September 22, 2014 – Republic of Mining

AUDIO: Low metal prices put chill on northern Ontario mineral exploration (CBC News Sudbury – September 22, 2014)

September 22, 2014

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

Northern Ontario’s mineral exploration industry is experiencing trying times. Exploration spending is down $400 million from 2011.

Brian Polk, who has been working in the mining and exploration industry in Timmins for the past 30 years, recently had to take up a day job to support his family. Recent changes to Ontario’s Mining Act have increased the cost and time it takes to do exploration work, he noted.

“It’s hard to get anything done. So, I think a lot of these companies, which are now global in philosophy, are simply just going to places that aren’t as expensive, which could be as close as Manitoba or Quebec.” Polk added the downswing in the exploration industry is hurting the economy in northeastern Ontario.

“A lot of the old-timers — I guess I’m one of them — say now that this is the worst they’ve ever seen it and I believe it.” Sudbury’s Scott McLean said he’s never seen it this bad.

“[The year] 2013 was probably the worst year that I’ve seen in my career and I’ve been through a number of cycles,” the 30-year exploration worker said.

Big iron miners too bullish on steel growth, says Chinese expert – by Matt Chambers and Barry FitzGerald (The Australian – September 22, 2014)

September 22, 2014

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

BHP Billiton and Rio Tinto are over-estimating long-term Chinese steel production growth and iron ore prices are unlikely to rise from current depressed levels, according to a senior representative of China’s steel industry.

Li Xinchuang, deputy secretary-general of the China Iron and Steel Association that represents China’s biggest state-owned steel mills, said Chinese steel production, now at about 800 million tones per year, could not grow beyond 900 million tonnes.

“That will be the peak level, we understand it cannot go over 900 million tonnes — we think roughly 800 million to 870 million,” Mr Li said on the sidelines of the International Mining and Resources Conference in Melbourne.

BHP and Rio, who are increasing iron ore production and putting pressure on prices, are both forecasting Chinese steel production will peak at 1 billion tonnes per year or more. “It cannot, trust me, I have been in the business 30 years,” he said.

Asked whether BHP and Rio misunderstood China, Mr Li said: “Maybe they keep that story for investors, I don’t know.” Mr Li, who is also president of the China Metallurgical Industry Planning and Research Institute, said the figure was based on previous steel use rates when industrialised nations like the US and Japan peaked in their steel use.

Mount Polley disaster undermines public trust – by Justine Hunter (Globe and Mail – September 21, 2014)

September 22, 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.

VICTORIA — When Enbridge Inc. sought approval to build the Northern Gateway oil pipeline, Premier Christy Clark said she would oppose the project so long as the environmental safety regime on land and on the water was in doubt. In its formal rejection letter, her government stated: “‘Trust me’ is not good enough in this case.”

The same could be said in the case of the Mount Polley mine. And the Clark government should be worried that this lack of faith could spill across the resource sector.

It is still not clear why the mine’s tailings dam burst last month. Environment Minister Mary Polak says there is no evidence that her government’s cutbacks to enforcement and inspections were to blame.

The breach in the dam flushed 24 million cubic metres of water and mine tailings into Quesnel Lake. Mining industry and government officials alike tugged their forelocks and promised to review dam design and maintenance. If the public focuses only on the question of dam safety, they will be getting off lightly.

Experts have warned, time and again, that provincial budget cuts to environmental regulation could result in a catastrophe. Here are just two examples:

Merkel’s Taste for Coal to Upset $130 Billion Green Drive – by Julia Mengewein (Bloomberg News – September 22, 2014)

September 22, 2014

http://www.bloomberg.com/

When Germany kicked off its journey toward a system harnessing energy from wind and sun back in 2000, the goal was to protect the environment and build out climate-friendly power generation.

More than a decade later, Europe’s biggest economy is on course to miss its 2020 climate targets and greenhouse-gas emissions from power plants are virtually unchanged. Germany used coal, the dirtiest fuel, to generate 45 percent of its power last year, its highest level since 2007, as Chancellor Angela Merkel is phasing out nuclear in the wake of the Fukushima atomic accident in Japan three years ago.

The transition, dubbed the Energiewende, has so far added more than 100 billion euros ($134 billion) to the power bills of households, shop owners and small factories as renewable energy met a record 25 percent of demand last year. RWE AG (RWE), the nation’s biggest power producer, last year reported its first loss since 1949 as utility margins are getting squeezed because laws give green power priority to the grids.

