End of the Iron Age – by James Wilson and Neil Hume (Financial Times – September 29, 2014)

http://www.ft.com/home/us

A collapse of ore prices throws miners’ strategies into doubt and threatens an industry shakeout

Iron is one of the most abundant elements on earth but pulling it out of the ground efficiently can be a daunting undertaking. Snaking through the low, green hills of southern Brazil is a 530km pipeline, the decisive link in Anglo American’s $8.2bn Minas-Rio project to extract iron ore in the Brazilian interior and ship it from a new Atlantic port. Way over its original $3.6bn budget and two years late, Minas-Rio is finally close to the point of “first ore on ship”.

For years, huge mining projects such as these have formed the backbone of global economic expansion. The world’s most important commodity after crude oil, iron ore has been devoured by Chinese steel mills, emerging as the raw material for an infrastructure-led growth spurt.

But Minas-Rio is about to deliver its first ore into a much less welcoming world. The price of iron ore has plunged more than 40 per cent this year, the worst performance across metals and bulk commodities in 2014. From an average price of $135 per tonne last year, the benchmark iron ore contract sank last week to less than $80 for the first time since the global financial crisis.

“The iron ore market is in the midst of a transition without precedent in recent commodity history,” says Macquarie, the Australian bank.

Behind the change is a big increase in iron ore exports – and not just the 26.5m tonnes that Minas-Rio will bring to market when fully operational in 2016.

Read more

Juniors reap $1bn windfall from big miners’ ‘unloved assets’ – by Paul Garvey (The Australian – October 1, 2014)

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

ASSETS unloaded by some of the world’s biggest mining houses for less than $250 million created more than $1 billion in value in months for a handful of junior Australian mining companies.

Data compiled by The Australian shows the recent acquisitions by companies such as Northern Star, Poseidon Nickel and Saracen Minerals have paid for themselves several times over given the share price gains since the deals were ¬announced.

Falling commodity prices and shareholder demands for greater financial discipline have prompted the mining giants to offload non-core assets as part of their efforts to rein in operating costs and reduce debt.

The smaller miners and explorers willing to step in and buy assets in a falling market have been richly rewarded. The Australian’s analysis shows the acquirers enjoyed a surge in market capitalisation that collectively totalled more than $1.3bn at its peak.

While share prices across the sector have fallen in recent months, the combined market capitalisation of the acquirers is still $730.8m higher than their pre-purchase levels.

The acquirers have all comfortably outperformed the ASX 300 Resources Index, which has fallen by 7.2 per cent this year.

Read more

BHP Billiton Dispatches Top Manager to Much-Watched Potash Project – by ALISTAIR MACDONALD, RHIANNON HOYLE and ELENA CHERNEY (Wall Street Journal – September 29, 2014)

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

Industry Will Watch Closely for Clues to Company’s Next Move for Massive Mine

BHP Billiton BLT.LN -0.32% PLC. has sent its top project manager to run the giant Jansen potash development in western Canada, a move the potash market will scrutinize for clues to BHP’s plans for its Canadian mine. BHP Billiton’s Phil Montgomery, its head of group project management, last month arrived in Saskatchewan from Australia, a spokeswoman said.

At stake is a mine that—if producing today—would increase global supply of the key fertilizer ingredient by almost 15% according to Scotiabank. That would worsen an oversupply problem for potash. The price of potash, which is fixed through long-term contracts, has rallied by as much as 17% this year on better-than-expected demand, according to analysts. Analysts, though, and some BHP executives, believe that this rally will fade as the increase in demand fizzles.

BHP has already committed some $3.8 billion to a project that it says has no fixed completion date. Last December, work was halted for several months amid technical trouble.

“Jansen has become almost mythological in the industry,” said Matthew Korn, an analyst at Barclays, BARC.LN +0.64% said of the project and the prospects of it being finished. “We know it is there, we know it represents a load of volume, but in terms of timing I don’t think anyone believes this will happen before 2020, if at all,” Mr. Korn added.

Read more

Many months, probably years for nonferrous mining in Northern Minnesota – by Aaron Brown (Minnesota Star Tribune – September 29, 2014)

http://www.startribune.com/

It’s been several months since the public comments period closed for the environmental review and permitting process for PolyMet, a controversial proposed nonferrous mineral mine in Hoyt Lakes, Minnesota. Most had hoped for news about the completion of the Environmental Impact Statement and a clearer timeline for the final permitting by this fall. However, a Marshall Helmberger interview of DNR commissioner Tom Landwehr in the Sept. 24 issue of the Timberjay shows that it could be years, not months.

For those following this issue closely, Helmberger’s story is a must-read.

The reason for the delay, according to Landwehr, is the unprecedented number of primarily critical comments, many of which involve unique and extremely detailed scientific questions and concerns. About 58,000 written comments were received, which raise between 7,000 and 8,000 unique concerns or questions about the massive Draft EIS document discussed last winter.

