PROFILES IN MINING
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VP, Engineering & Tech., Advanced Explorations Inc. Dr. Florin Gheorghiu
IRON ORE Iron Ore Demand Forecast Remains Weak But Not Dire
M I N I N G
MINING INDUSTRY FINANCE Fortescue Moves Toward Investment Grade
R E V I E W JUNE 2013 • VOL. 102 NO.6
IRON ORE PRICE REPORT MINING INDUSTRY PEOPLE Mining Analyst Roundtable MINING MATTERS STATISTICS
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CONTENTS
JUNE 2013 VOL. 102 No. 6
Progress on New Iron Ore Projects...6 Kennametal Acquires Tungsten Processing Operations in Bolivia..34 This month, we take a look at the Progress on New Iron Ore Projects.
MINING THOUGHT LEADERS......................................................................4 ADVERTISING INDEX.................................................................................26 Advertorials...................................................................................... 9-19 MINING ANALYST ROUNDTABLE..............................................................16 MINING INDUSTRY PEOPLE/MINING MATTERS........................................35 STATISTICS/ IRON ORE PRICE REPORT..................................................30,31 COAL Coal Exports Pressuring Pacific Port Capacity........................................... 5 Canada Grabs Skilled Workers.................................................................. 5 COPPER BHP Sells Copper Mine to Capstone........................................................ 27 Following Landslide, Kennecott To Operate At 50%............................ 27 GOLD Early Warning Signs For Gold GLD.......................................................... 21 Gold Mine Stocks: Operating vs. Trading Performance......................... 22 MINING INDUSTRY FINANCE Fortescue Moves Toward Investment Grade.......................................... 20 Greens Push For Mining Tax Renewal..................................................... 21 Sundance Refuse Hanlong....................................................................... 20 MINING INDUSTRY SHIPPING Vale Ship Enters China Port after Two Years.......................................... 29 Water Levels Worry At Great Lakes........................................................ 28 Vale Back In China.................................................................................... 31 IRON RANGE REGION Researchers: “Could Taconite Dust Cause Cancer?”.............................. 28 Swiss Invest $20 Million in PolyMed........................................................ 28 IRON ORE Rio to Proceed With $ 5bn Iron Ore Expansion...................................... 22 Fortescue Goes From Strength To Strength............................................ 24 BC and Cleveland to Mine Iron Ore in Brazil.......................................... 25 Iron Ore Demand Forecast Remains Weak But Not Dire....................... 23 NON FERROUS METALS Markets Rebound and China’s Stock Goes Up........................................ 21 China Gets New Rules For Steel............................................................... 21 Obituary Driving Force behind L&M Radiator Passes Away.................................. 21 PROFILES IN MINING Dr. Florin Gheorghiu, VP, Advanced Explorations Inc............................ 26 SAFETY Better Safety For WA............................................................................... 31 Mechanization: An Option To Increase Productivity & Manage Safety Issues...................................................... 31 STEEL Steel And Bearings to Separate as Timken Splits Company in Two...... 20 Timken Votes To Spin Off Steel Division................................................. 35 Subscriptions: U.S.: $72 annually in U.S. funds. $109 annually in U.S. funds for 1st Class Service All other countries: $250 in U.S. funds for 7-21 day service. $335 in U.S. funds for air mail service www.skillings.net
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Publisher Chas Pitts Chas.Pitts@Skillings.net Associate Publisher John Edward john.edward@cfxnetwork.com Senior Sales Manager Stan Salmi Stan.salmi@Skillings.net Contributing Editors Anna Grant anna.grant@cfxnetwork.com Mary Claire Whitaker MC.Whitaker@cfxnetwork.com Carien Daffue Carien.Daffue@cfxnetwork.com Art Director Mo Shine mo.shine@cfxnetwork.com Circulation and Subscriptions Subscriptions@skillings.net Sales & Marketing Christine Marie Advertising@Skillings.net SKILLINGS MINING REVIEW (ISSN 0037-6329) is published monthly, 12 issues per year by CFX Network, 340 S. Lemon Ave #7197 Walnut, CA 91789 USA Phone: (909) 962-7321 printed in the USA Payments and Billing: PO Box 1184 Venice, FL 34284-1184 Periodicals Postage Paid at Walnut, California and additional mail offices. Postmaster: Send address changes to: SKILLINGS MINING REVIEW 340 S. Lemon Ave #7197 Walnut, CA 91789 USA. Phone: (909) 962-7321 Fax: (888) 261-6014 Email: Advertising@Skillings.net Visit us on the web: www.skillings.net
Editorial matter may be reproduced only by stating the name of this publication, date of the issue in which material appears, and the byline, if the article carries one. June 2013 SKILLINGS MINING REVIEW | 3
SKILLINGS MINING REVIEW
JUNE 2013 | VOL. 102 No.6
Mining Thought Leaders Dr. Florin Gheorghiu Vice President Engineering and Technology, of Advanced Explorations Inc.
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or the June 2013 issue of Skillings Mining Review, we interviewed Dr. Florin Gheorghiu—the Vice President (Engineering and Technology) of Advanced Explorations Inc.—a public exploration and mining company based in Toronto, Canada. He has served as a Mineral Processing Manager at Min-Met Ltd., a consulting and engineering company in Montréal, Canada, and worked as an associate consultant with Atkins International Ltd. in London, U.K., in
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mineral processing and ore beneficiation areas. He has extensive experience of more than 40 years in the metallurgical and mining industries (R&D, Production, Operational Development, Projects). He was also professor at Polytechnic University of Bucharest, Romania, and visiting professor at University of Québec at Chicoutimi, Canada. During the last 20 years, Florin has focused his professional activity on iron ore beneficiation and pellet manufacture. Florin’s recognized expertise in ore crushing, grinding, enrichment processes and advanced/intelligent control systems has permitted him—as a consulting engineer—to develop important
Skillings Mining Review publishes comprehensive information on global mining, iron ore markets and critical industry issues via our monthly magazine, weekly E-newsletter, annual mining directory and real time website.
mining projects for the major iron ore and pellet producers (Quebec Cartier Mining, Canada; Kudremuch Iron Ore, India; Mittal Steel, South America and Africa; SNIM, Mauritania). His involvement goes from true R&D to field application, and includes greenfield construction, new plant start-up and capital equipment design, selection, and commissioning. Dr. Florin Gheorghiu is SME Professional Member (CO, US) and author or co-author of more than 150 technical papers, reports and books on carbon and graphite electrode manufacture and mineral processing. The full interview is available on our website www.skillings.net - a summary is reproduced in the current issue.
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CoAL
Coal Exports Pressuring Pacific Port Capacity By Mary Claire Whitaker
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epresenting a more than 10 percent reduction in coal energy, 175 coal-fired plants are expected to retire in the US by 2016. In 2012, coal-produced energy had fallen to just over 34 percent of US total energy consumption, from 50 percent in 2005. The reason is increased reliance on cheaper, cleaner-burning natural gas. Coal production, however, has slowed less; total production was down 7.3 percent over 2011 and 12.6 percent from 2006. Meanwhile, exports to Europe and Asia were up to 114 million, a historic record and 17 percent higher than in 2011. The main ports for shipping coal are currently Norfolk, Baltimore and New Orleans, destined mainly for Europe, where natural gas prices have remained high. Europe imports Appalachian coal primarily, though some also comes from the Illinois and Powder River basins. In China, despite resistance to coal dependence, the country’s need for the resource is expected to double by 2030, and it will increasingly rely on imports from the US, Australia, Indonesia and Russia. The capacity of western US ports for coal is still limited. Proposals by SSA Marine and BNSF for expansion in Oregon and Washington are facing political opposition. Asia-destined coal currently ships from Los Angeles or from three ports in British Columbia, taking 10 to 14 days. The Gulf of Mexico is another option, adding an extra 8 to 12 days to the journey. US coal could also ship via Lazaro Cardenas in Mexico, a port tied to Kansas City Southern rail lines, although there is no indication yet of any regular coal routes there.
