April 13, 2015 – Republic of Mining

Rumbles from the jungle as Bougainville mine stirs – by Rowan Callick (The Australian – April 13, 2015)

April 13, 2015

http://www.theaustralian.com.au/

Even the long-suffering Bougainville Copper board, which has witnessed cargo cults, wars, and the closure of its own vast mine, was puzzled when its share price soared 50 per cent a week ago.

For this sudden surge of confidence appeared, oddly, to have been triggered by troubling news for the company — the commencement of a new Mining Act passed by the Bougainville autonomous region’s parliament, which hands back control of all resources to landowners.

The future of the Bougainville mine, which still contains copper and gold worth about $50 billion, is tied up with its complex past, with the long geopolitical shadow cast by the 1989-2001 civil war on the island — and with cargo-cultist hopes held out by local leaders allied to eccentric foreigners constantly seeking to seize control of the resources from BCL.

The ASX issued a “speeding ticket”, asking the company to explain the April 2 share price leap. BCL replied that it couldn’t. The price had slid back down to 28c by Friday.

The directors of the company, which is 53.58 per cent owned by Rio Tinto, 19.06 per cent by the Papua New Guinea government, and 27.36 per cent by other shareholders, are trying to juggle an enormous range of unknowns and variables, without even the compensating benefits of having a mine to run.

CREDO Launches National Drive to End Cancer-Linked Mountaintop Removal Mining – by Jeff Biggers (Huffington Post – April 13, 2015)

April 13, 2015

http://www.huffingtonpost.com/green/

Calling for a “national, coordinated response to the humanitarian disaster of mountaintop removal mining,” CREDO Action launched an extraordinary petition drive this past weekend for Congress to pass the Appalachian Community Health Emergency Act (ACHE Act) and place an immediate moratorium on “the deadliest and most destructive form of coal mining.” Within 24 hours, over 50,000 signatures had joined the campaign.

Only days after President Obama referred to climate change as a public health issue, presidential candidate Hillary Clinton declared a “child from the hills of Appalachia” should have the same chances as her granddaughter, and former Mayor Michael Bloomberg kicked in an additional $30 million to the Sierra Club’s Beyond Coal Campaign, long-time Appalachian advocates hope the CREDO campaign to ban the cancer-linked mining operations will be ramped up with major resources from national public health and cancer organizations, as well as climate and environmental groups.

“With the national petition launch from CREDO in support of the Appalachian Community Health Emergency Act (ACHE Act), an all-hands-on-deck is being called to all regional and national organizations to get behind and support the ACHE Campaign to put an end to the public health threat of mountaintop removal,” said Bo Webb, the Purpose Prize-winning West Virginia activist, whose family has lived under the fallout of mining operations.

New reckoning for copper miners now running in the red – by Josephine Mason (Reuters U.S. – April 12, 2015)

April 13, 2015

http://www.reuters.com/

(Reuters) – Nearly a quarter of the world’s major copper mines are running in the red, even after producers including Codelco and BHP Billiton engage in their deepest cost-cutting in years, according to a Reuters analysis.

A 17-percent slump since last July has pushed copper futures on the London Metals Exchange to under $6,000 a tonne, the lowest since 2009, is the first major test of producers’ margins since the global economic crisis, forcing a new reckoning after five years of relatively consistent profitability.

Codelco, the Chilean state miner that produces about 8 percent of the world’s copper, will review the cost reduction plan at its Salvador mine as it prepares to restart operations there after torrential rains shuttered the complex in March, said a source close to the state-run miner.

The company has an ambitious target to slash total costs by as much as $1 billion this year. Salvador produced copper at a cost of some $11,439 per tonne in the fourth quarter last year, the highest out of 91 mines analyzed by Thomson Reuters unit GFMS as part of its Copper Mine Economics database.

The mines account for more than two-thirds of global output, and almost a quarter of them had production costs late last year above current prices.

Ontario Urgently Needs a Comprehensive “Value-for-Money” Cost-Benefit Analysis for Mining (Mining Watch Canada – April 10, 2015)

April 13, 2015

http://www.miningwatch.ca/

An Open Letter to Bonnie Lysyk, Auditor General for Ontario

Dear Ms. Lysyk:

Re: Need for a comprehensive “value-for-money,” costs-benefits analysis for mining in Ontario

Current mining policies, programs, and regulations pose a threat to public finance and taxpayers in Ontario, with potentially billions of dollars at stake.

The Ontario government recently announced its intention to review its Mineral Development Strategy (March 2015). MiningWatch Canada is very concerned about the current lack of a comprehensive “value for money,” cost-benefit analysis for mining in Ontario.

Pitifully low mining royalties, very low corporate taxes, direct and indirect subsidies, give-away prices on electricity, unaccounted social and environmental costs, and hundreds of millions of dollars in mine site clean-up costs are all major concerns.

