November 14, 2014 – Republic of Mining

EY’s Canadian Mining Eye falls 15% during Q3, expects sluggish Q4 – by Henry Lazenby (MiningWeekly.com – November 14, 2014)

November 14, 2014

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

TORONTO (miningweekly.com) – Professional services firm EY’s quarterly ‘Canadian Mining Eye’ index fell 15% in the September quarter, paring a 9% gain during the previous quarter.

The firm said on Thursday that the fall in the index was in line with the S&P/TSX Composite index, which also plummeted 15% during the period, while the London Metal Exchange index (LMEX) decreased 4% during the quarter.

“In the last quarter, companies continued to focus on strengthening their core businesses by accelerating development of projects, increasing production, managing costs and adding attractively priced assets to their portfolio for strategic objectives.

Still, the M&A [mergers and acquisitions] momentum we witnessed over the last few months is unlikely to die down soon, as companies will continue to look for attractively priced assets for a long-term strategic advantage,” EY’s Canadian mining and metals leader Bruce Sprague said.

Canadian mining equities had suffered owing to a fall in metal prices across the board, especially gold prices, as a result of the strengthening US dollar. The growing uncertainty around the global macroeconomic situation led to investor caution and fuelled the decline in metal prices over the three-month period.

Don Blankenship, Former Massey Energy CEO, Indicted Over 2010 Upper Big Branch Mine Disaster – by John Raby (AP/Huffington Post – November 14, 2014)

November 14, 2014

http://www.huffingtonpost.com/green/

CHARLESTON, W.Va. (AP) — Don Blankenship, the steely-eyed executive once dubbed “The Dark Lord of Coal Country,” on Thursday became the highest-ranking coal official to face federal charges in the nation’s deadliest mine disaster in 40 years.

A federal grand jury indicted the former Massey Energy CEO on numerous counts of conspiracy in the April 2010 underground explosion that killed 29 men at the Upper Big Branch Mine in Montcoal, West Virginia.

The 43-page indictment said Blankenship “knew that UBB was committing hundreds of safety-law violations every year and that he had the ability to prevent most of the violations that UBB was committing. Yet he fostered and participated in an understanding that perpetuated UBB’s practice of routine safety violations, in order to produce more coal, avoid the costs of following safety laws, and make more money.”

His attorney, William W. Taylor III, said in a statement that Blankenship “is entirely innocent of these charges. He will fight them and he will be acquitted.”

“Don Blankenship has been a tireless advocate for mine safety,” the statement said. “His outspoken criticism of powerful bureaucrats has earned this indictment. He will not yield to their effort to silence him. He will not be intimidated.”

Marikana: The end of a bitter road promises little closure – by Niren Tolsi (Mail & Guardian – November 14, 2014)

November 14, 2014

http://mg.co.za/ [South Africa]

COMMENT

Andile Yawa’s bus leaves Queenstown in the Eastern Cape at 8pm. It reaches Johannesburg’s hustle and grime at six the next morning, and Pretoria by seven.

When the Farlam commission of inquiry starts in Centurion two hours later, Yawa is there, as he has been for almost every day it has sat over the past two years. He wants to find out who was responsible for the fatal shooting of his son Cebisile on August 16 2012 at Marikana.

Yawa’s wife Nosipho says that the time they now get to spend together at home in rural Cala is similar to when her husband worked as a miner.

There is repetition, too, in the journey into South Africa’s mineral-rich hinterland that Yawa first undertook by train in the 1970s, and since the 1980s, by bus.

The route is that of the “conscripted” that Hugh Masekela laments in Stimela, and which Cebisile followed when he succeeded his father after he was medically boarded with lung disease in 2008.

Mining company under fire for Kamloops election letter – by Pauline Holdsworth (Globe and Mail – November 14, 2014)

November 14, 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.

VANCOUVER — The company behind a proposed open-pit gold and copper mine that will fall partly within Kamloops city limits has waded into the waning days of the civic election campaign, sending a letter to voters listing candidates who oppose the mine.

The letter has increased tensions ahead of Saturday’s vote. KGHM International’s Ajax mine project, which would be within three kilometres of a school, has emerged as a divisive issue, even though the province, not municipal leaders, will decide whether it goes ahead.

The company sent the letter late last week, and KGHM registered with Elections BC as a third-party sponsor on Monday. According to Elections BC rules, a company must register before sending such information to voters.

Kamloops resident Michael Crawford, a former federal NDP candidate, complained about the letter to Elections BC. “Whatever social licence or trust this company has in this community I think has been shaken,” Mr. Crawford said.

The letter included a list compiled by the Facebook group Support Ajax Mine that categorizes candidates as either “opposed to Ajax” or “waiting for scientific studies.”

