March 20, 2015 – Republic of Mining

Mount Polley spill leads to new rules for tailing ponds (Canadian Press/CBC News B.C. – March 2015)

March 20, 2015

http://www.cbc.ca/news/canada/british-columbia

Companies have to enhance safety and cut the risk of dam failures

The disastrous collapse of the Mount Polley mine tailings pond in B.C.’s Interior last year has spurred changes to provincial environmental requirements for new mines with similar dams.

Developed in collaboration between the ministries of environment and mines, the new rules say mining firms must consider the possibility of a tailings disaster and evaluate the environmental, health, social and economic impacts of an accident.

Environment Minister Mary Polak said Thursday that companies currently under environmental assessment have been anticipating the changes.

“I think there’s an understanding within the industry that after Mount Polley, the world has changed,” Polak said. “We have to be able to assure the public that what’s happening in the province for resource development is safe.”

On Aug. 4, 2014, the massive dam storing tailings from the gold and copper mine gave way, spilling 24 million cubic metres of mine waste and water into nearby lakes and rivers.

Global diamond jewellery demand hits record $81bn – by Martin Creamer (MiningWeekly.com – March 20, 2015)

March 20, 2015

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

JOHANNESBURG (miningweekly.com) – Global demand for diamond jewellery grew 3% to a record $81-billion in 2014, De Beers said on Friday, while pointing out a slower last-quarter pace of growth across the luxury goods category in both the US and China, the biggest and second–biggest diamond-jewellery markets respectively.

De Beers diamond industry insight data, which was released at midnight, shows that the top five diamond markets – which make up 75% of total sales – all grew in currency terms and that the momentum should continue through 2015 (Also see Creamer Media TV video attached).

“It was another strong year for diamond jewellery demand across the world, as we saw continued growth across both mature and quickly developing markets,” De Beers CEO Philippe Mellier commented in a media release to Creamer Media’s Mining Weekly Online.

The US, as the world’s largest market, last year represented 46% of total diamond jewellery sales, after leaping 7% higher to $37-billion, with China at a 5%-higher $10-billion in second spot.

Including Hong Kong and Macau, the Chinese market now represents 14% of the total value of the global diamond jewellery market.

Potash Corp profit to take $100-million hit this year after Saskatchewan tax-rule changes – by Peter Koven (National Post – March 20, 2015)

March 20, 2015

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

Saskatchewan is preparing to review its byzantine potash royalty regime, and Premier Brad Wall thinks it is long overdue.

“Without the incentives that are overlaid on top of the royalty structure for brownfield and greenfield investment, we have the highest potash taxes on earth,” he said in an interview. “Higher than Russia.”

But in this week’s budget, Mr. Wall introduced one interim tax change that has already drawn a furious response from the world’s biggest fertilizer company.

Saskatchewan is stretching out the timing in which miners make deductions for expansions and maintenance spending. That has a significant impact on Potash Corp. of Saskatchewan Inc., which is wrapping up a $6-billion expansion program in the province. Potash Corp. expects budget proposals will cut its pre-tax earnings by $75-million to $100-million this year.

“Changing the rules midstream impacts the ability of our shareholders to earn a fair return on their capital and undermines Saskatchewan’s relative competitiveness,” chief executive Jochen Tilk said in an uncharacteristically harsh statement.

It takes chutzpah for Potash to protest new tax regime – by Sean Silcoff (Globe and Mail – March 20, 2015)

March 20, 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.

Saskatchewan is blessed with the world’s largest bounty of potash – and cursed with the worst tax system for capitalizing on its bounty of the naturally-occurring fertilizer. It is a regime so complex that nobody – miners, investors or governments – has a clue how to forecast the tax outlay from year to year. Even University of Calgary tax expert Jack Mintz, who has written extensively about it, calls the regime “the most complicated thing I’ve seen in my whole career.”

Finally, after much prodding, the government of Brad Wall is promising to do something. In the provincial budget tabled this week, the Premier promised “a broad review of the entire potash tax regime.” Change can’t come soon enough. Potash Corp. of Saskatchewan, the industry’s largest miner, isn’t happy, but it has a lot of nerve to complain.

Saskatchewan’s potash tax system, according to a recent paper co-written by Dr Mintz, is convoluted, inefficient and uncompetitive. There are three levels of levies, creating a “tax jungle” that leaves producers subject to marginal effective tax and royalty rates last year ranging from 0.3 per cent to 22.6 per cent. It’s a wild and ridiculous range, especially considering the rate in other potash-producing countries amounts to one number, usually in the mid-teens or low 20s.

