August 11, 2015 – Republic of Mining

The Trick That’s Going to Keep America’s Coal Alive – by Mario Parker (Bloomberg News – August 11, 2015)

August 11, 2015

http://www.bloomberg.com/

A 30-year-old mining technique is becoming all that’s keeping a group of U.S. coal producers from joining their competitors in bankruptcy.

Coal, already locked in a battle with cheap natural gas, now faces federal environmental rules that threaten to reduce its share of power generation to the lowest in 66 years. Companies from Illinois to Northern Appalachia are responding by leaning more heavily than ever on longwall-mining, a technology that’ll be used to produce a quarter of America’s coal this year, up from 19 percent in 2013.

Investors are backing the miners who rely on the efficient approach. Think of a giant deli slicer with multiple revolving blades that cuts coal from a seam into slices. Eighty percent of analysts covering Foresight Energy LP and CNX Coal Resources LP, both known for longwall operations, recommend buying their shares, compared with less than a third for producers who use it less, data compiled by Bloomberg show.

“People ask me all the time, ‘What’s the new mining technology that saves coal?’” Jim Stevenson, director of North American coal for consultant IHS Inc. in Houston, said by phone July 31. “It’s the longwall. It’s the proliferation of this 30-year-old technology that’s keeping coal coming out of these basins.”

How recent currency moves have been an absolute gift to miners outside the U.S. – by Peter Koven (National Post – August 11, 2015)

August 11, 2015

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

It is no secret that mining companies are struggling through tough times. Commodity prices are down sharply in the past few months, and investor interest in the space has plummeted.

However, recent earnings reports show that many companies are adapting well to the lower-price environment. And one of the main reasons involves absolutely no work on their part.

It comes down to exchange rates. The sharp rise of the U.S. dollar against most foreign currencies is an absolute gift to anyone mining outside the United States. Since commodities are priced and sold in U.S. dollars and most of a company’s operating costs are in the local currency, they receive significant cost reductions just by doing what they always do.

Of course, a rising U.S. dollar is almost always negative for commodities, since they are viewed as a currency hedge. That has certainly been the case in recent weeks. But the exchange rate movements have offset much of the pain from tumbling metal prices.

Baffinland ships first load of iron ore to Germany from Nunavut mine (Nunatsiaq News – August 11, 2015)

August 11, 2015

http://www.nunatsiaqonline.ca/

Mary River ore heads off to Germany

The first load of iron ore from the Mary River iron mine on northern Baffin Island is now on its way to Germany, Baffinland Iron Mines Corp. said Aug. 10.

A bulk ore vessel, the Federal Tiber, departed from the mine’s Milne Inlet port Aug. 8 carrying 53,624 tonnes of iron ore.

The ship is bound for the North Sea port of Nordenham, Germany where its cargo will be offloaded and eventually used to make high quality steel, Baffinland said.

“This is a great moment for Baffinland, its investors, and its employees, who have worked hard to reach this goal. In just two years, the men and women who work at the site, both Inuit or southern, have collaborated to build the mine and its infrastructure and have now moved the new port into full operation — this is their achievement and they can be proud of what they have accomplished,È Tom Paddon, Baffinland’s president and CEO said in a company statement on the first ore shipment.

Gold mine spill shines light on practice of avoiding environmental assessment – by Nelson Bennett (Business Vancouver – August 11, 2015)

August 11, 2015

https://www.biv.com/

Pollution on a remote northern B.C. island only discovered after whistleblower reported improper practices

A small gold mine on an uninhabited island on B.C.’s north coast has some big problems. Just seven months after its Tel mine was declared to be in commercial production, Banks Island Gold Ltd. (TSX-V:BOZ) has been forced to shut it down, putting 100 people out of work and leaving investors with shares that fell more than 70% in value over the course of one week.

There is some question whether the mine can reopen, as the company had been struggling with a $14 million deficit before the mine was shut down and says it will need to seek “immediate financing” in order to restart.

The mine was ordered shut down for unauthorized discharges of effluent from its mine site that resulted from flooding. An inspection by the Ministry of Energy and Mines also found a number of permit violations, including the processing of ore from an unpermitted mine site.

The company is facing potential legal action from the Gitxaala Nation, which says the Banks Island Gold mine is an example of project splitting and scoping –

What China’s surprise currency devaluation means for its economy and the world – by Ana Swanson (Washington Post – August 11, 2015)

August 11, 2015

http://www.washingtonpost.com/

China surprised the world on Tuesday by devaluing its currency, in a move likely to boost Chinese exports and support the country’s flagging economic growth. The change to the currency’s value was the most dramatic one-day change in two decades.

The move is likely to stir intense concern, as political leaders, especially in the United States, have long complained that China leaves its currency at a lower value to boost its domestic industries.

