February 19, 2015 – Republic of Mining

Low dollar could help Sudbury miners in labour negotiations – by Staff (Northern Ontario Business – February 19, 2015)

February 19, 2015

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.

A low Canadian dollar could work in the United Steelworkers’ favour as they enter into contract negotiations with Vale in Sudbury, said a Laurentian University commerce professor.

The current five-year collective bargaining agreement between the United Steelworkers Local 6500 and Vale will expire at midnight on May 31, 2015. Jean-Charles Cachon said the low Canadian dollar should give the Steelworkers more bargaining leeway when it comes to salaries.

The lower Canadian dollar decreases Vale’s operational costs in Sudbury, Cachon said. “As workers are paid in Canadian dollars, any weakening of the Canadian dollar is to the advantage of Canadians,” he said.

“It’s becoming a seller’s market in terms of the job market,” Cachon said. “There are less and less people waiting to work for the mining industry. They (Vale) are probably going to have to pay a premium for employees in the next few years.”

Cachon said he expects the Canadian dollar to stay well below parity as long as oil prices remain low. But while the low dollar might give workers more negotiating room, Cachon said he does not expect Vale to give in without a fight.

Rio Tinto Alcan open to expanding Canadian smelters once market rebounds: CEO – by Ross Marowits (Canadian Press/Vancouver Sun – February 18, 2015)

February 19, 2015

http://www.vancouversun.com/index.html

MONTREAL – Rio Tinto Alcan plans to expand its smelting capacity in Canada once the fragile aluminum market gains strength, the mining giant’s CEO said Wednesday.

Alfredo Barrios says aluminum prices, which have retreated since rising last year, are not encouraging investment at the moment because of excess smelting capacity.

But strong long-term fundamentals, including demand expected to grow through 2025 in part from the automotive sector, should eventually encourage new investments.

“If the market starts improving and the returns start remunerating the investments then there are a number of projects that we have across the world, even in Quebec, to potentially grow,” Barrios, who took the helm last June, told reporters. He pointed specifically to a new Alouette smelter and expansion of its AP60 pilot project in Quebec.

“When the moment is right, Quebec is a clear place where we will be investing in smelting. That is where our core smelting business is.” However, the 48-year-old former oil executive wouldn’t say how long it could take before these new projects could be built.

Copper heading for 1.5 million tonne deficit by 2018 – by Lawrence Williams (Mineweb.com – February 19, 2015)

February 19, 2015

http://www.mineweb.com/

Bernstein senior analyst, Paul Gait, sees a huge copper supply deficit arising over the next few years.

While most mainstream bank analysts don’t see it – perhaps being too fixated on current spot prices in their analyses – global research and investment management group Bernstein senior analyst, Paul Gait, looks to the medium- and long-term view and sees a massive copper supply deficit building over the next few years and reaching as much as 1.5 million tonnes by 2018.

Speaking at the Natural Resources Forum Latin America meeting held at London’s Royal Institution, Gait also commented that he does not see the China dominated supercycle as being over, but only about a third into its full course. This suggests a major turnaround in the copper price, which is currently languishing at around the $2.60/lb ($5,700/tonne) mark, over the next two to three years.

These are controversial statements going hugely against much current thinking, but he makes some good points on his way to this prediction, but does warn that copper frequently seems to confound analysts’ predictions both on the upside and downside.

At the moment Gait says that cash mining costs are on average close to the copper price itself but that historically base metals, apart perhaps from aluminium, tend to trade at a substantial premium to cash costs – and copper particularly so to normally average 50% above costs.

Goldcorp takes US$2.3-billion writedown on ‘cornerstone’ Argentine project – by Alexandra Posadzk (Canadian Business – February 19, 2015)

February 19, 2015

http://www.canadianbusiness.com/

Goldcorp Inc. reported a US$2.4-billion net loss in its latest quarter as it took a big writedown charge on its Cerro Negro project, but the company’s chief executive says he still has high hopes for the Argentine mine.

“This is an accounting charge and does not reflect losses of gold ounces in the ground or our expectations for this asset,” Charles Jeannes told investors during a conference call Thursday.

“Quite the contrary, we continue to believe Cerro Negro will be a cornerstone operation for Goldcorp for a long time to come.”

The news came after the gold miner announced a loss of $2.94 per diluted share in the fourth quarter compared with a loss of US$1.1 billion or $1.34 per diluted share in the last three months of 2013.

The loss includes the US$2.3-billion hit that Goldcorp took in relation to a drop in the value of the Cerro Negro project, which began commercial production last month.

On an adjusted basis, Goldcorp says it earned US$55 million or seven cents per share, down from nine cents per share in the fourth quarter of 2013. Analysts had estimated an adjusted profit of 12 cents per share for the quarter, according to Thomson Reuters.

