December 4, 2014 – Republic of Mining

UPDATE 2-Rio Tinto not looking at acquisitions to raise defences against Glencore – by Silvia Antonioli (Reuters India – December 4, 2014)

December 4, 2014

http://in.reuters.com/

LONDON, Dec 4 (Reuters) – Global mining company Rio Tinto is not looking to make any major acquisition to protect itself from a potential Glencore takeover, Chief Executive Sam Walsh said at a meeting with investors on Thursday.

Since Rio Tinto rejected a tentative approach from smaller rival Glencore in July, speculation has mounted that it might rush to make an acquisition to raise its defences against another takeover attempt by the mining and trading giant.

But Rio Tinto’s boss said the focus remained on improving mining operations and delivering more cash to shareholders, rather than becoming involved in disruptive mergers and acquisitions.

“I see speculation that we are going to rush out and buy somebody. Let me reassure you that we are not looking at any major M&A. We are not looking at doing anything stupid,” Walsh said.

Glencore Chief Executive Ivan Glasenberg has criticized the strategy of rival miners BHP Billiton and Rio Tinto to flood the market with new iron supply to squeeze out smaller competitors. He says the move has backfired and led to a fall in the iron ore price, which is down 50 percent this year.

Constitutional Court in Indonesia Upholds Ore Shipment Ban – by Yoga Rusmana (Bloomberg News – December 3, 2014)

December 4, 2014

http://www.bloomberg.com/

Indonesia’s Constitutional Court upheld today the country’s ban on exports of raw mineral ores imposed in January, rejecting a challenge from mining companies.

The court ruled the prohibition was acceptable to ensure ore supplies to domestic smelters. The Indonesian Association of Mineral Entrepreneurs and companies with mining business licenses filed a request in January to seek revision of articles in the 2009 law that formed the legal basis of the ban. Chief Justice Hamdan Zoelva said the ruling was final.

The country, the biggest producer of mined nickel and third-largest bauxite miner last year, banned shipments from Jan. 12, seeking to spur investment in domestic processing and transforming the nation into the producer of high-value metal. President Joko Widodo reaffirmed his commitment to the ban last month. Nickel and aluminum prices have climbed in London this year helped by the curbs.

“This will continue to act as a restraint on Indonesia’s export revenues, and therefore continue to adversely affect Indonesia’s balance of trade,” Luke Devine, foreign legal consultant, finance and projects, at Hadiputranto, Hadinoto & Partners, said by e-mail before the decision.

Nickel futures climbed 18 percent this year to $16,370 a metric ton, the biggest gainer among six base metals on the London Metal Exchange, while aluminum added 9 percent to $1,961.50 a ton.

Petronas delays decision on Pacific NorthWest LNG project – by Brent Jang (Globe and Mail – December 4, 2014)

December 4, 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 — Petronas has delayed making a final investment decision on plans to export liquefied natural gas from British Columbia, warning that estimated construction costs are too high.

The Petronas-led Pacific NorthWest LNG terminal proposed for Lelu Island has been budgeted to cost $11.4-billion, part of a $36-billion undertaking to ship LNG from the West Coast to energy-thirsty customers in Asia.

But Pacific NorthWest LNG warned Wednesday that pipeline and terminal engineering costs estimated so far make the Canadian LNG project uneconomic, especially against a backdrop where the Malaysian energy giant needs to scrutinize capital spending because it is being hurt by plunging oil prices.

In postponing the project decision, Petronas may be seeking to squeeze prospective suppliers’ bids on the project in hopes of nudging the project closer to being launched. Still, the delay raises the possibility that another major resource project in Canada could be sidelined, following a string of planned oil pipelines that have run into political and environmental opposition.

The window of opportunity for LNG exports from Lelu Island is closing, Pacific NorthWest LNG president Michael Culbert said in an interview.

Emerging markets mock the pessimists – by Jim O’Neill (Business Standard – December 3, 2014)

December 4, 2014

http://www.business-standard.com/

Analysts’ prediction that 2014 would be a bad year for emerging markets didn’t play out. The numbers show that developing-country stock markets performed better than those in the advanced economies

Remember how this time last year a lot of analysts were predicting that 2014 would be a bad year for emerging markets? Didn’t really happen, did it? Now I hear economists saying the reckoning they’d expected has only been postponed. It’ll happen next year instead. It’s possible, but I wouldn’t bet on it.

