CONGA GOLD PROJECT IN PERU IN STALL MODE BUT HOPEFUL TO PROCEED

The Wall Street Journal reports Peru on Friday announced a programme of social and infrastructure investments in its poor Cajamarca region aimed at winning over local protesters who have brought to halt Newmont Mining’s $4.8 billion Conga project over environmental concerns.

Protestors, led by Cajamarca’s Maoist governor Gregorio Santos, say Conga will destroy the environment by transforming four high Andean lakes into reservoirs for mining operations.

In December the government was forced to declare a state of emergency after boulders were used to block exits from the regional capital of more than 200,000 inhabitants, schools, hospitals and business were closed and dozens injured in clashes with police.

The Wall Street Journal reports Peru’s new Prime Minister, Oscar Valdés, who was elevated to the position after a cabinet shake-up prompted by the Conga crisis said late Thursday that he thought work on the project which was stopped in November could restart by March:

On Friday, René Cornejo Diaz, the housing minister, was sent to Cajamarca to tout the federal government’s program to invest 4.3 billion soles, about $1.6 billion, in infrastructure and expanded antipoverty programs in Cajamarca.

But Cajamarca leaders, including the governor, Gregorio Santos, didn’t seem likely to be swayed by government largess. “The position of the regional government is clear, Conga is not going ahead,” Máximo Léon, a top adviser to Mr. Santos, said in a telephone interview.

Conga has gold deposits worth about $15 billion at current prices and would be the biggest investment ever in Peru mining.

Conga has turned into a political nightmare for President Ollanta Humala who took office last year and who has on many occasions publicly backed the project. The bitter dispute is seen as a test case for scores of conflicts triggered by mining investments in the country.

At least 200 communities nationwide in Peru have organized to stop mining or oil projects, usually over environmental concerns or to demand direct economic benefits in rural towns.

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The East Coast basin is “literally leaking oil and gas” and provides potential for thousands of wells, an oil company with exploration permits in the area says.

New Zealand’s main oil and gas producing region is at Taranaki on the west coast of the North Island but Tag Oil says the East Coast basin on the other side of the North Island has “world class upside potential”.

A presentation by the small Canadian-based company on its website says it has identified widespread oil and gas seeps over a large area.

The presentation says the “East Coast basin is literally leaking oil and gas”.

The Sunday Star Times newspaper reported that the company regarded the East Coast as a “Texas of the south” and wanted to pursue an aggressive program there.

Last September the company said it was undertaking seismic testing in the region, with first exploration drilling planned after that. The region is seen as having potential for so-called shale oil extracted from rock.

The company has a farmout deal with Apache for the region, under which Apache may spend up to $US100 million ($A97 million) to earn up to half of Tag’s present 100 per cent share of exploration prospects.

“This is not where New Zealand’s economic future lies. We need to be investing instead in renewable solutions,” says Moana Mackey, Labour’s Energy representative.

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ASSESSMENT – Peru has a very rich precious metals background. This diverse nation in the Andes, once a victim of Spanish looting, is now the biggest silver producer in the world, the second largest copper and zinc producer and the sixth largest gold producer. The wealth of its mineral deposits stems from  dramatic landscapes consisting of soaring mountains, winding valleys, stark deserts, mysterious jungles and isolated coastlines. More than 7% of global mining exploration occurs on this unforgiving terrain, where historical production collides with modern geological technology. The Peruvian mining industry represents about 60% of the country’s export earnings.  Earnings from mining are expected to grow 6% annually through 2011-13.

But with a landscape as diverse as this, miners have to pick and choose locations carefully.

Ancash & Cajamarca Regions

Two regions which should be on the radar of eager gold and silver investors are the Ancash and Cajamarca in northern Peru. Both Ancash’s and Cajamarcas’ economies are largely made up of gold, silver, copper, zinc & precious metals mining.