From the story:

Indeed, it’s by far the largest such undertaking in state history, and that makes it difficult for state officials to even estimate when the job might be completed. Landwehr was blunt: “We don’t know how long it will take. We can’t even say months.”

Read more

Commodity super cycle turning downward, says RBI – by Rajesh Bhayani (Business Standard – September 30, 2014)

http://www.business-standard.com/

In latest commodity super-cycle, inflation-adjusted prices of commodities rose 60-500% between 1999 and 2010

Mumbai – Global commodities prices have already reached inflexion points and are headed downward, according to the RBI (Reserve Bank of India). The central bank, as a part of its monetary policy announced today, published the analysis based on the last five decades’ data of prices of commodity both energy and non-energy, to show that commodity super cycle may be turning downwards.

Commodity super-cycles are long and rapid rises in prices across commodities, propelled by persistent increases in demand that outstrip supply. The policy statement said that, “since 1894, four super-cycles have been identified, with the last one starting from the late 1990s and attributed to rapid and sustained industrialisation and urbanisation in China and other emerging economies”.

During this latest commodity super-cycle, inflation-adjusted prices of commodities rose in the range of 60 to 500 per cent between 1999 and 2010, the year in which they peaked. Oil price rose by 467 per cent, metals by 202 per cent and agricultural prices by 77 per cent — the largest price increases among all the four commodity super-cycles. The sharp rise in prices are after adjusting for inflation and hence the issue of whether the super cycle is ending arises.

Nic Brown, Head of Commodities Research at London based Natixis said, “We would agree that weak global growth (“stable but secularly lower levels of growth”) is one of the key characteristics behind the relative weakness of commodity prices over the past few years.”

Read more

Environmental Disturbance and the Emergence of Tropical Disease: Lessons From the Gold Fields of Ghana – by Mario Machado (Huffington Post – September 29, 2014)

http://www.huffingtonpost.com/theworldpost/

Mario Machado is a recently returned Peace Corps volunteer (RPCV) and Independent Scholar.

This forest feels like an eternity as our four-wheel drive vehicle plods down yet another washed-out dirt road. This is the Central Region of Ghana and the lack of infrastructure only adds the ambiance as groups of women pass by with their loads of firewood balanced effortlessly on their head, their babies dozing comfortably in tow.

Abruptly, the trees stop and a barren dirt-scape throws the equatorial sun back into our faces. Compared to the shade of the canopy, this feels like the surface of the sun. And yet, despite the devastating heat, I can easily make out the distant silhouettes of people shoveling and sifting and working through this terrible hole in the earth.

As we get closer, the figures assume the faces and nuances of the tired men and women that they are. Holes in boots; tattered, stained clothing; knee deep in stagnant water with shovels or pick-axes or buckets of mud in hand. All for a paltry daily bounty of gold and the eternal promise to strike it rich someday. It’s enough to keep them busy and fed for now, but at a terrible cost to their bodies and the land. This is the face of unregistered small-scale mining in Ghana, called “galamsey” by the locals.

Ghana, the proverbial “Gold Coast”, has furnished the world with the gold for hundreds of years and although the mechanisms have changed — a colonial administration has been replaced by economic structures that are equally exploitative — the fundamental ethos remains the same: the wealth contained within this land does not belong to those that live and work it, but to those with the might to control it.

Read more

Glencore, Rio Tinto could save $500m by merging coal operations – by Sarah-Jane Tasker (The Australian – October 1, 2014)

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

DIVERSIFIED miners Rio Tinto and Glencore could target $500 million in annual savings if they merge their NSW coal operations, analysts on a site tour of the Swiss giant’s assets have flagged.

Glencore, rumoured to be eyeing acquisitions, highlighted the significant synergy potential with Rio Tinto in the Hunter Valley region given the two miners had many adjacent assets.

“These have not been quantified but could total close to $500m per annum pretax, and relate to overhead reduction, mining efficiencies, logistics and blending,” Credit Suisse analyst Liam Fitzpatrick said. “Despite this, there appears to have been very limited progress between the two companies.”

Recent media reports have suggested Glencore chief Ivan Glasenberg has Rio on his acquisition wish list, but neither company has weighed in on market speculation.

Glencore kicked off a sell-side analysts tour of its Australian ¬assets this week with a visit to its coal operations, and the head of coal assets, Peter Freyberg, told those on the trip the company had a “synergistic and targeted acquisition strategy”.

Read more

New Caledonian, Chinese companies plan Vanuatu nickel partnership – by James Regan and Cecile Lefort (Reuters India – September 30, 2014)

http://in.reuters.com/

SYDNEY, Sept 30 (Reuters) – The South Pacific islands of New Caledonia and Vanuatu are studying a plan to jointly mine and process nickel ores into refined metal to help produce stainless steel in China.

