May 19, 2015 – Republic of Mining

Rio Tinto’s Andrew Harding ‘stunned’ by Twiggy Forrest’s iron ore war – by Matthew Stevens, Julie-anne Sprague, John Kerin and Ben Potter (Sydney Morning Herald – May 20, 2015)

May 19, 2015

http://www.smh.com.au/

Rio Tinto iron ore chief executive Andrew Harding says he is stunned by the public campaign waged against the company by rival Fortescue Metals Group.

Mr Harding denied Rio Tinto is flooding the market with iron ore and expressed deep frustration with Fortescue founder Andrew Forrest’s aggressive public relations campaign, which he believes is winning political support by distorting reality.

Mr Forrest has led a public campaign against Rio Tinto and BHP Billiton for weeks that has won the support of Prime Minister Tony Abbott, who is supporting a parliamentary inquiry into the iron ore industry and the nation’s biggest taxpayers against several of his own cabinet ministers.

Mr Harding said there could be “extraordinary” ramifications for Australia in its strong reputation for promoting free and open markets.

“It is stunning. I am absolutely stunned,” he said in an interview. “As I keep saying, there is a reality dysfunction. The commercial reality of it all gets overlaid by the claim ‘that is rubbish’ and ‘that is not how it works’, but no one ever goes on to explain how it works in the alternative.

UPDATE 4-Rio Tinto, Mongolia end stand-off to build huge copper mine – by Terrence Edwards and Sonali Paul (Reuters U.S. – May 19, 2015)

May 19, 2015

http://www.reuters.com/

ULAN BATOR/MELBOURNE, May 19 (Reuters) – Mongolia and Rio Tinto have reached an agreement paving the way for work to resume on a stalled $5 billion underground copper mine that is expected to drive growth for both the country and the global miner.

The Oyu Tolgoi project, which started producing from an open pit mine two years ago, is the biggest single foreign investment in Mongolia, and resolution of the disputes over the second phase has revived hopes for a string of other stalled mining projects.

Rio Tinto’s Turquoise Hill Resources arm owns 66 percent of Oyu Tolgoi, while the Mongolian government owns the remainder. Rio is operator of the project, located in the Gobi desert near Mongolia’s border with China.

Vancouver-based Turqoise Hill shares leapt by as much as 11 percent to C$5.80 on the Toronto Stock Exchange on Tuesday after Rio Tinto announced the agreement on Monday which it said was signed by itself, Turquoise Hill and the government of Mongolia.

Turqoise Hill shares were last trading at $5.49, 4.8 percent higher on the day. “There is no doubt that moving forward with the Oyu Tolgoi project will improve the investment climate in Mongolia,” Prime Minister Chimediin Saikhanbileg said in a statement.

South Africa-The Long Read: Marikana massacre: the untold story of the strike leader who died for workers’ rights – by Nick Davies (The Guardian – May 19, 2015)

May 19, 2015

http://www.theguardian.com/international

On 16 August 2012, South African police opened fire on a large crowd of men who had walked out on strike from a platinum mine at Marikana, about 80 miles north of Johannesburg. They shot down 112 of them, killing 34.

In any country, this would have been a traumatic moment. For South Africa, it was a special kind of nightmare, since it revived images of massacres by the state in the old apartheid era, with one brutal difference – this time it was predominantly black policemen, with black senior officers working for black politicians, who were doing the shooting.

In response, President Jacob Zuma appointed a commission of inquiry, chaired by a retired judge, Ian Farlam, which eventually sat in public for a total of 293 days, hearing evidence from miners, their bosses and the police, and reviewing video, audio and paper records of the shooting and of the seven-day strike that preceded it.

At the end of March this year, the commission delivered its report to Zuma, who so far has failed to publish its conclusions. Those who may find themselves accused of colluding in the police action include not only senior figures from the ruling African National Congress but also Lonmin, the British company that owns the Marikana mine.

Platinum deficit forecast to drop – by Allan Seccombe (Business Day Live – May 19, 2015)

May 19, 2015

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

CHINA’s slowing economy prompted a downward revision to the full-year deficit in the global platinum market by 45,000oz, with the supply side left unchanged as increased supply from SA, the world’s largest source of primary platinum, offset declining output from other producers.

In its latest quarterly report, the World Platinum Council, which was set up by six South African-focused platinum mining firms to give the market regular insights into the platinum market, the full-year deficit for this year was reduced to 190,000oz from 235,000oz the council forecast in March in its fourth quarter report last year.

