and many challenges ahead of us, there is also much promise. I can assure all of our stakeholders we are hitting the ground running.”

Mr. Goncalves replaces Jim Kirsch who served as Chairman since July 2013, and Gary Halverson who served as CEO since February 2014.

Richard K. Riederer, who has been a Director of the Company since 2002 and was re-elected at this year’s Annual Meeting, added, “I look forward to working with the new Board and management team. The Company wishes to thank Gary Halverson for his contributions to Cliffs as CEO. We also extend our thanks to Jim Kirsch for his service as Chairman of our Board and wish him well in his future endeavors.”

The Risky Rise of the [Mine Tailings] Dams – by Andrew Nikiforuk (The Tyee.ca – August 7, 2014)

August 7, 2014

http://thetyee.ca/

A massive mining wastewater spill in the interior of British Columbia highlights a new global trend: tailing dams that hold waste are not only getting bigger, but posing greater risks to watersheds and communities downstream.

Drawing upon recent industry reports and presentations made by engineers living in the province, it’s clear that the complexities of the industry have multiplied and with them, risks to water are escalating.

Increased global mining production of substances such as iron ore, gold, copper and nickel along with rising metal prices has tripled the value of the industry from $200 billion to $600 billion over the last decade.

But due to declining ore quality, the sheer volume of waste produced by the industry, which can contain substances such as arsenic, lead and cyanide, is increasing.

Every year, the industry digs and moves as much solid rock (several thousand million tonnes per year) as all earthen materials transported by natural geological processes, such as landslides and erosion.

Because of the challenge of peak metals and high global demand, the mining industry faces a number of somber risks, as reported by Andrew M. Robertson of Robertson GeoConsultants at a recent mining conference.

Rodriguez would renew fight for resource revenues – by Ben Leeson (Sudbury Star – August 7, 2014)

August 7, 2014

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

Some may call it an old idea. John Rodriguez calls it unfinished business.

The former Greater Sudbury mayor, who’s running again in the municipal election in October, said he’ll take up the fight once more to tackle the municipality’s $700-million infrastructure deficit by seeking “a fair share” of resource revenues.

Rodriguez made the announcement in front of the Ministry of Northern Development and Mines in Sudbury on Wednesday.

“It’s a question of justice, of fairness,” Rodriguez said. While the province receives royalties from the ores mined in Greater Sudbury – to the tune of $50 million in 2007, based on figures supplied by Rodriguez – the city does not.

Greater Sudbury does get 7.5 cents per tonne for gravel under the Aggregate Resources Act, while the province gets 13 cents.

“But for ores, we don’t get a penny,” Rodriguez said. “We have these major roads in the city – Lasalle Boulevard, Falconbridge Road, Cote Boulevard, (Municipal) Road 15, (Highway) 69 North — that are used as major routes for transporting ores from the mines to the smelters and refineries, yet we bear the cost of repairing these roads. You can set your clock by it, or your calendar. Every four or five years, we have to resurface the roads, but we don’t receive any royalties to help us offset the cost of repairing these roads.

Editorial: Mount Polley tailings spill – Imperial’s best not good enough – by John Cumming (Northern Miner – August 6, 2014)

August 7, 2014

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. Editor John Cumming MSc (Geol) is one of the country’s most well respected mining journalists. jcumming@northernminer.com

The complete failure of the tailings dam at Imperial Metals’ Mount Polley copper–gold mine in Central B.C.’s Cariboo region on Aug. 4 is the most depressing thing to have happened in Canadian mining since the Bre-X Minerals debacle in 1997. It’s the worst tailings dam failure tied to a Canadian company since the Los Frailes disaster in Spain in 1998 (5 million cubic metres spilled) and the Omai spill in Guyana in 1995 (2.3 million cubic metres spilled).

It’s about as big a tailings dam failure as you can get: some 15 million cubic metres of tailings muck has so far flowed out of the mine’s tailings-impoundment area through a gaping hole in an obliterated eastern portion of a huge dam wall.

To see the jaw-dropping scale of the devastation, watch the full video of a helicopter survey of the affected area at http://youtu.be/M1YgX2jXnpA, posted by the Cariboo Regional District authority. The video takes 37 minutes, because the affected area is so huge: the massive tailings facility itself, Polley Lake immediately to the east and the deeply messed-up Hazeltine Creek, which empties into the western reaches of the formerly pristine Quesnel Lake, where there are critical salmon-spawning grounds.

In the video, huge amounts of material is actively flowing out of the tailings facility in great, muddy torrents into Hazeltine Creek. Have you ever seen a waterfall of mine tailings? It’s here in this video, in the middle of Hazeltine Creek — a formerly 1-metre wide trickle of wending water that is now a scoured-out 45 metres wide.

UPDATE 2-China’s Ramu nickel mine in PNG restarts after attacks – embassy – by Sonali Paul, Melanie Burton and Polly Yam (Reuters India – August 7, 2014)

August 7, 2014

http://in.reuters.com/

Aug 7 (Reuters) – A Chinese-owned nickel mine in Papua New Guinea has resumed production three days after an attack by armed villagers forced work to halt, a Chinese embassy official in the South Pacific country said on Thursday.

The $2.1 billion mine, forecast to produce 22,000 tonnes of nickel in 2014, is operated by Ramu NiCo, which is majority owned and run by Metallurgical Corporation of China Ltd (MCC) .

Equipment including nine excavators, a fuel truck and a lighting vehicle were burned and five Chinese workers were injured in the attack on Monday, the embassy said, confirming earlier media reports.

“The embassy strongly condemns these brutal attacks and makes urgent request to the PNG Government to take immediate and effective measures to prevent the violence from recurring and ensure the safety of the personnel and properties, and to bring those attackers to justice to deter such criminal acts,” an embassy official said in an emailed response on Thursday.

“With the assistance of the police force, now the situation is under control and the mining production has been resumed.”

Mining and energy projects are the major source of income for Papua New Guinea, but outbreaks of violence sparked by landowner disputes and environmental concerns are not uncommon.