July 10, 2015 – Republic of Mining

K+S investors see Potash Corp deal within reach despite rebu – by Andreas Kröner and Ludwig Burger (Reuters Canada – July 9, 2015)

July 10, 2015

http://ca.reuters.com/

FRANKFURT (Reuters) – Shareholders in takeover target K+S say a deal could be done because suitor Potash Corp’s main aim is to get control over its German rival’s ambitious Canadian project and scale it back.

K+S’s “Legacy” mine in the prairies in western Canada would be the first built from scratch in the global potash industry in almost 40 years. It would add to an already oversupplied market where demand is suffering from weak emerging market currencies and low crop prices.

Potash Corp could more easily ration global supply by controlling K+S, but still commit to leaving its German operations largely intact. The potential threat to K+S’s domestic operations were seen as one reason why German regulators might block a deal.

K+S last week rebuffed Potash Corp’s 7.9 billion euro ($8.6 billion) proposed bid of 41 euros per share as too low and suggested the suitor was planning to shrink the company.

Potash is in demand as a mineral because it plays a vital role in plant growth and crop resistance to cold and drought.

No Gold Rush as Greece and China Troubles Roil Markets – by Rhiannon Hoyle (Wall Street Journal – July 9, 2015)

July 10, 2015

http://www.wsj.com/

Gold is losing its shine as a safe-haven investment, as prices for the commodity trade near five-year lows

SYDNEY—Market mayhem is normally a buy signal for one asset: gold. But this time around the precious metal is the dog that hasn’t barked.

The commodity surged to a record high in 2011 amid rising anxiety over the eurozone’s unfolding debt crisis, as mass protests against austerity policies hit the streets of Athens. This year, faced with more turmoil from a deteriorating situation in Greece, investors haven’t yet rushed to gold.

Nor have concerns about China’s economy and its plunging stock market yet caused the sort of panic gold-buying seen in past years.

“Put simply, this year feels as if has had more than its share of drama,” Macquarie said in a client note. “Gold has done nothing. In fact worse than nothing—the price of gold is 3% lower than it began the year.”

CN pulls the plug on Algoma passenger train – by Ian Ross (Northern Ontario Business – July 10, 2015)

July 10, 2015

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. Ian Ross is the editor of Northern Ontario Business ianross@nob.on.ca.

The search is on for a new operator to take over a Sault Ste. Marie-to-Heart passenger train service after Canadian National Railway (CN) announced it will cease operations on July 15.

The repeated inability of Railmark Canada and its president-CEO R. Allen Brown to obtain financing led CN, the track’s owner, to finally terminate the service.

The same issue cropped up in June, forcing CN to step in and take back a popular sister service on the same line, the Agawa Canyon Tour Train excursion, from the hands of Railmark after a satisfactory agreement couldn’t be reached.

For the Sault Ste. Marie Economic Development Corporation (EDC) and a regional stakeholders group, it’s back to the drawing board with a full-out scramble to find a replacement operator during the height of the summer tourism season.

Op-Ed: Why South Africa must do better – by Greg Mills and Jeffrey Herbst (SOUTH AFRICA Daily Maverick – July 8, 2015)

July 10, 2015

http://www.dailymaverick.co.za/page/home/#.VZ_0N_lViko

While the end of Apartheid in April 1994 brought about political rights for the excluded black majority, their economic enfranchisement over the subsequent two decades has proven to be exceptionally difficult. The fundamental claim of our new book is that the overwhelming challenge that South Africa faces, and has to date failed to address, is unemployment.

As is well known, the current unemployment statistics are appalling and fall especially on young African youths who were promised a better future in 1994. If the unemployment crisis is not addressed, it will be impossible to lift many millions of people out of poverty. Especially in light of the Arab Spring – fuelled in good part by youths who believed that they had no future – the stability of South Africa cannot be assured given compounding issues of insecurity, unemployment and lack of investment.

The prospects of the African National Congress (ANC) will also be challenged if it cannot deliver jobs to the ‘born-free’ generation. Equally, the ANC’s trade union partner, the Congress of South African Trade Unions (Cosatu), with an ageing cohort of members, requires economic and employment growth to refresh their membership.