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Canada Grabs Skilled Workers By Carien Daffue
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he global mining industry is facing a series of challenges, one of the most significant being a skills shortage. Investor and owner of Northern Venture Group Richard (Rick) Mills recently highlighted the the shortage as the source of the crisis in mining. Canada in particular is feeling the effects of the crisis. Migrant workers attracted by the expat opportunities in Canada have historically faced barriers to their job search. For example, job seekers are required to secure employment before applying for work permits. Canadian governments, at both the national and provincial levels, are courting skilled workers such as miners, plumbers, pipefitters, electricians and others from the US and elsewhere. A category for specific trades began in January to address labor shortages while easing the path to residency, the federal government said. That program is forecast to admit up to 3,000 applicants in its first year. The country is trying “to build a fast and flexible immigration system that is responsive to the needs of Canada’s economy,” Immigration Minister Jason Kenney said in a press release January 2nd. Employers “have long been asking for ways to get the skilled tradespeople they need to meet demands in many industries across the country.” The government announced changes to the temporary foreign worker program April 29 that will require employers to pay temporary foreign workers at the prevailing wage and have a plan to transition to a Canadian workforce over time. There were 200,000 employment vacancies among Canadian businesses, according to Statistics Canada data. Almost 900,000 net jobs have been created in the country since July, 2009.
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COVER STORY
By Anna Grant and Mary Claire Whitaker
Alderon Iron Ore Corporation has entered into a definitive Agreement with Worley Parsons Canada, and Golden West Resources has accelerated its mine plans for W. Australia iron ore project. It is also likely that POSCO’s $12 billion steel project in India could now move forward…
$92.5 Million Contract for WorleyParsons
The Union government will decide if South Korean steel maker Posco can have preferential access to an iron ore mine for its planned $12 billion steel plant in Orissa. Photo: Reuters
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Alderon Iron Ore Corporation through the Kami Mine Limited Partnership has entered into a definitive Engineering, Procurement and Construction Management Agreement with WorleyParsons Canada Services Limited who will be the engineering, procurement and construction management contractor for the development of the Kami Iron Ore Project. The budget for the EPCM Agreement with WorleyParsons is estimated at US$92.5 million, which is consistent with the cost estimate set out in Alderon’s Feasibility Study for the Kami Project. “We are pleased that the Alderon team has chosen WorleyParsons for
the development of this world-scale iron-ore project,” said WorleyParsons CEO Andrew Wood. “This contract builds upon the successful and important relationship we have developed with Alderon.” The Kami iron ore mine is situated in Quebec, adjacent to Wabush and Labrador city. According to Alderon’s own figures, during its first phase, the mine will produce eight million tonnes of high-grade ore per year, averaging 65.2 percent iron. Capital costs are pegged at around US$1.27 billion excluding sustaining capital, with operating costs at US$42.17 million. Production is slated to commence toward the end of 2015, and the www.skillings.net
project has a projected mine life of 30 years. As opportunities dry up for mining services companies in Australia, WorleyParsons has looked abroad for growth opportunities. Earlier this year, the company was awarded two framework agreements by British Petroleum for environmental consulting work on its operations outside the United States. The overseas projects should provide much needed relief to the company’s operations at a time when the outlook for the Australian resources sector is increasingly pessimistic. A report issued by BIS Sharpnel says spending on major resource projects in Australia will decline sharply over the next several years as the China-backed mining boom draws to an end.
Will Spending On Major Resource Projects in Australia Decline? Despite the report, Golden West Resources has plans to accelerate its W. Australia iron ore project. Golden West Resources can now commence mining at its Wiluna West iron ore project in Western Australia, as the project does not warrant a formal assessment by environmental authorities. With the appeals period now closed without any objection lodged, the way is now clear for GWR to progress its detailed plan to mine at a rate of up to 10 million MT/year, with a mine life of approximately 15 years. “The company is excited about the positive environmental outcome, because other supply chain variables such as the Esperance Port multi-user iron ore facility upgrade are falling into place,” GWR’s chief executive Craig Ferrier said. In February, the Western Australian government approved plans for expanding capacity at Esperance Port to handle over 20 million MT/year of iron ore exports, from its current 11.5 million MT/year. The upgrade is expected to begin in 2014 and be completed by 2015. GWR has already obtained approvals to clear land and commence mining at a rate of 1 million MT/ year www.skillings.net
Kami Iron Ore Mine. image courstey: http://designbuildsource.com.au/
for three years at its John William Doutch deposit, part of Wiluna West. Stage one of Wiluna West is based on exporting 1 million - 2 million MT/ year of iron ore from existing ports, depending on which has sufficient capacity.
POSCO Sees Positive Change in Indian Iron Ore Climate In India, where the iron ore industry has been going through a lot of turbulence, POSCO turned lucky as it moves closer to iron ore access for a $12 billion India steel plant. POSCO’s planned $12 billion steel project in India moved a step forward in May 2013, after a court handed a decision on a mining license to the federal government, raising the South Korean firm’s chances of getting preferential access to iron ore. The world’s fourthlargest steel producer has waited eight years to get necessary clearances, land, and an iron-ore mining license to start work on the project, billed as India’s largest foreign direct investment. While the project planned in Eastern India may still face hurdles from protesters and over issues such as land ownership, a supportive federal government is expected to clear the path for POSCO’s top concern - a captive mine that will give it steelmakingquality iron ore. “This is positive for the company because the central government has been supporting this project,” said
Rakesh Arora, a metals expert and head of research at Macquarie Capital Securities. “There is no doubt that without iron ore, this project was not starting at all.”
Rio Tinto Prioritizing Growth, Smaller Iron Projects Waver Rio Tinto stood firm following its May 9 annual shareholder meeting about its decision to increase its annual iron ore output from the Pilbara project. Some Rio Tinto shareholders have questioned the plan because of projections that increased global supply—forecast to cause a surplus within the decade—will lower iron ore prices. Vale is also planning to increase output, to 402 million metric tonnes per year by 2017. In China, despite high production costs and low iron grades, 66 new projects could contribute another 435 million MT annually by 2020. Rio Tinto’s chief executive Sam Walsh has said that Rio Tinto’s plan to increase from 290 to 360 million MT per year has been carefully modeled, with considerations for global steel capacity, urbanization trends, and increased global supply. Barring any surprises affecting Chinese demand, the plan is expected to be approved by shareholders in the fourth quarter. He pointed out the strong advantage of Rio Tinto in its low operating costs, especially compared to the Chinese projects. June 2013 SKILLINGS MINING REVIEW | 7
COVER STORY
Machinery operates in a pit at Rio Tinto Group's West Angelas iron ore mine in Pilbara, Australia.