Gold and silver production and exploration in these regions are a clear example of the investment and muscle needed to survive in the Peruvian Andes. This high-elevation, mineral rich area, which has been on the list of eager juniors for decades, currently persists mainly on the activity of the world’s two biggest gold miners:

Minera Yanacocha – Newmont Mining

Newmont Mining’s [NMC – TSX] legendary Yanacocha mine is a joint-venture project with Peruvian Company Buenaventura and the International Finance Corporation, which own 43.65% and 5%, respectively. Yanacocha is the largest gold mine in Latin America and is not only considered to be the second largest gold mine in the world, but also one of the most profitable.

The Yanacocha consists of three active open pit mines, with production having exceeded 26 million ounces (US$7 billion) since the mine opened in 1993. Located only 48 kilometres from city of Cajamarca, the mine produced 1.5 million ounces in 2010 and has reported 5 million ounces of gold reserves as of December 2010.

Considering Newmont’s recent stock rocketing in the past six months, buoyed by positive third-quarter results and ongoing production and exploration around the globe, the Company’s stock price may scare away smaller investors. Then again, the recent dip below $70 could also be seen as a gift by many who believe gold is about to go parabolic in the face of worldwide currency destruction.

Pierina – Barrick Gold

Not to be outdone by its competitor, the world’s largest gold producer, Barrick Gold Corp. [ABX – TSX], has two key mines in the regions: Alto Chicama & Pierina. Of the two, the Pierina’s mine life has recently been extended to the end of 2014 due to the rising gold price and increased interest in Peru’s gold possibilities. An open-pit operation, Pierina produced 191,000 ounces of gold at $434 per ounce in 2010 and recorded proven and probable mineral reserves as of December of 791,000 ounces of gold. Considering that Barrick recently reported record net earnings of 45% to CAD $1.37 billion for the 3^rd quarter, investors should look for future exploration and increased production in the Ancash region.

Much like Newmont, investors may hesitate on following such a high-priced stock. But judging from Barrick’s recent price volatility, a result of the volatile yet upward-moving gold price, there are plenty of opportunities to catch the stock on the dips.

Yanamina Gold Project – Coronet Metals

For those with shallower pockets and hopes for higher gains, Coronet Metals [CRF – TSX.V] offers an alternative to the nearby majors that may add another producing mine to the Ancash region. A junior gold exploration and development company, Coronet is presently developing its Yanamina Gold project, which Coronet recently purchased from Latin Gold Limited. Yanamina is an advanced-stage project with an initial inferred and indicated resource of approximately 286,000 ounces of gold grading between 1.6 and 2.0 grams/tonne and 1,400,000 ounces of silver grading on average of 8 grams/tonne.

The project represents an ideal opportunity to catch the attention of the two previously mentioned majors, as it is an open pit, heap leach gold operation. Exploration on the area has revealed a low sulphidation epithermal Au-Ag deposit, with indicated ounces mentioned above, and substantial upside potential. Coronet reports good existing infrastructure in the region, along with an proposed mine life estimate of 8+ years.

On top of the development of the Yanamina project, Coronet has also recently announced an agreement to evaluate re-processing up to 950,000 of gold tailings in Peru. The project is located 16 km below the Yanamina project and will give Coronet the opportunity to demonstrate its adherence to corporate social responsibility and best practices in the area. Mr Joel Dumaresq of Coronet says, “ This low-capital project could move Coronet into gold and silver production with the objective of generating sufficient free cash flow to cover the Company’s overhead. The contractors are already approved and completion of due diligence is targeted for Q1, 2012.”

2011 And Beyond

As the Yanamina gold project and the re-processing of gold tailings unfold, expect to hear a growing buzz of expectation from the Ancash region.

As the global gold hunt heats up in the face of financial calamity, well-placed juniors such as Coronet may deliver significant rewards to schrewd punters

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In 2010, it accounted for 23.5% of the total diamond production in terms of volume, and 25% in terms of value.