“The reduction in the demand forecast is primarily due to a downward revision to industrial demand in China based on lower growth forecasts,” the council said on Monday.

Total supply this year is forecast to rise 10% to 7.965-million ounces, with South African production rising 30%, or by 945,000oz, after the five-month strike last year knocked more than 1-million ounces of production out of the global market.

Demand is forecast to rise by 3% to 8.155-million ounces.

Saskatchewan is to mining what Crosby is to hockey – by Bruce Johnstone (Saskatoon StarPhoenix – May 19, 2015)

May 19, 2015

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

To call Saskatchewan a major player in the global mining industry is a bit like saying Sidney Crosby is a good hockey player. Saskatchewan is a mining superstar.

It’s the world’s leading producer and exporter of potash, accounting for 30 per cent of the global supply of the agricultural nutrient potassium (one of three essential components of fertilizer, along with phosphorous and nitrogen.)

Potash was the top-ranked commodity produced in Canada in 2013, with a reported value of $6.1 billion, ahead of gold ($5.9 billion) and iron ore ($5.3 billion), according to Natural Resources Canada.

In fact, potash is the only mineral in which Canada is a world leader. And virtually all of that Canadian potash (96 per cent) was produced in Saskatchewan. (The remaining four per cent was produced at the Potash Corporation of Saskatchewan mine at Sussex, N.B.)

Saskatchewan is also a world leader in uranium production, with nearly 16 per cent of the world’s supply of the nuclear fuel source, placing Canada second among uranium-producing nations after Kazakhstan.

BHP Left With $2.8 Billion of Reject Assets After Spinoff – by David Stringer (Bloomberg News – May 18, 2015)

May 19, 2015

http://www.bloomberg.com/

Despite BHP Billiton Ltd.’s spin off and sale of about $15 billion of unwanted assets over the last three years, the biggest miner remains saddled with a portfolio of even harder-to-shift rejects.

A total of nine assets — from a U.S. thermal coal mine to U.K. oil and gas platforms — haven’t made the cut for a new slimmed-down parent or the demerger company South32 Ltd.

The unloved operations, valued at more than $2.8 billion according to RBC Capital Markets, are hampering Chief Executive Officer Andrew Mackenzie’s quest to halve the size of BHP’s core portfolio to focus on big ticket earners including crude oil, iron ore and copper.

“They did the big clean up with South32 and these are what are left,” said Michelle Lopez, a Sydney-based investment manager at Aberdeen Asset Management Ltd., which holds BHP shares. “I’m sure they’ve been on the sale slate for a long time. It’s a disappointment.”

Global mining companies are trimming portfolios to focus more closely on their most profitable operations as commodity prices have tumbled and amid a drive to reduce costs.

Wynne’s Ontario Transit Spending No Bogeyman for Bonds – by Josh Wingrove and Matthew Winkler (Bloomberg News – May 19, 2015)

May 19, 2015

http://www.bloomberg.com/

Investors are voting for infrastructure over austerity in Kathleen Wynne’s Ontario.

The province’s debt is outperforming the average of its peers as Premier Wynne pledges to spend C$130 billion ($108 billion) on roads, transit and hospitals over the next 10 years and Moody’s Investors Service has labeled it the world’s largest sub-sovereign debtor. The government is so confident of strong demand for the initial public offering of its Hydro One Inc. utility it plans to pay investment banks a quarter of the standard fees for the sale.

The demand signals markets are buying into Wynne’s Liberal Party vision for investing in the economy to help stoke growth. While jurisdictions from Greece to Italy are cutting spending to restore fiscal balance, the 61-year-old Wynne is taking a go-slow approach that is winning investors over.

“It’s encouraging, because we are at this moment having a very difficult discussion in Ontario about how we’re going to go about building this infrastructure,” Wynne said in an interview at Bloomberg’s New York headquarters on May 14, along with her finance minister, Charles Sousa. “This reinforces what Charles and I know to be true, which is – this is what’s needed in Ontario in order for us to be able to compete.”

B.C. First Nation will accept LNG project – on their terms – by Brian Lee Crowley (Globe and Mail – May 15, 2015)

May 19, 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.

Brian Lee Crowley is the managing director of the Macdonald-Laurier Institute, an independent non-partisan public policy think tank in Ottawa.

What a brave new natural resource world it is that has such players in it. What else but the Bard’s Tempest could be brought to mind by the storm of consternation and controversy surrounding the decision by one B.C. First Nation to turn down more than $1-billion for their agreement to a liquefied natural gas project on their territory?