“We need to invest in the best projects. These need to be robust, and in the Pilbara we do come with an advantage. We are the lowest cost producer,” Walsh said. “There are shareholders who felt very strong that we should proceed as the lowest cost producer proximate to China, lunching off existing infrastructure.” Iron ore is expected to account for almost 85 percent of Rio Tinto’s earnings before interest in 2013. The expansion at Pilbara to 360 million MT, proposed for 2015 completion, would be Rio Tinto’s second expansion phase following a current capacity increase to 290 million MT. The current phase is focused on expansion at two ports and four inland sites. Port operations include train-dumping, primary and secondary crushing and screening, ore stockpiling and blending, and ship loading, and expansion will increase handling capacity by a total of 108 MT. At the inland sites, expansions underway include accommodation village extensions, additional mine fleets, the construction of two primary crushers, 24 kilometers of overland conveyor systems including a covered system, and at Marandoo, the introduction of below water-table mining, which involves the construction of a wet ore processing plant. Also on track at Pilbara is the expansion by BHP Billiton at Jimblebar and the reactivation of development at Fortescue Metals Group’s Kings deposit. While iron ore giants have scale economy and cash flow on their side to mitigate the risk of market price fluctuations, smaller and medium-sized projects that depend on speculative investors for funding are being reconsidered. This is occurring even as Chinese and other steelmakers increasingly invest in smaller projects to guarantee supply. WPG Resources had been considering a 25 percent stake in the Giffen Well site in central South Australia, held by Maosen Australia, for the development of a new 1.5 billion AUD iron ore project; however, after talks with its potential steel-mill partner in Asia stopped, WPG has withdrawn. WPG had already completed a 3 million AUD pre-feasibility study for the project, which would have involved plans for an open-pit mine to produce 5 million MT 8 | SKILLINGS MINING REVIEW June 2013
of iron ore concentrate annually, plus a magnetite ore concentrator, an open-pit coal mine at Penrhyn, and a power station. WPG head executive Bod Duffin explained, “With no partner, lukewarm interest from investors and the dreadful track record of Australian magnetite projects, we thought it was better not to progress with it.” Another Australian company, Aquila Resources, had to suspend engineering and design progress on its West Pilbara Iron Ore project at least through June. Aquila and its partners, including the South Korean steelmaker POSCO, were unable to reach an agreement on the project’s budget last September. The project suffered another setback in April when an Aquila partner for coal exploration opted out of an investment that Aquila had hoped would provide capital for West Pilbara. The Aquila project particularly needs funding for rail and port access. Mining companies new to the Pilbara region, including Atlas Iron, Brockman Resources, and Hancock Prospecting, are facing a similar need. Those companies have depended on the construction of a fourth Pilbara rail line, which may have lost the economic momentum required for its construction.
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Eriez’ Mining equipment Features Wet Drum separators Eriez’ Mining equipment features wet drum separators to recover iron ore, and magnetic mill liners to increase wear resistance and improve grinding efficiency in ball mills. Wet Drum Separators provide continuous recovery of magnetite or ferrosilicon in heavy media operations, or a concentration of ferrous and weakly magnetic ores. Eriez’ wet drum separators use the strongest, most effective magnetic elements in the industry. They have a stainless steel-encapsulated magnetic element, one-piece stainless steel drum shell, abrasion-resistant aluminum or stainless steel end flanges and doublerow, self-aligning ball bearings that are easily accessible without disassembling the drum. Eriez’ Magnetic Mill Liners are wearresistant, stainless steel-encased magnets designed for secondary and regrind
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Wet Drum
ball mills. They are long-lasting, hardworking and safer than conventional liners. Magnetic Mill Liners combine the best qualities of steel liners with the added benefits of the magnetic field. The magnetic field holds the liner to the mill shell and retains ball chips on the grinding surface. This creates a solid protection layer for the shell, lasting longer than conventional liners – some more
than 10 years! In many installations using Eriez’ Magnetic Mill Liner, the product can increase mill throughput, lower energy and grinding media consumption, reduce maintenance thereby increasing mill availability, reduce noise levels and eliminate mill leakage. For more information about Eriez’ mining products and services, visit their website, www.eriez.com.
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It’s About Cost Savings W.P. & R.S. Mars Company is a regional industrial distributor with branches in Bloomington, Duluth and Hibbing, Minnesota. Each year, the company management team selects a theme that is presented to its sales team. This year the theme is cost savings and each Mars Account Manager was given a goal to save their customers 5% over the 2012 total spend. To kick off the new sales program, a two-day training session was held in January where cost savings opportunities were identified to work on throughout the year. At the end of the meeting, each sales rep was issued an iPad and was trained on a software
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program that will allow the capture and documenting of cost savings activities. Mars customers are also able to log in to this web-based program to view those cost savings activities completed specifically for them. Another way to drive cost savings for customers is by utilizing vending machines to provide everyday supplies. Dispensing perishable tooling and PPE products such as cutting tools, gloves and safety glasses, etc, to workers through a vending solution has a number of advantages for employers. The greatest advantage is that product usage can be monitored and controlled more effectively through vending than
through the old “tool crib” style of ordering, storing and issuing supplies. Mars’ sister company, Conveyor Belt Service in Virginia, has been performing cost savings activities for several years. CBS’ main business is installing and repairing large conveyor belts for the region’s taconite processing plants. But the service CBS provides goes beyond that. Regular preventative maintenance inspections are performed that can uncover possible problems so they can be fixed before they cause a shutdown. Backup belting inventory is also carried by CBS so the customer does not have to. Finally, the CBS 24/7 response time of
Contact Mars about costsaving vending solutions
its belt technicians to an unforeseen conveyor problem, can save taconite companies thousands of dollars in lost productivity. For more information call 218-628-0303 (Duluth), 218-262-0756 (Hibbing), 800-662-5789 or click www.marssupply.com.
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When You Can’t Afford To Stop Moving... Industrial Lubricant Is At Your Side Industrial Lubricant Company serves its Iron Range customers from service centers in Grand Rapids and Coleraine, Minnesota. Drawing on 70 years of experience in the mining industry, Industrial Lubricant utilizes nation-wide best practices of its customers served from their personnel and service centers in Wyoming, North Dakota, Texas and Canada. The company’s dedicated employees strive to pursue its vision of providing world class productivity solutions. Industrial Lubricant Company provides lubricants, filtration products and services and lubrication system analysis, design, installation and maintenance. The company offers effective, specific and customized services and product solutions, based on both their nation-wide and Iron Range experience. Their sister company, Industrial Fluid-Technologies and its partners, provide competitive bulk lubricants, custom blending solutions, recycling and related value added services. Now in its third generation of continuous Iron Range ownership, management and accountability, Industrial Lubricant is strengthening its commitment to the Iron Range through significant investments in its people, facilities and service and product offerings.
