Republic of Mining

After China dumps gold, don’t count on India to come to the rescue – by MANOLO SERAPIO JR AND RAJENDRA JADHAV (Reuters India – July 21, 2015)

July 21, 2015

http://in.reuters.com/

MANILA/MUMBAI – Blame poor rains or a lack of weddings, but Indians, for whom gold is the investment of choice, aren’t rushing to buy bullion after this week’s sharp sell-off.

India and China are the world’s top gold buyers and, after massive selling on the Shanghai Gold Exchange on Monday helped drive down gold prices by 4 percent to a 5-year low, traders hoped demand would perk up in India, or elsewhere in Asia.

The last big slide in gold prices – a 13 percent drop in just two consecutive trading days in April 2013 – prompted weeks of long queues of Indians outside gold showrooms.

Not this time. India’s gold appetite – it accounts for more than a fifth of global demand – remains sluggish, with only modest local premiums to the global spot benchmark.

“That’s really a bearish sign, when the main consuming region remains on the sidelines after such a price drop to a multi-year low,” Commerzbank senior oil analyst Carsten Fritsch told the Reuters Global Gold Forum on Tuesday.

Chinese Nickel Imports Jump to 6-Year High as Shortage Looms (Bloomberg News – July 21, 2015)

July 21, 2015

http://www.bloomberg.com/

China imported the most refined nickel in six years in a further sign that the world’s biggest consumer is drawing on global supply. Futures rose 2.4 percent in London.

Inbound shipments of the metal used to produce stainless steel surged 67 percent to 38,545 tons in June from the previous month, the highest since July 2009, and were more than three times the level a year earlier, Chinese customs data show.

Goldman Sachs Group Inc. and Citigroup Inc. are bullish on prices amid prospects for rising Chinese demand. Macquarie Group Ltd. sees a global shortage which may cut inventories further from a record. Stockpiles in London Metal Exchange sheds have already fallen to the lowest in almost two months. Some imports may have been for delivery against the first nickel contract to expire on the Shanghai bourse, said Celia Wang from Tianjin Zhongwei Group’s investment department.

“Huge imports arrived in China from LME warehouses as traders seek profits by delivering against the first settlement of a Shanghai nickel futures contract,” said Wang, the general manager. “Refined nickel imports are expected to remain at a high level into July.”

Quebec isn’t ready for uranium development: report – by Sarah Rogers (Nunatsiaq News – July 20, 2015)

July 21, 2015

http://www.nunatsiaqonline.ca/

Province-wide commission finds lack of reliable information, lack of social acceptability

A new report says it would be “premature” to allow the uranium sector to develop in Quebec, given the lack of both information and social acceptance on the issue.

The Bureau d’audiences publiques sur l’environnement (BAPE), Quebec’s environmental impact review board, released its report on the future of the uranium industry July 17, following a year-long, province-wide commission.

And while the commission found the uranium mining sector has seen major progress in technology and waste management, it found that there are too many unanswered questions about the industry.

The 600-page report also noted significant gaps in scientific knowledge about the impacts of uranium mining on the environment and public health. “Given this situation, the participants at the hearings were almost unanimous in their rejection of uranium sector development,” the French-language report said.

COLUMN-Gold mining cost-cutting shows price can fall further – by Clyde Russell (Reuters U.S. – July 21, 2015)

July 21, 2015

http://www.reuters.com/

LAUNCESTON, Australia, July 21 (Reuters) – What does gold have in common with iron ore and coal? All three are travelling down the same road of structural oversupply, softer demand growth and severe cost-cutting by their producers.

While exciting for gold watchers, Monday’s mini flash crash, which sent the most-active U.S. gold futures contract to a five-year low of $1,088 an ounce in thin early Asian trade, is largely irrelevant, unless viewed against a wider backdrop.

The broad picture for gold is that since the spot price reached its peak of $1,920.30 an ounce in September 2011, demand has dropped as supply has risen.

