Archive for July, 2012


Tuesday, July 31st, 2012


Eric Sprott announced that his company has $200 million committed to his self-named Sprott Physical Silver Trust, and the announcement will help silver.
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“We thought the timing was good in the sense that the silver price has been in the doldrums and there would be some underlying interest in the metal. We were happy the announced offering reached the target of $200 million because the issuing market is not very robust these days,” wrote Sprott on his blog.

Spot silver hit a high of $35.41/oz in February. It is now sitting at just over $28/oz.

While Sprott now has the money, his firm hasn’t pulled the trigger yet.

“So we were quite happy with the results. And initially it will allow us to buy seven million odd ounces of silver, which we haven’t bought yet, but it will certainly help the silver market.”

The Sprott Physical Silver Trust is an exchange-traded investment.
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Sourced & published by Henry Sapiecha


Monday, July 30th, 2012

Tanzania insists that mining companies pay a

30% corporate tax because of rise in prices

* Plans 200-megawatt coal-fired power project

* Eyes higher revenues from gold exports

* Says has over 130 mln pounds of uranium oxide

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DODOMA, July 27 (Reuters) – Tanzania, fourth largest gold producer in Africa, has told mining companies operating for more than five years to start paying a corporate tax of 30 percent, citing rising prices of precious metals in the world market.

Tanzania’s gold export earnings rose 31 percent last year to $1.879 billion from $1.436 billion a year before on higher world prices for the commodity, Sospeter Muhongo, energy and minerals minister, told parliament on Friday.

The minister said the government wants to earn higher revenues from mining companies due to the rising gold price and added the government had ordered audits of all large-scale gold mines in the country to ensure they started paying corporate taxes after recovering their costs of production.

“I am instructing all mining companies that have been in operation for more than five years to start paying corporate tax without any excuses,” he said.
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“If they claim they are still making losses and can’t contribute to the national economy through taxes, they should shut down their mines and leave because minerals do not rot.”

Major gold mining companies in Tanzania include African Barrick Gold Plc, which has four gold-producing mines, AngloGold Ashanti Ltd and Resolute Mining Ltd.

He did not say which of these mines were affected, but said Geita Gold Mine owned by AngloGold Ashanti and the Golden Pride mine owned by Resolute had already paid a total of 228.5 billion shillings in corporate taxes.

He said Tanzania was also evaluating around a dozen bids from investors for a stake in the state-run Buhemba gold mine. The government regained ownership of the mine this year after reversing its 2005 privatisation to a local company amid allegations of graft in the previous sale of the mine.

It is much smaller than mines run by the big companies.

The country has also invited bids for a joint venture project to develop a state-run coal mine with 35.5 million tonnes of reserves, the country’s energy and minerals minister said Friday.

The government said the project would also involve construction of a 200-megawatt coal-fired power plant at a cost of $400 million.

“By June 2012, the State Mining Corp received bids from 16 foreign and local companies to enter into joint venture to develop this project,” Muhongo said.

He said Tanzania has 136.5 million pounds of uranium oxide, with Australia-based miner Mantra Resources given a go-ahead to build a $450 uranium mine at a world heritage park after the project received approval from UNESCO, the U.N. cultural agency.
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Monday, July 30th, 2012


World biggest iron ore producer Vale over the last few days “played down fears” that the planned expansion of its Carajas mine – a truly monstrous  project that will see the Brazilian giant commit to almost $20 billion over the next several years – would have an ill effect on the local Awá tribe

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AFP quotes Survival International, an indigenous peoples rights group, as saying the Brazilian firm’s plans to have trains as long as two kilometres run in both directions to its port in a remote northern section of the Amazon forest will only heighten the pressure on the still nsurviving members of “The planet’s most threatened tribe”.

The rights group said the Carajas mine and railways “devastated the Awa tribe in the early 1980′s by opening their land up to a number of settlers, ranchers and loggers.”

A Brazilian government survey cited by Survival International estimates there could be “up to 4,500 invaders, ranchers, loggers and settlers” occupying just one of the four territories inhabited by the Awa, whose total population stands at less than 450.

The rights group has enlisted the help of British actor Colin Firth who narrates a short film about the plight of the Awá.

In the film, the Oscar-winner says: “The Awá’s forest is being illegally cut for timber. When the loggers see these natives, they kill them. Their bows and arrows are no match for guns. And at any other time in history, that’s where it would end. Another people wiped off the face of the Earth, forever. But we’re going to make sure the world doesn’t allow that to happen.”

The area also hosts some 2,000 caves that scientists regard as “potentially precious features” because of the high incidence of iron and unusual biology: “One caveexplored, hosts four species of bat – only one of them carnivorous, luckily – and excavations in its floor have revealed evidence of human habitation as long as up to maybe 9,000 years ago” according to a BBC report.

The operations manager of the mine, Jaymilson Magalhaes, tells [the BBC] that the mine complex only covers about 3% of the area of the national forest and that before any digging can start, the company has to have an adequate  restoration plan to return the area to its original state.

That includes using spoil to fill in the mines once they are exhausted to reshape the topography – a process we witnessed in one small area – and undertake a massive replanting programme using native species of vegetation.

The chronically understaffed Brazilian conservation agency only has 1a dozen rangers in that area of the Serra Sul Amazon region “but Vale pays for a further 80, plus cars, boats,equipment and the use of a helicopter, all vital to guard against illegal logging and poaching.”


According to The Guardian, Ibama , Brazil’s environment agency, “has fewer than 1,000 officers on the ground at any one time across a country nearly four times the size of western Europe”.

Vale (NYSE:VALE) was granted a preliminary environmental license for the lowly-named “S11D” mine in June.

The Carajas complex is the largest iron ore deposit in the world with 7.2 billion tonnes in proven and provable reserves – that’s a more than  $800 billion contribution  to the Brazilian economy at today’s prices.

S11D would not only lower Vale’s overall costs at the operation, but drastically improve the average quality of the ore that it mines.

Vale said in a statement that it plans to spend $8 billion to develop the mine and build a new processing plant, as well as $11.4 billion to expand the railroad and local port to allow it to ship the steel-making ingredient to important markets in Asia & the rest of the world using its massive Valemax carriers (400,000 deadweight tonnes).
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To ameliorate the planned works’ environmental impact, Vale said it would transport iron ore from the mine to the processing plant via a massive distance 37km of conveyer belts instead of using trucks. At the moment the mine mills 300,000 tonnes per day.

The Rio de Janeiro-based company added S11D would produce 90 million metric tonnes of iron ore – adding some 30% to Vale’s current output – and begin operations in 2016.

This week Vale’s earnings came in at $2.7 billion, down 59% from $6.5 billion in 2011 and its lowest level in more than two years. Profits sank 30%.

The Q2 results came only days after CEO Tito Martins announced he was leaving the company, marking the fifth top-level substitution in the past eight months at Vale.

Sourced & published by Henry Sapiecha

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