July 29, 2015 – Republic of Mining

Warren Buffett And Elon Musk To Spark A Lithium Boom – by James Stafford (Oil Price.com – July 28, 2015)

May 13, 2016July 29, 2015

The age of electrification across the transportation sector, the solar panel revolution, and Tesla’s battery gigafactory are igniting a battle for the cheapest battery. That will transform lithium into a boom-time mineral and the hottest commodity on the energy investor’s radar.

It has been easy to take lithium for granted. This wonder mineral is the backbone of our everyday lives, popping up in everything from the glass in our windows to our mountains of electronics.

And while investors have long appreciated the steady rise in demand for this preferred mineral, the number of new applications continues to multiply. Smart phones, tablets, laptops, and other consumer electronics demand more lithium. But the largest driver for future lithium use will be in electric vehicles and home batteries for solar panels. That has lithium on the verge a boom for which supply can no longer be taken for granted.

Not since the shale boom have we seen a market transformation of such significance. Lithium has long been used for a variety of mundane purposes, and while the variety is spectacular—with applications in everything from glass, ceramics and greases to a line-up of industrial process—it has flown under the radar for most investors.

Copper’s Tumble Not Over With Most Miners Still Making Money – by Agnieszka De Sousa and Debarati Roy (Bloomberg News – July 28, 2015)

July 29, 2015

http://www.bloomberg.com/

World copper mine production at record

The pain rippling through the copper market isn’t yet threatening profits for most miners, and that could mean more tears for bullish investors.

Even with prices near a six-year low, about 90 percent of copper mines are profitable, meaning most producers have little incentive to reduce output, according to Standard Chartered Plc. Prices need to fall another 24 percent before major companies begin cutting back, Bloomberg Intelligence estimates.

“You want miners to throw in the towel, start shutting down some mines,” Kenneth Hoffman, an analyst at Bloomberg Intelligence, said by telephone. “They keep forging ahead with all their plans. They’re still bringing new stuff on.”

As producers dig up more metal, demand for the raw material is weakening with China’s economy expanding at the slowest pace since 1990. Societe Generale SA estimates that copper’s oversupply will almost double this year. Goldman Sachs Group Inc. expects prices to reach $4,800 a metric ton in the next six months, a 9.4 percent drop from Tuesday’s settlement.

UPDATE 2-India’s Vedanta looks to restart Goa mines by October – by Aman Shah (Reuters U.S. – July 29, 2015)

July 29, 2015

http://www.reuters.com/article

MUMBAI, July 29 (Reuters) – India’s Vedanta Ltd said on Wednesday it expected to restart iron ore mining by October in top exporting Goa province and that talks were continuing with regulators for merging with its cash-rich unit Cairn India.

The mining and energy group, which has been hit by a slump in crude prices and mining bans in key producing states, also posted a consolidated net profit of 8.66 billion rupees ($135.61 million) for its fiscal first quarter to June 30.

That compared with a profit of 3.76 billion rupees in the same period last year, which was hurt by a one-time charge of 21.28 billion rupees. Excluding the impact of one-off charge, the company’s first-quarter profit was 35.4 percent lower than a year earlier.

Chief Executive Tom Albanese said on a conference call Vedanta was hoping to get approvals as early as next month to restart a few mines in Goa and was positioned to restart mining at a rate of 5.5 million tonnes a year.

Exploration option agreements need to be specific – by Julius Melnitzer (National Post -July 29, 2015)

July 29, 2015

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

Exploration option agreements negotiated by sophisticated parties mean what they say and nothing more, says the British Columbia Court of Appeal in a recent decision called American Creek Resources Ltd. v. Teuton Resources Corp.

That might sound simple — perhaps even obvious — But the American Creek decision has major implications for the way parties set up option agreements, a common way to fund exploration in the Canadian mining industry.

“The American Creek decision will definitely change industry practice for drafting the exploration agreements that are the lifeblood of the industry,” says Josh Lewis of Fasken Martineau DuMoulin LLP in Vancouver.

Typically, the company holding the property grants another company the option to earn an interest in the property by exploring it. The agreement usually prescribes the amount of the expenditures that must be made, but the description of those expenditures can vary from deal to deal.

Flight simulator firm CAE selling mining division – by Bertrand Marotte (Globe and Mail – July 28, 2015)

July 29, 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.

MONTREAL — Five years after placing a bet that entering the mining sector would pay off handsomely as a smart diversification move, flight simulator manufacturer CAE Inc. is selling its mining division.

The Montreal-based company said on Monday that Constellation Software Inc. has acquired its CAE Mining unit for an undisclosed amount, which one analyst estimates is slightly below the asset’s net book value of $47-million.

CAE had been carrying CAE Mining on its books as discontinued operations for the past year. The company had been looking for a buyer for about a year and chief executive officer Marc Parent said at the time that the division would not be sold at a fire-sale price.

CAE Mining, whose main brand name is Datamine, provides technology and services for the management of mining operations, including exploration data management and ore-body modelling.

Sherritt CEO sees brighter future in Cuba – by Lisa Wright (Toronto Star – July 29, 2015)

July 29, 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.

