May 25, 2015 – Republic of Mining

Independence Group to Buy Sirius Resources for $1.4 Billion – by Rhiannon Hoyle (Wall Street Journal – May 24, 2015)

May 25, 2015

http://www.wsj.com/

Australian gold and nickel miner Sirius Resources agreed to a cash-and-shares takeover by its larger rival

SYDNEY—A mining company that traces its roots to one man’s hunt for wreckage from a NASA space station in the Outback has become the focus of one of Australia’s biggest resources deals so far this year.

Sirius Resources NL, which is building a vast nickel mine in Western Australia state, on Monday agreed to a cash-and-shares takeover offer worth 1.8 billion Australian dollars (US$1.4 billion) by larger rival Independence Group NL. If approved at shareholder meetings in late August, the deal will create a midtier mining company producing commodities ranging from gold to nickel and zinc.

Modern-day mining companies typically owe their success to the drillbit, but Sirius’s story is a throwback to the days when Australian prospectors headed into the Outback with little more than a shovel, a compass and a map.

In 1979, Mark Creasy drove deep into Australia’s red center to search for debris from the Skylab space station, which was partly strewn across Western Australia instead of falling entirely into the Indian Ocean as the National Aeronautics and Space Administration had hoped.

UPDATE 2-Barrick sells Australian Cowal gold mine to Evolution for $550 mln – by Sam Forgione and Sonali Paul (Reuters U.S. – May 25, 2015)

May 25, 2015

http://www.reuters.com/

NEW YORK/MELBOURNE, May 25 (Reuters) – Barrick Gold , the world’s top gold producer, has agreed to sell its Cowal mine to Evolution Mining for $550 million in a deal that will turn Evolution into Australia’s second largest producer of the precious metal.

The deal gives Evolution a large, low-cost mine that will boost its output to around 800,000 ounces a year, around one-third the output of top Australian producer Newcrest Mining .

“This is a truly transformational acquisition for Evolution,” Executive Chairman Jake Klein said after the deal was announced on Monday. “This is the high quality asset we have been looking for to cornerstone our business.”

Barrick put Cowal up for sale along with its Porgera mine in Papua New Guinea, among other assets, in an effort to cut debt by $3 billion by the end of this year.

Analysts congratulated Evolution for snaring Cowal for well below the $650 million price tag it had been expected to fetch.

Australia’s Scrapped Iron-Ore Inquiry Fires Up Debate Over Output – by Rhiannon Hoyle (Wall Street Journal – May 24, 2015)

May 25, 2015

http://www.wsj.com/

Questions loom over who should control Australia’s natural resources: the nation, or the private companies that own and operate them

SYDNEY—The Australian government’s decision to reject an inquiry into the iron-ore market capped a tumultuous week during which a bitter debate over the industry’s relentless output expansion, despite sinking prices, has dominated the national discourse.

At the heart of the issue: whether a country’s natural resources belong to the nation, or the private companies that own and operate them.

Australia’s Prime Minister Tony Abbott earlier this month backed calls for the parliament’s economics committee to investigate claims that mining giants BHP Billiton Ltd. and Rio Tinto PLC have been driving down iron-ore prices by boosting production in a way that undermines their smaller competitors, as well as harming the country’s economy.

But in a sign of the rift within government itself over the issue, Australia’s Treasurer Joe Hockey late Thursday officially nixed any plans for an inquiry.

His decision followed an unusually outspoken campaign by the normally publicity-shy mining majors, with BHP’s Chief Executive Andrew Mackenzie saying any probe would be “a ridiculous waste of taxpayers’ money.”

Can Elon Musk and Tesla save the mining industry? – by Andrew Critchlow (The Telegraph – May 25, 2015)

May 25, 2015

http://www.telegraph.co.uk/

New generation of batteries will make cobalt, lithium and nickel essential investments in commodities

When it comes to investing in the future of commodities forget about resources such as iron ore and coal, which dominated the industrial economies of the old world order. The new currency for smart commodity investors will be cobalt, which is poised to play a growing role in everyone’s life if the vision of American billionaire Elon Musk to have a Tesla Motors battery powering homes comes to fruition.

Mr Musk, the force behind Tesla electric cars and Space X, wants to make his revolutionary next generation battery packs on walls a standard fixture for every household along with a rechargeable car parked in the garage and a solar panel on the roof. Tesla is in the process of building a giant new battery production facility in Nevada known as the Gigafactory to meet expected demand from this revolution in domestic energy supply and storage.