Yukon Zinc granted creditor protection after mine closure (CBC News North – March 19, 2015)

March 20, 2015

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

Yukon Conservation Society concerned about $3 million environmental security owed by Wolverine Mine

Yukon Zinc has been granted creditor protection by the Supreme Court of British Columbia, nearly three months after closing the Wolverine Mine, located north of Watson Lake.

The company owes more than $646 million to hundreds of creditors, but documents listed with PricewaterhouseCoopers Inc. show that most of the debt is owed to its parent company, JinDui Cheng Canada Resource Corporation Limited, which has a head office in Vancouver.

About $50 million is owed to businesses in and outside Yukon including Alkan Air, Air North, P.S. Sidhu Trucking, Northern Industrial Sales and Small’s Expediting Services. The Companies’ Creditors Arrangement Act, which Yukon Zinc is protected under, is a federal law that basically gives a company time to try to work out its financial difficulties with its creditors.

In this situation, Yukon Zinc says its creditors are required to continuing providing goods and services to the mine in accordance with existing agreements. Invoices after March 13 will be paid in full by the company, but invoices before that date “cannot be paid.”

Bay Street loses millions on Silver Wheaton bought deal – by Tim Kiladze (Globe and Mail – March 19, 2015)

March 20, 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.

The unsold shares from Silver Wheaton Corp.’s billion-dollar financing are finally sitting in the hands of investors, but getting them there required the underwriters to endure substantial losses.

Earlier this month, the company, which specializes in buying royalty streams from miners, launched an $800-million (U.S.) share offering, worth roughly $1-billion (Canadian), to help finance the acquisition of a gold stream from Vale SA. The money was raised by way of a bought deal, in which a company issues equity to a syndicate of underwriters who then re-sell the shares.

Investors have been more than willing to help fund asset purchases over the past few months by buying shares in bought deals, such as Fairfax Financial Holdings Ltd.’s $650-million offering that was tied to its $1.88-billion (U.S.) acquisition of Brit PLC. For this reason, Silver Wheaton’s underwriters hoped — perhaps justifiably — their deal would sell quickly, but it ran into trouble from the get-go.

As soon as word got out that the deal was struggling, investors backed away, and multiple sources said the deal was likely only one-third sold. To get rid of the remaining shares, the investment banks re-priced the remaining stock this week at a substantial discount to the original offer price.

COMMENT: Quebec okays controversial Arnaud apatite [phosphate rock] mine – by Marilyn Scales (Canadian Mining Journal – March 19, 2015)

March 20, 2015

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

One of the hottest topics debated by residents of the town of Sept-Isles, QC, lately has been the fate of the proposed Arnaud open pit apatite mine. The project is owned by Invstissement Quebec and Yara International, a Norwegian fertilizer manufacturer.

Not surprisingly many residents of the North Shore town are wildly opposed to a large open pit on the edge of town. Even the Bureau d’audiences publicques sur l’environement (BAPE) said the project was “unacceptable” in its present form last year. The bureau cited the risk of water contamination and landslides.

Union members and the potential pool of workers for the project insist it must go ahead if the region is to have any economic hope. The Arnaud mine would create perhaps 330 jobs over its 30 year life, and it would be a welcome step toward diversifying the local economy.

Then on Monday, March 16, 2015, Quebec environment minister David Heurtel gave the project the province’s blessing. He said the operator has agreed to 11 conditions spelled out by BAPE to lessen the impact of the mine. And the new development is in line with the province’s Plan Nord.

Mining critics barred from Canada – by Jason Warick (Saskatoon StarPhoenix – March 20, 2015)

March 20, 2015

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

A group of farmers critical of Canadian mining interests in their native Dominican Republic has been blocked from travelling to Saskatoon, Toronto and other cities. “It’s so preposterous,” said Irena Smith of St. Thomas More College at the University of Saskatchewan. The three farmers, representing La Federación de Campesinos Hacia el Progreso, were due to arrive in Toronto Wednesday and travel to Saskatoon on Saturday to speak at various events.

Smith, an organizer for the Saskatoon leg of the speaking tour, said the farmers planned to speak about their work forming co-operatives and implementing environmentally-friendly innovations such as shadegrown coffee.