According to Natural Resources Canada, mining companies generated over $93.3 billion in gross revenue in Ontario over the last 10 years. During the same period, a meagre 1.5% was generated in mining royalties – 10 times less than a tip at a restaurant!

THE BIG READ: Nicolau tears into Carroll – by Chris Barron (Business Day Live – April 12, 2015)

April 13, 2015

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

FORMER Anglo Platinum CEO Neville Nicolau says he might have been able to save the world’s biggest platinum miner from last year’s crippling five-month strike if he had not been given the cold shoulder by Cynthia Carroll.

At the time of their disagreement, the US-born Carroll was CEO of Anglo American, which owns 78% of Anglo Platinum, and chairwoman of Amplats. Nicolau, who was CEO of Amplats from 2008 to July 2012, said in an interview that he took a “very significant” proposal to the Amplats board about how it could survive falling platinum prices and looming labour strife — but the board was not interested.

“Cynthia Carroll disagreed completely with what I wanted to do with the company,” he says.

Nicolau’s frank admissions mark the first time that the boardroom unhappiness about Carroll’s leadership style has spilt out. Carroll left the group in November 2012, shortly after Nicolau, under intense pressure from shareholders.

“There were certain actions which I needed to take. Amcu [the Association of Mineworkers and Construction Union] was on its way in and there was a better way to manage that. The metal price was on its way down and there was a better way to manage that. There were opportunities to consolidate the platinum sector.”

Former Xstrata boss Mick Davis’ Canada links set mining rumour mill turning – by James Thomson (Australian Financial Review – April 13, 2015)

April 13, 2015

http://www.afr.com/

They seek him here, they seek him there, those miners seek him everywhere! Mining industry chief Mick Davis might not exactly have a secret identity like the Scarlet Pimpernel, but he seems to share a few common traits with the legendary literary figure right at the moment.

The former Xstrata boss now heads up X2 Resources and has raised about $7.2 billion to buy unloved, undervalued and unwanted mining assets and companies.

It’s such a huge amount of money and such a huge brief that, like the Scarlet Pimpernel, he seems to be everywhere at once. His exploits are talked about in hushed tones by unnamed sources and no one is exactly sure where he might strike first.

Will it be a raid on BHP Billiton’s South32, before or after it is spun off? Does he have his eyes on assets within Rio Tinto or Anglo American’s giant portfolios? Could he swoop in Australia, Canada, London or South Africa?

On the weekend there was a sighting of the Mining Pimpernel in Canada, with a Bloomberg report saying unnamed sources had linked Davis with three Canadian mining companies.

News Release: Ontario mining health and safety conference April 14 to 16

April 13, 2015

Workplace Safety North hosts 300 participants in Sudbury

(April 13, 2015) NORTH BAY, ON – From April 14 to 16 in Sudbury, Workplace Safety North (WSN) will host more than 300 attendees at the annual provincial Mining Health and Safety Conference. The event brings together Ontario’s mining industry, giving organizations the opportunity to share knowledge about safety programs and innovations dealing with hazards specific to mining.

“We’re in our eighteenth year and continue to focus on the occupational health and safety approach known as the ‘Internal Responsibility System,’” says Candys Ballanger-Michaud, CEO. “The focus of conference will be the final recommendations from the Mining Health, Safety and Prevention Review on improving health and safety in the underground mining sector.

“Mining is a vital and technically demanding industry,” notes Ballanger-Michaud. “We have mining health and safety consultants as well as mine rescue officers providing miners across Ontario with training on topics like core health and safety principles as well as industry-specific issues. WSN mining specialists provide training with regard to mine ventilation, ground control, electrical-mechanical safety, rescue and recovery operations, priority hazards, plus we help companies assess health and safety risks and meet legislative requirements.”

In addition to workshops and a trade show, the sold-out conference features guest speakers Dr. Linda Duxbury and Kevin Burns, along with sessions on training, WSIB claims, heat stress, occupational lung disease, emergency preparedness, working at heights, and more.

NEWS RELEASE: ALAMOS GOLD AND AURICO GOLD TO COMBINE CREATING LEADING INTERMEDIATE GOLD PRODUCER

April 13, 2015

TORONTO, ONTARIO–(Marketwired – April 13, 2015) – Alamos Gold Inc. (“Alamos”) (TSX:AGI)(NYSE:AGI) and AuRico Gold Inc. (“AuRico”) (TSX:AUQ)(NYSE:AUQ) are pleased to announce that they have entered into a definitive agreement to combine their respective companies (the “Merger”) by way of a plan of arrangement, creating a new, leading intermediate gold producer (“MergeCo”).