New assessments from Frost & Sullivan, Outlook of the Russian Diamond Market, find that the market earned revenue of $4.79 billion in 2010 and is estimated to reach $5.74 billion in 2015. Deployment of modern equipment will be essential for productive outcomes in mining low-grade ore.

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Controversy continues to rage over mining in Zimbabwe’s Marange alluvial diamond fields, & Voice of America reports a deal has been reached to sell Marange diamonds.

According to the World Diamond Council, the agreement allows two Marange operations to sell diamonds on the international market and a third, run by Chinese interests, will be allowed to resume sales following third-party verification.

The agreement, reached in Kinshasa, Congo, was supported by members of the Kimberley Process, which is a system to prevent the sale of so-called “blood diamonds”.

The United States opposed the decision by abstaining from voting.

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November 01, 2011

BHP Billiton today approved development of the Caval Ridge Mine project and expansion of the Peak Downs Mine in the northern Bowen Basin in Central Queensland, Australia. The initial project will add 8 million tonnes per year capacity (100 per cent basis) in export metallurgical coal, with the expectation of a rapid, low cost expansion to 10 million tonnes per year. This additional 2 million tonnes per year will only require the addition of mining equipment. This expansion has not yet been permitted.

The total investment in the initial project is US$4.2 billion, of which BHP Billiton’s share is US$2.1 billion. The resource life of the initial project is expected to be greater than 60 years1. First coal is expected in calendar year 2014.

The new Caval Ridge Mine will have the capacity to produce 5.5 million tonnes per year. The Peak Downs Mine will expand production by 2.5 million tonnes per year. The investment will include construction of a new coal handling and preparation plant at Caval Ridge to process production from the Caval Ridge Mine and Peak Downs expansion. Coal from the Peak Downs expansion will be transported by conveyor to the new plant. The Peak Downs Mine lies to the immediate south of the new Caval Ridge Mine.

The Caval Ridge Mine will be an open cut dragline and truck and shovel operation, with coal railed to the BHP Billiton Mitsubishi Alliance (BMA) Hay Point Coal Terminal. The project has received all necessary regulatory approvals.

BHP Billiton Metallurgical Coal President, Hubie van Dalsen, said: “This investment in the Caval Ridge Mine was foreshadowed in March of this year when BHP Billiton announced investments in the new 4.5 million tonne per year Daunia mine, the life extension of the Broadmeadow mine and the 11 million tonne per year expansion of the Hay Point Coal Terminal.

“This is a continuation of BHP Billiton’s strategy of investing in large, low cost, expandable mines with long lives. Additional expansion projects are being advanced to follow this investment in due course,” he said.

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8. Ukraine has the world’s largest reserves of manganese ore – 2.3 billion tons or about 11% of all deposits of the world.

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order in Indian iron ore mining

Weir Minerals Africa has received its biggest order from India to date – seven Linatex vibrating screens of various sizes for RBSSN, a mining and metals company based in Hospet, in northern Karnataka.

The order includes the biggest screen Weir has supplied to India, with dimensions of 2.4 m by 4.8 m. Weir Minerals Africa’s Chris Dorlas says the order, which is destined for an iron ore application, is a milestone for the company, since it firmly establishes Weir Minerals’ footprint in India and will serve as a reference base for further sales in that country.

The RBSSN order includes three VD18/38, one VD15/38 and one VD21/48 dewatering screens. Linatex dewatering screens incorporate a 45^o sloping back section, fitted with slotted apertures across the direction of the flow. Incoming slurry is fed uniformly along the top of this back section, which acts as a vibrating drainage panel. The screen’s main deck slopes upwards at 5^o and is fitted with smaller slotted apertures.

“This design achieves exceptionally high dewatering and draining capacity,” Dorlas says, “making it possible in many cases to use smaller units than if one was using conventional dewatering screens. This, in turn, reduces the cost of the initial investment in the screens.”

