September 12, 2014 – Republic of Mining

AngloGold says asset split will add value – by Allan Seccombe (Business Day Live – September 11, 2014)

September 12, 2014

http://www.bdlive.co.za/

ANGLOGOLD Ashanti is the latest mining company in SA to split its assets, creating a debt-free local company that will become a multi-commodity player, and a large London-listed gold-focused company holding a suite of international mines and growth assets.

Two large operators in the South African mining sector have split their assets in the past two years. Gold Fields unbundled three deep-level, labour-intensive mines into a new JSE-listed company, Sibanye Gold, to allow Gold Fields to focus more fully on its international portfolio.

BHP Billiton has cherry-picked its best assets to retain in its portfolio and is creating a separate company to house the balance of its assets, which are largely in SA and comprise coal, manganese and aluminium.

AngloGold operates the deepest mine in the world — its Mponeng mine is 4km deep.

As part of its division process, which needs shareholder approval, AngloGold will need to raise $2.1bn, which will primarily go towards clearing most of its debt, which CEO Srinivasan Venkatakrishnan described on Wednesday as “too high”. AngloGold has about $3.5bn in gross debt.

The South African Reserve Bank, in its approval of the restructuring, demanded that the company housing the South African assets start debt-free.

China’s coal proposals leave some hope for exporters – by Clyde Russell (Reuters U.S. – September 11, 2014)

September 12, 2014

http://www.reuters.com/

LAUNCESTON, Australia – (Reuters) – When the best thing you can say about new policies is that they aren’t as bad as they could have been, then you know your industry is in deep trouble.

China’s proposed cap on coal consumption and ban on low-quality imports won’t have sparked celebrations among export-focused coal miners, but may have given them some hope that the world’s top importer of the fuel will remain open for business.

The State Council, China’s cabinet, on Tuesday published a draft version of a law to tighten air pollution control by cutting the use of coal, which is used to generate about 80 percent of the nation’s electricity.

The draft didn’t spell out exactly what the consumption cap would be, nor the quality standards that would be imposed on imported fuel.

However, industry sources say the recommendation from the National Energy Administration is that coal with a sulfur content of more than 0.6 percent and ash content of more than 15 percent be banned.

What is also interesting to note is that the proposed import ban doesn’t specify heating value, meaning low-calorific coal could still be shipped in as long as it has low ash and sulfur.

Uranium: Not if but when – by Lawrence Williams (Mineweb.com – September 12, 2014)

September 12, 2014

http://www.mineweb.com/

Speakers at a uranium seminar in London were all in agreement that uranium prices will rise, but only in the medium to long term.

LONDON (MINEWEB) – Presenters at a uranium seminar organised this week by the London branch of Women in Mining, and sponsored by Fission Uranium, from a broad spectrum of the industry were all in agreement that uranium prices would likely rise substantially, but perhaps not yet – only in the medium to long term. And medium to long is just another way of saying ‘jam tomorrow’, although in this case ‘tomorrow’ will undoubtedly come but price rises may not be significant until perhaps the end of the decade.

The opening keynote was given by Ian Hiscock of commodities research group CRU who reckoned that short term price weakness would remain but that demand for uranium would likely double in the next 20 years with growth in usage for nuclear power generation flat to downwards in the West, due to the probably overdone post Fukushima fallout, but very substantial growth occurring in the East, and in particular in China which has a huge nuclear power development programme in place.

Nuclear power arguably offers the only real major scale non polluting, zero carbon emission technology out there and China sees this as a means for reducing its enormous air pollution problems which beset its major cities from its massive coal-fired power generation sector.

The problem for uranium is that because of its association with atomic weaponry many people live in fear of it – a fear exemplified by the three main nuclear power disasters – Three Mile Island in North America in 1979, Chernobyl in the Ukraine in 1986 and most recently Fukushima in Japan in 2011.

