September 11, 2014 – Republic of Mining

Northern Canada, the Conflict-Free Diamond Frontier – by Christopher F. Schuetze (New York Times – September 11, 2014)

September 11, 2014

http://www.nytimes.com/

The four C’s of a conventional diamond are color, clarity, cut and carat weight. Deepak Kumar is fond of saying that his stones will have six C’s. “The fifth C is for ‘conflict-free,’ and the sixth C is for ‘Canadian,”’ Mr. Kumar said in a telephone interview from Yellowknife — population 20,000 — the capital of Canada’s Northwest Territories.

Mr. Kumar’s company, Deepak International, announced this summer that it had bought two defunct diamond polishing plants in Yellowknife for 1.9 million Canadian dollars, or $1.7 million, together with the exclusive rights to the polar bear symbol, a quality logo for the Territories’ sustainably mined stones.

As consumers increasingly ask where their diamonds are sourced, polished and cut, Canadian diamonds have a reputational advantage. They are marketed as conflict-free and cleanly mined under the Canadian Diamond Code of Conduct, overseen by the federal government, that goes beyond the Kimberley Process certification program, established in 2003, which sets minimum standards for ethical diamond mining.

“Canada is a wonderful story. It is icy, it is clean, it is cold,” said Dylan Dix, an executive with HRA Group, Canada’s biggest diamond producer.

Industrial-scale diamond mining started in Canada in the 1990s — just as stories of war atrocities and exploitation began to roil the market for African gemstones. Canada has since become the world’s third-biggest diamond producer, after Botswana and Russia.

Kinross Gold in talks to sell Ecuador project to Lundin family – by Rachelle Younglai (Globe and Mail – September 11, 2014)

September 11, 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.

Kinross Gold Corp. is in talks to sell its mothballed gold project in Ecuador in a move that could see the Lundin family develop the deposit, according to people familiar with the matter.

For about a year, Kinross has been trying to exit Ecuador and divest the Fruta del Norte after clashing with the local government on the economic terms of the project. The Ecuadorean government gave Kinross approval to sell Fruta del Norte last week, one person familiar with the matter said.

Fruta del Norte, also known as FDN, was at one time seen as critical to Kinross’s growth. The company acquired the precious metal deposit when it bought Aurelian Resources for $1.2-billion in 2008.

But after more than two years of negotiations with the Ecuadorean government, Kinross threw in the towel and said it was not going to waste any more capital developing the mine. It recorded a $720-million charge on the asset in 2013 and slashed its gold reserves by a third to reflect the loss of Fruta del Norte.

“We continue to work co-operatively with the Ecuadorean government on our exit from the country and the FDN project,” Kinross spokeswoman Andrea Mandel-Campbell said. “We do not comment on speculation,” she said.

High cost of mining a challenge in Far North – by Jonathan Migneault (Sudbury Northern Life – September 11, 2014)

September 11, 2014

http://www.northernlife.ca/

Mining Association of Canada CEO raises challenges for mining sector

The high cost of doing business in Canada, especially in the Far North, is the biggest challenge the mining sector faces nationally, said Pierre Gratton, president and CEO of the Mining Association of Canada.

Gratton, who was the keynote speaker at a Chamber of Commerce event for the North America Mining Expo in Sudbury on Sept. 9, said according to Mining Association of Canada research, it can cost up to two and a half times as much to build a remote mine there, than a mine near a populated urban centre in the south.

“The fact is, while a vast country rich in resources, Canada has lost ground,” Gratton said. “We were a top-five producer of 14 major minerals in 2007, but today (Canada is on top) of only 10.” What’s more, mineral reserves for most commodities have been plummeting since the 1980s, he said.

To address the high cost of doing business in remote regions, like northwestern Ontario’s Ring of Fire mineral deposits, government needs to partner with mining companies, Gratton said.

Building infrastructure in those regions, which often benefits remote First Nations by connecting them to transportation routes and electrical grids, constitutes a public good, Gratton said.

China’s Global Mining Play Is Failing to Pan Out – by Wayne Arnold (Wall Street Journal – September 10, 2014)

September 11, 2014

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

Citic’s Troubled Australian Iron-Ore Mine Shows How Much Has Gone Wrong with China’s Push to Buy Raw Materials

CAPE PRESTON, Australia—A $10 billion iron-ore mine that has taken more than eight years to develop near this remote Australian port is a glaring example of how much has gone wrong with China’s decadelong push to buy up raw materials around the world.

