February 11, 2015 – Republic of Mining

‘Full speed ahead’ for Victoria Mine, says KGHM manager – by Jonathan Migneault (Sudbury Northern Life -February 11, 2015)

February 11, 2015

http://www.northernlife.ca/

Project still waiting for full funding from KGHM

It’s still “full speed ahead” for KGHM’s Victoria Mine project in Sudbury, said a senior manager with the company in Sudbury.

Trevor Eagles, KGHM’s manager of engineering in Sudbury, said the project is finalizing a feasibility study, and is on schedule to complete a mining shaft by 2019.

In 2014 KGHM completed timbering at the site, located about two kilometres south of the historic Victoria Mine, which was first developed in the 1890s and then closed in the 1920s.

The former Inco reopened the mine in the 1970s, and made a deal with KGHM’s predecessor, FNX, in 2002, to take control. A long and thin ore body – about 50 kilometres long – was discovered in 2010, which the company now wants to bring into production.

KGHM estimates the new mine site contains 14.2 million tonnes of resources. The inferred resources include 700 million pounds of copper, 700 million pounds of Nickel and 3.5 million ounces of platinum group elements. “Everybody working on the project is fully confident we have a world-class ore deposit and a very strong business case,” said Eagles.

KGHM’s original plan was to sink two mine shafts at the site – an initial exploration shaft, and a second larger shaft for production – but in the last six to eight months, the company decided instead to go with one larger mine shaft.

First Nations issue $127M bill to Ontario for extracted resources – by Jody Porter, CBC News Thunder Bay – February 11, 2015)

February 11, 2015

http://www.cbc.ca/news/canada/thunder-bay

Nishnawbe Aski Nation calculates value of centuries of mining, forestry on its traditional territory

The Nishnawbe Aski Nation is resubmitting an unpaid bill in the amount of $127 million to Ontario as part of the province’s budget consultation process.

The provincial treaty organization, representing 49 First Nations in northern Ontario, hired York University economics professor Fred Lazar to calculate the current value of resources extracted from its traditional territories between 1911 and 2011.

In Lazar’s 2012 report he pegged the figure at 3.2 billion dollars, and then broke that down to an annuity, with a four per cent interest rate, that would amount to 127 million dollars per year, in perpetuity.

Nisnawbe Aski Nation Deputy Grand Chief Les Louttit said he doesn’t really expect the province to cut a cheque “but there are ways in which they can invest into Nishnawbe Aski First Nations to improve the value and quality of our lifestyles in our communities.”

Those ways include funding such things as housing, water and sewage treatment or social programs to deal with such things as addictions, Louttit said.

INTERVIEW-Vale’s CEO rules out nickel IPO, writedowns – by Stephen Eisenhammer and Marta Nogueira (Reuters U.K. – February 11, 2015)

February 11, 2015

http://uk.reuters.com/

Feb 10 (Reuters) – Vale’s chief executive said on Tuesday that a possible initial public offer of part of its nickel division was off the cards for now due to low prices for the commodity, but that other asset sales could be expected over the coming year.

The Brazilian miner is under pressure to resolve a cash-flow squeeze this year as it wrestles to fund mega-projects in the midst of a price slump in its core product: iron ore. But Chief Executive Murilo Ferreira said that the option of spinning off part of its base metals division, which had been outlined in December, was no longer attractive.

“We’re not going to sell it on the cheap … You can forget that possibility,” Ferreira said in an interview at the Rio de Janeiro offices of the world’s largest iron ore producer.

He added that a sale of the entire division was not being considered, and dismissed reports that former Xstrata CEO Mick Davis might be looking to buy it through his startup, X2. “It has been at least two years since I have seen our friend Mick Davis,” he said.

Cash will be raised through other means and Ferreira said the market could expect an announcement of some form of divestment in March and another in the second half of the year. He did not elaborate.

Platinum fuel cells to power five-million Japanese homes – Ivanhoe – by Martin Creamer (MiningWeekly.com – February 11, 2015)

February 11, 2015

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

CAPE TOWN (miningweekly.com) – Japan was building platinum-using fuel cells to provide clean electricity and heat to 5.3-million homes, Ivanhoe Mines executive chairperson Robert Friedland told the Mining Indaba on Wednesday.