“Despite the massive expansion of renewable energies, achieving key targets for the energy transition and climate protection by 2020 is no longer realistic,” said Thomas Vahlenkamp, a director at McKinsey & Co. in Dusseldorf, Germany, and an adviser to the industry for 21 years. “The government needs to improve the Energiewende so that the current disappointment doesn’t lead to permanent failure.”

Mount Polley’s Sister Mine: We Must Do This One Right – by Wade Davis (The Tyee.ca – September 22, 2014)

September 22, 2014

http://thetyee.ca/

Red Chris mine is expected to yield a vast fortune. But how to insure against another catastrophe?

The highest levels of corporate integrity and responsibility should be the standard for any new mine in Canada, and especially for one with as much potential as Imperial Metals’ Red Chris project, situated at the heart of the Sacred Headwaters in remote northwestern British Columbia. Imperial Metals has acknowledged that all exploration, regulation and construction costs will be reclaimed within two years of the mine’s anticipated three decades of active production.

If true this immense and certain profitability ought to allow both the company and the government to push the limits of excellence on every front, assuring the public at every step in the process that costs and/or expediency will never deflect them from their goal of building an exemplary mine. It is in the interests of all of the mining industry and both federal and provincial governments that such high standards be set for Red Chris. Civic and corporate responsibility aside, self-interest alone would suggest that Imperial ought to build a great mine.

Consider the optics of Imperial’s immediate dilemma. Todagin Mountain, site of the Red Chris mine, is home to the largest concentration of stone sheep in the world, a resident population that attracts remarkable numbers of predators. A wildlife sanctuary in the sky, the massif looks west to Edziza, sacred mountain of the Tahltan; north to the Grand Canyon of the Stikine, internationally known as the K2 of white water challenges; east to the Sacred Headwaters, birthplace of the Stikine, Skeena and Nass Rivers; and beyond to the Spatsizi, widely recognized as the Serengeti of Canada.

Axiom eyes legal win over Japanese giant Sumitomo – by Sarah-Jane Tasker (The Australian – September 23, 2014)

September 22, 2014

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

AUSTRALIAN-listed minnow Axiom Mining is confident of winning its “David versus Goliath” battle with Japanese giant Sumitomo Metal Mining to develop one of the world’s largest nickel laterite deposits.

Axiom chief Ryan Mount is undaunted by his battle opponent, a metals major and Japan’s No 2 copper producer, and is hopeful that when the judge delivers his decision this week on the project, in the Solomon Islands, Axiom will win.

In what has been the longest-running and most expensive case on the Solomon Islands, Sumitomo has fought to be recognised as the developer of the nickel asset, after it was taken off the Japanese giant and given to Axiom by the traditional owners of the land.

Analysts have estimated that Axiom has spent more than $10 million on its court action. They have also outlined that Sumitomo spending millions to challenge Axiom’s ownership of the Isabel project was a clear indication that the asset was of great significance to a major company.

“It was worth pursuing. It will be of significant value to our shareholders. We feel confident as to our rights on this matter,” Mr Mount said. “We didn’t initially believe it would take this long.”

NEWS RELEASE: KWG Makes International Patent Claim; Steel and Chrome Giants Interested in Offtake and Marketing Alliance, Engineering and Construction

September 22, 2014

September 22, 2014 10:30 ET

TORONTO, ONTARIO–(Marketwired – Sept. 22, 2014) – KWG Resources Inc. (TSX VENTURE:KWG)(FRANKFURT:KW6) has filed an international patent application under the Patent Cooperation Treaty. This will provide KWG with the right to file patent applications in over 140 countries around the world in order to secure its rights to its new method of refining chromite ore into ferrochrome by means of natural gas. The disclosed subject matter of this PCT application is supported by results of ongoing metallurgical tests being conducted on behalf of KWG by XPS Consulting and Testwork Services.

KWG has received expressions of interest in creating two strategic alliances:

A global steel company has proposed to provide project engineering and construction expertise and to market intermediate products for primary stainless steel casting. In this regard, KWG is studying the opportunity to build a facility to produce custom-made stainless steel billets for global export to stainless steel makers for remelting and dilution with iron.

A large ferrochrome producer has proposed a strategic marketing alliance for the global charge chrome market.

The parties are mutually exploring terms for offtake agreements for such products that could support future project financing facilities.

Philanthropies, including Rockefellers, and investors pledge $50 billion fossil fuel divestment (Reuters India – September 22, 2014)

September 22, 2014

http://in.reuters.com/

WASHINGTON – (Reuters) – The Rockefellers, who made their vast fortune on oil, and other philanthropies and high-wealth individuals on Monday will announce pledges to divest a total of $50 billion from fossil fuel investments.

