November 11, 2014 – Republic of Mining

Nickel West bids fail to find magic number – by Nick Evans (The West Australian – November 12, 2014)

November 11, 2014

https://au.news.yahoo.com/thewest/

BHP Billiton has shelved the $800 million sale of Nickel West after bids for the struggling unit failed to meet its price expectations.

It remains unclear what the mining giant now plans to do with a business that employs about 1800 people across its mines, concentrators, nickel smelter and refinery.

BHP would not comment yesterday. Chief executive Andrew Mac- kenzie has made clear he does not want to keep the unit, which is part of the proposed NewCo spin-off that will house second-tier assets, including Worsley alumina.

Mr Mackenzie said three months ago that Nickel West was “neither a good fit with BHP Billiton nor with NewCo” and the best outcome was for it to be owned by an operator “much more committed to the nickel business”.

Industry sources said no final bids received over the past fortnight came close to the $500 million to $800 million valuation BHP is said to have initially put on Nickel West.

The failure of suitors to see sufficient value in the business came despite talk that BHP had dramatically revised its price expectations as the sales process dragged on.

Book review: John Grisham’s ‘Gray Mountain’ is a searing look at Big Coal – by Patrick Anderson (Washington Post – October 19, 2014)

November 11, 2014

http://www.washingtonpost.com/

At the start of “Gray Mountain,” John Grisham’s angry and important new novel, Samantha Kofer — age 29, Washington native, graduate of Georgetown and Columbia Law — is a third-year associate at a huge New York law firm. She works 100 hours a week, doing boring chores that she hates, but she’s earning $180,000 a year and expects to be a $2 million-a-year partner by age 35.

Or she did expect that, until September 2008, when the economy tanked and panicked law firms began ridding themselves of associates and partners. We meet Samantha at the moment — “day ten after the fall of Lehman Brothers” — when the ax falls for her, with only one consolation offered. If laid-off associates will agree to intern with a nonprofit agency, they can keep their health benefits and will be considered for rehiring if prosperity returns. Thus it is that Samantha finds herself at the Mountain Legal Aid Clinic in tiny Brady, Va., in the heart of Appalachia.

That opening scene, wherein a world of privilege abruptly vanishes for astonished young people who have known only success, is startling, but no more than Grisham’s portrait of the world of poverty and injustice that Samantha soon enters. The author does justice to the physical beauty of Appalachia and to the decency of most of its people, but his real subject is the suffering inflicted on those people by mining companies and politicians who pander to them.

Samantha’s new boss, Mattie Wyatt, has kept the Mountain Legal Aid Clinic alive for 26 years. The first case she assigns to Samantha is that of a woman who needs protection from a husband who deals in crystal meth and beats her.

China commodity imports don’t fit soft economic narrative – by Clyde Russell (Reuters U.S. – November 10, 2014)

November 11, 2014

http://www.reuters.com/

LAUNCESTON, Australia – (Reuters) – It’s becoming increasingly hard to make Chinese commodity import data fit with the prevailing narrative of a softening in the world’s second-biggest economy.

Trade figures released Nov. 8 showed ongoing strength across a broad spectrum of commodity imports, with the only consistent weak spot this year being coal.

October iron ore imports may have slipped 6.3 percent from the previous month’s high to 79.39 million tonnes, but they are still up 16.5 percent in the first 10 months of the year over the same period in 2013, on track for the strongest annual growth since 2009.

Unwrought copper imports gained 2.6 percent from September, and are 9.3 percent up in the first 10 months of 2014, while imports of copper ores and concentrates have jumped 17.2 percent so far this year.

Crude oil showed a 15.5 percent decline on a barrels per day (bpd) basis from September, dropping to 5.67 million bpd in October, but total imports have gained 9.2 percent in the first 10 months of the year over the same period in 2013.

Only coal looks as anemic as many commentators suggest the overall Chinese economy is, with imports dropping 4.9 percent in October from September, taking the year-to-date decline to 7.7 percent.

Canadian platinum firms unbowed by South African labour unrest – by Geoffrey York (Globe and Mail – November 11, 2014)

November 11, 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.

JOHANNESBURG — Even as one Canadian mining company is abandoning South Africa’s troubled platinum sector, two other Canadian miners are plunging ahead with ambitious plans here.

Vancouver-based Eastern Platinum Ltd. announced the sale of its South African assets to a little-known Chinese company for $225-million (U.S.) in cash, provoking surprise and skepticism from some analysts.

