November 3, 2014 – Republic of Mining

Tycoon [Mick Davis] has eye on Anglo assets – by Danny Fortson (The Australian – November 3, 2014)

November 3, 2014

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

MINING tycoon Mick Davis has entered the fray again, tabling a multi-billion dollar offer for a big chunk of Anglo American’s empire.

The bid, thought to have been made in recent weeks, is the latest attempt by the former boss of mining giant Xstrata to launch his new vehicle, X2 Resources.

Mr Davis, who sold Xstrata last year to Glencore for $US27 billion, has raised $US4.8bn ($5.5bn) from a handful of investors to set up a diversified mining giant.

The Anglo bid marks the second time he has tried to prise away assets from one of the world’s top miners to form the heart of his new venture. BHP Billiton rejected a similar bid and has instead decided to spin off aluminium, coal, nickel and manganese operations into a new $US12bn listed company.

The 56-year-old South African is not the only suitor knocking on Anglo’s door. It is understood that Warburg Pincus, the private equity giant who this year hired Peter Kukielski, Arcelor Mittal’s former mining chief, had also made an approach for some of the giant’s assets.

Mark Cutifani, who took over as Anglo’s chief executive 18 months ago with a mandate to slash costs, sell assets and knock the company into shape after years of underperformance, has already announced plans to sell a big part of its historic platinum mining operation in South Africa and launched an auction for copper mines in Chile.

Australia coal mining marks challenge for U.N. green push – by James Regan (Reuters U.S. – November 3, 2014)

November 3, 2014

http://www.reuters.com/

SYDNEY, Nov 3 (Reuters) – U.N. calls to curb greenhouse gas emissions by ending most electricity generation using coal will face some tough challenges, with coal mining going through a growth spurt in countries such as Australia.

The U.N on Sunday released a report saying governments could keep climate change in check at manageable costs but would have to cut greenhouse gas emissions to zero by 2100 to limit risks of irreversible damage.

Although coal is blamed for contributing to climate change and causing large amounts of harmful pollution, it remains by far the most important fuel for power generation at a global share of around 40 percent.

Australian production of thermal coal is forecast to rise by 8 percent over the next two years to 270 million tonnes, according to government figures, confirming the nation as the world’s second’s biggest-exporter after Indonesia.

By fiscal 2018/19, production will reach 290 million tonnes, says the Australian Bureau of Resource and Energy Economics, the government’s forecaster.

Australian growth is expected to continue as companies including Rio Tinto , BHP Billiton and Glencore earmark capital to dig and acquire new mines.

Quebec premier promotes Plan Nord in China, Iceland – by Jane George (Nunatsiaq Online.ca – November 3, 2014)

November 3, 2014

http://www.nunatsiaqonline.ca/

“An exemplary sustainable development project”

From China to Iceland, Quebec’s premier Philippe Couillard promoted Plan Nord last week, touting the massive development scheme for northern Quebec to potential investors.

In Iceland, Couillard described Plan Nord as a sustainable project of unprecedented scope, a great project for the future, and one that is also “tailor-made” for investors.

After signing scores of economic and cultural deals in China from Oct. 26 to Oct. 31, Couillard wrapped up his round-the-world junket with a Nov. 1 pitch to an international audience of academics, government officials, indigenous representatives and business interests at the Arctic Circle forum in Reykjavik, a rival to the federal government’s Arctic Economic Council, which met in September behind closed doors in Iqaluit.

“Through the Plan Nord, we hope to develop northern Quebec’s vast potential in order to make of it an exemplary sustainable development project,” Couillard said. “It has been designed and will be carried out in a close, ongoing partnership with local communities to ensure that northern development concretely benefits the communities and protects the territory’s environment and distinctive biodiversity.”

Plan Nord will require a “massive investment” of money— but it’s a safe project for investors, Couillard said — because there’s a “clear, predictable framework” for Plan Nord which will be developed with local communities, he said.

Mining sector lacks support for innovation: Industry expert – by Jonathan Migneault (Sudbury Northern Life – November 03, 2014)

November 3, 2014

http://www.northernlife.ca/

Pierre Lassonde to address mining sector challenges at Laurentian Nov. 6

The mining industry lacks the government support needed to innovate, says Pierre Lassonde, chairman of Franco-Nevada Corporation.

Lassonde is scheduled to speak at Laurentian University’s Fraser Auditorium Thursday, Nov. 6, where he plans to address many of the issues Canada’s mining sector faces.

“The Ontario government blew $300 million on MaRS (Innovation) here in Toronto for high technology that has gone nowhere, producing nothing,” Lassonde said in a phone interview with NorthernLife.ca. “Why don’t you invest that money in exploration and find billion-dollar ore bodies that are going to produce a billion dollars worth of taxes?”

