KWG, Noront react to Cliffs shakeup – by Ian Ross (Northern Ontario Business – October 3, 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. Ian Ross is the editor of Northern Ontario Business ianross@nob.on.ca.

Frank Smeenk was direct in his appraisal of Cliffs Natural Resources ending up on the wrong end of an acrimonious proxy fight with a New York hedge fund. “I thought they deserved everything that befell them,” said the president-CEO of KWG Resources. “They haven’t been easy to get along with at all.”

There’s no love lost between the Toronto junior and the Ohio miner, but a change in leadership and corporate philosophy in Cleveland may signal the thawing of a frosty relationship.

The head of KWG wasn’t at Cliffs’ July 29 shareholders meeting to gloat over the demise of the old guard at the 167-year-old mining giant, but it was a get-acquainted opportunity to meet the new blood as Casablanca Capital seized control of the board of directors.

Casablanca has vowed to make good on its promise to carve off Cliffs’ costly international projects, including its mothballed Ring of Fire chromite properties, like the Black Thor deposit, from its core U.S. mines.

“I’m trying to persuade them that KWG can be the (development) vehicle,” said Smeenk, “that it might be opportune for (us) to be their partner of choice.

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Sourcing practices changing as US law on mineral imports from Africa’s Great Lakes region takes hold – by Anine Vermeulen (MiningWeekly.com – October 3, 2014)

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

For decades, the trade in tin, tantalum, tungsten and gold (also known as 3TG), along with various other minerals and resources, has played a central role in funding and fuelling some of the world’s most brutal conflicts.

According to international nongovern- mental organisation Global Witness, revenues from the extraction and sale of these natural resources, also known as ‘conflict minerals’, not only provide armed groups with the means to operate but also provide State security forces and corrupt officials with off-budget funding.

Section 1502 of the Dodd Frank Act – the US’s conflict minerals law – is the first piece of legislation that aims to break the links between the lucrative minerals trade in certain African regions and the abusive armed groups that prey on and profit from these regions’ minerals trade.

The Dodd Frank legislation was passed in July 2010 and the final rules for Section 1502 were released in 2012.

“The Dodd Frank Wall Street Reform and Consumer Protection Act came into effect in January last year, and Section 1502 on conflict minerals requires compliance from all public companies that are listed with the US Securities and Exchange Commission (SEC),” ENSAfrica mining and environmental law director Lloyd Christie tells Mining Weekly.

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Naomi Klein’s revolutionary dreamland – by Terence Corcoran (National Post – October 3, 2014)

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

Parts of Naomi Klein’s new climate-revolution/kill-capitalism manifesto, This Changes Everything: Capitalism vs. The Climate, make for damn good reading. Especially worthy are chapters and sections that explore the group-grope shenanigans of big corporations and pro-business environmental groups as they spent much of the last decade jumping into bed with one another.

But the good bits are not enough to salvage This Changes Everything, a 560-page call-to-arms in which Ms. Klein proposes to overthrow four centuries of Enlightenment-driven human achievement. Down with Francis Bacon, Adam Smith, the scientific method and pretty much all of the core ideas that created the Western world. Notwithstanding all the media attention she’s been getting on the book for the last few weeks, it’s a campaign that’s doomed to fail for any number of reasons.

But there is enough in Ms. Klein’s latest work to keep readers of all ideological stripes engaged, if not enraged. And that includes the free-marketers she wants to put out of business.

A major Klein target is Richard Branson, the media-darling head of Virgin Group who — after a personal PowerPoint presentation from Al Gore on climate change at the Branson mansion — concluded that “we are looking at Armageddon.” Mr. Branson was so alarmed at this pending end of the world shock that he decided to launch a “new Virgin approach to business.” He called it Gaia Capitalism, and made a high-profile pledge at the 2006 Clinton Global Initiative in Manhattan to spend $3-billion to develop bio-fuels as an alternative to climate-destroying oil and gas. Mr. Branson also launched the Virgin Earth Challenge and the Carbon War Room.