Citic Pacific’s Sino Iron mine cost roughly four times its initial budget, and analysts who track the project say it likely will lose hundreds of millions of dollars in 2014, its first full year of production. Citic Pacific, a Hong Kong-listed subsidiary of Chinese state-owned behemoth Citic Group, and its contractors made a series of blunders, from thinking they could import workers at Chinese pay levels to a botched bet on currencies that forced the company to seek a $1.5 billion bailout from its parent.

And while Sino Iron is at last shipping ore, it remains locked in a legal battle with its local partner, Clive Palmer, a property mogul turned politician who has accused Citic Pacific of taking Australian resources without fully paying for them.

“It was a painful learning process,” said Zhang Jijing, who spent 16 years running Citic Group’s Australian business before being appointed in late 2009 president and executive director of subsidiary Citic Pacific, which recently changed its name to Citic Ltd. “Today I look back and I did not realize it would be so difficult.”

Over the past decade, China rushed to buy up global commodities as its economy boomed—both to feed its factories and to ensure it wasn’t reliant on Western powers for raw materials.

Monkey Cage: In Eastern Congo, economic colonialism in the guise of ethical consumption? – by Christoph Vogel and Ben Radley (Washington Post – September 10, 2014)

September 11, 2014

http://www.washingtonpost.com/

The following is a guest post by Christoph Vogel and Ben Radley. Vogel is an Independent Analyst and a PhD candidate at the University of Zurich. Radley is a Director for Heartland Alliance and a PhD student at the International Institute of Social Studies.

When we think of the Congo today, we may think of bloody resource wars where women are being raped by armed groups to gain access to and control of the country’s minerals. If we do so, it’s because of the work of numerous NGOs, advocacy organizations, and activists such as the Enough Project or the “no blood in my mobile” campaign, who have been campaigning for several years to reduce conflict in the eastern Congo by “cleaning up” the region’s mineral trade. The struggle against so-called “conflict minerals” has literally become, borrowing Autesserre’s words, a lopsided “dominant narrative” spanning policy discourses and practical engagement in the sector.

The most significant policy result of this work to date, Section 1502 of the Dodd-Frank Act, was passed by the Congress and signed into law in July 2010. It requires companies registered on the U.S. stock market to report on an annual basis whether their minerals have been sourced from the eastern DRC or neighboring countries, and thus, potentially financing conflict. This has in turn led to recent announcements by electronics giants including Apple and Intel that more of their products will be “conflict-free” in the future.

In the meantime, a coalition of around 70 Congolese leaders and international experts argue that, in the Congo itself, the movement risks contributing to, rather than alleviating, the very conflicts it sets out to address. While not calling to keep transparency and regulation at the lowest level, their open letter urges governments, companies, and other stakeholders to carefully rethink and increase their engagement on the issue.

More than four years after the signing of the Dodd-Frank Act, only a small fraction of the hundreds of mining sites in the eastern DRC have been reached by practical measures emanating from Dodd-Frank legislation, such as supply chain traceability or mineral export certification.

Infrastructure deficit hampering western Nunavut mine project: MMG (Nunatsiaq News – September 9, 2014)

September 11, 2014

http://www.nunatsiaqonline.ca/

MMG wants partners, maybe government, to help pay for port, airport, road, microwave broadband system

You might call it a “challenge,” as an MMG manager put it, or you could see it as an ultimatum. After sinking $300 million into studies to see if the mineral-rich Izok Corridor in western Nunavut is economically viable, the mining giant says it won’t move ahead with the project unless a partner helps build a port, airport, road and microwave broadband towers.

MMG ‘s delivered its latest message to residents of Nunavut’s western communities of Cambridge Bay and Kugluktuk this week: the lack of regional infrastructure is a deal-breaker for its plans to build a $6.5-billion network of lead, zinc and copper mines along the Izok Corridor.

Unless a partner is found to invest a “quite substantial” amount of money to build a deep-water port and airport at Grays Bay on the Coronation Gulf, a 325-all-season road and a microwave broadband network, the majority Chinese-government-owned company won’t go ahead with the project.