Barrick Gold Investors Get Answers as Thornton Outlines Strategy – by Liezel Hill (Bloomberg News – February 19, 2015)

February 19, 2015

http://www.bloomberg.com/

(Bloomberg) — Barrick Gold Corp. investors waiting to hear Chairman John Thornton’s plans for the world’s biggest gold producer finally have some answers.

Barrick will stay focused on gold and has no plans to diversify into other metals, Thornton said Thursday in his first appearance on a quarterly earnings call.

The chairman, who replaced Barrick’s founder Peter Munk in April, said he’s trying to go “back to the future,” returning the Toronto-based company to the nimble, entrepreneurial roots that first made it successful.

The last few years have been tumultuous for Barrick, with the departure of two chief executive officers, a sliding gold price and a tumbling share price. With shareholders looking for reassurance, at least two of them — ASA Gold & Precious Metals Ltd. and USAA Precious Metals & Minerals Fund — have complained that Thornton’s plans for the future weren’t clear.

“After having listened to the call, I do feel better about Barrick and its corporate strategy,” Diana Racanelli, a Toronto-based resources fund manager at Manulife Asset Management, said Thursday. “These have all been key issues that needed to be addressed.”

Barrick Gold posts another big quarterly loss (Canadian Press/CTV News – February 19, 2015)

February 19, 2015

http://www.ctvnews.ca/

TORONTO — Barrick Gold Corp. (TSX:ABX), citing massive impairment charges on mine projects in Africa and Chile, has reported another multibillion-dollar net loss in its most recent quarter.

Canada’s second-largest gold miner by market capitalization says it net loss in the three months ended Dec. 31 was US$2.85 billion or US$2.45 per share, compared with a net loss of US$2.83 billion or US$2.61 per share in the same 2013 period when it had fewer shares.

Revenue was US$2.51 billion, down from US$2.94 billion as the company sold fewer ounces of gold — 1.57 million versus 1.83 million — at an average realized price of US$1,204 per ounce compared with $1,272 in the 2013 quarter.

The quarterly loss reflected the impact of US$2.8 billion in after-tax impairment charges primarily related to the Lumwana mine in Zambia (US$930 million) and the Cerro Casale project in Chile (US$778 million), the company said in an earnings report issued Wednesday after markets closed.

Fourth-quarter adjusted net earnings were US174 million or 15 U.S. cents per share, compared with US$406 million or 37 cents in the 2013 quarter. For the full year, Barrick recorded a net loss of US$2.91 billion or $2.50 per share, reflecting the impact of $3.4 billion in after-tax impairment charges. The full-year net loss in 2013 was US$10.37 billion or US$10.14 per share.

UPDATE 1-Brazil’s Vale beats iron ore forecast, takes nickel crown – by Stephen Eisenhammer (Reuters U.S. – February 19, 2015)

February 19, 2015

http://www.reuters.com/

Feb 19 (Reuters) – Brazilian miner Vale SA said on Thursday it produced 319.2 million tonnes of iron ore in 2014, beating its forecast for the year, as it begins to boost production after years of stagnation.

Vale, the world’s largest producer of iron ore, produced 83 million tonnes of the steelmaking ingredient in the fourth quarter, an increase of 2 percent from the same period a year earlier.

Full-year iron ore production rose 6.5 percent compared with the previous year, breaking through the 300 million-tonne-a-year mark, where it has been practically frozen since 2007. Vale had forecast output of 312 million tonnes for the year.

The growth in production will be more than offset by falling iron ore prices, which fell by half last year as a massive increase in Australian capacity coincided with a slowdown in China, the main market for iron ore.

Vale took the crown for the world’s biggest producer of nickel from Russia’s Norilsk Nickel, reaching 275,000 tonnes of the ingredient used to make stainless steel in 2014. That was its best performance since 2008, despite falling short of guidance.

A Gold Digger’s Guide to the Universe – by Dr. Sten Odenwald (Huffington Post – February 19, 2015)

February 19, 2015

http://www.huffingtonpost.com/science/

Dr. Sten Odenwald is an Astronomer at the National Institute of Aerospace.

The first documented use of gold by humans was found in the jewelery recovered from the Varna Necropolis in Bulgaria and dated to about 6,500 years ago. Since then, enough gold has been mined from Earth’s crust to form a cube 60 feet on a side.

Gold is one of the 100-odd basic elements in the universe. Number 79 in the element list, a cubic meter of it weighs 19 metric tons. Your ‘weight in gold’ would be worth over $2 million! How much gold is there?

