Workers clean gold bars at Endeavour Mining’s Tabakoto mine in Mali
A new report by SNL Metals and Mining shows Africa at the top of tables when it comes to the value of gold still in the ground.
Using the combined value of reserves and resources reported by explorers and mining companies active on the continent, the research company, calculated a figure of $1.48 trillion for primary gold projects.
Canada and the US came in second with gold in situ values as at September 8 of $1.26 trillion.
For gold in non-gold primary projects, Asia-Pacific was the key contributor in terms of resource value, accounting for $692 billion of the total according to SNL.
When it comes to the value of gold resources where it is mined as a secondary product alongside other metals, Africa falls down the rankings with less than $100 billion on the books.
As for revenue, calculated by multiplying 2015 total gold production from primary gold mines with the 2015 average gold spot price, Asia-Pacific and Africa are once again the most as most valuable gold regions, with gold revenues of $20.2 billion and $16.1 billion, respectively.
Gahcho Kué is expected to contribute $5.2 billion (Cdn$6.7 billion) to Canada’s economy and provide 1,200 new jobs.
Situated almost 300 kilometres east of Yellowknife, in Canada’s Northwest Territories, the mine — a joint venture between De Beers Canada (51%) and Mountain Province Diamonds (49%) — has so far provided a $341 million (Cdn$440 million) boost to the NWT economy, the reports says. It has also contributed a further $272 million (Cdn$350 million) to the rest of Canada, according to the figures released by De Beers.
But what makes the mine especially important is the fact that two of Canada’s major diamond mines — Diavik and Ekati — are approaching the end of their productive lives, and —although it’s smaller— Gahcho Kué would be able to offset the production drop-off.
The report, which looks into the socio-economic impact of the Anglo American-owned diamond company in Canada, also highlights De Beer’s contribution to the country’s economy over the past 10 years:
More than Cdn$7 billion to Canada’s gross value added (GVA), with exports supported by DeBeers mining operations bringing Cdn$4 billion in foreign currency into the country’s economy. In 2015, they represented 28% of Canada’s export earnings from diamonds.
Cdn$55 million in support to First Nations through Impact Benefit Agreements (2006-2015).
An expected Cdn$24 million contribution to Alberta’s economy by the recent move of headquarters from Toronto to Calgary.
Cdn$750 million in exploration across Canada since 1961, supporting almost 100 jobs each year on average.
Responsible for the discovery of more than 170 kimberlites to date.
“In the 50 years we have been in Canada, we have seen how our business can be a catalyst for delivering both economic and social value, locally, regionally and across the country,” De Beers Canada’s chief executive Kim Truter said in a statement.
He noted that, only last year, De Beers’ activities contributed Cdn$1.2 billion ($930 million) to the Canadian economy.
An Australian prospector has discovered a massive 145-ounce gold nugget worth more than $250,000.
Dubbed ‘Friday’s Joy’, the nugget was found with a Minelab metal detector in an already work-over area at the southern edge of central Victoria’s Golden Triangle, an area well known for yielding gold, finding the top of the nugget only around 30cm below the ground.
The prospector who found the nugget wanted to stay anonymous.
“I thought it was rubbish at first, maybe an old horseshoe,” the man said,“I was in total disbelief as I didn’t think nuggets of this size were still around.”
An avid prospector – having prospected for more than ten years – the man had an agreement with his other gold prospecting enthusiast friends to split the proceeds on any large gold item found when they went prospecting together.
Upon the find, he was unsure of what to do at first.
“It’s like catching a big fish and not knowing what to do with it,” he said.
“I washed it in water, covered it in aluminium foil and kept it in my oven on the first night.”
The man did not intend to quit his job and retire, instead aiming to buy a van and travel around Australia, sightseeing and prospecting.
The nugget is currently in a bank vault, with a replica in construction. Plans for an auction are also underway.
Minelab’s regional sales and marketing director Fraser Kendall said the company was thrilled a customer made such a discovery.
“He was prospecting in an area that others had clearly worked over and this just goes to show that there’s plenty of gold still coming out of Victoria,” he said.
China may be slowing, but a commodities rebound is under way and the world’s biggest miner knows where the next growth story is building – emerging economies in South-east Asia.
Combined gross domestic product in the ASEAN-5 nations – Indonesia, Thailand, Malaysia, the Philippines and Vietnam – will rise about a third to $US3 trillion ($3.9 trillion) in the five years to 2020, fuelling commodities-intensive infrastructure projects. Momentum like this across Asia will help maintain and increase commodity demand, BHP Billiton’s chief executive Andrew Mackenzie said this week.
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“People have been so used to believing that commodities was a China story, and that with China decelerating where’s the growth going to come from?” Nathan Lim, Sydney-based head of research for Morgan Stanley’s wealth management division, said by phone. “That incremental demand is coming from the emerging markets, and that’s the part people don’t have their head around.”
Thailand is considering more than $US50 billion of infrastructure spending, while Vietnam has begun major projects including a $US10 billion rail modernisation, Indonesia is seeking to accelerate road to ports programs and Philippine President Rodrigo Duerte has promised new railroads and airport runways. These markets are “back on their growth path after a period of under-performance”, according to Lim.