Since telling the Nunavut Impact Review Board in April 2013 not to proceed with its recommended detailed review, MMG has crunched its numbers in a $60 million feasibility plan and revised its 2012 Izok Corridor Mine Proposal.

According to information distributed at public meetings in Cambridge Bay, the two Nunavut communities closest to the Izok Corridor, the new, streamlined mine plan includes a relocation of the three-million tonnes per year ore plant at Grays Bay, more modular components into the mine deign and a mining of the most distant deposit, Izok, to followed by High Lake.

[Nanaimo] City’s south is steeped in history – by Lynne Bowen (Nanaimo Daily News – September 11, 2014)

September 11, 2014

http://www.nanaimodailynews.com/

Mining families lived in small houses and grew their own food, single men found in boarding houses

Excerpt From Lynne Bowen’s essay: Thinking Back, from the forthcoming publication for Black Diamond Dust.

Lynne Bowen is an award winning Nanaimo-based historian and author known for her landmark 1982 book ‘Boss Whistle: The Coal Miners of Vancouver Island Remember,’ and six other important books about British Columbia history.

Haliburton Street was the most important thoroughfare in the South End. Mining families lived there or on the streets above and below it; single men lived in the boarding houses that clustered around the corner nearest the pub where the day shift miners, except those who were teetotal, drank beer after work.

In a town where all the important streets and avenues were named after English coal company directors, it was fitting that the main thoroughfare of the South End, where the biggest mine in British Columbia drew coal from under the harbour, was named after the best known among the directors.

Thomas Chandler Haliburton had lived most of his life in Nova Scotia, but had moved to Britain when he retired. Although he had been a judge and a politician on both sides of the Atlantic, posterity knows him best as the creator of the Sam Slick satirical sketches, which made him a bestselling author in Nova Scotia, Great Britain and the United States.

Occupational Safety: Progress on mine review – by Carol Mulligan (Sudbury Star – September 11, 2014)

September 11, 2014

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

It was a good day for the mining industry, but it came about as a result of tragedy. But four initiatives that go effect immediately will improve the health and well-being of workers in Ontario’s mines, says Labour Minister Kevin Flynn.

He provided an update on his government’s Mining Health, Safety and Prevention Review on Wednesday at the Willet Green Miller Centre.

That came one day after Flynn paid his first visit to a mine, descending to the 5,000-foot level at Vale’s Coleman Mine in Levack. The underground visit gave him a better understanding of the safety issues miners face every day.

The progress report calls for action in four areas that “jumped off the page” for the mining review advisory panel in the eight months it has been meeting, said Flynn.

The province is setting out to improve the visibility of workers through increased promotion of high visibility apparel. That is a guideline for now, but it could be enacted into law when the final report of the mining review is presented to Flynn early in the new year.

The province is also developing a mining health database to track incidents of illness and exposure to carcinogenic substances, helping to prevent miners from being exposed to unsafe levels and assisting in the development of improved health and safety rules.

UPDATE 2-Tanzanian growth accelerates on back of gold production – stats office – by Fumbuka Ng’wanakilala (Reuters India – September 11, 2014)

September 11, 2014

http://in.reuters.com/

(Reuters) – Tanzania’s growth accelerated in the first quarter of 2014 from a year earlier, on the back of a jump in gold production and power generation, the statistics office said on Thursday.

Gross domestic product (GDP) in Tanzania – one of the fastest growing economies in the region – expanded by 7.4 percent in the first quarter of 2014 compared to 7.1 percent a year ago, said the state-run National Bureau of Statistics.

“Mining and quarrying activities registered a growth of 8.7 percent in the first quarter of 2014 compared to a growth rate of 1.7 percent during the same period in 2013,” NBS director of economic statistics Morrice Oyuke told a news conference.

“This growth increase is attributed to an increase in gold production during the first quarter of 2014,” he added. Tanzania is Africa’s fourth-largest gold producer after South Africa, Ghana and Mali.

Big gas discoveries offshore – still several years away from major exports – have drawn in more investors, both in the energy industry and other sectors looking to find a foothold in a growing market.