Tesla plans to produce two types of battery at the facility that is taking shape in the desert and so far the exact specification of the lithium-ion power units is being kept a close secret. The company currently uses batteries sourced from Panasonic to power its S-model cars.

These batteries use a cathode that is comprised mainly of lithium, nickel, cobalt and aluminium oxide. According to Mr Musk, the company will use a more powerful battery for the home grid, which will utilise nickel, manganese and cobalt oxide for its cathode.

European mining seemingly regaining lost lustre as at least one mine opens each year since 2008 – by Ilan Solomons (MiningWeekly.com – May 22, 2015)

May 25, 2015

http://www.miningweekly.com/page/americas-home

HANNESBURG (miningweekly.com) – Europe is remarkable in that its mining industry predates the Roman Empire, yet large portions of unexplored territories with highly prospective resources remain, says European metals and minerals mining representative body Euromines president Mark Rachovides.

Mattia Pellegrini, head of the raw materials, metals, minerals and forest-based industries unit of the European Commission* Directorate-General for the Internal Market, Industry, Entrepreneurship and Small and Medium-sized Enterprises, tells Mining Weekly that the body recently commissioned a study to assess the competitiveness of the European mining industry.

The results highlighted that the 28 member countries of the European Union (EU) have an active nonenergy extractive industry that produces a wide range of commodities.

He adds, however, that the results also showed the EU’s “modest” contribution to the global production of mineral resources. “Nevertheless, when one considers investment in exploration in some of the EU member States during the past five years, there is an encouragingly increasing trend,” states Pellegrini.

Forrest fire: Twiggy’s secret bid to salvage iron ore price – by Andrew Burrell and Paul Garvey (The Australian – May 23, 2015)

May 25, 2015

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

For the second time in five years, Andrew Forrest has been comprehensively out-lobbied, out-manoeuvred and out-muscled in Canberra’s halls of power by his despised rivals BHP Billiton and Rio Tinto.

The billionaire chairman of Fortescue Metals Group is seething at being snookered again by two multinationals he believes are hellbent on pushing him out of business by driving down the iron ore price.

“This won’t be the end of it — he won’t stop now,” said a close ¬associate of Forrest’s after Joe Hockey bowed to the demands of BHP and Rio by announcing on Thursday that there would be no ¬inquiry into the iron ore market.

Another was more blunt: “He will keep going — he actually believes his own bullshit.”

Sure enough, at the crack of dawn yesterday, the indefatigable Forrest hit the national airwaves from Perth in a bid to reboot his campaign, suggesting BHP and Rio had sent “plane loads” of ¬lobbyists to Canberra in recent days to convince the government to call off the planned inquiry.

[Potash Mineral] Products ‘feed and fuel the world’ (Saskatoon StarPhoenix – May 22, 2015)

May 25, 2015

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

Pamela Schwann, executive director of the Saskatchewan Mining Association, answered a few questions from Paul Sinkewicz during the seventh annual Mining Supply Chain Forum held April 14 and 15 in Saskatoon

Q How important is mining to Saskatchewan’s economy?

A Mining is one of Saskatchewan’s key economic engines of growth, directly contributing approximately seven per cent of our GDP. When you also include the related service sector industry that supplies to the mining sector, that number adds up into the double digits.

Q What role does mining play in the lives of Saskatchewan residents?

A On the surface, this is what you see: There are over 25 different mining operations in Saskatchewan spread out across the province from the coal mines along the U.S. border to the potash deposits that stretch across the south central part of the province to the uranium and gold mines in the northern part of Saskatchewan.

[Iron] Range Resiliency Tested Again: WE WILL PERSEVERE – by Bill Hanna (Mesabi Daily News – May 23, 2015)

May 25, 2015

http://www.virginiamn.com/

Resilient — adjective.

1. Springing back; rebounding.

2. Recovering readily from adversity or the like.

The word resilient definitely defines a strong quality of the Iron Range, its people and our No. 1 industry of mining.

The Range has had to bounce back several times from economic difficulties associated with the ore and steel industries. And we have done so repeatedly through hard work, innovation and a never-give-up attitude.