Small Brazilian iron ore miners soldier on amid low prices – by Stephen Eisenhammer and Marta Nogueira (Reuters U.S. – November 12, 2014)

November 14, 2014

http://www.reuters.com/

Nov 12 (Reuters) – Small Brazilian iron ore miners are proving resilient in the face of low global prices, pushing ahead with expansion projects even as that reduces the chance of a quick rebound in prices.

Interviews with five iron ore “juniors” operating in Brazil showed players in this section of the industry, helped by cheap development bank loans and the flexibility to sell locally or abroad, are not being forced out of business at the pace larger rivals hope.

The price of iron ore has fallen 40 percent this year as new capacity from major Australian mining companies entered the market just as Chinese demand growth slowed.

The “big three” in iron ore, Brazil’s Vale, Australia’s BHP Billiton and Rio Tinto, argue the self-inflicted price drop will drive higher-cost producers out of the market, making it possible to retrieve market share and for the price to rise.

But such a process is complicated. Many predicted a similar process when coal prices dropped last year, but coal mines have been slow to close, keeping prices down.

Transboundary group wants a voice in BC mining process -by Angela Denning, KFSK (KTOO.org – November 14, 2014)

November 14, 2014

http://www.ktoo.org/ [Juneau, Alaska]

Proposed copper mines in British Columbia have a coalition speaking out on what they say could potentially hurt salmon runs for people on both sides of the border.

Salmon navigate through their noses and that sense of smell could be in jeopardy if proposed mines are developed in British Columbia, according to Sarah O’Neal, a fisheries biologist.

“That’s what they use to find predators and prey and mates and also to find their way back to the receiving stream where they were born,” O’Neal says. “So that’s how they know how to get back to spawn is by smelling.”

O’Neal is working with the campaign, Salmon Beyond Borders, which is trying to raise public awareness about the potential impacts of proposed mines in BC. She says it doesn’t take much contact with copper for salmon to be affected.

“Experiments have shown that salmon’s ability to smell can be impacted at just two to ten parts per billion of copper,” O’Neal says. “That equates to 2 to ten drops of water in an Olympic-sized swimming pool … so, miniscule amounts.” O’Neal says those amounts are within water quality standards and can be legally discharged. And as the amount of cooper increases, the effect on salmon does too.

Column – Falling gold supply a rare beacon of hope for price recovery – by Clyde Russell (Reuters India – November 14, 2014)

November 14, 2014

http://in.reuters.com/

LAUNCESTON, Australia – (Reuters) – It must be getting increasingly hard for the World Gold Council to find something positive to focus on when compiling its quarterly report.

The latest instalment, released on Thursday, is no exception and the council, which represents gold producers, chose to highlight what it termed the “good health” of the market for jewellery.

This was despite a drop in jewellery demand of 4 percent year-on-year in the third quarter, but maybe it looks better than highlighting the fact that overall gold demand fell to the lowest level in nearly five years.

However, instead of focusing on the demand side of the gold equation, if the council was looking for some better news on the outlook for the precious metal, the supply side offers some hope.

It’s becoming a more common theme in commodities this year, namely that supply-side dynamics are driving markets far more than demand, but many in the market have been slow to adjust to this.

Ottawa vows to protect ‘Canada brand’ with social responsibility policy – by Shawn McCarthy (Globe and Mail – November 14, 2014)

November 14, 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.

OTTAWA — The federal government plans to punish mining and energy companies that run afoul of its new corporate social responsibility policy by withdrawing support they receive from agencies such as Export Development Canada and embassies abroad.

International Trade Minister Ed Fast is to announce the measure in a speech in Vancouver Friday, saying it is important to protect Canada’s “brand” as a global heavyweight in the resource industries.

“Let there be no mistake,” the minister says in a draft copy of the speech provided to The Globe and Mail, “Canada’s expertise in the extractive sector is second to none; Canada is a world leader in sustainable technology, and in environmentally, ethnically and socially responsible business practices. That is the ‘Canada brand’ – it is how we are known throughout the world.”

The government is launching a corporate social responsibility (CSR) strategy as part of its broader effort to enhance the business prospects for resource companies abroad. Toronto is a global centre for mining finance and Canadian-based companies are particularly prominent in Africa and South America, where more than 250 companies controlled $81-billion in assets in 2011.

Nordgold tries to usurp AuRico with microcap takeover – by Kip Keen (Mineweb.com – November 14, 2014)

November 14, 2014

http://www.mineweb.com/

The Russian miner looks to takeover Carlisle Gold Fields in a hostile takeover – not that it’s calling it that yet.

HALIFAX, NS (MINEWEB) – Now you get some thick stuff on this one. Carlisle Goldfields, which owns some near surface gold assets in Manitoba, numbering close to two million ounces in highish-grade resources, has become the bargain prize in an atypical tussle between two intermediates gold miners.

