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Day: June 26, 2015

Coal worth more to SA than gold – by Sungula Nkabinde (Moneyweb.com – June 26, 2015)

http://www.moneyweb.co.za/

A coal sector strike would hurt the economy more.

The gold sector wage negotiations have taken centre stage in mining circles this week, detracting attention from the upcoming coal sector talks scheduled to start on July 2.

According to this StatsSA article, coal has leapfrogged gold as South Africa’s most important resource, contributing more to GDP. As the resource has become critical for electricity generation in SA, a protracted coal mining strike could leave the economy in a worse off state than if the gold sector negotiations had to turn sour.

Xavier Prévost, senior coal analyst at XMP Consulting, shares this sentiment saying that coal was the top contributor to GDP in 2014 with R101.5 billion in revenue. Gold was at R46.8 billion, behind Platinum Group Metals (PGM) and iron ore, which generated R77.5 billion and R58.7 billion in revenue respectively.

“Coal [is the most important commodity for the future of South Africa’s economy] because it is our source of energy. Without it the whole country will be paralysed, including the gold, iron ore and PGM mines,” says Prévost.

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Lutsel K’e First Nation says board caved to De Beers in Snap Lake decision – by Guy Quenneville (CBC News North – June 26, 2015)

http://www.cbc.ca/news/canada/north

First Nation’s land manager says De Beers issued ‘ultimatum’ to board to have dissolved solids limit increased

The manager of environment for the Lutsel K’e Dene First Nation (LKDFN) says the Mackenzie Valley Land and Water Board has caved in to pressure from De Beers Canada, the owner of the N.W.T.’s Snap Lake diamond mine.

On Thursday, the board recommended changes to De Beers’ water licence for Snap Lake — changes that De Beers hopes will make it easier for the company to manage a higher than expected volume of underground water rich in total dissolved solids, and which, according to the company, are needed to keep the mine from closing prematurely.

But Peter Unger, the manager of wildlife, lands and environment for the Lutsel K’e Dene First Nation, says De Beers is just playing hardball to get what it wants

“It’s very difficult to not see that as a form of threat, really,” said Unger. “That is one of the things that disturbs us: the mining company was able to come in and basically issue an ultimatum to the board. And it kind of looks like that ultimatum worked.”

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Plan Nord: A Model for Sustainable Development – by Will Becker (World Policy Blog – June 26, 2015)

http://www.worldpolicy.org/

On Tuesday June 23, World Policy Institute and the Government of Québec held a private breakfast and discussion featuring the Premier of Québec, Philippe Couillard. The event was part of the Arctic Deeply Roundtables initiative, which seeks to engage leading experts and investors on the most pressing issues of our time, including sustainable development in the region.

Couillard began the discussion by outlining Québec’s capacity for Arctic development. The province holds 3 percent of the world’s renewable freshwater, which has already been put to sustainable use through its hydroelectric industry. Ninety-eight percent of energy in the region now comes from this hydroelectricity, and many Québecois companies boast of their wind power capabilities as well.

Currently, Québec is home to several specialized centers like the TechnoCentre Éolien, which focuses on wind power, as well as the Canada Research Chair on Nordic Environment Aerodynamics of Wind Turbines (ÉTS), the Anti-Icing Materials International Laboratory (UQAC) and the Wind Energy Research Laboratory (UQAR). And there is tremendous room for growth across this sector.

After laying out the province’s capabilities, the Premier’s presentation focused on Plan Nord, the Québec government’s proposal to develop the Québécois region north of the 49th parallel.

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ANALYSIS: South Africa: Telling the Marikana Story – an Invitation to Look More Closely At What’s in Front of Us – by Bronwyn Law-Viljoen (All Africa.com – June 26, 2015)

http://allafrica.com/

Platinum, a collaboration between London-based writer Jack Shenker and British photographer Jason Larkin, seeks in both content and presentation of text and photographs to remind us that we are after all privileged observers of the events leading up to the massacre of at least 34 mine workers in South Africa’s platinum belt.

Larkin has spent a great deal of time thinking about how to make books and get them into the world. The stories he has covered as a photographer in the last several years have compelled him to think about the politics of art books – who makes them, who distributes them and, most importantly, who can afford them.

