February 27, 2015 – Republic of Mining

Platinum CEOs say mechanisation not a panacea – by David McKay (MiningMx.com – February 27, 2015)

February 27, 2015

http://www.miningmx.com/

THE mechanisation of mines has become a buzzword in the South African mining sector construed as something of a panacea for investors especially in the platinum sector where estimates suggest two-thirds of production is still cash negative.

For unions, however, mechanisation implies looming job cuts. According to Chris Griffith, CEO of Anglo American Platinum (Amplats), the Anglo American listed subsidiary, mechanisation is neither quite of these things entirely, although he acknowledges there’s a long-standing debate on the effect of mechanisation and the impact on jobs.

“[I]t is common cause that better productivity is better for the economy,” said Griffith in a presentation at the Mining Indaba conference earlier this month. “Jobs don’t get lost – they get created in new areas,” he said, adding that mechanisation was “… a social and economic imperative”.

Tell that to Lonmin shareholders who witnessed the efforts of former CEO, Brad Mills, who pioneered mechanisation from about 2007 at the group’s operations with the intention of taking mining costs down to 35% of total costs from 65% at that time. It failed and cost him his job.

Said Griffith in an interview with Miningmx: “Mechanisation is not universal panacea; sometimes it’s not the solution. At Lonmin, it was at an early stage of mechanisation but we’ve had a long history since then.

BHP Sounds Warning as Casualties Mount in Iron Ore Price War – by Thomas Biesheuvel and Jesse Riseborough (Bloomberg News – February 24, 2015)

February 27, 2015

http://www.bloomberg.com/

(Bloomberg) — The first fractures are appearing in an escalating iron ore price war that’s putting more producers out of business.

The biggest mining companies led by Rio Tinto Group, BHP Billiton Ltd. and Vale SA have persisted with multi-billion dollar expansion plans, citing still-healthy earnings even in the wake of a price collapse. Now, for the first time, one of the big three has voiced concern they may have gone too far.

“I do fear that other competitors have an awful lot more capital waiting in the wings to invest in expanding,” Andrew Mackenzie, chief executive officer of BHP, the world’s largest mining company, told analysts on a conference call on Tuesday after reporting a 35 percent decline in underlying profit from his iron-ore division. “We do look to the future and see a degree of pressure downwards on iron-ore prices.”

BHP, Rio and Vale have been squeezing smaller rivals in their quest for market share, while demand growth in China, the biggest consumer, slows. From Sierra Leone’s jungle to Sweden’s Lapland, abandoned mines are beginning to dot the global landscape.

“They wanted to make sure no one else entered the market and to maximize their own market share,” said Seth Rosenfeld, an analyst at Jefferies International Ltd. in London. “They’ve now done that as they’re expanding and no one else is.”

Australian coal industry takes another step closer to the abyss – by Peter Ker (Sydney Morning Herald – February 27, 2015)

February 27, 2015

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

The downturn in the Australian coal industry has deepened, with three major mining companies warning on Friday that more jobs will be cut, mines will close and assets will be written down to a shadow of their former value.

Rio Tinto, Glencore and Brazilian miner Vale have all reiterated their pessimistic view of the coal sector’s future, revealing major changes to their local operations.

Glencore has made the most aggressive move, announcing that it will cut its Australian coal output by 15 million tonnes in 2015, or more than 20 per cent when compared to 2014 volumes.

In a move that is likely to put more than 100 jobs on the line, Glencore said the cuts would “more closely align” its coal output with customer demand, and some expansion projects would be slowed. “We will defer some projects and ensure that inventory management and blending are optimised,” the miner said in a statement.

The move comes less than a year after Glencore tried to merge its Australian coal division with Rio Tinto’s, underlining the predicament the Australian coal sector finds its self in.

Probe’s David Palmer our Mining Person of the Year – by Trish Saywell (Northern Miner – February 25, 2015)

February 27, 2015

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

When the discovery of a new gold patch rocks the mining world, it is a wondrous thing. When the discovery is made in an underexplored area with no previously known precious metal deposits it’s even more exciting, and when the discovery stems, in part, from a simple good deed, it becomes extraordinary.

The tale of how David Palmer discovered the Borden Lake gold deposit and earned the prestigious Bill Dennis Award and title to The Northern Miner’s Mining Person of the Year for 2014 begins in 2003, about four years after he graduated from McGill University with a PhD in economic geology.

The geologist, whose PhD thesis focused on ore-forming hydrothermal fluids associated with carbonatites, was working for a junior, when a prospector he didn’t know by the name of Bob de Carle, pitched a nickel property called Sunday Lake, north of Thunder Bay.

The property didn’t fit the company’s model, so it passed. But Palmer thought it still held promise. His view was that the material just hadn’t been presented in the right way, which masked some of what he felt were its most interesting features. So he offered to spend some personal time reworking the geological data to improve the odds that de Carle — a geophysicist by training — could find success the next time he shopped it around.

Cash-strapped North Korea steps up mining output – by Anna Fifield (Washington Post – February 27, 2015)

February 27, 2015

http://www.washingtonpost.com/

SEOUL — The sharp fall in global commodity prices is starting to have an impact on North Korea, economists say, hurting a state that relies heavily on exports of minerals to keep its economy afloat — and its gargantuan military funded.

Combined with China’s economy coming off the boil, the recent slump in coal prices in particular could hurt Kim Jong Un’s “byungjin” policy: his stated desire to simultaneously develop North Korea’s economy and its nuclear weapons program.