In this discussion, one crucial fact is both obvious and usually forgotten: the so-called emerging markets are all quite different. They don’t move in unison. Take the impact of cheaper oil. Just as in the advanced economies, it’s good news for some (the equivalent of a tax cut) and bad news for others (the equivalent of a cut in income). It’s unhelpful to generalise. Many of the world’s star performers in 2014 were emerging-market economies. The same will be true in 2015.

The fallacy of agglomeration is compounded by a failure to grasp relative scales. Taken together, the two errors give a distorted picture of global activity.

The slowing of China’s expansion is a constant theme these days. Yes, but remember that China will be a $10-trillion economy by the end of 2014; that during the course of this year’s slowdown, it added roughly $1 trillion to world output; and that slowing growth in China is still quite rapid by most countries’ standards.

Controversial mine legislation slipped into defense bill – by Rebekah L. Sanders (The Arizona Republic – December 3, 2014)

December 4, 2014

http://www.azcentral.com/

A controversial Arizona mining bill that appeared dead for this Congress has gotten new life, as supporters have tucked it deep into a defense bill that lawmakers must pass before the end of the year.

The legislation would authorize a federal land swap to allow an international mining company to drill into one of North America’s richest copper deposits near Superior, about 60 miles east of Phoenix.

House lawmakers slipped the land-exchange bill late Tuesday night into the 1,600-page National Defense Authorization Act, a key bill that continues funding for the Defense Department.

The must-pass defense legislation may give the Southeast Arizona Land Exchange and Conservation Act its best chance of passage yet. A House committee will vote on the defense bill Wednesday and likely advance it to a full House vote on Thursday. From there it would go to the Senate, where no amendments would be allowed.

Lawmakers are trying to plow through a list of lame-duck priorities before leaving for Christmas. Most of Arizona’s delegation supports the land exchange, though they are staying mum for now.

Rio Tinto diamond bet adds sparkle to junior miners’ prospects – by Susan Taylor (Reuters U.S. – December 3, 2014)

December 4, 2014

http://www.reuters.com/

TORONTO – Dec 3 (Reuters) – Rio Tinto Plc’s re-commitment to diamonds with a $350 million Canadian mine expansion has highlighted the prospects for a handful of smaller players boasting one of the sector’s rarest commodities – new mines.

After two decades without a big discovery, the $18 billion diamond mining industry will need fresh resources to feed a growing consumer appetite for the elusive stone, industry forecasters predict.

They say demand has been boosted by marketing aimed at convincing couples in China and India that diamonds are forever and single women to treat themselves to a right-hand ring.

Global consumer demand for diamond jewelry is forecast to grow at 4 to 5 percent annually, to $31 billion in 2018 from $25 billion last year, Anglo American Plc-owned De Beers said in a presentation last month.

De Beers, the world’s biggest diamond producer by market value, has also said it expects global supply to decline after 2020, with demand outstripping supply in the next 10 years.

BMO Research forecasts rough diamond prices will increase 5-7 percent annually from 2015 through 2017, helped by solid retail sales.

Ring of Fire needs urgency, warns Ontario Chamber of Commerce – by Lisa Wright (Toronto Star – December 4, 2014)

December 4, 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.

Preliminary report card on the stalled mineral belt in Northern Ontario says “progress on development has been slow” and “major steps” are required soon to reap economic benefits.

Ontario needs to move quickly on development of the stalled Ring of Fire mineral belt or risk losing huge economic benefits for the province when metal prices bounce back again, warns a preliminary report card by the Ontario Chamber of Commerce.

“Despite the tremendous economic and social opportunities the Ring of Fire affords Ontario, progress on development has been slow,” says the consultation paper obtained by the Star Wednesday.

The future of the highly-touted, mineral-rich region in the James Bay lowlands has been put in doubt by a severe downturn in the global mining industry. And Cliffs Natural Resources, the largest land claim owner in the Ring, has pulled out of the area, and its new chief executive says there is “zero chance” a mine will ever be built there with all the red tape in the way.

“Unfortunately, in the last few months, the tone of the conversation surrounding the Ring of Fire has turned net negative,” says the document, which provides a preview of the chamber’s official report card on the Ring’s progress expected in February.