September 16, 2014 – Republic of Mining

Canada’s small fertilizer companies shuffle ranks, search for capital – by Rod Nickel (Reuters India – September 17, 2014)

September 16, 2014

http://in.reuters.com/

(Reuters) – Capital-strapped small fertilizer companies in Canada are shuffling their senior executive ranks to draw investors in a period of weak prices.

Stonegate Agricom Ltd, which is developing a phosphate mine in Idaho, said on Tuesday that Chief Executive Mark Ashcroft resigned, the latest change at the top among small players in the sector. Others that have installed new senior executives this year include Canada’s Arianne Phosphate and Karnalyte Resources Inc.

Fertilizer values are rising off the floor prices reached earlier this year, but their upside looks limited, Rabobank said in a report on Monday.

Stonegate’s parting with its CEO was mutual, said co-chairman Ian McDonald, who will carry out CEO duties on an interim basis with co-chairman Kerry Knoll. He declined to give further details.

“Nobody’s having any parties, because nobody’s happy, but there’s been no pressure here based on Mark’s performance,” McDonald said.

Stonegate shares dropped 3 Canadian cents, or about 19 percent, to 13 cents in Toronto. For the year, the stock is down nearly one-third.

Northern companies establish Saskatchewan mining presence – by Lindsay Kelly (Northern Ontario Business – September 16, 2014)

September 16, 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.

It was during a trip to Toronto about a year ago that Wayne Ablitt and Don Croteau realized they were both thinking of expanding into Western Canada with their respective companies, Jannatec Technologies and Schauenburg Industries Ltd. But with expansion comes considerable expense, not to mention the challenges of breaking into a new market.

“We stopped and looked at each other and said, ‘Why not do something together rather than duplicate things?’” recalled Croteau, managing director of Schauenburg’s North Bay office.

So Croteau and Ablitt devised a plan to bring the two companies together, sharing costs and resources, and a year later, D3 Mining Solutions is ready to debut from its Saskatoon office.

Joining the partnership are suppliers Porcupine Canvas out of Timmins and Maslack Supply out of Sudbury, along with a Winnipeg-based dome manufacturer. The companies will retain their individual identities and home locations, but will operate in Saskatchewan together under the umbrella company D3 Mining Solutions.

Goldcorp’s Massive Eleonore Mine Has Potential To Grow – Chuck Jeannes – by Alex Létourneau (Kitco News – September 15, 2014)

September 16, 2014

http://www.kitco.com/

Denver (Kitco News) – Goldcorp Inc.’s (TSX:G)(NYSE:GG) massive Eleonore mine, located in the James Bay region of northern Quebec, has the potential to produce beyond its anticipated 600,000 ounces of gold annually.

The company is currently expecting first pour in the fourth quarter of 2014, with commercial production expected in the first quarter of 2015. Ramp-up to its full potential of 600,000 ounces annually is expected to go through 2018.

Speaking with Kitco News at the 25th Denver Gold Forum, Chuck Jeannes, president and chief executive officer of Goldcorp, said that while the mine will be a large gold producer, there’s still potential for more.

“This is the kind of deposit – a Hemlo style deposit – that can continue to grow significantly, Jeannes said. “We haven’t seen the bottom of it, we continue to have success looking at new areas of the deposit, both to the north and the south, so we’re a long way from figuring out what’s there.

“We’ve always believed that there’s potential for a district scale opportunity and we’ll be the first ones looking for it.” Jeannes said that his team at Eleonore is working diligently to speed up the ramp-up process. “It’s a vertical dipping ore body so development takes longer and it’s a steady ramp-up over that period, “ he said. “The guys there are trying to find ways to advance that ramp-up schedule.”

NEWS RELEASE: Preliminary mining safety review panel report initiates early actions

September 16, 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.

The Ontario Ministry of Labour Mining Health, Safety and Prevention Review’s progress report, which was released last week, is already leading to changes making positive impacts on mining health and safety. This panel started work in January 2014 with the target date for the release of a final report planned for early 2015.

Ontario Chief Prevention Officer George Gritziotis is leading the review, along with Fergus Kerr, industry co-chair, and John Perquin, labour co-chair. Key initiatives, which have been enacted upon already, include guidance on high visibility safety apparel by mine workers, updating joint health and safety committee certification training and advancing research.

Over the past six months, the review has held 12 public consultations, in which more than 150 people participated, and it has received more than 60 written submissions. In the key issues section of the progress report, it states “At public consultations and in written submissions, the Internal Responsibility System (IRS) was the most discussed topic. Stakeholders are unanimous in their view that an effective IRS is key to safe workplaces.”

Other Mining Health, Safety and Prevention Review panel members include Roger Emdin, Manager of Sustainable Development for Glencore’s Sudbury Operations, and Mike Bond, Chair of USW/Vale Safety, Health and Environment Executive Committee.