Platinum, the second collaboration between Larkin and Shenker, reflects these sensibilities. Larkin’s photographs accompany Shenker’s essay “Marikana”, a wide-ranging analysis of how South Africa got to Marikana, and how this event might come to define the country in years to come. Shenker is unflinching in his criticism of big business and the mining industry, and Larkin’s photographs offer a fairly dispassionate but astute look at the people and the landscape of the platinum belt around Rustenburg.

The publication of these two elements of the story takes the form of a loose-leafed folder of sorts: six posters printed back-to-back in full colour, and the essay — in English and with a translation in isiXhosa by Lulu Mfazwe-Mojapelo – as a separate booklet. All are held together with an elastic band inside a plain card sleeve with the title handstamped on the front.

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Commentary: Safety first for a new generation of Cree miners – by Daniel Bland (Northern Miner – June 26, 2015)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

“Working underground for me is like working in your basement for you.” That’s the first thing Marcelin Bruneau tells the 12 young Crees sitting in front of him. That gets their interest. “When I started mining in 1930,” he continues, “there were no rules about safety underground.” A wry smile, some mental math and confused looks among the Crees prompts the admission: “Bon. Maybe not 1930. But a long, long time ago!”

Marcelin Bruneau has spent more than forty years working as an underground miner. He got what he calls his first real job as a teenager in the early 1970s when he was hired by Noranda Mines as an underground helper. That was the beginning of a mining career that would take him not only across Canada — to Quebec, Ontario, Manitoba and B.C. — but overseas to Australia and Indonesia and see him work with over 20 mining companies and contractors.

In 2008, Bruneau was hired as an instructor by the Centre de Formation Professionnelle in the mining town of Val-d’Or, Que. His experience made him a natural and he spent five years delivering a six-month training program in underground ore extraction to students from the Abitibi-Témiscamingue region of southwestern Quebec.

Then, with mines under construction farther north on James Bay Cree land and job opportunities for Crees on the horizon, Bruneau remembered an old friend and accepted a new challenge.

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‘Malaysia Is the Winner’: Indonesia Miners Go Overseas After Ban – by Yoga Rusmana (Bloomberg News – June 26, 2015)

http://www.bloomberg.com/

Malaysia is emerging as an unexpected beneficiary of Indonesia’s ban on ore exports as mining companies from its larger Southeast Asian neighbor pump cash into local bauxite deposits to meet demand from China.

At least five Indonesian miners invested in Malaysia by the end of last year, teaming up with partners to extract the ore and ship it to China, according to Erry Sofyan, chairman of the Association of Indonesia Bauxite and Iron Ore Producers. More companies may follow, Sofyan said in an interview in Jakarta.

The investments highlight the challenge Indonesia faces in trying to boost its metal-processing industry. The policy, which also covered nickel, aimed to compel investments in higher-value facilities and shipments to address concern the country was selling off resources on the cheap.

While some smelters are being built in Indonesia, the curb boosted prospects for rival suppliers, including the Philippines, Malaysia and Australia.

“Malaysia is the winner from the Indonesian export ban,” Sofyan said on Thursday.

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Aboriginal employment a focus for Hudbay – by Jonathon Naylor (Flin Flon Reminder – June 25, 2015)

http://www.thereminder.ca/

In 2013, at the height of the Idle No More protest movement, Hudbay found itself mired in controversy.

Mathias Colomb Cree Nation, a small native band based in Pukatawagan, declared the company in breach of treaty law by opening its Lalor and Reed mines near Snow Lake without First Nations consent.

The powers that be (and much of the public) sided with Hudbay and mining carried on as planned. The episode may have soured some First Nations people on Hudbay, but it hasn’t dampened the company’s enthusiasm for bringing more Aboriginals – perhaps a lot more – into the workforce.

“We find that building familiarity and understanding is what we need to accomplish,” says Rob Winton, vice-president, Manitoba Business Unit for Hudbay. “If you don’t work in a sector, you might know what it does in the broadest sense but not have much familiarity with all the aspects and details of it. I don’t think that’s unusual or unique to First Nations. But because we want to provide opportunity for Aboriginal people to be part of Hudbay, we’re trying to bridge that gap. We want them to see and believe that Hudbay is an option.”

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Gina Rinehart’s Roy Hill Tells Workers To Take Pay Cut To Keep Jobs – by Anne Lu (International Business Times – June 26, 2015)

http://www.ibtimes.com.au/

Australia’s richest person has told her employees to take a pay cut or lose their jobs. Gina Rinehart’s Roy Hill project will cut pay rates for its employees to avoid job losses.

