September 3, 2014 – Republic of Mining

Iron ore giants eating little guys now, but cannibalism looms – by Clyde Russell (Reuters U.S. – September 3, 2014)

September 3, 2014

http://www.reuters.com/

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

LAUNCESTON, Australia – (Reuters) – There was maybe more than a touch of hubris in Rio Tinto boss Sam Walsh’s recent comment that it’s time for other iron ore producers to “really feel the consequences” of the current low price.

The chief executive of the world’s No.2 iron ore miner was speaking after his company’s first-half results last month, basically delivering the message that Rio Tinto is going to keep going full-steam ahead on its iron ore expansion plans.

Walsh, along with the bosses of top iron ore miner Vale and No.3 BHP Billiton, is betting that their low-cost, high volume model will force smaller competitors to the wall, leaving them the undisputed kings.

Perhaps he should have a word or two with the chief executives of coal miners, which, oddly enough, includes himself given Rio Tinto’s extensive coal assets.

When the price of both thermal and coking coal started to decline in mid-2011, the word from the industry was that this wasn’t too big a surprise, but no need to worry as Chinese demand will ensure prices don’t fall too far, and all the new capacity brought on and planned will be profitable.

Glencore CEO Rebuffs Anglo American Bid Speculation – by Paul Burkhardt and Jesse Riseborough (Bloomberg News – September 3, 2014)

September 3, 2014

http://www.bloomberg.com/

Glencore Plc (GLEN) Chief Executive Officer Ivan Glasenberg rebuffed speculation about a possible takeover of Anglo American Plc (AAL), saying the world’s third-biggest miner is only interested in assets it already trades.

“With Anglo, we don’t trade diamonds, if that gives you a good idea, and we don’t trade platinum,” Glasenberg told reporters in Johannesburg today. “We will only look at assets which we trade, which we market,” he said in response to a separate question.

Glencore, the world’s biggest exporter of power-station coal, completed the $29 billion all-share takeover of Xstrata last year to add coal, copper and nickel mines. Anglo American, the largest platinum producer, also controls copper, coal, iron ore, nickel and diamond mines and has a market value of about $36 billion. CEO Mark Cutifani is open to takeover offers, the Wall Street Journal reported yesterday, citing an interview with the Australian.

“Cutifani said someone’s going to take him over, he’s happy,” Glasenberg quipped. A Glencore bid for Anglo American is increasingly possible next year as the stock widens its outperformance over its smaller rival, Jefferies LLC analyst Chris LaFemina wrote in a report today.

“This outperformance, combined with Glencore’s completion of the full integration of the Xstrata acquisition and a strong strategic rationale for Glencore to acquire Anglo, should make Anglo a compelling target for Glencore some time next year,” LaFemina said.

UPDATE 1-Philippines Senator files bill to ban mineral ore exports – by Rosemarie Francisco, Erik dela Cruz and Melanie Burton (Reuters India – September 3, 2014)

September 3, 2014

http://in.reuters.com/

(Reuters) – A Philippine senator has filed a bill urging a halt to exports of unprocessed mineral ores, similar to a ban introduced by Indonesia that led to a sharp spike in nickel prices and cut exports of other ores.

The Philippines, which has vast but largely untapped mineral resources, has been looking at ways to raise the contribution of mining to its economy.

The bill, filed in late August by Senator Paolo Benigno Aquino, a first cousin of President Benigno Aquino, would require domestic processing of all minerals extracted in the country prior to export if passed into law.

This may require nickel miners, for example, to build more smelters to process the ore before shipment. Some ores are shipped directly to China and Japan for processing.

The Philippines currently has two processing plants for nickel, both owned by the country’s top producer Nickel Asia Corp, two for gold, and one for copper, according to the Mines and Geosciences Bureau.

Paolo Benigno Aquino is one of 24 members of the upper house Senate, which is dominated by allies of the president. “This measure seeks to generate more domestic income, attract more investments, and lead to more jobs and livelihood for the Filipino people,” the bill said in its explanatory note.

Webequie chief says Ontario moving ‘unilaterally’ ahead on Ring of Fire development – by Lenny Carpenter (Wawatay News – September 3, 2014)

September 3, 2014

http://www.wawataynews.ca/

The chief of Webequie First Nation said the Ontario government is failing to live up to its commitment with his community after the province announced the establishment of an infrastructure development corporation on Aug. 28.

Instead of working with the Matawa First Nation in the Ring of Fire to develop the corporation, Chief Cornelius Wabasse said the Ontario government “unilaterally move(d) ahead,” a decision he called “disappointing.”

The province first announced its intention to establish an infrastructure development corporation in early July, which would decide how to invest Ontario’s $1-billion dollar commitment to Ring of Fire infrastructure. The corporation would “work to bring First Nations and the public and private sectors together to create partnerships and facilitate investment decisions in strategic transportation infrastructure.”