The country aims to double its power production capacity to 3,000 megawatts by 2016 by investing in new gas and coal-fired turbines.

Vale’s Q2 nickel production plunges in Sudbury (Northern Miner – September 10, 2014)

September 11, 2014

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

Vale ’s (NYSE : VALE) companywide nickel production in the second quarter of 2014 was 61,600 tonnes, an 8.6% drop from the first quarter and 5.3% fall from the year-ago period. Vale says the decline mainly reflects the impact of four weeks of planned maintenance work carried out on the acid plant and furnaces in Sudbury, Ont. For the first half of 2014, Vale’s companywide nickel output was only off 0.7% to 129,200 tonnes.

Vale’s Sudbury operations produced 9,100 tonnes nickel in the second quarter, a decline of 48.4% from the first quarter and 49.2% from the second quarter of 2013. For the first half of 2014, Vale produced 26,800 tonnes nickel in Sudbury, off 23.6% from the 35,000 tonnes produced in the first half of 2013.

(Elsewhere in Canada in the second quarter, Vale produced 6,900 tonnes in Thompson, Man., or up 11% year-over-year; and 12,100 tonnes at Voisey’s Bay, Labrador, down -19.7%.)

The low point of the quarter came on April 6, when millwright Paul Rochette was killed at Sudbury’s Copper Cliff smelter complex. The United Steelworkers Local 6500 and Vale carried out a joint investigation into the fatality.

Cliffs Director Quits Citing ‘Bullying’ at Board Meeting – by Sonja Elmquist (Bloomberg News – September 10, 2014)

September 11, 2014

http://www.bloomberg.com/

A director resigned from Cliffs Natural Resources Inc. (CLF), the U.S. iron ore producer that’s trying to sell its foreign mines, saying management won’t listen to dissenting views.

In his Sept. 4 resignation letter, which was published in a filing late yesterday, Richard K. Riederer said resolutions were presented for approval at a board meeting the week before without input from directors.

“There was an unwillingness to discuss options and bullying of directors who considered other options,” he said in the letter to Chairman and Chief Executive Officer Lourenco Goncalves. “I have a fundamental disagreement with your approach to corporate governance.”

Riederer, who had been a director for 12 years, is the second person to quit the board since its overhaul in July, when a slate of nominees from activist investor Casablanca Capital LP was elected following a six-month proxy contest. Timothy Sullivan resigned Aug. 11, saying Goncalves and newly elected directors rejected “anything that might be contrary to your per-scripted plan.”

Casablanca, which holds a 5.2 percent stake in Cliffs, has urged the Cleveland-based company to raise its dividend and sell assets outside the U.S. It backed Goncalves’ appointment as CEO last month. The company is looking to sell iron ore mines in Canada and Australia amid a slump in the price of the commodity.

NEWS RELEASE: Outokumpu’s Kemi mine celebrates 50-year anniversary

September 11, 2014

www.outokumpu.com

September 11, 2014 – This September it will be exactly 50 years since Outokumpu made the decision to begin mining operations in its chrome mine in Kemi, Finland. The deposit had been found five years earlier by a local diver, Martti Matilainen. The mining began in 1967, with large-scale mining operations and ferrochrome production to begin next year.

Chrome mine and ferrochrome works were the first steps in Outokumpu’s journey to become the leading stainless steel producer in the world. Today the Kemi mine employs 400 people, and on top if this the nearby ferrochrome works and stainless steel mill in Tornio employ some 2,000 people.

CEO Mika Seitovirta: “The Kemi mine is the only chrome mine in the Europen Union, and it is an essential part of the integrated production chain in the Tornio site. Chromium is what makes steel stainless, and our own chrome mine guarantees us competitive sourcing of chromium for the future. Chrome mine puts Outokumpu in a league of its own, since none of the other stainless steel producers has its own source of chromium. Therefore, the Kemi chrome mine is a unique competitive advantage for us globally.”

The operations of the Kemi mine differ from several other mines because there are enough reserves for mining for several decades. At the moment, Outokumpu mines some 2,4 million tonnes per year. Since there are proved ore reserves of 50 million tonnes and mineral reserves, not yet fully explored, estimated to be some 98 million tonnes, the continuation of the mining operations is therefore guaranteed.