Commodities surged the most in the first half since the 2008 financial crisis as China’s economy stabilised and policy makers backed growth. The World Bank forecasts commodities will rebound next year after hitting the bottom of the cycle and Citigroup agrees, saying last month it’s bullish on raw materials for 2017.
A bellwether of commodities’ demand is steel. New demand across South-east Asia is seen increasing the market for China’s steel exports, which notched record volumes in the first seven months of 2016 and have supported rising iron ore imports.
China is already exporting about 12 per cent of its output and could raise sales overseas further, according to BHP’s Mackenzie. India will also import more iron ore, as will nations across Southe-ast Asia, he told analysts in a presentation Tuesday.
“We look to use steel as a proxy, though you would naturally find the same dynamics for other commodities as well, whether it’s aluminium or copper or bauxite,” Morgan Stanley’s Lim said. Steel demand in the ASEAN-5 will grow at about 6 per cent this year and in 2017 on infrastructure building, according to the World Steel Association. Consumption of 74.6 million tons in 2017 will be more than in regions including Africa and the Middle East, and compares to forecast demand in China of 626.1 million tons, the association said in April.
Fortescue Metals Group, the No. 4 iron ore exporter, said in March it saw emerging sources of steel demand across Asia and in India. China is no longer the sole driver for the $US120 billion copper market, according to Andrew Cole, chief executive of OZ Minerals, a producer that’s also developing Australia’s biggest unmined deposit of the metal.
“Global demand for copper is becoming increasingly diversified, both geographically and by industry sector,” he said in an August 10 interview with Bloomberg Television. “We are seeing increasing diversification through other counties outside of China, which is an important factor that we need to remember.”
Still, global industrial production – output of mining, utilities and manufacturing – is well below historical levels and China “remains the only real growth story”, Macquarie Group said in an August 15 note.
The impact of action early this year to stimulate China’s economy is now fading, the bank said.
China accounts for about 65 per cent of iron ore imports, takes 21 per cent of seaborne metallurgical coal and consumes about half the world’s copper, according to a joint report this month by Westpac Banking Corp and Australia’s Department of Industry, Innovation, Science.
BHP, Whitehaven Coal, Alumina and Evolution Mining are among the companies that Morgan Stanley’s Lim sees benefiting from the emerging Asia growth story. BHP’s second-half underlying profits jumped 95 per cent, while coal producer Whitehaven reported Thursday it swung back to a net profit in fiscal 2016 from a loss the previous year.
“We are not saying that we have discovered a new China, or that India is going to become the new China,” Lim said. “The underlying message is that the reason we are seeing demand coming from ex-China, is that it’s the emerging markets where we see the next leg of growth.”
Fimiston pit in 2014. Image: Kalgoorlie Consolidated Gold Mines
The world’s number one and two gold producers both released second quarter results and production guidance the past week.
For Barrick Gold, 2015 year was the last period of 6m-plus ounces of production which was already substantially down from its peak of 7.7 million ounces in 2010 and 2011.
While its financials came in slightly below expectations the Toronto-based company stuck to its annual output forecast of between 5 million and 5.5 million ounces.
Barrick has been shedding assets at a clip in an effort to tackle its heavy debt load and to achieve its 2016 target will have to find another $1 billion before the end of the year.
Earlier this week there were reports the miner is close to selling its 64% stake in Tanzania’s Acacia Mining (LON:ACA) for as much as $1.9 billion. And buried in Barrick’s Q2 release was an announcement that it’s looking for a buyer for half of Australia’s Kalgoorlie Consolidated Gold Mines.
Newmont Mining owns the other half and Barrick handed over operational control of the the iconic mine called the Super Pit to Denver-based Newmont a year ago. The mine some 600km west of Perth has produced 50 million ounces over 30 years and fully developed the cut will be 3.6 kilometers long, 1.6 kilometers wide and up to 650 meters deep.
Newmont would be the natural buyer and has expressed interest in the mine in the past which could fetch as much as $1 billion. The company sports one of the stronger balance sheets in the sector having embarked on a debt reduction program earlier than its rivals and recently selling its Indonesian Batu Hijau copper-gold operation for $1.3 billion.
Unlike many of its rivals Newmont has been building its portfolio and last year acquired the Cripple Creek & Victor gold mine in Colorado. Newmont also has five key projects that are in execution stage including the Turf Vent project in Nevada and Merian mine in South America expected to start production late in 2016.
Newmont said in its results its Northwest Exodus project in Nevada is approved and will start production this quarter. In addition unapproved projects “represent upside of between 200,000 and 300,000 ounces of gold production beginning in 2018.”
While far from certainties should Barrick’s deals go ahead, Newmont picks up Kalgoorlie, the companies’ production guidance pans out and all things being equal (which they never are in gold mining) next year Denver and not Toronto will be the home of the world’s number one gold mining company.
Jay is a significant undeveloped deposit at Dominion Diamond’s Ekati mine.
Canada’s Dominion Diamond (TSX, NYSE:DDC) has decided to proceed with a key expansion for its Northwest Territories-based Ekati mine, which would help keep the iconic operation in production until 2033.