In the Aug. 28 announcement, Northern Development and Mines Minister Michael Gravelle said the not-for-profit corporation has an interim board of directors composed of four Ontario public servants. The announcement said that the corporation would evolve and its board of directors would broaden to include First Nations membership.

However, Wabasse said this was decision was made without First Nations input. “What we’re saying we’re supposed to be working side-by-side to develop that. A path of process needs to happen so we can select who is going to be on that board,” Wabasse told Wawatay News. “Now they’re at the stage where they put in a board of directors from their side, the Ontario side. But there is no First Nation content. That’s the problem with that (development corporation).”

Mining overregulation curbing key to our future, says Rinehart – by Barry FitzGerald (The Australian – September 4, 2014)

September 3, 2014

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

Billionaire iron ore magnate Gina Rinehart believes the Abbott government has more to do after fulfilling its election promise to axe the carbon and mining taxes.

A strong critic of the now-abandoned mining tax on the iron ore and coal sectors, Mrs Rinehart said “overregulation and the high costs of approvals and compliance remain as huge impediments’’.

Writing in her regular column in Australian Resources and Investment, out today, Mrs Rinehart said that mining should not be seen as a dirty word, but as an industry critical to Australia’s future. “Unfortunately it is an industry facing problems,” she said.

“We can’t afford to overregulate and overburden industry if we want to remain competitive and maintain our standard of living. “ We should instead be focused on making our country’s exports sustainable in the world markets, for the benefit of Australians and Australia’s future.”

Mrs Rinehart — Australia’s richest person and the major shareholder in Fairfax Media — said low-cost nations, particularly in places like Africa and parts of Asia, were seeking out investors to develop their resources.

Mining threatens to eat up northern Europe’s last wilderness – by John Vidal (The Guardian – September 3, 2014)

September 3, 2014

http://www.theguardian.com/uk

Vast network of rivers, lakes and mountains in Finland, Sweden and Norway at risk from being exploited for rare earth and other minerals

Great stretches of Europe’s last wildernesses risk being damaged and polluted as the international mining industry gears up to develop northern Finland, Sweden, and Norway in search of uranium, iron ore, nickel, phosphorus, and valuable rare earth minerals, according to environmentalists.

The prize for British, Australian, Canadian and other companies is billion-dollar mega mines in Lapland, a region which covers all three countries and Russia, able to supply burgeoning industry in Asia.

But conservationists say the rush could bring permanent damage to the vast network of rivers, lakes and mountains which are home to many of Europe’s largest mammals, such as the lynx, wolf, bear and wolverine.

In addition, human rights groups argue that Lapland and Sami indigenous commuities who live by reindeer herding and fishing will be hit, along with the region’s tourist industry, which depends on pristine nature.

The polar mining boom, which mirrors the oil industry’s search for oil and gas, is heating up as climate change makes new areas and sea routes accessible and world prices of iron ore continue to soar.

Iron ore slide to $US75 will hit Australian suppliers: analyst – by Paul Garvey (The Australian – September 3, 2014)

September 3, 2014

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

IRON ore prices will fall to as low as $US75 a tonne next year and begin knocking out Australian sources of supply, a leading commodities analyst has warned.

Ian Roper, a former analyst with Rio Tinto who now works out of Shanghai for CLSA, has made further cuts to his iron ore price outlook in response to a stronger than expected ramp-up in supply by Australia’s iron ore miners.

Mr Roper now expects the iron ore price to fall to $US75 a tonne by September 2015, compared to his previous forecast for prices to drop to $US80.

The benchmark iron ore price has already fallen by more than 37 per cent this year to around $US87.10 a tonne.

While smaller iron ore miners are hoping that high-cost Chinese iron ore production will put a floor under the price and stop the price slide, Mr Roper argued that prices would continue to fall and flagged closures would spread to international iron ore suppliers including Australia.

He said iron ore was likely to follow a similar path to the coal price, which has been hovering at lows for two years as marginal mines battle to stay in production. Mr Roper also argued Chinese steel mills would be reluctant to shut their own iron ore production capacity.

Anglo American CEO Says Open to Takeover Offers – by Alexis Flynn (Wall Street Journal – September 2, 2014)

September 3, 2014

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

Mark Cutifani Aims to Boost Miner’s Return on Capital Employed to At Least 15% in 2016

LONDON—The chief executive of Anglo American AAL.LN +1.18% PLC, one of the world’s largest mining companies, said he won’t pull up the drawbridge if a compelling takeover offer arrives.

“My job is to create value, however that may be shown,” said Mark Cutifani, an industry veteran tasked 15 months ago with turning things around at Anglo after the departure of former chief executive Cynthia Carroll.

“Our job is to do a good job with the business, and at the end of the day, if somebody sees value, then there’s a conversation to be had,” said Mr. Cutifani.