The Toronto miner reports weak Q2 results amid severe downturn in nickel, oil

Toronto-based miner Sherritt International Corp. is taking a beating as nickel and oil prices plummet, but the chief executive sees a silver lining for his company as U.S. and Cuba relations continue to thaw.

David Pathe, who delivered weak second-quarter results Wednesday, said he visited the firm’s operations in the island nation last week as the U.S. reopened its embassy in Havana after 50 years under renewed diplomatic ties.

“There’s a tremendous amount of optimism in Cuba at the moment, and a lot more interest in Cuba internationally,” Pathe said in an interview. “We’ve been in Cuba for over 20 years and it’s a remarkably stable place to do business,” he said.

Sherritt produces approximately two-thirds of Cuba’s oil and also owns a 50 per cent interest in the Moa nickel and cobalt joint venture with the Cuban government, which includes mining, processing and refining operations.

NEWS RELEASE: Interdisciplinary Research Reveals Global Trend of Tailings Dam Failures That Will Result In $6 billion in Unfunded Unfundable Public Liability 2010-2019

July 29, 2015

https://www.earthworksaction.org/

Catastrophic mine waste spills increasing in frequency, severity and cost world-wide

Click here for the full report: https://www.earthworksaction.org/files/pubs-others/BowkerChambers-RiskPublicLiability_EconomicsOfTailingsStorageFacility%20Failures-23Jul15.pdf

July 29th — On the 1st anniversary of North America’s worst mining waste spill at the Mount Polley Mine in British Columbia, a new interdisciplinary analysis reveals that such catastrophic spills are increasing in frequency, severity and cost.

The Risk, Public Liability, and Economics of Tailings Storage Facility Failures shows that modern metal mining techniques have driven the creation of increasingly more risky mine waste facilities, enabled by regulators that have failed to require best practices to minimize financial and environmental risk. These failures are almost all the result of the failure of regulatory agencies to require, and the industry’s failure to follow, known best practices.

Co-authored by Lindsay Newland Bowker, Director, Bowker Associates, Science & Research In The Public Interest, and David Chambers, Ph.D., a mining technical specialist, the report’s primary findings include:

Mining Outer Space: Who Owns the Asteroids? – by Timothy G. Nelson (New York Law Journal – July 29, 2015)

July 29, 2015

http://www.newyorklawjournal.com/

Over the last two years, U.S. business and policy makers have focused afresh on the commercial possibilities of the asteroids—the solar system’s minor planetary objects. Most of these are located between Mars and Jupiter, while some are closer to Earth. Some have large deposits of precious metals and other potentially valuable substances.1

In the last few years, some private operators have announced plans to mine them commercially, a concept that, until now, has been exclusively the realm of science fiction.2

In apparent response to these initiatives, the House of Representatives recently passed the “Space Resource Exploration and Utilization Act of 2015,” H.R. 1508, part of a broader SPACE Act of 2015, H.R. 2262. The proposed legislation aims to assure private companies of title over “[a]ny asteroid resources obtained in outer space”3—assuming, of course, that they are eventually able to get there.

Although this initiative only began in the late part of the last congressional session, with relatively brief hearings, it was sponsored by key members of the House Committee on Space, Science and Technology.4 The bill now goes to the Senate (where it already has at least two potential adherents, including presidential candidate and Senator Marco Rubio).5 If enacted, this will be a bold, if controversial, development in U.S. space policy.

Mining industry faces job losses as coal and iron ore prices remain depressed (The Guardian – July 29, 2015)

July 29, 2015

http://www.theguardian.com/

Almost 80% of Australian mining leaders are reducing capital expenditure, up from 44% last year, a report has found

The Australian mining industry is bracing for more job losses and mine closures next year as coal and iron ore prices remain depressed.

Almost 80% of mining leaders are reducing capital expenditure, up from 44% last year, a report by Newport Consulting has found.

While mining company bosses are still reluctant to spend money or make investments, the latest Newport Mining Business Outlook Report shows 16% of mining leaders are cautiously optimistic about their growth prospects for the next 12 months.

Newport managing director David Hand said more job losses were expected as coal and iron ore miners fight to remain competitive.

“Miners are likely to make decisions in the next 12 months to shut more operations,” Hand said. “There are thousands of jobs hanging in the balance right across New South Wales.”

Rings of Fire (AlJazeera.com – July 29, 2015)

July 29, 2015

http://www.aljazeera.com/

Opiate addiction and mining developments are threatening the future of Canada’s First Nations rural communities.

In the far north of Canada’s Ontario province, where opiate addiction afflicts the First Nation population, nurse practitioner Mae Katt runs a mobile drug treatment programme.

Her urgent mission is to set up effective programmes to treat this devastated population in the hopes that they will be able to shape their future, on their territory, and become the employment workforce backbone of the coming “Ring of Fire” mining operations.

It is a mammoth challenge, especially as up to 80 percent of the adult population of some communities negotiating the mining developments are addicted to opiates.

This pristine territory is set to emerge as one of the richest mining sites in North America.

