Archive for the ‘MOVERS & SHAKERS’ Category

A Canadian mining discussion. Barrick & Goldcorp PODCAST

Monday, July 10th, 2017

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Henry Sapiecha

Chinese takeover buy of world’s largest mining project

Saturday, October 29th, 2016

Simandou iron ore mine image www.www-globalcommodities.com

World number two miner Rio Tinto is exiting the world’s largest mining project, by selling its stake in Guinea’s Simandou iron ore  to partner Chinalco, potentially opening up a new path to development for the $20 billion project.

According to a statement by Melbourne-based Rio the deal is worth between $1.1 billion and $1.3 billion payable when Simandou starts commercial production and based on output. Rio says a final agreement could be inked within six months. In February this year Rio wrote down the value of Simandou by $1.1 billion, before deciding to shelve the project.

Rio owns  46.6% of Simandou south; Chinalco’s stake is 41.3% and the Guinea government holds 7.5%. Earlier this month the World Bank’s financing arm – the International Finance Corporation – sold its its 4.6% interest.

With complete control, Beijing-based Chinalco may revive the stalled project with the backing of the Chinese governmentRio has already spent more than $3 billion on the project having first acquired the property in the late nineties. With complete control, Beijing-based Chinalco may revive the stalled project, no doubt with the backing of the central government. In September Chinalco took private its Hong Kong listed mining arm, primarily focused on copper.

China consumes more than 70% of the world’s seaborne iron ore and is on track to import one billion tonnes of the steelmaking raw material this year. Imports have gradually displaced domestic production, pushing dozens of Chinese iron ore mines into bankruptcy.

The shelving of the project has been devastating news for Guinea. Simandou by itself would’ve been the world’s fifth-largest producer at 95 million tonnes per year.

Simandou with over two billion tonnes of reserves and some of the highest grades for direct-shipping-ore in the industry (66% – 68% Fe which attracts premium pricing) has a back-of-the-envelope calculation value of more than $110 billion at today’s prices.

The initial agreement signed in May 2014 called for a new 650km railway across the West African country to Conakry, Guinea’s capital in the north, plus a new deep water port at a conservatively estimated cost of $7 billion; infrastructure investments that would double the economy of the impoverished country.

The impoverished nation, which was one of the worst affected country’s by the recent Ebolo epidemic, and is in dire need of infrastructure to develop other parts of the industry, particularly the export of bauxite, the primary ore used to manufacture aluminum. Bauxite represents some 80% of the country’s export earnings. Chinalco is primarily an aluminum manufacturer.

Simandou’s chequered history

rio-tinto-guinea-simandou-signing-may-2014 image www.www-globalcommodities.com

Rio Tinto held the licence for the entire deposit since the early 1990s, but was stripped of the northern blocks in 2008 by a former dictator of the country.

BSG Resources, a company associated with Israeli diamond billionaire Beny Steinmetz acquired the concession later that year after spending $160 million exploring the property.

In 2010 BSGR sold 51% to Vale for $2.5 billion. The Rio de Janeiro-based company stopped paying after the first $500 million after missing a number of development milestones. Then the new Guinean government under Conde launched a review of all mining contracts awarded under previous regimes and launched an investigation into the Vale-BSGR joint venture.

The Guinea government withdrew the mining permit in April last year, accusing BSGR of obtaining its rights through corruption. BSGR has denied wrongdoing and filed an arbitration request in an attempt to win compensation from the Western African nation.

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Shortly after BSGR’s rights were stripped Rio filed a lawsuit for billions of dollars against both Vale and BSGR in New York courts for what it called a “steal” of its previously-owned concession. Rio alleged BSGR paid a $200 million bribe to Guinea’s former minister using funds from Vale’s initial payment.