Lassonde said there have not been any major technological breakthroughs in the mining sector since the 1980s. While machinery has gotten bigger and more efficient, and exploration techniques have gotten more refined, nothing has changed dramatically, he said.

“We’re reaching the limit of many of the technologies we’ve been using for the past 50 years,” Lassonde said. The advent of reflection seismology in oil exploration increased the rate of new discoveries from one for every 10 drill holes, to seven for every 10 drill holes, Lassonde said, but there has been no such advancement in mining exploration.

[Vale in the Sudbury Basin] SPEECH TO THE GREATER SUDBURY CHAMBER OF COMMERCE – BY KELLY STRONG, VICE PRESIDENT, ONTARIO/UK OPERATIONS (November 3, 2014)

November 3, 2014

CHECK AGAINST DELIVERY

• Thank you Geoff for that kind introduction. It’s a pleasure to be here.

• It’s so nice to see so many friendly and familiar faces here in Copper Cliff this afternoon. I’m not sure if your motivation to come here was to hear me speak or for a great plate of Italian food, but regardless I appreciate you coming here today.

• To all of the sponsors of today’s luncheon, thank you for your support of this event…it’s very much appreciated and we are happy to count you as partners in our business.

• I want to especially recognize Debbi Nicholson, who’s been an exemplary leader of the Greater Sudbury Chamber of Commerce for almost 35 years. Debbi – you lead with dignity, a sharp business sense and a keen awareness of what’s in the best interests of our community. I congratulate you on all the things you’ve accomplished, and thank you for the invitation to give an update on our operations here today.

* * *

• As I think many of you know, I grew up in Espanola and started in this industry way back when as an underground miner. My roots in the mining industry, and in the Sudbury area, run very deep. This is the place I’ve chosen to work and raise my family, and the place I call home. Sudbury is, and I believe always will be, one of the greatest mining communities on the planet.

In Polley’s Wake, Downstream Alaska Fears BC’s Mining Boom – by Christopher Pollon (The Tyee.ca – November 1, 2014)

November 3, 2014

http://thetyee.ca/

Tag along with the fishermen whose livelihood depends on watersheds that cross borders

Roaring at seven knots up the U.S. side of the Stikine River, a grizzly bear of a man named Mark Galla steers our jet boat through a gauntlet of protruding logs, attempting to point out the exact point at which Alaska becomes British Columbia. Against the vastness of the surrounding wilderness, the border is invisible, almost arbitrary. Until recently, most Alaskans couldn’t see it either.

That all changed in August when YouTube video highlights of the Mount Polley mine disaster circulated through panhandle towns like Ketchikan, Petersburg and Wrangell. Media from across the state drew comparisons between Mount Polley and the tailings dams that could one day accompany the half-dozen open pit mines proposed in the wild river watersheds that Alaska and B.C. share — the Unuk, Taku and, more than anywhere else, the Stikine.

The first of these proposed mines will be Red Chris, a copper and gold mine built by Mount Polley-owner Imperial Metals in the B.C. headwaters of the Stikine, scheduled to open later this year. Another is the $5.3 billion Kerr-Suphurets-Mitchell (KSM) project, which could generate two billion tons of waste rock, requiring tailings storage in the Nass River drainage and waste rock dumps in the Unuk watershed.

The grand enabler of these projects is a taxpayer-subsidized power line completed this year, which will bring cheap, rock-grinding electricity to the B.C.-Alaska border region for the first time. With the price tag of about $750 million (BC Hydro’s original estimate was $404 million) comes the electricity required for at least five new northwest mines.

Canada: The Duty To Consult First Nations: A Never-Ending Story? by Benson Buffett PLC Inc. (November 3, 2014)

November 3, 2014

http://www.mondaq.com/

West Moberly First Nations v. British Columbia (Chief Inspector of Mines) 2014 BCSC 924; Grassy Narrows First Nation v. Ontario (Natural Resources), 2014 SCC 48

Natural resource projects involving land that is subject to a historical treaty necessitates a slightly different standard of accommodation and consultation. These lands have been, effectively, passed to the Crown in exchange for a host of promises. By no means is the duty to consult First Nations eradicated where a treaty exists. Rather, a different set of legal principles and considerations come into account. Modern-day treaties take the form of comprehensive land-claims agreements between First Nations and governments that set out the respective rights, duties, and obligations with respect to the territory in question. As such, any question of consultation and accommodation must be framed within these agreements.

The Decisions

Two recent court cases, West Moberly First Nations v. British Columbia (Chief Inspector of Mines) and Grassy Narrows First Nation v. Ontario (Natural Resources) illustrate the principles at play in consultation and accommodation on treaty lands. In both cases the lands were subject to a treaty, and authorization was given by the Crown to proceed with a natural resource project. The First Nations petitioned the courts to halt the development, citing a lack of consultation and accommodation on the project.

