October 6, 2015 – Republic of Mining

Glencore Stock’s Roller-Coaster Ride Continues Amid Commodity-Price Concerns – by Alex MacDonald (Wall Street Journal – October 6, 2015)

October 6, 2015

http://www.wsj.com/

Chief Executive Ivan Glasenberg has been talking up prospects for copper prices

LONDON— Glencore PLC’s roller-coaster stock-market ride continued Tuesday, with the shares falling sharply after hefty gains the day before amid management’s efforts to assure investors that the commodities group remains financially robust.

Shares in the Swiss commodities trader and producer fell as much as 8.1% to an intraday low of 106.15 pence a share before paring the losses to a 1.8% drop. The stock is still the worst performer in the U.K.’s blue-chip FTSE 100 index, outpacing the FTSE 350 mining index’s 0.86% fall and the FTSE 100’s 0.1% decline.

Glencore’s shares have been pummeled by concerns that the world’s largest copper supplier and thermal coal exporter may struggle to safeguard its credit rating in light of its heavy debt burden, which is among the highest in the industry.

Investors are concerned about Glencore’s exposure, as a major commodities producer and trader, to slumping prices. Demand has fallen sharply given slower economic growth in China, the world’s largest consumer of many industrial raw materials, while global supplies remain plentiful.

South Africa: Latest Strike to Paralyse SA Mining Sector – by Savious Kwinika (All Africa.com – October 5, 2015)

October 6, 2015

http://allafrica.com/

Johannesburg — Mining is set to grind to a halt as 30 000 South African mine workers down their tools amid demands for a salary increment.

The workers, who are demanding salary increment of between 8,5 percent to 14 percent, have vowed not to resume work until their demands are met.

Mine workers at the Anglo Coal, Glencore, Exxaro Coal Mpumalanga, Kangra, Koornfontein, Delmas and Msobo Mine were on Sunday issued with the Commission for Conciliation, Mediation, and Arbitration (CCMA) certificate of non-resolution to the dispute, paving way for an industrial action.

“The conciliation came to an abrupt end this week when the parties could not reach an agreement over the R1000 for the lowest category and 14% for the artisans, miners and officials demand by the National Union of Mineworkers,” said NUM Chief Negotiator in the coal sector, Peter Bailey Bailey.

He said Anglo Coal and Glencore were offering the lowest paid workers an increment of 8,5 percent for the artisans. Miners and officials were offered 7 percent.

Glencore CEO bets on copper production cuts as shares surge – by Dmitry Zhdannikov and Olivia Kumwenda-Mtambo (Reuters U.S. – October 5, 2015)

October 6, 2015

http://www.reuters.com/

LONDON – Glencore Chief Executive Ivan Glasenberg said steep output cuts by copper miners will help lift prices in the next 18 months, in some of his first public comments since fears about commodities demand and the company’s debt battered the company’s shares.

Trader and miner Glencore’s stock jumped as much as 72 percent in illiquid trade in Hong Kong and as much as 20 percent in London, partly on prospects the company will sell some assets to cut debt.

The stock has recouped all of its losses from the past week, with several brokers saying a recent sell-off was overdone as the miner and trader had the ability to withstand the crunch on commodity prices.

The price of copper, Glencore’s largest earner, hit six-year lows below $5,000 a tonne in August due to a slowdown in China, one of the world’s biggest consumers of metals and other raw materials. It was around $5,180 on Monday.

“Supply will ultimately tighten… Fundamentals will prevail,” Glasenberg told the FT African Summit on Monday.

Manitoba-Nunavut hydro link is economically viable: study – by Sarah Rogers (Nunatsiaq News – October 6, 2015)

October 6, 2015

http://www.nunatsiaqonline.ca/

Report calls for next study on $904-million electrical power network

A new study commissioned by the Kivalliq Inuit Association says a project connecting Nunavut’s Kivalliq region to Manitoba’s electrical power grid is economically viable, environmentally beneficial, and should move forward without delay.

The estimated cost of the project, which would extend transmission lines north from Churchill, Man. up the western Hudson Bay coast, is about $904 million, says the new scoping study, prepared for the KIA by engineering firm BBA Inc. and released last month.

But the study suggests the project would pay for itself over its estimated 40-year lifetime, delivering projected savings of $40 million a year by replacing fossil fuels from dirty, expensive diesel generators with cleaner hydroelectric power.

