Many Mines Put Up for Sale, but Buyers Are Scarce – by Scott Patterson and John W. Miller (Wall Street Journal – May 28, 2015)

http://www.wsj.com/

Drought of deals reflects low commodity prices, low quality of assets on the block

Miners across the world want to sell off their mines, but they have a problem: Almost no one wants to buy them.

Some veteran bankers in the mining industry say they are seeing the longest drought of deals in their careers. The rut is caused by a commodity price rout with little sign of recovery, low-quality assets on the block and a focus on shareholder returns—not acquisitions—from industry giants like BHP Billiton PLC and Rio Tinto PLC.

Deal volumes in 2014 fell 23% to 544 from the previous year, the lowest amount since 2003 and the fourth straight year of declines, according to Ernst & Young. Deals during the past decade peaked in 2010, when 1,123 were completed amid a China-fueled boom in prices. In the first quarter of 2015, the value of mergers and acquisitions in the mining industry globally fell 18% to $5.9 billion, from $7.2 billion a year ago, Ernst & Young said.

The paucity of mining deals, amid a broadly roaring M&A market, comes as prices for commodities such as iron ore, aluminum and copper are trading at near six-year lows. Other metals like nickel and zinc are being weighed down by lackluster demand.

Read more

Barrick investors welcome Chinese tie-up, debt reduction moves – by Nicole Mordant and Euan Rocha (Reuters U.S. – May 26, 2015)

http://www.reuters.com/

VANCOUVER/TORONTO – Barrick Gold Corp’s first step to long-promised partnerships with China, as well as progress in reaching an ambitious debt-cutting goal, are turning skeptical investors warmer toward the world’s biggest gold miner.

Barrick said on Tuesday it would sell a stake in its Porgera mine in Papua New Guinea mine to China’s Zijin Mining Group, and form a strategic partnership with Zijin. The moves marked an initial push in Executive Chairman John Thornton’s plan to forge closer ties with China, the world’s biggest producer and consumer of gold.

The former Goldman Sachs executive’s radical overhaul since taking Barrick’s reins a year ago, including eliminating the position of chief executive, had raised eyebrows among investors. Many also complained about his outsized signing bonus, lack of access, and most recently his 36 percent pay rise.

But a clearer strategy unveiled in February to slash Toronto-based Barrick’s mountain of debt, while seeking close links with China, looks to be winning approval.

Read more

Gina Rinehart loses control of $5b family trust – by Louise Hall (Sydney Morning Herald – May 28, 2015)

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

John Hancock, the estranged son of Australia’s richest person Gina Rinehart, has won an epic legal battle over control of the family’s multibillion-dollar family trust, with his sister and ally Bianca Rinehart appointed trustee.

On Thursday, NSW Supreme Court Justice Paul Brereton appointed Bianca, 38, trustee of the Hope Margaret Hancock Trust, which was set up by her late grandfather Lang Hancock and is thought to be worth about $5 billion.

Justice Brereton also ordered Mrs Rinehart to hand up documents and accounts relating to the trust that John and Bianca had claimed were withheld from them for many years.

The decision follows a bitter and public three-and-a-half-year war that saw Mrs Rinehart and her youngest daughter, Ginia, 28, pitted against her eldest two children, John, 39 and Bianca. Hope Welker, 29, who initially launched the legal action against her mother, settled in 2013 for $45 million because of the “high degree of distress” the litigation was causing her.

Justice Brereton said: “Mrs. Rinehart has demonstrated that she is prepared to go to extraordinary lengths to retain control, directly or indirectly, of the Trust, and that she is capable of exerting enormous pressure and great influence to do so”.

Read more

NEWS RELEASE: KWG Reports Progress of Claims Hearings

TORONTO, ONTARIO–(Marketwired – May 28, 2015) – KWG Resources Inc. (CSE:KWG)(FRANKFURT:KW6) reports that its subsidiary Canada Chrome Corporation (“KWG/CCC”) has filed the materials required to perfect its appeal at the Ontario Court of Appeal. A hearing date will be scheduled by the Court’s Registrar.

The respondent 2274659 Ontario Inc. and the intervenor the Minister of Northern Development and Mines will have until June 29, 2015 to file responding materials if they elect to do so. 2274659 Ontario Inc. was formerly a subsidiary of Cliffs Natural Resources Inc. (“Cliffs”) and is now wholly-owned by Noront Resources Ltd. (“Noront”).

The Contest with Cliffs for access to the Ring of Fire:

At a hearing before the Mining and Lands Commissioner (“MLC”) in early 2013, Cliffs sought an order to dispense with the consent of KWG/CCC for the granting of an easement for Cliffs to build a road on top of mining claims staked by KWG/CCC along a 340 kilometer corridor of high ground. KWG/CCC had spent some $15 million to explore the claims and assess their profiles and aggregates to provide a means of egress for the Big Daddy chromite deposit in which KWG/CCC has a 30% joint venture interest with Cliffs then holding the 70% interest. The MLC declined to grant the order sought by Cliffs and Cliffs then appealed the MLC decision to the Divisional Court of the Ontario Superior Court.