More than anything else this simple dynamic explains why gold has now given up about half the gains of the decade long rally between 2001 and 2011.

Figures from Thomson Reuters GFMS show that in 2011 there was an overall deficit of 154.1 tonnes in the gold market, which fell to a deficit of 77.9 tonnes in 2012, then rose to a surplus of 248.7 tonnes in 2013 and 358.1 tonnes last year.

Iron Ore Supply to Overwhelm Weak China Demand, Goldman Predicts – by Jake Lloyd-Smith (Bloomberg News – July 20, 2015)

July 21, 2015

http://www.bloomberg.com/

Rising seaborne iron ore supplies over the next two quarters will probably overwhelm weak demand from mills in China, according to Goldman Sachs Group Inc., which said that a global glut was entering its second year.

While housing starts in China have recovered and infrastructure has overtaken property to become the largest market for steel, an improvement this half may not be strong enough to support iron ore, the bank said in a report. Prices are seen dropping over the next four quarters, from $49 a metric ton through September to $44 by the April-to-June period of 2016, according to analysts Christian Lelong and Amber Cai.

Iron ore sank to the lowest since 2009 this month amid concern that the biggest mining companies including Rio Tinto Group, BHP Billiton Ltd. and Vale SA are intent on boosting low-cost supply even as demand falters.

Imports by China fell in the first six months of the year, while local mills sold a record amount of output overseas. BHP, which is set to report quarterly production data tomorrow, said on Tuesday it’s spending $240 million to upgrade tug-boat operations at Port Hedland.

MININGWATCH NEWS RELEASE: Canadian Mines Ministers Conference in Halifax – Provinces & Territories Must Act To Avoid Mine Waste Disasters

July 21, 2015

http://www.miningwatch.ca/

Click here for full recommendations in the attached letter, click here: http://www.miningwatch.ca/sites/www.miningwatch.ca/files/2015-07-20_mines_ministers_letter_0.pdf

Halifax, July 20 2015 – While Energy & Mines Ministers from across Canada are meeting in Halifax for their annual conference, a coalition of more than 50 environmental, First Nations, and community organizations today sent a letter to all Canadian Mines Ministers urging them to take immediate action to assess and prevent the threat posed by hundreds of mine waste dams and impoundments in Canada.

The groups are pressuring provincial and territorial governments in Canada to respond to the lessons learned from the August 2014 Mount Polley mine disaster in British-Columbia – the biggest mining waste spill in Canadian history.

In January 2015, the Independent Expert Review Panel on the Mount Polley failure determined that current Canadian and global standards for mine waste disposal are fundamentally flawed and that future failures at other mines are simply a matter of time.

The Expert Panel firmly rejected any notion “that business as usual can continue,” and urged the industry and all regulators to change the way mining waste facilities are designed, operated, and regulated in order to avoid any future failures:

Mining boss frustrated by drug test failures – by Jason Warick (Saskatoon StarPhoenix – July 20, 2015)

July 21, 2015

http://www.thestarphoenix.com/index.html

The owner of a Saskatoon mining company says it’s getting tougher to find good workers after nearly all recent applicants failed a routine drug screening.All applicants had the required equipment training and some even had sales experience or university education for the lucrative positions, most of which paid between $30 and $45 per hour. But over a 10-day period last month, 22 of 26 people who wanted a job with Xtreme Mining and Demolition failed the drug test, said owner Leonard Banga.

“I was surprised, for sure. That’s way higher than it’s ever been,” Banga said.

Most of the failures — 17 of them — were for cocaine rather than “softer” drugs like marijuana. Marijuana was detected in one sample and amphetamines in another. Two other samples detected agents attempting to mask illicit drug use, and one man attempted to give a sample by hiding a bag of urine and a tube under his armpit.

The tests shouldn’t have been a surprise, Banga said. The explanation of pre-employment drug testing is on the application form, and prospective workers are given 48 hours notice.

