Republic of Mining

Batista Miner Counting on Trafigura to Emerge From Debt Woes – by Juan Pablo Spinetto (Bloomberg News – September 15, 2015)

September 15, 2015

http://www.bloomberg.com/

A year ago, former billionaire Eike Batista’s iron-ore unit was halting output and battling creditors as prices plunged. Now it’s planning to reemerge with the help of commodities trader Trafigura Beheer BV.

MMX Sudeste Mineracao SA is selling its mining assets to Amsterdam-based Trafigura as part of a restructuring plan approved by creditors representing about 800 million reais ($207 million) in debt, Ricardo Werneck, who heads the parent company MMX Mineracao e Metalicos SA, said in an interview.

The unit also expects to obtain about 70 million reais from the sale of logistics assets and farmlands, allowing creditors to recover about 30 percent of the value of their claims, he said.

“There is no better option; the alternative is the failure of the company,” Werneck, 44, said. “Trafigura is a big part,” of the recovery plan, he said. MMX, which Batista listed in 2006 when the commodities super-cycle was in full swing, stopped operations at its only producing unit in August 2014 as the value of the steelmaking ingredient plunged and debt mounted.

Nickel, aluminium expected to trade higher in mid-September – by Anne Lu (International Business Times – September 15, 2015)

September 15, 2015

http://www.ibtimes.com.au/

Markets research firm Angel Commodities said base metals nickel and aluminium would experience a price hike by the middle of this month due to various positive global cues. Nickel, for instance, would be highly affected by Indonesia’s decision to continue its ban on unprocessed metals.

“ We expect nickel prices to trade higher in September 15 as Indonesia decided to retain its export ban on nickel ore, contrary to media reports suggesting the country may relax curbs to prop up its slowing economy,” a representative from Angel told Commodity Online .

Aluminium, on the other hand, will get a price boost on production upgrade from a giant Russian bauxite producer.

“ We [also] expect aluminium prices to trade higher in September 15 as supply glut concerns will likely get a breather as Russia’s Rusal, the world’s top aluminium producer, is considering capacity cuts of 200,000 tonnes a year this year,” the firm added.

Earlier this year, Rusal executive said that bauxite producers across the globe are forced to either cut production or completely shut operations down due to the losses obtained from weak global prices.

Teck Resources Ltd cut to junk by Moody’s rating agency amid ‘prolonged commodity price weakness’ – by Peter Koven (National Post – September 15, 2015)

September 15, 2015

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

Moody’s Investors Service has slashed Teck Resources Ltd.’s credit rating to junk status as the miner struggles with low coal prices and huge capital spending requirements.

Moody’s announced on Monday that it cut its rating on Teck to Ba1 from Baa3, which is the lowest investment-grade level. It cited the Vancouver-based company’s “significant” financial leverage and “material” free cash flow consumption. Teck had US$8.65 billion of debt at the end of June.

“We expect prolonged commodity price weakness and sizable investment spending will cause Teck’s financial leverage to remain well in excess of typical investment grade thresholds through at least 2017,” Moody’s senior credit officer Darren Kirk said in a statement.

The downgrade could have a significant impact on the company’s future borrowing costs, especially if the other rating agencies follow suit. Fortunately for Teck, it has strong liquidity and no immediate need to borrow more money.

Canadian oilpatch may be out ‘of the game’ if new pipelines not built: CAPP – by Yadullah Hussain (National Post – September 15, 2015)

September 15, 2015

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

TORONTO – The party that takes over the reins of the federal government after Oct. 19 must make pushing ahead pipelines projects as a top priority, the head of the Canadian oil industry association says, adding the lack of progress is hurting the Canadian economy’s competitiveness.

“After the election [pipelines] will continue to be one of the biggest impediments to the Canadian economy — and affect our ability to access markets,” said Tim McMillan, president of the Canadian Association of Petroleum Producers.