The US district court threw out the case in November last year saying Rio “had waited too long to file the lawsuit” under the Racketeer Influence and Corrupt Organizations Act, which calls for a four year time limit.

rio-tinto-simandou-port-visit-conde-900-506 image www.www-globalcommodities.com

 

Henry Sapiecha

World’s largest, newest diamond mine to inject $5.2bn into Canada’s economy

Friday, September 9th, 2016

worlds-largest-newest-diamond-mine-to-inject-5-2-billion-into-canadas-economy-300x250 www.www-globalcommodities.com

Gahcho Kué, co-owned by De Beers Canada and Mountain Province Diamonds, is located at Kennady Lake, about 280 km northeast of Yellowknife. (Image courtesy of De Beers Group)

Gahcho Kué, the world’s largest new diamond mine due to begin production later this month, is expected to contribute $5.2 billion (Cdn$6.7 billion) to Canada’s economy and provide 1,200 new jobs, a report released Thursday by majority owner De Beers shows.

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.

debeers-diamond-mines-map image www.www-globalcommodities.com

Courtesy of De Beers Group.

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.

www.www-gems.com

www.worldwidediamonds.info

www.gem-creations.com

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Henry Sapiecha

Dominion Diamond to go ahead with Ekati mine expansion in Canada

Thursday, July 7th, 2016

dominion-diamond-to-go-ahead-with-ekati-mine-expansion image www.www-globalcommodities.com

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.

www.worldwidediamonds.info

www.gem-creations.com

www.www-gems.com

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Henry Sapiecha

Luxembourg invests big time $$$ in space mining

Friday, June 24th, 2016

luxembourg-invests-heavily-in-space-mining image www.www-globalcommodities.com

Luxembourg is stepping up efforts to become Europe’s centre for space mining by agreeing to buy a major stake in US-based asteroid miner Planetary Resources.

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.

Legal frame

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.

Luxembourg invests heavily in space mining

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.”

And while a discussion on the matter is bound to happen, countries such as the US, have decided to make their own rules. In November, President Barack Obama signed a law granting American citizens rights to own resources mined in space.

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.

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Henry Sapiecha

The world’s 40 biggest mining companies listed here in an infographic

Wednesday, June 15th, 2016

Coal-mining-machinery image www.www-globalcommodities.com

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.

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Henry Sapiecha

It must be pointed out that this list is for 2015 & may not represent an accurate current status in 2016

top-40-2015-mining-companies-infographic image www.www-globalcommodities.com

 

 

NASA releases gold-covered telescope putting the Hubble to shame

Saturday, April 30th, 2016

nasa-unveils-gold-covered-telescope-that-will-put-the-hubble-to-shame

NASA has finally unveiled the giant successor to the Hubble Space Telescope, the James Webb, which is equipped with a collapsible honeycomb-like mirror made of 18 gleaming, gold-covered pieces.

Scheduled to be launched in 2018, the $10 billion tennis-court-sized telescope is the result of a joint effort involving NASA, the European Space Agency and the Canadian Space Agency.

james web telescope images www.www-globalcommodities (2)

Ball Aerospace optical technician Scott Murray inspects the first gold primary mirror segment. (Image provided by NASA)

Each coffee table-sized mirror segment, weighing roughly 46 pounds (21kg), is made from beryllium and is coated with a fine film of vaporized gold to optimize the reflection of infrared light.

james web telescope images www.www-globalcommodities (1)

Rendering of the James Webb Space Telescope. (Image by Northrop Grumman | NASA )

The James Webb telescope has been described as a ‘time machine’ that could help unravel the secrets of our cosmos.

Unlike The Hubble, the new instrument will look in the infrared part of the spectrum, instead of capturing visible light. This will allow it to better see through clouds of gas and dust, where stars are being born, which should give us a view farther back to the beginning of the universe.

james web telescope images www.www-globalcommodities (3)

Standing tall and glimmering gold inside NASA’s Goddard Space Flight Center’s clean room in Greenbelt, Maryland (Image provided by NASA)

Once launched, the James Webb will be the world’s biggest and most powerful telescope, capable of peering back 200 million years after the Big Bang.

Learn more about The James Webb telescope in the video below:

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Henry Sapiecha

Company Investors going wild for world no 1 commodities player

Friday, December 11th, 2015

Copper-Smelter-Altonorte-Glencore-333-300x250

At the end of trading in London on Thursday shares in Glencore plc (LON:GLEN) was priced at 89p, up 7.4% in colossal volumes of more than 134 million shares traded.

