Archive for March, 2015

On The Bench: The Rush from Uranium? [VIDEO]

Monday, March 23rd, 2015

On The Bench: The Rush from Uranium? [VIDEO]

In a new segment for Australian Mining, Editor Cole Latimer and Journalist Vicky Validakis sit down to discuss commodities, the mining industry and breaking news in resources across the globe.

This week we discuss QLD’s looming uranium mining ban and what it means for the industry.

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Henry Sapiecha

VIDEO SHOWS THE 3195 huge excavator machine undressing girl in 5 minutes

Monday, March 16th, 2015

CAN YOUR MINING EXCAVATOR UNDRESS A WOMAN IN 5 MINUTES

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Henry Sapiecha

CHART: Beijing has finally turned around rare earth prices

Friday, March 13th, 2015

CHART: Beijing has finally turned around rare earth prices

Beijing has a new strategy to tighten its grip on the rare earth supply chain. And it’s working.

Beijing has finally turned around rare earth pricesChina produces nearly 90% of the world’s rare earths and its downstream industry consumes 70% of the 17 elements used in a variety of hi-tech industries including renewable energy, medical devices and defence.

Customs data show export volumes grew 27.3% in 2014 to 28,000 tonnes but the average export price of REE products plummeted to only 83,000 yuan ($13,000) per tonne. That’s a decrease of 47.8% from the year before and the third year in a row of sharp declines.

Following a World Trade Organization ruling, China is abolishing its decade-old export quota system for rare earths and is due to lift export tariffs of 20%-plus in May.

This liberalization should translate into further price declines, but Beijing has found other ways to tighten its grip on the industry.

The price surge at the start of the decade resulted in widespread demand destruction and substitution causing long term damage to the industry

The country is consolidating the industry under six large organizations led by the newly-named China North Rare Earth Group. The Inner Mongolia-based company operates the Bayan Obo iron ore mine and before the 2010 price surge after Beijing reduced export quotes, produced half the world’s REEs as a by-product.

Apart from combining mine output China North Rare Earth and the five groups are being vertically integrated to help modernize the country’s mostly low-tech rare earth separation and refining businesses.

Long the scourge of the industry, China is also intensifying efforts to shut down small-scale illegal REE mining and is enforcing strict new environmental policies as part of its broader war on pollution.

Details are still sketchy, but the export quota system could be replaced by production control licences based on adherence to environmental standards (so-called “green permits”) while export tariffs could make way for a value added tax and export certificates.

China’s State Bureau of Material Reserve is also embarking on a new round of REE stockpiling, while the Baotou Rare Earth Products Exchange launched in March should encourage private sector stockpiling a la Fanya Metal Exchange.

These measures are pushing up the cost of production which is already being reflected in the price.

The Association of China Rare Earth Industry price index (a rolling 20-day average of REE prices across the industry) this week racked up gains of 13% since the end of last year.

Some light REEs including the work horses of the industry cerium and lanthumum continue to fall while terbium and dysprosium have soared recently so it’s not a broad-based rally just yet.

Neither is it a return to he crazy days of 2010 – 2011 by any stretch, nor the mid-2013 rally (which turned out to be a dead cat bounce). But a turnaround nonetheless.

The price surge at the start of the decade resulted in widespread demand destruction and substitution causing long term damage to everyone from rare earth explorers to magnet manufacturers.

A steady – if unspectacular – build-up in price may be just what the industry needs.

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Henry Sapiecha

Copper Porphyries INFOGRAPHIC: Everything you need to know about it here

Friday, March 13th, 2015

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Henry Sapiecha

Prospector uncovers massive two kilo gold nugget in Victoria Australia

Monday, March 9th, 2015

Prospector uncovers massive two kilo gold nugget

A prospector has uncovered a single gold nugget weighing in at more than two kilograms in central Victoria.Australia.

The man, Mick Brown, discovered the 87 ounce rock while prospecting alone outside of Wedderburn, according to 9News.

Brown dubbed the find the ‘fair dinkum’ nugget.

“It took a while to name it but everyone that looked at it was like “fair dinkum”, you know, so that’s what we called it, the fair dinkum nugget,” Brown told Nine news.

The nugget, at current gold prices, is believed to be worth at just over US$ 104,000.

In 2013 another prospector uncovered an 177 ounce gold nugget outside of Ballarat, Victoria.

Brown’s find is believed to have been discovered near the Pride of Australia nugget, which was uncovered in 1981, and weighed around 256 ounces, and was found in Mosquito Gully, near Wedderburn.