The $10 billion company will be deducting 5 to 10 percent from the salaries of about 60 percent of its workforce in a bid to save its employees. It will also offer lower salaries to new workers. The move is expected to affect about 540 workers, with the upper management group taking the biggest cut, though it will spare existing employees in the lower remuneration bands.

According to Barry Fitzgerald, the company’s chief executive, the decision was made after reviewing the cost base. The pay cuts, which he said was approved by the workers through a survey, was to maintain the “family-friendly roster,” which is 14 days on with 10 days off, and 14 days on with 11 days off. He said the roster was what attracted a number of people to join the company recently.

“We felt it was more important for our people to retain their job rather than pursue workforce reduction as a cost-saving strategy in response to market conditions,” Fitzgerald, who will be getting a 10 percent cut from his pay, said. He further explained that cutting salaries was a practical decision they agreed on to keep the company competitive over the long term.

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A visit to the world’s largest operating salt mine – by John M. Smith (Inside Belleville – June 26, 2015)

http://www.insidebelleville.com/bellevilleregion/

My wife and I recently spent a couple of days in the picturesque town of Goderich, which is located in western Ontario, north of Grand Bend and south of Kincardine on the shore of Lake Huron. We were drawn to this destination by its having the world’s largest operating salt mine. We soon found that it was, indeed, quite a sight to simply view the humungous surface storage silos and the blue elevator shafts that decorate much of Goderich’s harbour area.

However, we didn’t find any mounds of salt, for the operation actually occurs far underground, at a depth of about 1800 feet, and the Sifto Canada mine, which is now a part of the American-owned Compass Minerals Company, apparently extends for more than two miles into Lake Huron and averages a width of more than a mile. To put this into perspective, the salt mine is about as deep as the CN Tower is high, and massive trucks carry the blasted rock salt through a series of large underground tunnels into crushing and screening operations before it’s then hoisted to the surface via customized skiffs.

I hoped to get an up close and personal guided underground tour of the operation, but that was not to be. In fact, there are no tours available to the public, for the work continues non-stop, 24 hours every day, except when the lake freezes and shipments by the massive freighters become impossible. There’s, of course, a real concern with work stoppages and with liability, so the Compass Mineral Company doesn’t seem very anxious to get into the touring business.

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S. Africa’s Zuma to release Marikana mine massacre report – by AFP (Yahoo News – June 25, 2015)

https://uk.news.yahoo.com/

President Jacob Zuma was on Thursday due to release the official report into the police killing of 34 South African striking workers at Marikana mine in 2012, his office said.

The report into the shooting was handed to the president on March 31, after more than two years of hearings plagued by delays.

Rights groups and lawyers representing the killed and injured miners have been clamouring since then for Zuma to make the document public.

The president’s office said the report would finally be published after he addresses the nation on public television on Thursday night. The August 16 shooting was the worst violence South Africa has witnessed since the advent of democracy in 1994.

Days after the killings, Zuma set up the Farlam Commission of Inquiry to investigate the events at Marikana, around 100 kilometres (60 miles) northwest of Johannesburg.

The commission was granted powers to suggest names of individuals to be criminally charged. But proceedings were plagued with delays from the start and the deadline was repeatedly extended.

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K+S shares surge after Potash Corp takeover approach – by Arno Schuetze and Ludwig Burger (Reuters Canada – June 26, 2015)

http://ca.reuters.com/

RANKFURT (Reuters) – Shares in German potash miner K+S SDFGn.DE leapt almost 40 percent on Friday after a takeover proposal from Canada’s Potash Corp POT.TO which sources close to the matter said was worth more than 7 billion euros ($7.8 billion).

K+S, which would become the first German blue-chip firm in a decade to be bought by a foreign company, said it was assessing its options after announcing the approach late Thursday. Two sources close to the matter said K+S would likely reject the proposal as too low.

K+S believes Potash Corp wants to take capacity out of an over-supplied market to boost its profitability, the sources said, adding the Canadian firm might also look to close some of K+S’s high cost German mines and sell its salt business.

Potash Corp is currently operating well below full capacity because of weak potash prices.

