August 22, 2014 – Republic of Mining

Port authority OKs controversial coal-shipping facility in Metro Vancouver – by Steven Chua (Canadian Press/Canadian Business Magazine – August 21, 2014)

August 22, 2014

http://www.canadianbusiness.com/

VANCOUVER – Port Metro Vancouver approved Thursday construction of a controversial coal-shipping facility on the Fraser River, over concerns from local medical health officers and area residents about air quality and the environment.

Fraser Surrey Docks was granted a permit to build the facility to handle four-million metric tonnes of coal from the U.S. Midwest each year.

Peter Xotta, vice-president of planning and operations at the port authority, said the decision was not made lightly. “We have required extensive analysis,” said Xotta. The permit decision brings to an end a process that has dragged on for almost two years.

Concerns focus mainly on the effects of coal dust on air quality and the impact on the region. Global climate change also came into play in the drawn-out debate.

Fraser Surrey Docks hired SNC Lavalin to review the proposal, and the resulting report concluded there would be no significant adverse effects to the environment or people’s health.

But in a letter last November to the company, the chief medical health officers for the Fraser and Vancouver Coastal Health authorities dismissed the report’s findings.

Rio Tinto Considers Exiting Papua New Guinea Copper Mine – by Rhiannon Hoyle (Wall Street Journal – August 18, 2014)

August 22, 2014

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

New Law Threatens Project, Closed for 25 Years, as It Moves Toward Reopening

SYDNEY— Rio Tinto RIO.LN -1.18% has maintained control of its closed Bougainville copper mine through independence clashes in Papua New Guinea.

But as the mine today edges toward restarting after a quarter-century and copper prices are strong, Rio might head for the exit.

The Anglo-Australian company on Monday said it was reviewing its options for its controlling stake in Bougainville Copper Ltd. BOC.AU +1.22% , after the government passed new laws that could strip the company of its lease on its Panguna mine.

When Panguna—one of the world’s biggest copper deposits—started operations in 1972, Papua New Guinea saw the project in Bougainville as a path to riches. The impoverished country then was still under Australian control and had little industry beyond fishing the schools of tuna that swam near its shores.

But islanders soon became envious that revenue that was flowing to government coffers in Port Moresby rather than to Bougainville schools, health clinics and local incomes. Those frustrations, combined with worries over the mine’s poor environmental record, burst into violence in 1989 when militants forced the mine to shut down.

Nickel region on edge as BHP looks for exit – by Paul Garvey (The Australian – August 23, 2014)

August 22, 2014

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

AS a lifelong resident of the Kambalda region, shire president Mal Cullen has watched the fortunes of the town wax and wane in line with the price of the nickel that has been pulled out of the ground there for almost 50 years.

The residents of Kambalda, in Western Australia’s Goldfields, have become accustomed to the volatility of the nickel price and the impact it can have on their lives. But just as the nickel price appeared to be starting to emerge from years in the doldrums, BHP’s decision to get rid of its assets in the region has brought a new level of uncertainty to the town.

BHP surprised the market when it opted to exclude its Nickel West division from the spin-off it announced this week, with BHP chief executive Andrew Mackenzie instead saying the group would push ahead with a long-running trade sale that is yet to flush out a deal. The assets were deemed to be too mature and too marginal to be lumbered into the spin-off. The failure to find a new owner so far, coupled with their exclusion from the spin-off, leaves the assets looking like the orphan that nobody wants.

For the people of Kambalda and the smaller nickel miners that feed ore into the Nickel West concentrator and smelter, the idea the operations could be shut down altogether is difficult to comprehend.

Raglan mine: Canada’s first industrial-scale wind and energy storage facility – by Henry Lazenby (MiningWeekly.com – August 22, 2014)

August 22, 2014

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

WASHINGTON – The decision to install a 3 MW wind turbine at Glencore’s Raglan mine came after nearly five years of careful investigation, assessment, and analysis, says Jean-Francois Verret, director of strategy, projects, and public affairs.

Because of the Arctic conditions at the mining site, which sits on the Ungava Peninsula, in Nunavik, roughly 1 800 km north of Montreal, gathering in-depth data was an essential first step.

