Republic of Mining

As pressure on BHP and Glencore grows, Australia cuts may signal nickel revival – by Melanie Burton (Reuters U.S. – February 10, 2016)

February 10, 2016

http://www.reuters.com/

MELBOURNE – Australian nickel miners are under increasing pressure to suspend or cut production, with investors eyeing key announcements in coming weeks after rival producers in New Caledonia won a pledge of support from France.

Benchmark prices of the steel-making material have fallen more than 45 percent since early 2015 to their lowest since 2003, and are seen grinding lower amid ample global stocks and slowing property growth in top consumer China.

Glencore and BHP Billiton, whose high-cost Murrin Murrin and Nickel West facilities are struggling to sustain operations, are both due to make production and profit reports in coming weeks. News of any output cuts could buoy prices.

[Canada] Why equalization no longer works – by Joe Oliver (Financial Post – February 10, 2016)

February 10, 2016

http://business.financialpost.com/

“Opposition to resource development, unrelated to legitimate environmental
concerns, is a self-indulgence we cannot afford in a period of slow growth,
large deficits and escalating health-care costs. The public may not be
fully aware of the financial and social implications of its choices.
A reduction in equalization payments would be a wake-up call.” (Joe Oliver)

Equalization is about to loom large in federal-provincial relations and will make the prime minister’s promise to meet with his provincial counterparts increasingly uncomfortable.

The significant regional restructuring of economic fortunes, resulting from the precipitous decline in resource-based revenue, will reallocate billions of dollars in transfer payments — some from previously “have not” to “have” provinces.

[Nevada mining] Editorial: Governor puts Jewell’s credibility on the line (Elko Daily – February 9, 2016)

February 10, 2016

http://elkodaily.com/

Gov. Brian Sandoval has thrown down the gauntlet in the battle over hardrock mining’s future in Nevada, taking the bold step of calling out Sally Jewell over management of agencies she oversees as Secretary of the Interior.

Their response will reveal whether the proposed mineral withdrawal is more about helping the sage grouse or harming the state’s mining industry.

The Bureau of Land Management’s comment period closed three weeks ago, and Nevadans could learn by the end of the month whether the current two-year ban will be extended to 20 years. If it is, there will be no exploration along the northern edge of our state, nor in much of Idaho and southeastern Oregon.

Our energy economy should be celebrated, not shunned – by Jim Prentice (Globe and Mail – February 9, 2016)

February 10, 2016

http://www.theglobeandmail.com/

Jim Prentice lives in Calgary and is a Global Fellow at the Wilson Center’s Canada Institute in Washington. His book Canada, Energy and the Environment will be published by Harper Collins.

It is encouraging to see some early signs that Canada’s new governments understand that export pipelines are vital to Canada’s economic future.

Canada is one of the world’s largest exporters of crude oil. We produce four million barrels of oil a day and export three million barrels of it. We are also the world’s fourth-largest exporter of natural gas.

Sadly, we are not a global presence when it comes to our energy resources. Canadian governments play checkers, while others play chess.

COLUMN-Australia’s tough miners want government help; shouldn’t get it – by Clyde Russell (Reuters U.S. – February 10, 2016)

February 10, 2016

http://www.reuters.com/

Feb 10 – When the going gets tough, the tough ask for tax relief. If you are looking for a sign that the end game of the commodity downturn is getting closer, witness the clamour for more support from Australia’s embattled resources sector.

Asking for government help is one of the last steps a mining company can take to stay alive, assuming it’s already exhausted every conceivable cost saving, emptied the pockets of its owners and reached the limits of what its bankers will lend.

The latest call came this week from the Queensland Resources Council (QRC), which said the coal mining industry needs support to keep the remaining 60,000 workers employed, following the loss of 21,000 jobs in the past two years.

The Exploitation Fueling Madagascar’s Sapphire Trade (World Crunch.com/Le Monde – February 9, 2016)

February 10, 2016

http://www.worldcrunch.com/

ILAKAKA — The rush first started in October. With nothing but muscle power, some 100 holes, 10 to 20 meters deep, were dug in the red, dry ground. No one really knows who found the first sapphire in the locality of Ankiliabo, a bush area in southern Madagascar. But they all came running to this new El Dorado, which is accessible with a simple zebu and cart or on foot.