Is that tempest justified? If the media narrative around the decision were correct, the answer is probably yes. According to that account, yet another First Nation has refused a hugely generous benefits package in order to indulge their environmental and anti-development hobby horses. If this kind of behaviour is allowed to continue, it will spell the end of new natural resource investment in Canada.

That investment, already made nervous by Canada’s high costs, ponderous regulatory apparatus and politicized decision-making, was already close to concluding that Canada doesn’t want to develop its resources and going elsewhere. Adding unreasonable and capricious aboriginal demands to the mix is simply the straw that will break the camel’s back.

UPDATE 3-Peru strike spares output at top copper and gold mines – by Mitra Taj and Marco Aquino (Reuters U.S. – May 18, 2015)

May 19, 2015

http://www.reuters.com/

May 18 (Reuters) – Peru’s production of copper and gold was largely unaffected by a national strike on Monday as unionized workers declined to down tools for fear of losing their jobs and companies used replacements.

Walk-outs at some mines, however, might have curbed silver, tin and iron output, according to unions in Peru, the world’s third biggest copper, silver, zinc and tin producer and the seventh-ranked gold producer.

The strike, organized by the National Mining Federation that represents about 20,000 workers, aimed to press the government to tighten restrictions on firings and the use of contract workers.

But plans for an ambitious stoppage across Peru were upended after the government declared the strike unfounded and companies threatened to dismiss strikers or ordered contract workers to fill in, said federation head Ricardo Juarez.

Copper output from Peru’s four top producers, Antamina, Southern Copper, Cerro Verde and Antapaccay, was normal, union bosses at the mines said. The mines together produced about a million tonnes of the red metal last year, or more than three quarters of Peru’s total copper output.

Dig Into New Jersey’s Mining History at Sterling Hill – by Brian Glaser (May 18, 2015)

May 19, 2015

http://baristanet.com/

http://sterlinghillminingmuseum.org/

New Jersey is famously The Garden State, but as far back as its Colonial days it also was a major North American mining center. The Sterling Hill Mining Museum, about an hour north of Essex County, lets families to dig into this important part of the state’s history.

Located in Ogdensburg, Sterling Hill is the site of a zinc mine that is one of the oldest in the U.S., operating from the early 1700’s until it closed in 1986. It was converted into a museum in 1990, and the good news is that it’s not just an abandoned hole in the ground you can walk through—the Sterling Hill folks converted the mine into a real museum and offer an experience that’s fun and educational.

Most days at 1pm, Sterling Hill offers a guided tour that’s 2-plus hours long and includes an exhibit of vintage mining equipment equipment and minerals from around the world, followed by a walk inside the actual mine—where it’s always a cool and comfy 56 degrees! (Group tours can be booked, too.)

The entrance to the mine immerses you in the sights, sounds and overall feel of NJ’s mining days, and the museum has historical equipment and mannequin miners set up in key points throughout the tunnels.

Northeastern Ontario municipalities back First Nations’ proposal for a railway across traditional lands for Ring of Fire – by Len Gilles (Timmins Daily Press – May 19, 2015)

May 19, 2015

The Daily Press is the city of Timmins broadsheet newspaper.

Martin was a guest speaker at the spring meeting of NEOMA, the Northeastern Ontario Municipal Association, which met in Iroquois Falls on Friday.

He outlined for municipal leaders from across the North how the plan is to build and east-west rail corridor from Moosonee, up to Kashechewan and then over to Webequie, where the Ring Of Fire mining prospects are located. Further to that, Martin said Mushkegowuk also wants to install a high voltage hydro transmission line to the same area.

The Ring of Fire is the name given to the vast deposit of chromite and nickel, located in the McFauld’s Lake and Webequie area, about 600 kilometres north-west of Timmins. The prospect is valued in the tens of billions of dollars.

After an extensive presentation by Grand Chief Martin on Friday, NEOMA members voted on, and approved, a resolution of support put forward by the City of Timmins, seeking formal support for the Mushkegowuk plan.

Before the resolution could be voted on, Cochrane mayor Peter Politis stood up to say he had a concern about the Timmins resolution, which he said had a “nuance” about the conceptual support for Mushkegowuk to privatize the rail service in Northeastern Ontario.

Anglo American Can’t Solve Problems With Surgery – by Helen Thomas (Wall Street Journal – May 15, 2015)

May 19, 2015

http://www.wsj.com/

The miner could redouble efforts to find cost savings

Falling commodities prices have left Anglo American floundering. Taking an ax to a limb probably isn’t the right response.

