Republic of Mining

Australia’s Small Mining Towns Are Running Out of Water – by James Paton (Bloomberg News – January 18, 2016)

January 19, 2016

http://www.bloomberg.com/

The Australian mining town of Broken Hill is preparing for a future that doesn’t depend on silver and zinc, but there’s one resource it won’t be able to live without: water.

The prospect of that commodity running out has sparked concern in the remote community more than 1,110 kilometers (680 miles) west of Sydney. The city of 19,000 people exhausted its supply of water that can be treated conventionally, forcing it this month to turn on a desalination plant to process the salty remains. Water flowing into the Menindee Lakes, the city’s key source, is at a record low amid an El Nino-induced drought.

Broken Hill’s plight underscores the vulnerability of Australia, the world’s driest inhabited continent, and the investment needed to secure water for Outback communities.

Rio Tinto continues to push up iron ore output – by Renée Schultes (Financial Times – January 19, 2016)

January 19, 2016

http://www.ft.com/

Sydney – Rio Tinto increased production of iron ore 11 per cent last year to a new record and is forecasting a further 6.8 per cent rise to 350m tonnes in 2016, despite the collapse in the price of the key steel ingredient.

Sam Walsh, chief executive of the Anglo-Australian miner, which last week said it would freeze pay for all staff this year, on Tuesday acknowledged the challenging market. He said the company would “continue to focus on disciplined management of costs and capital to maximise cash flow generation throughout 2016”.

The world’s second-largest iron ore producer shipped 336.6m tonnes of iron ore last year after mining 327.6m tonnes and selling 9m tonnes from stockpiles. It said bulk inventories were now largely exhausted.

Potash Corp suspends Picadilly mine in N.B., cuts 430 jobs (CBC News New Brunswick – January 19, 2016)

January 19, 2016

http://www.cbc.ca/news/canada/new-brunswick/

Saskatchewan company says mining near community of Sussex is suspended indefinitely

Potash Corporation of Saskatchewan is indefinitely suspending its Picadilly mine operation near Sussex, N.B. The move is expected to result in the loss of 420 to 430 jobs.

Mark Fracchia, the president of PCS Potash and a former general manager for the New Brunswick mine, told a news conference that the decision to suspend operations at the mine was “extremely difficult.”

“This is just a very sad day for all of us. Most of all to the people who have given us so many years of loyal service, for the community of Sussex, for the province generally and certainly for all of us at PotashCorp,” Fracchia told reporters.

COMMENT: Coal, hard facts – by Marilyn Scales (Canadian Mining Journal – January 18, 2016)

January 19, 2016

http://www.canadianminingjournal.com/

Mining coal has always been a tough endeavour. Underground miners work in the dust and dark with the threat of deadly explosion. Surface miners must be ever alert to the hazards of large equipment. And in today’s markets the industry has become even less attractive.

As Chinese demand for steel has softened, the price of metallurgical coal has plummeted. Over the past year it has slid to roughly US$75 to US$80 per tonne, a six-year low. Some producers were commanding as much as US$300/tonne in 2011.

High cost coal producers are being forced to close their doors. Several have announced recent suspensions in Australia. Chinese authorities have anticipate the closing of 1,000 more coal mines this year on top of the 1,300 that were shuttered a year ago.

Renewables require innovation and change of mining industry mindset – by Simon Rees (MiningWeekly.com – January 19, 2016)

January 19, 2016

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – The future success of renewables in the mining sector will require companies to overhaul the way they think about energy and mine development, according to professional services firm Deloitte.

“When we look at mining, innovation and competitiveness, we don’t often put those things together,” said Deloitte associate partner Adriaan Davidse, addressing an audience at a recent Canadian German Chamber of Industry and Commerce renewables in mining conference.

Davidse highlighted innovation as an important value driver, as it helps attract capital and deliver alternative or new profit streams for many mining companies. Renewables played an important part within this, he said.