Last year, the company suspended its Crocodile River platinum project in South Africa because of what it called a “perfect storm” of labour unrest, rising costs and stagnant markets.

Eastplats announced on Friday that it is selling Crocodile River and all of its other South African assets to Hebei Zhongbo Platinum, a company that seems almost unknown. The Chinese company “has never been mentioned in the press or online (as far as we can tell) prior to this announcement,” said an analyst’s report from Raymond James Ltd. on Monday.

Chinese companies have been dramatically raising their stakes in South Africa’s platinum sector with several acquisitions as other companies give up.

Trace Matrix Bribery Index: Canada 2nd-Least Corrupt Country In The World – by Daniel Tencer (Huffington Post – November 11, 2014)

November 11, 2014

http://www.huffingtonpost.ca/business/

http://www.traceinternational.org/trace-matrix/

Canada is the second-least corruption-prone country in the world, with only Ireland having a lower risk of bribery, according to a new index measuring business corruption.

The study comes as business groups across the country pressure the federal government into rescinding strict new rules that would ban companies convicted of bribery and other corrupt acts from winning government contracts.

The first edition of the TRACE Matrix, developed by the anti-bribery non-profit TRACE International and the RAND Corporation, names Nigeria as the country with the highest risk of bribery. It scored 97 out of 100; Canada scored 22, with Ireland coming in at 20 (the higher the score, the higher the risk of bribery).

The index looks at four broad areas: businesses’ interactions with government; anti-bribery laws and enforcement; government transparency; and and capacity for civil oversight, including media. But Canada being named one of the least corrupt countries is not the same thing as Canadian business being declared to be corruption-free.

Many Canadian companies that operate abroad have been accused of bribery and other forms of corruption. Since 1999, these companies have been subject to the Corruption of Foreign Public Officials Act, which makes it a crime in Canada for a business to bribe officials in other countries, provided some part of the corruption involves Canada.

New tech-dependent nations desperate for non-Chinese REE sources – by Dorothy Kosich (Mineweb.com – November 11, 2014)

November 11, 2014

http://www.mineweb.com/

In recent years, Chinese production has accounted for about 95% of the REE global market.

RENO (MINEWEB) – The U.S. Geological Survey has released a report, which supports scientific research to determine where undiscovered/undeveloped resources of rare-earth elements may occur, as well as trends in the supply and demand of rare-earth elements domestically and internationally.

Because of the many important uses of REEs, nations dependent on new technologies, such as Japan, the United States and members of the European Union, which now must rely on Chinese REE exports, are encouraging discoveries of economic REE deposits and bringing them into production, says the Geological Survey.

“Most REEs are not as rare as the group’s name suggests,” says the new report, The Rare Earth Elements—Vital to Modern Technologies and Lifestyles. “Cerium is the most abundant REE, and is more common in the Earth’s crust than copper or lead.”

“All of the REEs, except promethium, are more abundant on average in the Earth’s crust than silver, gold, or platinum. However, concentrated and economically minable deposits of REEs are unusual,” according to the Geological Survey.

The real story of US coal: inside the world’s biggest coalmine – by Suzanne Goldenberg (The Guardian – November 10, 2014)

November 11, 2014

http://www.theguardian.com/uk

In the world’s biggest coalmine, even a 400 tonne truck looks like a toy. Everything about the scale of Peabody Energy’s operations in the Powder River Basin of Wyoming is big and the mines are only going to get bigger – despite new warnings from the United Nations on the dangerous burning of fossil fuels, despite Barack Obama’s promises to fight climate change, and despite reports that coal is in its death throes.

At the east pit of Peabody’s North Antelope Rochelle mine, the layer of coal takes up 60ft of a 250ft trough in the earth, and runs in an interrupted black stripe for 50 miles.

With those vast, easy-to-reach deposits, Powder River has overtaken West Virginia and Kentucky as the big coalmining territory. The pro-coal Republicans’ takeover of Congress in the mid-term elections also favours Powder River.

“You’re looking at the world’s largest mine,” said Scott Durgin, senior vice-president for Peabody’s operations in the Powder River Basin, watching the giant machinery at work. “This is one of the biggest seams you will ever see. This particular shovel is one of the largest shovels you can buy, and that is the largest truck you can buy.”

By Durgin’s rough estimate, the mine occupies 100 square miles of high treeless prairie, about the same size as Washington DC. It contains an estimated three billion tonnes of coal reserves. It would take Peabody 25 or 30 years to mine it all.

In China, Candu Energy sees promising future – by Nathan Vanderklippe (Globe and Mail – November 10, 2014)

November 11, 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.