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Gold’s Faces Big Chart Test After This Week’s Weakness – by Debbie Carlson (Kitco News – October 03, 2014)

http://www.kitco.com/

(Kitco News) – Gold prices fell under $1,200 an ounce this week for the first time in 2014, and several market watchers said it’s likely that the yellow metal will seek to take out the 2013 lows, possibly as soon as next week.

Looking at technical price charts, a nearby continuation chart shows the December 2013 low of $1,180, which is just above the June low of $1,179.40. Market watchers said with gold falling as low as $1,190.30 Friday, there’s a good chance bearish traders will try to test the strength of those support levels.

“It’s a matter of when, not if,” said Dave Toth, director of technical research at RJ O’Brien.

December gold futures fell Friday, settling at $1,192.90 an ounce on the Comex division of the New York Mercantile Exchange, down 1.9% on the week. December silver fell Friday, settling at $16.826 an ounce, down 5.7% on the week.

In the Kitco News gold survey, out of 37 participants, 26 responded this week. Of those, seven see higher prices, 16 see lower prices and three see prices trading sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

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NEWS RELEASE: IAMGOLD to sell Niobec for a total consideration of US$530 million – Will focus on profitably growing its core gold business

All monetary amounts are expressed in U.S. dollars, unless otherwise indicated.

TORONTO, Oct. 3, 2014 /CNW/ – IAMGOLD Corporation (“IAMGOLD” or “the Company”) today announced that it has reached an agreement to sell its Niobec mine, one of the world’s three niobium producers, to a group of companies led by Magris Resources Inc. for cash proceeds of $500 million after tax upon closing. The sale of Niobec, which is located in Saint-Honoré-de-Chicoutimi in the Saguenay-Lac-Saint-Jean region, Quebec, is to include the adjacent rare earth element (“REE”) deposit. The total consideration of $530 million for the transaction is comprised of a cash payment of $500 million payable on closing, as well as an additional $30 million when the adjacent REE deposit goes into commercial production. A 2% gross proceeds royalty will be payable on any REE production.

“This sale unlocks the value of Niobec for our shareholders, positions IAMGOLD as a pure gold play and significantly improves our liquidity, which provides us with the opportunity to further improve the grade and cost structure of our portfolio of gold assets,” said the Company’s President and CEO, Steve Letwin . “On behalf of the Board of Directors, I extend my thanks to the entire Niobec team for their outstanding efforts over the years to improve their operating performance and strengthen the attractiveness of this asset. I also commend all our employees who continue to work hard and find innovative ways to improve productivity and reduce costs, getting us closer to our target of being free cash flow positive at our owner-operated gold mines, including capital spending.”

“Niobec has been a steady contributor to our operating cash flow since 2006 when we acquired this asset as part of a larger transaction,” said Carol Banducci , IAMGOLD’s Executive Vice President and CFO. “We are pleased that the group of companies is led by Aaron Regent, who brings a wealth of experience in mining and finance to Niobec.

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The North is the Future of Ontario – Dave Canfield (Netnewsledger.com – September 26, 2014)

http://www.netnewsledger.com/

Northern Ontario is Ontario’s Future

THUNDER BAY – “We are the future of Ontario,” stated Northern Ontario Municipal Association (NOMA) President Dave Canfield. Speaking to the Northwestern Ontario Regional Conference, Friday morning Canfield updated the delegates,

“Getting our communities up and running is critical,” added Canfield, sharing with the delegates that at the recent AMO meetings, that the provincial government is listening. “Premier Wynne was present for the entire hour,” added Canfield, explaining that was the first time that had happened”.

Energy remains a focus for NOMA. Canfield explained that in talks with OPA, most of the time the elected officials, and communities are right. Getting the needed power in the region, not just for mining, but for forestry is important.

Infrastructure funding is a success for the north. There was $100 million announced in the budget. Canfield explained that it might take a bit of time to get it going, but the groundwork has been done.