Africa’s Biggest Gold Deposit Becomes Burden as Prices Plunge – by Kevin Crowley (Bloomberg News – July 28, 2015)

July 29, 2015

http://www.bloomberg.com/

After production delays and fatal accidents, the plunging price of bullion is making Africa’s richest gold deposit the biggest burden for owner Gold Fields Ltd. And the bond market’s taking note.

The 81 million-ounce resource at South Deep near Johannesburg is still burning cash after Gold Fields bought it for $3 billion in 2006. The mine has helped lift the company’s break-even price to $1,105 an ounce, according to Moody’s Investors Service. Yields on the company’s bonds climbed to a six-month high during July as gold fell 6.7 percent to $1,093 an ounce.

“You’ve got a perfect storm now, with a low gold price environment and the potential for South Deep to continue to consume cash,” Douglas Rowlings, a Dubai-based analyst at Moody’s, said by phone. “The question on everybody’s mind is how much more cost can sustainably be taken out of South Deep and other mines?”

The failure to exploit South Deep profitably is hastening the decline of South Africa’s gold-mining industry, which has produced a third of all the world’s bullion over 120 years. The country is today ranked sixth in the world among gold producers, down from first just eight years ago.

Gold miners set to report Q2 earnings, but investors zero in on other issues – by Peter Koven (National Post – July 29, 2015)

July 29, 2015

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

Investors usually care about basic things such as how much revenue and income companies earned when they report quarterly results. After all, these are essential building blocks to valuing a stock.

But in the case of Canada’s gold industry, they have become largely irrelevant.

The second-quarter earnings season for the gold miners begins Wednesday afternoon, and experts said there will be little-to-no interest in the actual profits. Instead, all the focus will be on liquidity and the overall health of balance sheets.

“It’s going to be about who is most aggressive in trying to defend their balance sheets,” said Greg Taylor, portfolio manager at Aurion Capital. This is a direct result of the recent chaos in the gold market.

Gold averaged just under US$1,200 an ounce in the second quarter, which ended June 30.

Canadian miner Sherritt posts wider loss as nickel prices drop (Reuters Canada – July 28, 2015)

July 29, 2015

http://ca.reuters.com/

(Reuters) – Canadian miner Sherritt International Corp S.TO reported a bigger loss for the second quarter, hurt by lower nickel prices.

The Toronto-based company said on Tuesday its adjusted net loss from continuing operations widened to C$75.2 million ($58.2 million), or 25 Canadian cents per share, in the three months ended June 30 from C$56.2 million, or 19 Canadian cents per share, a year earlier.

Sherritt operates nickel mines in Madagascar and Cuba. Average realized prices for nickel fell about 19 percent to $7.13 per pound in the quarter, the company said.

Sherritt, which also produces oil and gas, said its combined revenue fell about 12 percent to C$268.4 million.

Sherritt said it expected total production of 78,000-82,000 tonnes of nickel in 2015, down from a previous estimate of 80,000-86,000. The company cut the estimate for the Ambatovy mine in Madagascar to 45,000-48,000 tonnes from 47,000-52,000.

Pollution spill at Yellow Giant gold mine sparks investigation by Environment Canada -by Gordon Hoekstra (Vancouver Sun – July 28, 2015)

July 29, 2015

http://www.vancouversun.com/

Federal agency determining possible violations of the Fisheries Act at remote island in northwest B.C.

Environment Canada has launched an investigation into a pollution spill at Banks Island Gold’s Yellow Giant mine in northwestern B.C. over potential violations of the Fisheries Act.

The B.C. government has said Environment Canada will lead the investigation, supported by the B.C. Conservation Officer Service. Environment Canada would not provide an official for an interview.

“Environment Canada’s enforcement branch is currently investigating to determine whether there have been any violations of the pollution prevention provisions of the Fisheries Act,” Environment Canada spokeswoman Barbara Harvey said in a written response. “As the investigation is ongoing, it would be inappropriate to provide further information at this time.”

The gold mine operation 110 kilometres south of Prince Rupert was shut down earlier this month by the B.C. Energy and Mining Ministry following an order by the B.C. Ministry of Environment to stop polluting.In an interview on Tuesday, B.C.’s chief inspector of mines, Al Hoffman, said his office is co-operating with other agencies on the investigation.

Mining: Province looks to feds for Ring money – by Carol Mulligan (Sudbury Star – July 29, 2015)

July 29, 2015

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

Ontario has formally asked the federal government to match the $1 billion it has committed to infrastructure for the Ring of Fire with $1 billion from its Building Canada Fund.

Brad Duguid, Ontario’s minister of Economic Development, Employment and Infrastructure, nominated the Ring of Fire project under the national infrastructure component (NIC) of the fund.

The $4-billion NIC supports projects of national significance that have broad public benefits and contribute to Canada’s long-term economic growth and prosperity.

Ontario’s Northern Development and Mines Minister, Michael Gravelle, said the Ring of Fire offers tremendous opportunity. By developing a transportation corridor and building hydroelectric systems, many First Nations will be able to “get off diesel,” said Gravelle.

“We can open up all kinds of economic development opportunities and that’s where the contribution from the federal government is so important.”