The decision of moving forward with the development of the Jay pipe, located near Ekati’s existing Misery pit, was based on positive feasibility study results, the company said in a statement.
Dominion also expects to begin construction of a fourth pipe at its 40%-owned Diavik mine, Canada’s largest diamond mine and one of the oldest.The project, which includes building a dyke, draining part of a lake and digging an open pit, will be funded from existing cash and internal cash flow, Dominion said. Without the expansion, Ekati would have run out of its existing reserves by 2020.
In a separate statement, the company said it would focus on developing its core assets in the Lac de Gras region of the Northwest Territories and on buying back shares. As part of the plan, Dominion also expects to begin construction of a fourth pipe at its Diavik mine, Canada’s largest diamond mine and one of the oldest, which it co-owns with Rio Tinto (ASX, LON:RIO).
Additionally, the firm announced that chief financial officer Ron Cameron would step down on July 15 and vice president Group Controller Cara Allaway would take over as interim CFO.
Dominion is also selling its office building in downtown Toronto. That transaction, said the diamond miner, should be completed in the third quarter of fiscal year 2017.
The company is still assessing damage after a fire halted processing operations at Ekati on June. It is believed that more than 300 employees and contract workers are at risk of being laid off as a result.
While it was not immediately clear what the government’s initial investment in Planetary Resources Luxembourg would be, the parties said in a statement that the agreement seeks to speed up the development of technologies and lines of business toward the exploration and utilization of resources from asteroids.
The government has also opened a $225 million (€200 million) line of credit for entrepreneurial space companies to set up their European headquarters in Luxembourg.The tiny European nation is one of the euro zone’s wealthiest countries and already has a long-standing space industry, playing a significant role in the development of satellite communications.
While its drive to become a significant actor in the asteroid mining industry is rather new, the country has already taken major steps towards achieving that goal.
On Friday, it announced the opening of a €200 million (US$225 million) line of credit for entrepreneurial space companies to set up their European headquarters within its borders.
And last month, the government reached an agreement with another US-based company, Deep Space Industries, which will be conducting missions to prospect for water and minerals in outer space. Both parties are currently developing Prospector-X, a small and experimental spacecraft that test technologies for prospecting and mining near Earth asteroids after 2020.
Luxembourg’s administration is also working on a legal frame for exploiting space resources so that private companies can be entitled to the resources they mine from asteroids, but not to own the celestial bodies themselves.
Digital rendition of a robotic asteroid mining equipment. (Image courtesy of Deep Space Industries)
The only international legal body available dates back to 1967. The Outer Space Treaty, signed by the US, Russia and a number of other countries, says that nations can’t occupy nor own territory in space.
“Outer space shall be free for exploration and use by all States,” the treaty says, adding that “outer space is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means.”
The ground-breaking rule was touted as a major boost to asteroid mining because it encourages the commercial exploration and utilization of resources from asteroids obtained by US firms.
Such law does include a very important clause, as it clarifies that US citizens are not granted “sovereignty or sovereign or exclusive rights or jurisdiction over, or the ownership of, any celestial body.”
Geologists believe asteroids are packed with iron ore, nickel and precious metals at much higher concentrations than those found on Earth, making up a market valued in the trillions of dollars.
PwC’s latest report into the performance of the world’s 40 largest mining companies shows just what a watershed year 2015 was.
The management consultants’ Mine 2015 report shows the top 40 companies suffering their first collective net loss in history ($27 billion), a decline in collective market capitalization of 37% (to below half a trillion dollars from a peak of $1.6 trillion in 2010), the lowest return on capital ever, asset impairments totalling $53 billion (for a total of nearly $200 billion since 2010), record high leverage of 46% and operating expenditure cuts of $83 billion.
The entries, re-entries and movements up and down the ranking also provides insight into the changing landscape of global mining.
The authors point out that the market capitalization threshold for attaining Top 40 status remained consistent at $4.5 billion despite “the huge decreases in value of the top mining companies, and demonstrates that the new entrants are catching up.”
A lithium miner joins top ranks of listed mining firms for the first time as the price of the battery ingredient skyrockets
China is featuring more heavily. All four companies admitted to the list for the first time was from China, pushing out Canada’s First Quantum and Teck Resources. China now provides 12 of the top 40 listed mining firms versus six from Canada despite one Chinese firm dropping out.
Gold’s changing fortunes saw AngloGold Ashanti re-emerge in the ranking for the first time since 2013 although other top gold producers Goldfields and Kinross haven’t made it back onto the list. When grouped by primary commodity mined gold producers still lost a combined $12 billion in market value.
The only sector to show an increase in market value was rare earths with the world’s top producer of the 17 elements jumping 23 places in the ranking. Another technology mineral is showing up for the first time.
Even though it’s early days for the lithium boom, the Top 40 has already welcomed its first miner of the battery raw material. Sichuan Tianqi Lithium enters as the world’s 31st most valuable miner helped by a doubling of the price of lithium carbonate just over the final months of 2015 and predictions of explosive growth in demand spurred by the electric vehicle and mass grid storage market.
It must be pointed out that this list is for 2015 & may not represent an accurate current status in 2016