“I’m not anti. I’m very open. I’m not scared by it,” he said in an interview with The Wall Street Journal. But Mr. Cutifani, 56 years old, said his overriding ambition remained transforming Anglo into a top miner in its own right.

“That’s not what we’re setting this business up for,” Mr. Cutifani said, referring to any future deal. In 2009, Anglo-Swiss mining firm Xstrata PLC made an approach that was rebuffed by Ms. Carroll. Since then, Xstrata has been absorbed by Glencore GLNCY +0.65% PLC.

Mr. Cutifani’s key aim is to boost Anglo’s return on capital employed to at least 15% in 2016. That measure slipped to 10% in the first half of 2014 from 11% a year earlier.

Resetting the energy debate won’t be easy, despite premiers’ pact – by Claudia Cattaneo (National Post – September 3, 2014)

September 3, 2014

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

With Canada’s premiers agreeing to an energy strategy that is similar to what Ottawa has been pushing for years, the political classes seem to be in agreement that energy and its alter ego, climate change, should be at the top of the national agenda.

It’s a big achievement for a policy area that has been a minefield for Canada in the past. Will we finally make it happen? It won’t be easy given the reality on the ground, which is rife with conflict over energy-expansion plans.

From the City of Burnaby, B.C., fighting Kinder Morgan’s TransMountain expansion plans, to aboriginals mobilizing against all manner of energy infrastructure, to communities refusing to accept fracking to unlock natural gas, to anti-oil activists agitating to keep the oil sands in the ground, to disagreement over what needs to be done about climate change — a cacophony of special interests has been pushing priorities they believe are more important than the greater good.

They have chosen the streets, the courts, the regulatory system to press their case, and been pretty successful at it. Important projects have been delayed. Investors are getting nervous.

But last week’s provincial agreement has the potential to reset the debate by reminding us what Canada stands for — a moderate approach that strikes a balance between promoting energy development and improving environmental protection.

Growing reliance on mineral imports poses economic and political risks [to U.S.] – by Bernard L. Weinstein (Dallas News – September 1, 2014)

September 3, 2014

http://www.dallasnews.com/

Bernard L. Weinstein is associate director of the Maguire Energy Institute and an adjunct professor of business economics in the Cox School of Business at Southern Methodist University. His email address is bweinstein@cox.smu.edu.

When Americans think of mining, they typically think of coal, oil and natural gas, but dozens of other minerals are extracted by above- or underground mining processes that are critical to our manufacturing and construction industries.

These nonfuel minerals include phosphates, nickel, iron ore, molybdenum, manganese, silver, copper, zinc and rare earth metals, many of which are used in conventional and renewable energy components, consumer electronics and hundreds of other products.

Tesla Motors, whose proposed “gigafactory” that Texas hopes to attract, requires huge amounts of rare earths for its battery packs. Few of us are familiar with rare earths, such as neodymium, samarium and dysprosium, but they are crucial in the manufacturing of jet fighter engines, antimissile systems, night-vision goggles and smart bombs, among other advanced military systems.

Mining contributes mightily to the U.S. economy. According to a recent study by the National Mining Association, in 2011 America’s mining operations contributed $232 billion to gross domestic product. Direct and indirect employment totaled 2.1 million jobs, and the industry paid almost $51 billion in federal, state and local taxes.

NEWS RELEASE: Best wishes to Ontario mine rescue champs entering international competition

September 3, 2014

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

Let’s all hope Ontario’s 2014 mine rescue winners from Vale Canada’s East Mines find success at the ninth international mine rescue competition being held in Poland. The group from Vale, which includes Sudbury captain Lorne Plouffe, Will Davies, Justin Whitmore, Jonathan Hamilton, Fred Pelletier, Aime Gagnon, Jean Yves Doiron, Perry Simon and Mike Johnson, won the 64th annual Ontario provincial mine rescue overall event in June in Timmins.

Now, these mine rescue volunteers are off to test their skills against teams from other countries. The event in Poland is being held from September 6 to 13, 2014 in Katowice. Past international competitions have been held in Ukraine, Australia, United States and China. The squad from Sudbury can expect to be engaged in friendly and constructive competition with similar teams from Australia, Turkey, Russia, Poland, Kazakhstan, Turkey, China and elsewhere.

Tomorrow, Vale Canada will be holding a special send off for its mine rescue team. On Thursday, September 4, at the Stobie Mine complex in Sudbury, a mine rescue demonstration, which will be followed by a barbecue, is scheduled to propel the Ontario winners across the Atlantic Ocean with good wishes into the next level of competition.

There are a number of components to the mine rescue program in Poland. Along with a simulated mine rescue, there are tests in measuring equipment, using breathing apparatus, first aid, emergency provisions and the theoretical knowledge of mine rescue.