Disaster down deep — inside the 2010 Chilean mine collapse – by Héctor Tobar (National Post – November 3, 2014)

November 3, 2014

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

In the San José Mine, sea level is the chief point of reference. The five-by-five-metre tunnel of the Ramp begins at Level 720, which is 720 metres above sea level. The Ramp descends into the mountain as a series of switchbacks, and then farther down becomes a spiral. Assorted machines and the men who operate them drive down past Level 200, into the part of the mountain where there are still minerals to be brought to the surface.

On the morning of Aug. 5, 2010, the men of the A shift are working as far down as Level 40, some 2,230 vertical feet below the surface, loading freshly blasted ore into a dump truck. Another group of men are at Level 60, working to fortify a passageway near a spot where a man lost a limb in an accident one month earlier. A few have gathered for a moment of rest, or idleness, in or near El Refugio, the Refuge, an enclosed space about the size of a school classroom, carved out of the rock at Level 90, that serves as both emergency shelter and break room.

The mechanics led by Juan Carlos Aguilar find respite from the oppressive heat by setting up a workshop at Level 150, in a passageway not far from the vast interior chasm called El Rajo, which translates loosely as “the Pit.” The mechanics have decided to start their workweek by asking Mario Sepúlveda to give them a demonstration of how he operates his front loader. They watch as he uses the clutch to bring the vehicle to a stop, shifting from forward directly to reverse without going into neutral first. He’s mucking up the transmission by doing this, wearing out the differential. “No one ever showed me,” Sepúlveda explains when asked why he’s operating the machine that way. “I just learned from watching.”

John Ralston Saul calls for all Canadians to be idle no more – by Joe Friesen (Globe and Mail – November 1, 2014)

November 3, 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.

In the winter of 2012-13, John Ralston Saul watched as the Idle No More movement swept across the country, bringing thousands of aboriginal people into the streets to draw attention to a wide range of issues.

When the round dances stopped and the media moved on, he decided to write something – a pamphlet or manifesto that would help explain to a non-aboriginal audience what had just happened. According to Mr. Saul, when aboriginal leaders speak, many Canadians tend to misinterpret what they are saying.

The result is his new book The Comeback, the story of a movement that has been building from a low point a little more than a century ago to where it’s now poised, he says, to reclaim a central place in Canadian affairs.

The author begins by dismissing sympathy, the lens through with which many Canadians view aboriginal issues. That’s just soft racism, he argues. Sympathy is fine as a point of entry, but it obscures why things are the way they are.

BHP Billiton Rejects Mining Industry’s Bigger-Is-Better Mantra – by Alexis Flynn and Andrew Peaple (Wall Street Journal – October 31, 2014)

November 3, 2014

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

CEO Mackenzie Is About to Realize His Goal for a More Focused Company

LONDON— BHP Billiton is the world’s largest mining company by market value, with operations in 25 countries. So what’s one of the first things its chief executive advised his board when he joined six years ago?

Break it up. Now Andrew Mackenzie is about to get his way. The Anglo-Australian miner disclosed plans this summer to spin off unwanted assets in areas such as aluminum and manganese to shareholders. The business could be valued $18 billion as a stand-alone operation, analysts say.

Mr. Mackenzie said the spinoff, expected to be completed next year, shows that BHP isn’t about getting bigger. Once a company decides to focus on large assets, “there is a lot of simplification,” the 57-year-old said in an interview.

The slimmed down BHP will pursue four main areas: coal, copper, iron ore and oil and gas. It also may expand into potash, a mineral mainly used as fertilizer. Mr. Mackenzie, a former academic and energy executive, plans to focus the remaining company’s efforts on just 12 major assets world-wide, down from 30 before the split.

The breakup is something more companies—especially in natural resources—are doing to hone their business and make earnings more predictable.

Ring of Fire Development Must Benefit Ontario – by James Murray (Netnewsledger.com – November 3, 2014)

November 3, 2014

http://www.netnewsledger.com/

THUNDER BAY – OPINION – Cliffs Natural Resources is a company primarily focused on iron ore. The company has a major holding of claims and lands in Northwestern Ontario’s Ring of Fire chromite deposit.

This past week, Cliffs Chairman said that he doubts there will be any serious action in the Ring of Fire in “his lifetime” and he plans on being around for at least another fifty years.

Cliffs Natural ResourcesLourenco Goncalves, head of U.S.-based Cliffs Natural Resources said, in a published interview with the National Post, that “I don’t believe under my watch, and I plan to stay [alive] for the next 50 years… that the Ring of Fire will be developed”.

Does that mean the Ring of Fire is dead?

Likely not. Long before Cliffs was pulling out – and as they denied the story repeatedly, the company was trying to pressure everyone into going their way.