Over the past decade, China has let the value of the currency, known as the yuan or renminbi, rise, but the announcement by China’s central bank Tuesday is sure to reignite debate over whether the country is giving an unfair advantage to its businesses.

Stephen Roach, a fellow at Yale University who formerly served as a non-executive chairman for Morgan Stanley in Asia, told Bloomberg that the move raised the “possibility of a new and increasingly destabilizing skirmish in the ever-widening global currency war.”

Asteroid Mining May Be a Reality by 2025 – by Mike Wall (Space.com – August 11, 2015)

August 11, 2015

http://www.space.com/

Asteroid mining could shift from sci-fi dream to world-changing reality a lot faster than you think.

Planetary Resources deployed its first spacecraft from the International Space Station last month, and the Washington-based asteroid-mining company aims to launch a series of increasingly ambitious and capable probes over the next few years.

The goal is to begin transforming asteroid water into rocket fuel within a decade, and eventually to harvest valuable and useful platinum-group metals from space rocks.

“We have every expectation that delivering water from asteroids and creating an in-space refueling economy is something that we’ll see in the next 10 years — even in the first half of the 2020s,” said Chris Lewicki, Planetary Resources president and chief engineer Chris Lewicki.

“After that, I think it’s going to be how the market develops,” Lewicki told Space.com, referring to the timeline for going after asteroid metals.

COLUMN-China commodity imports will have to do more than just “hold up” – by Clyde Russell (Reuters U.S. – August 11, 2015)

August 11, 2015

http://www.reuters.com/

LAUNCESTON, Australia, Aug 11 (Reuters) – China’s imports of major commodities are holding up well, according to market consensus, but that in itself is quite concerning for the overall state of the world’s second-biggest economy.

Commodities are often viewed as the canary in the coal mine, with falling demand a sign of economic troubles ahead. Likewise, consumption of natural resources should pick up ahead of a more general recovery.

The fact commodity imports haven’t weakened does allow some of the more alarmist views of China’s economy to be discounted.

But equally, the absence of a resurgence in imports means any significant, infrastructure-led recovery is not yet on the horizon, even if it is coming, as is the widely-held conviction.

“July commodity imports held up,” was how Barclays headlined a report on China’s trade data, while London-based consultancy Capital Economics said, “Commodity imports hold up well.”

Critical Metals: The West is sleepwalking to its economic decline – by Robin Bromby (Investor Intel.com – August 4, 2015)

August 11, 2015

http://investorintel.com/

Anne-Marie Brady, professor at the School of Social and Political Sciences at the University of Canterbury in the New Zealand city of Christchurch, specializes in China, and has since 2008 been researching Chinese interests in the polar regions. Some time ago she saw on a Chinese website a map of Antarctica’s mineral resources. After she revealed her find, the map was swiftly removed.

She will in October be delivering a lecture on the subject of “China as Polar Great Power”, which is also the title of her forthcoming book. She says Chinese literature is “very, very clear about China’s interests in Antarctic minerals”. And everyone else’s.

Reading Jack Lifton’s incisive summation of the global rare earth situation posted on InvestorIntel yesterday, and the West’s continuing weakness in that sector, it occurred to me that this is part of a much wider problem. As Jack wrote, the strategy being followed by Chinalco involves a concerted, well-planned consolidation of Chinese interests.

And he added: “While American, European, Brazilian, South African, and Australian rare earth producers and juniors squabble with each other and promote their share prices as their only hope of raising new capital in a market dominated by China’s use … of the majority of the world’s rare earths as well as the majority of all metals, Chinalco is methodically planning to diversify its sources of raw materials and to seek out technology sales or purchases to improve its efficiencies.”

“They’re Getting Away with It”: Locals Say No Blame Means No Compensation for Mount Polley Mine Spill Victims – by Carol Linnitt (Desmog Canada.com – August 9, 2015)

August 11, 2015

http://www.desmog.ca/

Whether it was an act of God or the fault of negligent mine operators, the cause of Mount Polley mine spill — the worst mining disaster in Canadian history — remains officially undetermined, leaving local residents in a frustrated state of limbo.

One year ago this week the Mount Polley mine tailings impoundment collapsed, sending a catastrophic 24 million cubic metres of contaminated mining waste down the Hazeltine Creek and into Quesnel Lake, a local source of drinking water and in peak years can host up to 60 per cent of the province’s sockeye salmon run.

The province of B.C. says the Mount Polley Mining Corporation, owned by Imperial Metals, is still under investigation although some fear a January report that found glacial silt responsible for the instability of the collapsed tailings pond may take culpability away from the company.

Kanahus Manuel, a local indigenous activist and member of the Secwepemc First Nation, said the province’s decision to approve a partial re-opening of the Mount Polley mine last month signals to the media and the public that the company is without blame.