“Commodity prices are dropping, so it’s becoming more and more difficult for North Korea to earn foreign currency,” said Choi Kyung-soo, president of the North Korea Resources Institute in Seoul. “I think last year, minerals trade decreased by about 10 percent by volume and about 15 percent by price.”

Mining makes up roughly 14 percent of the North Korean economy, which, although in a parlous state and under heavy financial sanctions, appears to have been growing modestly in recent years, when China still was booming and commodity prices still were surging.

Getting to Yes has never been tougher – by Jeffrey Simpson (Globe and Mail – February 27, 2015)

February 27, 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.

Mines and forest projects can face the same procedural snakes and ladders.
In Northern Ontario, the so-called Ring of Fire chromite deposits will be
tied up for years and years in environment reviews and aboriginal demands.
Already, the major U.S. company interested in developing the deposits has
walked away. Who could blame it? (Jeffrey Simpson – Globe and Mail)

Forget for a moment U.S. President Barack Obama’s doubts about the Keystone XL pipeline. Whether the President decides for or against the project shouldn’t deflect Canadians from asking within their own borders: How do we get to Yes?

Getting to Yes is becoming harder all the time. Fossil-fuel developments, pipelines, mines, dams, hydro-electric transmission lines and wind turbines are frequently contested, delayed or blocked.

Even when they’re approved, the process for getting to Yes can take so long that projects lose their economic rationale, as with the now-abandoned Mackenzie Valley gas pipeline, which shuddered to a halt after 10 years of review because the gas market had changed. Or, projects are postponed or killed because they face tough competition from overseas suppliers where approvals are not so protracted. Proposed liquefied natural gas projects in British Columbia face this very risk.

The Mongols were fearsome warriors… and big POLLUTERS: Kublai Khan’s silver mining dumped more heavy metals into the environment than modern industry – by Richard Gray (Daily Mail – February 27, 2015)

February 27, 2015

http://www.dailymail.co.uk/home/index.html

They were feared as barbarians who built one of the largest empires in the world from horseback, but it appears the Mongolian emperors were also some of the planet’s biggest polluters.

A new study into the silver mines of Kublai Khan, the grandson of Genghis Khan, shows that the people produced four times as much pollution as modern industrial mining activities.

It is thought to be one of the few examples where pre-industrial period pollution has exceeded modern day levels. Geologists from the University of Pittsburgh and the Chinese Academy of Sciences have found pollution from heavy metals like lead, zinc and cadmium spiked between 1271AD and 1368AD in the Yunnan region of south west China.

They say that this pollution was caused by large amounts of silver smelting driven by the Mongolian hunger for the precious metal, which they used to make coins, jewellery and art.

Writing in the journal Environmental Science and Technology, Aubrey Hillman, who led the work, said that the impact of this pollution was still being felt today by the wildlife and environment in the area.

Giant Mine headframe set for demolition this summer – by Guy Quenneville (CBC News North – February 27, 2015)

February 27, 2015

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

Yellowknife city council abandons plans to take over Con Mine Robertson headframe

One landmark from Yellowknife’s gold mining past is close to disappearing for good, while the future of another is in limbo. Plans are underway to begin dismantling the iconic C-Shaft headframe at Giant Mine this summer, representatives from Aboriginal Affairs and Northern Development Canada said at a public meeting Thursday night.

It’s part of an early “site stabilization” phase of the remediation project triggered in 2013 by concerns about site safety. “People will definitely notice a difference,” said Jane Amphlett, an engineering manager with the project.

“We haven’t finalized the plan, but it’s likely that significant parts of the shaft will come down in the next year, and likely perhaps all of it will come down once [our engineers] finalize the actual plan for it.” Amphlett said the timber tower, which is at the centre of the clean-up site, poses a potential safety risk to remediation workers.

The smaller A-Shaft headframe, near the Yellowknife boat launch area and close to the intended site of a proposed N.W.T. Mining Museum, will also be taken down, though when has not be determined yet, Amphlett added.

Pebble Mine debate in Alaska: EPA becomes target by planning for rare ‘veto’ – by Joby Warrick (Washington Post – February 15, 2015)

February 27, 2015

http://www.washingtonpost.com/

Just north of Iliamna Lake in southwestern Alaska is an empty expanse of marsh and shrub that conceals one of the world’s great buried fortunes: A mile-thick layer of virgin ore said to contain at least 6.7 million pounds — or $120 billion worth — of gold.

As fate would have it, a second treasure sits precisely atop the first: the spawning ground for the planet’s biggest runs of sockeye salmon, the lifeline of a fishery that generates $500 million a year.

Between the two is the Obama administration, which has all but decided that only one of the treasures can be brought to market. How the White House came to side with fish over gold is a complex tale that involves millionaire activists, Alaska Natives, lawsuits and one politically explosive question: Can the federal government say no to a property owner before he has a chance to explain what he wants to do?

As early as this spring, the Environmental Protection Agency is expected to invoke a rarely used legal authority to bar a Canadian company, Northern Dynasty Minerals Ltd., from beginning work on its proposed Pebble Mine, citing risks to salmon and to Alaska’s pristine Bristol Bay, 150 miles downstream.

The EPA’s position is supported by a broad coalition of conservationists, fishermen and tribal groups — and, most opinion polls show, by a majority of Alaskans.