March 30, 2015 – Republic of Mining

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

March 30, 2015

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.

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

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.

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

March 30, 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.

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

March 30, 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.

Lusaka paying for its indecision – by Victor Kgomoeswana (Independent Online – March 29 2015)

March 30, 2015

http://www.iol.co.za/news

While Zambia see-saws over its mining tax regime, the DRC has overtaken it as a copper source, writes Victor Kgomoeswana.

Johannesburg – The African week went by pretty quickly for me, especially with the Monetary Policy Committee (MPC) of the SA Reserve Bank leaving interest rates unchanged. I need to pay off those debts, while the current rates last.

This MPC meeting happened while African finance ministers and a number of central bank governors met in Addis Ababa, continuing on that long road towards the alignment of Africa’s fiscal and monetary policy landscape.

Back in South Africa, Eskom gave us another grim reminder of the power crisis hovering above and leaving most people whispering in the dark, even as unions are calling for the axing of the chairman of the power utility.

Egypt also had to ration its electricity supply due to a fuel shortage. How’s that for Cape to Cairo? Our cricket team bowed out of the semi-finals, setting up their opponents for a final clash with Australia – although I would plead with my fellow South Africans to stop using the C-word this time around.

B.C.’s Brucejack gold mine approved; first since Mount Polley tailings dam failure – by Gordon Hoekstra (Vancouver Sun – March 29, 2015)

March 30, 2015

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

Mine will not use a dam to store waste

The B.C. government has approved Pretium’s $450-million Brucejack gold mine, the first mine approved since the collapse of the Mount Polley mine tailings dam last year.

Construction of the mine, about 275 km northwest of Smithers, is expected to begin this summer and it is to be in commercial production by 2017. The project will create 500 jobs during the two-year construction period and 300 permanent jobs during its 16-year life.

The Ministry of Energy and Mines said the mine, unlike Imperial Metal’s Mount Polley gold and copper mine, will not have a facility to store mine waste held back with an earth-and-rock dam.

The failure of the Mount Polley earth dam last summer released millions of cubic metres of water and finely-ground rock containing potentially-toxic metals (called tailings) into the Quesnel watershed in the B.C. Interior.

It has raised concerns on the long-term effects of the spill on millions of spawning salmon and other aquatic life, and has led to intense scrutiny of tailings dams in B.C.

Teck, Antofagasta Said to Explore Copper Mining Merger – by Matthew Campbell and Dinesh Nair (Bloomberg News – March 30, 2015)

March 30, 2015

http://www.bloomberg.com/

(Bloomberg) — Teck Resources Ltd. and Antofagasta Plc are exploring a merger that would create one of the world’s largest copper producers, people with knowledge of the matter said.

The companies have held early-stage talks, and any agreement hinges on the approval of the families that control both miners, the people said, asking not to be identified discussing private information. There’s no guarantee they will reach a deal, which would be primarily stock based, the people said.

Teck shares in Toronto rose as much as 15 percent Monday, the most since April 2009 and were trading at C$20.03 ($15.78) as of 3:13 p.m. local time.

A combination of Teck, based in Vancouver, and London-based Antofagasta would be the first major mining transaction since an across-the-board slump in commodity prices hammered the industry. Both companies have extensive copper operations in Chile which could be combined by a merger, potentially reducing costs. Representatives for both companies declined to comment.

With a market value of about C$11.3 billion, Teck is Canada’s third-largest mining group after Goldcorp Inc. and Barrick Gold Corp.

Mine your own business: Plan Nord’s disastrous consequences – by Jasreet Kaur (McGill Daily – March 30, 2015)

March 30, 2015

http://www.mcgilldaily.com/

With recent austerity measures affecting many economic sectors within Quebec, the provincial government is desperately looking for new sources of income. The precious metal industry is still profitable, and mining developments such as Plan Nord could bring investors to the province, acting as a safety net to protect people from the ongoing cuts. However, this would not come without a cost that would be shouldered by current and future generations.

The benefits of invasive projects such as Plan Nord are often only measured by their immediate value, leaving out negative externalities. Plan Nord is expected to cause substantial environmental damage to the region, due both to the resource extraction the project would entail, as well as its magnitude. In addition to the environmental damage, however, the project will have significant negative impacts on the local communities in the North, particularly with regards to women.

