September 17, 2014 – Republic of Mining

Cliffs Natural Resources looking to exit Ontario’s Ring of Fire – by Rachelle Younglai (Globe and Mail – September 17,2014)

September 17, 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.

A major player in Ontario’s Ring of Fire is considering selling a key property in the mineral belt, adding more uncertainty to a stalled project that was supposed to help boost the province’s northern economy.

Cliffs Natural Resources Inc. this week signalled it could sell its huge chromite deposit in the Ring of Fire – a 5,000-square-kilometre crescent of chromite, nickel, copper, zinc and gold thought to be worth as much as $50-billion during the commodity boom.

Earlier this week, Cliffs sent the First Nations in the area a letter saying it was exploring alternatives. “We should expect there will be a change, with a sale of the project one of the potential outcomes,” Bill Boor, Cliffs’ executive vice-president of corporate development, said in a letter that was viewed by The Globe and Mail.

A Cliffs spokeswoman confirmed the letter had been sent.

Cliffs suspended the project late last year after numerous delays and difficult discussions with the province and the First Nations communities near the vast deposit about 500 km north of Thunder Bay.

The province has touted the Ring of Fire as the economic engine for Northern Ontario. But its future appears bleak.

Nunavik’s young mine workers pave way for future generations – by Sarah Rogers (Nunatsiaq News – September 17, 2014)

September 17, 2014

http://www.nunatsiaqonline.ca/

“Sometimes it’s hard, but I keep at it because I’m always learning something new”

KUUJJUAQ — Siasi Kanarjuak never imagined working at a mine. Growing up in Kangiqsujuaq on Nunavik’s Hudson Strait coast, she was aware of the nickel mine operating only 60 kilometres to the south. She knew people from her community who commuted there for work.

But in her mid-20s, something clicked. Looking at her job options across Nunavik, Kanarjuak realized that work at a mine could offer benefits that other jobs couldn’t.

“So I went for an interview at Raglan (Glencore’s nickel operation in Nunavik) and I found out they cook for us,” Kanarkjuak told a meeting of Kativik Regional Government councillors last week at their meeting in Kuujjuaq.

“Then I would be home for two weeks — not just a weekend — and that was very appealing to me,” she said. “It gave me time to travel. If you look at it, it’s like having five months off [a year.]”

Today, Kanarjuak, 29, works to bring new Inuit staff to the Raglan mine site, as Inuit recruitment supervisor under the KRG’s Tamatumani on-the-job training program.

She’s one of roughly 160 Inuit employees who work at Raglan, about 18 per cent of the mine’s total workforce. And her job involves trying to entice more Nunavimmiut to look to the mine for jobs.

COLUMN-China coal restrictions may have little impact on imports – by Clyde Russell (Reuters U.S. – September 17, 2014)

September 17, 2014

http://www.reuters.com/

LAUNCESTON, Australia, Sept 17 (Reuters) – Who to believe? The traders and analysts who say China’s new regulations on coal quality is a body blow to Australian exports, or the companies and their association who say the impact will be insignificant.

In this case, it seems far more likely that the impact will be minimal, but not non-existent, as the new rules will lead to changes in the composition of coal China imports. A far bigger impact may come from the curbs on transporting low-quality domestic coal, which may actually boost imports.

In theory, the Chinese ban from the start of 2015 on coal imports above certain ash and sulphur contents appears to favour Indonesia, the world’s biggest shipper of thermal coal, over Australia, the world’s top exporter of metallurgical coal and number two for thermal coal.

China’s new rules aren’t uniform across the country, but for exporters, the most relevant is the ban on using coal with ash content higher than 16 percent and sulphur of 1 percent for cities in the southern Pearl River Delta, the eastern Yangtze River Delta and three northern cities including Beijing, Tianjin and Hebei.

The southeastern cities are biggest users of imported coal, given their distance from the bulk of China’s own coal output. The fear for Australian exporters is that 80 percent of the 54 million tonnes of thermal coal it exported to China in 2013 exceeded the new ash limit, according to consultants Wood Mackenzie.

OBITUARY: Yves Fortier: A herald of Canada’s golden age of geology – by Eric Harris (Globe and Mail – September 17, 2014)

September 17, 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.

When the astronauts walked on the moon in July, 1969, their main mission was to collect rocks and dust from the Sea of Tranquility. They were test pilots first and narrowly trained field geologists second.

When Yves Oscar Fortier explored Canada’s remote northern reaches in the 1940s and 1950s, he was also breaking new ground in a hostile environment. But he was a geologist through and through.

Dr. Fortier, who died peacefully in Ottawa on Aug. 19, two days after his 100th birthday, conducted milestone work in the Arctic for the Geological Survey of Canada (GSC) that was, in many ways, like a months-long moon mission.

His most ambitious project, Operation Franklin, in 1955, mustered 28 scientists to systematically study and map the cold, barren sedimentary rock of a polar region larger than Britain.