Two decades and five ‘new’ strategic economic plans into its democratic transition, South Africa does not have the luxury of too many more chances.

U.K. to End 300 Years of Deep Coal Mining as Prices Slump – by Alessandro Vitelli (Bloomberg News – July 10, 2015)

July 10, 2015

http://www.bloomberg.com/

Britain plans to close its last deep coal mine in December, spelling the death of an industry that’s kept the nation’s economy humming since the Industrial Revolution.

The U.K.’s last deep underground mine, located at Kellingley in northern England, will shut around Dec. 15, U.K. Coal Holdings Ltd. said in a statement. The company’s Thoresby mine ceases production on Friday.

The closing of Kellingley will mark the nation’s exit from an industry that employed more than a million workers at 3,000 pits a century ago. Since 2000, U.K. power generators Electricite de France SA to RWE AG bought more of the fuel from abroad, where coal from Australia to Colombia is cheaper, according to the Federation of U.K. Coal Producers. European prices slumped to an eight-year low in April.

“The U.K. coal industry has been in structural decline for 40 years,” Paolo Coghe, an analyst in Paris at Societe Generale SA, said Friday by phone. “It’s no longer positioned to withstand an extended period of low prices such as the one we are experiencing now.”

Time to Tackle Rare Earth’s Toxic Underbelly – by Matthew J. Kiernan (Huffington Post – July 9, 2015)

July 10, 2015

http://www.huffingtonpost.com/business/

Matthew J. Kiernan is the Founder and Chief Executive of Inflection Point Capital Management

On April 2, 2015, the BBC ran an investigative report that illustrated rare earth mining’s trail of destruction. Whilst it was not the first time that the toxicity of rare earth mining had been the subject of scrutiny, the graphic portrayal of a man-made toxic lake on the outskirts of Baotou in Mongolia, should be a wake-up call for consumers of digital TVs, computers and smart phones, which are the major users of rare earth elements.

BBC’s piece was written by Tim Maughan, who had received support from Unknown Fields Division, an NGO that has a track record of going to the farthest flung regions of the world to uncover hidden secrets. It is estimated that Baotou is the centre of production of half of China’s rare earth elements, with one tonne of rare earth elements producing 2,000 tonnes of toxic waste.

Baotou’s toxic lake raises the important question; how is that such important commodities continue to be mined with such low environmental standards? Rare earth mining has long been dominated by China, which up until recently produced over 90 percent of global production.

NEWS RELEASE: Boart Longyear Marks 125th Anniversary With Historic Display at The National Mining Hall of Fame and Museum

July 10, 2015

SALT LAKE CITY – June 3, 2015 – Boart Longyear (www.BoartLongyear.com), the world’s leading provider of integrated drilling services and drilling products, is proud to recognize its 125th anniversary today, marking the occasion by announcing a historic timeline and collection of Longyear and Boart Longyear artifacts dating back to the late 1800s will feature at the National Mining Hall of Fame and Museum in Leadville, Colorado, USA.

“We are very proud to celebrate Boart Longyear’s 125th anniversary this year,” said Kent Hoots, senior vice president of Boart Longyear. “The display and historic pieces are proof of the long and respected legacy of quality and innovation that Edmund J. Longyear started in 1890 and that we maintain today. “Our 125th anniversary is dedicated to the people who built – and continue to build – this fine company. That’s why we want to make sure our history is properly preserved and on display for people to enjoy.”

All but a few of the historic pieces on display have been permanently donated to the museum. Among those on loan for the summer is Longyear’s first-ever drilling services contract, dated May 19, 1891. The handwritten contract was with Mallmann Iron Mining Company and included sinking diamond drill holes in the Mesabi Iron Range of Minnesota.

Included in the permanent collection of donated pieces is an original San Francisco Chronicle newspaper story entitled “The World’s Greatest Span,” dated October 5, 1930.

