August 20, 2014 – Republic of Mining

RPT-COLUMN-Reliance on cost-cutting the real BHP story – by Clyde Russell (Reuters India – August 20, 2014)

August 20, 2014

http://in.reuters.com/

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

LAUNCESTON, Australia, Aug 20 (Reuters) – BHP Billiton’s plans to spin-off unwanted assets may have received a tepid welcome from investors, but the real news from the mining giant’s results is the limits to cost-cutting.

Delving into BHP’s results presentation on Tuesday shows the company has been successful in cutting expenses, with a 12 percent cut in cash costs at the flagship Western Australian iron ore operations, while the Queensland coal business recorded a 24 percent drop.

BHP said its productivity-led volume and cost efficiencies were $2.9 billion in the year to end June 2014, beating its target by $1.1 billion. Given the company’s net income for the period was $13.4 billion, the $2.9 billion in savings represents about 22 percent of the profit, which certainly looks impressive.

The problem comes when you start to look at the savings achieved, the potential for further cost-cutting and the likely trajectory of commodity prices.

BHP said it produced a record 225 million tonnes of iron ore in the 2014 financial year, which resulted in revenue of just under $23 billion, or roughly 34 percent of the group’s total revenue.

Mexican government files criminal charges in copper mine acid spill – by Dorothy Kosich (Mineweb.com – August 20, 2014)

August 20, 2014

http://www.mineweb.com/

Mexico’s Environmental Secretary has estimated that the fine for the Buenavista copper mine spill could reach $3 million.

RENO (MINEWEB) – Mexico’s federal environmental protection regulator, Profepa, has filed criminal charges with the Federal Attorney General’s Office against Grupo Mexico’s Buenavista del Cobre and Minera Mexico over a leakage caused by defects in newly constructed leaching ponds, which contaminated two rivers and left thousands of people without drinking water.

Two days after the Mount Polley tailings dam breach in British Columbia, 40,000 cubic meters of copper sulfate acid solution from Grupo Mexico’s Buenavista mine spilled into the Bacanuchi River and, subsequently, the Sonora River in northern Sonora State.

Initially, Grupo Mexico blamed unseasonal rains for causing the acid solution to spill from a dam now under construction for a new leaching plant in the mining operation. The company said it would pay for all the damage from the accident.

Arturo Rodriguez, chief of industrial inspection for the Attorney General for Environmental Protection, suggested mine operators should have been able to detect the leak before such a large amount of drainage had leaked into the rivers.

However, Mexico’s Environmental Secretary Juan Jose Guerra Abud told a local radio station Tuesday Grupo Mexico’s claim that excessive rain caused the overflow was “totally false” because there was no rain on August 6th, the day the spill is believed to have occurred.

Mining giant Glencore makes good on pledge with $1 billion buyback – by Sivia Antonioli (Globe and Mail – August 20, 2014)

August 20, 2014

http://uk.reuters.com/

LONDON – (Reuters) – Commodities group Glencore (GLEN.L) became the first of the large miners to honor promises to return cash to shareholders, announcing a share buyback program of up to $1 billion as it reported forecast-beating first-half profit.

Diversified mining companies have vowed to control their spending and reward shareholders more after being criticized for years of squandering money on risky projects that resulted in multibillion-dollar writedowns as metals prices started to fall.

However, rival BHP Billiton (BHP.AX)(BLT.L) failed to deliver when it held fire on an expected buyback announcement on Tuesday, while Rio Tinto (RIO.L)(RIO.AX) signaled a share buyback could come when it reports full-year results in February.

Expectation of Glencore making good on its promise was heightened with this month’s completion of the sale of Glencore’s Peruvian copper project Las Bambas to a Chinese consortium for $6.5 billion after tax, either through a buyback or special dividend.

Glencore, which completed a record-breaking acquisition of rival Xstrata a little more than a year ago, is the world’s largest producer of zinc, used to galvanize steel, and one of the top miners and traders of copper and nickel.

However, while it has noted cost overruns at its Koniambo project in New Caledonia, it was the balance-sheet improvement from the Las Bambas sale that allowed it to accelerate the return of capital to shareholders.

Canadian sues Silvercorp over ‘false imprisonment’ in China – by Nathan Vanderklippe (Globe and Mail – August 20,2014)

August 20, 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.

BEIJING — A Canadian man who spent years behind bars in China has filed a lawsuit accusing a mining company of conspiring with Chinese authorities to have him arrested and detained.

Kun Huang was an investigator for a hedge fund manager who in September, 2011, claimed that ore estimates at a Chinese mine owned by Vancouver-based Silvercorp Metals Inc. were too good to be true. Three months later, Chinese officials detained Mr. Huang at the Beijing airport, strip-searched him, seized his computer and placed him in a lengthy detention that culminated in a single-day closed-door trial and a two-year sentence for criminal defamation.

He was released on July 17, and returned to Canada the next day. Now, in a lawsuit filed Tuesday in the Supreme Court of British Columbia, Mr. Huang claims that Silvercorp masterminded his detention as a reprisal for his research, whose publication prompted a steep decline in the company’s share price.

Silvercorp, his court filing claims, effectively enlisted the local Chinese police as its “agent,” giving them money, encouragement and guidance “to falsely imprison and then later knowingly bring baseless criminal charges against Mr. Huang.”