Japan was also planning to run the Tokyo Olympics on fuel cells to showcase the arrival of the hydrogen economy. It had also become mandatory for all Japanese government cars to be hydrogen fuel cell driven to ensure cleaner air, which was a growing imperative in a world where 66% of people would be living in cities by 2050.

Platinum-group metals (PGMs) were absolutely critical to having cleaner air, Friedland said in outlining the progress being made at Ivanhoe’s rich Platreef PGMs and nickel project on the northern limb of the Bushveld Complex in South Africa’s Limpopo province, where Japanese government agencies are 10% shareholders.

To show the growing use of PGMs in everyday products, he flashed on to a large screen pictures of fuel-cell driven Toyota and Honda cars as well as fuel-cell-powered smartphone chargers, before going on to provide detail on Ivanhoe’s upcoming Platreef project, where a Stage 2 drilling programme has firmed up 78-million ounces of mechanically mineable PGMs and substantial nickel at a depth of 700 m.

Guinea’s Simandou Auction to Test Appetite for Iron Ore – by Scott Patterson (Wall Street Journal – February 11, 2015)

February 11, 2015

http://www.wsj.com/

Bidding for One of the Most Sought-After Deposits Comes Amid Soft Prices

Mining companies struggling with depressed commodity prices are about to have the opportunity to bid for one of the most sought-after iron-ore deposits in the world, testing the industry’s appetite for new iron-ore supply at a time when many experts say the world is awash in the steelmaking component.

The Guinean government plans to auction the northern half of the massive Simandou iron-ore deposit in the next few months, Guinea’s Minister of Mines Kerfalla Yansane told The Wall Street Journal on the sidelines of the Mining Indaba conference in Cape Town, South Africa.

“We’ll put it on the market and call for companies to come and compete,” Mr. Yansane said.

He said Guinea has signed memorandums of understanding with several large industrial companies to build infrastructure to aid the Simandou project, which lies hundreds of miles from the country’s port in Conakry. The project could cost $20 billion to $30 billion, including rail lines, due to its remote location deep in the hills of southeastern Guinea in West Africa, experts estimate.

The iron-ore deposits, which lie in the northern wing of the Simandou mountain range, are at the heart of an international legal dispute.

Gold Miners Are on the Hunt for Assets as Prices Climb – by Jesse Riseborough, Kevin Crowley and Thomas Biesheuvel (Bloomberg News – February 10, 2015)

February 11, 2015

http://www.bloomberg.com/

(Bloomberg) — Gold producers with cash on hand are on the hunt for cheap mining assets as rising prices drive shares higher.

During a 12-year bull run that ended last year, about $30 billion in debt was racked up by companies that mine gold. Those that minimized borrowing then are in the best position now to scoop up mines from rivals with weaker balance sheets, said executives at the Investing in African Mining Indaba conference in South Africa, the biggest such gathering on the continent.

Already, $2.7 billion in deals have been announced or completed this year within the industry, including Monday’s $1.1 billion offer for Rio Alto Mining Ltd. by Tahoe Resources Inc. It’s an early leg-up on the $10.5 billion in deals last year.

“Gold is one of the brighter spots out there in the commodities space today,” said Rajat Kohli, head of metals and mining at Standard Bank Group Ltd., Africa’s largest lender. “I would expect corporate activity to be reasonably pronounced in gold, not just in Africa but globally. We will see a few transactions, definitely.”

The price of gold jumped 8.1 percent last month in the biggest rally since January 2012. Currencies in Europe and Asia are sliding, and as policy makers introduce stimulus packages to battle cooling growth, investors are flocking to the metal.

[South Africa] GOVT. PLANS TO GO TOE-TO-TOE WITH ANGLO AMERICAN – by (Eyewitness News – February 11, 2015)

February 11, 2015

http://ewn.co.za/

Ngoako Ramatlhodi yesterday specified which assets government would be targeting. CAPE TOWN – Government has announced plans to establish what it says will be a mining champion big enough to rival Anglo American through the acquisition of projects being disposed of by multinationals in the country.