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NON FERROUS METALS / Obituary/ ADVERTORIAL/ MINING INDUSTRY FINANCE
COREM is a private research consortium that provides competitive advantages to its members through a cuttingedge pre-competitive research program and the transfer of technological innovation that evolves from it. The research program is guided by members and therefore responds directly to their own concerns. This customized research program provides considerable competitive advantages to the industry by allowing maximum return on investment and preventing the duplication of research efforts. Dedicated to the improvement of individual members’ processes, COREM is a valued ally in a highly competitive environment where large demand for metals puts constant pressure on the production capacity of mining com-
panies. The know-how of COREM is articulated through six fields of expertise related to the processes of its members. For each of these fields, our strong expertise in mineralogy and the close link between ou mineralogist and the metallurgists allow us to better understanding the behavior of minerals in their treatment process: • Comminution (including classification) • Physical separation (gravimetic and
magnetic) • Flotation (chemistry and hydrodynamics) • Extractive metallurgy (cyanidation and other leaching processes) • Pelletizing (balling, pelletizing and briquetting) • Thermal processes (travelling grate and grate/ rotary-kiln induration) COREM operates world-class facilities: • Pilot plant of 5,300 m2 • Mineralogy and mineral processing laboratories • Pyrometallurgical characterization laboratory (ISO 9001:2008 certified) • Analytical services laboratory (ISO/CEI 17025:2005 accredited) • Environmental management system (ISO 14001:2004 certified)
Fortescue Moves Toward Investment Grade By Mary Claire Whitaker
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t the beginning of May, the iron-ore miner Fortescue Metals Group opened its Firetail mine in the Pilbara region of Western Australia, part of its expansion plans to reach 155 million tonnes by the end of 2013. Total expansion costs were expected to be US$9 billion, including port expansions. The company took out US$5 billion in bonds in 2012 to finance the expansions. Fortescue forewent its half-yearly dividend payment given its current debt. “We’re going to 155 million tonnes from 45 million tonnes previously so you can see the massive ramp up in production that’s occurring,” said chief executive Nev Power. In the first quarter of 2013, Fortescue reported 60 percent capacity increase had dropped the company’s operating costs to between US$45-50 per tonne. The company expected costs to drop further in 2013 to US$25-30 per tonne, once the Kings mine goes into production, which should occur on schedule, Fortescue reported. The company hopes raise between US$3-4 billion by selling up to 40 percent interest in its Pilbara rail and port infrastructure, and has been talking to mining junior Atlas Iron about a deal. With the sale, originally targeted for completion by June, the company would reduce interest costs by US$200 million per year and bring it closer to an investment grade rating, according to Credit Suisse.
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China Gets New Rules For Steel By Carien Daffue
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ew rules aimed at making China’s sprawling steel sector greener will do little to tackle rampant overcapacity or help Beijing protect its big state-owned mills from smaller, nimbler rivals. China’s environment ministry has said it will impose “special emissions restrictions” starting next month on major industries from steel and petrochemicals to cement, non-ferrous metals, and coal-fired power. Environmental inspections have already started in big steelproducing regions. But when it comes to steel, it’s more than just pollution. Many in the industry hope the curbs will help tackle overproduction, slash the number of privately-owned mills, and boost the market share of state-owned giants such as Baoshan Iron and Steel (Baosteel) <600019.SS>, Wuhan Iron and Steel <600005.SS> and Angang Steel <000898.SZ>. Still, many analysts suggest the government is again guilty of wishful thinking. While the costs of the industry minnows could increase as a result of the new pollution guidelines, the big mills could suffer just as much. The CISA complained in January that profits at its member mills—mostly large-scale and state-owned—slumped 98 percent last year due to weak demand and chronic overcapacity, exacerbated by the small “rampantly expanding” mills. But the CISA has always been reluctant to acknowledge that those private mills have remained more profitable than their lumbering
Markets Rebound And China’s Stock Goes Up By Anna Grant
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tock markets on the Chinese mainland are expected to climb in the weeks ahead as authorities are likely to resume Renminbi Qualified Foreign Institutional Investors (RQFII) approvals, say analysts. Markets in Shanghai and Shenzhen advanced in May 2013 after the European Central Bank cut interest rates, and the Dow Jones Industrial Average neared another all-time high. The key Shanghai Composite Index added 1.44 percent, to finish at 2,205.5; while the Shenzhen Component Index rose 1.49 percent to 129.47 points, closing at 8,847.67. Along with steel, nonferrous metals, and petroleum stocks, financial shares walked away with major wins after China’s central bank unveiled new rules for its RQFII scheme, which analysts say will entice more foreign funds to invest in China’s capital market. So far this year, the Shanghai Composite has been one of Asia’s worst performing equity benchmarks, largely due to signs of softening in the domestic economy. For instance, China’s gross domestic product was expanded 7.7 percent during the first quarter, down from the 7.9 percent growth posted in 2012. If more policies are introduced to support consumer spending and service industries, some experts believe that the economy could regain enough momentum to revive confidence in the stock market at least over the mid-term.
state counterparts. “2012 was not as bad as the media said for the steel industry, because private firms’ profitability was generally better than the state-owned enterprises,” said a steel industry official.
Driving Force behind L&M Radiator Passes Away
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ongtime successful businessman Mr. Alex Chisholm, of L&M Radiator, passed away on May 22, 2013 in Hibbing. Born in 1930 in Utah, Mr. Chisholm had spent time in the United States Military before pursuing and earning a mining engineering degree in 1957. In January 1961, he joined his father-in-law, Mr. www.skillings.net
Clay Murray (the “M” in L&M), at the start-up of L&M Radiator. Sales were high that first year, and Mr. Chisholm quickly became the driving force behind expanding L&M’s reach. The company continues to thrive today under its third generation of family ownership and management. Mr. Chisholm had been recognized for his
“They are able to react faster to the market. That’s because private firms control their own production; they can stop producing if they are operating at a loss; but SOEs still sell, even if they lose money on every sale.” success in various ways including being named Minnesota Small Business Man of the Year in 1975 and a Minnesota Business Hall of Fame inductee in 1982 and reigning as Titan of Taconite in 1981. He also served on the Minnesota State Chamber of Commerce and had been appointed to the U.S. Presidential Trade Commission. He is survived by his children, Ms. Laura Ekholm and Mr. Dan Chisholm.” June 2013 SKILLINGS MINING REVIEW | 21
STEEL/MINING INDUSTRY FINANCE/GOLD
Steel And Bearings To Separate As Timken Splits Company In Two By Anna Grant
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imken Co. shareholders have voted to support a proposal to split its steel and bearings operations into two businesses. Of the shares voted, approximately 53 percent were in favor of spinning off the company’s steel business and 46 percent were against, with 1 percent abstaining. The results of the vote are nonbinding. But the outcome may shape how Timken proceeds. “Shareholders have made it clear that they want the true investment value of Timken’s businesses to properly realized, and that the Company’s conglomerate structure, which has proven to be an ongoing impediment, must be eliminated,” Ralph Whitworth, Founder and Principal of Activist
Shareholder Relational Investors, said in a release. Chairman of the Board Ward Timken Jr. said the vote on the proposal told the company that there were differences in the path it should take. “It is this long view that has helped Timken create staying power that has lasted for over 100 years,” Timken said. “We have a board of directors that shares the long view.” He said the board will evaluate the views and announce the next steps within 45 days. Timken sent three letters to shareholders in April stressing that the fifthgeneration Canton firm had a proven business strategy. In the last letter on April 25, Timken wrote, “The simple fact is that our integrated business model is working. The deep synergies
between our businesses provide us with a tremendous competitive advantage in the marketplace.” The California State Teachers’ Retirement System and its partner, Relational Investors LLC, had asserted on their website, www.unlocktimken.com, that Timken’s share price is trading at a significantly lower level than it should be because of the company’s “conglomerate structure, which combines two incongruent core businesses—steel and bearings.”