$8bn mining private equity needs to be spent. And soon – by Frik Els (Mining.com – September 14, 2014)

September 16, 2014

http://www.mining.com/

Countercyclical investors sitting on $8 billion unspent funds have been waiting for clear signs of a market bottom. The wait may well be over.

The mining M&A market is not exactly in robust health at the moment. Mining and metals deal values during the first half of this year tanked 69% to $16.7 billion, deal volumes are down 34% and nearly 9 out of every ten agreements were were valued at less than $50m according to the latest Ernst & Young market barometer.

One reason for the slackness, the consulting firm notes, is that “the much anticipated influx of substantial capital from new mining-focused private funds is taking longer than expected to hit the market.”

Back in February Michael Rawlinson, co-head of mining and metals investment banking at Barclays the Indaba conference in Cape Town put it this way: “They’ve all set up, no one’s done anything. The sand is going through the hourglass and the money is going to get taken away if they don’t start spending.”

Ernst & Young said much the same in its report – “contributors to these funds are unlikely to wait much longer to see their investments put to use”:

Uranium Enters Bull Market Amid Russian Sanctions, Strike – by Ben Sharples and Heesu Lee Bloomberg News – September 16, 2014)

September 16, 2014

http://www.businessweek.com/

Uranium entered a bull market amid new sanctions against Russia over its conflict with Ukraine and a labor strike at the world’s biggest mine in Canada.

The atomic fuel has advanced 21 percent in New York from a May 20 low of $28 a pound, according to data from Ux Consulting Co. in Roswell, Georgia, which provides research on the nuclear industry. Prices closed 1.8 percent higher at $34 yesterday and have averaged $31.87 in 2014.

The U.S. and European Union stepped up their sanctions last week on Russia, which provides enrichment services to western utilities, stoking concern the Ukraine crisis may deepen. In Canada, the United Steelworkers union said Sept. 12 that it had reached a “tentative” agreement with Cameco (CCO) Corp. to end a two-week strike at McArthur River.

“The market may need some more time to digest the recent announcements about McArthur River and additional Russian sanctions to determine any additional impacts on price,” Ux Consulting said in a note dated Sept. 15.

Uranium declined as much as 60 percent since March 2011 when an earthquake and tsunami caused the meltdown of Tokyo Electric Power Co.’s Fukushima Dai-Ichi plant and led to the shutdown of Japan’s nuclear fleet. The nation is seeking to restart reactors as it conducts safety checks, while producers from Kazakhstan to Australia cancel projects and close mines.

As mining curbs bite, India offers market to glut-hit iron ore – by Manolo Serapio Jr. (Reuters India – September 16, 2014)

September 16, 2014

http://in.reuters.com/

SINGAPORE – (Reuters) – An oversupplied global iron ore market may find some relief from an unlikely source as former No.3 exporter India turns into a big importer due to a cutback in domestic production.

The country may ship in up to 45 million tonnes over the next three years as home-grown iron ore output falls short of domestic steel production needs, an executive at an influential industry group said.

India imported just 0.37 million tonnes of the steelmaking raw material in 2013/14, government data showed. But already JSW Steel, India’s third-largest maker of the alloy, has said it will import 6 million tonnes of iron ore in 2014/15 against zero a year earlier.

“There’s no option but to import to meet the shortfall. We’re looking at between 10 and 15 million tonnes every fiscal year over the next three years,” Basant Poddar, vice president of the Federation of Indian Mineral Industries, the only industry group for mining firms in the country, told Reuters by phone.

“The mine closures all over India, starting from Karnataka, Goa, Odisha and Jharkhand, have created a massive disruption to supply,” Poddar said.

China ban on low-grade coal set to hit global miners – by Lucy Hornby, Jamie Smyth and Neil Hume (Financial Times – September 16, 2014)

September 16, 2014

http://www.ft.com/intl/markets/commodities

Beijing, Sydney and London – China’s top planning agency has banned the use of low-quality coal in a further effort to address the country’s problem with pollution and its growing glut of the fuel. The move comes as a blow to international miners already smarting from a steep drop in iron ore prices.

Huge new coal projects in the west of China combined with slower than expected growth in the east have already hit China’s coal imports, which for the first eight months of the year are 5 per cent lower than the same period last year. Prices have tumbled.

Australian thermal coal prices, the benchmark for Asia, have dropped more than 20 per cent this year, and could decline further as the door to China closes.

The National Development and Reform Commission said on Monday it would ban the burning of coal with ash content of more than 16 per cent or sulphur content of more than 1 per cent from 2015 in populous and prosperous eastern cities that are the focus of national efforts to fight air pollution.

That would, in effect, bar the import of lower-quality coal from Australia, Southern Africa and elsewhere, since the cities along the east coast are also the biggest consumers of imported seaborne coal.

Ivan Glasenberg ponders Glencore’s next move – by James Wilson and Neil Hume (Financial Times – September 15, 2014)

September 16, 2014

http://www.ft.com/intl/companies/mining

Ivan Glasenberg, the chief executive of Glencore, demonstrated in a 48-hour period this year why the Switzerland-based group occupies a singular place among the world’s biggest mining companies.