The plans were announced by Mineral Resources Minister Ngoako Ramatlhodi last year and yesterday he specified which assets government would be targeting. The discussions took place at the 2015 Annual African Mining Indaba Conference which continues today in Cape Town.

The minister says they have not yet decided on the scope of the new company but will target the sale of Anglo American and BHP Billiton’s assets in platinum and coal.

Ramatlhodi says these companies need to sell their assets with a comprehensive turnaround plan that will turn it into black empowered representative businesses.

Chamber of Mines President Mike Teke says the establishment of a umbrella company must be preceded by widespread consultation as this will inspire investor confidence.

Uralkali Sees Potash Deal With India Possible Ahead of China – by Yuliya Fedorinova (Bloomberg News – February 11, 2015)

February 11, 2015

http://www.bloomberg.com/

(Bloomberg) — PAO Uralkali, the largest potash supplier by volume last year, sees a possible supply deal with India taking place ahead of China for the first time since 2008, signaling a price increase.

China, with larger stockpiles, won’t rush to lock in a new deal, said Oleg Petrov, chief of sales.

“China may have around 4.5 million tons of stockpiles now,” he said in Moscow. “We saw higher levels in the past but still this is far from the 2.5 million-ton level which is seen as more comfortable for the new contract. On top of this we saw Belarus shipping four cargoes in January to China. Some of those volumes went to the market, some stay in the port, but still this is delaying the opportunity for the new deal.”

Normally China, the biggest consumer of the soil nutrient, strikes a deal first, and that contract provides the benchmark price for the year, with India paying a premium. Only once, in 2008, a contract with India came first, and China paid the premium.

China’s potash demand was 14 million metric tons last year, when the market hit a record 62 million tons, Uralkali’s press service said today, updating last-month estimates. The country last signed contracts at $305 per ton in January 2014 covering the first half of the year, later prolonging them to year-end.

Canadian mining companies find niches in smaller African countries – by Geoffrey York (Globe and Mail – February 11, 2015)

February 11, 2015

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.

CAPE TOWN — At Africa’s biggest mining conference, foreign investors can’t avoid the electricity crisis. The shortage is obvious even in their swish Cape Town hotels, where their rooms are often plunged into darkness from rolling blackouts.

Africa’s traditional mining powers, South Africa and Zambia, are under siege from a range of self-inflicted problems these days. South African miners are plagued by worsening electricity rationing and persistent labour unrest, while Zambia is facing a revolt from foreign mining companies after it tripled its royalty tax rate to 20 per cent last month.

While political leaders from both countries were struggling to soothe jittery investors at the African Mining Indaba this week, many Canadian miners are instead finding their own niches in smaller and more obscure African countries – some of which were considered too unstable or risky for investors until recently.

On Tuesday, senior cabinet ministers from South Africa and Zambia took to the stage at the mining conference to put a positive spin on their trouble-plagued mining sectors. But neither was able to offer much to placate the industry.

South African Mineral Resources Minister Ngoako Ramatlhodi admitted that his country faced “power challenges” – a mild term for electricity shortages that have caused substantial losses for many mining companies.

Another mining company endorses Kaska resource law – by Nancy Thomson (CBC News North – February 11, 2015)

February 11, 2015

http://www.cbc.ca/news/canada/north

Kaska law will govern use of resources on traditional territory

A lawyer who represents the Kaska says Yukon Premier Darrell Pasloski may not understand how the Kaska have the inherent right to self govern. Steve Walsh was referring to comments made recently by Pasloski.

The premier told CBC News that because the Kaska haven’t signed a final land claim and self government agreement, they still fall under the Indian Act, and can’t pass their own laws.

The five Kaska First Nations have issued a declaration, saying they will pass a Kaska resource law this summer. They say it will be used to govern the use of resources on Kaska territory. Walsh says the Constitution clearly outlines the rights of First Nations when it comes to governing themselves.

“I was very surprised to hear Premier Pasloski refer to the Indian Act .. the inherent right of self government was recognized by the government of Canada 20 years ago in 1995,” he says.

