Republic of Mining

[U.K. potash mine] Sirius reaps the benefits of charming the locals – by Kate Burgess (Financial Times – July 5, 2015)

July 6, 2015

http://www.ft.com/home/us

Miner won planning permission to extract 13m tonnes a year of potash from the North York Moors

The comic potential in mineral fertiliser was exploited to the full by satirist Sacha Baron Cohen when his creation, Borat the Kazhak, boasted “other countries have inferior potassium” in a spoof national anthem. But his claim is one that Britons might legitimately dispute now as Aim-quoted Sirius Minerals prepares to mine a Yorkshire deposit of potassium-rich salts described as the richest in the world.

Last week, Sirius Minerals won planning permission to extract 13m tonnes a year of white pellets of so-called polyhalite from under the North York Moors national park. The planning victory was no mean feat. Last month, just across the Pennines, Lancashire locals saw off a bid by shale gas explorer Cuadrilla to begin fracking in the area, because they were worried about the effects on local homes and health.

In contrast, Yorkshire’s local residents cheered Chris Fraser, Sirius’ forceful founder and chief executive, as he left the council meeting at Sneaton Castle in Whitby, pictured. The talk in the Venerable Bede hall was all about Sirius creating a thousand jobs and pumping millions into the local economy for the next century.

It was the culmination of a canny three-year campaign by Mr Fraser to woo the region’s farmers and landowners.

A decline in Alberta’s fortunes means a decline in Quebec’s – by Gwyn Morgan (Globe and Mail – July 6, 2015)

July 6, 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.

TransCanada Corp.’s 4,600-kilometre Energy East pipeline would carry Alberta crude oil to refineries in Quebec and New Brunswick that are dependent on Middle East imports.

Last November, the Quebec government declared that, for the pipeline to cross the province, it must generate economic benefits. Then on June 23, Quebec Premier Philippe Couillard told reporters that he didn’t see much economic value for his province in being a “transit place” for the pipeline.

New Brunswick Premier Brian Gallant was quick to respond: “The province of Quebec is … estimated to receive … about 4,000 jobs … an increase of about $3-billion in the GDP and, on top of that, about $700-million in extra tax revenue.”

Given the size of those economic benefits and that they are roughly twice those that would accrue to Premier Gallant’s own province, Mr. Couillard’s statement is indeed baffling. Perhaps it’s simply a matter of the anti-oil bias he illustrated later in the interview: “I prefer a world without fossil fuel, only electric, you know.”

RUSSIAN HEARTLAND: Cossacks on the run to protect nature – by Marc Bennetts (Politico – July 5, 2015)

July 6, 2015

http://www.politico.eu/

In Russia’s fertile Black Earth region, eco-activists struggle to protect their communities from a state-backed nickel-mining project.

NOVOHOPYORSK, Russia — It’s almost midnight when I arrive in the town of Novokhopyorsk, located deep in the bucolic heart of central Russia’s Black Earth region, so-called for its famously fertile soil. The curtains in a nearby home twitch as I step out of the car — late-night visitors are a rare sight in the rural community.

Surrounded by lush countryside and rolling fields, Novokhopyorsk, population 6,380, has become the unlikely setting of what is arguably modern Russia’s most stubborn protest movement.

The Kremlin may have quashed the mainly middle-class political demonstrations that rocked Moscow in 2011 and 2012, but environmental issues are stirring dissent in Russia’s heartland, creating new problems for the authorities as the war in Ukraine rumbles on and economic instability rises.

German minister backs K+S’s Potash bid rejection (Reuters U.S. – July 4, 2015)

July 6, 2015

http://www.reuters.com/

FRANKFURT – A German regional minister gave his backing to potash miner K+S’s rejection of an $8.8 billion-euro takeover bid by Canada’s Potash Corp of Saskatchewan, saying K+S should remain a German company.

Tarek Al-Wazir, minister of economy in K+S’s home state of Hesse, said on Saturday he would support K+S’s efforts to make sure regional jobs and value creation were not lost.

K+S has rejected a proposed bid by Potash of 41 euros per share, saying it was too low and warning its suitor could be planning to dismantle or shrink the salt and fertiliser company.

Al-Wazir said in a statement emailed by K+S: “We will continue to make efforts to ensure that K+S has a successful future in our state and we stand by K+S’s side.”