Sundance Refuse Hanlong By Carien Daffue
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undance Resources Ltd. plunged 48 percent to A$0.11 at the close of trade in April, valuing the company at A$338 million and cutting Hanlong’s holding to about A$47.7 million, according to data compiled by Bloomberg. Hanlong paid A$191 million for 433.8 million shares in 2011. Sundance, which recently terminated the accord after Hanlong was unable to secure funding, said it’s in talks with other groups for a stake in its A$4.7 billion African iron ore project. The collapse of the deal, first agreed in October 2011, comes after Hanlong’s billionaire Chairman Liu Han, 47, was reported to have been detained last month by police in China for helping his brother evade capture. Hanlong, which was seeking to buy the shares it didn’t already own in the Australian company, was also unlikely to meet other required conditions, Perth-based Sundance said yesterday in a statement. Sundance said it is in talks with unspecified other Chinese and non-Chinese parties. Buying Sundance would have given Hanlong control of the Mbalam iron-ore project that straddles the Republic of Congo and Cameroon. 22 | SKILLINGS MINING REVIEW June 2013
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Early Warning Signs For Gold GLD By Carien Daffue
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month”—formed as many analysts were speculating much higher prices. The chart on the other hand, was telling a different story as there were concerted distribution forces occurring to form this pattern. In early March 2013, GLD was still in the midst of an extensive high level consolidation (sideways) trading pattern. As these patterns need resolution before any decisive action can be taken, traders and investors were forced to trade within the confines of this pattern until
such resolution comes. The reality of the matter and the conclusion is that GLD/Gold are likely headed lower. Until the technical damage is repaired, rallies should be viewed as unsustainable and may be seen as opportunities for the longs to exit positions and the shorts to build theirs. In order to become convinced that a bottom has been put in place, evidence of some kind of base-building effort needs to occur to prove that buyers are willing to support prices.
Greens Push For Mining Tax Renewal
the industry is under stress,” he said. Liberal Senator Mathias Cormann said the policy has been a complete mess and warned against adopting any of the Greens’ plans to expand the scope
of the tax. In the meantime, the Government is not commenting on figures, except to say that all will be revealed on budget night.
fter the dramatic sell-off in gold, the question for both traders and investors is what to do now. SPDR Gold Shares (NYSEArca: GLD) and other bullion-backed ETFs need to find a bottom and it appears that the low has not yet been reached. It is possible that once a bottom is firmly established it may only be realized in hindsight. So until then, trader and investor mentality looks to have shifted from buying the dips to selling the rallies. There were early warning signs that GLD was running into trouble as early as September 2011, the month that GLD reached all-time highs of 185.85. A powerful technical reversal pattern—known as a “negative outside
By Anna Grant
I
n 2012, the Australian Government was banking on the mining tax raising $3 billion this financial year, but the decline to just $800 million—less than half of what the Government was predicting—is a trend which is likely to spill over into the next four years. The Greens say the latest figures are a strong argument for the tax to be rewritten. Greens leader Christine Milne blames a fall in commodity prices, but also what she describes as “flaws” with the design of the tax. “It is hard to believe that the Government has been through all this pain with the mining tax and so little is being raised,” she said. “If you actually increase the rate, plug the loopholes, you can still raise $26.2 billion over the forward estimates.” Minerals Council head Mitch Hooke said the forecast slump in revenue is no surprise. “The exchange rate is high, commodity prices have come off, and costs have doubled. No wonder www.skillings.net
June 2013 SKILLINGS MINING REVIEW | 23
GOLD/IRON ORE
Gold Mine Stocks
Operating vs. Trading Performance By Mary Claire Whitaker
G
old mine stocks have a strong correlation with gold prices. That can change, however, when decreasing metal prices magnify operating inefficiencies or budgetary shortfalls of mines. As analysts grasp for an expanding array of gold-mine stock indicators, it is worth taking a look at the operating results being reported by two mines generating analyst buzz, Allied Nevada and Newmont. Allied Nevada Gold Corp announced key management changes in light of below-par performance at the Hycroft Mine, which is undergoing capacity expansion. During Allied’s first-quarter preliminary results conference, the board chairman and new CEO Bob Buchan explained that previous underperformance at Hycroft was a result of poor operating plan implementation. “The mine is starting to perform as it should, and we currently believe that it will continue to do so,” he said. He also affirmed that the project expansion was on track to finish on time and on budget. During the call he announced the recent appointments of a new operations manager for Hycroft, Carl Waggoner, joining from the Coeur d’Alene Rochester mine, and a new process manager, Darren Tinney, joining the company from Barrick Gold. Stock performance between April and May: -30 percent Price-to-earnings ratio: 4.2
Newmont Mining out of Denver, Colorado, reported in its firstquarter results that while downward values had resulted from lower grades at two mines and shipping delays, it had succeeded in cutting capital expenditure by $100 million for 2013, and first-quarter consolidated spending by $217 million. It also reported increased gold output at La Herradura, Mexico and Boddington, Australia, due to grade improvements. Newmont CEO Gary Goldberg also reported the company expects to increase production in the second half of the year because of higher mill throughput in Nevada and production in Ghana going online. Stock performance between April and May: -14 percent Price-to-earnings ratio: 8.6
24 | SKILLINGS MINING REVIEW June 2013
Rio To Proceed With $ 5bn Iron Ore Expansion By Anna Grant
I
n spite of forecasts of a looming global supply glut, Rio Tinto intends to press ahead with a multibillion-dollar expansion of its iron ore mines in Western Australia. The plan means more iron ore production in the world market over the next few years, and will add to concerns about increased supply weighing on a price recovery. According to some attendees at the institutional investors meeting in Sydney in May 2013, CEO Sam Walsh mentioned that a $5 billion plan to increase annual output from its Pilbara mines to 360 million tonnes by 2015 would be put before the board of the AngloAustralian resources group for approval in 2013. Iron ore is Rio’s most profitable business and is expected to generate 85 percent of group earnings before interest this year. The world’s second-biggest iron ore miner has already approved spending to lift annual output in the Pilbara to 290 million tonnes by the third quarter of this year, and has built port and rail facilities to handle the increase in capacity to 360 million tonnes. But some fund managers and analysts have questioned whether Rio should go ahead with the expansion to 360 million tonnes at a time when the iron-ore market is expected to move into surplus. According to Citigroup, the steelmaking commodity is set for a small surplus in 2014, growing to around 70 million tonnes in 2015. Concerns about slowing economic growth in China, the world’s biggest buyer of commodities, and increasing supply has seen the benchmark iron-ore price drift lower since reaching $159 per tonne in February. It is currently at $128.10 per tonne.
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Iron Ore Demand Forecast Remains Weak But Not Dire By Mary Claire Whitaker
W
ith 2013 first-quarter results now in and analyzed, the major iron ore producers continue to be optimistic in the face of low growth numbers in iron-ore demand, driven by relatively flat steel production. Large iron ore mines, whose lower operating costs seem to afford them a longer view, are seeing the ironore-demand rise for China—forecast between 3 and 4.8 percent for 2013— as a relatively healthy indicator, even in light of anticipated supply surplus. The president of Rio Tinto Asian iron ore has predicted that this year the company will exceed its 2012 record of 147 million tonnes in sales to China. Vale’s head of ferrous metals, Juan Carlos Martins, has pointed out that demand for iron ore in China is being driven up in part by increased pig-iron and direct-reduced iron production. Martins, speaking on Vale’s firstquarter results call, also noted the tendency of the market to self-adjust when prices get too high or too low.