This summer, the Raglan mine began installing its first wind turbine, manufactured by Enercon, in Germany. If all goes as planned, Verret predicts that this wind turbine would replace about 5% of the mine’s diesel consumption – or 2.4-million litres of diesel.

A project like this also holds out the promise of significant cost savings. At the Raglan mine, energy typically accounts for 18% to 23% of operating costs. If the wind pilot goes well, Raglan was considering installing additional wind turbines that could generate a total of 9 MW to 12 MW of energy, slashing the mine’s overall diesel consumption by 40%.

In 2009, Raglan launched a study to investigate options for the mine and its fully diesel-powered operations. The nickel/copper mine’s remote locale meant that it would be impossible to connect to the hydroelectric grid or to the natural gas network.

Northwest mining cluster group still in the cards – by Ian Ross (Northern Ontario Business – August 22, 2014)

August 22, 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.

Mining supply and service companies in the northwest want to take baby steps toward forming an industry cluster group.

A study commissioned by the Northwestern Ontario Associated Chambers of Commerce (NOACC) revealed there isn’t enough of a groundswell of support toward establishing a mining supply association, but there’s definite interest in opportunities for professional development.

The study is an expansion of a survey started by the Thunder Bay Chamber of Commerce a year ago. With funding from FedNor, NOACC hired Crupi Consulting to survey more than 200 mining-related businesses who have indicated they were not in favour of an association at this time.

Thunder Bay chamber president Charla Robinson said companies are willing to support an “event-based” cluster; such staging topical workshops, educational seminars and luncheons; which may lay the foundation for an association down the road.

Robinson said there’s a high level of interest in the cluster idea, but there remain many questions on what the organization would look like, and how much value they would derive in exchange for a membership fee.

UPDATE 1-UK forces energy, mining firms to show foreign state payments – by Silvia Antonioli and Karolin Schaps (Reuters India – August 22, 2014)

August 22, 2014

http://in.reuters.com/

Aug 22 (Reuters) – Britain announced that energy and mining firms would have to disclose from next year any payments made to governments in countries where they operate as it aims to curb corruption in the natural resources sector.

UK-registered companies will have up to 11 months after the end of their financial year to report payments to Companies House under the new rule, which will take effect from Jan. 1 2015.

“The UK is determined to lead by example, which is why we have introduced reporting requirements on UK-based extractives companies early,” Business Minister Jo Swinson said in a statement.

“Oil, gas and mining can, if well managed, deliver precious economic benefits to the populations of developing countries. Too often, though, the assets from resource-rich countries are not benefiting local people or the local economy.” The announcement on Friday follows a period of consultation with industry and the public on the proposal.

“While these reforms may be a step in the right direction to eradicate corruption, tax evasion and reduce extreme poverty in emerging markets, a disclosure regime is not of itself a cure,” Rachel Speight, a partner at law firm Mayer Brown, wrote in an email to Reuters.

[Canadian PM’s] Northern vision melts – by Peter Foster (National Post – August 22, 2014)

August 22, 2014

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

Trudeau is dead set against Northern Gateway, which makes it rather peculiar for him to be criticizing Harper

Media commentators, political opponents, and even Stephen Harper’s putative hosts gave the Prime Minister’s ninth annual trip to the far north a less than a rousing send off this week.

Michael Byers, the Canada Research Chair in Global Politics and International Law at the University of British Columbia, pointed out that the dispatch of two ice breakers to scope Canadian claims on the North Pole was – in legal terms — a fool’s errand. There was a story alleging that the Harper government had – yet again – “muzzled” its scientists from reporting record low Arctic sea ice coverage two years ago.

Then there’s the lawsuit against the Conservatives by the Nunavut Planning Commission, claiming that the Feds are trying to interfere with Nunavut affairs by, er, not providing enough cash.

The tour kicked off Thursday morning with a photo op in Whitehorse to announce money for cold weather technology. Ho hum. Meanwhile progress on major commitments such as new icebreakers, and Arctic port and research facilities, continues to flag.

As the Post’s Michael den Tandt noted earlier this week, the fact that northern achievement lags far behind aspiration has been starkly highlighted by the new belligerence of Vladimir Putin, who is pouring huge resources into the Russian Arctic.

