Republic of Mining

Lithium-ion Batteries – The Cobalt Cliff Is Upon Us – by John Peterson (InvestorIntel.com – April 8, 2016)

April 8, 2016

I had a very enlightening conversation on Wednesday morning with the experts at Darton Commodities Limited, a U.K.-based metals trader that specializes in cobalt and serves as an intermediary between cobalt producers and European users. A couple days before the call, Darton sent me a copy of their 42 page “2015-2016 Cobalt Market Review.” It was one of the most impressive and data rich industry overviews I’ve ever seen.

Our wide ranging hour and a half conversation confirmed my developing thesis that cobalt is an immense supply chain risk that lithium-ion battery manufacturers and users have blithely dismissed in a headlong rush to build production capacity for markets that may not develop, or may develop more slowly than anyone anticipates. It left me more convinced than ever that my initial risk assessments were understated.

The Cobalt Cliff is upon us and there is no reasonable probability that the battery industry will have the muscle to outbid other essential industries that must have cobalt to make far more valuable products.

Commodity Rebound Forecast by Australia as Exports Resume Gains – by David Stringer (Bloomberg News – April 8, 2016)

April 8, 2016

http://www.bloomberg.com/

The global commodity rout looks set to hit a bottom with Australia, a key bellwether for the resources industry, forecasting the value of its commodities exports will resume rising from the second half of 2016.

Export earnings will rise by almost a third to A$208 billion ($157 billion) by fiscal 2021, the government’s Department of Industry, Innovation and Science estimated Friday in a quarterly report, after tumbling to a third straight annual decline in the current fiscal year.

The worst of the commodity price collapse is probably already over for materials including metallurgical coal, aluminum, zinc, lead and gold, Credit Suisse Group AG analysts led by Matthew Hope wrote in note dated Friday. The outlook for steel demand in China is also improving on the prospects for additional government infrastructure spending, the analysts wrote.

Miners dig in to weather storm in Liberia – by John Aglionby (Financial Times – April 8, 2016)

April 8, 2016

http://www.ft.com/

The iron ore loader rising more than 20 metres into the sky at ArcelorMittal’s berth at Buchanan port is testament to the multinational company’s ambitions in Liberia. It is part of a $1bn expansion plan to triple annual production from the current maximum of just over 5m tonnes at the Tokadeh mine, 240km to the north.

But the loader stands idle. Construction halted after Ebola struck the west African nation in 2014 and many contractors used clauses in their contracts to stop working. As Liberia tackled the deadly virus, the price of iron ore fell to less than a quarter of its 2011 peak and work has not resumed on the expansion project. That is despite the country being over the worst of the Ebola crisis and the price of iron ore rising more than 40 per cent from its December 2015 low.

The loader’s lack of use highlights the challenges mining companies face in Liberia. There is plenty of potential but, through a mixture of bad luck, unfavourable market forces and ineffective development policies, much of the extractive industry is suffering.

UPDATE 1-Malaysia extends bauxite mining ban by another three months (Reuters U.S. – April 8, 2016)

April 8, 2016

http://www.reuters.com/

Malaysia will extend its ban on bauxite mining by another three months, effective April 15, in order to clear stockpiles and remove the risk of the aluminium-making ingredient contaminating the country’s rivers, the environment minister said on Friday.

While lower output at the world’s top exporter of bauxite threatens to interrupt supply to the world’s biggest aluminium producer, China, traders expect the impact to be limited given China’s ample stocks of the raw material.

Malaysia’s largely unregulated bauxite mining industry has boomed in the past two years to meet demand from China, filling in a supply gap after Indonesia banned exports, but the frenetic pace of digging has led to a public outcry with many complaining of water contamination and destruction of the environment.

Trudeau still has eyes on the Ring of Fire – by Staff (Northern Ontario Business – April 8, 2016)

April 8, 2016

http://www.northernontariobusiness.com/

Prime Minister Justin Trudeau hinted that federal support in some form could be announced soon related to the stalled Ring of Fire mineral project.

Trudeau dropped that tidbit of information during a March 7 visit to Sudbury to announce long-awaited federal funds for Maley Drive, a critical arterial road infrastructure project that’s been 30 years in the making.

When asked by a reporter if an access road could be built into the remote mineral belt by this summer, Trudeau responded: “We know that the Ring of Fire means good jobs, means continuing development of the North in ways that hopefully will build the kind of sustained partnerships with Indigenous communities that have been too long absent from the economic growth landscape.”