The Range’s resiliency is now being tested once again because of a downturn in the ore and steel industries brought on in a major way by illegally subsidized steel that has flooded the U.S. market and a glut of iron ore that has lowered prices for the resource.

These certainly are some tough times for mining on the Iron Range. But, once again, the resolve of the companies and people who flip the switch of the industry to make it go will persevere.

Peru Declares 2-Month Martial Law in Area of Disputed Copper Mine – by Robert Kozak (Wall Street Journal – May 23, 2015)

May 25, 2015

http://www.wsj.com/

Residents have protested Southern Copper’s plans to set up Tia Maria mine

LIMA, Peru—The government of President Ollanta Humala on Saturday started a two-month period of martial law in the southern state of Arequipa, where local residents are protesting against a plan by Southern Copper Corp. to set up a copper mine known as Tia Maria.

Under the state of emergency, police can enter houses without search warrants, while meetings and marches can be broken up, as the government aims to end almost two months of often-violent protests in the region about 650 miles south of Lima.

Local residents have blocked roads and clashed with police since late March, saying the $1.4 billion Tia Maria project will contaminate water and the air. The government last year approved the company’s environmental study, and the company says it can operate a clean mine.

“In line with what is established in the constitution and the decree declaring a state of emergency, the national police with the backing of the armed forces will be charged with maintaining public order,” Prime Minister Pedro Cateriano said late Friday.

Jose Ramos Carrera, mayor of the municipality of Punta de Bombón, said many local residents will continue to oppose the Tia Maria project.

Mongolia to be transformed by giant Rio Tinto copper mine – by Andrew Critchlow (The Telegraph – May 23, 2015)

May 25, 2015

http://www.telegraph.co.uk/

Land of Genghis Khan to become global copper superpower after mega deal to build giant underground Oyu Tolgoi mine

On the face of it, Mongolia – a landlocked and wild land – hasn’t changed much since Genghis Khan and his Golden Horde pillaged their way across Asia in the 13th century. The country’s population is still predominantly made up of nomadic herders living in yurts and drinking airag – fermented mare’s milk.

But this is all about to change after an agreement was reached between the government and Rio Tinto last week to develop one of the world’s largest copper and gold mines at Oyu Tolgoi, which literally means Turquoise Hill. The development of the mine is expected to trigger a rush to exploit $1 trillion (£638bn) worth of mineral resources that are thought to exist in the country and drag its mainly agrarian society into the modern age.

Signs of this transformation are already apparent on the streets of the capital Ulan Bator where around 40pc of the country’s 2.8m population now live. Skyscrapers and new office developments across the city are confronting signs of the impending change that the arrival of the mining industry will bring. Oyu Tolgoi is at the forefront of this new era, which according to the Chimediin Saikhanbileg, the prime minister, will “benefit Mongolian citizens for generations to come”.

EXECUTIVE COMPENSATION: Gold company stock options lose their glitter – by David Milstead (Globe and Mail – May 22, 2015)

May 25, 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.

Canada’s gold companies are notorious, to use a loaded word, for the millions of dollars they’ve paid their executives in the past several years even as the price of gold, and the companies’ share prices, have tumbled.

But there’s one place in the summaries of executive pay where gold chief executive officers are racking up zeros: The current profits of the stock options they hold.

A look at the options held by the top executives at five major TSX-listed gold companies – Goldcorp Inc., Barrick Gold Corp., Agnico Eagle Mines Ltd., Yamana Gold Inc. and Eldorado Gold Corp. – shows none of the five men held any stock options at the end of 2014 that were “in the money,” or exercisable for any profits.

That certainly could change if the mining industry’s fortunes improve, because many of the options don’t expire for two to five more years. On the flip side, however, a number of the options the executives held at the end of 2014 have since expired, useless.

A prolonged slump, then, could mean that what has been a key compensation tool will turn out very different than expected.

Indian PM breathes life into Posco’s stalled project – by Ajoy K Das (MiningWeekly.com – May 21, 2015)

May 25, 2015

http://www.miningweekly.com/page/americas-home

KOLKATA (miningweekly.com) – South Korean steel major Posco’s plans for securing iron-ore resources for its $12-billion Indian investments have been thrown a lifeline through the intervention of Indian Prime Minister Narendra Modi.

The project, which has been hanging fire for over a decade, was given a nudge following the Prime Minister’s two-day Seoul summit with Korean President Park Geun-hye, followed by a meeting with Posco CEO Kwon Oh Joon earlier this week.