“These are fundamental, big pieces and if we can get those in line, we can be far more competitive — we have to be. If we are not, we are out of the game,” McMillan said during an National Post editorial board meeting in Toronto.

Lack of pipelines has seen Canadian producers fetch crude prices that are on average of US$13 per barrel lower than U.S. crude this year, further eroding already razor-thin margins in a depressed oil price environment.

UN Considers Canada’s Overseas Mining Record – by Ryskeldi Satke (The Diplomat – September 15, 2015)

September 15, 2015

http://thediplomat.com/

Canadian mining outfits have come under widespread fire for their practices in Central Asia and elsewhere.

Human rights abuses linked to the operations of Canadian mining businesses abroad took center stage in Geneva in June, when the UN Human Rights Committee addressed a series of concerns over Canada’s extractive industry’s record.

Canada is a global leader in the mining sector, and mining alone contributed $54 billion to Canada’s GDP in 2013. However, complaints about human rights violations and mistreatment of indigenous peoples by Canadian mining companies have accumulated over the years, prompting Amnesty International and the Canadian Human Rights Commission to raise the issue with the UN. Canadian firms have been accused of damaging the environment, with mass protests in South America and Central Asia.

In Guatemala, Toronto-based Hudbay Minerals was criticized for its inability to stop the rape and murder of local environmental activists. The contractors of another Canadian mining giant, Barrick Gold, were allegedly involved in a mass rape of 137 local women aged between 14 and 80 in Papua New Guinea. In Kyrgyzstan, a Centerra Gold-operated mine triggered violent protests against the Canadian firm, which led to allegations that community activists were tortured by government forces and local police.

UPDATE 1-Petrobras chairman to take leave, to focus on job as Vale CEO – by Stephen Eisenhammer and Rodrigo Viga Gaier (Reuters U.S. – September 14, 2015)

September 14, 2015

http://www.reuters.com/

(Reuters) – Murilo Ferreira will take a leave of absence as chairman of state-run oil firm Petrobras, turning his full attention to his job as chief executive of Vale SA as the mining giant grapples with a downturn in the sector.

Petroleo Brasileiro SA, as the company is formally known, did not give a reason for Ferreira’s leave, which it said would last until Nov. 30. A company source told Reuters he had requested time off to focus on Vale as it navigates a slump in iron ore prices and a slowdown in China.

Ferreira, 62, who has been CEO of Vale since 2011, was appointed chairman of Petrobras in April as it looked to send a market-friendly signal after a giant corruption scandal resulted in billions of dollars in writedowns.

At the time some mining executives criticized the move, saying Vale was going through a difficult patch and needed the full focus of its CEO. Ferreira shrugged off concerns, saying the double job would only eat into his “leisure time.”

But the world’s largest producer of iron ore has continued to struggle. Shares in Vale have lost nearly 40 percent over the past 12 months and touched their lowest in a decade last month.

Rio Tinto CEO Sam Walsh still a China bull – by John Kehoe (Australian Financial Review – September 12, 2015)

September 14, 2015

http://www.afr.com/business/

The chief executive of global mining giant Rio Tinto, Sam Walsh, has expressed strong confidence in the Chinese government pulling “levers” to keep the economy on track, as he revealed that Rio’s internal economic measures for the nation were broadly in line with Beijing’s official estimates.

Mr Walsh admitted the world economy had become far more “volatile” and that potential “shocks” are in store for commodity markets, but was overall upbeat on China in the face of growing unease about its prospects.

Speaking in Washington on Friday, Mr Walsh pointed to reassurance from Chinese Premier Li Keqiang at the World Economic Forum on Thursday that China would avoid a hard landing and that Beijing will meet its 7 per cent growth target this year.

“Rio Tinto endorses that. We believe it will be around that,” Mr Walsh said, after delivering a speech at the US Chamber of Commerce.

“I am positive about China and I am positive about the Chinese leaders and what they can do in relation to pulling the levers they need to pull to keep the economy motoring,” he added.