Forging a New Path – NAN Grand Chief Yesno

Nishnawbe-Aski Nation Grand Chief Harvey Yesno addressed the delegates. One of the goals is building permanant infrastructure into our communities. The Grand Chief spoke on how high costs for transportation and food is impacting the region.

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Michael Gravelle on negotiations between mining companies and First Nations – interview by Markus Schwabe (CBC News Sudbury – October 2, 2014)

http://www.cbc.ca/morningnorth/ We contacted the Minister of Northern Development and Mines, Michael Gravelle, to talk about the difficulties in negotiations between mining companies and First Nation communities. Click here for the interview: http://www.cbc.ca/morningnorth/past-episodes/2014/10/02/michael-gravelle-on-negotiations-between-mining-companies-and-first-nations/

My Take on Snow Lake II: Ribbon cut at Reed – by Marc Jackson (Thompson Citizen – October 3, 2014)

The Thompson Citizenwhich was established in June 1960, covers the City of Thompson and Nickel Belt Region of Northern Manitoba. The city has a population of about 13,500 residents while the regional population is more than 40,000.  editor@thompsoncitizen.net

Prior to Sept. 16, Hudbay Minerals had opened a total of 26 mines in the province of Manitoba; staying true to that prolific nature, the company opened two more on this historic afternoon. A mere two hours after they cut the ribbon on the massive Lalor Project, Hudbay and VMS officials had the scissors out and were doing it all over again 80 kilometres down the road at the Reed Mine!

As the snow swirled outside, close to 100 people gathered in the welcome warmth of Reed’s surface shop to break bread, and toast the province’s newest mine.

As he did previously in the day, Hudbay Manitoba business unit vice-president Rob Winton very capably acted as emcee and after smudging the gathering place with sage and sweetgrass, Opaskwayak Cree Nation elder Nathan McGillivary once again delivered wise words and a welcome prayer.

To bring any mine to production involves a long list of those who were key through a variety of stages. Thanking them is no small feat, but acknowledging their contributions is certainly one of the ways this is accomplished. Mr. Winton did this in thanking Steve West (now retired) head of the environment department, as well as environmental lawyer Sheryl Rosenberg for their tireless work on the environmental licensing and in putting the Reed Mine on the map. He praised them for the high standards that had been set and met at the site. Steve Polegato was also commended for bringing the mine in on time and budget.

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NEWS RELEASE: VALE’S EAST MINES RESCUE TEAM IMPRESSES AT INTERNATIONAL MINE RESCUE COMPETITION IN POLAND

Team photo at Opening Ceremonies in Poland: (Vale East Mines 1) L to R back row – Mike Johnson, Dennis Gosselin, Lorne Plouffe, Bruce Hall, Tim Maloney, Aime Gagne. (Vale East Mines 2) L to R front row – Perry Simon, Will Davies, Jean Yves Doiron, JustinWhitmore, Jon Hamilton.
Team photo at Opening Ceremonies in Poland: (Vale East Mines 1) L to R back row – Mike Johnson, Dennis Gosselin, Lorne Plouffe, Bruce Hall, Tim Maloney, Aime Gagne. (Vale East Mines 2) L to R front row – Perry Simon, Will Davies, Jean Yves Doiron, JustinWhitmore, Jon Hamilton.

For Immediate Release

SUDBURY, September 30, 2014 – Vale’s East Mines Rescue Team finished with impressive results at the 9th International Mine Rescue Competition in Katowice, Poland. Of 21 competing teams, representing more than 13 countries, the Vale team finished in the top five for the First Aid competition. The top four teams were from Poland, making Vale the best foreign team in this category.

The team finished 12th overall in the Mine Rescue Simulation Exercise, and was the top Canadian team in this competition. The simulation exercise was a coal mine scenario, something very new to a team that typically trains for underground hard rock emergencies.

“We could not be more proud of the team and all of the effort they put into preparing for this competition,” said Kelly Strong, Vice President of Vale’s Ontario & UK Operations.

