Archive | Latin America Mining

UPDATE 2-Brazil’s Vale slumps as ore price outlook, profit disappoints – by Guillermo Parra-Bernal and Marta Nogueira (Reuters U.K. – April 27, 2017)

Shares in Vale SA slumped the most in two weeks on Thursday, as executives signaled lackluster trends for iron ore prices this year and investors reacted to a first-quarter profit miss with disappointment.

Preferred shares, world No. 1 iron ore producer Vale’s most widely traded class of stock, shed as much as 4 percent. The decline thwarted a recovery in the stock that had made gains this week on expectations Vale would report a near record quarterly profit.

On a results conference call, company executives said supply and demand of the main ingredient for steel look balanced, helping prices stay at $70 reais per tonne or less. In February, Vale’s head of ferrous minerals Peter Poppinga expected prices hovering around $80 a tonne this year. Continue Reading →

Vale’s first quarter profit lower than expected as rains hurt iron ore output – by Cecilia Jamasmie ( – April 26, 2017)

Brazil’s Vale (NYSE:VALE), the world’s No.1 iron ore miner, logged Thursday net income for the first quarter that missed estimates, reflecting the impact of heavy rains that hampered output in the so-called northern system, which groups the Carajás, Serra Leste and S11D mines in northern Brazil, as well rising financial expenses.

The Rio de Janeiro-based company reported a net income of $2.5 billion, no less than a billion off the average consensus estimate of $3.325bn in profit. It was, however, the largest since the first quarter of 2014, according to Vale.

The miner had already announced a production record in iron ore of 86.2 million tonnes for the January-March period, which it credited to the ramp-up of its massive S11D mine in Pará, and the Itabirito project, in Minas Gerais. Continue Reading →

Global Warming Costs Mount as Heatwave Hits Chile’s Glaciers – by Laura Millan Lombrana (Bloomberg News – April 27, 2017)

(Bloomberg) — High, high up in the Andes mountains above Chile’s capital, at the foot of the glaciers that date from the last ice age, the temperatures were almost balmy this summer. That threatens long-term water supplies to the city of seven million spread out on the plain below.

At the Olivares Alfa glacier, 4,420 meters above sea level, temperatures rose above 10 Celsius on several days in January and rarely fell below zero, said Andres Rivera, a glaciologist at the Center of Scientific Studies in Valdivia. “It is not rare to have above-zero temperatures during summer, but high temperatures day and night, for several days in a row, that was unprecedented,” Rivera said.

The glaciers that supply much of Santiago’s water over the hot, dry summer months shrunk by a quarter to 380 square kilometers in the 30 years to 2013/14, according to a study by the Universidad de Chile. Continue Reading →

Barrick shares tumble as gold miner sounds cautious tone – by Josh O’Kane (Globe and Mail – April 26, 2017)

Barrick Gold Corp. shares slid 11 per cent Tuesday as investors reacted to the gold miner’s first-quarter results, which missed production and earnings estimates and revealed higher operating costs.

The world’s largest gold producer late Monday reported first-quarter net income of $889-million (U.S.) and adjusted net earnings of $162-million, or 14 cents a share, versus the analyst consensus estimate of 20 cents a share.

At the company’s annual meeting Tuesday, president Kelvin Dushnisky highlighted Barrick’s new era of caution, including cost savings through new joint ventures and debt reduction – having paid down $178-million in the first quarter. Continue Reading →

Barrick’s bad day: Shares fall 10% as investor confidence shaken by third cyanide spill at Argentine mine – by Sunny Freeman (Financial Post – April 26, 2017)

Barrick Gold Corp.’s third cyanide spill in two years at its Argentine operation was among a number of environmental and social concerns that took centre stage at its annual general meeting Tuesday, the stock’s worst day in six months.

Barrick president Kelvin Dushnisky told shareholders that a cyanide pipeline rupture on Mar.28 at its Veladero mine posed no risk to people or the environment.

“However, this was the third incident at Veladero leach pad in the last 18 months and that is completely unacceptable,” Dushnisky said. “These incidents weaken our partnerships and the trust that underpin them.” Continue Reading →

INTERVIEW-Colombia to clarify mining laws as ruling, vote worry investors – by Julia Symmes Cobb and Luis Jaime Acosta (Reuters U.K. – April 24, 2017)

BOGOTA – Colombia’s government will seek congressional approval to harmonize national and local mining laws, the mines and energy minister said on Monday, as legal wrangling over environmental regulations and community opposition threaten investment.

