August 5, 2015 – Republic of Mining

Nickel West just might be the biggest loser – by Barry FitzGerald (The Australian – August 6, 2015)

August 5, 2015

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

Mylanta and Panadol were in short supply as the 1700 mining types pushed through the final day of the Diggers & Dealers bash. “Go hard or go home” seemed to be mantra.

But while sympathy was in short supply for those delegates who had badly timed their runs, there was much on offer for our biggest miner, BHP Billiton.

Not that BHP was out and about. While it operates the Kalgoorlie nickel concentrator and smelter, BHP operatives are only seen in the shadows, if at all.

Anyway, BHP’s Nickel West division — the one that wasn’t good enough to shove in to the South32 spin-off — is doing it tough, real tough, as a result of the crash in nickel prices.

Talk around the conference is that it would be no surprise if Nickel West was losing tens of millions of dollars a month — that’s right, a month — at current prices for the stainless steel ingredient of $US4.86 a pound.

Clueless do-gooders make Africa’s conflict mineral mines even more dangerous – by Tim Worstall (The Register – August 5, 2015)

August 5, 2015

http://www.theregister.co.uk/

Dodd-Frank stupidity writ large

Worstall on Wednesday I have muttered around here more than a few times about the various idiocies of the Blood in the Mobile campaign. This was the idea that we could stop the appalling (and true) levels of violence in Eastern Congo’s mining trade by making American companies fill out lots of documents.

The idea was that if they all had to say whether they used conflict minerals, they’d all prefer to be able to say “no” and therefore there wouldn’t be the violence over the minerals trade that happens today.

We were told that this would cost some $10m originally, one cent on the price of each mobile phone. By the time the legislature got at it, the Securities and Exchange Commission (SEC) said it would cost $4bn in the first year alone.

I rather railed against this, insisting that there was a much easier, cheaper and simpler system available; one that the industry itself was already implementing.

[Canada] CRA targeting mining-sector tax havens – by Nelson Bennett (Business Vancouver – August 5, 2015)

August 5, 2015

https://www.biv.com/

Tax evasion by Canadian companies using offshore havens promises to become election issue

Canadian corporations that use tax havens like Switzerland and the Cayman Islands to reduce the taxes they pay at home have good reason to worry.

The Canada Revenue Agency (CRA) has been stepping up its scrutiny of Canadian companies with offshore subsidiaries, as evidenced earlier this month when it was announced that Vancouver streaming company Silver Wheaton (TSX:SLW) is facing a potential reassessment that could cost the company more than $600 million.

It’s an issue that the Canadians for Tax Fairness and the Liberal Party of Canada appear to be hoping to make a federal election issue.

Tackling corporate tax evasion is one of the planks in the Liberal Party’s platform and has been raised in Parliament by Liberal national revenue critic Emmanuel Dubourg.

“It is unacceptable and unfair that CRA frightens and poorly serves honest Canadian taxpayers and it harasses charities for political reasons while leaving billions uncollected in tax havens,” Dubourg told Business in Vancouver by email.

Approving uranium project will only alienate Nunavut Inuit: Mining Watch (Nunatsiaq News – August 5, 2015)

August 5, 2015

http://www.nunatsiaqonline.ca/

“Inuit would rightfully feel like their voice does not matter”

Mining Watch Canada is urging the federal government to take the advice of the Nunavut Impact Review Board, which advised that a Nunavut uranium project should not move forward for now.

The mining watchdog group sent a July 28 letter to Aboriginal Affairs and Northern Development Minister Bernard Valcourt, asking him to uphold the NIRB’s decision on Areva Resources Canada’s Kiggavik mine proposal.

Mining Watch’s letter comes just weeks after Areva asked the federal government to reject the NIRB’s report, which recommends the proposed uranium project not go ahead because of the company’s lack of firm start date.

“It is entirely inappropriate for a proponent to propose a major mining project without any start date, let alone wait until after a review has concluded to bring forward vital arguments and information related to substantial community concerns,” said Ugo Lapointe, Canadian program co-ordinator at Mining Watch Canada, said in a news release.