The quest for improved agricultural productivity spurs investor interest – by Henry Lazenby (MiningWeekly.com – September 11, 2014)

September 12, 2014

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

TORONTO (miningweekly.com) – Rising demand for protein and more sophisticated diets in developing countries are spurring investors to get excited about investing in fertilisers.

The ‘protein story’ was still providing a good thesis for investment, as the developing world continued to consume more meat and dairy products, which required exponentially more agricultural inputs than traditional staples, which in turn, required improved nutrients to ensure better-yielding crops.

“It bodes well for phosphates, nitrogen and potash,” Brazilian entrepreneur and founder in 2005, at the age of 23, of fertiliser junior Verde Potash, Christiano Veloso told Mining Weekly Online in an interview.

He noted that the protein story was still evolving, with much of Africa still to follow the route Asia had gone in recent years. This would mean increased demand for high-quality fertilisers to achieve improved agricultural output, driven by the need for increased productivity owing to the scarcity of arable land, climate change, scarce water supplies and labour, among other factors.

In Asia and Africa, protein consumption per capita was still far below the norm in Europe and North America. The development of Brazil into what could very well be the world’s food basket for numerous generations to come, augured well for TSX-listed Verde Potash, which was developing the largest potash mine in the country.

Former AFN executive promotes P3 model for Ring of Fire infrastructure – by Bryan Phelan (Onotassiniik Magazine – Fall 2014)

September 12, 2014

http://onotassiniik.com/

Public-private partnerships, also known as P3s, will be considered as a mechanism for building the power supply, roads and other assets needed to enable mining development in the Ring of Fire. Dale Booth, who has held senior positions with the Assembly of First Nations (AFN) and the department of Aboriginal Affairs and Northern Development (AANDC), is sure of it.

“I can guarantee it, P3s are going to be … looked at very closely for the Ring of Fire, and not only for the power transmission, not only the transportation,” Booth predicted during a presentation on the topic at the Ontario Mining Forum in June.

The P3 model should also be considered for building infrastructure in First Nations near the Ring of Fire and elsewhere, said Booth, president of Tiree Innovation, a First Nations company located in the Mohawk community of Akwesasne.

“It allows communities access to external capital for their infrastructure and … it’s an effective model to get things done on time and on budget,” he said.

How does the P3 model work? Essentially, federal and provincial governments fund and finance the infrastructure, along with private equity sources, Booth explained, and a private sector partner builds and maintains it.

The P3 model has been applied to more than 200 projects across Canada, from roads to schools to hospitals, although the approach is relatively new to First Nations, said Mark Romoff, president and CEO of the Canadian Council for Public-Private Partnerships.

Falling prices threaten Canadian oil patch momentum – by Jeffrey Jones and Jeff Lewis (Globe and Mail – September 12, 2014)

September 12, 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 — World oil prices sank to their lowest intraday level in more than two years after the West’s energy-security watchdog cut its forecast for demand growth, threatening the earnings momentum that had returned to the Canadian oil patch.

The International Energy Agency said in its September oil market report that economic weakness in Europe and China prompted it to temper its outlook for global oil demand in 2014 and 2015. Meanwhile, supplies are up from last year as the boom in light, tight oil from such regions as the North Dakota Bakken formation and Eagle Ford formation in Texas turns away imports to the United States.

The price weakness is remarkable in that it comes in the midst of heightened tensions in hot spots such as Iraq, Libya and Ukraine. It shows how fears of supply disruptions are having a shrinking influence on markets as production in countries outside OPEC, including Canada, surges and demand growth shrinks.

Deep discounts on heavy oil, once the bane of the Canadian sector, have shrunk since early 2013 as export transportation options have grown. But now returns for oil producers are shrinking again due to the lower world benchmarks.

“China data has been less than spectacular. Two days ago the numbers … inside the country, where demand growth for oil was supposed to be really large, disappointed [the market].

Dams under review after Mount Polley breach, mining leader says – by Wendy Stueck (Globe and Mail – September 11, 2014)

September 12, 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.