At the lowest point of the screen, where the sloping back and main deck meet, a pool of partially dewatered slurry forms. Here, solid particles bridge over the apertures and form a cake, which acts as a filtration platform, allowing only quite fine particles to pass through. The vibration action conveys the cake along the screen and out of the pool, where further dewatering takes place, depending on the porosity of the cake, which is finally discharged over the adjustable weir into the product chute.

Vibration is produced by two linear motion low noise exciter motors operating at 980 or 1460 rpm. Alternatively, geared exciters with an external drive motor can be fitted to the larger screens. Both the vibrating motors and the geared exciter have been specifically designed to ensure long life, with minimum maintainance requirements.

Easy adjustment of the amplitude of vibration and deck inclination, as well as the discharge weir plate, are features incorporated to suit changes in process requirements. A high solids recovery outcome is achieved when the screen underflow is kept in closed circuit, with the only solid losses occurring as the very fine material exits in the cyclone overflow.

The two large Linatex HG24/48 screens included in the RBSSN order are horizontal linear motion screens. Linear motion is produced by the action of counterweights on separate shafts, geared together to produce a straight line “throw”. The mechanism’s direction of rotation does not affect the pattern of motion.

“Linear motion provides excellent performance in applications such as wet screening, desliming and dewatering, owing to the ability to break the surface tension between deck apertures and the pulp being screened,” Dorlas says. “Screen capacities vary widely, depending on the material characteristics and the separation required.

“Screen design has evolved and improved over many years of operational experience and industry know-how. However, the company has actively taken these improvements to the next level and introduced the Finite Element Analysis (FEA) method of design to our development technology some years ago. Our in-house FEA capabilities have assisted in optimising the mass and strength of the screens, helping to provide lower cost solutions, both in terms of capital and operational costs.”

The Weir Group acquired the Linatex group of companies in September 2010, now marketed as Lintex^® rubber products. Dorlas says that these products are proving a valuable addition to the Weir Minerals product line and assist the company in positioning itself as a solutions provider. The South African Linatex manufacturing facility in Alrode is capable of producing screens up to 4.9 m wide by 10 m in length.

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WASHINGTON — Ranchers from Nebraska, people in car caravans from California and hundreds of others plan to hold daily sit-ins at the White House starting Saturday, protesting against a planned pipeline that would greatly expand the flow of oil from the black sands of western Canada.

Two weeks of protests will raise the question of what the United States should do about climate change, putting the topic back into the spotlight. They’ll pressure President Barack Obama, who must decide whether the pipeline is in the national interest and whether it will be built.

For some participants, the key issues are local matters of land and water conservation. The proposed Keystone XL pipeline from the oil sands of Alberta would run from Canada through Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas.

It would cross the Ogallala Aquifer, the giant underground water source under much of Nebraska and other Great Plains states. Some Nebraskans have been calling for a different route away from their irrigation source and the state’s Sand Hills, a land of canyons and mountains of grass-covered sand where cattle graze.

For others, the key issue is climate change.

Writer and protest organizer Bill McKibben says it may be the “single clearest decision Obama will make in his first four years because for once he has a clear shot. Congress isn’t in the way. He gets to make the call.”

McKibben said it’s a test to see if Obama stands by his 2008 campaign promise that in his presidency “the rise of the oceans will begin to slow and the planet begin to heal.”

An Obama denial of the permit for Keystone XL would “send an electrifying jolt through his base,” McKibben said. “We’ll be reminded about why we were so enthused when he was running.”

The decision puts the president between his environmentalist supporters and those looking for projects that create jobs immediately. The American Petroleum Institute said the pipeline would create 20,000 direct jobs in the two years it would take to build it.

An existing Keystone pipeline from Canada already brings 591,000 barrels of diluted bitumen, the technical name for the thick oil mixed in the sands, to refineries in Oklahoma and Illinois. The new pipeline would increase the capacity to 1.3 million barrels a day and deliver the crude to refineries on the Gulf Coast.