Plan Nord was initially proposed by the Liberal government led by Jean Charest in 2011, but was shut down by Pauline Marois after the Parti Québécois (PQ) came into power in 2012. The PQ has traditionally held an antagonistic position toward the mining sector. Recently, however, with the comeback of the Liberals, a revised version of the project has started to gain steam once again.

This version, which encompasses 72 per cent of the land area of Quebec, an area twice the size of France, is expected to create significant economic benefits for the province, including the creation of 20,000 jobs.

An idea for Ring of Fire’s riches – by Tom Mills (Sault Star – March 28, 2015)

March 30, 2015

http://www.saultstar.com/

Ontario should look to socialist Norway if it wants to capitalize on the rich mineral deposits of the far north’s Ring of Fire.

Like Canada, Norway has a resource-based economy, exploiting extensive reserves of oil, natural gas minerals and lumber. Half its export revenues come from oil and gas.

Unlike Canada, Norway is not in hock up to its eyeballs. In fact, it’s the second-wealthiest country in the world. Every Norwegian is, theoretically, a millionaire. That’s a million kroner, which translates to about $177,000 US apiece.

That’s because, unlike many other resource-rich countries and provinces, Norway put its oil revenues, from taxes, fees and ownership stakes, into a fund where politicians couldn’t get their spendthrift hands on them.

The money was invested in financial markets outside Norway. It grew. Their sovereign wealth fund, created a mere 20 years ago, now controls about one per cent of all publicly traded shares in the world.

Allana Potash Corp agrees to $137-million takeover bid from Israel Chemicals – by Peter Koven (National Post – March 28, 2015)

March 30, 2015

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

Allana Potash Corp. agreed to a $137-million takeover bid from Israel Chemicals Ltd. because its chief executive said there was no other way to avoid massive dilution of shareholders.

Toronto-based Allana is in the same position as many other junior mining firms: it has a great project but no easy way to finance it in the current rough market conditions. The company’s Danakil project in Ethiopia is expected to cost US$642 million; by comparison, Allana had less than $8 million on its balance sheet at the end of January.

“Even if we could raise half of the money through debt, which is uncertain, we would still have to raise substantial amounts through equity,” Allana CEO Farhad Abasov said in an interview. “And that equity would come at a substantial discount to the current price.”

Allana did have options apart from an outright takeover. According to a source, the company was in negotiations to sell a large stake in itself to a state-owned Chinese construction firm that could finance the project. The source said the premium was very significant. But Mr. Abasov argued the Chinese option would be punitive for shareholders.

“It would be close to 100%, if not more, dilution for shareholders,” he said.

The Iron Ore Bust into a Housing Boom – by Greg Canavan (Daily Reckoning Australia – March 30, 2015)

March 30, 2015

http://www.dailyreckoning.com.au/

Irony is thick on the ground this morning as we head into a shortened Easter trading week. Just as Sydney property prices go absolutely bonkers, the iron price crashes.

Of course, revenue from the great iron ore boom helped to fuel the housing bonfire, along with regular petrol douses from RBA boss Glenn Stevens. But now, with iron ore crashing, property prices continue to detach from reality. It’s a cheap money driven boom if there ever was one.

In case you missed it, the benchmark iron ore price finished trading on Friday down US$2.22 to US$53.14, a new low. It was another dose of irony that probably knocked the price lower.

Last week, Fortescue Metals [ASX:FMG] Chairman and major stakeholder Andrew Forrest implicitly called on iron ore miners to form a cartel to control the price (and save his company from a slow death). Rio Tinto [ASX:RIO] boss Sam Walsh replied with scorn, which the market interpreted to mean that Rio will continue to dig up as much red dirt as it can. Hence the price crack on Friday.

The comments from Forrest indicate just how much damage the iron ore bear market is having on marginal cost producers. Aussie juniors won’t survive this price rout. It’s just a matter of time before they fold.

Mining for tourists? A dubious economic savior in Appalachia – (Chattanooga Times Free Press – March 29, 2015)

March 30, 2015

http://www.timesfreepress.com/

Associated Press – SECO, Ky. (AP) – Mines built this company town. Could vines – the wine grapes growing on a former strip mine in the hills above – help to draw visitors here?