The farmers also planned to speak critically about Canadian mining companies and their multi-billion dollar operations in that country. The cross-Canada speaking tour has been in the works for a year, Smith said.

The farmers went to the Canadian embassy in the Dominican capital of Santo Domingo this month, bringing letters of support from the University of Saskatchewan, the University of Toronto, the Canadian Catholic Organization for Development and Peace and its youth wing, Just Youth, as well as other groups.

Latin American Bishops Petition Inter-American Commission On Human Rights To Hold Mining Companies Accountable For Economic And Environmental Harm

March 20, 2015

March 19, 2015 – WASHINGTON—The U.S. and Canadian governments must hold mining companies from their countries that operate in Latin America to laws and standards that protect indigenous communities and vulnerable groups, as well as local economies and the environment, said representatives of the bishops of Latin America in a hearing before the Inter-American Commission on Human Rights (IACHR), March 19. The hearing was held in response to a petition filed by the Consejo Episcopal Latinoamericano (CELAM) and other member institutions of the Pan-Amazonian Ecclesial Network, which represents bishops’ conferences, religious men and women and Catholic relief agencies throughout Latin America.

Archbishop Pedro Barreto of Peru and Bishop Alvaro Ramazzini of Guatemala represented CELAM, along with Father Peter Hughes and Enrique Pinilla of its Department of Justice and Solidarity. Bishop Donald Bolen, who heads the Peace and Justice Commission at the Canadian Conference of Catholic Bishops (CCCB), as well as Archbishop Timothy Broglio, archbishop for the Military Services, were present at the hearing to express support.

A petition provided an overview of the issues pertaining to extractives in a number of Latin American countries, outlining calamitous public health and environmental consequences of mining operations by U.S. and Canadian multinationals. The testimony at the hearing focused on six countries, Brazil ,Guatemala, Peru, Ecuador, Honduras and Mexico, and focused on key themes including violence and criminalization of human rights defenders and the need for a new model of sustainable development.

China Cuts Coal Mine Deaths, But Count in Doubt – by Michael Lelyveld (Radio Free Asia – March 16, 2015)

March 20, 2015

http://www.rfa.org/english/

China has announced continuing progress in reducing coal mine fatalities, although doubts remain about death counts and cover-ups in one of the most dangerous industries in the world.

On March 10, the director of the State Administration of Work Safety (SAWS) told a Beijing press conference that coal mine accidents claimed 931 lives last year, as the death toll dropped below 1,000 for the first time.

“The situation has been greatly improved,” said the SAWS director, Yang Dongliang, according to Agence France-Presse. Speaking on the sidelines of China’s annual legislative sessions, Yang mixed praise for safety advances with a promise that the agency was determined to do more.

The most recent fatality figure represented an 86.7 percent decline from the toll of some 7,000 in 2002, the official Xinhua news agency reported. “The nation is still confronted with grave and complicated challenges in coal mine work safety, as the authorities aim to achieve a zero-death target,” Yang said.

There seems little doubt that China has made major steps forward in lowering the casualty count in an industry that accounts for half the world’s coal output.

NEWS RELEASE: Mining Revenues Significant to Nunavut and Northwest Territories

March 20, 2015

http://www.miningnorth.com/

Yellowknife, NT (March 19, 2015) The value of mining production has increased in the Northwest Territories and in Nunavut over the last year, according to Federal government statistics just released. Preliminary estimates for 2014 mineral production posted by Natural Resources Canada (NRCan) show that the total value of NWT mining production is $1.886 billion, up $227 million (14%) from $1,659 billion in 2014. Of this:

• Diamond production value is $1.794 billion, up $234 million or 15% from to $1.561 billion;
• Tungsten value was down approximately 2% to $84.71 million; and
• Copper value is down by 17% to $1.86 million.

In Nunavut, the total value of mining production was $642 million, up 2% from $629 million. Of this:

• Gold production value was $639 million, up 2% from $627 million in 2014; and
• Silver production value was up 8% to $2.6 million from $2.4 million last year.

Ontario falling behind in mining, say industry stakeholders – by Jonathan Migneault (Sudbury Northern Life – March 20, 2015)

March 20, 2015

http://www.northernlife.ca/

Province holds consultation session to update mineral development strategy

Ontario is falling behind as a mining jurisdiction, agreed several industry players who participated in a consultation forum organized by the Ministry of Northern Development and Mines Wednesday.