The acting prime minister of Vanuatu, Ham Lini, has expressed interest in the proposal and has asked the partners to lodge a formal application to construct the smelter in his country.

The move comes as Chinese steel mills scour the Asia-Pacific region for alternative supplies of nickel after top supplier Indonesia imposed a ban on such exports in January.

Under the proposed partnership, New Caledonian company MKM Group and China’s Jin Pei Century Investment (Group) Co Ltd plan to mine low-purity nickel ore in the French Pacific territory and ship it to Santo in northern Vanuatu for smelting.

Media reports in New Caledonia said the project would be owned 51 percent by MKM and 49 percent by Jin Pei. The head of MKM, Wilfried Mai, told New Caledonian television he had advised the Chinese investors to build the plant in Vanuatu.

Read more

In risk-averse mining sector, innovation begins with taking the guesswork out of sorting rock – by Peter Koven (National Post – September 30, 2014)

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

The mining industry is not always synonymous with innovation. Extraction methods have been entrenched for decades, and many companies are happy to stick with the same mining and milling processes that are standard across the sector.

“There’s a monolithic barrier to anybody trying to do anything new, because everybody’s the same and everybody thinks the same,” says Andrew Bamber, chief executive of MineSense Technologies Ltd.

Mr. Bamber, 43, believes there is an untapped billion-dollar market for innovation and new technologies within the broader industry. With Vancouver-based MineSense’s latest invention, a unique ore-handling technology for optimizing metal recovery, Mr. Bambler hopes to help prove his case.

The technology has nothing to do with finding new mines. It is about identifying valuable ore in existing mines that he believes companies are foolishly throwing away. Conversely, it is about making sure companies do not waste time and money processing low-quality ore.

When mining firms design their mine plans, they spend hours poring over the drill holes on a property and carefully assigning value to blocks of material in the ground. Rock that gets assigned a high value goes to the mill for processing, and low-value material gets shipped to the waste pile.

Read more

COMMENT: Tackling the confusion between reserves, resources – by Marilyn Scales (Canadian Mining Journal – September 29, 2014)

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

I had my knuckles rapped last week for sloppy reporting. Okay, I deserved it. I failed to read a news release closely enough and confused “reserves” and “resources” as the company reported. I find it confusing that sometimes resource numbers include reserves and sometimes they don’t. So I asked a knowledgeable reader to clarify the NI 43-101 requirement on this issue.

He responded: The NI 43-101 requirement is to state which way the company is doing it (reserves within resources, or disclosed separately). I find most of the big producers quote reserves and resources separately, while juniors tend to go the other way. That might be because juniors are often looking at development projects rather than producing mines, and so the question they’re answering to themselves is ‘how much of this resource is mineable?’

But it also seems that there are a lot of companies out there that simply assume they’re doing it right because they’ve always done it that way.

CIM definition and best practice standards leave it up to the qualified person to decide whether to report reserves and resources together or separately, but best practices recommends reporting them separately. CIM reiterates the requirement for a clear statement about which practice is being followed.

Read more

Ethical jewelry shop provides alternative to conflict minerals – by Marco Chown Oved (Toronto Star – September 29, 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.

Pioneers have shop in Cabbagetown that sources fair-trade gold from Latin America and custom makes engagement rings.

Peek into the window of the Fair Trade Jewellery Company on Parliament St. and you’ll see display cases filled with gleaming engagement rings.

It’s a view not unlike one you’d find at other jewelry shops in town, but the gold and diamonds here have an invisible but ethical difference — they’re traced all the way from mine to finger.

“We’re purpose-built to eliminate all the worst abuses that occur in mining, from gold that fuels conflicts to the mines that use child labour,” said the shop’s co-founder and lead designer Ryan Taylor. “We work directly with mining communities to improve their practices. We want to lead by example in this industry.”

Not everyone is preoccupied by the origins of their engagement rings, but as awareness of the dangerous conditions and toxic chemicals in mining grows, ethical jewelry is emerging as an alternative.

“We knew a bit about mining,” said Carleen McGuinty, who went to the Fair Trade Jewellery Company with her husband Eric for their wedding bands.

Read more

NEWS RELEASE: Barrick Named the Exclusive Provider of Gold, Silver and Bronze for the Medals at Toronto 2015 Pan Am/Parapan Games

TORONTO, September 29, 2014 – Barrick Gold Corporation is joining the TORONTO 2015 Pan Am/Parapan Am Games as its Official Metal Supplier. Toronto-based Barrick (NYSE:ABX) (TSX:ABX) will supply all the raw materials used to make the more than 4,000 gold, silver and bronze medals awarded at the Games.