Among the fortune seekers is 27-year-old Jean-Louis Damlinbesoa, who traveled 15 hours in a bush taxi to come and start digging. “I need to find 30 to 50 grams of sapphire to finally be able to build a concrete house for my wife and two children,” he says. “It’s a hard job, but do I have a choice?”

With temperatures reaching 37°C (98.6°F), about 1,500 people, all unlicensed, are busy exploiting the opportunity. The miners descend into a one-meter-large hole thanks to a pulley rope uncoiling around a big tree branch. “Once at the bottom, I scratch horizontally on a maximum of four meters. After that, it’s too dangerous,” says Christian Bienvenu, who is wearing a headlamp and has dust encrusted on his face.

As politicians gloat about climate ‘leadership,’ Saudi Arabia’s oil is dumped in Canada – by Claudia Cattaneo (Financial Post – February 10, 2016)

February 10, 2016February 10, 2016

http://business.financialpost.com/

“Where is the political outrage over oil imports from rogue nations with
inferior environmental records and deplorable behaviours toward women,
dissidents and minorities? Where are the beefed up regulatory reviews
of Saudi Arabia’s climate change impacts, or their dumping practices?”

As federal and provincial politicians pat themselves on the back for their climate change ‘leadership,’ and pipeline opponents gloat about stalling construction of new Canadian pipelines, tanker-loads of foreign oil are delivered regularly to Eastern Canadian refineries, including increasing volumes from Saudi Arabia.

That’s right. Saudia Arabia, the oil-rich kingdom that is waging a brutal price war to shore up its market share and devastating Canada’s oil and gas sector in the process, dumped an average of 84,017 barrels a day of its cheap oil in New Brunswick’s Irving Oil Ltd. refinery in 2015, according to data compiled by the National Energy Board (NEB). That’s up from 63,046 b/d on average in 2012.

Meet Germán Larrea Mota-Velasco: The Mining Mogul of Mexico – by Maureen Bongat (Latin Post – February 9, 2016)

February 9, 2016

http://www.latinpost.com/

Despite being listed as one of the richest persons in the world, mining mogul Germán Larrea Mota-Velasco still has this amazing characteristic of hating to be in the spotlight. Having privacy while becoming a great person is difficult to achieve but Germán has nailed it.

In fact, he had kept his privacy and mystery for years that only few people know what he really looks like. Basic facts about him are also sketchy. Even Wikipedia doesn’t have that much information about him.

Because of that, the Mexico’s top corporate elite was able to travel and go to places incognito whenever he wanted to, experiencing a certain freedom to roam places unlike other business tycoons.

African Mining Conference Indaba Kicks Off With a Whimper – by Scott Patterson, John W. Miller and Alexandra Wexler (Wall Street Journal – February 9, 2016)

February 9, 2016

http://www.wsj.com/

CAPE TOWN—For the world’s mining elite, the party is over.

Executives of the industry gathered Monday at a 316-year-old winery owned by U.K. giant Anglo American PLC for a night of dancing, drinking fine wine and deal making. But the dancing was subdued, and there were few deals to discuss as a colossal slump in commodity prices cast a pall over the shindig.

“It’s a tough time for the industry,” Mark Cutifani, chief executive of Anglo American, told partygoers at Vergelegen, the vast winery the company bought during better days in 1987. If miners don’t develop “new pathways to success…there will be no future.”

Then, a steak dinner was served with the estate’s signature wines, and the dance music started.

South Africa plans fuel cell plant to boost platinum demand – by Wendell Roelf (Reuters U.S. – February 9, 2016)

February 9, 2016

http://www.reuters.com/

CAPE TOWN, Feb 9 South Africa plans to set up a fuel cell component plant by 2018, the latest initiative from the world’s top platinum producer to increase demand for the metal and support firms hit by plunging prices and labour strife.