“It’s a right protected under section 35 of the Constitution Act 1982 as an existing aboriginal right. So the question whether the Kaska can pass a resource law has nothing to do with the Indian Act, it has to do with their inherent right of self government.”

Mining in Albania [chromite mining] by Christopher Ecclestone (Investorintel.com – February 10, 2015)

February 11, 2015

http://investorintel.com/

Albania – Not Quite the Land that Time Forgot: In the not too distant past, with one of my other hats on, I was very involved with the mining scene in Albania. At the time I headed a company that desperately needed to diversify away from the mammoth country risk involved in doing business in Turkey (therein lies another story) and my glance turned to Albania for a couple of reasons.

Firstly it was a country with a very strong mining history (in fact its fate post-WW2 was directly linked to mining). Secondly, its major resource was chromite, for which I have a particularly soft spot (as evidenced by my recent writings on Tasman’s diversification into this metal). Thirdly it is geologically governed by the Eastern Ophiolite Belt which is a spur of the great Tethyan Copper Belt that stretches from the Carpathians in Slovakia, all the way through the Balkans, across, Turkey, Iran and ending in Afghanistan or Pakistan depending on your point of view.

I am more conflicted as to whether it is a positive or negative for the country that it is not currently a member of the EU.

Albania, with a population of approximately 3.5 million people, has had an open market economy since 1991 though the country’s potential (mineral and otherwise) remains largely untapped. The population of Albania is relatively young, (average age of 32) and the majority of people speak English, Greek and/or Italian. There is an ongoing effort in the country to improve infrastructure, sanitation facilities and wealth creation amongst its population as part of an overall bid to eventually join the European Union.

Suffocating Congo’s War – by John Prendergast, Sasha Lezhnev and Lauren Wolfe (Foreign Policy – February 7, 2015)

February 11, 2015

http://foreignpolicy.com/

Rules imposed by Dodd-Frank are cutting off a critical source of funding for armed groups that have plagued the country for more than 20 years.

In a critique on the campaign to end the trade in conflict minerals from the Democratic Republic of Congo, Foreign Policy contributor Lauren Wolfe asserts that three main arguments used by the campaign are myths. Over a decade of independent research by the United Nations, Congolese research bodies, and NGOs, as well as key leaders of Congolese civil society, however, reveal critical evidence on why work on conflict minerals is one important part of the solution in eastern Congo.

In its assessment of the impact of the Dodd-Frank legislation on conflict minerals, the article misses the larger picture of the deadly conflict in eastern Congo and ignores many important voices of Congolese civil society.

[Editor’s note: A response from Lauren Wolfe can be found at the end of this article.]

Alleged myth: Armed groups control and rely on most of Congo’s mines, and Dodd-Frank has helped to counteract them.

Fact: Armed groups and their backers have profited heavily from minerals in eastern Congo, and Dodd-Frank Section 1502 is starting to transform that. But there is still a long way to go.

Disputed Land Claims The Greatest Deterrent To B.C. Mine Investment – by Ravina Bains and Taylor Jackson (Huffingtion Post – February 6, 2015)

February 11, 2015

http://www.huffingtonpost.ca/british-columbia/

Ravina Bains and Taylor Jackson are Fraser Institute policy analyists.

More than 10,700 British Columbians were employed in the mining sector in 2013 with an average salary and benefits totalling $114,600. That same year, the mining industry contributed $511 million in revenues to the B.C. government. However, the industry faces an uncertain future.

Depreciated commodity prices, a tough financing market for juniors, and a slowdown in global demand will make it difficult to attract mining investment in the near-term.

Last week the B.C. government announced that it will establish a Major Mines Permitting Office to streamline the permitting process for the industry. But a lengthy permitting process is not the biggest policy issue hampering mining investment in the province. That distinction belongs to disputed land claims — the greatest deterrent to investment in B.C.

According to the Fraser Institute’s Annual Mining Survey, in terms of pure mineral potential, B.C. ranks in the top five most attractive jurisdictions in the world. However, when government policy (or lack thereof) is added to the equation, B.C. starts to lag behind similar jurisdictions.