Ontario’s 2,400-km power pipe dream – by Terence Corcoran (National Post – July 21, 2015)

July 21, 2015

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

In its 2013 long-term energy plan, the Ontario government said it would begin looking at importing electricity from other jurisdictions when such imports “are cost effective for Ontario ratepayers.” On Monday, Ontario Energy Minister Bob Chiarelli appears to have noticed that electricity rates in the province have already soared beyond the point of cost-effectiveness, thereby making it attractive to look at importing cheap power, as per plan, from other jurisdictions.

In comments surrounding the announcement of a joint “high-level working group” to study electricity trade between Ontario and Newfoundland & Labrador, Chiarelli said the objective is to “bring down rates” in Ontario. Well, that’s news.

Anyone who follows his public pronouncements knows that he has been blissfully unperturbed by Ontario’s soaring electricity prices. So his acknowledgment it might be necessary to bring rates down will be welcome by consumers and industries. In the past, the minister has mostly rejected the idea that electricity rates are all that high and need to be reduced.

Less encouraging, however, is the proposed source of the cheaper electricity, hydro power development in Newfoundland & Labrador, from where electricity would have to be wheeled about 2,400 kilometres to make it to Toronto.

Gold’s fall threatens to cool temperature of mining M&As – by James Regan and Denny Thomas (Reuters U.S. – July 21, 2015)

July 21, 2015

http://www.reuters.com/

SYDNEY/HONG KONG – A dramatic slide in gold prices this week threatens to squash a run of mining mergers and acquisitions just as momentum in the sector was picking up.

Mining executives and fund managers warn predators will turn more cautious before splashing out cash or approving capital raisings, at least until bullion shows signs of stabilising.

The value of completed gold mining mergers and acquisitions so far this year has reached $3.2 billion, compared with $4.4 billion for all of 2014, according to Reuters data.

Gold this week took its sharpest dive since September 2013, landing at $1,088 per ounce, a five-year low. That sent key indices measuring the health of gold mining companies crashing in its wake.

The Australian and Canadian indices fell 11 percent each, while the Johannesburg Stock Exchange gold index dropped 12 percent.

More resources write-downs expected as commodities slump – by Amanda Saunders (Australian Financial Review – July 21, 2015)

July 21, 2015

http://www.afr.com/

A steady flow of write-downs across most metals and oil and gas is tipped over the next year, as many of the mining majors tweak their medium-term price forecasts and try to offload non-core assets in a depressed market.

The big miners are facing profit falls of between 30 and 60 per cent in their next round of results, with their impressive cost cutting not enough to offset the commodity price rout.

Glencore is a candidate to take hits in nickel and possibly other base metals at its interim results, analysts say.

If thermal coal prices continue to languish at $US60 a tonne, Glencore could also write down its Australian coal holdings over the next year, and Anglo American could impair some of its South African coal assets, but probably at the full year.

Ahead of its interim results on Friday, Anglo flagged a writedown of up to $US4 billion ($5.42 billion) post-tax on its Brazilian iron ore mine and some Australian coal assets, two days after BHP Billiton took a $US2.8 billion (pre-tax) impairment on its US shale gas business.

Business Network News Interviews About Gold Decline (July 20, 2015)

July 21, 2015

http://www.bnn.ca/

Analyst John Ing: Despite 5 year low, lots of opportunity in gold stocks

John Ing, President, Maison Placements Canada discusses why gold is selling off and why he’s seeing buying opportunities in the sector.

Gold hits 5-year low as commodities struggle With Andrew Bell and Frances Horodelski

Gold fell to the lowest level in more than five years on the outlook for higher U.S. interest rates and as China said it held less gold reserves than previously thought.