Voters in central Tolima province last month backed a proposal to ban mining projects in their municipality, raising questions about the future of an AngloGold Ashanti Ltd gold exploration in the area. Canadian company Eco Oro Minerals Corp, meanwhile, is waging a legal battle against a court ruling that bars exploration in half its concession.

The Tolima vote was made possible by a Constitutional Court decision that overturned the national government’s sole authority to approve mining projects, allowing mayors and provincial governors to challenge exploration permits, to the delight of environmental groups and some politicians. Continue Reading →

Vale’s iron ore output just hit another record – by Cecilia Jamasmie ( – April 20, 2017)

Brazil’s Vale (NYSE:VALE), the world’s No.1 iron ore miner, said output of the steelmaking material hit a fresh record high in the first quarter as its massive S11D mine in the Amazon continued to ramp up.

The Rio de Janeiro-based company said iron ore production jumped 11% to 86.2 million tonnes in the January-March period, compared to the same quarter a year earlier.

The figure however, was 6.7% lower than total iron ore output of 92.386 million tonnes in the prior three months, and the company said it might restrain supply even further in coming months to support prices if necessary. For now, however, the mining giant reiterated its output guidance for the year of between 360 million and 380 million tonnes of seaborne. Continue Reading →

El Salvador mining ban may cause a rethink in Philippines – by Ben Kritz (Manila Times – April 18, 2017)

ON March 29, the Legislative Assembly of El Salvador passed what activists are hailing as a “landmark” law that essentially bans all forms metallic mining in the small Central American country. The ban on mining has been brewing since 2007, when the Catholic Church, which wields formidable political influence in the country, took a stance against mining.

The following year, the right-wing Salvadoran government at the time canceled the exploration permit of the Canadian mining company Pacific Rim (absorbed by OceanaGold in 2013), prompting the mining firm to take the government to the International Center for Settlement of Investment Disputes (ICSID) in Singapore.

Two successive leftist governments in El Salvador maintained the exploration moratorium, and in October 2016, ICSID dealt a blow against OceanaGold (who inherited Pacific Rim’s case), ruling the company must pay the government $8 million in legal costs, which it has so far not done. Continue Reading →

BHP-Vale Mine Restart Hinges on Deal With Small-Town Mayor – by R.T. Watson (Bloomberg News – April 13, 2017)

A 34-year-old mayor of a small Brazilian city stands between a giant mine and its plans to resume operations after a disastrous dam collapse.

By refusing to sign off on the use of river water, Leris Braga is delaying permit approvals that would allow the BHP Billiton Ltd.-Vale SA iron venture to rehire thousands of workers and start generating cash again for debt repayments. While that makes Braga a villain for bondholders and unemployed locals, he says he’s only trying to get the company to meet its responsibilities.

“The city of Santa Barbara isn’t going to receive one cent,” he said in an interview from his offices in the more than 300-year-old mining town. “I’m not trying to make some exchange for the document they need.” Continue Reading →

Curious Case of Billion-Dollar Lithium Mine Sold for a Song – by Benjamin Robertson and Kanga Kong (Bloomberg News – April 13, 2017)

High in the Andes, in northwest Argentina, stories are told of fortunes being made in lithium, the wonder metal inside iPhones to Teslas that has captivated global investors from Warren Buffett down. This is not one of those stories.

It begins in the lithium-rich salt pans of Argentina’s Salta Province and stretches all the way to South Korea and Hong Kong, leaving a trail of lawsuits and unhappy investors. The drama reinforces a timeless lesson about sinking money into natural resources: Chasing the latest rush, whether in lithium, uranium or oil, is a high-risk game.

Just five years ago, investors were told that lithium mining company Lithea Inc. soon might be worth $1.4 billion. But last month, after various legal wrangles, a Hong Kong court ordered the assets of a businessman behind Lithea to be frozen as investigators chased him over unpaid debts. Continue Reading →

Brazil suspends Belo Sun’s gold mine licence, stock collapses – by Cecilia Jamasmie ( – April 12, 2017)

A Brazilian court has once again suspended a construction licence for Canada’s Belo Sun Mining’s (TSX:BSX) Volta Grande project, expected to become the South American country’s largest gold mine.

