May 11, 2015 – Republic of Mining

Germany Divided Over Future of Coal – by Rachel Knaebel (Equal Times.org – May 11, 2015)

May 11, 2015

http://www.equaltimes.org/

On 25 April, 6000 people formed a human chain stretching over seven kilometres in the Rhineland mining area in western Germany to protest against the role of coal in the country.

At the same time, in Berlin, 15,000 people were taking part in a demonstration called by the mining sector union IG BCE.

They were protesting against the proposal of the German Minister for Economic Affairs, Sigmar Gabriel, to introduce an extra tax on the country’s oldest coal power plants.

The objective: to reduce Germany’s greenhouse gas emissions. Berlin has committed to reducing CO2 emissions by 40 per cent by 2020, compared with 1990 levels. To achieve this, Germany’s coal power plants need to do their bit, according to the ministry.

Environmental associations agree, and they see the proposal as a first step towards a coal phase-out, following on from the nuclear phase-out to be completed by 2022.

Transparency act could muddy things with FNs, assoc. warns – by Jonathan Migneault (Sudbury Northern Life – May 11, 2015)

May 11, 2015

http://www.northernlife.ca/

Aimed at corruption, Mining Assoc. prez says act could be used against First Nations

A new transparency act for the mining industry may go too far when it comes to First Nations, says the Mining Association of Canada.

The Extractive Sector Transparency Measures Act (ESTMA), which received royal assent in December 2014, and is expected to come into effect in June, requires mining companies to publicly disclose payments greater than $100,000 they make to foreign and domestic governments.

“It’s an anti-corruption measure,” said Pierre Gratton, the president and CEO of the Mining Association of Canada. “By having companies disclose what they pay, then citizens of those countries can ask questions about what their governments might be doing with that money.”

The act’s purpose, as it appears in the document itself, is to “implement Canada’s international commitments to participate in the fight against corruption through the implementation of measures applicable to the extractive sector, including measures that enhance transparency and measures that impose reporting obligations with respect to payments made by entities.”

Mining companies to face more transparency – by Rita Celli (CBC News Business – May 11, 2015)

May 11, 2015

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

For Rita Celli’s Ontario Today program on mining, click here: http://podcast.cbc.ca/mp3/podcasts/ontariotoday_20150511_48892.mp3

When federal law requires reporting of all payments to government, it will shine light on royalties

Canadian-owned oil, gas and mining companies must begin reporting next year all payments of more than $100,000 for government services, including port fees and royalties, beginning a new era of transparency in the mining sector.

The federal government’s new Extractive Measures Transparency Act will give Canada similar legislation to what exists in the U.K. and the U.S. “There is opacity,” says Pierre Gratton, president and CEO of the Mining Association of Canada.

Details are still being finalized, but the legislation is designed largely as a way to cut down on corruption in Third World countries. The industry likes the new disclosure rules because it puts all companies on the same playing field, Gratton says.

“Our view was that more disclosure is better. We’re going in with eyes wide open,” says Gratton, acknowledging that the revelation of new financial details will likely spark a different kind of debate in Canada, about whether mining companies pay enough taxes.

COLUMN-China stimulus, jobs worry may boost some commodity exports – by Clyde Russell (Reuters India – May 11, 2015)

May 11, 2015

http://in.reuters.com/

LAUNCESTON, Australia, May 11 (Reuters) – China’s efforts to re-energise its economy through interest rate cuts are probably not enough to give much of a boost to commodity import demand, but oddly enough may act to boost some commodity exports.

The People’s Bank of China cut interest rates for the third time in six months on May 10 in the wake of weaker-than-expected trade and inflation numbers.

Analysts are divided on whether the rate cut will have much of an impact, with a seeming consensus that at best it will act to halt the slowing of economic growth, rather than increasing the pace.

For natural resource producers, already pressured by prices close to multi-year lows for several major commodities such as iron ore and coal, even a stabilisation of economic growth around Beijing’s 7 percent annual target would be good news.

However, for China’s commodity demand to rise in any meaningful way, it’s likely that fiscal stimulus in the form of increased spending on infrastructure and social housing will have to be put in place.