It also not far from where the Hand of Faith nugget, which is the largest single nugget uncovered with a metal detector and weighed in at 845 ounces, was discovered, and Cindy’s Pride, which was discovered in 1985 and weighed in at 159.3 ounces.

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Henry Sapiecha

Russian potash mine disaster in pictures

Friday, March 6th, 2015

Insane pictures of Russian potash mine disaster

Solikamsk-2 accident first implications: situation could worsen

After a statement made by one of the world’s largest potash producers and exporters Uralkali (MCX:URKA)(LON:URALL), first visual implications of Solikamsk-2 potash mine accident have been revealed.

Insane pictures of Russian potash mine disaster

30-40 meters diameter sinkhole near the Solikamsk-2 potash mine (source: V-kurse.ru).

A sinkhole with a diameter of 30-40 meters has been detected to the east of the Solikamsk-2 production site, at the area packed with summer cottages. There were no casualties reported so far.

Insane pictures of Russian potash mine disaster

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Henry Sapiecha

Russia stashes 55 tonnes of gold in Switzerland

Friday, March 6th, 2015

Russia stashed 55 tonnes of gold in Switzerland last year

While calming down considerably from the torrid pace of previous years, the movement of physical gold and silver from West to East continues unabated.

The process playing itself out goes roughly like this:

ETF investors in the US and other developed markets offload their gold holdings allocated to them and held in the UK, where most of the world’s gold vaults are to be found.

From the UK the bullion is exported to Switzerland. A staggering 70% of global gold is processed by just four big Swiss refineries: Valcambi, Argor Heraeus, Pamp and Metalor. Raw gold, often of low purity, is refined, melted down and recast into smaller bars in the country.

Are they stored in the high security vaults in the Swiss Massif Central?

Then the bullion is shipped to China and India and other growing gold consuming nations in Asia led by Vietnam and Indonesia.

Evidence of the dramatic slowdown in these flows come from new export statistics from Swiss customs officials which show the European nation’s gold exports falling 37% in last year compared to 2013, according to Goldreporter.de.

According to Swiss trade statistics published this week, Switzerland exported 1,746 tonnes of gold worth $65 billion Francs (just over $70 billion). The decline is also due to the fact that 2013 was a banner year for Swiss refiners – exports topped 2,777 tonnes, worth a whopping $132 billion.

The decline in the average price of the metal in 2014 and the strong franc, meant that the Swiss also received less for their bars – with the average price per kilogram pegged at $40,334 versus last year’s $47,459.

Russia is the world’s second largest producer of gold behind China

Roughly a third of Switzerland’s imports came from the UK, followed by the US with 211.5 tonnes. As expected India was the top importer with 471.2 tonnes, followed by Hong Kong and China which combined topped the subcontinent with 590 tonnes. Singapore was third with 134 tonnes.
The flows of Russian gold raises questions (if not eyebrows): Russia exported 58.3 tonnes to Switzerland, but only 2.6 tonnes made its way back into the country.

The 55 tonnes of Russian gold that stayed behind is worth some $2.3 billion. Goldreporter asks the question: “Are they stored in the high security vaults in the Swiss Massif Central?”

Russia is the world’s second largest producer of gold behind China, with an estimated 272 tonnes mined last year – an increase of 9% from the year before.

Switzerland produces no gold itself. In 2012 an Alpine village turned down a $1.2 billion project which would’ve been the country’s first and only gold mine.

Goldreporter.de is the go-to place for European gold news. Click here for the German version and here for a selection of English articles.

Image of one of Stalin’s 16 goddesses representing Russia in the park of VDNH in Moscow by Boris SV.

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Henry Sapiecha

Large coal and iron ore reserves found & proved up in Iran

Wednesday, March 4th, 2015

vintage map showing the Middle East, including Iran

Two large coal and iron ore reserves have been discovered in Iran, according to a top official.

The claim by Mehdi Karbasian, Deputy Minister of Industry, Mines and Trade, was reported on Tuesday in the country’s state media, Islamic Republic News Agency (IRNA). Karbasian, who is also chairman of the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) told IRNA that 200 million tons of iron ore reserves and 120 million tons of coal reserves respectively were discovered in the Sangan mine, in the eastern province of Khorasan Razavi, during the first half of the current Iranian calendar year, which begins within a day after March 21 of the Gregorian calendar.

The discovery adds to “huge reserves of high-quality iron ore in the country’s central Lut Desert” found last year, according to IRNA.