Trudeau announces $26.7M for Sudbury [mining] road project – by Mary Katherine Keown (Sudbury Star – April 8, 2016)

April 8, 2016

http://www.thesudburystar.com/

The Maley melee is finally over and the road will be built. Prime Minister Justin Trudeau stopped by the Nickel City on Thursday to deliver a message and several million dollars for the Maley Drive extension project.

With a current price tag of $80.1 million for phase one, a three-way cost-sharing agreement will see the municipal, provincial and federal governments each contributing $26.7 million. The money comes from the Building Canada Fund and is part of about $120 billion the Liberals pledged to spend on infrastructure over 10 years in the budget they presented in March.

“This funding will help to create good jobs, better our communities and grow the middle class,” Trudeau said to a clapping crowd. “This $26.7 million investment will fund the creation of a new, much needed east-west arterial link through the city. This important initiative will reduce traffic congestion, improve commuter safety and get people home on time – and take ore trucks off Lasalle. My government is proud to invest in Sudbury and the people who call it home.”

Canadian firms dominate phosphate imports from Western Sahara: report – by Peter Koven (Financial Post – April 8, 2016)

April 8, 2016

http://business.financialpost.com/

Two Canadian fertilizer firms have become the dominant buyers of phosphate rock from the disputed territory of Western Sahara after other companies stopped the practice, according to a report.

The study, released Friday by Western Sahara Resource Watch (WSRW), found that Potash Corp. of Saskatchewan Inc. and Agrium Inc. shipped a combined 916,000 tonnes of phosphate from the territory last year. That accounted for 64.5 per cent of all purchases from Western Sahara in 2015. Potash Corp. shipped 474,000 tonnes and Agrium shipped 442,000, the report said.

“Agrium and Potash Corp. are by far the biggest importers,” Erik Hagen, a WSRW board member, said in an interview. These shipments are controversial because of Western Sahara’s unique status. It is the last remaining colony in Africa, but is under the de facto control of Morocco, which claimed sovereignty over the area after Spain withdrew in 1975.

Notley demands a ‘yes’ on pipeline for Alberta oil as province struggles with deficit – by Claudia Cattaneo (Financial Post – April 8, 2016)

April 8, 2016

http://business.financialpost.com/

CALGARY — Alberta Premier Rachel Notley, once a reluctant defender of the oilpatch, now says she won’t take no for an answer on getting a bitumen pipeline to tidewater.

The NDP premier made the pledge in a televised speech to Albertans on Thursday evening, a week before presenting a budget that will come with a $10-billion-plus deficit and help for the needy as the once oil-rich province struggles with a price shock that has destroyed government revenue, investment and jobs.

“We can’t continue to support Canada’s economy, unless Canada supports us,” she said. “That means one thing: building a modern and carefully regulated pipeline to tidewater,” she said. “I can promise you this: I won’t let up. We must get to ‘yes’ on a pipeline.”

Approval process going too slow for Gowest Timmins gold project – by Len Gillis (Timmins Daily Press – April 8, 2016)

April 8, 2016

http://www.timminspress.com/

TIMMINS – The Timmins man in charge of the Gowest Gold mining project in Timmins has challenged the city’s business community to do something about the slow pace of permitting.

Gregory Romain, the president and CEO of Gowest was the guest speaker at a Timmins Chamber of Commerce lunch event Thursday.

Gowest is a junior gold exploration company working to develop the North Timmins Gold project located roughly 35 kilometres north of the built-up area of Timmins. The project, which is part of the well-known Bradshaw gold venture, has more than 400,000 indicated ounces of gold and more than 750,000 ounces inferred.

Romain told the chamber lunch crowd he is confident the property will eventually become a mine, but there was clear frustration in his voice as he spoke of the permitting process.

Deals Help Shrink Glencore’s Mountain of Debt – by Jesse Riseborough (Bloomberg News – April 6, 2016)

April 7, 2016

http://www.bloomberg.com/

Glencore Plc’s $2.5 billion agriculture deal is another milestone to solving Chief Executive Officer Ivan Glasenberg’s biggest problem last year — reducing a mountain of debt.

Canada’s biggest pension fund will buy a 40 percent stake in the agriculture business and Glencore said it may sell an additional 20 percent, which could be worth $1.25 billion based on Wednesday’s deal. Other transactions are in the works, including the sale of two small copper mines and Australian coal and rail assets.

The latest deal “shows continued asset disposals as promised, but perhaps a lower price than hoped,” Marc Elliott, a mining analyst at Investec Plc in London. His September research note on Glencore’s debt helped send the shares plunging 29 percent in one day.