Anglo’s shares have lagged behind mining peers. The reason is simple: Anglo has higher debt and less scope to chop investment spending. It won’t generate free cash flow this year, and possibly next, raising concerns about its dividend. Its credit rating was cut by Standard & Poor’s in April.

This has prompted debate about other ways to shore up its position. Anglo could potentially realize value by separating its diamond business, De Beers. That seems unlikely. De Beers has become a bigger contributor as other commodities have dropped. Spinning out the business wouldn’t raise cash. And, despite a solid outlook, prices for the rocks have fallen this year.

Another idea, suggested this week by Investec, is that Anglo could sell its iron ore operations. Amid mounting excess supply, iron ore has been among the sickliest of commodities. In April, it was trading at less than $50 a metric ton, down from about $100 a year ago.

THE LUNCH: Christy Clark: B.C. premier has made a big bet on LNG – by Brent Jang (Globe and Mail – May 16, 2015)

May 19, 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.

VANCOUVER — Christy Clark springs out of her chair after she sees four kids waving at her through the restaurant window.

“Hold on a sec,” the B.C. Premier tells me, gesturing to them to meet her inside. She poses for photos with the four smiling elementary school pupils, who are on a family outing to Vancouver from the nearby community of Abbotsford in British Columbia’s Fraser Valley.

We are two-thirds of the way through our lunch, seated in a corner of the Fairmont Waterfront Hotel’s Arc Restaurant with a great view of the North Shore mountains. It’s a convenient spot because it’s across the street from her downtown Vancouver office. I remark that someone was bound to recognize her and want to meet her. “It’s not that often that kids do,” she says. “I kind of thought that I should reward that attentiveness.”

Two years after the B.C. Liberals were re-elected with a majority government, Ms. Clark isn’t showing any signs of rust when it comes to her campaign skills. Whether it’s connecting with kids who are still many years away from voting or telling the server that she loves the soup of the day, her ability to launch a charm offensive won’t be easy for Opposition NDP Leader John Horgan to counter in the next provincial election in May, 2017.

For the Lax Kw’alaams, cultural identity is priceless compared to LNG – by Brent Jang (Globe and Mail – May 16, 2015)

May 19, 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.

LAX KW’ALAAMS, B.C. — Aboriginal artist Lianna Spence will treasure this feast long after the 100 friends and relatives finish their plates filled with B.C. seafood.

It is a special occasion for this late-afternoon potluck lunch at the elders’ lodge in Lax Kw’alaams. On a long table are an array of delicacies, including dried salmon and halibut, smoked black cod, boiled Dungeness crab and fried eulachon – small fish that many natives enjoy eating whole, from head to tail.

It is a day to laugh and cry as residents share memories to celebrate the life of Ms. Spence’s great-grandmother, Vera, who raised her in Lax Kw’alaams, a remote B.C. community accessible by boat or float plane. Ms. Spence, 32, spent months carving and painting an elaborate totem pole in honour of Vera, who died in 2006 at the age of 87.

During this long day full of emotion, Ms. Spence takes time to talk about a subject that has dominated the Lax Kw’alaams people’s thoughts over the past couple of weeks – Pacific NorthWest LNG’s $1-billion cash offer to the 3,600-member band, or the equivalent of almost $320,000 a person.

The worldwide crackdown on NGOs – by Lawrence Solomon (National Post – May 19, 2015)

May 19, 2015

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

In Canada, China, India, Israel, Russia and in other countries around the world, governments are cracking down on foreign-funded NGOs operating in their countries. These crackdowns are inevitable and understandable, and in all cases come down to one factor: Governments, whether democratic or dictatorial, don’t like foreign forces interfering in their domestic politics.

The crackdowns typically take the form of beefing up laws and regulations, or creating new ones, to require more disclosure on the activities of NGOs. An exception is China’s proposed Foreign NGO Management Law, now in Second Reading in its legislature, where the Public Security Department of China’s State Council — its cabinet — would assume responsibility for approving the funding and the activities of all NGOs in receipt of foreign funds, to guard against purposes ranging from the political to the religious to the economic. Unlike other countries, China’s NGO law isn’t about disclosure but about censorship and control.

In one country — the United States — there is no talk of crackdowns, not because the U.S. is blasé about foreign-funded NGOs but because it has long had strict laws on the books.

In the 1930s, Franklin Delano Roosevelt signed the Foreign Agents Registration Act (FARA) after he realized that the American Nazis — then a potent force in U.S. politics — were being funded by Hitler’s Germany.