The most common ingredient to Earth’s crust is silicon. It makes up beach sand, granite, sandstone and the actually the entire lithosphere. By comparison, you have to sift through about 250 metric tons of this stuff to come up with a measly 1 gram (5 carats) of gold. This kind of a gold mine would be rated at 0.004 g/ton. Generally, industrial mining is only economically feasible if the rating is about 1gram/ton or higher! The best mines produce gold at ratios of 5 gm/ton or more when a rich ore vein is available.

How about sea water? For every 250 million liters of water you will get about 1 gram of gold. This works out to about 1 gram for every 255,000 tons of water or a ratio of 0.000004 g/ton. This of course will be mixed with all kinds of other sediments in solution too, like 34,000 g/ton of sodium, chloride and other ions. So mining for gold in the ocean is not just a matter of evaporating away the water!

Hard up miners turn to Asian contractors to help fund projects – by Nicole Mordant and Sonali Paul (Reuters India – February 19, 2015)

February 19, 2015

http://in.reuters.com/

(Reuters) – Miners who can’t get financing for new projects from banks or traditional equity investors because metals prices have collapsed are turning to an alternative source: the engineering and construction companies, many from China and South Korea, who actually build their mines.

Several North American and Australian miners are in talks with engineering, procurement and construction (EPC) companies to take equity stakes or bring along banking partners to provide debt funding in projects in return for the EPC group winning a contract. China’s NFC and South Korea’s POSCO Engineering & Construction Co Ltd are among the companies pursuing these deals as they look to make up for business lost because of slowing infrastructure growth at home.

“The domestic order books of Chinese construction and equipment companies have been falling for a year, actually quite dramatically,” said Ingo Hofmaier, director at Hannam & Partners, a London-based corporate finance advisory firm. “To avoid underutilization and keep the music going, Chinese companies are now aggressively targeting foreign markets.”

Infrastructure investment in China slowed in 2014 as authorities try to re-engineer the growth model by reducing inefficient state spending and encouraging domestic consumption. Investment grew at its slowest pace in nearly 13 years between January and November 2014 at 15.8 percent, according to official figures.

Lockerby Mine fire under investigation – by Carol Mulligan (Sudbury Star – February 19, 2015)

February 19, 2015

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

A fire underground Monday at First Nickel Inc.’s Lockerby Mine, in which no one was injured, illustrates the effectiveness of procedures and protocols in place in Ontario to react to emergencies underground, says the company’s vice-president.

Officials at First Nickel and with the Ministry of Labour are investigating the cause of a fire detected Monday about 11 a.m. on a conveyor belt in a small space of the mine in which no one was working at the time.

Vern Baker, FNI vice-president of Sudbury operations, said the fire drove more than 30 employees who were working underground to refuge stations, where they remained for 61/2 hours.

Flames were evident when mine rescue teams showed up and they put the fire out with water, said Baker. “The problem almost always in a mine is not the flame,” said Baker. “The problem is the smoke. That’s where the real danger for most of us is.”

While company officials don’t know what caused one of several conveyor belts at the nickel mine to catch fire, they have ruled it was not caused by electricity or “by a person,” said Baker.

NEWS RELEASE: For the first time in Quebec, Canada: World Uranium Symposium

February 19, 2015

QUEBEC CITY, Feb. 19 2015 /CNW Telbec/ – The World Uranium Symposium will be held for the first time in Quebec City, Canada, from April 14 to 16, at the Centre des congrès de Québec. Organized by medical associations and civil society partners, the symposium will welcome more than 100 national and international specialists who will examine major questions associated with the nuclear fuel chain, including issues related to economic trends in the industry, safety and governance, social and environmental aspects, health, ethics, human rights, and indigenous peoples’ rights (register online: www.uranium2015.com/en).

“We’re very pleased to be able to present the World Uranium Symposium in Quebec this year. This is an important event and a unique opportunity for specialists and the public alike to explore the key issues pertaining to the nuclear fuel chain,” says Dr. Juan Carlos Chirgwin, Faculty lecturer at McGill University and president of Physicians for Global Survival (1985 Nobel Peace Prize).

2015: a key year for debating the future of nuclear energy

The World Uranium Symposium is taking place in a unique international context: rising costs and safety issues related to the Fukushima accidents in 2011 have led many countries to question the future of nuclear energy, which currently generates about 11% of the world’s electricity. This year also marks the 70th anniversary of the bombings of Hiroshima and Nagasaki, as well as the United Nations’ negotiations in New York for the Non-Proliferation Treaty. A new United Nations climate agreement will also be signed in Paris this year. All of these issues form the backdrop for the Symposium, whose primary aim is to make key recommendations to public policy makers to ensure increased protection of health, safety and the environment (see Preliminary Program).