Senior officials in the Steel Ministry said that the Indian Prime Minister held a series of talks on bilateral economic issues with Korean political and business leaders, but Posco investments, almost on the verge of being scrapped, did not specifically figure during this visit.

This initially was considered a disappointment, as Posco’s plans to set up a 12-million-tonne-a-year steel plant in the eastern Indian port town of Paradip, in Odisha, linked to the Khandadhar iron-ore reserves, represented the single largest foreign direct investment in the country, the official said.

However, soon after his return, Modi was reported to have pushed for several initiatives aimed at getting the stalled project off the ground.

[Mining] Education, research help create success – by Brian Burton (Saskatoon Phoenix – May 20, 2015)

May 25, 2015

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

Alberta couldn’t do it — but Saskatchewan did. Today it’s home to the world’s first carbon capture and storage (CCS) operation at a coal-fired power plant.

Alberta approved three coal-based CCS projects and saw proponents back away from all of them. Meanwhile, SaskPower completed its $1.5-billion CCS unit at the Boundary Dam coal-fired power plant in 2014 and now captures 1.2 million tonnes of carbon dioxide a year, equivalent to removing 250,000 cars from the road. Captured carbon dioxide is mostly injected into Weyburn and Midale oil reservoirs; earning a revenue on CCS, boosting oil production, prolonging oilfield life and raising provincial crude royalties.

While some jurisdictions, notably Ontario, have turned their backs on carbon-heavy coal, Saskatchewan is making the technical and environmental case for continued use of a resource that provides about 70 per cent of its electric power.

“It enables the continuation of coal use in the generation of electric power,” says David Grier, chief strategist with Innovation Saskatchewan. Without CCS, he says, new carbon dioxide limits could have spelled the end of coal mining in the province.

Nickel Mine, Lead Bullets: Maya Q’eqchi’ seek justice in Guatemala and Canada – by Sandra Cuffe (Mongabay.com – May 19, 2015)

May 25, 2015

http://www.mongabay.com/

German Chub faces the judge as he responds calmly and evenly to question after question during cross-examination. He uses his arms to lift himself up and shift a little in his wheelchair. Other young Maya Q’eqchi’ men had to carry him up the stairs to the second-floor courtroom in Puerto Barrios, a bustling Caribbean port city in eastern Guatemala.

Five and a half years ago, Chub was playing soccer in the community of La Unión, in the department of Izabal, when security guards from the Guatemalan Nickel Company (CGN), a mining corporation, showed up, he told the court. Chub heard a commotion coming from the direction of company-owned hospital property and approached the fence separating the company complex from the soccer field to see what was going on, he said.

“I saw Mynor Padilla pointing his pistol at me,” Chub testified. “When I turned around, I heard the gunshot.”

Chub is one of several Maya Q’eqchi’ community members shot on September 27, 2009 during a crackdown on protests over threats that a group would be evicted from its ancestral lands near CGN’s Fenix ferro-nickel mining project. Chub is paralyzed from the chest down as a result, and doctors determined it too risky to remove the bullet lodged near his spine.

UPDATE 1-Potash Corp evaluating SQM, ICL stakes; other holdings ‘strategic’ – by Rod Nickel (Reuters U.S. – May 21, 2015)

May 25, 2015

http://www.reuters.com/

May 21 (Reuters) – Potash Corporation of Saskatchewan Inc Chief Executive Jochen Tilk said on Thursday that he views the company’s stakes in fertilizer companies Sinofert Holdings and Arab Potash Company as “strategic,” but continues to review whether to keep its shares in ICL and SQM.

Tilk, speaking at a BMO investor conference in New York, said if Potash Corp could not build on its SQM and ICL minority stakes, it will consider whether it should keep them.

Potash Corp has control over how Jordan’s Arab Potash Company markets its potash, and Tilk said the Sinofert stake gives Potash a window into the Chinese market. But the company does not have as much influence as it wants over SQM and ICL.

Tilk said in an interview that he has not spoken with Israeli Prime Minister Benjamin Netanyahu about whether he would permit a foreign company to take control of ICL, in which the government holds a golden share.

Potash Corp tried under former Chief Executive Bill Doyle to gain a majority stake in ICL, but ran into strong opposition and backed off in 2013.