ITC Probe Could Pave the Way for Aluminum Import Tariffs – by John W. Miller and Scott Patterson (Wall Street Journal – April 7, 2016)

April 7, 2016

http://www.wsj.com/

The U.S. International Trade Commission said Wednesday that it will investigate the global aluminum trade and its impact on the U.S. aluminum industry, an inquiry that could help pave the way for new import tariffs.

The ITC said it would look into foreign government policies that drive overproduction, a swipe at China, which has drastically increased output of the metal this century, contributing to falling prices and the closing of U.S. smelters.

The ITC said it would hold a hearing Sept. 29 and deliver its report to the House Ways and Means Committee by June 24, 2017. The investigation was requested by a letter sent to the ITC in February by the committee. House Ways and Means Committee.

India Could Be Sitting on a Gold Mine – by David Fickling (Bloomberg News – April 7, 2016)

April 7, 2016

http://www.bloomberg.com/

Gold is so popular in India that it’s created an economic problem for Prime Minister Narendra Modi.

The country vies with China as the world’s biggest buyer of gold jewelry, thanks in large part to its cherished status in marriage ceremonies. Imports of the metal came to $35 billion last year, and were equivalent to about 43 percent of the country’s current account deficit in the September quarter.

In November, Modi launched a program to lure private gold holdings onto the market by getting banks to offer interest on items deposited in their vaults. If he really wants to limit the amount of gold imported into the country, here’s a smarter way of doing it: Make it easier to produce the stuff domestically.

At the start of the 20th century, India was the world’s sixth-biggest gold producer, according to the country’s Geological Survey.

NIRB says no to Nunavut diamond project (Nunatsiaq News – April 7, 2016)

April 7, 2016

http://www.nunatsiaqonline.ca/

Project should be “modified or abandoned,” review board says

The Nunavut Impact Review Board has recommended a diamond exploration project in the Kivalliq region be revised or scrapped due to local social and environmental concerns.

“The project has the potential to result in unacceptable adverse ecosystemic and socio-economic impacts,” the NIRB said in a screening decision issued April 4.

On its proposed Kahuna Diamond Project, located about 54 kilometres northeast of Rankin Inlet and 35 km southwest of Chesterfield Inlet, Dunnedin Ventures Inc. planned to conduct year-round diamond exploration from March 2016 to March 2018.

EDITORIAL: Aboriginal economic growth benefits all (Toronto Sun – April 6, 2016)

April 7, 2016

http://www.torontosun.com/

It doesn’t make for juicy front page headlines, but Aboriginal people are quietly engaged in the hard work of growing their local economies. Canadian businesses need to understand this, embrace it and get involved.

In a recent guest column for the Sun papers, academics Ken Coates and Greg Poelzer wrote that “crises are noisy, accomplishments are quiet.” In other words, the bad news gets a lot of media attention, but the success stories go unreported. And the success stories are many.

This past week brought a reminder of those quiet accomplishments. Leaders from business and Aboriginal communities gathered in Toronto to participate in the Natural Resources Forum to discuss economic growth.

Infrastructure in the Ring of Fire: ‘Getting it Right’ rather than just Getting it Soon – by Chief Elizabeth Atlookan (Sudbury Star – April 11, 2016)

July 6, 2018April 7, 2016

Elizabeth Atlookan is Chief of Eabametoong First Nation and a member of the Matawa Tribal Council.

A version of this column ran in the Sudbury Star under the title of “We ‘Will Not Be Bought Off”

On March 11, 2016 the Financial Post and Sudbury Star published an article by Mr. Stan Sudol that called for rapid Federal investment in industrial Ring of Fire and community infrastructure, based on a ‘Mining Marshall Plan’ concept that he published in July 2015. Is a Marshall Plan needed? No. Rather, our First Nations and Ontario need to collaborate on a new, long-‐term vision of human and environmental life that can incorporate wise industrial development. Let’s work together on that.

As the Chief of Eabametoong First Nation, I write from a remote community of roughly 2500 members, with about 1400 living on-‐reserve approximately 400kms North of Thunder Bay. Eabametoong First Nation has been referenced in multiple news stories lately. These stories have outlined a number of tragic losses throughout our winter. In particular, we have suffered a suicide in February, the loss of an infant earlier this month, and one of our members falling victim to a homicide just over a week ago.

I write from the context of social crisis. This is something that has been documented, but rarely from the perspective of community leader who is facing so much local pain and difficulty, while navigating tremendous pressure for industrial development nearby.