“Our mine rescue teams have always been among the best in the world, and our team demonstrated that in spades this month in Poland.”

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Diamond crunch: Exploration dries up – by Thomas Biesheuvel (Mineweb.com – October 3, 2014)

http://www.mineweb.com/

“You need deep pockets to find kimberlites,” one expert notes. Meanwhile money, efforts have dried up.

(BLOOMBERG) – Diamonds are so hard to find that explorers have pretty much given up trying.

More than $7 billion has been plowed into the hunt for the gem since 2000, according to top supplier De Beers, and the results have been meager, with no major finds. That’s led producers including BHP Billiton Ltd. to pack up their maps and drills and head for home. The amount spent looking for diamond- rich kimberlite formations underground has dropped by half since 2007, when exploration investment topped $1 billion.

The dearth of new projects is putting pressure on an industry where supplies of accessible diamonds near the surface are depleted and the cost of going deeper is rising. De Beers opened the Orapa mine in Botswana in 1971 and its Jwaneng project, the world’s largest diamond mine by production value, in 1982. Botswana, the top producer, saw output drop to 22.7 million carats last year from 33.6 million carats in 2007.

“The odds of finding an economic kimberlite are extremely against you,” said Johan Dippenaar, chief executive officer of Petra Diamonds Ltd., which spent just $2.1 million looking for new mines last year and has abandoned prospective projects in Angola and Sierra Leone. “Exploration, for the foreseeable future, will remain something that we will be involved in, but it won’t command very much of our cash flows.”

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No rebound in copper till after 2016 – by Rowan Callick (The Australian – October 2, 2014)

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

THE falling copper price — which has held its value much better this year than its metal peers, down just 8 per cent so far — will not bounce back any time soon, due to a series of one-off developments in China, which consumes 40 per cent of the world’s production.

That is the verdict of Michael Komesaroff, a leading Australian expert on China’s mining industry — a former Rio Tinto executive in Asia, who then worked for a major Chinese resource corporation — writing in new analysis for China-based GavekalDragonomics.

Over the past 10 years, he says, China’s consumption of ­refined copper has almost trebled, while consumption in the rest of the world has contracted by 6 per cent.

The metal’s high value to density ratio and the ease with which it can be stored for long periods has resulted in its widespread use as collateral in China, being pledged against relatively low interest hard currency loans.

This practice was driven by the People’s Bank of China raising in 2010 the reserve requirement for the commercial banks, effectively tightening domestic credit.

Mr Komesaroff says: “Speculators, mainly small and medium-sized companies with access to copper, pledged their stocks as collateral against US-denominated letters of credit issued by the domestic banks.

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Mining deals are keeping lawyers humming – by Paul Brent (National Post – October 2, 2014)

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

With global commodity prices in a downward spin, it’s been a tough time to be in the mining game. The economics of big-budget projects have been thrown into question, forcing industry giants to abandon, downsize or sell prized assets.

A multitude of assets on the block and a lack of financial injections from investors have set the stage for a resurgence of acquisition activity for mining this year, dealmakers say.

“There is only one song playing on the jukebox and that is the M&A song,” said Paul Stein, a partner with Cassels Brock & Blackwell LLP in Toronto. “There is little if any financing and unfortunately there are companies that simply will not survive and we have started to see that as well.”

Mr. Stein cited base metals miner Mercator Minerals, which filed for protection from creditors last month, as an example of a casualty of the commodity price crunch.

Size is providing no immunity. Earlier this month diversified mining heavyweight Anglo American PLC said it would entertain takeover offers if the price was right. It is looking to sell assets, just like competitors BHP Billiton PLC and Rio Tinto PLC. Last April rivals Barrick Gold Corp. and Newmont Mining Corp. did the merger dance before a messy and public breakup.

