Tax breakthrough at Rio Tinto’s Mongolia copper mine -source – by Terrence Edwards (Reuters U.S. – March 31, 2015)

http://www.reuters.com/

ULAN BATOR – (Reuters) – Rio Tinto and Mongolia have made a breakthrough in a tax dispute that has been among issues stalling development of the $6.5 billion Oyu Tolgoi copper mine, according to an official familiar with the government’s position.

Disputes over costs and taxes have delayed an expansion of the mine that would extend its life beyond an estimated 15 years.

“Misunderstandings and issues surrounding the tax climates have been resolved,” the official told Reuters, without specifying the terms of an agreement or what other issues needed to be resolved for the next underground phase of the project to go ahead.

“The parties are working towards agreeing on the commercial terms of the underground project,” added the official, who asked not to be named because no announcement had been made yet. A Rio Tinto spokesman and a spokesman for Mongolia’s mining ministry declined to comment.

A spokesman for Rio’s Turquoise Hill Resources, which owns 66 percent of the mine, also declined to comment and pointed to a statement last week that said Oyu Tolgoi was appealing a ruling by Mongolia’s Tax Dispute Resolution Council to the country’s Administrative Appellate Court.

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India: At the coalface – by James Crabtree (Financial Times – March 31, 2015)

http://www.ft.com/home/us

Failure to boost energy supplies will hurt Modi’s goal of turning India into a manufacturing force

A large, colourfully painted sign hangs above the entrance to the depths of Jhanjra, the largest underground mine in West Bengal’s Raniganj coal belt. The left side shows Indian mining as it once was, with roughly drawn cartoon figures wielding basic shovels and carrying woven baskets of coal, balanced on their heads. The right paints a more modern scene, featuring large yellow mining machines, operated by skilled technicians.

Take the cage-like lift down hundreds of metres into the darkness below, and walk for nearly an hour through narrow tunnels in stifling heat, and that second image suddenly becomes real as a cutting vehicle with fierce rotating metal teeth, known as a continuous miner and built by US manufacturer Caterpillar, rips tonnes of black rock from the coal face.

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Appalachia Miners Wiped Out by Coal Glut That They Can’t Reverse – by Mario Parker (Bloomberg News – March 30, 2015)

http://www.bloomberg.com/

(Bloomberg) — Douglas Blackburn has been crawling in and out of the coal mines of Central Appalachia since he was a boy accompanying his father and grandfather some 50 years ago.

The only time that Blackburn, now a coal industry consultant, remembers things being this bad was in the 1990s. Back then, he estimates, almost 40 percent of the region’s mines went bankrupt.

“It’s a similar situation,” said Blackburn, who owns Blackacre LLC, a Richmond, Virginia-based consulting firm. Now, like then, the principal problem is sinking coal prices. They’ve dropped 33 percent over the past four years to levels that have made most mining companies across the Appalachia mountain region unprofitable.

To make matters worse, there’s little chance of a quick rebound in prices. That’s because idling a mine to cut output and stem losses isn’t an option for many companies. The cost of doing so — even on a temporary basis — has become so prohibitive that it can put a miner out of business fast, Blackburn and other industry analysts say.

So companies keep pulling coal out of the ground, opting to take a small, steady loss rather than one big writedown, in the hope that prices will bounce back.

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Mining Documentary: Yamashita’s Gold – World War Two History

 

http://en.wikipedia.org/wiki/Main_Page

Yamashita’s gold, also referred to as the Yamashita treasure, is the name given to the alleged war loot stolen in Southeast Asia by Japanese forces during World War II and hidden in caves, tunnels and underground complexes in the Philippines. It is named for the Japanese general Tomoyuki Yamashita, nicknamed “The Tiger of Malaya”. Though accounts that the treasure remains hidden in the Philippines have lured treasure hunters from around the world for over fifty years, its existence is dismissed by most experts.[1][2] The rumored treasure has been the subject of a complex lawsuit that was filed in a Hawaiian state court in 1988 involving a Filipino treasure hunter, Rogelio Roxas, and the former Philippine president, Ferdinand Marcos.[3]

The looting and the alleged cover-up[edit]