The Global Divest-Invest coalition will announce new pledges and members one day before 120 heads of state address the United Nations on how their countries will contribute to a global effort to halt a dangerous rise in temperatures.

Since the divestment movement launched three years ago, some 650 individuals and 180 institutions, including 50 new foundations, which hold over $50 billion in total assets, pledged to divest from fossil fuels over five years using a variety of approaches.

One of the signatories is the Rockefeller Brothers Fund. Stephen Heintz, an heir of Standard Oil tycoon John D. Rockefeller, said the move to divest away from fossil fuels would be in line with his wishes.

“We are quite convinced that if he were alive today, as an astute businessman looking out to the future, he would be moving out of fossil fuels and investing in clean, renewable energy,” Heintz said in a statement.

Since January 2014, commitments by campuses, churches, cities, states, hospitals, pension funds, and others in the United States and abroad doubled, from 74 to 180, according to philanthropic giving consultancy Arabella Advisors.

U.S. Steel filing throws fate of Hamilton, Ontario assets into question – by Euan Rocha and Allison Martell (Reuters Canada – September 21, 2014)

September 22, 2014

http://ca.reuters.com/

TORONTO (Reuters) – U.S. Steel Corp’s move to seek creditor protection for its Canadian operations throws into question the fate of the more than a century old steel operations in Hamilton, Ontario.

U.S. Steel acquired the Canadian operations – including the Hamilton assets and the newer Lake Erie facilities in Nanticoke, Ontario – through its acquisition of Stelco Inc in 2007. The Canadian operation was soon bleeding red ink, however, as demand for steel declined following the financial crisis.

Much of the Canadian operation’s value is seen residing in Lake Erie, with years of job cutbacks, environmental liabilities and the weight of a massive retiree base weighing on the worth of the Hamilton assets.

People familiar with the situation told Reuters that U.S. Steel had sought to restructure its Canadian operation this summer, before it sought creditor protection in Canada earlier this week. One plan included the parent company acquiring the Lake Erie facilities but divesting itself the Hamilton assets.

After those plans failed to pan out, some industry watchers think U.S. Steel’s move to seek creditor protection may just be the longer road toward the same end game.

Cliffs says it’s weighing its options in the ‘Ring’ – Star Staff (Sudbury Star – September 20, 2014)

September 22, 2014

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

Reports are suggesting that Cliffs Natural Resources is looking at selling its Ring of Fire chromite properties.  If so, the move would be full circle for Cleveland-based Cliffs, which at one time planned to have an open pit mine and ferrochrome refinery in Capreol, creating as many as 600 jobs in the Sudbury area, by the middle of this decade.

In the fall, however, Cliffs halted all exploration and technical work on its Big Daddy chromite deposit and suspended spending on the project. In the summer, it sold off its remote exploration camp to Noront Resources.  The Globe and Mail is now reporting that Cliffs sent a letter to First Nation chiefs in the area that it was considering selling its chromite properties in the James Bay region.

The letter, obtained by the newspaper, included a statement from Cliffs vice-president of corporate development Bill Boor, that a sale of the project was among those options.

The Globe is also reporting that KWG is looking at buying Cliffs holdings in the Ring of Fire area.

Cliffs spokesperson Patricia Persico, reached on Friday, said a potential sale of Ring of Fire properties is only one of several options the company is considering. “Cliff’s is exploring alternatives with the chromite project,” Persico said. “Potential sale is an option, but it’s a range of strategic options we’re looking at.

AUDIO: NDP MP Claude Gravelle blasts Tories over Ring of Fire inaction (CBC Radio Sudbury – September 19, 2014)

September 22, 2014

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

Feds claim Ontario has not identified Ring of Fire mining project as a priority

Concerns about the development of the Ring of Fire are being raised in Ottawa. This week, KWG Resources announced it’s talking to Cliffs Natural Resources about the company selling its assets.

So far, Cliffs is only saying it is exploring strategic alternatives. During question period, Nickel Belt NDP MP Claude Gravelle questioned the Conservative party about the mining developme

“Northerners are fed up,” he said. “Instead of a real plan from the Liberals of Ontario, there is real trouble. Start-up is delayed, the smelter is on hold. Thousands of potential jobs are in jeopardy, but we see no leadership from the Conservatives.”

