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Day: August 14, 2014

COLUMN-Is China’s economy like Clouseau’s inflatable parrot? – by Clyde Russell (Reuters U.K. – August 14, 2014)

http://uk.reuters.com/

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

LAUNCESTON, Australia, Aug 14 (Reuters) – Why does the Chinese economy remind me of Chief Inspector Jacques Clouseau?

One of the many memorable scenes featuring the late Peter Sellers as the bumbling French detective comes in the Revenge of the Pink Panther, when he disguises himself as a peg-legged Swedish sailor, complete with an inflatable rubber parrot on his shoulder. [here ]

Problem is the parrot leaks, requiring Clouseau to flap his arm to operate a pump to re-inflate the bird, which eventually pops off as too much air is put in.

The connection to the Chinese economy is that once again a set of softer-than-expected economic numbers has the market anticipating that the authorities will act to boost activity. Like Clouseau’s parrot, every time the economy loses some air, the expectation is that it will be pumped up again and it will return to health.

The release of economic data that failed to meet expectations on Wednesday is the latest case in point. Credit figures showed that the amount of money flowing into the Chinese economy fell to a six-year low in July, while growth in investment, retail sales and bank lending was short of the market consensus.

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B.C. First Nations band evicts mining company that owns Mount Polley tailings pond – by James Keller (Vancouver Province – August 14, 2014)

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

THE CANADIAN PRESS – CHASE, B.C. — A British Columbia First Nation plans to issue an eviction notice to Imperial Metals Corp. (TSX:III) — the company behind a massive tailings pond breach at a gold and copper mine last week — over a separate project in the band’s territory.

The declaration from the Neskonlith Indian Band is the latest sign that last week’s tailings spill at the Mount Polley Mine in central B.C. could ripple across the company’s other projects and possibly the province’s entire mining industry.

The Neskonlith band said the notice, which its chief planned to hand-deliver to Imperial Metals in Vancouver on Thursday, orders the company to stay away from the site of its proposed Ruddock Creek zinc and lead mine, which is located about 150 kilometres northeast of Kamloops.

The mine, which is still in the development phase and has yet to go through the environmental assessment process, would be located near the headwaters of the Adams River, home of an important sockeye salmon run. The Neskonlith band opposed the mine long before the Mount Polley tailings spill.

“We do not want the mine developing or operating in that sacred headwaters,” Neskonlith Chief Judy Wilson said in an interview Wednesday.

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U.S. Mining Winning The Costs Race – by Tim Treadgold (Forbes Magazine – August 13, 2014)

http://www.forbes.com/

Mining booms are nearly always driven by rising commodity prices but what’s happening in the U.S. today indicates that falling costs are the driving force behind a revitalized interest in all forms of resources, from oil and gas to gold.

Activist investors, sometimes criticized for being too aggressive, have spotted the value gap developing between international mining and oil operations and those in the country winning the low-cost race, the U.S.

Cliffs Natural Resources CLF -3.04% and Apache APA -0.67% Corporation have been targeted by activist funds demanding the sale of high-cost, low-profit, assets in Australia, with Cliffs under pressure to sell an iron ore mine in Western Australia, and Apache planning to sell a 13% stake in a big Australian liquefied natural gas project being developed by Chevron CVX -0.5% Corporation.

Both U.S.-based companies will probably re-invest the capital generated in U.S. projects in much the same way some industrial companies are shifting their international operations back to the U.S. because it has become the global go-to destination, in some cases surpassing the long-term low-cost leaders, China and Germany.

Gold Cheapest To Mine In The Americas

In the commodity world, the value-gap is best illustrated by that universal material gold, with the cost profile of one company demonstrating why the U.S. is a preferred destination for new mine developments.

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Appeals court OKs permits for U.P. mine – by John Flesher (Detroit News – August 13, 2014)

http://www.detroitnews.com/

Associated Press – Traverse City — The Michigan Court of Appeals on Wednesday upheld a decision by state regulators to allow construction of a nickel and copper mine in the Upper Peninsula backwoods, the latest development in a 12-year legal and political struggle.

A three-judge panel ruled unanimously that the Department of Environmental Quality was within the law to approve mining and groundwater discharge permits for the Eagle Mine in Marquette County. Kennecott Minerals Co. began the project but its present owner is Lundin Mining Corp., a Canadian company.

Environmental groups, a Native American tribe and a private hunting and fishing club have fought to prevent the mine from being built since Kennecott conducted exploratory drilling in 2002, saying it poses numerous ecological risks. The department issued the permits five years later, a decision upheld by an administrative law judge and a circuit court before the appeals court took the case.

