April 16, 2015 – Republic of Mining

REFILE-As rivers dry up, Chile copper mines turn to the Pacific for water – by Anthony Esposito and Fabian Cambero (Reuters U.S. – April 12, 2015)

April 16, 2015

http://www.reuters.com/

(Reuters) – Alvaro Badillo remembers a time when his dad would take him fishing in the stream just a stone’s throw away from the dusty streets of their small hometown of Caimanes in central Chile.

Now, like countless communities that dot the arid valleys north of the capital, Santiago, Caimanes is left with a dry riverbed. The culprit? That depends on who you ask.

For many in the town of 1,200 people, the answer lies just a few miles upstream: a 470 foot tall wall that stretches nearly a half-mile straight across the valley. It is the tailings dam for Los Pelambres, Chilean miner Antofagasta Plc’s flagship copper mine, which holds enough leftover processed rock to fill some 140,000 Olympic swimming pools.

For its part, Antofagasta blames an eight-year drought in Chile for the evaporation of already slim water resources, and says the canals it built to redirect rain water have minimized the impact on the stream.

Both sides have findings that support their arguments and are thrashing them out in a court battle that could stop work at one of the world’s biggest copper mines.

Australia steeled for China slowdown as iron ore prices fall – by Jamie Smyth (Financial Times – April 16, 2015)

April 16, 2015

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

Sydney – The last time Western Australia was engaged in a dispute with Canberra of this magnitude, it threatened to secede during a financial crisis sparked by the 1930s Depression.

The current friction is linked to China’s slowdown — a sign of how closely Australia’s fortunes are tied to Beijing’s appetite for its commodity exports.

“It’s not secession but it is tension and disengagement,” Colin Barnett, Western Australia’s premier, said this week when Canberra and other states rejected a request to help plug a widening hole in the state budget caused by plunging iron ore prices.

Western Australia is a mining state that enjoyed a decade-long boom selling iron ore — a key ingredient in steel — to China. Known by some as “China’s quarry”, the state hosts BHP Billiton, Rio Tinto and Fortescue Metals Group, which have spent billions of dollars building mines, railways and ports to almost double iron ore production to 717m tonnes over the past five years.

But just as global supply hits record levels, China’s economy is slowing and its desire for the reddish-brown ore may have plateaued.

PolyMet CEO: Copper can help Iron Range diversify – by John Myers (Duluth News Tribune – April 15, 2015)

April 16, 2015

http://www.duluthnewstribune.com/

You could understand why the mood might be dour at the annual Society for Mining, Metallurgy and Exploration conference in Duluth this week. With the price of iron ore less than half what it was when last year’s conference was held, layoffs rampant and foreign steel flooding the U.S.economy, the 600 or more regional mining industry folks gathered here weren’t exactly whooping it up.

But Jon Cherry, president and chief executive officer of PolyMet Minerals, said copper may be the balm that soothes what ails northern Minnesota’s mining industry.

Iron ore that sold for $180 per ton in 2011 and $100 one year ago now is going for about $47. And while Cherry said he understands his brothers and sisters in the iron ore mining industry are facing “difficult challenges” with predictions of sub-$40-per-ton iron ore prices, he was happy to proclaim that “these are exciting times for PolyMet” and copper in Minnesota.

Cherry, the conference’s closing plenary speaker, said his company is projecting that both global supply and demand for copper will remain relatively stable through 2017 before both start to increase. In the meantime, he predicts stable prices, and nothing like the free-fall of iron ore prices, on the horizon for copper.

Beyond the backyard: Northern Ontario mining suppliers outgrow their traditional customers – by Eavan Moore (CIM Magazine – March/April 2015)

May 4, 2015April 16, 2015

http://www.cim.org/en.aspx

For every one person employed in an Ontario mine, there are two employed in the sectors that supply them. The expertise accumulated in the province has long overflowed its borders, but local developments and global forces have challenged mine suppliers who might otherwise have stayed content with local business.

“We’re running about 15,000 people working just in Sudbury alone on service functions and products and services,” says Dick DeStefano, executive director of the Sudbury Area Mining Supply and Service Association (SAMSSA). “Vale and Glencore have maybe 5,000 people or 6,000 people total working. Mining suppliers get to the point where they need to maintain their workforces, so they go look for other markets.”

DeStefano believes that more northern Ontario suppliers have turned their attention outwards. Part of that is simply due to the universal downturn; in Ontario as everywhere else, mining has slowed in recent years. But Vale and Glencore (then Xstrata) also changed the local landscape when they acquired major customers Inco and Falconbridge in 2008 and 2009.

“When the global mining companies purchased the Canadian assets, among all the other effects two actions occurred regarding the acquisitions,” explains Spencer Ramshaw, director, information and communications at the Canadian Association of Mining Equipment and Services for Export (CAMESE).