This included the Queen Elizabeth Islands and many of the other islands in the triangle at the northern end of the country. (The name Operation Franklin was a nod to the ill-fated 1845 expedition led by Sir John Franklin to search for a Northwest Passage through the Canadian Arctic. One of the long-lost ships from that expedition was recently discovered.)

[Canada] Mines ministers talk transparency in Ontario (Northern Miner – September 17, 2014)

September 17, 2014

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

Sudbury played host to this year’s Energy and Mines Ministers’ Conference in late August. The annual gathering of federal and provincial mining and energy ministers is meant to foster discussion and collaboration to advance development across the country.

In a statement released after the meeting, the attendees affirmed their commitment to the following principles:

• The responsible development of Canada’s energy and mines sectors is critical to our economic competitiveness, job creation and long-term prosperity

• Provincial and territorial governments will work with the federal government in support of Canada’s commitment to establish new mandatory reporting standards for Canadian extractive companies, with a view to enhancing transparency of payments made to governments

• The continued advancement of energy infrastructure (e.g., oil, gas, electricity, etc.) projects is fundamental to gain access to new markets and generate economic growth and revenue for critical social programs

• Progress is being made by all levels of government in implementing regulatory reform in a way that ensures the environment is protected

New HudBay mines expected to create hundreds of jobs (Winnipeg Free Press – September 16, 2014)

September 17, 2014

http://www.winnipegfreepress.com/

The opening of two new mines by Hudbay Minerals in northern Manitoba is expected to create more than 370 permanent jobs, the province says. Tuesday marked the official opening of both the Lalor and Reed mines.

Hudbay’s Lalor mine, located 13 kilometres west of Snow Lake, contains gold, zinc, copper and silver. Mineral Resources Minister Dave Chomiak said it is quickly evolving into one of the most significant base-metal discoveries in a generation in Manitoba. Total mine construction budget is $441 million.

The Reed copper mine, located in Grass River Provincial Park, 45 kilometres west-southwest of Snow Lake, is a joint venture of Hudbay and VMS Ventures Inc. Copper reserves associated with the project have an estimated value of $800 million, Chomiak said.

In 2013, capital expenditures on mining and petroleum development in Manitoba totalled an estimated $1.4 billion and the industries accounted for approximately seven per cent of provincial GDP and 8.7 per cent of total exports.

Chomiak credited the effectiveness of Manitoba’s mineral regulatory process for getting the mines on stream quickly. The process from discovery to production took less than seven years.

NEWS RELEASE: GLOBAL DIAMOND DEMAND REACHES RECORD LEVELS – 17 SEPTEMBER 2014 – HONG KONG

November 3, 2015September 17, 2014

Report highlights need for industry investment to sustain future success

The Diamond Insight Report 2014 is available for download at: www.debeersgroup.com/insightreport

Global demand for diamond jewellery reached a record high of US$79 billion in 2013 according to the inaugural Diamond Insight Report, published today by The De Beers Group of Companies.

Demand is expected to continue to grow over the long-term, driven by the ongoing economic recovery in the US (the world’s largest diamond jewellery market) and the growth of the middle classes in developing markets such as China and India. Sales of polished diamonds in the US increased seven per cent in 2013, while both India and China have seen their domestic diamond jewellery markets grow by a compound annual growth rate of 12 per cent in local currency terms between 2008 and 2013.

The report cautions that while diamonds retain their special allure with consumers around the world, future demand levels cannot be taken for granted. The overall category is facing increasingly strong and sophisticated competition from other luxury categories, with diamonds’ share of advertising voice in the US market having reduced within its competitive set.

Global rough diamond production in 2013 increased by seven per cent in carat terms over 2012 levels to a total of around 145 million carats. However, this remains well below the 2005 peak of around 175 million carats. The report further highlights that a forecast reduction in supply from existing sources will likely not be matched by new production coming on-stream in the years ahead and diamond supply is expected to plateau in the second half of the decade before declining from 2020 onwards.

UPDATE 2-Workers to strike at Chile’s Escondida copper mine next week – union (Reuters U.K. – September 16, 2014)

September 17, 2014September 17, 2014

http://uk.reuters.com/

(Reuters) – The union at the world’s largest copper mine, Chile’s Escondida, has called a strike for Sept. 22 and 24, aiming to paralyze activity to win improved working conditions, the union said on Monday.

In a surprise announcement on Monday evening, the Sindicato No. 1 union said it would call on its 2,800 members to stage two 24-hour strikes at the mine, which is controlled by global miner BHP Billiton Plc .

The union, which represents the vast majority of workers at the mine, said the stoppage would affect mining and port operations. Escondida, in northern Chile’s copper belt, produced 1.19 million tonnes of copper last year, about 20 percent of the output from Chile, the world’s top copper producer.