Prominent among those arguing for the existence of Yamashita’s gold are Sterling Seagrave and Peggy Seagrave, who have written two books relating to the subject: The Yamato Dynasty: the Secret History of Japan’s Imperial Family (2000) and Gold Warriors: America’s Secret Recovery of Yamashita’s Gold (2003). The Seagraves contend that looting was organized on a massive scale, by both yakuza gangsters such as Yoshio Kodama, and the highest levels of Japanese society, including Emperor Hirohito.[4]

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De Beers toughens rules for diamond customers – by James Wilson and Avantika Chilkoti (Financial Times – March 29, 2015)

http://www.ft.com/intl/companies/mining

De Beers is making the biggest reforms in more than a decade to the way it sells most of its diamonds, amid concerns over the financial stability and transparency of some of its best customers.

The diamond group, which sells $6bn of unpolished diamonds annually and is the world’s largest supplier by value, is introducing tougher rules for companies wanting to join its coveted group of customers known as “sightholders”.

Under the new rules, expected to be announced this week, sightholders will have to present their accounts according to international standards. De Beers will also insist customers hold a specified proportion of equity in their businesses, making them less reliant on bank borrowing.

De Beers sells about 90 per cent of its mined output to sightholders, which play a vital role in the diamond trade, cutting and polishing rough stones and channelling them into global jewellery markets.

Only about 80 companies — most from traditional diamond trading and polishing centres such as Antwerp, Israel or India — are approved by De Beers to become sightholders and take part in regular sales, or “sights”, each year where they buy rough stones.

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Former Xstrata CEO under pressure to make new mining deals – by Silvia Antonioli and Freya Berry (Reuters India – March 31, 2015)

http://in.reuters.com/

LONDON, March 31 (Reuters) – More than a year after he launched his private fund, former Xstrata boss Mick Davis is coming under pressure to build a new mining empire with the $6 billion in capital he has raised.

The renowned dealmaker set up X2 Resources 18 months ago after Glencore’s $46 billion takeover of Xstrata, when he was passed over for the top job in favour of his Glencore counterpart, Ivan Glasenberg.

Davis has since approached most large mining companies looking to buy a variety of assets, banking and industry sources said, but nobody has agreed to sell given a feeling that current prices are at rock bottom and may turn up again before long.

“Mick’s team has been looking at so many assets closely. But nobody wanted to sell to them. Vale didn’t want to sell, Rio didn’t want to sell, BHP didn’t want to sell,” said an industry source close to Davis. With his portfolio still empty, some sources expressed concern that some investors’ patience with Davis may run thin.

A banking source said: “Not all those investors are stuck on mining. So they say: if we can’t spend on this, we’ll go buy a bank or a supermarket.”

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Teck Resources Ltd, Antofagasta Plc deny merger talks – by Peter Koven (National Post – March 30, 2015)

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

Investors got excited at the prospect of a merger between Teck Resources Ltd. and Antofagasta PLC on Monday, but any deal would likely require major compromises by the families in control of each company.

Vancouver-based Teck is controlled by the Keevil family and Japanese firm Sumitomo Metal Mining Co. through multiple-voting shares. Antofagasta is under the thumb of Chile’s Luksic family, which owns 65% of the shares.

Both companies denied they are in merger talks, but Bloomberg reported that they held early-stage negotiations.

A merger would create a dominant copper producer with more than one million tonnes of output per year, vaulting it into the top five producers worldwide. It would also reduce Teck’s reliance on coking coal, where it is is facing very weak market conditions.

Their valuations are quite similar, as Teck is worth $11-billion while Antofagasta is worth slightly above $13-billion. Any deal is likely to be all-stock or very close to it, which puts the family share ownership in the spotlight. No deal will happen unless the families endorse it and loosen their respective grips on the companies.

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Eldorado Gold faces accusations of tax avoidance in Greece – by Eric Reguly (Globe and Mail – March 31, 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.

Canada’s Eldorado Gold Corp., the biggest foreign investor in Greece, is engaged in a tax-avoidance scheme that uses mailbox companies in the Netherlands to lower its tax load, a new report from a Dutch foundation says.

The Centre for Research on Multinational Corporations, known as SOMO, made the claim in a detailed 116-page report called Fool’s Gold, which was released in Amsterdam Monday and will be presented Wednesday in Athens at a panel discussion featuring Norway’s Eva Joly, a member of the Green Party in the European Parliament.