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Rio $5.4 Billion Copper Project Mired as Deadline Missed – by Simon Casey and David Stringer (Bloomberg News – October 3, 2014)

http://www.bloomberg.com/

Rio Tinto Group (RIO) and the Mongolian government broke another deadline set by lenders for the $5.4 billion expansion of their Oyu Tolgoi project, raising concerns over the earnings outlook for Rio’s copper business and the strength of the Mongolian economy.

Commitments from project finance lenders expired Sept. 30, Rio’s unit in Canada, Turquoise Hill Resources Ltd. (TRQ), said in a statement yesterday. Oyu Tolgoi’s shareholders haven’t asked for those commitments to be extended, although “engagement” with lenders continues, it said.

“With iron ore in decline, the market is looking for Rio’s other businesses to fill the gap,” said David Radclyffe, a Sydney-based analyst at CLSA Asia-Pacific Markets. “The market is concerned from the point of view that Rio needs to do the expansion to give its copper business relevance.”

Underground development at Oyu Tolgoi, the largest foreign investment in Mongolia, has been held up for more than 18 months on disputes between London-based Rio and the government over taxes due and cost overruns, among other issues. Copper accounted for 11 percent of Rio’s revenue in the 2013 fiscal year, behind iron ore and aluminum.

An Oyu Tolgoi board meeting was scheduled yesterday, according to Mongolia’s mining ministry. Three Mongolian members of the board didn’t respond to phone calls after the meeting. A call and e-mail to the government’s cabinet secretary Saikhanbileg Chimed went unanswered.

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Four months on, fallout from Chinese scandal drives up nickel stocks – by Melanie Burton (Reuters U.K. – October 3, 2014)

http://uk.reuters.com/

SYDNEY, Oct 3 (Reuters) – A commodity fraud at China’s Qingdao port has hit bank financing of metal deals, sparking a surprise jump in nickel exports and pushing back expectations of a global supply shortage of the metal used mainly in stainless steel.

The Chinese exports have helped global stockpiles hit record highs, confounding expectations of a deficit as soon as next year that drove a spike in nickel prices after Indonesia enforced a ban on ore exports in January.

That was part of Indonesia’s ambition to retain more of its mineral wealth by building a processing industry. Investors bet that Chinese stainless steel mills would run out of feed before Indonesia’s industry reached full swing, putting a rocket under prices.

“The market got quite bullish. The reason they got bullish is still there. But now they are looking at all this metal coming out of financing deals,” said analyst Lachlan Shaw of Commonwealth Bank of Australia in Melbourne.

“It doesn’t change the reasons for the deficit next year -essentially the ferronickel sector in China not being able to access the ore because of Indonesia’s export ban,” he said. China is the world’s biggest consumer of nickel.

Its stainless steel mills relied on Indonesian ore to make nickel pig iron (NPI), a cheaper substitute for refined nickel, and the result of the export ban was a 50 percent jump in nickel prices by May.

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Smacked by Ebola, low prices, West Africa iron mining faces reshape – by Silvia Antonioli and Karen Rebelo (Reuters Africa – September 29, 2014)

http://af.reuters.com/

LONDON/BANGALORE, Sept 29 (Reuters) – Plunging prices and the spread of Ebola are reshaping the iron ore mining sector in West Africa where some companies risk sinking if they cannot find new partners, lenders or owners.

West African iron ore miners already are in a critical situation due to a 40 percent plummet in prices this year which is making most mines unprofitable and projects hard to finance.

Costs are also rising, partly due to measures to fend off the Ebola epidemic that has so far killed about 3,000 people in the region. The virus is also making it difficult to move workers and goods and threatens to disrupt logistics.

Shares of companies such as Sierra Leone-focused African Minerals and London Mining have plummeted by 89 and 91 percent respectively, versus a 4 percent fall of the UK-listed mining sector this year.

“It’s pretty devastating. The perception of West African mining has completely changed. At the moment we don’t see any upside,” said Ed Bowie, director of Altus Capital, a fund focused on medium and small mining companies. Altus has exited its investments in West Africa iron ore in the last two months due to concerns about Ebola and low prices.

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