SNL sees up to $20bn private equity war chest boosting mining M&A – by Angela Kean (Mineweb.com – August 22, 2014)

August 22, 2014

http://www.mineweb.com/

SNL says market experts see mining M&A activity picking up as up to US$20 billion in private capital funds look for investments in the sector.

SNL Metals & Mining is the world’s largest source for integrated comprehensive data, expert analysis and breaking news in real time for the global mining industry. It encompasses worldwide exploration, development and production data to strategic planning and acquisitions information. www.snl.com

PERTH (SNL) – The much-anticipated influx of capital from new mining-focused private funds is taking longer than expected to hit the market, but market experts expect more deals to hit in the second half of 2014 and an increase in activity in early 2015.

Ernst & Young estimates that mining-focused private capital funds have amassed at least US$10 billion, and possibly as high as US$20 billion, to invest in the global metals and mining sector.

The firm’s global mining and metals transactions leader, Lee Downham, said mergers and acquisitions activity is likely to remain subdued for the rest of 2014 despite a strong deal pipeline and a private capital funds war chest yet to be unleashed.

“Dealmaking in the sector continues to be cautious, partly due to the continuing commitment to capital discipline, but also due to a lack of urgency over investment given the lack of competition for assets,” Downham said in a statement.

Lac-Mégantic report skims surface of deep problems – by Greg Gormick (Toronto Star – August 22, 2014)

August 22, 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.

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.

The report of the Transportation Safety Board of Canada on the Lac-Mégantic disaster blames “systemic problems” for the fourth deadliest accident in nearly two centuries of Canadian railroading. Those problems are more deeply rooted than even the TSB indicates.

As an arm’s-length agency, the TSB isn’t controlled by politicians and doesn’t bow to any master except public safety. But it does not play a public policy role. That’s in the hands of politicians, backed by their advisers and ministry staff.

It is at that level where blame must be placed. The Lac-Mégantic tragedy can be traced to decades of policy and investment failures resulting from unbridled faith in deregulation and competition as the guiding rules of rail legislation and funding. The biggest culprit is the 1985 transportation act, which the Mulroney government billed as “legislative change which will free Canada’s transportation system from the burden of excessive economic regulation.”

That it did. But it went further by eliminating most of the public interest tests contained in the previous acts, which applied both commercial and public policy requirements to all federally regulated transportation. The 1985 act was based on the profitability test for the regulation of our system, particularly rail.

Ontario’s Wynne, Quebec’s Couillard forge central Canadian alliance – by Jane Taber (Globe and Mail – August 22, 2014)

August 22, 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.

Ontario and Quebec are forging a central Canadian alliance to co-operate on issues, including potentially expanding electricity trade, hoping their combined clout will bring back prosperity to both provinces.

Ontario’s Kathleen Wynne and Quebec’s Philippe Couillard announced the new regional partnership in Quebec City on Thursday. It is the first time the rookie Liberal premiers – both leading so-called have-not provinces – have met in person. According to one senior Ontario official, there is “a lot of personal like-mindedness and great rapport between the two.”

A bullish Mr. Couillard said the new central Canadian alliance signals the two provinces are “back as a very important block of influence in the country.”

“I think by acting together we will be more efficient,” he said. “When we have common concerns like infrastructure, like climate change, like energy strategy, it’s good that we voice those concerns together … Western provinces do the same, Maritime provinces do the same. It was time that Quebec and Ontario, again, do that.”

As have-not provinces, Ontario and Quebec rely on millions of dollars of federal equalization payments as they struggle in the federation economically.

Ex-MP Stockwell Day joins company planning to build B.C. bitumen refinery – by Lauren Krugel (Globe and Mail – August 22, 2014)

August 22, 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.

CALGARY — Stockwell Day has joined the leadership team of a Vancouver company that’s planning to build a $10-billion oil sands refinery on the West Coast.

The former politician, who has held high-profile cabinet posts in the federal and Alberta governments, has been hired as a special adviser at Pacific Future Energy Corp. and will sit on its board of directors. He’ll also head an arm’s-length advisory council that’s expected to be formed over the next few months.

“I’ve been very gratified that I’ve been involved in a number of projects since leaving politics, but this has to be right up there in terms of something that’s exciting for me,” Day said in an interview from Vancouver.