The report claims the scheme has cost the Greek government at least €1.7-million ($2.3-million) in revenue in the past two years.

The timing of the report was apparently no accident. It came as Eldorado fights hard to keep its Greek mining operations going in the face of threats from Greece’s new radical left Syriza government to shut down or curtail them over environmental concerns. It also came a month after the European Parliament’s committee on tax rulings revealed it is examining allegations that some European Union countries are using special tax regimes or deals to favour large companies.

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Putting oil revenues into a savings fund isn’t always a great idea – by Stephen Gordon (National Post – March 31, 2015)

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

Pundits outside Alberta are almost unanimous in their support for a Norway-style sovereign wealth fund. If only the Alberta government had saved more of its resource revenues, the argument goes, then the Alberta government would have saved more of its resource revenues. Or something like that; details are never the strong suit of big-picture pundits. It’s usually enough to make the clearly unarguable point that it would nice to have an extra $1 trillion on hand, just like the Norwegians.

The Alberta government could have set aside some of its revenues into a wealth fund. But then again, so could have the federal government and any of the other provincial governments; Quebec already has put away $7 billion into its Generations Fund. The mechanics are pretty simple: set expenditures less than revenues and put the savings into a wealth fund. Any government can do it, so why don’t they? The answer is of course that saving is costly, and the benefits of being able to finance future spending don’t always exceed the costs of sacrificing current expenditure.

There are two things you can do when your income goes up: You can spend the increase, or you can save it (or some combination of the two). The theory of optimal savings says that the decision depends on whether or not the increase is temporary or permanent. A purely temporary jump in earnings — a good example is winning the lottery — should be saved, so that the benefits can be spread out across a long period of time.

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Vale, Sudbury employees charged – by Carol Mulligan (Sudbury Star – March 31, 2015)

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

The Ministry of Labour has laid nine charges against Vale Canada Ltd. and eight charges against three company employees in the April 6, 2014, death of millwright Paul Rochette at Vale’s Copper Cliff Smelter Complex.

Rochette, 36, died from injuries to the head after a large piston or moil operating under pressure, crushing ingots of nickel under pressure, released from an area of a processing system at the smelter.

A second man, 28, who has never been identified, also suffered injuries to the face and head. Vale has been charged under the Occupational Health and Safety Act with failing to:

– Ensure that while work was being done on the Farrel crusher, any gravity stored energy was dissipated or contained;

– Ensure that while work was being done on the Farrel crusher, all energy isolating devices were properly engaged, locked and tagged;

– Provide information, instruction and supervision to workers on a safe procedure to remove a broken moil point from the jaws of the Farrel crusher;

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ENEMY OF MINE ENEMY: Mining companies and lobbyists are waging the real war on coal – by Jake Flanagin (Quartz – March 30, 2015)

http://qz.com/

It is indisputably better to be a coal miner today, in 2015, than in 1969—the year in which Congress passed the Federal Coal Mine Health and Safety Act.

Generally known in simpler terms as “the Coal Act,” the law precipitated the establishment of a number of crucial regulatory bodies, including the Mining Safety and Health Administration (MSHA)—a sort of Occupational Safety and Health Administration (OSHA), tailor-made for underground and surface-mining operations.

The act itself, in addition to creating this regulatory framework, laid down a set of nationwide health and safety standards for US miners, who, prior to, suffered some of the highest work-related mortality rates in the country.

The passage of the Coal Act, in conjunction with the establishment of MSHA, is generally credited with the precipitous decline in prevalence of coal worker’s pneumoconiosis (CWP, or “black lung”) between 1970 and 1995. This is an important distinction, because while life for the average coal miner today may be measurably better than it was 1969, it is not necessarily so when compared to industry-wide conditions in 1995.

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[Rouyn-Noranda Horn mine] Shuttered mine in Abitibi may live again – by Robert Gibbens (Montreal Gazette – March 30, 2015)

http://montrealgazette.com/

A team of mining engineers and geologists is determined to relaunch the historic Horne mine in northern Quebec, which produced 11.6 million ounces of gold and 2.5 billion pounds of copper from 1927 to 1976, when reserves ran dry.

They believe the Horne 5 deposit, located immediately below the old Horne mine workings, holds reserves that could make it one of Canada’s top gold-silver-copper producers.