Just like the athletes coming to the Games, the metal for their medals will come from the Pan American region. The metals will be sourced from Barrick mines throughout the Americas.

“Barrick is a proud Canadian company with operations around the globe, including six Pan American countries,” said Barrick Co-President Kelvin Dushnisky. “With the 2015 Pan Am and Parapan Games being held in our hometown of Toronto, we saw a rare opportunity to do something that symbolizes our pride in our heritage and our commitment to our host countries. We look forward to welcoming the athletes and government representatives to Toronto next summer.”

“Barrick and all of its people are excited to supply the metals that will become the treasured symbols of the dedication, teamwork and excellence that will be on display in Toronto at the Games,” said Barrick Co-President Jim Gowans. “These are values we share at Barrick and try to live every day. Next summer’s Games will be a great opportunity to bring the Americas together, celebrate our shared values and learn from our differences, all while enjoying more than three weeks of athletic excellence.”

The Games are a high-profile event that will attract interest from around the world, including up to 380 million viewers across the Americas alone.

Read more

Mining News: Incentives spur exploration projects – by Rose Ragsdale (Mining News – Week of September 28, 2014)

http://www.petroleumnews.com/miningnewsnorth/index.shtml

Inaugural program aims to encourage existing, would-be mineral explorers to chase diamonds, gold and other metals in the North

The Government of Northwest Territories has implemented a new Mining Incentive Program that was oversubscribed by midyear, with strong interest shown by companies and prospectors in the Northwest Territories and across Canada.

“The Mining Incentive Program helps our government support those with the energy, expertise and perseverance that this industry relies on to conduct mineral exploration in an environmentally sustainable way,” said GNWT Industry, Tourism and Investment Minister David Ramsay.

“I especially look forward to using this program to contribute to the success of northern and Aboriginal-owned businesses pursuing mining projects, so more northerners can enjoy the benefits of economic development and a healthy mining sector,” Ramsay said in a statement.

“It’s very positive to get that much interest,” said Pam Strand, director of Mineral Resources for the Government of Northwest Territories. “But it’s not surprising when compared with other jurisdictions such as Yukon Territory and Manitoba. Their programs have grown year by year.”

Yukon Territory, for example, awarded C$1.4 million this year to 44 companies and prospectors, up about C$630,000 from comparable funding in 2013.

Read more

BC Cities Demand Review of Thermal Coal Exports – by David P. Ball (The Tyee.ca – September 26, 2014)

http://thetyee.ca/

Confab of municipalities passes resolution in favour of greater oversight.

The province’s 190 local governments and 26 districts are calling for more government oversight over thermal coal exports in British Columbia, which are set to increase after a recent federal decision.

Delegates at the Union of B.C. Municipalities’ annual meeting in Whistler voted in favour of an assessment of the health and environmental risks of coal carried by train from the U.S. through White Rock and Surrey, and by barge to B.C.’s Texada Island — a corridor beyond the scope of Port Metro Vancouver’s own required reviews.

The UBCM resolution states that “there is currently no mechanism that provides oversight or ensures the implementation of mitigation measures to minimize environmental and health impacts of thermal coal transport over coastal waters and by rail.”

It calls for “a comprehensive environmental and health impact assessment for the shipment of thermal coal over coastal waters and by rail,” and that a provincial or federal agency be chosen to monitor it.

Though non-binding on the provincial or federal governments, the vote came five weeks after a federal port authority approved Fraser Surrey Docks’ application to build a transfer facility for four million tonnes of thermal coal a year.

Read more

U.S. Ramping Up Major Renewal in Nuclear Arms – by WILLIAM J. BROAD and DAVID E. SANGER (New York Times – September 21, 2014)

http://www.nytimes.com/

KANSAS CITY, Mo. — A sprawling new plant here in a former soybean field makes the mechanical guts of America’s atomic warheads. Bigger than the Pentagon, full of futuristic gear and thousands of workers, the plant, dedicated last month, modernizes the aging weapons that the United States can fire from missiles, bombers and submarines.

It is part of a nationwide wave of atomic revitalization that includes plans for a new generation of weapon carriers. A recent federal study put the collective price tag, over the next three decades, at up to a trillion dollars.

This expansion comes under a president who campaigned for “a nuclear-free world” and made disarmament a main goal of American defense policy. The original idea was that modest rebuilding of the nation’s crumbling nuclear complex would speed arms refurbishment, raising confidence in the arsenal’s reliability and paving the way for new treaties that would significantly cut the number of warheads.
Instead, because of political deals and geopolitical crises, the Obama administration is engaging in extensive atomic rebuilding while getting only modest arms reductions in return.

Supporters of arms control, as well as some of President Obama’s closest advisers, say their hopes for the president’s vision have turned to baffled disappointment as the modernization of nuclear capabilities has become an end unto itself.

Read more