More trouble for snakebit Sudbury mine – by Jonathan Migneault (Northern Ontario Business – August 4, 2015)

August 5, 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.

A weekend underground explosion at First Nickel’s Lockerby Mine in Sudbury on Aug. 2 resulted in minor injuries and smoke inhalation for one worker, confirmed the company’s president and CEO.

“There was an explosion this morning (Aug. 2) that resulted in a worker requiring a medical aid – nothing serious,” said First Nickel president and CEO Thomas Boehlert in an email to Northern Ontario Business. “As we do not run a shift on Sunday, we will be assessing the situation underground tomorrow.”

In a later release, the company reported that three other workers were checked for smoke inhalation and released without medical treatment.

The company said it is investigating the cause of the incident and planned to resume operations the following day. It’s unknown if the Ministry of Labour is investigating.

In coal-mining Kentucky, shock and dismay over Clean Power Plan’s new targets – by Francine Kiefer and Ryan Alessi (Yahoo News – August 5, 2015)

August 5, 2015

http://news.yahoo.com/

Kentucky was on track to meet an earlier proposed target in the Clean Power Plan. Now the state, which has lost thousands of coal-mining jobs in recent years, plans to fight the final, more stringent rule in the courts.

It is a tense time in Kentucky. The Environmental Protection Agency has just come out with its final rule on reducing carbon emissions – the strongest step ever taken to counter climate change in the United States – and this coal state is reeling.

“We are shocked at the difference in the proposal we were given to work on last year, versus the final rule announced Monday,” said Dick Brown, spokesman for the state’s Energy and Environment Cabinet, in an e-mail. The new target is a 27 percent increase in the amount of CO2 emissions that Kentucky’s power plants have to reduce by 2030, he says.

In many states, residents may be wondering how the EPA’s Clean Power Plan will affect their energy bills, for example. But in states like Kentucky, the new carbon rule arguably hits even closer to home. The Bluegrass State is America’s third-largest coal producer, and it gets more than 90 percent of its electricity from coal. Even before the carbon rule was finalized, the state had lost thousands of coal-mining jobs in the past two years alone.

A big fall in gold output will come from mine closures – by Lawrie Williams (Mineweb.com – August 5, 2015)

August 5, 2015

http://www.mineweb.com/

Consultancy Metals Focus forecasts gold output to fall as unprofitable mines are shut.

LONDON – Taking All-in Sustaining Costs (AISC) figures, precious metals consultancy Metals Focus reckons that just short of a quarter of global new mined gold output is running at a loss at an $1100/ounce gold price, and falls below that level will add to this quite sharply.

The consultancy’s global cost curve covers gold mines providing around half the global gold output of 1,650 tonnes. Metals Focus estimates that as much as half of annual new mined production in their survey, i.e. 400 tonnes, will be uneconomic at current prices.

Presumably extrapolating this figure across total global gold output would thereby suggest that as much as 800 tonnes of production could currently be running at a loss.

But the consultancy notes, this doesn’t mean that any of the production will fall away through closures and cutbacks, not until the gold price downturn is more prolonged or more severe. It notes that there may be substantial costs involved in closing an operating mine down, which may mean it is less costly to keep the mine producing at some level – perhaps high grading where this is an option (which may actually increase output).

NEWS RELEASE: Guyana Goldfields Inc. Pours First Gold at its Aurora Gold Mine

August 5, 2015

http://www.guygold.com/s/Home.asp

TORONTO, Aug. 4, 2015 /CNW/ – Guyana Goldfields Inc. (TSX:GUY) (the “Company” or “GGI”) is pleased to announce that first gold production has been achieved on-time and on-budget at its Aurora Gold Mine (the “Project”) in Guyana, South America.

First gold production was attained through the gravity and saprolite production circuits which allowed for earlier gold production (pre-commercial production) through the processing plant. Initial start-up gold was captured by processing the lowest grade ore available and GGI is now progressing towards full saprolite circuit operation and will gradually feed the mill with higher grade material. The commissioning and startup of the hard rock crushing circuit is projected to be completed later in the third calendar quarter of 2015.