More detail was provided on Sangan in a paper given at a tailings waste conference in Vancouver, Canada, in 2011, which studied tailings disposal options at the mine:

The Sangan iron ore deposits form part of the east-west trending Kuh-e-Taleb mountain range, and in the Khorasan-Razavi Province in north-eastern Iran (Figure 1). The deposits lie approximately 300 km south of the city of Mashhad, 30 km west of the Afghanistan border and some 18 km north-east of the Sangan town. The deposits can be accessed from Mashhad via two separate ways, one via Torbat Heydariyeh and the other via Torbat Jam.

Iran was the 10th largest iron ore producer in 2012, according to the USGS, when it extracted 28 million tons of the steelmaking ingredient. MINING.com reported the same year that while there is no formal ban on the iron ore trade with Iran, ranking sixth in terms of exports, shipping firms and traders in Europe nevertheless are balking at the financial and political risks in dealing with the country, considering US-led sanctions over its nuclear program.

Canadian miners the world’s top asset buyers in 2014

Tuesday, March 3rd, 2015

Canadian miners the world’s top buyers of assets in 2014

Canada led the acquisition of mining and metals assets in terms of volume last year, and it was a close contender in terms of value, a study released Monday shows.

Despite the deals boom, overall mergers and acquisitions globally continued to decline on both a volume and value basis in the sector compared to 2013, according to EY’s Mergers, acquisitions and capital raising in mining and metals: 2014 trends, 2015 outlook.

“A few big deals in Canada in 2014 put us at the top in terms of deal volume,” says Bruce Sprague, EY’s Canadian Mining & Metals Leader. “But the reality is that the majority of the deals were junior-level strategic mergers aimed at conserving cash.”

Canada scored the top gold deal in 2014, with the joint acquisition of Osisko Mining Corp by Yamana Gold and Agnico Eagle Mines for $3.6 billion. The next largest gold deal was the UK’s Polymetal International’s acquisition of Kazakhstan’s Altynalmas Gold (Kyzyl gold project) for $619m.

“Gold remains the most-targeted commodity by volume,” says Sprague. “We saw that play out right here in Canada. The majority (88%) of gold deals, however, were valued at less than $50m, reflecting distress among gold juniors on the back of squeezed margins.”

e-and-y-deals1

EY says current market conditions are putting mining companies in a quandary – investing for the next stage of growth is potentially unpopular with shareholders, but it could prove to be a masterstroke if they want to fully capitalize on the next uplift in the cycle.

“For the past few years, companies have been focused on cost-reduction programs, internal capital allocation and productivity measures,” notes Sprague. “Moving forward, they need to have a broader focus on total shareholder return and make capital decisions that will support long-term value creation.”

Companies in a quandary

Still, in its outlook EY says long-awaited funding from private capital funds should begin to deploy across the sector as sellers align their value expectations with the market, and assets continue to be sold by the large cap producers in search of optimum portfolios.

“The deals we’re seeing now are a lot of mergers between equals and consolidation opportunities benefiting both parties,” explains Sprague. “The large cap producers are more focused on looking to either sell or spin off non-core assets.”

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Henry Sapiecha

The full report is available here.

American mining junior finds rare earth deposit on old gold concession

Tuesday, March 3rd, 2015

American junior finds rare earth deposit on old gold concessions

Rare earth prices are on an uptrend in 2015 as market participants hold a widely held upbeat outlook for China’s rare earth industry.

New World Gold Corporation (OTC Pink: NWGC), a gold mining and milling junior with existing operations in Ecuador and Peru, may diversify its business after discovering a rare earth deposit in one of its old gold concessions.

While the Florida-based company has not disclosed the location of the finding it says that since the discovery several companies, including a Chinese group, have approached them with offers.

Independent analysis results indicate that the rare earth mineral discovered is Antimony. Preliminary testing results indicate that there are significant economic reserves present on the concession.

Since discovery of the antimony deposit, the Company has had significant interest in the deposit. The Company is negotiating with several companies including a Chinese group to option and then develop the deposit. The British Geological Survey reported in 2005, The Peoples Republic of China was the top producer of antimony with approximately 84% of the worlds share followed at a distance by South Africa and Bolivia. Roskill Consulting estimates that primary production of Antimony shows that in 2010, China held 76.75% of the world’s supply of antimony followed by Russia with 4.14%. Antimony was identified as one of 12 critical raw materials for the EU in a report published in 2011, primarily due to this lack of supply outside China.

Processed antimony is used as an alloy to strengthen tin and steel. Antimony compounds contain fire retardants found in many commercial and domestic products like stoves and refrigerators. There is an emerging application for the use of antimony in microelectronics

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Henry Sapiecha

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