Copper Kings Look Past China Wobbles to Looming Scarcity – by Matthew Craze and Agnieszka de Sousa (Bloomberg News – April 14, 2015)

April 16, 2015

http://www.bloomberg.com/

As forecasters debate copper’s next price move, the world’s biggest producers say they can extend a decade of profits as mines struggle to keep up with demand.

Even with Chinese growth slowing, aging mines will fail to keep pace with electrical equipment demand in developing countries, according to Jean-Sebastien Jacques, head of Rio Tinto Group’s copper business. He joined executives from Codelco, Freeport McMoRan Inc., Antofagasta Plc and Teck Resources Ltd. in Santiago this week for the industry’s annual get-together.

“I see a substantial supply gap opening up by the end of this decade,” Jacques said. “Now is the time to keep investing.”

Copper lost 11 percent in the past year and traded at three-week lows Wednesday after data showed China’s economy grew at the slowest pace in six years. The metal used in wiring and plumbing will avoid following oil and iron ore into a more abrupt slump as an anticipated surplus is erased by mine setbacks, mining executives including Antofagasta Chief Executive Officer Diego Hernandez and Teck CEO Don Lindsay told the World Copper Conference in Santiago.

Uranium deal with India signals new era, Modi tells Harper – by Les Whittington (Toronto Star – April 16, 2015)

April 16, 2015

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Trade, energy, the environment, security, and culture are expected to be among the issues Harper and Modi will discuss during the visit.

OTTAWA—Indian Prime Minister Narendra Modi kicked off his visit to Canada by signing a uranium supply deal with Ottawa he says signals a new era in cooperation between the two nations.

At a joint press conference on Parliament Hill with Prime Minister Stephen Harper, Modi said the agreement that will see hundreds of millions of dollars worth of uranium exported to India from Saskatchewan annually “is a mark (of Canada’s) trust and confidence” in his country.

“And this is going to take forward our relations,” Modi told the media, adding that uranium for India’s civilian nuclear program will help his country address global warming through “clean energy” and thus allows India “to give something to the world.”

Harper, who will accompany Modi to Toronto and Vancouver during the Indian leader’s three-day visit, agreed the uranium sales deal will end the lingering tension arising from India’s use of Canadian equipment to develop a nuclear bomb in the 1970s — which Harper said created “an unnecessarily frosty relationship for far too long.”

NEWS RELEASE: Sale of Canadian Uranium to India Denounced by International Experts at the World Uranium Symposium

April 16, 2015

QUEBEC CITY, QUEBEC–(Marketwired – April 15, 2015) – About 200 international experts and delegates of the World Uranium Symposium this morning denounced the sale of Canadian uranium to India, a country that maintains an arsenal of nuclear weapons and has never signed the United Nations’ Nuclear Non-Proliferation Treaty (NPT). By signing such a deal on the eve of the NPT review conference to be held in New York City in two weeks’ time, Canada is undermining and discrediting the key international treaty prohibiting the proliferation of nuclear weapons.

“Canada’s attitude sends a terrible message to the international community regarding the necessity for all countries to respect and to reinforce the Nuclear Non-Proliferation Treaty,” said Arielle Denis, Director of the International Campaign for the Abolition of Nuclear Weapons (ICAN) for Europe, the Middle East and Africa.

“India’s nuclear weapons program is very active, as demonstrated by a series of nuclear test explosions. Moreover tensions between India and Pakistan, a country with its own nuclear arsenal, are running very high. The attitude of Canada is irresponsible and alarming,” according to Shri Prakash, one of several participants from India at the World Uranium Symposium.

“Despite rules specifying no military use of Canadian materials, some uranium from Canada could well end up in Indian bombs,” said Dr. Gordon Edwards of the Canadian Coalition for Nuclear Responsibility. “At the very least, Canadian uranium will free up more Indian uranium for weapons production purposes.”

Advanced military technology shows need for minerals and metals supply – by Hall Quinn (The Hill – April 7, 2015)

April 16, 2015

http://thehill.com/

Quinn is the president and CEO of the National Mining Association. http://www.nma.org/

Innovation is essential for sustaining strong national defense and security. Take, for example, the Defense Advanced Research Projects Agency’s (DARPA) Robotics Challenge (DRC). In June, teams representing some of the most advanced research and development organizations in the world will showcase the hardware, software, sensors and human-machine control interfaces of robots capable of aiding the U.S. military response efforts in environments that may be too dangerous or difficult for humans to navigate.

The $95 million project demonstrates the Pentagon’s commitment to innovation and the creation of state-of-the-art military technologies. But beyond the design and testing of these sophisticated systems, we must ensure that our military has secure and reliable access to the domestic raw materials needed for these systems.