The report, called Hydroelectric Power from Manitoba to the Kivalliq region of Nunavut, says extending the electric power grid “would generation great socioeconomic and environmental benefits for the population of the Kivalliq region and the development of the mineral industry.”

Pacific trade deal good for Sudbury, says Slade -by PRESS RELEASE (Sudbury Northern Life – October 05, 2015)

October 6, 2015

http://www.northernlife.ca/

“The Trans-Pacific Partnership agreement will benefit all of Canada but, we in Greater Sudbury with our strong resource and manufacturing sectors, will see many more doors opened for products and services produced here in Greater Sudbury with our new trading partners” says Fred Slade, Conservative Party of Canada candidate.

Canada’s Conservative Government has signed the Trans-Pacific Partnership (TPP) agreement that will protect and create Canadian jobs, and grow every sector of our economy by giving Canadian businesses access to some of the most dynamic markets in the world.

The TPP is a 12-nation market of almost 800-million consumers with GDP of $28 trillion — over 14 times the size of Canada’s economy. Canada will now be the only G7 nation with free trade access to all of the US and Americas, Europe, and Asia-Pacific continents, that’s over 60 per cent of the world’s economy.

Since 2006, our government has concluded Free Trade Agreements with 44 countries, compared to only five when we took office. “Canada’s mining industry has been a strong advocate for liberalized trade and investment flows for many years,” stated Pierre Gratton, Mining Association of Canada’s (MAC) President and CEO in a release today.

Commodity Collapse Has More to Go as Goldman to Citi See Losses – Luzi-Ann Javier (Bloomberg News – October 5, 2015)

October 6, 2015

http://www.bloomberg.com/

Even with commodities mired in the worst slump in a generation, Goldman Sachs Group Inc., Morgan Stanley and Citigroup Inc. are warning bulls that prices may stay lower for years.

Crude oil and copper are unlikely to rebound because of excess supplies, Goldman predicts, and Morgan Stanley forecasts that weaker currencies in producing countries will encourage robust output of raw materials sold for dollars, even during bear markets. Citigroup says the sluggish world economy makes it “hard to argue” that most prices have already bottomed.

The Bloomberg Commodity Index on Sept. 30 capped its worst quarterly loss since the depths of the recession in 2008. The economy in China, the biggest consumer of grains, energy and metals, is expanding at the slowest pace in two decades just as producers struggle to ease surpluses. Alcoa Inc., once a symbol of American industrial might, plans to split itself in two, while Chesapeake Energy Corp. cut its workforce by 15 percent. Caterpillar Inc. may shed 10,000 jobs as demand slows for mining and energy equipment.

“It would take a brave soul to wade in with both feet into commodities,” Brian Barish, who helps oversee about $12.5 billion at Denver-based Cambiar Investors LLC. “There is far more capacity coming on than there is demand physically. And the only way that you fix the problem is to basically shut capacity in, and you do that by starving commodity producers for capital.”

Government of the Northwest Territories’ (GNWT) proposal to alienate industry – by Gary Vivian (October 5, 2015)

October 6, 2015

http://www.nnsl.com/index.php

A Guest Editorial by Gary Vivian, President of Aurora Geosciences Ltd., in Northern News Services.

It’s said that the road to hell is paved with good intentions. The GNWT’s recent draft conservation plan has “good intentions” but it certainly will take us on a path to economic hell.

The plan – shared predominantly with conservation representatives, not the business community – is misguided, anachronistic and unnecessary. By simply circulating it for discussion, Environment Minister Michael Miltenberger has started that paving job to hell. If allowed to proceed, the plan will further damage our already wounded mining industry’s ability to create the high paying jobs, much needed business spending and royalties and taxes that are much needed by both aboriginal and public governments.

In this post-devolution world, we are expected to be more mature and able to take responsibility for our economic future. Taking such a misguided approach to conservation will alienate our number-one industry from land access and undermine the government’s own economic agenda.

Canadian mining sector cheers TPP signing – by Peter Koven (National Post – October 6, 2015)

October 6, 2015

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

TORONTO – The Canadian mining industry is celebrating Canada’s signing of the Trans-Pacific Partnership (TPP), which brings plenty of positives and no serious negatives.

The deal will gradually eliminate tariffs on Canadian mineral exports in TPP nations, some of which are enormous. At the same time, it does not bring any of the risks to Canada’s mining sector that it does to the dairy or auto sectors. It simply enhances the export opportunities.

“We don’t have some of the issues that other sectors face,” Pierre Gratton, president of the Mining Association of Canada, said in an interview. “For us, it’s really an opportunity to see reduced tariffs and to make us more competitive.”