VANCOUVER — Industry and government officials across the country are reviewing dam design, maintenance and oversight in the wake of a tailings dam breach at Mount Polley mine in B.C., says the head of the Mining Association of Canada (MAC).

“No one in the industry, after this incident, didn’t wake up in the morning and go, ‘I better go check’ – even though they had reams of information and assurances that everything was safe,” MAC president Pierre Gratton said Thursday following an address to the Vancouver Board of Trade. “I think every one of them wanted to go out and get that reassurance again.”

On Aug. 4, a tailings dam at the Mount Polley mine – operated by Vancouver-based Imperial Metals – gave way, sending a torrent of mud and debris into neighbouring waterways and resulting in drinking-water bans in affected areas. Most of those advisories have been lifted, but a do-not-use order remains in effect for the “impact zone,” which includes Hazeltine Creek, Polley Lake and part of Quesnel Lake.

The cause of the breach is unknown and an independent investigation is under way.

The incident rattled the mining sector and raised questions about oversight and regulation of tailings dams in British Columbia and elsewhere in the country. Following the Mount Polley breach, the B.C. government moved the deadline for companies to file annual inspection reports for tailings dams from March 31, 2015, to December 1, 2014, and also ordered those inspections to be independently reviewed.

Allan potash mine: All trapped workers returned to surface, some ‘grouchy and hungry’ (CBC News Saskatoon – September 11, 2014)

September 12, 2014

http://www.cbc.ca/news/canada/saskatoon

All miners returned to surface, some after more than 24 hours underground

Miners who spent some 24 hours trapped underground at PotashCorp’s Allan mine east of Saskatoon have made their way to the surface, after a fire forced dozens of workers to seek shelter in safety stations on Wednesday.

Around 8:30 p.m. CST Thursday, the last three workers who were in safe spaces below ground were up and out. Earlier in the day, 51 of their co-workers returned to the surface.

A union leader said he was able to speak to some of the workers who were brought up and reported they were safe, but some were “grouchy and hungry”. Mike Belyk was one of the workers who returned to the surface Thursday afternoon.

“[I’m] just relieved to be back up, to get home see your family,” he said. “Other than that it wasn’t too, too bad.” Belyk said miners were in contact with rescue teams and people found ways to pass the time. “We had communication. Played cards. Played a lot of cards.”

NEWS RELEASE: Canada needs to act now to hold onto its global mining leadership – Head of the Mining Association of Canada addresses the Vancouver Board of Trade

September 12, 2014

VANCOUVER, Sept. 11, 2014 /CNW/ – In a speech to the Vancouver Board of Trade today, Pierre Gratton, President and CEO of the Mining Association of Canada, provided an overview of the past decade of mining development in Canada and the keys to maintaining Canada’s position as a global mining leader.

“Canada benefited tremendously from the past decade of rising commodity prices, seeing a 25 percent increase in the number of new mines, increased employment and rising government revenues. The opportunity is there for Canada to continue to responsibly develop its mining industry, and the jobs, business development and community investments that go along with it,” said Gratton. “Governments and individuals all play a part in deciding whether we seize those opportunities, or let other countries take the leadership position instead.”

In his address, Gratton pointed to a few indicators to demonstrate how mining has contributed to Canada’s prosperity over the past decade, but also some signs of lost ground. Last year, after an eight-year period as the top jurisdiction for global exploration spending, Canada fell to the second spot behind Australia. Similarly, in the Fraser Institute’s latest annual survey, traditionally top Canadian jurisdictions lost their footings. For example, Quebec, which held first place from 2007 to 2009, fell to the 21st spot in 2013. In terms of mineral production, Canada has also declined from being the top five producer of 14 major minerals and metals in 2007 to just 10 today.

To explain these declines, Gratton notes that Canada’s mining sector operates in a much more competitive global environment. Some basic business fundamentals make Canada an expensive place to build new mines. This includes rising energy and operating costs, skills shortages, a lack of critical infrastructure to build new mines in increasingly remote and northern regions, high transportation costs to get goods to market, and complex and lengthy regulatory processes.