The Company expects to produce between 30,000 ounces to 50,000 ounces of gold in 2015, depending on how quickly full ramp-up is achieved, and approximately 120,000 ounces to 140,000 ounces of gold in 2016. GGI expects to issue an updated National Instrument (NI) 43-101 Technical Report Feasibility Study in the first quarter of 2016 for the Project which will reflect an extended open pit mining scenario while deferring the underground production until later in the mine life, as well as, current operating cost parameters, and an updated ore reserve metal price.

Rare Lizard Thwarts Indian Giant Adani’s Coal Ambition – by Rhiannon Hoyle (Wall Street Journal – August 5, 2015)

August 5, 2015

http://www.wsj.com/

Australian activists raised concerns about the Carmichael project’s impact on the yakka skink and ornamental snake

SYDNEY—The yakka skink may be little known globally, but the native Australian lizard is causing problems for one of India’s biggest conglomerates.

On Wednesday, a federal court in Sydney overturned approval for Adani Group to build one of the world’s biggest new coal mines on scrubland facing the Great Barrier Reef. Environmental activists have raised concerns about the project’s impact on the yakka skink and another vulnerable species, the ornamental snake.

Adani blamed Wednesday’s decision on red tape. Environment Minister Greg Hunt approved the mining project last year, but it was overturned because of what the environment department termed a “technical, administrative” issue. It said its advice to Mr. Hunt during the approval process may not have been provided in the correct manner.

The department said it would take six to eight weeks to prepare new advice and supporting documents and for Mr. Hunt to reconsider his decision. It added that all parties involved, including Adani, agreed with the federal court’s decision to set aside approval of the project.

South Africa strives to save jobs at under-fire mines – by Zandi Shabalala (Reuters U.S. – August 5, 2015)

August 5, 2015

http://www.reuters.com/

PRETORIA – South Africa’s mining ministry held talks with companies and unions over planned job cuts on Wednesday, as President Jacob Zuma’s government frets over high unemployment ahead of key elections next year.

The mining industry, which contributes around 7 percent to Africa’s most developed economy, is struggling with sinking commodity prices, rising costs and labor unrest.

“It’s about jobs, jobs, jobs and none of us should leave this place without committing something to the table,” mining minister Ngoako Ramatlhodi told reporters.

Zuma’s African National Congress (ANC) heads into local elections next year with its main rival the Democratic Alliance (DA) targeting wins in key metropolitan areas, including Gauteng, home to economic hub Johannesburg.

The DA will target the ANC on its inability to reduce stubbornly high unemployment, which officially stands at 25 percent but some experts believe is much higher.

Zambia Copper Miners to Cut Power Use 15% to Ease Shortage – by Matthew Hill (Bloomberg News – August 4, 2015)

August 5, 2015

http://www.bloomberg.com/

Zambian mining companies agreed to reduce their electricity consumption by as much as 15 percent to help ease a power shortage in Africa’s second-biggest copper producer.

The local units of Glencore Plc, Vedanta Resources Plc and other operators reached the agreement with Mines Minister Christopher Yaluma and electricity supplier Copperbelt Energy Corp. at a meeting on Tuesday, according to the Chamber of Mines.

Power cuts already enforced at projects run by First Quantum Minerals Ltd. and Barrick Gold Corp. will be reversed on Wednesday, said Jackson Sikamo, the president of the chamber.

“The discussion was very open and the minister acknowledged the effort the mining companies have made,” he said by phone on Tuesday from Kitwe, about 280 kilometers (174 miles) north of Lusaka, the capital. The reductions of 10 percent to 15 percent will “definitely affect production,” though it’s too early to tell by how much, Sikamo said.

Centerra continues talks with Kyrgyzstan despite arrest of former CEO – by Seres Lu and Jeff Gray (Globe and Mail – August 5, 2015)

August 5, 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.

Toronto-based Centerra Gold Inc. says it remains in talks with the government of Kyrgyzstan on the future of the company’s massive Kumtor gold mine in the mountains of the former Soviet republic, despite word that its former chief executive officer has been arrested on corruption allegations.