The decision, the second of its kind since 2013, represents a significant new obstacle in the way of the Toronto-based miner’s plans to develop the vast gold mine, in the Brazilian Amazonic state of Pará, local newspaper O’ Globo reported (in Portuguese).

According to the ruling, construction of the project is to remain suspended until indigenous study has been approved by Funai (Indigenous Affairs Agency of Brazil), Belo Sun said in a statement. Continue Reading →

Editorial: Debt-heavy Codelco forecasts muted growth – by John Cumming (Northern Miner – April 12, 2017)

Two highlights of the copper calendar — Cesco Week and CRU’s World Copper Conference, both held in Santiago, Chile in early April — have come to a close, with attendees reporting a sense of cautious optimism among the world’s top copper producers and refiners, as supply growth starts to level off and copper prices modestly rebound.

Santiago-based Cesco (from Centro de Estudios del Cobre y la Minería, or Centre for Copper and Mining Studies) was founded in 1984 as a private, non-profit organization, and describes itself as “independent and plural … promoting social legitimacy and confidence in Chile’s mining industry as a development engine,” and seeks to monitor and provide “information and quality analysis in novel formats.” Each year the organization puts on Cesco Week, including the Cesco Dinner, as well as the similar Asia Copper Week in Shanghai.

While much talk in the copper community over the first quarter focused on short-term supply disruptions at the world’s three largest copper mines — Escondida in Chile, Grasberg in Indonesia and Cerro Verde in Peru — the presentations in Santiago tackled some of the industry’s longer-term problems, including lower head grades, deepening mines with harder rock, water shortages and sociopolitical challenges. Continue Reading →

Barrick needs to reassure investors after Veladero mine mishaps – by Nicole Mordant and Susan Taylor (Reuters U.S. – April 12, 2017)

TORONTO – Barrick Gold must take steps to safeguard investor confidence by ensuring there are no more operating mishaps at its mines after a third incident in 18 months at its big Argentina mine, analysts said.

Argentine regulators told Barrick last week that it must overhaul environmental and operating processes at its Veladero mine, where operations have been partially suspended, after a cyanide solution spill on March 28.

“We are absolutely committed to making Veladero a mine that all of our stakeholders can be proud of and our resolve has not wavered,” Barrick spokesman Andy Lloyd said on Tuesday. Veladero is Argentina’s largest gold mine and Barrick’s third largest contributor to output. Veladero’s income was $220 million in 2016, up 2 percent from 2015. Revenue in 2016 was $685 million, down from $720 million in 2015. Continue Reading →

Water scarcity, pollution to take shine off Latin American mining sector – by Cecilia Jamasmie ( – April 11, 2017)

Water supply concerns and pollution in Latin America will drive increasingly strict environmental regulations in the region over the coming years, which in turn will also make miners’ life more difficult, a report by BMI Research shows.

According to the analysts, in addition to raising costs for mining companies and delaying certain projects, the focus on the amount of water used by the extraction industry will heightened social pressure on firms operating in the area.

A recent example of this trend is what happened in El Salvador, which last month passed a law that bans all mining for gold and other metals in the country, in an effort to protect its environment, particularly its water streams. Continue Reading →

Thornton Joins Barrick Top Brass in Argentina After Rupture – by Danielle Bochove and Jonathan Gilbert (Bloomberg News – April 10, 2017)

Barrick Gold Corp. Executive Chairman John Thornton flew to Argentina after authorities threatened to rescind the license for the Veladero mine on the same day the company agreed to sell half the asset.

Thornton joined President Kelvin Dushnisky, Chief Operating Officer Richard Williams and Chief Financial Officer Catherine Raw in meetings with local managers in Buenos Aires as the world’s top gold producer deals with the fallout from the third incident involving cyanide solution in two years.

“It underscores how seriously the company and the management team takes this issue,” Andy Lloyd, a spokesman for Barrick, said by telephone from Toronto. On Thursday, Barrick announced a $960 million deal with China’s Shandong Gold Group for a 50 percent stake in Veladero. Continue Reading →