The Merger combines two top-quality, highly-complementary asset portfolios, including two long-life, cash flow-generating gold mines: AuRico’s Young-Davidson mine in Ontario, Canada, and Alamos’ Mulatos mine in Sonora, Mexico. The transaction is structured as a merger of equals with a transaction equity value of approximately US$1.5 billion.

Under the terms of the Merger, holders of Alamos shares will receive, for each share held, 1 MergeCo share and US$0.0001 in cash, and holders of AuRico shares will receive, for each share held, 0.5046 MergeCo shares. Upon completion of the Merger, former Alamos and AuRico shareholders will each own approximately 50% of MergeCo (named Alamos Gold Inc.).

In addition, a new company (“SpinCo”), to be named AuRico Metals Inc., will be created to hold AuRico’s Kemess project, a 1.5% net smelter return royalty (“NSR”) on the Young-Davidson mine, AuRico’s Fosterville and Stawell royalties, and will be capitalized with US$20 million of cash. Upon completion of the Merger, MergeCo will own a 4.9% equity interest in SpinCo. The remaining shares of SpinCo will be distributed 50% each to former Alamos and AuRico shareholders.

First nations oppose Ring of Fire sale – by Staff (Sudbury Star – April 13, 2015)

April 13, 2015

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

Two first nation communities in the James Bay lowlands are protesting the proposed takeover of Ring of Fire assets by a Toronto-based company. In early March, Noront Resources Inc. announced it plans to buy the chromite assets owned by Cliffs Natural Resources, based out of Cleveland, for $20 million.

The chiefs of Marten Falls and Aroland First Nations, however, are now speaking out against this move, saying it will tread on their rights and prevent them from reaping the economic opportunities to which they are entitled.

“Our first nations have effectively been denied a real opportunity to benefit from key resources in our lands on our terms,” said Chief Sonny Gagnon of Aroland First Nation in a release issued Friday. “This unilateral move by Noront is unacceptable to our first nations.”

Bruce Achneepineskum, interim chief of Marten Falls First Nation, said the deal represents an “old way of thinking” when it comes to development in native lands.

“Progressive mining companies are inclusive, share resources equitably with indigenous peoples, and know that only real partnerships protect our rights, interests and environment,” he argued in the release.

Looming India Uranium Deal Huge for Saskatchewan, Premier Says – by Josh Wingrove (Bloomberg News – April 10, 2015)

April 13, 2015

http://www.bloomberg.com/

Cameco Corp., Canada’s biggest uranium producer, would reap a revenue windfall once a sales agreement is finalized with India, while boosting employment in its home province, Saskatchewan’s premier said.

A deal would be “huge,” yielding hundreds of millions in revenue and supporting jobs in the mining sector, Saskatchewan Premier Brad Wall said in an interview with Bloomberg News on Friday. He was asked to comment on a possible agreement by Saskatchewan-based Cameco to provide uranium for nuclear power.

“It’ll mean tax revenue, it’ll mean job retention, it’ll mean new jobs, if in fact there is an agreement here with India,” Wall said by telephone. “Depending on all the specifics, you’re going to be talking about hundreds of millions of dollars worth of sales over some period of time.”

A long-term deal by Cameco to sell uranium to India could be announced as soon as next week when Indian Prime Minister Narendra Modi visits Canada, said a person familiar with negotiations, who asked not to be identified because the agreement isn’t yet final. The Globe and Mail had reported the possibility of a deal earlier Friday. Modi is scheduled to make a three-day trip to Canada from April 14-16, with stops in Toronto, Ottawa and Vancouver.

Revenue Canada targets Steelworkers charity for political activities – by Dean Beeby (CBC News Politics – April 12, 2015)

April 13, 2015

http://www.cbc.ca/news/politics

Steelworkers’ president suggests outspoken critics of Harper government targeted by Revenue Canada

A union-backed charity that wants Canadian mining companies held accountable for overseas misdeeds is among the latest to be targeted by the Canada Revenue Agency for political activities.

The Steelworkers Humanity Fund Inc. is still awaiting a verdict from the agency, nine months after an auditor showed up at the Toronto office and hauled away several binders of sensitive material.

The fund, with about $1.3 million in annual revenues, has supported Canadian food banks and provided disaster relief abroad since its founding in 1985. But the charity’s support of the Canadian Network on Corporate Accountability or CNCA, to which it gave about $37,000 in 2013, appears to have piqued the agency’s interest.

“We’ve been part of this CNCA, and no doubt that’s part of the rationale” for the audit, Steelworkers president Ken Neumann said in an interview from Toronto. “It’s quite clear that it’s targeted to folks that speak up sometimes against the government’s policies.”

On land title, which road will aboriginal groups take? – by Jeffrey Simpson (Globe and Mail – April 11, 2015)

April 13, 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.