Europe must do its bit to stop the trade in conflict minerals – by Ed Zwick (The Guardian – August 19, 2014)

August 20, 2014

http://www.theguardian.com/uk

We have to let our leaders know we do understand the link between products we buy and the suffering of others

Almost a decade ago, my film Blood Diamond told the story of the illicit diamond trade and its funding of the bloody civil war in Sierra Leone. The reaction was profound as consumers came to understand the sparkly ring they bought in their local jewellery store could have brutal implications elsewhere.

But this story was never just about diamonds. Throughout the world, the demand for all natural resources is soaring. Yet tragically, local populations – especially in poorer nations – rarely benefit. Instead, revenues continue to fund conflict rather than development. We have an opportunity to help change that.

Today, the sale of “conflict minerals” sourced from high-risk areas, such as parts of Colombia, the Democratic Republic of Congo and the Central African Republic, are funding armed groups that visit unimaginable suffering on helpless civilians. These minerals are then traded into global supply chains, where they end up in our mobile phones, laptops and automobiles.

Meanwhile, the EU is at risk of becoming a major trading hub for conflict minerals. It imports almost 25% of the global trade in tin, tantalum and tungsten. Despite this, there is no legislation requiring companies to source minerals responsibly.

Africa’s middle-class boom is real, study shows – and it’s gaining speed – by Geoffrey York (Globe and Mail – August 20, 2014)

August 20, 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.

JOHANNESBURG — The rise in Africa’s middle class has been over-hyped in recent years, but it is still a genuine phenomenon that is generating huge commercial and political opportunities, a new study says.

The analysis released on Tuesday by Standard Bank, a South African bank with operations across Africa, estimates that the African middle class has tripled in size over the past 14 years – and the boom is gathering speed.

The study analyzed 11 of the biggest economies in the region, accounting for about half of sub-Saharan Africa’s population and GDP. Those economies have grown tenfold since 2000, reaching a collective GDP of more than $1-trillion today, compared with a growth of just 25 per cent between 1990 and 2000.

Using a more rigorous definition of “middle class,” the study concludes that earlier estimates were much exaggerated. But it still finds dramatic growth, from about 4.6 million households in 2000 to almost 15 million households today in the 11 focal countries, if the middle class and lower-middle-class categories are both included.

Lax safety measures to blame for Lac-Mégantic tragedy, safety board says – by Allan Woods (Toronto Star – August 20, 2014)

August 20, 2014

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

The Transportation Safety Board of Canada identified 18 distinct factors that led to the Lac-Mégantic rail crash, including mechanical problems, unsuitable tank cars carrying crude oil, the cost-conscious rail firm and human error.

MONTREAL — Blame a rule-breaking rail company, blame ineffective train inspectors, but don’t blame the federal government for the deadly Lac-Mégantic train disaster, says Federal Transport Minister Lisa Raitt.

In the wake of a scathing report into the July 2013 derailment that killed 47 people in the Quebec town, Raitt pointed the finger at three employees of the Montreal, Maine & Atlantic railway now charged with criminal negligence, and referred questions about lapses leading to the accident to bureaucrats under her command.

“We need to remember that in terms of safety, the government puts the rules in place. The companies are expected to follow the rules,” Raitt said in Ottawa. “The company did not follow the rules and that’s a very important fact here too.”

The Transportation Safety Board’s definitive account of the incident said the crash was caused by a marginal rail company that put profits before safety during more than a decade in business.

Mt Polley: Expert Panel Review – by Jack Caldwell (I Think Mining.com – August 18, 2014)

August 20, 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.

We are heartened by today’s announcements re the Mt Polley tailings facility failure. I particular we applaud the choice of experts retained to do the engineering review.

CBC New reports as follows on this issue: “Minister of Energy and Mines Bill Bennett says the B.C. government is setting up two separate reviews following the Mount Polley tailings pond failure earlier this month.

Bennett said Monday that:

The first review by three independent experts will investigate the failure of the tailings dam at the Mount Polley mine.
The second review will require all mines in British Columbia that have tailings dams to have independent experts conduct a review of their facilities and submit them to the government.

The first review will be completed and submitted to the government and the Soda Creek and Williams Lake Indian bands by Jan. 31, 2015, and the recommendations will be implemented by the government “where needed,” Bennett promised. The minister said the reviews were necessary to restore public confidence in the mining industry.

NEWS RELEASE: Grand opening of first Remote Training Centre celebrated in Neskantaga

August 20, 2014

NESKANTAGA, ON, Aug. 19, 2014 /CNW/ – The grand opening of the Neskantaga Training Centre was celebrated today in Neskantaga Territory, Ontario, showcasing the new innovative facility and collaboration technology which delivers training directly to the remote community.

The Neskantaga Training Centre is a multi-purpose facility with construction components designed to be flown into remote communities and assembled on-site. The centre is outfitted with state of the art technology, including Cisco TelePresence, high-definition two-way video communication and collaboration technology, a 70-inch Smart Board, a 70-inch LED HDTV, high-speed satellite broadband connectivity, as well as individual laptops. The centre directly connects to e-learning tools and programs to offer a wide variety of curriculum including access to secondary and post-secondary institutions, safety training courses, trades and technical certifications. To see the Neskantaga Training Centre in action, visit: https://www.youtube.com/watch?v=ASjo4mFVOdQ&feature=youtu.be.

“The partnerships formed to build this facility, along with all of the hard work, have culminated in a facility that will have a positive impact on the people of Neskantaga for many years to come,” said Chief Peter Moonias of Neskantaga First Nation during the opening ceremonies.