Trial to begin over accusations of environmental crimes at Alaska mine – by Lisa Demer (Alaska Dispatch News – September 13, 2015)

September 14, 2015

http://www.adn.com/

A first-in-Alaska federal environmental crimes trial over a mining operation is set to begin this month in Anchorage with a single defendant.

Two other managers with XS Platinum Inc. already have pleaded guilty — one earlier this month — which opens the possibility they might testify at the trial of Canadian James Slade.

Yet those at the top of the company have yet to answer charges that the effort to restart an old mine near the Southwest Alaska community of Platinum went terribly wrong. The Australians who led XS Platinum have not shown up in U.S. District Court in Anchorage, and prosecutors have been unable to find remnants of the company itself.

In all, five officials or managers were charged with felonies as was XS Platinum. The case is the first federal prosecution in Alaska related to mining under the Clean Water Act.

The focus now is on Slade, who is arguing in court that the government knew what the platinum miners were up to all along. His trial is set to begin Sept. 21 with jury selection and is expected to last about two weeks.

Investors Worry as Miners Cut Spending – by Rhiannon Hoyle (Wall Street Journal – September 13, 2015)

September 14, 2015

http://www.wsj.com/

BHP, Rio Tinto have tightened their belts in response to commodities slump

SYDNEY—For some years, the big question for the struggling mining industry has been how to shave costs and be more efficient.

But while the biggest companies remain preoccupied with belt tightening—mainly in response to the sharp retreat in world commodity prices—their impatient shareholders are asking a different question: What’s next?

With the bulk of the cutbacks completed, investors are putting increasing pressure on BHP Billiton Ltd., Rio Tinto PLC and others to begin looking beyond the downturn, and to focus more on eking out new sources of growth.

“The last thing you want to see is an air bubble in the development pipeline and then, when there’s a recovery, they’re not around to benefit from it,” said Ric Ronge, a Melbourne-based asset manager at Pengana Capital, reflecting the rising nervousness of some investors.

Since a decadelong commodity-price boom hit the skids about four years ago, mining companies have been busy slashing spending across the board on projects and exploration.

The losing battle against conflict minerals (Al Jazeera.com – September 14, 2015)

September 14, 2015

http://america.aljazeera.com/

Minerals from countries where sales fund corruption and violence continue to enter the US, as oversight proves tricky

Efforts by the United States to reduce the devastating violence in the eastern Democratic Republic of Congo by regulating the trade in conflict minerals — a group of four minerals, mined in Congo and neighboring countries, where they help to finance conflict there — are proving difficult to enforce as illegal armed groups and corrupt members of the national military continue to create instability in the region, according to a report released this summer by the Government Accountability Office.

“We do see these armed groups are still present and they are most likely still benefiting from the mineral trade,” Evie Francq, a DRC researcher with Amnesty International, told Al Jazeera America by phone from Nairobi.

“What we see is there are still very big displacements of the population, people that are fleeing abuses by rebel groups,” said Francq, adding that civilians have also become caught up in army operations against those groups, like the Democratic Force for the Liberation of Rwanda (FDLR).

“Often civilians are targeted either by the armed group or by the [Congolese] army because they’re suspected of giving information about the group to the army, or about different groups that are fighting against each other,” she said.

Novelis manufacturing plant, once known as Alcan to generations of Kingstonians, marks 75 years in the city – by Steph Crosier (Kingston Whig-Standard – September 13, 2015)

September 14, 2015

http://www.thewhig.com/

From Alcan’s Kingston Works to Novelis Inc., the aluminum manufacturing plant is celebrating 75 years in the Limestone City.

“I think in the heyday there was 4,100 to 4,200 employees, three plants,” Jake Czyz, Novelis plant manager, told the Whig-Standard Saturday. “We pretty much say everybody in Kingston knows somebody who has retired or worked here at the plants.”