Protesters argue that the pipeline would be in place for some 50 years, bringing a heavily polluting form of oil. The extra energy needed to mine the oil from the sands of Alberta and to process it creates more greenhouse gas emissions than conventional oil.

NASA climate scientist James Hansen argues that if emissions from coal are phased out in a few decades and unconventional fossil fuels such as the crude from the oil sands are left in the ground, it will be possible to stabilize the climate.

“Phase-out of emissions from coal is itself an enormous challenge. However, if the tar sands are thrown into the mix, it is essentially game over,” Hansen wrote in a paper in June. Hansen in recent years has participated in protests, and organizers say he’ll join this one as well.

The organizers said they expect some arrests. They plan to station people in Lafayette Park across from the White House every day for two weeks.

That means they will be there in a week, when the president and his family return from their vacation on Martha’s Vineyard.

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on Tuesday; miners critical of it.

Miners are worried that the new mining law, which is expected to be passed by Finland’s parliament on Tuesday could increase bureaucracy and compensation to landowners which may make future ops more difficult

Author: Terhi Kinnunen (Reuters)
Posted:  Monday , 14 Mar 2011

HELSINKI (Reuters) -

Finland’s parliament is expected to pass a new mining law on Tuesday that miners fear will increase bureaucracy and compensation to landowners, making future operations more difficult.

Updating a law from the 1960′s, it is seen coming into force on July 1.

The government says the new law promotes mining but also takes into account environmental issues, citizens’ and landowners’ rights and gives municipalities more potential to influence decision-making on mining projects.

Supervision of mining issues will move to the Safety Technology Authority, Tukes, from the Ministry of Employment and the Economy.

“The compensation fees will be higher than in Sweden,” Olavi Paatsola, executive director of Finnish mining industry association FinnMin, told Reuters.

“The harsh bureaucracy is to be introduced to the ore prospecting stage, which in our opinion is unnecessary, because prospecting work has a minimal impact on nature.”

Environmentalists say the reform is good for nature, although it is not perfect.

“The reform is a clear improvement to the current situation. Firstly, it will take into account environmental points, and secondly it will secure citizens’ rights,” said Leo Stranius, secretary general for the Finnish Nature League.

He added the Finnish Nature League had demanded the law would prohibit ore prospecting in nature reserves and that uranium would not be included in the mining law.

The reform to the mining law began in 2005, but the process has been slow due to its thoroughness. The parliament is expected to give the green light to the new law at the current parliament’s last session. Finland will hold general elections on April 17.

The new law requires a final approval from President Tarja Halonen.

THREE MINES UNDER CONSTRUCTION

Finland’s location in the middle of the Fennoscandian Shield gives it an excellent potential for a variety of minerals such as nickel, gold and chrome. Its geology is similar to that of areas of Canada and Australia, both big mining countries.

Currently there are nine metallic ore mines operating in Finland, and five of them are gold mines.

In addition three mines — two gold mines and one mine producing nickel, copper and palladium — are being built.

The mining sector in 2010 amounted to only 0.4 percent of Finland’s gross domestic product (GDP).

One of the biggest mines is Talvivaara (TLV1V.HE: Quote), which produces nickel, zinc and copper. It delivers nickel and cobalt to Norilsk Nickel GNKN.MM refinery in Harjavalta and zinc to Nyrstar (NYR.BR: Quote).

Finnish stainless steel maker Outokumpu (OUT1V.HE: Quote) owns Europe’s only chromium mine in Kemi with current annual production of about 1.3 million tons of ore. The mine produces chromite concentrates for its ferrochrome smelter in Tornio, some 35 kilometres (22 miles) away.

“If I look at this law from the perspective of the industry, it has been an awful project,” Antti Pihko, chief of the Kemi mine told Finnish daily Kauppalehti.

“After this, international companies will prefer to go to Sweden where fees are only a tenth compared to Finland and where production can be started much faster,” he was quoted as saying.

(Editing by Jane Baird)

© Thomson Reuters 2011 All rights reserved

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