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The range he cited still clears US$100 per tonne. “If [high-cost steel producers] cannot pay the market price for iron ore,” he said, “less demand will be on the market… When the price of iron ore goes up to a level of US$160 to US$170, we also can see a lot of blast furnaces being stopped.” “On the other hand,” Martins said, “if the price of iron ore goes below, let’s say, US$100, US$110, many highcost iron ore produces will be out of the market.” ArcelorMittal also weighed in during its first-quarter earnings review, saying that its external iron-ore sales grew 7 percent in the first three months of 2013, though the company’s operating profit for iron ore fell 19 percent due to market prices. The company reported that it would continue on track with its planned mining expansion. The company’s CEO Lakshmi Mittal, reported that as in the case of iron ore, steel markets are also facing an oversupply scenario. However, the company expected steel demand to recover in
the second half of 2013 due to demand increases not just in China but also the US and Brazil. ArcelorMittal has calculated that automotive and appliance production will both continue to be positive in those markets as will construction growth. In addition to demand from steel consumption, another factor likely to help the large players stay afloat in the iron ore market is the continued lack of exports from India mines. Despite the country’s long-standing position until 2011 as China’s numberone iron ore supplier, India mines are facing regulatory impositions both prohibiting exports and denting domestic production. H.C. Daga, president of the Federation of Indian Mineral Industries has indicated India may actually import 12 million tones of ore this fiscal year. A reduction in Chinese stockpiles made news coverage in May because international iron-ore suppliers held out on selling at lowered market prices. China’s Baosteel also reported that it would discount its steel prices for June.
June 2013 SKILLINGS MINING REVIEW | 25
IRON ORE
Fortescue Goes From Strength To Strength By Carien Daffue
A
ustralian iron ore company Fortescue Metals Group has officially opened its Firetail iron-ore mine, the first stage of the company’s $3.2 billion Solomon hub project in Western Australia’s Pilbara region.The Firetail mine, FMG’s third mine to open in the past five years, will help the company achieve its ambition to become the leading supplier of iron ore to Asia. This is something that the company has been looking at for a while now. Fortescue is the world’s fourthlargest iron-ore producer, as of March 2011. The company has holdings of more than 87,000 km² in the Pilbara region of Western Australia making it the largest tenement holder in the state, larger than both BHP Billiton and Rio Tinto. Fortescue Metals CEO Nev Power said in a statement that the new iron ore mine will produce 20 million tonnes per year, while the second stage of the Solomon hub project, which involves work on the neighboring Kings mine, will produce an additional 40 million tonnes per year. “This represents a valuable source of new production from long-life, low-cost mining operations that allow us to blend with Chichester ores to create an enhanced product for our customers—the new Fortescue blend,” Power said. Operations at the Firetail deposit have been underway since 2012, where ancillary in-pit crushing is used to produce ore. If targets are met, the new iron-ore mine will increase the company’s production capacity to 115 million tonnes per year, up from 100 million tonnes per year at the end of 2012. Iron ore from the Firetail mine will be mixed with other ores from FMG’s Christmas Creek and Cloudbreak mines at Chichester hub in order to produce an improved product called Fortescue Blend, which will contain 58.3 percent iron. The company continues to dabble outside its Pilbara iron-ore heartland, announcing an early-stage agreement to investigate territory in South Australia to look for prospective copper, gold,
26 | SKILLINGS MINING REVIEW June 2013
and iron ore. The non-binding deal with ASX-listed Monax Mining will see the pair investigate a section of the old Woomera Protection Area, which has been off-limits for the past 28 years because it is part of a missile-testing range. The early-stage agreement was struck using FMG Resources Pty Ltd, which is a subsidiary of Fortescue Metals Group. While the deal is financially trivial to Fortescue, it is one of several recent indications that the company has an eye on the future beyond iron ore. Late last year Fortescue toyed with the idea of becoming majority shareholder in a small shale oil aspirant, but eventually decided to walk away from the deal for various reasons. In January, Fortescue chief executive Nev Power said while it was not a priority, the company would consider investments in other commodities. But for now, Fortescue’s biggest priority remains its iron-ore business in the Pilbara, and in particular, an ongoing
attempt to sell down a stake in its rail assets. The sell down should raise several billion dollars for the company, which will help ease its debt pressures. Overseas pension funds and rail operators are among those taking interest in the sell down, which is likely to result in rival companies getting access to Fortescue’s railway. The recent deal with Monax is still awaiting approval by the federal government. Once that happens, Monax will conduct three months of due diligence. The company has recently announced that it may list an iron ore project on the Hong Kong Stock Exchange in a venture with China’s Baosteel Group, a source from the sidelines of the Boao Forum in Hainan, China reported. A listing on the Shanghai Stock Exchange is also a possibility, although a Hong Kong listing shapes as a better possibility. Fortescue Metals is “bullish” on continuing demand from China for high grade 60 percent iron ore from its Pilbara projects.
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BC and Cleveland to Mine Iron Ore in Brazil By Carien Daffue
T
he two ASX-listed companies BC Iron and Cleveland formed a strategic alliance in August last year to acquire iron-ore projects in Brazil. The miners have signed two agreements to earn the rights to acquire up to 80 percent of three separate ironore exploration projects in the Brazilian states of Salvador da Bahia and Minas Girais. BC and Cleveland have investigated more than 50 South American iron-ore projects since they formed an alliance nine months ago. The three projects under the Memorandum of Understanding were selected for further work based on outcropping iron mineralization, geology, geophysical signatures, community attitudes to mining and options for port and rail logistics. The alliance is targeting itabirite iron mineralization ranging from 30-45 percent iron that could be upgraded to a higher-grade product. This is typical of Brazilian iron ores, which are easily and cheaply processed and highly sought after by the international steel industry. The proposed acquisitions would be their first foray into iron ore projects in Brazil. The Salvador da Bahia and Minas Girais projects are 194 km^2 and 1,070 km^2 respectively. Rail infrastructure is under construction at Bahia while a rail line is
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proposed at Minas Girais. “These rail lines will connect to open access ports which are capable of loading cape-sized vessels with iron ore,” BC Iron said in a statement. The deal structure is consistent with the approach to potential growth opportunities in Brazil: the upfront expenditure is relatively small, but increases with success and de-risking; and they maintain a tight, commercial relationship with the Vendors, who have the in-country knowledge to assist with approvals and community liaison. Under the first stage of the MoUs, the alliance would spend some $4 million on exploration, with BC noting that the expenditure for each following stage would be dependent on the success of the preceding work to delineate economic mineralization. The main game for BC Iron is, as always, maintaining its focus and operational efforts on the Nullagine JV and, considering growth potential in the Pilbara, maintaining positive shareholder return and a strong balance sheet. This deal introduces early-stage Greenfield opportunities into the BC Iron stable which compliments the Pilbara focus appropriately. First payment under the proposed deal will not be made until after initial due diligence, which includes a satisfactory drilling program. Cleveland
said the three project areas had the potential to host more than a billion tonnes of iron ore. It comes as BC Iron plans to extend its Nullagine mine life in the Pilbara region of Western Australia. The deal marks a major step in the partnership with BC Iron – an alliance that will help Cleveland de-risk its path to iron ore production and ensure there is no impact on the company’s gold activities. Cleveland has a different approach to project selection with project economics driving target selection. Projects are chosen according to their likelihood of generating returns at the bottom of the economic cycle. The company’s management team have a track record for building billiondollar projects from the ground up. This will be further strengthened with the assistance of a strong mid-tier mining company such as BC Iron. The risk to entering these new projects is lessened with a staged earn-in and no upfront consideration. Additionally, the planned open-access infrastructure reduces the minimum deposit required to justify a mine. The staged earn-in style vend terms ensure there is no upfront cash payment. BC Iron posted a net profit of $7.74 million for the first half of the current financial year. The deal is said to be beneficial for both companies as they look to break into the iron ore market in Brazil.