There are huge variations in mineral import tariffs in TPP countries. On the low end, Australia applies tariffs of up to five per cent on Canadian imports, and Japan applies tariffs up to 7.9 per cent, the mining association said. On the high end, Vietnam’s tariffs are as high as 40 per cent, and Malaysia’s go up to 50 per cent.

GLOBE EDITORIAL: TPP-Less than hoped for, less than feared.(Globe and Mail – October 6, 2015)

October 6, 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.

The Trans-Pacific Partnership (TPP) trade and investment agreement reached by 12 countries on Monday morning looks like a good deal – good, and not quite as big as promised. Both the positives and negatives in the deal appear to be smaller than hoped, or feared.

The broad strokes of the deal are known, though the precise details won’t be out for a few days. The TPP will open closed sectors of the Canadian economy, such as dairy, poultry and eggs – but by less than expected. In pharmaceutical patents, an area of concern to Canadians, the TPP’s changes to the status quo also appear to be smaller than advertised. And while the agreement, which includes Japan and the United States (but not China), is being sold as the biggest trade deal ever, it is not as revolutionary as all that.

Thanks to three decades of trade liberalization, from the Canada-U.S. Free Trade Agreement to NAFTA to the World Trade Organization, Canada’s trade is already largely free. The remaining old-style tariff barriers are few and generally low. The TPP is mostly about taking one more step down that path.

Canada’s auto industry could lose 20,000 jobs because of TPP trade deal, union says – by Kristine Owram (National Post – October 6, 2015)

October 6, 2015

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

The Trans-Pacific Partnership trade deal could have major ramifications for Canada’s already struggling auto industry, resulting in cheaper vehicles for consumers, but a more competitive landscape for Canadian manufacturers.

Unifor, the union that represents Canadian workers at the Detroit Three, said the deal would put an estimated 20,000 auto jobs at risk by eliminating tariffs and significantly reducing content rules for vehicles and auto parts.

Under the TPP agreement, Canada will phase out its existing 6.1 per cent tariff on imported passenger vehicles over the next five years — a move that is expected to lower the cost of Japanese-made vehicles for Canadian consumers.

“Certainly it’s good news for consumers and to us that means it’s good news across the board,” said Michael Hatch, chief economist at the Canadian Automobile Dealers Association.

How Suncor Energy Inc hopes to cement its position as oilsands kingpin by purchasing Canadian Oil Sands Ltd – by Claudia Cattaneo (National Post – October 6, 2015)

October 6, 2015

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

Canada’s oilsands are not high on the list of investor must-haves at a time of depressed oil prices, potentially higher provincial royalties and tougher climate change regulations.

But those are also the reasons oilsands pioneer Suncor Energy Inc. launched a $6.6-billion unsolicited bid Monday for Canadian Oil Sands Ltd. (COS), the largest shareholder in once arch-rival Syncrude Canada Ltd. and lately a challenged, underperforming operator.

In short, Suncor has figured out how to make money in a potentially lower-for-longer downturn (its operating costs are $28 a barrel and heading lower); Syncrude is struggling to adjust (comparable costs are $52.63 a barrel); Suncor believes it can push Syncrude to improve. If oil prices recover, Suncor will have cemented its position as Canada’s oilsands kingpin and will be laughing all the way to the bank.

“If you look at the way reliability and operating costs are going, it’s a very successful business, even at these low oil prices,” Suncor President and CEO Steve Williams said in an interview. “We would be giving the (Syncrude) operator much more support … so we can accelerate the reliability improvement.”

Politics: Ring fires up Nickel Belt debate – by Mary Katherine Keown (Sudbury Star – October 6, 2015)

October 6, 2015

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

The long-stalled chromite project in Northwestern Ontario proved to be a fierce topic of debate on Monday.

Claude Gravelle, the incumbent NDP MP for Nickel Belt, squared off against Aino Laamanen, Stuart McCall and Marc Serre over a number of business-oriented topics at a debate organized by the Greater Sudbury Chamber of Commerce.

“The Ring of Fire has been stalled for the last little while. … It is very important to have a strong MP with a business background and the expertise to work with communities, stakeholders and First Nations,” Serre, the Liberal candidate, began. “The Ring of Fire will create more jobs.”

Gravelle, who has served as the Nickel Belt MP since 2008, relied on his experience in Ottawa, noting he has visited the Ring of Fire twice and laid the groundwork for movement on the project.