With acquisitions taboo for most large miners after a decade-long spending binge, perhaps only the ebullient trader would have followed a $5.85bn disposal of a Peruvian copper mine with the $1.35bn purchase of Caracal, a west African oil explorer, a day later.

The flurry of activity showed not only that Mr Glasenberg has retained his eye for an opportunity after the $80bn purchase of Xstrata last year, but also that he has a unique mandate to grow via acquisition, at a time when peers such as BHP Billiton are reversing years of dealmaking growth and streamlining their businesses.

“The market believes the Glencore management team are a solid allocator of capital,” says Dominic O’Kane, analyst at JPMorgan.

“What Ivan buys next” has been a favourite mining sector parlour game even before Glencore’s stock market flotation in 2011. Now it is likely to be played with increasing interest. Glencore has digested most of Xstrata as well as Viterra, a Canadian grain trader it bought for C$6.1bn in 2012, and can take advantage of opportunities while rivals stick to a diet of austerity.

Black Lung Disease Makes Comeback, Study Shows – by Kris Maher (Wall Street Journal – September 15, 2014)

September 16, 2014

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

Prevalence of Severe Form of Disease in Central Appalachia’s Coal Miners Is 3.2%, Similar to 1974 Level, Federal Research Says

The prevalence of severe black lung disease among coal miners in Central Appalachia has hit levels not seen since coal dust was first regulated in mines roughly 40 years ago, according to federal researchers.

A new study indicates the disease has roared back faster in the region than previously was thought and comes as the coal industry and the Obama administration are locked in a legal battle about stricter coal-dust regulations that took effect Aug. 1.

In 2012, the prevalence of severe black lung, known as progressive massive fibrosis, in miners in West Virginia, Virginia and Kentucky reached 3.2%, up from a low of 0.4% in 1998, according to findings published Monday in the American Journal of Respiratory and Critical Care Medicine. In 1974, the level was 3.3% for miners in those states.

More powerful machines that grind coal into finer particles could be to blame, safety experts say. They also suspect that mining the region’s thinner coal seams is churning up more rock and hazardous silica dust.

The study—by researchers at the National Institute for Occupational Safety and Health, part of the U.S. Centers for Disease Control and Prevention—analyzed results from a long-term surveillance program in which miners periodically undergo chest X-rays.

Ontario mines still power Goldcorp (Northern Miner – September 15, 2014)

September 16, 2014

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

Goldcorp (TSX: G; NYSE: GG) has been so growth-oriented over the past decade, building new mines across the Americas and snapping up gold assets left and right, it’s easy to forget sometimes just how productive its Ontario gold mines are.

Goldcorp’s three wholly owned gold production centres in Ontario — Red Lake, Musselwhite and Porcupine — yielded an impressive 1.04 million oz. gold in 2013, or 39% of Goldcorp’s companywide production of 2.67 million oz. gold last year.

And the global reserves and resources at these three Ontario mines total 21.2 million oz. gold, or 19% of Goldcorp’s companywide total of 112.6 million oz. gold. The jewel in Goldcorp’s crown remains the Red Lake underground mine in the town of Red Lake in the province’s northwest. Goldcorp rightly calls it its “Canadian cornerstone and the world’s richest gold mine.”

Indeed, after all these years, it’s still Goldcorp’s top-producing mine, cranking out 493,000 oz. gold in 2013. In the first half of 2014, Red Lake produced 184,500 oz. gold, putting it on track to hit 440,000 to 480,000 oz. gold for the full year.

The mining method for the quartz-vein deposit is longhole, underhand and overhand cut-and-fill, and the milling rate at two nearby surface facilities totals 3,100 tonnes per day.

Ring of Fire development plans spurred by Ontario’s outrageous energy prices – by Peter Koven (National Post – September 16, 2014)

September 16, 2014

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

As Dominic Fragomeni recalls it, his firm’s big idea for the Ring of Fire just came from a willingness to try something new.

“Innovation comes from people sitting back and thinking about what’s possible given their experience and background,” the director of XPS Consulting & Testwork Services said in an interview.

“That’s basically how these ideas were hatched. Our guys have 30-plus years of experience in metallurgical engineering and have tested a lot of different concepts in their day.”

Northern Ontario’s remote “Ring of Fire,”a huge mineral belt named after the Johnny Cash song, is the most exciting new mining opportunity the province has seen in decades. Rough estimates suggest the region could hold $60-billion worth of minerals, with chromite being the most important.

But moving the project to development has been a very slow and arduous task, as stakeholders have struggled to find solutions around key challenges like infrastructure.

One of biggest obstacles is power supply. Processing chromium ore is extremely energy-intensive, requiring a whopping four megawatts per tonne of ore. To support the Ring of Fire, there were plans to build a 300-megawatt smelter near Sudbury. That is enough electricity to power a city of roughly 300,000 people.