June 2013 SKILLINGS MINING REVIEW | 27
PROFILES IN MINING/Copper
Dr. Florin Gheorghiu Vice President, Engineering and Technology, of Advanced Explorations Inc., Toronto, ON, Canada
SMR: You have over 35 years in the industry with over 20 in iron ore beneficiation and pellet manufacturing. What about the Roche Bay project’s processing will be challenging for you? FG: As you remarked, during the last 20 years, in addition to my direct operation experience with ArcelorMittal Mines of Canada (formerly Quebec Cartier Mining), I worked on numerous iron ore projects around the world (Africa, South America, Kazahstan, etc.), but the development of the Roche Bay Magnetite Project, because of its location (about 120 km north of Arctic Circle), climate conditions and ore characteristics and power unavailability, has been a challenge task for me. Our and my major objectives have been and are the minimization of the project investment cost and maximization of the efficiency of the Roche Bay ore beneficiation. Taking into consideration the required advanced grinding of the ore (-0.028 mm or 440 mesh), by silica and sulfur removal processes, we were obliged to select the most efficient comminution concept and equipment, in relationship with the ore requirements and aimed production capacity. The result of the use of Cone Crushers, HPGRs and VMs, an optimal and original process concept, is the significant diminution of the power consumption required by size reduction processes....The concept and the benefits of the 28 | SKILLINGS MINING REVIEW June 2013
Roche Bay comminution flowsheet, have been included in our recent presentation for the SME Technical Conference, Duluth, MN, April 16-17, 2013, and are in accordance with the road map and objectives of the Coalition for Eco-Efficient Comminution (CEEC; www. ceecthethefuture.org). ...Another major challenge of the Roche Bay Project has been the selection of the optimal power generation option, a long and difficult process. We studied all available clean power generation variant, starting from power generation based on the Arctic Diesel Fuel (ADF), the most simple and cheapest option but negatively influenced by the high cost of ADF and its volatility. Under these conditions, I carefully studied the use of the Syngas (resulted from the degasification of the Canadian no-metallurgical coal) and LNG based power generation. Finally, based on the available power generation equipment and cost criteria, the LNG based-power generation option has been selected, in the spite of the apparent high cost of LNG storage and re-gasification. SMR: What are some forward-looking methods for developing low-quality ore in the area once the iron-rich area is processed? FG: The Roche Bay Magnetite deposit, located in Nunavut, Canada, is one of the biggest magnetite deposits around the world. It includes three distinct zones - A&B and C. Our Roche Bay Project is based on the solid results from the C-Zone drilling campaigns. The results of the geological studies and models, developed on the C-Zone, demonstrate the availability of the resources sufficient for 30-40 years of mine operation and production of 20 million t ore per annum (Run-Of-Mine), of 28 percent Fe,
required by the production of 5.5 million t premium concentrate per annum, of 68.9 percent Fe, 4.2 percent SiO2 and 0.07 percent S, a very valuable product for manufacturing iron pellets, based on its fine size, -0.028 mm, P80. The Zone C ore resource potential is based on a very reasonable mine operation, the use of the ore cut-off of 20 - 25 percent Fe. The drilling campaigns recently developed on the Zone A&B demonstrate the existence of important magnetite resources, of better quality than the Zone-C ores. Consequently, the aspects related to the deterioration of the ore quality during the exploitation of the Roche Bay Magnetite Deposit cannot be considered as a risk factor. What steps is AEI taking to ensure that the relevant environmental protections are in place in an increasingly ecoconscious era? FG: I think we are in a very good position regarding current and future requirements. Our attention and efforts towards the environment are being developed in two major directions: clean process and power generation. As you know, the Roche Bay concept of the comminution process aims at significant reduction of power and consequently the indirect reduction of the pollutant character of power generation. Even the LNG-based power generation option is a recommended power generation variant under environmental requirements. In addition, during the process of flowsheet development, we tried to avoid the pollutant phases such as silica flotation. We deposed serious efforts aimed at diminishing the negative environmental impact of the wet tailings resulting from the wet magnetic separation and sulfide flotation processes. www.skillings.net
BHP Sells Copper Mine To Capstone By Anna Grant
B
HP Billiton has agreed to sell its Pinto Valley copper mine and a railroad in Arizona to Capstone Mining Corp. for $650 million, reaping far more than expected as the top global miner tightens its belt in a weaker market. BHP and its global mining peers have put billions of dollars worth of mines, projects, and aluminum operations up for sale as they look to slash costs, cut debt, and focus on their highest-returning assets as commodity prices slump. The Australian company flagged earlier this year that it was looking to sell 10 more assets, without naming them. Analysts had said Pinto Valley was a likely target, along with aluminum,
manganese and some petroleum operations. There has been speculation the major miners would find it tough to find buyers for their unwanted assets as smaller miners are strapped for cash, and even Chinese companies hungry to expand have become choosier under pressure from Beijing. But BHP managed to fetch much more than expected for Pinto Valley. Deutsche Bank had estimated the mine could sell for around $274 million, while UBS estimated it was worth $500 million. The Pinto Valley Mine is located in the Globe-Miami mining district in Arizona, approximately 125 kilometers east of Phoenix. It is projected to pro-
duce 130-150 million pounds of copper in concentrate, and approximately 10 million pounds of copper cathode annually, along with by-product molybdenum and silver, at an estimated cash cost of approximately $1.80 per pound net of by-product credits, for the first five years of production. “Pinto Valley represents a unique opportunity to acquire a mid-sized producing copper mine in a wellestablished jurisdiction with a significant mineral resource,” said Darren Pylot, President and CEO of Capstone. “This acquisition gives Capstone a long mine life and is consistent with Capstone’s strategy of building an intermediate copper producer focused in the Americas.”
Following Landslide, Kennecott To Operate At 50% By Mary Claire Whitaker
F
ollowing the April 10 2013 landslide at Kennecott Utah Copper’s Bingham Canyon Mine, the company continues assessing recovery plans. Kelly Sanders, CEO of Kennecott, a subsidiary of Rio Tinto, called the landslide one of the largest in mining history. A press release confirmed that over 165 million tons of earth had fallen. No employees were injured in the landslide. Immediately prior to the slide, Kennecott detected geological movement and restricted access to affected areas, moving employees and shifting heavy equipment and utility operations to safe areas of the mine. At an April 25th 2013 press conference at the mine, Sanders detailed that the plan would be to operate at 50 percent of planned capacity for the rest of 2013. “Our employees are constantly striving to improve the business, and I will not be surprised if they exceed those www.skillings.net
th
expectations, but that is our plan at the current time,” he said. To reduce costs during the limited production period, the mine announced layoffs would be necessary, although employees were invited to take vacation or voluntary unpaid leave. Employees eligible for retirement by June 1 were offered a $20,000 resignation incentive. According to Sanders, operations resumed in some areas of the affected pit within 48 hours of the landslide, and that employees had been setting production records since then. Visual inspections had confirmed that the in-pit crusher and tunnel and conveyer systems, as well as 90 percent of the mine’s equipment, were undamaged in the slide. Sanders described a general 120-day plan in which the anticipated 50 percent capacity would be reached and plans developed to bring production back to 100 percent for 2014.
June 2013 SKILLINGS MINING REVIEW | 29
MINING ANALYST ROUNDTABLE/ MINING INDUSTRY SHIPPING
Researchers: "Could Taconite Dust Cause Cancer?"