Suncor reaches $4.2-billion deal with Canadian Oil Sands – by Jeff Lewis (Globe and Mail – January 19, 2016)

January 19, 2016

http://www.theglobeandmail.com/

CALGARY — Suncor Energy Inc. reached a deal to acquire rival Canadian Oil Sands Ltd. with a richer offer, putting it on track to hold the largest stake in one of the industry’s most troubled operations.

Suncor on Monday said the two companies agreed to a revised $4.2-billion deal equivalent to 0.28 of one of its shares for each Canadian Oil Sands share, ending a public feud between the partners in the Syncrude Canada Ltd. mining and upgrading project. Suncor also lowered the threshold of support needed for the deal to go through to 51 per cent from 66.7 per cent previously.

The détente inches Suncor closer to securing an additional 37-per-cent interest in Syncrude, a project with a history of mechanical breakdowns and missed production targets that ranks as one of the sector’s most expensive to operate. Suncor currently owns 12 per cent of the venture.

Congo cobalt mined by children may be in your mobile phone – Amnesty – by Aaron Ross (Reuters U.K. – January 19, 2016)

January 19, 2016

http://uk.reuters.com/

KINSHASA – Cobalt used in batteries for phones, laptops and electric vehicles could come from mines in Democratic Republic of Congo that use child labour, an Amnesty International report said on Tuesday.

Working with campaign group African Resources Watch (Afrewatch), Amnesty accused technology giants including Apple, Samsung SDI and Sony of lax oversight of the supply of cobalt from mines in Congo to smelters and on to battery-makers.

As a result, consumer products sold across the globe could contain traces of the metal produced each year by informal Congolese mines without companies knowing, the report said.

Gold miners say output has peaked as losses reshape the industry – by James Wilson (Financial Times – January 17, 2016)

January 18, 2016

http://www.ft.com/

Gold output has peaked in this commodities cycle, according to mining industry leaders and analysts who say few big projects will reach the point of production amid falling prices.

The lack of new assets and declining output at existing mines is expected to curb gold supply, a glimmer of hope for surviving producers of the precious metal in an industry coming to terms with a rush of investment when prices were far higher.

Kelvin Dushnisky, president of Barrick Gold, the world’s largest gold miner by annual output, said: “Falling grades and production levels, a lack of new discoveries, and extended project development timelines are bullish for the medium and long-term gold price outlook.”

Deadwood’s a TV masterpiece that deserves your time – by Adam Proteau (Toronto Star – January 16, 2016)

January 18, 2016

http://www.thestar.com/

Catch up with the brilliance of David Milch, Ian McShane et al now, before the promised Deadwood movie arrives.

When news broke last week that HBO’s shamefully short-lived series Deadwood will be brought back to life via a feature-length movie, its fans were elated.

From 2004 to 2006, David Milch’s show — set in gritty 1870s South Dakota, with real-life historical figures including famous frontierswoman Calamity Jane and folk heroes “Wild Bill” Hickok and Wyatt Earp — became a darling of critics and a smash hit with anyone who loved the Western genre and/or superb dramatic dialogue.

The real Deadwood: The South Dakota town made famous by the hit TV show – by Peter Fish (Sunset.com – 2006)

January 18, 2016

http://www.sunset.com/

This is a tale of two cities. The first is a mining camp in the Black Hills, where greed, lust, and violence kindle in such volatile combinations, you think they may burn the whole town down. The second is a tourist attraction whose tidy Main Street throngs with tourists jingling the quarters they won in the casino slots.

The first town is Deadwood, Dakota Territory, in 1876, as experienced on the HBO series Deadwood. The second is Deadwood, South Dakota, as experienced in real time in 2006. The genuine and virtual towns have become inseparable. It’s Deadwood’s real history that made the television series possible. It’s the television Deadwood that is breathing new life into the real town ― proving that in 2006, some juicy Western history can be as valuable as gold.