Right now in my opinion, Cliffs is stating the Ring of Fire is “dead” as a tool to put pressure on the Ontario Government.

Illegal mining forces Harmony to halt mine – by David McKay (MiningMX.com – October 31, 2014)

November 3, 2014

http://www.miningmx.com/

[miningmx.com] – HARMONY Gold is to shut its Kusasalethu mine on the west Rand for two weeks and send employees on leave in a bid to combat the threat to safety posed by illegal mining on its premises.

The action, aimed primarily at protecting employees at the mine which has suffered three underground fires this month, also has the affect of denting Harmony’s chances of clawing itself back to profitability.

Harmony said on October 14 that gold production in the first quarter of its 2015 financial year would be about 6% higher. It booked a full-year R1.27bn net loss (2013: – R2.35bn) in August amid falling gold recovery grades.

An underground fire broke out at Kusasalethu on October 30, and although all employees were evacuated safely, Harmony CEO, Graham Briggs, said the risk of another fire harming employees was too great a risk to bear.

“The risk of yet another underground fire is a risk that we are not prepared to take and therefore we are reverting to this temporary mine closure”, said Briggs. During the closure of the mine, Harmony would attempt to remove the illegal miners.

BHP offers little hope of revisiting giant copper mine expansion – by James Regan (Reuters U.K. – October 31, 2014)

November 3, 2014

http://uk.reuters.com/

SYDNEY – (Reuters) – Expansion by BHP Billiton’s giant Olympic Dam mine in Australia, once considered among its prized growth assets, is off the agenda due to low metals prices and productivity inefficiencies, the company said on Friday.

BHP shelved plans for a multi-billion-dollar expansion of the copper, gold and uranium mine in 2012 after a year-long study, citing a need to reign in spending as the Australian mining boom started to fade.

Since then business leaders and politicians, including Australian Prime Minister Tony Abbott, have implored BHP to reconsider its decision, hoping to alleviate job losses caused by the exit of car manufacturing in Australia.

But BHP has stood firm and on Friday reiterated its mothballing of expansion plans for Olympic Dam.

“Our immediate challenge is how we self-fund the required investment by being prudent and creative with our capital and engaging our workforce to not only reduce costs but also accelerate the initiatives that will reduce our costs,” Darryl Cuzzubbo, Olympic Dam assetpresident, said in a business speech emailed to Reuters.

Ring of Fire region needs protection – by Anna Baggio (Globe and Mail – October 31, 2014)

November 3, 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.

Re The Ring of Fire failure to ignite (Oct. 22): Reporter Rachelle Younglai deftly digs into the Ring of Fire and goes beyond the rhetoric. What’s missing, however, is the ecological context.

The Ring of Fire is located in the heart of an irreplaceable environmental treasure. This wilderness of trees, wetlands, lakes and rivers is part of the planet’s largest intact forest – the Boreal Forest. First Nations call these lands their ancestral home and have inherent rights to the land.

The region supports hundreds of plant, mammal and fish species, most in decline elsewhere, and is the continent’s main nesting area for nearly 200 migratory birds. For some species, it’s the last refuge. As one of the world’s largest storehouses of carbon, it helps keep climate change in check.

NEWS RELEASE: Duluth Metals Agrees to Acquisition by Antofagasta PLC

November 3, 2014

TORONTO, Ontario, November 3, 2014 – Duluth Metals Limited (“Duluth”, “Duluth Metals”) (TSX: DM) (TSX:DM.U) today announces that it has entered into a binding agreement (the “Acquisition Agreement”) with Antofagasta PLC (“Antofagasta”) pursuant to which Antofagasta has agreed, subject to the terms of the Acquisition Agreement, to acquire through a wholly owned subsidiary, all of the outstanding common shares of Duluth Metals by way of a friendly take-over bid or a plan of arrangement at a price of CDN$0.45 per share in cash (the “Offer”).

The Offer represents a 284% premium to the 20-day volume weighted average price of Duluth Metals’ common shares on the TSX as at October 31, 2014.

Kelly Osborne, President and CEO of Duluth commented: “We are pleased to reach an agreement with our partner Antofagasta and enter into this acquisition transaction. During a difficult period for the mining industry, Duluth has been able to negotiate a significant premium to the current market share price.”

Antofagasta has also entered into a lockup agreement with all of Duluth’s directors and officers and with Wallbridge Mining Company Limited who collectively own approximately 10.9% of Duluth’s currently outstanding common shares (136,767,985 common shares). In addition, Antofagasta, through its subsidiary, owns approximately 10.4% of Duluth’s common shares

The Acquisition Agreement contains customary deal support provisions, including non-solicitation, superior proposal and right-to-match provisions in favour of Antofagasta and the payment to Antofagasta of a termination fee of CDN$3.5 million if the acquisition is not completed in certain specified circumstances.