The U.S. Department of Defense (DOD) uses 750,000 tons of minerals each year in technologies that protect the very troops that protect our nation. Metals such as copper, lead and nickel are used in military gear, weapon systems and other defense technologies. Additionally, the mineral beryllium is used to reduce weight and improve guidance performance in fighter jets and NASA technologies such as the mirrors on the James Webb Space Telescope.

Mining Uranium: Saskatchewan Cameco Sets the Standard – by Rick Littlechild (First Nations Drum – April 12, 2015)

April 16, 2015

http://www.firstnationsdrum.com/

The Athabasca Basin hosts the world’s richest high grade uranium deposits. Saskatchewan produces 30% of the world’s uranium, and one main player in this Canadian mining success story is Cameco. The company was formed in 1988, and for over a quarter century, the company has been safely and reliably producing uranium and nuclear fuel products. Cameco currently has three active mines in northern Saskatchewan: Rabbit Lake, McArthur River and Cigar Lake.

Last year, Cameco successfully commenced production at their new Cigar Lake mine in northern Saskatchewan. This year, their main focus is to safely ramp up production at the mine. They expect to produce 6 to 8 million pounds in 2015, which would make Cigar Lake the third largest mine in the world by production. By 2018, Cameco expect’s to produce 18 million pounds(100% basis) of uranium concentrate annually.

The ore mined at Cigar Lake is transported by truck to the Mclean Lake Mill operated by Areva Resource Canada Inc, where it is processed to Unranium concentrate. Mclean Lake Mill is located approximately 70 kilometres northeast of the mine site. Mining at Cigar Lake began in March 2014 and the first Uranium concentrate was packaged at Mclean Lake in October 2014.

The company has developed strong ties with aboriginal people, with an emphasis on partnerships, Metis Sean Wiilly has spent a career in mining and is very sensitive to Aboriginal relations stated that “ Our goal is to develop and maintain long-term relationships between First Nations and Metis communities near where we operate.

Cameco’s first deal with India gives it access to the world’s second-fastest-growing consumer of uranium – by Jonathan Ratner (National Post – April 16, 2015)

April 16, 2015

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

The numbers certainly aren’t mind-blowing on Cameco Corp.’s five-year agreement to provide 7.1 million pounds of uranium to India through 2020.

The deal is only estimated to be worth $350 million and it’s small when you consider that the Saskatchewan-based miner sells about 33 million pounds of uranium annually.

But it’s not the size of the deal that prompted investors to push the stock up 7.56 per cent on Wednesday. What excites them and Tim Gitzel, Cameco’s chief executive, is the opportunity that has now opened up.

“This was more than a uranium buy-sell agreement,” Gitzel said in a telephone interview. “It was really a marking of a new relationship between Canada and India via Cameco. The pounds here aren’t enormous, it’s really the importance of being able now to deal with the Indians and bid into their market.”

Canada banned uranium exports to India in the 1970s after the country used Canadian technology to build nuclear weapons. But the countries put what Prime Minister Stephen Harper called an “unnecessarily frosty relationship” behind them on Wednesday, building on a nuclear cooperation agreement established in 2013.

NEWS RELEASE: Mining vs. Aboriginal Rights in Canada – Rio Tinto told to pay its rent to the Innu People

April 16, 2015

LONDON, UK, April 16, 2015 /CNW Telbec/ – Three First Nations chiefs, dressed in traditional garb and aware of the historic nature of their action, have come to London to address the shareholders of mining giant Rio Tinto directly during their annual general meeting in today, April 16, 2015. On the floor of the meeting, they asked Rio Tinto’s president and CEO, Sam Walsh, and its board of directors to intervene to end a longstanding conflict between the Innu Nation in Quebec, Canada, and mining company IOC, majority owned by Rio Tinto.

Inspired by Midnight Oil’s Beds Are Burning, a political song demanding the return to Australian aboriginals of ancestral lands stolen 200 years earlier by British colonists, the Innu chiefs informed Rio Tinto that “it’s time to pay the rent,” 60 years after exploitation of their territory began.

Supported by international law recognizing that indigenous peoples have rights—notably free, prior and informed consent—the Innu chiefs wanted to inform Rio Tinto shareholders that they can shed light on the negligence of IOC in Canada.

The Innu chiefs sought to inform Rio Tinto shareholders that there is specific legal precedent in Canada, where a recent Supreme Court ruling recognized the existence of First Nations ancestral title and stated that Aboriginal peoples holding this title, including the Innu of Quebec, “have the right to the benefits associated with the land—to use it, enjoy it and profit from its economic development” (excerpt from the ruling).