“We are committed to concluding these discussions,” John Pearson, Centerra’s vice-president of investor relations, said Tuesday, a day after the company disclosed that former president and CEO Leonard Homeniuk was detained in Bulgaria at the request of the Kyrgyzstani government.

Mr. Homeniuk, a Canadian mining executive who spent 16 years at the helm of the company as it developed the mine in Kyrgyzstan, retired in 2008. In a statement released on Monday, the company said he was picked up by Bulgarian authorities while on a family vacation. His photo was on Interpol’s website, saying he was wanted by Kyrgyzstani officials for “involvement in corruption.”

Mr. Homeniuk, 68, is now a director of Polymetal International PLC, a London- and Moscow-listed Russian gold and silver miner with operations in Russia and Kazakhstan. He is also listed as the founder and CEO of a private company, Polygon Gold, involved in Russian mining ventures.

Don’t believe the nasty talk about gold. But don’t buy the stuff, either – by David Olive (Toronto Star – August 5, 2015)

August 5, 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.

That gold has plummeted in value is no surprise. All investing mania go too far, and the decade-long bull market in the precious metal is no exception. But the developing consensus that gold is heading toward extinction as an investment class is both surprising and misguided.

“Gold is doomed” is the headline for Matt O’Brien’s recent Washington Post examination of why its price has fallen 42 per cent since its most recent peak, in 2011, and experienced a stunning drop of 8 per cent in June alone. Gold closed last week at $1,085 (U.S.), down from its 2011 peak of $1,895 (U.S.).

“Gold is out of fashion like flared trousers: no one wants it,” Robin Bhar, a London-based analyst at Société Générale S.A., France’s third-largest bank, told Bloomberg News last week.

Iain Stewart, who runs the Newton Real Return fund in the U.K., is highly regarded for his fund’s superior results, managing clients’ money with a cautious strategy that emphasizes preserving capital over high-risk, high-return bets.

No pleasing Obama on Keystone XL: Why Canada’s climate change moves are futile – by Claudia Cattaneo (National Post – August 5, 2015)

August 5, 2015

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

With his crackdown on power plants and expectations he will finally kill Keystone XL this month, U.S. President Barack Obama is picking up the pace on high-profile climate change moves to pad his green credentials.

He’s also demonstrating that efforts by Canada — and particularly Alberta — to toughen up climate change regulations won’t result in pipeline approvals. They will just make the Canadian oil industry less competitive.

The latest proof is Obama’s continuing and unsurprising disregard for Canadian climate change initiatives in his review of the project, now in its seventh year.

There were significant ones in recent months, and to ensure they got the full attention of the U.S. administration, they were highlighted by TransCanada Corp. in a June 30 letter to U.S. Secretary of State John Kerry.

The Calgary-based proponent of the Alberta-to-Texas pipeline talked up Ottawa’s new plan to cut Canada’s greenhouse gas emissions by 30 per cent below 2005 levels by 2030 as well Alberta’s plans to increase emissions reduction targets for large emitters.

Skimpies still a ‘touchy subject’ at Kalgoorlie’s annual Diggers and Dealers conference – by Claire Moodie (Australian Broadcasting Corporation – August 5, 2015)

August 5, 2015

http://www.abc.net.au/

Australia’s biggest and most colourful mining conference, Diggers and Dealers, is showcased on the world stage, but there are some images the industry does not want to share.

Television cameras are banned from Kalgoorlie’s busiest bars, where the real colour of the event unfolds after the forum has wrapped up for the day.

It is quite a spectacle – hundreds of mining types packed into bars with names like the Wild West Saloon, where the gold capital’s famous skimpy barmaids hold court to a sea of suits.

The “skimpies” – scantily clad and sometimes topless barmaids – have been entertaining Diggers delegates since the early days of the forum 20 years ago.

Many fly in from the Gold Coast, Sydney and Melbourne, with the promise of big tips during the three-day event. Local hoteliers have special licences that allow the women to go “toppo” – topless. “It’s a very touchy subject,” Palace Hotel owner Ashok Parekh said.