In New York Glencore’s (GLCNY) over the counter stock advanced by more than 10% in equally busy trade bringing the company’s market value back to within shouting distance of $20 billion.

The reason behind the surge is the Swiss mining and commodities trading giant’s announcement that it has increased its debt reduction target and cut spending plans. Again.

That these type of corporate initiatives (which are now a common feature of the industry) can inspire such a frenzy is a good indication of just how much turmoil and uncertainty there is in the mining sector.

The Baar-based company said it now aims to reduce its debt load by $13 billion from the previous target of just over $10 billion. Some $8.7 billion has been cut under the plan. By the end of next year Glencore wants the pile down to $18 billion to $19 billion.

Down 70% just this year despite today’s bump, Glencore is now worth $15 billion less than before the Xstrata takeover

Glencore CEO Ivan Glasenberg also announced its capital expenditure for 2015 will come in at $5.7 billion, $300 million below previous targets while next year’s outlays will be cut to $3.8 billion from $5 billion.

Apart from idling copper mines in central Africa, cutting coal production in Australia, reduce lead and zinc production in central Asia and inking streaming deals for its precious metals byproducts in South America, Glencore is also putting up assets for sale to cut costs and raise money.

In October, Glencore said it began the sales process for its Australian copper mine New South Wales and its Lomas Bayas copper mine in the Atacama desert in Chile. The company expects initial bids by mid-December and completion some time during the first half of 2016. Glencore has the same timeline to sell a stake in its agriculture business.

Glencore was first floated in May 2011 and two years later the company acquired coal giant Xstrata, turning it into the world’s fourth largest miner. Down 70% just this year despite today’s bump, Glencore is now worth $15 billion less than before the Xstrata takeover.

Image supplied by Glencore show Anibal Contreras clearing slag at the company’s Altonorte metallurgical facility, northern Chile.

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Henry Sapiecha

 

WORLDS LARGEST ZINC MINER MAY EXIT THE MINING INDUSTRY

Wednesday, November 11th, 2015

Mexico’s Campo Morado zinc mine image www.www-globalcommodities.com

Debt-laden European zinc producer Nyrstar (EBR:NYR) said Monday it plans to raise up to $296 million (€275m) through a share offering to pay down debt and has appointed bankers to explore a total exit from mining.

The Belgian company, which is the world’s No.1 zinc producer, laid out a package of measures it is putting in place to try repaying a $447 million bond that matures in 2016 and also address ongoing problems with it mining division.

Nyrstar also announced a number of commercial supply agreements with Trafigura, the world’s second-largest metals trader and its main shareholder.

Nyrstar also announced a number of commercial supply agreements with Trafigura, the world’s second-largest metals trader and its main shareholder.

The commodity trader has agreed to buy as much as $135 million (€125m) of shares in a first-quarter rights offer totalling $270m to $296m. As part of the deal, Trafigura won’t raise its stake to more than 49% from over 20%, according to Nyrstar. Should the rights offer boost Trafigura’s holding above 30%, it won’t be obliged to make an offer for the rest of the stock, the company added.

Nyrstar shares jumped up as much as 9.4% in Brussels on the news and were trading 5.5% higher at €1.62 mid-afternoon.

They took a huge dip on Oct. 22, falling 27% in a matter of hours, after new chief executive Bill Scotting said the company was considering selling stock to meet its debt obligations.

On Monday, Scotting noted Trafigura’s involvement in the refinancing was not a “takeover by stealth”.

Nyrstar has been hit quite hard by the rout in commodities, with zinc down 24% this year on declining demand from top consumer China. The company said it’s mulling reducing zinc production from its mines by as much as 400,000 metric tons if prices stay depressed. That would almost match the 500,000 tonnes that Glencore, another leading zinc producer, recently cut.

The company has already suspended operations at its Mexico’s Campo Morado and Canada’s Myra Falls mines.