Greek miners protest against government decision threatening their jobs – by Angeliki Koutantou and Alkis Konstantinidis (Reuters U.K. – April 16, 2015)

April 16, 2015

http://uk.reuters.com/

(Reuters) – Thousands of workers at a Canadian-run gold mine in northern Greece protested in Athens on Thursday against a decision by the new leftist government to revoke the company’s licence to develop the mine.

Eldorado Gold has spent about $400 million (268 million pounds) in the gold mine project in Skouries, in the lush forest of Halkidiki, since 2012. It wants to invest another $700 million by 2017 to build a processing plant and develop two mines in the area.

The investment has been a test case for Greece’s will to attract foreign investment and kickstart its economy after years of austerity-induced recession. Skouries has stirred violent clashes between the mine workers and opposing local communities who say that the investment would destroy the environment.

In a rare rally of this scale in favour of the project, thousands of workers worried they may lose their jobs gathered outside the environment ministry in their safety vests and helmets, waving flags which read “Yes to mines, yes to growth.”

About 2,000 people are currently employed by the project and the company planned to hire another 1,000 by 2020, in a country struggling with record high joblessness.

Quebec plans $100-millon loan to troubled Nunavik mine – by Sarah Rogers (Nunatsiaq News – April 16, 2015)

April 16, 2015

http://www.nunatsiaqonline.ca/

The Quebec government is prepared to loan $100 million through a government-linked investment agency to Canadian Royalties and its parent company Jien Canada Mining Ltd., which owns and operates the Nunavik Nickel mine.

The news comes just days after Quebec Premier Philippe Couillard re-launched the government’s Plan Nord, which promised to invest billions into building the province’s economy north of the 49th parallel.

But opposition parties in the National Assembly had questions April 14 about the government’s decision to invest in the Nunavik mine, given the premier’s background. Couillard was named to Canadian Royalties’ board of directors in 2009, a year after he resigned as health minister under the Charest government.

Couillard also sat on the board alongside Dr. Arthur Porter, the disgraced former CEO of the McGill University Health Centre in Montreal, who faces fraud charges alleging his involvement with a multi-million dollar, kick-back scheme linked to the construction of a new hospital centre.

Opposition MNAs suggested Couillard’s connection to the mining company raises a conflict in the face of such a large government investment.

UPDATE 1-Apart from Big 3, iron ore miners face ‘existential’ threat – Goldman – by Manolo Serapio Jr (Reuters U.S. – April 16, 2015)

April 16, 2015

http://www.reuters.com/

SINGAPORE, April 16 (Reuters) – Up to half of iron ore output by miners outside the three mega producers in Australia and Brazil is at risk of closure with global demand set to peak at about 1.4 billion tonnes next year, Goldman Sachs said.

Production volumes among top miners – Vale, Rio Tinto and BHP Billiton – was not at risk, the bank said. “However, the rest of the industry is now facing an existential challenge,” Goldman analysts Christian Lelong and Amber Cai said in a report.

“We expect seaborne iron ore demand to peak in 2016 as the displacement of marginal Chinese iron ore production fails to offset a contraction in domestic steel consumption,” they said.

Separately, Moody’s Investors Service said supply reductions were dwarfed by planned increases estimated to exceed 300 million tonnes over the next several years.

Goldman cut its 2015 iron ore price estimate by 18 percent to $52 a tonne. It forecast $44 in 2016 and $40 in 2017 and 2018, down 29-33 percent from previous estimates. The price could drop to $40 this year and next, based on Moody’s estimates.

Highway 407 debacle looms over Hydro One sell-off – by Martin Regg Cohn (Toronto Star – April 16, 2015)

April 16, 2015

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

How can the Liberals credibly persuade the province to try another hydro hopscotch?

A Hydro One sell-off will be a tough sell for Kathleen Wynne. As it has been for every other premier making a similar sales pitch.

Wynne’s Liberal predecessor, Dalton McGuinty, ultimately had second thoughts about putting hydro utilities on the market in 2010. A Progressive Conservative government also abandoned a sale in 2002. Hanging over any hydro sale are memories of the botched Highway 407 fire sale, which enriched foreign investors and infuriated Ontarians.

Now, after all that renouncing and denouncing of privatizing, can the governing Liberals credibly reverse course? How do they persuade the rest of the province to try another hydro hopscotch?

For Thursday’s announcement, Wynne is getting political cover from a panel of outside experts that includes ex-politicians of the left and right, headed by ex-TD Bank CEO Ed Clark (himself a former federal deputy minister).

The panel’s diversified composition is a counterpoint to the forces of ideology and personality that drove ex-PC premier Mike Harris to begin dismantling Ontario Hydro nearly two decades ago.