“Today’s ruling validates the MDEQ’s thorough and extensive permitting review process, which ensures responsible development with strong environmental protections,” said Dan Blondeau, spokesman for the mining company.

A spokesman for the National Wildlife Federation, one of the groups that challenged the permits, said no decision had been made about whether to appeal to the Michigan Supreme Court.

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MiedziCopper loses concessions in Poland – by Northern Miner (August 13, 2014)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. 

Ross Beaty isn’t the type of businessman who normally airs his grievances in public. But when two of his copper concessions in Poland were apparently revoked by the Polish government, he felt he had no choice.

On July 30 Poland’s Minister of the Environment revoked two concessions awarded to MiedziCopper, a private copper exploration company in which Beaty’s Lumina Capital investment group has a large stake. The ministry also cancelled a third concession that it awarded to MiedziCopper’s rival KGHM Polska Miedzi (WSE: KGH), Poland’s largest copper producer and a company in which the government owns 63.6 million shares or about 31.79% of the share capital.

Beaty alleges that KGHM brought political pressure to bear on the Ministry of Environment to reverse its decision awarding two of the concessions to his group and MiedziCopper is now suspending all new investment in Poland.

MiedziCopper has invested about $35 million on exploration in the country since 2010 and had planned to spend a further $65 million over the next few years. The company continues to hold 11 concessions in the country on which it has carried out extensive geochemical, geophysical, geological and drilling activities.

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Former Chilean president slams Codelco’s governance, calls for greater autonomy – by Cecilia Jamasmie (Mining.com – August 14, 2014)

http://www.mining.com/

Former Chilean president Ricardo Lagos (2000-2006) has called for a more independent Codelco, the state-owned copper company that is the world’s No.1 producer of the industrial metal.

Speaking at the 30-year anniversary of local mining think tank Cesco, Lagos said the miner’s corporate governance should be similar to that of the country’s central bank, La Segunda reports (in Spanish).

Chile’s monetary authority has its own legal framework and The President is responsible for appointing its five directors for a 10-year period, with the consent of the senate.

A nine-member board currently rules Codelco, with of three of the directors named by the President, four selected from a shortlist provided by the senior public management council, and two workers’ representatives.

“If you compare Codelco’s current corporate structure to that of the central bank, the degrees of autonomy are clearly different, which is based on the importance the company plays in the country’s public finances,” Lagos was quoted as saying.

Budget battles

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Australian state approves $2 bln rail line for Adani coal project – by Sonali Paul (Reuters India – August 14, 2014)

http://in.reuters.com/

MELBOURNE – Aug 14 (Reuters) – India’s Adani Mining has won state approval to build a rail line for its $15 billion Carmichael coal project in Australia, it said on Thursday, bringing it a step closer towards making a final decision on whether to go ahead with the massive scheme.

The state of Queensland approved the A$2.2 billion ($2 billion) North Galilee Basin Rail project, a 300 kilometre (186 mile) railway to connect the Carmichael mine and potentially other mines in the untapped Galilee Basin to the east coast port of Abbot Point.

Despite analysts’ views that Adani’s project would be unprofitable at current coal prices, the company said it remained committed to pushing ahead with it to supply coal to power stations in India.

“Adani looks forward to continuing to work with our project partners and all levels of government to see this through,” Adani Mining, the Australian arm of Adani Enterprises, said in a statement.

Adani recently signed an agreement with POSCO Engineering & Construction Co Ltd to build the rail line. Costs and other details of the contract are due to be set by the end of this year.

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Regulate Canadian, Not American Metals Mine, Murkowski Says – by Alan Neuhauser (U.S. News and World Report – August 14, 2014)

 http://www.usnews.com/

The Alaska senator seeks greater environmental enforcement at a Canadian metals mine, but opposes regs at a similar mine in Alaska.

Sen. Lisa Murkowski, R-Alaska, has called for greater oversight of a Canadian metals mine – even as she lambastes federal regulation of a similar proposed mining project in Alaska.

“It’s an irony, because the risks associated with Pebble Mine are precisely those that we have seen unfolding before our eyes over the past week in British Columbia,” says Joel Reynolds, western director and senior attorney with the Natural Resources Defense Council. “That is to say, a major containment dam failure resulting in significant off-site contamination in salmon habitats.”