He added that limiting the environmental damage caused by mining would also be much harder to negotiate with a Canadian company. “For that reason, too, we have an interest in K+S’s remaining a north Hessian company,” he said.

Ottawa’s change of heart on asbestos welcome but late – Editorial (Globe and Mail – July 4, 2015)

July 6, 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.

When Ottawa has a major new policy it wants to announce, it often makes a “Major Policy Announcement (photo op to follow).” Not so when it comes to asbestos, though.

This week, The Globe learned that the government had quietly changed its web page on the health risks of asbestos. The difference between the old web page and the new one is categoric. The old began, “Asbestos was a popular material used widely in construction and many other industries. If asbestos fibres are enclosed or tightly bound in a product, for example, asbestos siding or asbestos floor tiles, there are no significant health risks.”

The new one begins: “Learn about asbestos and how exposure can be dangerous to your health. Also find out how to properly handle a potential asbestos problem. Asbestos, if inhaled, can cause cancer and other diseases.”

This is a historic shift in Ottawa’s attitude toward asbestos. It brings the federal government in line with many of the provinces, where workplace safety officials have long been aware that asbestos is by far the number-one killer of Canadian workers.

China’s steel dragon has lost its appetite for American coal – by John Dizard (Financial Times – July 3, 2015)

July 6, 2015

http://www.ft.com/home/us

It may be too late to save the coal industry from looming financial disaster, says John Dizard

As the headlines earlier this week told you, the US coal industry scored a win at the Supreme Court. With a 5-4 majority it ruled that the Environmental Protection Agency had to consider compliance costs when it issues emissions rules for power plants. The court sent the Mercury and Air Toxics Standards (Mats) back to the agency to justify its net economic benefits.

Whatever short-term cheer this brought to the coal-mining companies, it has come too late to save most of the industry from looming financial disaster. Coal company shares and bonds bounced up for a day and then fell back into depression.

Most US coal capacity, more than 500m tons of annual production, is owned by companies in financial distress. The unsecured bonds of Arch Coal, behind which are more than 130m tons of capacity, are selling for 14 to 17 cents on the dollar. Peabody Coal (about 200m tons of capacity) has a bond maturing in 2018 that is priced at 48 cents on the dollar.

Even after the oil and gas price plunge, many oil and gas exploration and production companies with big reserves and negative cash flows have been able to raise new equity and refinance debt. The coal trade, on the other hand, is attracting little investor interest.

[Canada] Industry: Feds wrong to apply anti-corruption rules to FNs – by Staff (Northern Ontario Business – July 03, 2015)

July 6, 2015

http://www.northernlife.ca/

A new transparency act for the mining industry may go too far when it comes to First Nations, says the Mining Association of Canada.

The Extractive Sector Transparency Measures Act, which received royal assent in December 2014, requires mining companies to publicly disclose payments greater than $100,000 they make to foreign and domestic governments.

“It’s an anti-corruption measure,” said Pierre Gratton, the president and CEO of the Mining Association of Canada (MAC). “By having companies disclose what they pay, then citizens of those countries can ask questions about what their governments might be doing with that money.”

But when the Mining Association of Canada teamed up with non-governmental organizations to propose the legislation for the federal government, it didn’t intend for the rules to apply to First Nations as well.

“We actually discussed with the NGOs that very issue right at the beginning,” Gratton said. “And we all agreed that was too complex and would require extensive consultation we don’t have the capacity to do.”

[South Africa] Govt, private sector working constructively to tackle acid mine drainage in Wits basin – by Ilan Solomons (MiningWeekly.com – July 3, 2015)

July 3, 2015

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

JOHANNESBURG (miningweekly.com) – Although acid mine drainage (AMD) in the Witwatersrand basin is the result of a legacy of environmental mismanagement of water resources by mines and lax enforcement of regulations by government, these role-players are working to constructively address this problem, says Department of Water and Sanitation (DWS) senior manager Marius Keet.

Keet was a speaker during the first day of black-owned training and conferencing company Intelligence Transfer Centre’s two-day EnviroMining conference, held in Johannesburg, in March.

The Witwatersrand basin, a largely underground geological formation that surfaces in the Witwatersrand region of Johannesburg, comprises the Western, Central and Eastern basins.