Fortescue founder asks Australians to fight Rio, BHP iron ore plans – by James Regan (Reuters U.S. – May 11, 2015)

May 11, 2015

http://www.reuters.com/

SYDNEY – May 11 Fortescue Metals Group Chairman Andrew “Twiggy” Forrest on Monday called on Australians to urge the government to stop expansion plans by iron ore miners Rio Tinto and BHP Billiton, saying they were jeopardizing the economy.

The plea by the billionaire philanthropist and founder of the world’s fourth-biggest iron ore miner was condemned by the national mining lobby, the Minerals Council of Australia, for threatening to set the country on an “interventionist path.”

Forrest has accused Rio and BHP of over-producing to drive out competitors from the $60 billion-a-year Chinese import market despite Fortescue quadrupling its own production in the last seven years.

“These big companies say they must flood the market next year and the year after and the year after even though it will crash the price further,” Forrest said in an editorial in Sydney’s Daily Telegraph. “Every time they say this the price falls again.”

Iron ore prices .IO62-CNI=SI are trading off their lows at $60.50, but still 55-percent under last year’s peak. For every $1 price fall, the Australian economy lost A$800 million ($632 million) in foreign income, according to Forrest.

Mining for more: How much is mining really worth to Ontario? – by Rita Celli (CBC News Business – May 11, 2015)

May 11, 2015May 11, 2015

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

For Rita Celli’s Ontario Today program on mining, click here: http://podcast.cbc.ca/mp3/podcasts/ontariotoday_20150511_48892.mp3

Are low royalty rates making the province a tax haven for mining or building a viable industry

Ontario has collected about 1.5 per cent in royalties on the billions of dollars worth of ore extracted in the province over the past decade, but critics say that’s not enough for the loss of non-renewable resources, a CBC News investigation supported by Michener-Deacon shows.

“One and a half per cent! That’s like 10 times less than a tip at a restaurant. Can’t we require that they tip us 15 per cent for using and extracting our resources?” says Ugo Lapointe of Mining Watch Canada.

In Ontario, companies pay a mining profits tax on precious and base metals. When the company makes money, it’s supposed to pay this so-called royalty.

Critics say precious and base metals are Crown assets and that the province should get the best deal possible as compensation for the loss of non-renewable natural resources. But the mining industry and government officials argue that mining is a uniquely expensive enterprise and that focusing on royalties distorts the big picture.

Vale to divide and conquer by lifting high-grade iron ore output – by James Wilson (Financial Times – May 10, 2015)

May 11, 2015

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

Vale is keen to build up its supply of higher-quality iron ore in a move that could increase pressure on some rival producers in the global market for the steelmaking commodity.

The Brazilian miner is one of a quartet of companies that dominate the global market in iron ore, where prices have plummeted over the past year as a glut of supply — mainly from Australian producers — has encountered weakening Chinese demand.

Vale’s recent indications that it would be prepared to hold back some supply have helped to arrest the slide in the iron ore price, while underpinning a rally in the company’s shares in the past month.

In an interview Luciano Siani, chief financial officer, did not rule out Vale cutting its growth plans for next year. The miner expects to produce 340m tonnes of iron ore this year and has previously estimated that 2016 output will be 376m tonnes.

However, Mr Siani said Vale would be likely to “push to the fullest” its production of the highest grade of iron ore, which commands a premium price from steelmakers. By contrast Vale would be more likely to “manage” its more “standard” iron ore supplies, he said.

Waterloo Region reaps dividends by being conduit to Baffin Island – by Greg Mercer (Waterloo Region Record – May 9, 2015)

May 11, 2015

http://www.therecord.com/waterlooregion/

BRESLAU — The sun is just starting to peek above the horizon as a handful of men in work boots suck on their last cigarettes outside the airport terminal, getting ready for the long commute.

In a few minutes, they’ll join dozens of others boarding the Boeing 737 for the five-and-a-half hour charter flight to Mary River, Baffin Island — where a small army of pipe fitters, machinists, cooks, engineers and other tradespeople are helping build and supply one of the world’s largest and most ambitious iron ore mining projects.

For hundreds of workers passing through the Region of Waterloo International Airport three times a week, Waterloo Region is a southern hub for the buried riches of the Far North. And that connection is pumping millions into the local economy.