Last week, a dam containing the wastewater pond for Canada’s open-pit Mount Polley mine ruptured, sending millions of gallons of potentially contaminated water spilling into a river along the Alaska border (Canadian officials lifted a ban on drinking tap water Tuesday). Later that week, Murkowski dashed off a letter to Secretary of State John Kerry, urging him to impress upon Canadian leaders “the potential impacts that large-scale mining in Canada could hold” for the state’s fishing and tourism industries, as well as its indigenous population.

“The tailings pond breach at Mount Polley on August 4 has renewed the specter of environmental impacts from large-scale hardrock [sic] mineral developments in Canada that are located near transboundary rivers,” Murkowski wrote.

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Gold miners pressure suppliers for price cuts amid sector slump – by Rachelle Younglai (Globe and Mail – August 14, 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.

Goldcorp Inc. is leading an industry push to clamp down on suppliers, pressuring them to slash prices so the mining company can keep costs down amid the sector’s slump.

Miners are under siege after bullion lost about a third of its value over the past couple years. Big gold producers such as Barrick Gold Corp. and Kinross Gold Corp. overhauled operations and wrote down assets to mitigate the downturn. Smaller miners such as Iamgold Corp. have cut dividends to preserve cash. Now mining companies are pushing suppliers to slash prices on equipment, goods and services after years of escalating costs.

Goldcorp, a major producer and favourite among analysts and investors, is leaning on vendors to help reach the company’s goal of cutting costs by 17 per cent.

“We ask that you perform an immediate review of your costs and propose adjustments to your current pricing to meet our target,” the company said in a letter viewed by The Globe and Mail.

The pressure is bearing fruit. By the end of June, Goldcorp had realized $74-million in reductions from squeezing its supply chain – an area it has identified as “one source of significant cost savings.”

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BC’s two-faced approach to regulation – by Doug Firby (Troy Media – August 14, 2014)

http://www.troymedia.com/

Doug Firby is Editor-in-Chief and National Affairs columnist for Troy Media.

Doug FirbyCALGARY, AB, Aug. 14, 2014/ Troy Media/ – Several organizations have egg on their faces after the tailings pond disaster in central British Columbia. But no one has more than the government of British Columbia.

Yes, Imperial Metals Corp. looks like a bad corporate citizen for failing to anticipate and prevent the collapse of the dam. The mishap unleashed an estimated 10 million cubic meters of water and 4.5 million cubic meters of ground-up rock. The local folks are still waiting to hear when it will be safe to drink the water.

B.C., however, looks even worse and here’s why. As one recent poll found, citizens trust resource industries because they believe they are highly regulated. That is, they expect their governments to protect their interests. By that measure, the bureaucrats have betrayed that trust.

Accidents don’t happen when it comes to this sort of thing. Dams don’t just collapse without warning. They do when people aren’t paying close enough attention to them. Clearly, neither Imperial Metals nor the government of B.C. were paying close enough attention to this dam.

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CEMI to cast a wide net for deep mining research – by Jonathan Migneault (Sudbury Northern Life – August 13, 2014)

http://www.northernlife.ca/

Ultra Deep Mining Network has $46 M at disposal

The Sudbury-based Centre for Excellence in Mining Innovation (CEMI) plans to launch a Canada-wide request for proposals by late September for projects that would fall under its $46-million Ultra Deep Mining Network.

In January 2014, CEMI received a $15-million grant from the federal government’s Business-led Networks of Centres of Excellence program to pursue research to make ultra-deep mining — deeper than 2.5 kilometres or roughly 8,000 feet — more efficient and productive.

As mines go deeper underground, technologies and processes that can improve costs and efficiencies can mean the difference between a profitable operation and one that goes out of business.

In January 2014, Samantha Espley, general manager of mines and mills technical services with Vale’s Ontario operations, said the company wants to reach three kilometres in depth, or nearly 10,000 feet, at Sudbury’s Creighton Mine within the next decade.

Creighton Mine is currently under its Phase 3 expansion, which includes the extension of the primary access ramp from 7,940 to 8,200 level and the creation of three main production levels to access additional ore bodies.

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Flight simulator firm CAE puts mining unit up for sale as civil aviation profit soars – by Kristine Owram (National Post – August 14, 2014)

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

CAE Inc. is giving up its work underground to focus on the skies, announcing on Wednesday it plans to sell its nascent mining unit to give priority to its core businesses, including the robust civil aviation unit that provided the entirety of its first-quarter operating growth.

“There truly has never been a better time for commercial aviation,” CEO Marc Parent said at the company’s annual shareholders’ meeting on Wednesday, adding that he expects to sell 40 civil flight simulators in the current fiscal year.