News Release: Provincial & Territorial Ministers Working Together to Reduce Use of Diesel for Electricity in Remote Communities

July 21, 2015

July 21, 2015

Partners in Manitoba, Quebec, Newfoundland and Labrador, The Northwest Territories, Yukon, and Ontario to Find Opportunities to Support Remote Communities

The governments of Manitoba, Quebec, Newfoundland and Labrador, The Northwest Territories, Yukon, and Ontario are establishing a Pan-Canadian Task Force to reduce the use of diesel fuel to generate electricity in remote communities. Manitoba Municipal Government Minister Drew Caldwell, Quebec Minister of Energy and Natural Resources Pierre Arcand, Newfoundland and Labrador Minister of Natural Resources Derrick Dalley, Northwest Territories Minister of Industry, Tourism and Investment David Ramsay, Yukon Minister of Energy, Mines and Resources Scott Kent, and Ontario Energy Minister Bob Chiarelli announced this historic agreement today.

This agreement comes directly following the Council of the Federation’s announcement of the Canadian Energy Strategy, a demonstration of a shared commitment to strengthening the economy, creating jobs, ensuring a secure supply of energy for all Canadians, supporting energy innovation, and addressing climate change.

Together the Ministers encourage all Canadian governments to join in this new project to support remote communities.

Gold plunges below US$1,100 as U.S. dollar rises – by Peter Koven (National Post – July 21, 2015)

July 21, 2015

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

Gold prices were routed on Monday as part of a broader sell-off in commodities that rattled investors and moved Canadian gold producers closer to a crisis.

Gold had plunged more than four per cent in overnight trading, dropping below US$1,100 an ounce for the first time since early 2010. The key futures contract eventually closed Monday at US$1,106.80, down US$25.10, as the strong U.S. dollar weighed on gold and other commodities.

The drop is a major concern for gold miners, many of which face costs that are underwater at these prices. Analysts have warned that if prices remain below US$1,100 for a prolonged period, more mine closures are inevitable.

“These are very dangerous levels for the gold companies,” said Pawel Rajszel, an analyst at Veritas Investment Research.

Shares prices across the gold mining sector got crushed on Monday, and most of the stocks now trade at multi-year (or multi-decade) lows.

Podcast: The cavalry is not coming – by Warren Dick (Mineweb.com – July 20, 2015)

July 20, 2015

http://www.mineweb.com/

There’s fear and panic in the market and the commodity super-cycle is over, according to Bloomberg Intelligence’s Global Head of Metal and Mining, Ken Hoffman.

WARREN DICK: Good day, everyone. My name is Warren Dick, the editor of Mineweb.com. And joining me on the podcast today is Ken Hoffman, the global head of metal and mining research from Bloomberg Intelligence, and he is joining us from New York. How are you, Ken?

KEN HOFFMAN: I’m doing very well. How are you?

WARREN DICK: Very good, thanks. I think it might be as cold today in Johannesburg as it is in New York. I don’t know what the weather is like there.

KEN HOFFMAN: Oh, it’s absolutely perfect today, actually. Finally we are getting a little bit of summer here.

WARREN DICK: Well, I think, Ken, what we really wanted to do is just pick your brains. You guys are looking at trends in the market, and you’ve obviously seen the massive sell-off in commodity prices. That’s been pretty much indiscriminate. I think everything from iron ore to some of the precious metals we’ve seen. We’ve just seen platinum going below $1000/oz.

AUDIO: Vale expects to miss 2015 sulpher dioxide emissions target (CBC News Sudbury – July 20, 2015)

July 20, 2015

http://www.cbc.ca/news/canada/sudbury

Company says it has some emissions credits banked from past improvements to its process

Nickel giant Vale doesn’t expect to meet its sulphur dioxide emission targets this year, a decade after they were set.

Vale was granted a five-year extension, and has until the end of this year to get its annual emissions down to 66 kilotonnes.

The company reports it’s currently emitting about 150 kilotonnes, but is aiming to be down to 20 kilotonnes by 2018 — when $1 billion worth of upgrades are completed at its Copper Cliff smelter.

“There’s going to be a couple steps,” said Dan Legrand, Vale’s director of process technology. “The big one will occur in 2018 when we start capturing all of the converter gas.”

Vale has made other changes to its emissions process — racking up government credits that allow it to miss the emissions deadline without penalty. The Ministry of the Environment is keeping a close watch.