The sources said Potash Corp proposed to pay just over 40 euros a share, a 38 percent premium to K+S’s closing price on Thursday and 44 percent above the six-month moving average price, according to Thomson Reuters data.

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Two-Month Low Nickel Prices Continue to Slide Further Amid Nickel Glut – by Anne Lu (International Business Times – June 25 2015)

http://www.ibtimes.com.au/

A jump in nickel stockpiles has brought the metal to a two-month low as production continues to outstrip consumption, especially in China, the world’s biggest consumer of nickel. According to London Metal Exchange (LME) data, inventories rose 0.6 percent to 461,436 metric tonnes on Monday, its biggest gain in two weeks. Nickel for delivery in three months settled at US$12,410 [$16,000] a tonne — the lowest price since April 20.

“More metal continuing to show up in LME warehouses points to the fact that maybe the underlying demand isn’t as strong, and that has bearish implications,” Mike Dragosits, a senior commodity strategist at TD Securities, said in an interview with Bloomberg.

Analysts think that nickel prices still have further to fall, with many investors looking to get out of their positions at the earliest sign of a nickel rally. Many investors who were lured into nickel during the metal’s rally in early 2014 didn’t get out fast enough when the slide began, so they are lightening their positions every time the metal rallies, keeping a ceiling on the price.

Prices surged to 50 percent from January to mid-May 2014 as Indonesia, then the world’s top nickel exporter, banned exports of the metal, leading many analysts and investors believing that global nickel stockpiles are soon to be depleted.

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Royal Nickel gets green light from Quebec for its Dumont mine (Canadian Press/CBC News Montreal – June 25, 2015)

http://www.cbc.ca/news/canada/montreal

Mine in northwestern Quebec will initially produce 52,000 tonnes of ore per day

Royal Nickel is hoping to begin construction early next year on one of Canada’s largest base metal mines after receiving the green light Thursday from the Quebec government.

The Dumont project in Abitibi in northwestern Quebec is expected to cost an initial US$1.2 billion and produce 52,000 tonnes per day of ore that is a key ingredient of stainless steel.

The total project will cost US$3 billion over the mine’s 33-year life, including US$900 million that will double its output in five years and US$900 million in ongoing capital upgrades.

Chief executive Mark Selby said the mine will be one of the world’s largest nickel mines and will benefit the region’s economy. The concentrate will be exported primarily to Europe and Asia.

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TMAC Resources Inc boosts IPO to $135 million on strong demand – by Peter Koven (National Post – June 25, 2015)

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

TORONTO — The mining sector’s first initial public offering on the Toronto Stock Exchange since 2012 is shaping up to be a big success.

The IPO of TMAC Resources Inc. has been upsized by $30 million because of overwhelming investor demand, according to sources familiar with the transaction. TMAC is now planning to raise $135 million, and as much as $155 million if the banks sell the entire over-allotment. One source said it is a “safe assumption” that will happen.

TMAC plans to use the money to develop the Hope Bay gold project in Nunavut. The IPO values the Toronto-based company at between $446 million and $466 million.

It is a very impressive debut given the rough state of the mining sector, and the junior mining sector in particular. Metal prices have been weak, and smaller companies like TMAC have struggled to raise money. IPOs have been non-existent in mining because of poor demand, even though they have been very popular in other sectors of the Canadian economy this year.

The success of the TMAC offering will be interpreted as proof that market conditions are turning around. But sources said it is largely about the track record of the TMAC team.

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Nickel price expected to rise: Economist – by Carol Mulligan (Sudbury Star – June 26, 2015)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

The low nickel prices that prompted First Nickel Inc. to halt underground ramp development and consider shuttering its Lockerby Mine are expected to increase, but not dramatically, by the end of the year, says an economist.

Nickel was selling for US $5.80 on the London Metal Exchange earlier this week, and Patricia Mohr is forecasting it could rise to a profitable $8.75 in 2016.

Mohr is vice-president of economics and commodity market specialist at Scotiabank. The below-$6 price of nickel isn’t a profitable level, although it might cover cash costs or production at Canadian mines because we have “fairly low-cost nickel mines in Canada,” said Mohr.

“But it’s not sufficient to cover full break-even costs including depreciation and so, it’s a low price for nickel.”

FNI president and chief executive officer Thomas Boehlert blamed the decisions his company was forced to make on nickel selling below $6 a pound.

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