It will take some time to measure the impact of the Supreme Court of Canada’s judgment on aboriginal title, and the significant additional powers it gives aboriginal groups with that title.

The judgment, nine months ago, involved the Tsilhqot’in Nation, with about 3,000 people. They had been fighting commercial logging since 1983 in the territory they claimed as theirs.

Courtesy of the Supreme Court, their aboriginal title was affirmed, which meant in layman’s language almost a de jure veto over anything done in that territory. The ruling was, of course, hailed by aboriginal leaders everywhere, but especially in British Columbia where there are few treaties.

Yes, the court said governments could assert some power to allow a development with a “compelling and substantial public purpose.” But in the real world, as opposed to the one of legal reasoning, such a showdown between a government’s “compelling and substantial public purpose” and an empowered aboriginal group would be messy at best and a stalemate at worst. A government would be very reluctant to put the amorphous “public interest” against a narrow but determined aboriginal one.

Can Indonesia’s 50 Cent-an-Hour Workers Mimic China’s Success? – by Chris Brummitt (Bloomberg News – April 9, 2015)

April 13, 2015

http://www.bloomberg.com/

As the sun lowers into the Java Sea, Asep Saefullah and his friends sit by a pond among the rice fields near his village in Indonesia, chatting, smoking clove cigarettes and fishing.

Not for much longer. Work has begun on an industrial park with a power station and water treatment plant that will create as many as 190,000 jobs. It’s part of a grander plan to turn this stretch of coastline on the island of Java into an export city, with a container port and a highway to the capital, Jakarta.

This is Indonesia’s shot at recreating the success of Shenzhen, the marshy village in southern China that became the heart of that nation’s industrial expansion in the late 1990s. Now China is too expensive for many factories, and industries that poured money into cities from Shenzhen to Shanghai for two decades are looking for somewhere with lower costs and lots of cheap workers.

“The great China boom was really bad for the Southeast Asia economies,” said Tim Condon, the Singapore-based head of Asia research at ING Groep NV. “With the China slowdown, all that moves in reverse. Southeast Asia’s manufacturing sector is the big winner, as it was in the early 90s.”

Analysis: Booming economy can’t help iron ore, steel – by John Myers (Duluth News Tribune – April 5, 2015)

April 13, 2015

http://www.duluthnewstribune.com/

When Minnesota Lt. Gov. Tina Smith met with some of the hundreds of Iron Range Steelworkers who received layoff notices last week, she said the stress was evident on their faces.

“The older ones, who have been through this cycle before, really had this look of fatigue, like ‘here we go again,’ ” Smith told the News Tribune. “With some of the younger ones, there was more fear. We’re telling them we’re going to bring everything we can to help them. But mostly there’s just so much uncertainty. No one knows how long this is going to last.”

Those in attendance were among nearly 1,200 taconite industry workers who will be out of a job by June. Minnesota’s Iron Range and its mining industry are facing the most layoffs they’ve seen since 2009 thanks to an industry-crippling international trade problem that seems to be getting worse.

The prices of both finished steel and its main raw material, iron ore, are in a free fall thanks to a huge global oversupply. Similar Iron Range downturns in the early 1980s, in 2000-01 and again in 2009 all came as part of national and even global recessions.

Japan Bets on Nuclear, and Coal, for Future Power – by Keith Johnson (Foreign Policy – April 8, 2015)

April 13, 2015

https://foreignpolicy.com/

Four years after Fukushima, Tokyo is angling to get nuclear reactors back online. But dirty old coal will be doing the real heavy lifting.

Japan has a new blueprint for its energy future, one that opens the door for a controversial return of nuclear power four years after the Fukushima accident took the country’s reactors offline. But even more noteworthy is that Japan now appears set to embrace a dominant role for dirty coal in the country’s energy mix for decades to come.

The plan, presented Tuesday, April 7, to Prime Minister Shinzo Abe and expected to be finalized this spring, highlights the difficult choices that developing and even developed countries must make — just months before a landmark climate conference in Paris — between cheap but dirty energy and more expensive, if cleaner alternatives. Japan’s struggles are complicated further by the political fallout of Fukushima, which forced the evacuation of hundreds of thousands of people and has left a residue of radioactive soil and water.

Abe’s blueprint envisions stable, round-the-clock power sources such as nuclear, coal, and hydroelectric growing from about 40 percent of the electricity mix today to 60 percent in 2030. The rest of Japan’s electricity would come from natural gas and renewable energy like wind and solar power, complemented by increasingly aggressive efforts to boost energy efficiency.

While there are no hard-and-fast targets yet for nuclear power in the new plan, officials say it would represent about 20 percent of the total — slightly more than the 15 percent that Abe had sought, but much less than the 30 percent of Japan’s electricity in the years before Fukushima.