A current key focus for government is to prevent further decanting of AMD from the basins by pumping underground water to protect the environmental critical level (ECL). The ECL is the level above which the water in the mine voids at critical locations, which is where environmental features that need to be protected are at the lowest elevations.

First Nation, engineering firm breaking new ground on joint venture – by Ian Ross (Northern Ontario Business – June 30, 2015)

July 3, 2015

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. Ian Ross is the editor of Northern Ontario Business ianross@nob.on.ca.

In his 25 years in the engineering profession, Eric Zakrewski calls his Thunder Bay company’s business venture with Fort William First Nation a “gold star example” in Northern Ontario of a successful partnership between the private sector and an Aboriginal community.

Now entering its fifth fiscal year, Oshki-Aki Limited Partnership is creating employment and mentorship opportunities for Fort William members to learn and build skills toward permanent careers in the consulting and engineering field.

“This has been one of the things I’m probably most proud about in terms of our achievement as a private sector engineering firm,” said Zakrewski, the president-CEO of True Grit Consulting. “We set out to become partners with these folks, they trusted us, and the business and relationship has flourished.”

Incorporated in Dec. 2011, Oshki-Aki LP is a partnership between Fort William First Nation and True Grit Consulting that created a new environmental engineering company.

The Marikana massacre report has brought no justice and no relief – by Jack Shenker (The Guardian – July 3, 2015)

July 3, 2015

http://www.theguardian.com/international

Almost three years have passed since 34 men were shot dead on a hillside in South Africa, after asking for a living wage.

All of them had spent their working lives far below the Earth’s surface, blasting rocks in order to extract some of the metals that sit inside whatever computer or mobile phone you’re looking at right now. It’s hot, dangerous and dirty work, which leaves the body cramped and sore. Each of the miners had a name, a family and a story to tell, a past and a future.

Their relatives have waited more than 1,000 days to find out who was responsible for cutting those stories short and why. Last week, the findings of a judicial inquiry into the killings were finally made public. Most of the families missed the start of a speech by the South African president, Jacob Zuma, because the government hadn’t bothered to give them proper notice that a statement was imminent. The rest came through only in fragments, via a single erratic laptop feed in a language that many could not understand.

The inquiry’s report, as one commentator aptly observed, proved to be an exercise in throat-clearing. By the time Zuma’s summation was over, only one thing was clear: the wait for truth and accountability continues.

BP reaches $18.7 billion settlement over deadly 2010 spill – by Tery Wade and Kristen Hays (Reuters U.S. – July 2, 2015)

July 3, 2015

http://www.reuters.com/

HOUSTON – BP Plc will pay up to $18.7 billion in penalties to the U.S. government and five states to resolve nearly all claims from its deadly Gulf of Mexico oil spill five years ago in the largest corporate settlement in U.S. history.

The agreement adds to the $43.8 billion that BP had previously set aside for criminal and civil penalties and cleanup costs. The company said its total pre-tax charge for the spill now stands at $53.8 billion. (link.reuters.com/duz94w)

BP shares jumped more than 5 percent in New York trading as investors said the British company, often mentioned as a potential acquisition target, could now turn the page on one of the darkest chapters in its century-long history.

Under the agreement with the U.S. Department of Justice and the states, BP will pay at least $12.8 billion for Clean Water Act fines and natural resource damages, plus $4.9 billion to states. The payouts will be staggered over as many as 18 years. The preliminary settlement, subject to all sorts of variables, avoids a substantial amount of further litigation.

Iron Ore’s Recovery Turns to Rust – by Abheek Bhattacharya (Wall Street Journal – July 3, 2015)

July 3, 2015

http://www.wsj.com/

Mining firms looking to cash in on higher iron-ore prices are the same ones causing the steelmaking commodity’s downfall

The iron-ore market is discovering why the archenemy of high commodity prices is, well, high commodity prices.

The benchmark price of iron ore has fallen 15% in the past three weeks after hitting its highest level since January, which in turn has sent shares of Australia’s pure iron-ore producer Fortescue Metals tumbling 27%. Signals of high shipments from Australia and poor steel appetite from China suddenly reminded traders of the gulf that exists between supply and demand in this steelmaking ingredient.