The twisting, and extremely caveat-ridden language in multiple press releases out of Carlisle and Nord Gold sets the tone of what may prove a nasty tug-o-war. From Carlisle today:

“Nordgold issued a news release this morning announcing its request for Carlisle’s consent to make a take-over bid. Carlisle is of the view that, although the request made to Carlisle may be in compliance with the Mutual Confidentiality Agreement, the news release in that regard is in clear violation of the terms of the agreement.”

You may have to read the last line at least twice. Carlisle says Nordgold may be in compliance with a confidentiality agreement, but that it is also in clear violation of said agreement. A little convoluted to say the least.

Vedanta to build R8.7bn Gamsberg zinc project – by David McKay (Miningmx.com – November 13, 2014)

November 14, 2014

http://www.miningmx.com/

[miningmx.com] – UK-listed mining group Vedanta Resources said it had approved an in principle investment of $782m (R8.7bn) in the Gamsberg zinc deposit in South Africa’s Northern Cape province with a view to producing first zinc during the group’s 2017/18 financial year.

In terms of the proposed investment, Vedanta will establish an open pit mine producing 250,000 tonnes/year of zinc and a refinery at the site of Skorpion, a mine first developed by Anglo American, producing 150,000 tonne/year of zinc concentrate. The Skorpion mine produced 13% less refined zinc, or 60,000 tonnes, in the first half of Vedanta’s financial year.

“The detailed feasibility study for the mining project was placed at the board meeting, while the work for setting up pilot plant for refinery conversion is underway,” said Vedanta today as part of its interim results presentation. “Preliminary work on financing options have also been commenced,” it said.

Vedanta has a positive view on the internationally traded zinc market saying in its interim results that it expected a supply deficit to remain in place until 2018. London Metal Exchange zinc prices averaged $2,196 per tonne compared to $1,850/t in the same period in 2013, it said.

The Gamsberg deposit and Skorpion mine were sold to Vedanta in 2010 as part of a package of zinc assets for about $1.3bn by Anglo American, then led by Cynthia Carroll who had embarked on a wave of non-core asset sales.

The gold mining meltdown is so bad even activist investors won’t touch it – by Peter Koven (National Post – November 14, 2014)

November 14, 2014

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

As gold prices stumble and mining stocks sink to woeful lows, a lot of investors are asking the same question: where are the activists? The sad answer, experts say, is that activists don’t see any more hope for this sector than anyone else does right now.

It was a given over the past several years that proxy battles would break out across the mining space whenever commodity prices dropped. Frustrated investors would scrutinize the strategy and compensation of boards and management teams, and quickly act when they saw a problem.

Activists overhauled many mining boards during recent bear markets, including HudBay Minerals Inc. in 2009. There was an average of nine mining proxy fights a year between 2008 and 2013, according to law firm Fasken Martineau.

There are more frustrated mining investors today than at any other point in recent memory. But prices for commodities such as gold, silver and iron ore have fallen so much that it is hard to find opportunity in any of the related stocks.

“If you take over the board and take over the company, how are you going to create value at a gold price like this?” said Wes Hall, head of Kingsdale Shareholder Services.

Obama backed into Keystone corner as U.S. House to vote on pipeline Friday – by Claudia Cattaneo (National Post – November 14, 2014)

November 14, 2014

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

As the United States Congress moved closer to voting on the Keystone XL pipeline, President Barack Obama seemed increasingly isolated in his dislike of the Canadian project.

After years of bizarre regulatory delays, an out-of-nowhere court challenge in Nebraska and changing White House expectations, the push to line up votes in support of the Alberta-to-Texas pipeline is gaining momentum in Washington.

The House of Representatives was expected to start debating a bill to approve the US$8 billion project proposed by Calgary-based TransCanada Corp. on Thursday and hold a vote on Friday. The Senate is expected to hold a similar vote early next week, likely on Tuesday.

If Democratic Senators, led by Louisiana’s Mary Landrieu — yes, the instigators are people in President Obama’s own party — manage to line up 60 votes in support of KXL, the bill could be on President Obama’s desk for final approval by the end of next week.

Republicans have been long-time supporters of the project and have vowed to present legislation of their own in January, when they will take over control of both the House and the Senate thanks to their mid-term election wins last week.

What does an RMB trading hub mean for Canada? – by Dana Flavelle (Toronto Star – November 11, 2014)

November 14, 2014

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Canada has been designated a trading hub for China’s currency. What does it mean in terms of jobs, the economy and international trade?

Canada has been designated a trading hub for China’s currency, a move aimed at boosting international business between the two countries while also nudging China’s once cloistered “redback” toward global status.

Among other things, it means for the first time, Canadians can open bank accounts in Canada that contain China’s yuan, also known as the renminbi (RMB).

Canadian institutional investors, such as pension funds, will also be able to buy up to 50 billion yuan worth of Chinese bonds and stocks directly. That’s roughly $9.2 billion.

The deal will “continue to boost the Toronto region’s status as a global financial centre,” Janet Ecker, president and chief executive officer of the Toronto Financial Services Alliance, said in a statement.