Mr. Parent said global airline passenger traffic grew nearly 6% in the first half of 2014. In the United States, demand for the flight simulators that CAE makes is strong because several of that country’s airlines are in the midst of replacing their fleets. In addition, recovering demand in Europe, strong aviation growth in the Middle East and the rise of low-cost carriers in Asia are all boosting demand for simulators.

Operating income at CAE’s civil simulation and training unit rose 32% to $49.5-million in the fiscal first quarter, while operating margins jumped to 16% from 12.5% last year.

By comparison, operating income at CAE’s defence and security business, which focuses on military simulators, fell 7% to $21.9-million. Margins dropped 80 basis points to 11.1%.

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Clark still promising natural gas dream will produce ‘billions’ to slay B.C.’s debt – by Brian Hutchinson (National Post – August 14, 2014)

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

Time and other factors are shredding British Columbia’s $1-trillion liquefied natural gas (LNG) expansion dreams, served up by Premier Christy Clark and leading to her successful — and disingenuous — provincial election campaign last year.

Despite more and more skepticism, she’s still running with it. An expanded LNG industry in B.C. will eliminate the province’s mounting debt, or so the premier claims. As well, “billions-of-dollars in new [LNG] revenue will be dedicated” to a “Prosperity Fund,” a sort of rainy-day account “for the benefit of current and future generations.”

How many “billions-of-dollars” does Ms. Clark have in mind? “More than $100-billion.” That’s a loose figure, based on estimates from reports commissioned by the B.C. government and assuming at least five new LNG plants will soon enter production in the province.

B.C. has a lot of natural gas; in theory, much of it can be piped from the hinterland to seaports, then chilled, liquefied and shipped to markets in Asia.

Easier said than done. Ms. Clark’s “billions-of-dollars” promise relies on a whole lot of what-ifs; nonetheless, the premier and her B.C. Liberal Party ran with it, declaring themselves wealth generators, job creators, debt busters. Their opponents, the B.C. New Democratic Party, offered no compelling response in the election, and lost.

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KWG subsidiary to appeal court order waiving its consent for land easement – by Henry Lazenby (MiningWeekly.com – August 14, 2014)

http://www.miningweekly.com/page/americas-home/

TORONTO (miningweekly.com) – Ontario-focused explorer KWG Resources on Wednesday announced that subsidiary Canada Chrome Corp (CCC) would seek permission from the Ontario Court of Appeal to overturn the July 30 ruling of the Divisional Court of the Ontario Superior Court of Justice that ruled that CCC’s consent should be waived in an application for an easement to build a road over its mining claims.

In its decision in the appeal brought by 2274659 Ontario Inc, a subsidiary of US-based Cliffs Natural Resources, the Divisional Court set aside the decision of the Ontario Mining and Lands Commissioner issued on September 10, granting the original application to dispense with CCC’s permission for an easement over its mining claims.

The Divisional Court, in part, said: “Whether or not it is in the public interest to grant an easement for a road is a matter for the Minister of Natural Resources to determine, after an environmental assessment and consultation with First Nations and other affected interests.

“It is for the Minister to determine whether the easement should be granted in the public interest and on what terms. CCC will be able to participate in that process.”

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Editorial: Who designed the Mount Polley tailings dam? – by John Cumming (Northern Miner – August 13, 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

It’s a week and a half after the massive tailings spill at Imperial Metals’ Mount Polley copper–gold mine in B.C.’s Cariboo region, and many unclear aspects of the disaster are coming into better focus.

Of immediate concern, the tailings have continued to flow in an uncontrolled manner out of the tailings lagoon all this time, but on Aug. 12, the B.C. government said that the flow had “decreased dramatically,” and that Imperial had begun building a temporary dike to stop the flow. Lake and river water tests outside the contaminant plume show that this water is within safe drinking water guidelines, and so most water-drinking and fishing bans in the region have been lifted, except in the immediate area of the spill.

Engineering firms are usually pretty low-key when it comes to commenting on their clients’ projects, but the extraordinary scale of the Mount Polley breach has prompted both Knight Piésold and AMEC to go public and describe their roles in designing the tailings dam and its later expansions.

Knight Piésold describes itself as the “former engineer of record of the tailings storage facility at Mount Polley,” and said that it informed Imperial that it would no longer continue in that role as of February 2011. Knight Piésold commented that during the time it acted as engineer of record, the tailings storage facility at Mount Polley “operated safely and as it was designed,” and was subjected to multiple third-party reviews.

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