The price of platinum has fallen about 30 percent year-on-year, forcing miners to sell assets and cut production and jobs. Around two-thirds of the industry, whose mines were damaged by a five-month strike in 2014, are making losses.

Vinay Somera, chief executive of Isondo Precious Metals, said his firm was preparing a feasibility study and had secured a licence from U.S-based Chemours Technology, to assemble components for the fuel cells using platinum.

Black Swans Circling Canada’s Resource Sector – by Dennis Boyko (Seeking Alpha – February 9, 2016)

February 9, 2016

http://seekingalpha.com/

Ottawa Policies Are Shifting Under The New Leadership of Prime Minister Trudeau

“Times have changed, my friends,” Trudeau told the Calgary Petroleum Club. “Social licence is more important than ever. Government may be able to issue permits. But only communities can grant permission.”
…
The prime minister didn’t help defuse matters last week in Davos when he told international investors that his government wanted them to focus more on Canada’s resourcefulness than its resources.
…
“The fact is the future of our global economy will be low carbon. That is what was agreed in Paris,” he said in an interview with CBC Radio.

Innu nations in Quebec on verge of historic land settlement that would give them greater autonomy (National Post – February 7, 2016)

February 9, 2016

http://news.nationalpost.com/

After decades of a David versus Goliath struggle with the federal government, three small Innu nations are on the verge of securing a land claim settlement unlike any other in Canadian history.

The treaty would see the First Nations and Quebec governments co-manage a territory 16 times larger than the island of Montreal — setting aside certain areas for conservation and opening others up to mining partnerships with the Innu.

It would also guarantee royalties of at least three per cent for the group on all development within their vast traditional territory — centred in Quebec’s Saguenay and Côte Nord regions. The Innu would retain exclusive hunting, fishing and logging rights on most of the 8,000-square-kilometre land mass.

Electric cars, battery revolution power scramble for lithium – by Paul Garvey (The Australian – February 10, 2016)

February 9, 2016

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

The growing excitement around electric vehicles and home power storage is spilling over into the junior resources sector, with numerous players joining the hunt for lithium — the key ingredient in the new-generation batteries that are changing the way the world looks at energy.

While momentum has been building in the lithium space for some time amid the hype around Tesla, electric vehicles and other emerging lithium-ion battery applications, the value of the commodity has only recently started to surge.

Lithium carbonate prices have more than doubled in the past few months, climbing from $US7700 a tonne to more than $US16,000 a tonne. The surge comes despite the continued weakness in oil prices, which led some to question whether suddenly cheaper fuel could slow the rollout of electric vehicles.

Nickel price crushed by weight of ghost stocks – by Andy Home (Reuters U.S. – February 8, 2016)

February 9, 2016

http://www.reuters.com/

LONDON – Another day, another landmark low for the nickel price.

London Metal Exchange (LME) three-month nickel traded down to $7,900 per ton on Monday morning. Forget the troughs of the Global Financial Crisis in 2008. Nickel is now trading at levels last seen in April 2003.

And there may be worse to come.

Might the price of nickel fall below that of copper, which is currently trading on the LME around $4,600 per ton? “Not an inconceivable prospect by any means,” according to one analyst, Leon Westgate of ICBC Standard Bank. (“Commodities Weekly”, Feb. 4, 2016).

Tahoe Resources-Lake Shore Gold’s $945M deal brings potential benefits for both sides – by Peter Kovin (National Post – February 9, 2016)

February 9, 2016

http://business.financialpost.com/

TORONTO – Tahoe Resources Inc.’s friendly $945 million deal to buy Lake Shore Gold Corp. is being viewed as a logical transaction that addresses challenges faced by both companies.

Tahoe gets to diversify into Canada, increase its growth profile and reduce exposure to Guatemala, a very challenging jurisdiction. Lake Shore, meanwhile, can develop its projects quickly without worrying about diluting shareholders or taking on more debt.

“We believe this transaction brings strong mutual benefits to our respective shareholders and establishes the premier low-cost precious metals producer in the Americas,” Tahoe chief executive Kevin McArthur claimed on a conference call.