Activists: Canada mine approvals threaten Alaska fishing communities – by Renee Lewis (Al Jazeera.com – July 10, 2015)

July 10, 2015

http://america.aljazeera.com/

Almost one year after an unprecedented spill from a mine tailings pond in Canada’s largely pristine province of British Columbia, its government has given the green light for the mine to reopen — worrying environmentalists who say a number of other northern B.C. copper and gold mines are in various phases of approval, and could threaten downstream fishing communities in southeastern Alaska.

The provincial government on Thursday approved a restart of Imperial Metal’s Mount Polley mine, which has been closed since its waste dam failed last August and released 6.6 billion gallons of toxic tailings including arsenic, lead and nickel into salmon-producing lakes and streams of the Fraser River watershed.

Residents of southeastern Alaska, many of whom depend on fishing and tourism for their livelihoods, expressed concern at the announcement.

“The British Columbia and Canadian governments seem to be glossing over the Mount Polley disaster by ignoring recommendations of mining experts who studied the dam failure and warned that the province should stop allowing the same risky tailings dam technology,” said an emailed statement from Heather Hardcastle, a commercial fisherman from Juneau, Alaska, and campaign coordinator for Salmon Beyond Borders.

UK Coal’s Thoresby Colliery to cease mining on Friday (Reuters U.K. – July 10, 2015)

July 10, 2015

http://uk.reuters.com/

LONDON – Coal mining at Thoresby Colliery, one of the last remaining underground coal mines in Britain, will cease on Friday and 360 employees will be made redundant, mine owner UK Coal said in a statement.

Mining at UK Coal’s Kellingley mine will also cease on or around December 15, the company said.

Underground coal mining has become unprofitable in Britain because of fierce competition from cheaper markets such as Colombia, Russia and the United States, falling domestic demand and a government drive away from carbon-intensive coal power generation.

UK Coal was placed into administration in 2013 after struggling with rising costs, hefty pension liabilities and strong competition from cheaper coal imports.

Ontario is no Greece, but its debt is more than a casual concern – by Konrad Yakabuski (Globe and Mail – July 10, 2015)

July 10, 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.

This was the week the debt merry-go-round jerked and lurched and the whole world got nauseous.

Greece, which hit its debt wall years ago, once again took Europe to a precipice. Whatever the outcome of Sunday’s “final deadline” for a deal with its creditors, Greece is a goner, sadly. How much damage it does to the rest of the world remains to be seen.

Greece’s fate could also await Puerto Rico, whose governor suddenly declared that the $72-billion (U.S.) debt the U.S. territory in the Caribbean has racked up is “not payable.” That somehow came as a shocker to bondholders who had been breezily plugging coins into the island’s debt merry-go-round.

Then there’s China, whose debt-induced stock market bubble continued to deflate despite the Communist regime’s best efforts to defy the capitalist laws of gravity. It may take another Chinese miracle to contain the fallout caused by amateur investors who bought stocks on margin.

Ontario’s job killer: Business sounds alarm over soaring electricity prices – by Ross McKitrick and Tom Adams (National Post – July 10, 2015)

July 10, 2015

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

The Ontario Chamber of Commerce this week released the findings of an unprecedented consultation with its members and the results are painfully clear: soaring electricity prices are killing business in Ontario. One in 20 Ontario businesses now expect to shut their doors in the next five years due to electricity costs, and nearly 40 per cent report that electricity costs have already forced them to delay or cancel investment decisions.

The Chamber acknowledges that the larger policy picture from Queen’s Park is grim, with plans for cap-and-trade, higher minimum wages, rising workplace safety premiums and a new government-run pension system. But their report, Empowering Ontario, focuses above all on soaring electricity costs, a problem unique to Ontario that is directly traceable to a decade of foolish policy decisions.

The Chamber is to be applauded for taking on this issue. Many Ontario businesses have tried to shield themselves by seeking beggar-thy-neighbour gimmicks that merely shift their costs onto others, resulting in a less efficient and transparent pricing system. For instance the Chamber slams the Class A/B rate split that benefits large consumers by redirecting some of their costs onto households and small businesses.

Perhaps Ontario business leaders are finally realizing that moving their deck chairs to the high side of a sinking ship is not a long-term solution.