The Mary River Project, run by an Oakville-based company called Baffinland, aims to move its first shipment of iron ore — the main raw material used to make steel — this summer.

The ore deposits in that part of Baffin Island, first discovered by a prospector in 1962, are so rich and pure they’re the stuff of legend. Pilots used to report the minerals would scramble their compasses as they flew over.

Old deals in risky countries continue to haunt junior resource sector – by Peter Koven (National Post – May 9, 2015)

May 11, 2015

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

Given recent headlines, it is hard to imagine that Khan Resources Inc. was ever in an enviable position. But in early 2010, it really was.

The tiny Toronto-based exploration company, which owned a uranium deposit in Mongolia, was the target of a bidding war between massive, state-owned entities from China and Russia that were chasing foreign uranium reserves. It was exactly the sort of scenario that shareholders dreamed of when Khan went public in 2006. The company appeared to have overcome nationalization concerns in Mongolia and set up a decent outcome for shareholders.

“I don’t know if they’ll be fighting over us. But it has the makings of one trying to outbid the other,” then-chief executive Martin Quick predicted. Of course, that isn’t what happened. Instead of engaging in a market-driven takeover battle, the Russians appeared to apply political pressure behind the scenes, forcing Khan off the uranium project without paying its investors a dime.

The case ended up in international arbitration, with Khan actually winning a US$100-million award. Mongolia, an extremely poor country, signaled it would challenge the decision.

Newmont Mining Corporation History (1921- 1993)

May 11, 2015

For a large selection of corporate histories click: International Directory of Company Histories

Newmont Mining Corporation, primarily through two subsidiaries, is engaged in the exploration, mining, and processing of gold. The bulk of Newmont’s revenue is generated by Newmont Gold Company (NGC), of which parent Newmont controls a 90.1 percent interest. Operating in Nevada along a 38-mile stretch of the Carlin Trend, NGC is North America’s leading producer of gold. NGC controls a 58-square-mile area of mineral rights in the Carlin region, while Newmont owns rights to a surrounding additional 420 square miles. In 1991, NGC accounted for about $573 million of Newmont’s $623 million total sales, mining 132 million tons of gold ore and selling 1.58 million ounces of gold.

Newmont’s other main subsidiary is the wholly owned Newmont Exploration Limited (NEL) whose role is to discover new gold deposits in NGC’s areas of interest and to determine the minable ore reserves in these deposits by drilling. In exchange for a 10 percent royalty, NGC has rights to any gold discovered by NEL in the 2,300-square-mile area around its Carlin property. Newmont’s cost to produce an ounce of gold in 1991–$203–was a more efficient rate than 75 percent of the Western world’s gold production.

Newmont was founded in 1921 as Newmont Corporation by Colonel William Boyce Thompson as a type of holding company for his varied financial interests. Thompson was born in 1869 in Alder Gulch, Montana, and grew up in Butte. An overweight, cigar-smoking man with a penchant for gambling (a telling hobby for someone in his line of work), Thompson eventually landed at the Columbia School of Mines, after which he made some money in the coal business.

Kinross Gold Corporation History (1993 – 2001)

May 11, 2015

For a large selection of corporate histories click: International Directory of Company Histories

In just five years Kinross Gold Corporation went from a newly formed company to North America’s fifth largest gold producer. With revenues of $318 million in 1999, the young company considers itself the fastest growing gold producer in the world and its 1998 merger with Amax Gold helped put it there.

Among its flagship operations are the aptly named Fort Knox in Alaska, Hoyle Pond in northern Ontario, and the Kubaka property in eastern Russia. Kinross also mines properties in Chile, Zimbabwe, and in the United States’ richest gold vein, Nevada. Though gold is its raison d’être, Kinross also mines significant quantities of silver.

Birth of Kinross: 1992-93

Gold derived its name from the Latin aurum and its luster, malleability, and anticorrosive qualities have made it a prized possession since the earliest civilizations. More than 170 years after the establishment of the gold standard in 1821, several Canadian companies began discussions to unite and create a new company. Two of these companies were publicly held and controlled gold mining interests; the third was the equally-owned offspring of one of the gold industry’s titans, Placer Dome, Inc., and Dundee Bancorp.