The union carried out a similar 24-hour stoppage over pay and conditions last year, without causing any long-term impact on copper production. However, it stunned the copper market in 2011 by staging a two-week strike that sent the mine’s output tumbling.

Escondida “systematically infringed on labor norms,” the union said in a statement on Monday, citing overtime, holidays, hygiene and safety issues. It said on its blog that it held a series of meetings with company representatives on Thursday.

U.S. Steel Canada files for creditor protection – by Greg Keenan (Globe and Mail – September 17, 2014)

September 17, 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.

Toronto — United States Steel Corp. could sell all or part of the assets of U.S. Steel Canada Inc., as it restructures its Canadian unit, which was granted protection from creditors Tuesday under the Companies’ Creditors Arrangement Act.

U.S. Steel Canada, (USSC) consists of the operations of the former Stelco Inc., that U.S. Steel purchased in 2007. The filing culminates almost seven years of turmoil at what was once Canada’s largest steel maker and one of the country’s blue-chip manufacturers. Since the takeover of Stelco, U.S. Steel has locked out employees at operations in Hamilton, Ont., and Nanticoke, Ont., and engaged in a battle with the federal government companies–later settled–over whether the steel giant was breaking promises it made to Ottawa when it bought Stelco.

“The stay of proceedings and related relief sought in this application will provide USSC with the necessary ‘breathing room’ to allow it to carry out a restructuring, including continuing discussions with its key stakeholders,” U.S. Steel Canada said in a court filing, “and to explore restructuring solutions including, potentially, a consensual restructuring of certain material obligations, a sales process to solicit interest in purchasing all or part of USSC’s business, and/or other restructuring processes.”

The company filed for protection after racking up losses before interest, taxes, depreciation and amortization of $1.5-billion between 2008 and 2013, it said in the filing. That period included the recession of 2008-2009, when steel demand shrank dramatically in North America as auto makers slashed production and construction slowed to a trickle.

Mining giants may hoard cash as iron ore prices sag – by Sonali Paul (Reuters U.S. – September 16, 2014)

September 17, 2014

http://www.reuters.com/

MELBOURNE, Sept 17 (Reuters) – Sagging iron ore prices raise the prospect the world’s biggest miners will shelve plans to return excess cash to shareholders in February, despite promises to investors who had hoped to reap the benefits of two years of austerity.

Stung by slower growth in China, global miners have reined in expansion plans and brought in new management to sell assets and drive their mines harder, raising hopes that BHP Billiton alone could hand back up to $8 billion to investors.

In the August reporting season, Glencore kicked off the expected party with a $1 billion share buyback, world No. 2 iron ore miner Rio Tinto flagged it would be in a strong position to return capital in February, and BHP said a move was “close”.

But iron ore prices have collapsed to five-year lows since then, thanks to the major miners flooding the market with new supply and high-cost miners in China continuing to produce, defying expectations the market would bottom around $90 a tonne.

If prices remain below $90 for the rest of the year, BHP and Rio, both looking to keep their single ‘A’ credit ratings, would be hard-pressed to return capital to shareholders, beyond raising their dividends, debt and equity analysts said.

“At the moment, there’s a lot of cash flow at risk relative to history because of commodity price volatility, not just in iron ore, any spot price exposure. You can’t pre-emptively give back cash in this environment,” said Paul Phillips, a partner at fund manager Perennial Growth Management.

Hard-luck aboriginal community to get unusual Royal visit — the first since its treaty was signed in 1929 – by Adrian Humphreys (National Post – September 17, 2014)

September 17, 2014

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

Hunters in 14 boats pushed off Tuesday from the isolated northern reserve of Kitchenuhmaykoosib Inninuwug First Nation, fanning out across Big Trout Lake and down its myriad tributaries, looking to bag moose, caribou, geese — anything delicious enough to serve to the Royal Family.

Her Royal Highness The Countess of Wessex, wife of Prince Edward, who is the youngest son of the Queen and Prince Philip, is making a highly unusual, two-day visit this week to the remote, fly-in only aboriginal community in northern Ontario. It’s a reserve struggling with poor housing, unemployment, drug addiction and inadequate education facilities.

Joining her will be a high-powered entourage of women: Ontario Premier Kathleen Wynne; Lieutenant Governor-designate Elizabeth Dowdeswell; Ruth Ann Onley, wife of David Onley, the lieutenant governor; Vicki Heyman, wife of the U.S. ambassador to Canada; and others.

“We are just trying to grasp it now. The last time anyone came here from the Crown was in 1929 when we signed our treaty,” said Chief Donny Morris of the Kitchenuhmaykoosib Inninuwug, known as KI.

“To have someone from the Royal Family, representing that, reliving that, I think that’s what we’re excited about — somebody actually coming here 85 years after we signed the treaty with the Crown.” It will be an unusual few days for the VIPs.