“There’s no tacit recognition by this provincial government that it believes in mining,” said Gino Chitaroni, president of the Northern Prospectors Association. “All we hear about is the Ring of Fire. Let me explain something about the Ring of Fire, it’s not the only thing going on in this province. I’m sick to death of it.”

Chitaroni said that while the province has shifted its focus to the Ring of Fire – where development has advanced at a glacial pace, according to the Ontario Chamber of Commerce – other parts of the province have been neglected.

“We have a lot of projects out there that could be economic very shortly, but we have to encourage them,” Chitaroni said. “I don’t see it happening.” He said he could think of eight to 10 mining projects in eastern Ontario alone, that would be viable with some investment, and much easier to access than the remote Ring of Fire.

While legacy mining jurisdictions like Sudbury continue to do well, Chitaroni said, other parts of the province don’t have those advantages.

Parliament passes bills to allow mine auctions – by Krishna N. Das and Nigam Prusty (Reuters India – March 20, 2015)

March 20, 2015

http://in.reuters.com/

NEW DELHI – (Reuters) – Parliament passed two bills on Friday to auction mines that produce minerals such as coal, iron ore and bauxite, in a boost for Prime Minister Narendra Modi’s bid to kickstart an industry that has languished for years.

The Mines and Minerals Development and Regulation, and Coal Mines Special Provisions bills were seen as a test of the government’s ability to secure support from opposition parties in the upper house of parliament where the ruling Bharatiya Janata Party (BJP) lacks a majority.

BJP has an overwhelming hold over the lower chamber, Lok Sabha, due to Modi’s resounding election victory 10 months ago. The bills have to be approved by President Pranab Mukherjee for them to become law – likely to be a formality.

India’s mining sector has been mired in controversy over the illegal allocation of resources, causing a near standstill in granting permits to open new mines, including an iron ore exploration licence for South Korean steel giant POSCO that wants to set up a steel plant in India.

Asia’s third largest economy was once the world’s third-largest exporter of iron ore but now has to import heavily due to court action on illegal mining. The Supreme Court has eased some of the curbs, but state officials have been slow to renew mining licences, fearing charges of corruption.

[Aboriginal/Mining partnerships] Combined forces – by Chris Windeyer (CIM Magazine – March/April 2015)

March 20, 2015

http://magazine.cim.org/en/

A new partnership will jump-start mining contracts for First Nations in northern Ontario

The First Nations Mining Corporation (FNMC) is emerging as an example of a new kind of partnership to further aboriginal interests in mining development in Ontario. Centred in northern Ontario and formally launched in early 2014, FNMC is a joint venture between four First Nations and three corporate heavyweights in the Canadian mining industry. Lac Seul, Flying Post, Mattagami and Wahgoshig First Nations own 51 per cent of the registered corporation, with SNC-Lavalin, Cementation Canada and the Morris Group holding minority stakes.

“What we had envisioned for [FNCM] was finding a way that the communities can participate actively in mine construction, operation, and closure,” says Jason Batise, economic development and technical services advisor to the Wabun Tribunal Council, which represents the participating First Nations.

According to the Ontario Mining Association, about one out of every 10 people working in Ontario’s mining industry has an aboriginal background. What is changing is that aboriginal communities are moving beyond participation via impact and benefit agreements (IBAs); they are now organizing businesses and joint partnerships to spearhead mine development.

For the Wabun Tribal Council, mining is nothing new, says Batise. WTC is headquartered in Timmins, where gold mining has been going on for over a century.

Shaft Sinkers shakes off sinking feeling – by Allan Seccombe (Business Day Live – March 19, 2015)

March 20, 2015

http://www.bdlive.co.za/

SHAFT Sinkers, the essentially South African mine shaft development company, is poised to rise from near financial ruin, but it is unclear whether shareholders will benefit from the recovery.

It has put its main South African operating subsidiary into business rescue, after £10m in legal fees and a five-month platinum strike last year crippled the company and threatened to drag down the entire London-listed entity, which has valuable projects in India, the Democratic Republic of Congo, Kazakhstan and SA.

It has lost four, big shaft-sinking contracts in the local platinum sector, with Impala Platinum terminating three of those and Royal Bafokeng Platinum the fourth.

With the problematic South African company ring-fenced, Marius Heyns, previously CEO of construction company Basil Read for a decade, plans to resurrect the business by focusing on the mining subsidiary. Mr Heyns is executive chairman and acting CEO and chief operating officer.