The Aluminum Company of Canada plant was built in 1940 to support the Allied effort during the Second World War. The plant — referred to as “the annex” — housed manufacturing and research facilities. During the 1960s and 1970s, the plant was responsible for the research and manufacturing of aluminum sheet metal, cans and supplies for major industries such as automotive, transportation, beverage and packaging.

Today, Novelis, a subsidiary of the Aditya Birla Group, has 25 operating facilities on four continents with approximately 11,500 employees. The Kingston location employs approximately 275 people and creates aluminum products for Ford, BMW, Mercedes, General Motors, Thyssen Krupp and Peterbilt.

Political leadership vacuum exacerbates Brazil’s economic crisis – by Stephanie Nolen (Globe and Mail – September 14, 2015)

September 14, 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.

RIO DE JANEIRO — When Standard & Poor’s downgraded Brazil’s sovereign debt last week, the news had a certain feeling of inevitability here – just the latest in a seemingly unending streak of terrible economic news.

The real closed at its lowest value in 13 years against the U.S. dollar on Friday, at just $0.258. That’s a drop of almost 40 per cent from a year ago and 60 per cent from 2011 levels. Meanwhile the GDP is expected to contract by 2.4 per cent this year, the worst recession in 25 years. Other investment ratings are expected to follow S&P to junk status imminently. Inflation is higher than it has been since the turn of the century. The jobless rate nearly doubled in the first five months of this year.

It is hard to imagine the situation could get much worse – and yet there is a sense here that it almost certainly will.

Consumer demand is in free fall, which will only drive unemployment higher, in an ugly spiral. The real is expected to continue its fall, with some analysts predicting it will drop by another 16 per cent. And rather than a knuckled-down government attempting to navigate the crisis, Brazil has a gaping leadership vacuum and a political stalemate.

Why Canada needs entrepreneurial clusters, and how to go about making them – by Rick Spence (National Post – September 14, 2015)

September 14, 2015

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

Imagine you have an idea for a zillion-dollar business, but you need partners, skilled employees, industry contacts — and patient capital to build it.

In a perfect world, you could source all that with a few local calls. In this world, it happens in just a few places: Silicon Valley, New York City, London, and maybe Beijing and Tel Aviv. When the mix of entrepreneurial activity, knowledge, mentoring and funding reaches critical mass, help finds you.

Can Canadians build their own entrepreneurial clusters? That question is being explored this week in Waterloo, Ont., site of a three-day conference focusing on creating more innovation ecosystems. Waterloo Region, an hour’s drive west of Toronto, comes closest to the ideal in Canada.

Sparked by the University of Waterloo’s founding principles of industry placements and giving researchers ownership of their discoveries, the region has become home to 1,000 tech companies, as well as leading-edge science, think-tanks, and renovated co-working spaces where technology veterans and Google employees rub shoulders with ambitious startups and starry-eyed students.

Iran says finds unexpectedly high uranium reserve (Reuters U.S. – September 12, 2015)

September 14, 2015

http://www.reuters.com/

DUBAI – Iran has discovered an unexpectedly high reserve of uranium and will soon begin extracting the radioactive element at a new mine, the head of Iran’s Atomic Energy Organization said on Saturday.

The comments cast doubt on previous assessments from some Western analysts who said the country had a low supply and sooner or later would need to import uranium, the raw material needed for its nuclear program.

Any indication Iran could become more self-sufficient will be closely watched by world powers, which reached a landmark deal with Tehran in July over its program. They had feared the nuclear activities were aimed at acquiring the capability to produce atomic weapons – something denied by Tehran.

“I cannot announce (the level of) Iran’s uranium mine reserves. The important thing is that before aerial prospecting for uranium ores we were not too optimistic, but the new discoveries have made us confident about our reserves,” Iranian nuclear chief Ali Akbar Salehi was quoted as saying by state news agency IRNA.

Salehi said uranium exploration had covered almost two-thirds of Iran and would be complete in the next four years.