Between April and mid-June, traders had pushed up prices nearly 40% because they thought that gulf was closing. One reason: many iron-ore mines were shutting down. Midsize Australian producer Atlas Iron closed its operations while China closed high-cost mines.

But as prices ticked up, Atlas slowly restarted mines, the latest one this week. That amounts to an extra 10 million tons or 1% of supply. China has brought back over 20 million tons, notes Citigroup’s Ivan Szpakowski. There is also the prospect of new supply from Australian mines later this year.

NEWS RELEASE: McEwen Mining Addresses New York Stock Exchange Listing Requirements

July 3, 2015

TORONTO, ONTARIO–(Marketwired – July 2, 2015) – McEwen Mining Inc. (NYSE:MUX) (TSX:MUX) announced today that it has fallen below the New York Stock Exchange (“NYSE”) continued listing requirement related to the price of its common stock. The NYSE requires that the average closing price of a listed company’s common stock be above US$1.00 per share, calculated over a period of 30 consecutive trading days. The Company was advised by the NYSE on July 1, 2015 that the average price of our common stock for the previous 30 trading days was below US$1.00 per share

Under the NYSE’s rules, McEwen Mining has a period of six months from July 1, 2015, the date of the Company’s acknowledgement, to bring its share price and 30 day average closing share price back above US$1.00. During this period, McEwen Mining’s common stock will continue to trade on the NYSE, subject to all other continued listing requirements. The Company’s listing on the Toronto Stock Exchange (“TSX”) is unaffected by any actions of the NYSE.

“We do not believe that McEwen Mining’s current share price is reflective of the true value of the Company’s assets. Our share price has been under pressure as a result of the decline in gold and silver prices and a general reduction in financing options that have affected many companies in the mining space. The Company values its NYSE listing and will evaluate measures to bring our share price into compliance with listing requirements.” said Rob McEwen, Chairman and Chief Owner.

Barrick Gold makes big changes to become a smaller company – by Joe Castaldo (Canadian Business Magazine – July 3, 2015)

July 3, 2015

http://www.canadianbusiness.com/

Long-suffering shareholders see potential as the company focuses on shedding debt and getting back to gold

It’s quiet at the headquarters of Barrick Gold in Toronto. On a Wednesday afternoon in May, all that can be heard is the soft hum of the ventilation system. A few years ago, around 500 people filled the office, overseeing mining operations that spanned the globe. Today, there are just 140 employees responsible for a much smaller geographical footprint. And that footprint might shrink over the coming year.

For long-suffering Barrick shareholders, this is welcome news. “We’re taking Barrick back to the way it was 15 years ago,” says Kelvin Dushnisky, the company’s co-president. Back then, Barrick was not a bloated organization that had lost investor confidence, nor was it facing a mountainous $13-billion debt in a depressed gold market. Since 2012, Barrick’s share price has fallen by roughly 70%.

While gold prices are a long way from where they were at the height of the 2000s commodities boom—a reality that’s hurt many miners—Barrick’s wounds are mostly self-inflicted. In 2011, founder and chairman Peter Munk pushed the company to spend billions on an underperforming copper mine in Zambia. Barrick also botched the development of what was to be a monster gold mine on the border of Chile and Argentina called Pascua-Lama. These two headaches have cost Barrick about $15.9 billion over the past few years, according to an analyst at Macquarie Group.

REFILE-Iron ore price fall a sign China’s economic might waning – by James Regan and Ruby Lian (Reuters U.S. – July 3, 2015)

July 3, 2015

http://www.reuters.com/

SYDNEY/SHANGHAI, July 3 (Reuters) – Iron ore prices dropped to the lowest in more than two months on Friday, sending shivers through the mining industry and heightening worries that Chinese economic activity is slowing just as ore piles up at its ports.

China uses more than a billion tonnes of iron ore a year to make steel – 14 times the consumption of the United States – but Beijing’s efforts to shift the economy to consumer-led growth means steel consumption is peaking faster than expected.

“It’s clear China can no longer consume all the iron ore that’s out there, so something’s got to give,” said James Wilson, a sector analyst for Morgans Financial in Perth.

Shares in Australia’s biggest mining houses, including Rio Tinto , BHP Billiton and Fortescue Metals Group led the Australian bourse lower after the price of the raw material fell by 5 percent.