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Henry Sapiecha

Adani Carmichael: Australia’s largest coal mine free to proceed after Greg Hunt gives approval

Friday, October 16th, 2015

The nation’s largest coal mine has passed a significant hurdle after Environment Minister Greg Hunt approved it with “the strictest conditions in Australian history”, in a decision environment groups have declared “a disaster”.

Mr Hunt on Thursday said the Carmichael coal mine proposed by Indian mining giant Adani has been given the green light after the Federal Court in August set aside the previous approval.

Abbot Point coal terminal image www.www-globalcommodities.com

The project, which will produce up to 60 million tonnes of coal for export a year, has faced staunch opposition because its Abbot Point terminals are located close to the Great Barrier Reef.

Opponents have already flagged an intention to launch a legal challenge to the latest approval.

The government decision clears a regulatory hurdle, yet there are still questions over how the $16 billion project will be financed. National Australia Bank has said it will not fund the mine and other banks are being pressured to follow suit.

The approval will require $1 million funding for research programs to improve conservation of threatened species over 10 years, and strict groundwater monitoring and action triggers would protect Doongmabulla Springs, Mr Hunt said.

The Department of the Environment will monitor the mine and Adani must provide a groundwater management and monitoring plan.

Federal Labor resources spokesman Gary Gray welcomed the decision and said the project was of “great importance to Queensland and to Australia”.

Australian Environment Minister Greg Hunt, with Prime Minister Malcolm Turnbull image www.www-globalcommodities.com

Environment Minister Greg Hunt, with Prime Minister Malcolm Turnbull, announced on Thursday the mine would proceed. Photo: Alex Ellinghausen

The project still requires federal dredging approval and some state-based approvals.

The Mackay Conservation Group launched its Federal Court challenge in January, alleging greenhouse gas emissions from the mine, vulnerable species and Adani’s environmental track record had not been taken into account.

Mr Hunt said the court set aside the mine’s earlier approval at the request of the government.

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The case prompted the government to propose new laws that would prevent “vigilante” environment groups from challenging large developments in court.

Mackay Conservation Group coordinator Ellen Roberts said the approval “risks threatened species, precious ground water, the global climate and taxpayers’ money”.

“[Mr] Hunt is sacrificing threatened species … and precious ground water resources for the sake of a mine that simply does not stack up economically,” Ms Roberts said, adding the black throated finch would probably be pushed to extinction.

Equipment at the Abbot Point coal terminal in Queensland image www.www-globalcommodities.com

Equipment at the Abbot Point coal terminal in Queensland. Photo: Glenn Hunt

She said the conditions set by Mr Hunt did not adequately deal with the serious implications of the mine, which “can’t be offset”.

Greenpeace Australia Pacific campaigner Shani Tager said the mine would be “a complete disaster for the climate and the Great Barrier Reef”.”This project means more dredging in the Great Barrier Reef, more ships through its waters and more carbon emissions,” she said.

Adani welcomed the decision, saying the initial legal hurdle was a “technicality” prompted by a mistake by the Department of the Environment. In a statement, the company said it was always “confident in the soundness of the broader approvals, that the species involved had been protected by conditions, and that the technical error would be promptly rectified”. “Today’s announcement … makes clear that these concerns have been addressed, reflected in rigorous and painstaking conditions,” it said. The company intended to deliver mine, rail and port projects in Queensland creating 10,000 direct and indirect jobs, and $22 billion in taxes and royalties to be reinvested into community services, Adani said. The jobs figure has been disputed.

Former prime minister Tony Abbott with mining magnate Gautum Adani image www.www-globalcommodities.com

Former prime minister Tony Abbott with mining magnate Gautum Adani. Photo: Andrew Meares

Lobby group GetUp! on Thursday said its members had already helped fund legal action against the mine, and the organisation was “exploring the legal opportunities available to us” in light of the latest decision.

“This coal mine is the dumbest, most dangerous and uneconomic development in Australia,” senior campaigner Sam Regester said.

“We are calling on GetUp! members and the community to stand up and fight this mine again. We’ve beaten it before and we can beat it again.”

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Henry Sapiecha

 

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