Jack and Sandra Looney sure hope so. Their Highland Winery – housed in the lovingly restored, mustard-yellow “company store” – pays tribute to coal-mining’s history here, as do their signature wines: Blood, Sweat and Tears.

“The Coal Miner’s Blood sells more than any of them,” Jack Looney says of the sweet red. He and his wife have converted the store’s second and third floors into a bed and breakfast. They’ve also bought and restored a couple dozen of the old coal company houses as rentals, and rooms fill up during their annual spring Miner’s Memorial Festival.

Seco, like so many Central Appalachian communities, owes its existence to coal – its very name an acronym for South East Coal Company. But as mining wanes, officials across the region are looking for something to replace the traditional jobs and revenues.

In some of the poorest, most remote counties, about the only alternative people can come up with is tourism – eco-, adventure, or, as with the Looneys, historical and cultural.

Accent: Nuke waste plans stir Northern angst – by Mary Katherine Keown (Sudbury Star – March 28, 2015)

March 30, 2015

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

Nuclear is in the news, making some residents of Northern Ontario nervous. The Nuclear Waste Management Organization is scouting for a permanent storage solution for the waste produced by Ontario Power Generation Inc., Hydro-Quebec and the New Brunswick Power Corporation reactors.

Blind River and Elliot Lake are in the running to host a deep geologic repository (DGR), a storage facility that plunges more than 500 metres underground, in which nuclear waste will be buried. White River, Ignace, Hornepayne and Manitouwadge are also under consideration.

Robert Beaudoin sees red flags. A regular contributor to the Facebook group, Citizens Concerned about Nuclear Waste in Elliot Lake, which currently has 274 members, he believes there is “a lot of business potential” in the city and the presence of a DGR would be a deterrent.

“This is just going to put the big red letter on us,” he says. “Who’s going to want to live here? I can’t. I’ll take a loss on my house just to get away. I don’t want to raise my son around this.” He says he would rather lose his house and declare bankruptcy than jeopardize the safety of his seven-year-old. If the DGR is built in Elliot Lake, Beaudoin plans to relocate his family to the East Coast.

Barrick Gold hires John Baird, Newt Gingrich – by Rachelle Younglai (Globe and Mail – March 27, 2015)

March 30, 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.

Barrick Gold Corp. has tapped former foreign affairs minister John Baird and former top U.S. lawmaker Newt Gingrich to serve on its advisory board, the company said in regulatory filings.

Mr. Baird and Mr. Gingrich, a former Republican speaker of the U.S. House of Representatives, will join other political heavyweights including former Canadian Prime Minister Brian Mulroney on the miner’s international advisory board.

The board meets once a year and gives advice to the world’s biggest gold producer, which has operations in the Americas, Africa and Australia.

“The role of the board is to provide advice on geopolitical and other strategic issues that affect our business,” a company spokesman said. “Both Mr. Baird and Mr. Gingrich bring with them excellent credentials and experience in this regard,” he said. Mr. Mulroney chairs the board, which also includes former U.S. and German defense officials and a former prime minister of Spain.

No compensation details for Mr. Baird and Mr. Gingrich were disclosed in the filings.

My turn: Mine development in British Columbia raises concerns – by Abe Tanha (The Juneau Empire – March 29, 2015)

March 30, 2015

http://juneauempire.com/

Abe Tanha is owner and operator of Hooked On Juneau, a locally operated fishing tour company.

As owner of a sportfishing business based in Juneau, I join a large group of Alaskans including Sens. Lisa Murkowski and Dan Sullivan, Rep. Don Young, 11 municipalities including CBJ and the Southeast Conference of Mayors, tribes, fishermen and tourism operators who are deeply concerned with the scale and speed of mine development in British Columbia. Thank you, Juneau Empire, for a thorough job documenting this issue for your readers.

Last week the Empire responded to a litany of outrageous claims from B.C.’s Minister of Energy and Mines, Bill Bennett, about the Mount Polley mine tailings dam failure and development in the transboundary region. Bennett’s remarks are a total mischaracterization of Alaskans’ concerns and the widespread call from Alaskans for International Joint Commission involvement.

As unprecedented as the Mount Polley catastrophe may have been, the tailings dam failed because of regulatory oversight. Bennett claimed government inspectors could not have detected the glacial silt layer; however, they did identify a plethora of issues related to poor design and maintenance of the dam. These went unaddressed by Imperial Metals.