BEIJING — Jean Chrétien was in a good mood when he came to Shanghai in late 1996 to sell two Candu reactors. He kidded around with Li Peng, the then-Chinese premier, going so far as to try to place a red pompon on the head of the famously dour leader.

Mr. Chrétien promised a future filled with more multibillion-dollar sales of Canadian nuclear technology to China. “I hope we will have many more Candus built in this great country of yours,” he said then.

For the nearly two decades that followed, that optimism bore no fruit.

Now, however, Candu Energy – divorced from the federal government and in the hands of SNC-Lavalin Group Inc. – says it is working toward a deal that could see it partner with a Chinese nuclear giant to build new reactors, both in China and abroad.

By June, 2015, Candu hopes to finalize a joint-venture deal with China National Nuclear Corp., the massive state-owned atomic power and weapons company, “to develop global opportunities” for its advanced fuel reactor. The two sides signed an initial broad-strokes memorandum of understanding during the visit of Prime Minister Stephen Harper to Beijing this weekend.

Sudbury should stack up just fine minus landmark – by Carol Mulligan (Sudbury Star – November 11, 2014)

November 11, 2014

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

It felt like a punch in the gut when Vale vice-president Kelly Strong dropped the bombshell last week the mining company was analyzing tearing down its Superstack.

What would the Nickel City be without the 381-metre (1,250-foot) chimney that has marked the landscape for 42 years? Strong told the Greater Sudbury Chamber of Commerce that because new smelting processes are more efficient and cleaner, the Superstack may no longer be needed.

Vale will decide by the end of the year whether to decommission it. If it goes that route, it would undertake another study to determine what to replace it with.

Strong wouldn’t say how tall a new stack might be, but he offered assurances Vale is looking at the volume of sulphur dioxide (SO2) emissions going up the stack and the height a new stack would have to be not to impact upon local residents.

Reaction to Strong’s announcement has been divided. People who lived in the Nickel Basin pre-1972 remember dark clouds of SO2 descending on them outdoors. You never forget the strong, acrid taste of sulphur burning the back of your throat.

Iron ore and the dangers of living by the sword – by Andy Home (Reuters U.S. – November 11, 2014)

November 11, 2014

http://www.reuters.com/

LONDON – (Reuters) – The price of spot iron ore has sunk to $75.50 per ton this week, its lowest level since 2009. The scale of the price collapse has been breath-taking. Iron ore has dropped by over 35 percent since the start of the year, a significantly worse performance than any other industrial metal.

But what’s really shocking is that the price is now at a level that until recently was collectively deemed impossibly low. It was only in April that José Carlos Martins, executive officer of ferrous and strategy at Vale, the world’s largest producer of iron ore, told analysts that “one thing is for sure, the price will not go below $110 on a sustainable basis”.

This was not irrational producer exuberance. Martins was only voicing the prevailing consensus view when he went on to argue that “we have many times seen the price going below this level but recovering very fast”. Well, here we are with the price trading not just below $110 but a lot lower still. And sustainably so.

That tells you that something has gone very wrong with the iron ore narrative. This market is in a place it was not supposed to be.

And while big producers such as Vale, Rio Tinto and BHP Billiton are sticking to that narrative, they are now facing the unpredictable consequences of a pricing war they collectively started.

Gina Rinehart children seek profits from iron ore projects including Roy Hill and Hope Downs – by Louise Hall (Sydney Morning Herald – November 11, 2014)

November 11, 2014

http://www.smh.com.au/

Gina Rinehart’s two estranged children are seeking to claw back profits from the mining magnate’s major iron ore projects which they say are rightfully theirs.

But lawyers for Mrs Rinehart, Australia’s richest person, claim John Hancock and Bianca Rinehart’s latest legal action in their long-running family feud should not be allowed to go ahead because it is an abuse of process.

In an urgent hearing in the Federal Court on Tuesday, lawyers for Mrs Rinehart and her flagship company, Hancock Prospecting, asked Justice Peter Jacobson to suppress details of the childrens’ allegations of fraudulent concealment and deceptive conduct because any publicity could affect the US$10 billion ($11.6 billion) Roy Hill iron ore mining project.

The barrister for Mr Hancock and Bianca Rinehart, Christopher Withers, told the court his clients were seeking a constructive trust and an account of profits of four mining tenements, including Roy Hill and Hope Downs.

John Sheahan QC, for Hancock Prospecting, asked the court to suppress the case until he could apply for a stay on the grounds it was an abuse of process.