Their company, Falco Resources Ltd., in 2012 acquired a 100-per-cent interest in 74,000 hectares and effective control over most of the historic Noranda mining camp at Rouyn-Noranda, the Abitibi regional centre 630 kilometres northwest of Montreal.

Last year, Horne 5 exploration showed an initial inferred mineral resource of 2.8 million ounces, with an average grade of 3.4 grams per tonne of ore. An initial mine information report was based mainly on pre-1976 drilling data generated by Noranda geologists.

This year Falco plans 16,000 metres of drilling down to about 1,500 metres to confirm existing data and assess Horne 5’s silver content. Metallurgical tests will show new mineral recovery rates and studies will begin into hydrology (the old mine may have to be dewatered), ore hoisting and rock mechanics.

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Southern Copper Cancels Peru Project Over “Anti-Mining Terrorism” (Latin American Herald Tribune – March 30, 2015)

http://www.laht.com/index.asp

LIMA – Southern Copper Corp. has decided to cancel its Tia Maria copper project in southern Peru because of “anti-mining terrorism” in the area.

“After evaluating the complete politicization of the (Tambo) Valley and the lack of decisiveness by the relevant authorities … I’m here to announce the cancelation of the Tia Maria project and the total withdrawal of our investment from the Arequipa region,” Southern Copper’s spokesman in Peru, Julio Morriberon, told RPP Noticias radio.

The announcement will be made official by top management via the “relevant procedures before the relevant agencies,” he said. “We’ve done our best as a company and as people to carry out a project that was going to bring great benefits for Tambo and for Peru,” Morriberon said.

Southern Copper, a unit of Mexico City-based Grupo Mexico, had been planning to invest some $1.2 billion in the construction of Tia Maria, which has an estimated mine life of 18 years and had been projected to produce 120,000 metric tons of copper cathodes annually from the start of operations in 2016.

The project had been halted for two years after peasant protests in 2011 in the small town of Islay left three dead and 44 wounded, and as a result the Peruvian government did not award construction permits until the beginning of this year.

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Coal Producers: Obama Royalty Reform May Shut Us Down – by Mark Drajem (Bloomberg News – March 25, 2015)

http://www.bloomberg.com/

(Bloomberg) — The Obama administration has proposed to change how it collects royalties on coal mined from federal land, a move that environmentalists hope, and the industry worries, will cut use of the fuel linked to climate change.

The Interior Department says the accounting change is needed to update rules adopted almost three decades ago, and streamline the program for companies such as Peabody Energy Corp. and Arch Coal Inc. And more changes are on the way.

“It’s time for an honest and open conversation about modernizing the federal coal program,” Interior Secretary Sally Jewell said in a speech last week to the Center for Strategic and International Studies in Washington. “How do we manage the program in a way that is consistent with our climate-change objectives?”

For industry, the broad effort is seen through the prism of their ongoing complaints that President Barack Obama is waging a “War on Coal.” Sales of federally owned coal from the Powder River Basin in Wyoming and Montana — the biggest source — topped 350 million tons last year, generating company revenues of almost $5 billion, government data showed.

The Interior Department wants to assess the royalty when mining companies sell the coal to an unaffiliated buyer, not when sales are made to related intermediaries.

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Murdochville looks to tourism to shake ghosts of mining past – by Marika Wheeler (CBC News Montreal – March 29, 2015)

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

Former copper town banking on outdoor recreation to secure its future

Like many small communities that once dotted Quebec’s landscape, Murdochville was born a company town, built on the back of a mining boom.

Rich in copper ore, the mine was in operation for more than 50 years, an exceptionally long run compared to the average life span. But when the mining company pulled out more than a dozen years ago, the town’s economy crashed.

Now many believe the community’s future lies in another natural resource: the nature that surrounds the Gaspé Peninsula town.The mono-industry community has at least once been on the brink of becoming a ghost town.

It was served blow after blow when the open pit mine shut down, then the underground mine, and finally the smelter in 2002. In two referendums, a majority of unionized workers, then residents, voted to shut down the town. Those results scarred the towns history.

When Audrey Lévesque-Lecours, a high school human sciences teacher who has been living in Murdochville for five years, visits her family in Baie Comeau, people are surprised to learn the town still exists.

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