He said the proposed refinery, which bills itself as the world’s greenest, could be a “legacy project for Canada.”

Oil sands producers have been keen to access lucrative Asian markets, but stiff opposition to proposals such as Enbridge Inc.’s Northern Gateway pipeline has put a damper on those ambitions. One of the biggest environmental concerns has been the prospect of bitumen-laden tankers navigating coastal waters.

Ex BHP chairman says cycles move and he’s a happy shareholder – by Simon Evans (Sydney Morning Herald – August 21, 2014)

August 22, 2014

http://www.smh.com.au/

Former BHP chairman Jerry Ellis, who led the miner during one of its darkest periods in the late 1990s before it pursued a merger with South Africa’s Billiton, says the company is performing well and maintains the 2001 merger was a good move.

Mr Ellis says BHP needed its cash flows strengthened at the time, but the situation had now changed and the “cycle has moved on”.

He was chairman of BHP from 1997 to 1999 after joinng the board in 1991. He was also a former boss of the BHP ¬Minerals division and an active promoter of a decision by BHP to pay $3.2 billion for Magma Copper in the United States in 1996.

It ultimately proved to be a disastrous purchase when copper prices slumped dramatically and heavy writedowns were needed. Many analysts blame that acquisition for weakening the company to a point where it needed to pursue a merger.

“I’m a shareholder and very pleased with the way the company is travelling,’’ he said on Wednesday. BHP Billiton on Tuesday officially confirmed a $14 billion demerger plan where it is spinning off many of the assets Billiton brought to the table in the 2001 merger.

“I think [former chairman]Don Argus summed it up very well. At the time BHP needed the cash flow from the Billiton assets,’’ Mr Ellis said.

Mine Tales: Mining railroads overcame obstacles – by William Ascarza (Arizona Daily Star – August 3, 2014)

August 22, 2014

http://tucson.com/

William Ascarza is an archivist, historian and author. Email him at mining@tucson.com

Created in 1910, the Tucson-Nogales Railroad supplemented a line established 20 years prior between Nogales and Guaymas.

At an elevation of 4,613 feet, Dragoon Railroad station — the highest point on the Southern Pacific line between Los Angeles and El Paso — also served as the junction of the Johnson, Dragoon and Northern Railroad.

The railroad supplanted the freight wagon and stagecoach as did its method of power generation. Steam, electric and diesel locomotives were employed in Arizona history for mining, passenger transport and irrigation projects for agriculture.

Standard, narrow and baby railroad gauges used at the mines in Arizona were based upon the width of the track: standard gauge (56ƒ inches), narrow gauge (less than 56ƒ inches) and baby gauge (20 inches). Standard-gauge railroads in Arizona became dominant in the early 20th century, though many narrow gauge railroads continued to service the mines.

Challenges facing railroads included rockslides, floods, Indian raids and steep gradients. In 1910, the Arizona Eastern Railroad connected the eight miles between Winkelman and Christmas.

Mine Tales: Railroads spurred mining’s growth in Arizona – by William Ascarza (Arizona Daily Star – July 27, 2014)

August 22, 2014

http://tucson.com/

William Ascarza is an archivist, historian and author. Email him at mining@tucson.com

Railroad transportation proved indispensable to the development of the mining industry in Arizona, connecting it to lucrative markets in California and the Eastern states.

The arrival of the “iron horse” established towns and injected capital to advance mining interests through delivery of equipment and supplies while providing ease of ore transport to distant markets for refinement and profit.

Early talk of involving rail transportation in Arizona dates to shortly after the end of the Mexican-American War, when Congress financed surveys with the intention of establishing transcontinental railroad lines through what was then part of New Mexico Territory. Euphoric Manifest Destiny aspirations of the late 1850s included a railroad connecting mining operations around Tubac to Guaymas, Mexico.

This connection was deemed essential by William Wrightson, superintendent of the Santa Rita Mining Co.

Attempts to annex Sonora, Mexico, including a final expedition led by Henry Crabb in 1857, resulted in failure, as was the proposed rail line at the time. The Civil War, coupled with lack of financing, hindered rail in Arizona for the next two decades.