For proof of that statement, you can ask Mary Kopco. Director of Deadwood’s Adams Museum & House, she was in her office when someone from Hollywood phoned to gather facts about her town. How much would a miner’s pick have cost in 1876? What about a gold pan?

Hobbs is right: build a new road – Editorial (Thunder Bay Chronicle – Journal – January 18, 2016)

January 18, 2016

http://www.chroniclejournal.com/

Thunder Bay Mayor Keith Hobbs’ call last week for the creation of another paved highway straight through Northwestern Ontario resulted in some tittering among some of his regional counterparts, but we think Hobbs is on to something.

As anyone who has missed a medical appointment, or a flight, due to a prolonged Trans-Canada road closure knows too well, our neck of the woods is hardly teeming with highways.

While the province scrambled last week to deal with the closure of the Nipigon River bridge (now open to one lane), it noted that the structure is the “link” between this country’s west and east. The only one, in fact, when travelling by paved road.

Samarco Warned of Problems at Dam, Engineer Says – by Paul Kiernan (Wall Street Journal – January 17, 2016)

January 18, 2016

http://www.wsj.com/

RIO DE JANEIRO—Brazilian mining firm Samarco Mineração SA was alerted to “severe” structural problems in one of its dams a year before it collapsed but didn’t take appropriate measures to fix them, an engineer who worked on the dam said.

Dam engineer Joaquim Pimenta de Ávila said he was consulting for Samarco when, in September 2014, he inspected a crack in its Fundão waste-storage facility. He believed it indicated the beginning of a break and said he recommended that Samarco step up monitoring and reinforce the Fundão dam with a buttress.

About 14 months later, the dam collapsed, releasing an avalanche of sludge that buried a rural village, killed at least 17 people and traveled more than 400 miles.

Last working coal mine on Vancouver Island shuts down, marking end of era (CBC News British Columbia – January 17, 2016)

January 18, 2016

http://www.cbc.ca/news/canada/british-columbia/

‘In so many ways, coal has laid the foundation for the island,” says historian

The last working coal mine on Vancouver Island has halted production indefinitely, marking the end of an industry that established towns, a railway, and some of the province’s first labour unions, says a B.C. historian.

The owners of Quinsam coal mine near Campbell River suspended operations earlier this month, stating the move is in response to a decline in coal prices and market demand.

“In so many ways, coal has laid the foundation for the island,” said University of Victoria history professor John Lutz. “Between the 1850s and the early 20th century coal was the main economic resource on the island.”

Nickel Leads Gains in Most Industrial Metals Amid China Rebound (Bloomberg News – January 18, 2016)

January 18, 2016

http://www.bloomberg.com/

Nickel led base metals higher in London, rebounding after two weeks of losses prompted by concerns over financial turmoil in China, the biggest consumer of commodities. Metals benefited from gains in equity markets and the currency in the Asian country on Monday.

“The higher Chinese stock market and the sharp appreciation of the Chinese currency against the U.S. dollar brought a little bit of good mood into the bearish metals market,” Richard Fu, head of Asia & Pacific at Amalgamated Metal Trading Ltd. in London, said by email.

Nickel rose 2 percent to $8,560 a metric ton by 11:14 a.m. on the London Metal Exchange. Copper climbed 1.2 percent to $4,384 a ton, while lead and zinc also gained. Aluminum and tin fell.

Dividend cuts expected as top miners struggle – by Ian McGugan (Globe and Mail – January 18, 2016)

January 18, 2016

http://www.theglobeandmail.com/

Two giants of the global mining industry, already beset by plummeting metal prices, now face a new challenge – preparing their shareholders for sharply lower dividends.

BHP Billiton Ltd. and Rio Tinto PLC have both said in the past that they are committed to the payouts, but most observers doubt that sticking to the dividends is practical in today’s bleak environment for commodity producers.

At their current share prices in London, BHP’s dividend works out to a yield of more than 14 per cent, while Rio’s is equivalent to a payout of nearly 10 per cent.