Read more

COLUMN-“Cautious optimism” abounds in Asia commodities – by Clyde Russell (Reuters Africa – May 28, 2015)

http://af.reuters.com/

SINGAPORE, May 28 (Reuters) – There appears to be an outbreak of “cautious optimism” in the Asian commodities sector.

It was easy to lose track of the number of times the phrase popped up in presentations and conversations at four major commodities conferences in the region in the past two weeks.

However, defining what people meant by being cautiously optimistic was somewhat more challenging, although the common thread was a view that the worst is over for commodity prices, and the sector is once again worth looking at from an investment perspective.

Of course, it’s easy to dismiss participants at the SGX Iron Ore Forum and the Asia Mining Congress in Singapore, the Asia Oil & Gas Conference in Kuala Lumpur and the LME Week Asia in Hong Kong as talking their books, or at least to their hopes.

But what will be key is how the expectations of better times ahead translates into action. From a pricing perspective, there was widespread acknowledgement that the likelihood of strong rallies was very low, rather what producers, traders, buyers and investors are forecasting is a gradual grind higher as rising demand eats away the supply overhang created by over-investment in mines.

Read more

NEWS RELEASE: Teck Responds to Steelmaking Coal Market Conditions

May 28, 2015 – Vancouver, B.C. – Teck Resources Limited (TSX: TCK.A and TCK.B, NYSE: TCK) (“Teck”) announced today it will be implementing temporary shutdowns in the third quarter at its six Canadian steelmaking coal operations in order to align production and inventories with changing coal market conditions.

Each of Teck’s steelmaking coal operations will be temporarily shut down for approximately three weeks in the quarter. Shutdowns will be staggered over the summer months among the operations. Teck will continue to meet all contracted and committed coal sales for its entire suite of products.

Third quarter production will be reduced by approximately 1.5 million tonnes (Mt) to 5.7 Mt, a reduction of 22% for the quarter, with expected sales in the range of 6.0 – 6.5 Mt. Annual coal production is now estimated at 25 – 26 Mt. Additional coal production adjustments will be considered over the course of 2015 as market conditions continue to evolve.

Guidance for unit operating and distribution costs for the year is unchanged. Capitalized stripping is expected to be about $65 million lower than original guidance reflecting lower coal production and reduced stripping costs this year due to lower diesel costs and productivity improvements since the start of the year.

Read more

Vale may sell potash assets in Saskatchewan – by Rachelle Younglai and Niall McGee (Globe and Mail – May 28, 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.

As Brazil’s Vale SA figures out what to do with its fertilizer business, the mining giant is thought to be testing the waters on a potential sale, according to people familiar with the matter.

In addition to potash mines in South America, the Brazilian mining company owns a big potash development project and slew of fertilizer concessions in Saskatchewan, the world’s biggest producer of potash – a crop nutrient.

“There has been a lot of chatter that Vale is possibly considering selling their fertilizer business. If you are preparing your assets for sale, you want to increase the value of your portfolio,” said Joel Jackson, an analyst with Bank of Montreal.

Vale, the world’s biggest iron ore supplier and a major producer of other metals, is under pressure to sell assets amid a nearly $20-billion (U.S.) expansion of its iron ore complex in Brazil. People familiar with the matter said it has been trying to gauge how much its fertilizer business could fetch.

Read more

Mining investment crucial amid downturn, industry warns – by Lisa Wright (Toronto Star – May 28, 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.

‘Unlike the Maple Leafs, mining always bounces back,’ says Mining Association of Canada president

Mining is more resilient than the Toronto Maple Leafs, but Canada risks being shut out as a top global player as the commodity slump drags on, warns the president of the Mining Association of Canada. “It’s been tough,” Pierre Gratton told the Economic Club of Canada Wednesday.

He emphasized that the last six months have been “generally dismal” for miners and commodity prices, particularly iron ore and coal, and their near-term prospects aren’t great either, he said.

Mineral exploration financing was also “grim” in 2013 as global budgets to discover new projects dropped by 30 per cent, he noted, adding: “This decline is as worrisome as it is dramatic.”

And last year, after an eight-year reign as the top country for global exploration spending, Canada dropped to second place behind Australia.

Read more

Change needed to reboot [Ontario] exploration – by Len Gillis (Timmins Daily Press – May 28, 2015)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – A Northern geologist who represents one of the key players in the Ring Of Fire mining project, says Ontario needs a friendlier investment climate to reboot the mining exploration industry.

Without continued exploration and the discovery of new mineral deposits, the mining industry in Ontario will eventually fail according to Moe Lavigne who spoke at the opening of The Big Event on Wednesday.

Lavigne, a Timmins native, is the vice-president of exploration and development for KWG Resources Inc. which has a large stake in the Ring Of Fire.

Lavigne is taking part in an exploration forum at The Big Event and said Wednesday he was pleased to be part of the Timmins mining show, but somewhat disappointed that there were fewer exploration companies on site, compared to past years.

“Exploration or grass roots exploration in Ontario has come to a grinding halt,” Lavigne told the audience.

Read more