Mount Polley to re-open after last year’s disaster – by Mary Catharine Martin (Juneau Empire – July 10, 2015)

July 10, 2015

http://juneauempire.com/

Two British Canadian ministries announced Thursday that they are allowing Imperial Metals Corporation to re-open Mount Polley mine after last August’s tailings dam failure, which released billions of gallons of toxic tailings and contaminated water into the Quesnel Lake watershed. Southeast Alaskans concerned about Canada’s mining boom decried the move, saying the authorization ignores detailed recommendations of an independent review panel whose report was released earlier this year.

This is the first of three steps Mount Polley will need to begin operating as it did this time last year, said Minister of Energy and Mines Bill Bennett and Minister of Environment Mary Polak in a press release. They’ve granted the company the ability to begin conditional operations; it will not be able to release water from the site.

“In the early fall, the company will need a second conditional permit to treat and discharge water in order for operations to continue. Lastly, the company must submit a long-term water treatment and discharge plan to government by June 30, 2016. The mine will not be authorized to continue to operate long-term if it fails to complete either of the last two steps,” Bennett said in the press release.

Iron ore miners brace for more volatility – by Paul Garvey (The Australian – July 10, 2015)

July 10, 2015

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

A head-spinning 24 hours in iron ore may only be the start, with investors warned to expect more volatility in the market for Australia’s biggest export.

An early morning panic in response to an unprecedented plunge in the iron ore price yesterday transformed into a surprise rally for Australian iron ore miners as Chinese markets rebounded.

Yesterday had been shaping up as a bloody day for Australia’s iron ore sector following an 11 per cent plunge in the spot iron ore price to just $US44.10 a tonne. Both the closing price and the scale of the fall were the worst seen since the introduction of spot prices in 2009.

But a rally in Chinese markets and a rise in iron ore futures helped Australia’s miners not only recover early losses but, in many cases, close the day higher.

Fortescue Metals Group, having hit a six-year low earlier this week, was the biggest winner with a 6.6 per cent jump to $1.785.

Madagascar to pass mining, petroleum bills in October: minister – by Lovasoa Rabary and Drazen Jorgic (Reuters Africa – July 10, 2015)

July 10, 2015

http://af.reuters.com/

ANTANANARIVO (Reuters) – Madagascar will pass long-delayed mining and petroleum bills in October when the national assembly returns from a recess, the country’s resources minister said, a step seen as vital to boost flagging exploration in the mineral-rich Indian Ocean island.

One of Africa’s poorest countries, Madagascar hopes to accelerate economic growth by developing natural resources, but has struggled to attract foreign investors in recent years due to political instability and falling commodity prices.

Madagascar’s parliament in May impeached the president, a move later overturned by the constitutional court, and nearly toppled the government in a censure vote earlier this month, ratcheting up tensions on the coup-prone nation.

Mining and Petroleum Minister Joeli Valerien Lalaharisaina told Reuters Madagascar plans to auction 96 offshore blocks in the Mozambique channel after the petroleum bill is passed.

“As soon as the petroleum bill is updated at the parliament, we will make an international bid round,” Lalaharisaina said.

A Colorado Coal Mining Town Struggles to Define Its Future – by Jack Healy (New York Times – July 8, 2015)

July 10, 2015

http://www.nytimes.com/

Tighter regulations, environmental lawsuits and a pivot toward cleaner-burning natural gas have knocked communities like Somerset, Colo., on their heels.

SOMERSET, Colo. — For more than a century, the economy and identity of this tiny community wedged into the mountains have been defined by the coal heaps, railroad tracks and deep underground mines that filled train cars with coal and miners’ pockets with money. “Welcome to Somerset,” says the blue sign at the entrance to town, “Coal mining town since 1896.”

Maybe no longer. The Elk Creek Mine, towering over Somerset, once employed about 200 people, but it has been shut down since a collapse and underground fire in December 2012, with just nine employees left to manage its dismemberment. It is selling off its equipment, handing over its water treatment plant to residents and weighing whether to tear down the concrete coal silo that looms over the town and close for good.

“Everybody thinks our community is just going to fold and fall down,” said Terry Commander, who runs the local water district. “We have to learn how to be able to stand up on our own.”