He asked what the Conservatives will now do to get the Ring of Fire file moving. “Unlocking the vast potential of the Ring of Fire will require a nation-to-nation approach and real engagement from the federal government,” Gravelle continued.

“Northern communities should not be forced to pay for the price of government’s inaction. We’re talking about good value-added jobs and economic development that would transform our region.”

How much does it really cost to mine an ounce of gold? – by David Milstead (Globe and Mail – September 20, 2014)

September 22, 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 scan of major gold producers’ earnings suggests the cost of mining gold has risen dramatically over the past few years. Part of that is a true increase, owing to inflation and the expense of digging out tough-to-reach grades. But most of it is due to a change in the cost metric that gold miners emphasize in their reports to the investing community.

For years, miners liked to talk about “cash costs,” the mine-level expenses of pulling an ounce of gold from the ground. For the most part, cash costs ran from $500 (U.S.) to $800 per ounce, depending on a miner’s properties.

There was a problem, however: Even as the price of gold skyrocketed to nearly $1,900 per ounce, miners weren’t reporting wild windfall profits on their bottom lines. That’s because cash costs left out a host of expenses, from the costs of running the company to annual spending on equipment.

The new “all-inclusive” measures attempt to solve that. The most frequently used metric, “all-in sustaining costs,” puts the cost of extracting an ounce of gold at more than $1,000 industrywide – and explains why miners are having a rough go at profitability when gold sells for a couple hundred dollars more than that.

“The old [cash cost] led to a lot of misunderstanding about the ability of cash flow that would be there for equity holders,” says Jorge Beristain, an analyst for Deutsche Bank.

Minnesota’s Soudan mine now produces awe instead of ore – by Ann Wessel (St. Cloud Times – September 20, 2014)

September 22, 2014

http://www.sctimes.com/

The mine that once produced the most pure iron ore in the U.S. closed more than 50 years ago. Soudan Underground Mine State Park interpreter James Juip is among those who make a living there today.

SOUDAN – James Juip makes his living underground. The 2006 Cathedral High School grad wears a hard hat, headlamp, bib overalls and flannel shirt when he descends the half-mile into Soudan Underground Mine. He dresses the part. He relays the history. He’s even had late-night home visits from former mine workers who want to tell him their stories.

But his experience is far different from that of the miners who chipped a living out of the rich veins of iron ore under the surface. He walks a well-lit path, for one thing.

Back in the day when candles provided the only illumination underground and miners had to pay for those candles, they conserved their resources and walked the three-quarters of a mile in the dark. About 20 languages were spoken. Miners sang on the way to work to keep track of each other. At peak production in the 1890s, Soudan employed 2,000 people below ground and as many above. Soudan produced the most pure iron; before 1950, all steel produced in the U.S. contained some Soudan ore.

“For a long time, you could not make high-grade steel produced in this country without using ore from Soudan,” Juip said after a day of tours.

Cliffs may be looking sell Ring of Fire claim – Interviews by Jason Turnbull (Points North – September 18, 2014)

September 22, 2014

http://www.cbc.ca/news/canada/sudbury A news report claimed Cliffs Natural Resources wants to sell off its assets in the mineral deposit. Interviews with KWG Resources’ Moe Lavigne and Ontario NDP MPP’s Michael Mantha. Click here for an audio interview: http://www.cbc.ca/player/Radio/Local+Shows/Ontario/Up+North/ID/2522905241/

AUDIO: International miners tour ‘deep’ Sudbury mines – by Jenifer Norwell (CBC News Sudbury – September 19, 2014)

September 22, 2014September 22, 2014

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

Delegates from mining companies around the world are touring mines in Sudbury Friday. They are in town as part of Deep Mining 2014, an international conference to talk about the future of underground mining—which continues to progress at deeper levels, previously considered “un-minable”.

Marty Hudyma is an assistant professor at Laurentian University and is one of the main organizers of the week’s events. “Sudbury and Ontario has some of the deepest mines in the world. Outside of South Africa, we are the deepest mines in the world,” he said.

“And when I talk about deep, I’m talking about two kilometres and three kilometres and deeper.”

CBC Sudbury’s Jenifer Norwell met up with him to talk more about what lies ahead for the industry in the northeast. There was also a focus on what comes next for the industry globally.

The conference brought together mining personnel, consultants and researchers from around the world to discuss and document their experiences in deep mining.

Ray Durrheim from the University of the Witwatersrand in South Africa was a guest speaker. He talked about improving safety in mines in his country with CBC Sudbury’s Jenifer Norwell.