Swiss Invest $20 Million In PolyMed
By Anna Grant
By Carien Daffue
aconite-industry workers face an increased risk of contracting a rare form of lung cancer, and the risk increases the longer they remain on the job, according to researchers from the University of Minnesota. However, researchers have also mentioned that they cannot say for certain whether dust from the state’s iron mining and processing operations causes it. The researchers traveled to the Iron Range of northeastern Minnesota to announce the findings of their $4.9 million, five-year study into possible links between taconite dust and mesothelioma, a rare cancer of the lung lining caused by exposure to airborne asbestos fibers. The cancer has taken the lives of 82 taconite workers over the years. Previously released research confirmed a 300 percent higher rate of mesothelioma on the Range than among the general population in Minnesota. But the “why” remains a mystery “Our goal was to begin answering questions around how mining and taconite processing have impacted the health of Minnesotans,” says John Finnegan, Dean of the university’s School of Public Health. “These studies have started to uncover those answers.” Asbestos fibers fall into a family of “elongated mineral particles” that are present within dust from taconite operations. Taconite, a low grade of iron ore, can contain asbestos. The Taconite Workers Health Study found death rates in the industry also are higher than state averages for more common kinds of lung cancer and for heart disease, which suggests that other health conditions are at work, too—for example, lifestyle appears to be an important factor. “Researchers did identify a potential link between cumulative exposure to workplace EMPs and mesothelioma in taconite workers. However, the link is not felt to be certain,” researchers said in a statement.
P
T
30 | SKILLINGS MINING REVIEW June 2013
olyMet Mining’s long-awaited plans for a copper-nickel mine in Minnesota’s Iron Range received welcome news Wednesday when a Swiss-based commodity trading and mining firm pledged to invest $20 million and help raise another $60 million in new equity financing. The involvement from Glencore AG, which includes $20 million in bridge loans and up to $60 million in new equity, is expected to be finalized in June, pending regulatory approvals in the United States and Canada. The investment will allow PolyMet to complete the lengthy environmental review and permitting process that has already been six years in the making, at a cost of $50 million. Environmental permits and state regulatory approvals are required before mill work and mine construction can begin. Glencore’s financing arrangement will involve the issuance of new stock to current and new shareholders through a secondary offering process known as “a summary of rights offering.” It is not yet known how many PolyMet shares Glencore will ultimately own, but it will not exceed 49.99 percent. Over the past five years, it has loaned or invested about $100 million in PolyMet. The investment also will rehabilitate the ore-crushing mill that was the former site of the LTV Steel taconite plant in Hoyt Lakes. Once finished, the mill will crush rock shipped in from the Mesabi Iron Range near Babbitt and partially extract copper, nickel, platinum, palladium, cobalt and gold. If successful, the latest influx of cash will help achieve PolyMet’s vision of creating 600 construction jobs, 360 factory and mining jobs, $350 million in annual revenues and $200 million in earnings before taxes. Construction of the mine and the mill rehab work should begin toward the end of 2014, with the first metal extracts being produced 15 months later.
Water Levels Worry At Great Lakes By Carien Daffue
T
hanks to a combination of natural and political headwinds, the Great Lakes shipping industry is bracing itself for another season of rough sailing. The industry’s headaches can be traced to persistently low water levels across the Great Lakes. These challenges are exacerbated by continued political wrangling over the funding of dredging projects - the latter are essential to keep harbors open and accessible for both commercial and recreational users. After one of the wettest Aprils on record for many parts of western Michigan, forecasters expect the water levels to rise about six inches on Lake Michigan. However, even that increase may not be enough to quell fears of stuck vessels and higher costs for many companies. The Lake Carriers Association 2012 Annual Report revealed the toll that inadequate dredging has had on the Great Lakes. The report also estab-
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Vale Ship Enters China Port After Two Years By Anna Grant
A
giant iron-ore carrier owned by top global producer Vale called at a port in eastern China in April 2012, in a move by the mining company to overcome restrictions on the vessels, marking the first entry of the enormous ships since Beijing banned them in January 2012. The vessel Vale Malaysia, which measures in at 402,285 metric tons deadweight of the commodity used to make steel, entered the Chinese port of Lianyungang in China’s Jiangsu province on April 16, according to data compiled by Bloomberg. A shipping source in China said the ship unloaded about 220,000 MT of iron-ore, and was still carrying nearly 87,000 MT when it left the port. The last large ore carrier to call in China was the 388,133-deadweightton Berge Everest in 2011, according to Krispen Atkinson, Maritime Business Manager at IHS Fairplay, a Redhill,
lished the dredging crisis as a primary concern for 2013. Conditions crippled shipping efficiency on the Great Lakes; the largest US-flag Great Lakes shippers were leaving behind more than 10,000 tons of cargo by the end of 2012 due to draft limitations. In January 2013, vessels transiting the St. Mary’s River were loading at less than 26 feet, compared to the standard draft of 28 feet, according to the LCA Annual Report. The eventual goal of the LCA is to have ships loading at midsummer draft, which ranges from 28-34 feet, depending on the vessel. In order for that to happen, the Army Corps of Engineers would need to dredge ports throughout the Great Lakes. It is estimated that 17 million cubic yards of sediment clog the Great Lakes
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England-based research company that tracks ships. China banned the Brazilian miner’s mega ships, called Valemaxes, over safety concerns as well as to protect its own ocean-freight industry as a glut in vessels globally dragged down shipping rates. The Valemaxes, the world’s biggest dry-bulk vessels, are big enough to hold three soccer fields end-to-end on their decks. It was unclear if China had lifted its ban on the vessels to allow the Valemax to enter the port, although Vale has said it has been in talks with Chinese authorities to regain entry. “We have been aware of this and already reported this to the National Development and Reform Commission and Ministry of Transport,” said Zhang Shouguo, Secretary General of the China Shipowners’ Association to Reuters. A Vale official in Rio de Janeiro, where the company is based, declined to comment. Vale is assembling a Valemax fleet in an effort to
manage the cost of shipping cargoes to Asia, its main market, and to compete more effectively with BHP Billiton Ltd. and Rio Tinto Group, whose Australian iron-ore mines are closer to China. Vale plans to have 35 of the ships by the end of the year, its website shows. No Chinese ports have regulatory approval to receive dry-bulk carriers of more than 300-000 MT. Most of the ships were built in Chinese shipyards and partly financed by the country’s international development bank.
Navigation System, an amount that could be removed for approximately $200 million, or roughly 2 percent of the Harbor Maintenance Trust Fund surplus. Whether the HMTF surplus will be appropriated toward dredging depends on the decisions of Congress this year. In June 2012, 196 members of the House of Representatives and 37 members of the Senate voted for Realizing America’s Maritime Promise Act, a bill that would guarantee that HMTF money allocated by Congress could only be used for dredging and maintaining ports. The LCA is hopeful the RAMP Act will receive more attention in a non-election year, and noted that most of the lawmakers who voted for the bill returned to Washington in 2013.
June 2013 SKILLINGS MINING REVIEW | 31
STATISTICS / MINING INDUSTRY SHIPPING/ MINING INDUSTRY SAFETY
March 2013 Crude Steel Production
IRON ORE PRICE REPORT
By John Edward
NORTH AMERICAN MARKET (LTU)
World crude steel production for the 63 countries reporting to the World Steel Association (worldsteel) was 135 million tonnes (MT) in March 2013, an increase of 1.0 percent compared to March 2012. The crude steel capacity utilization ratio for the 63 countries in March 2013 slid to 79.4 percent from 80.5 percent in February 2013. Compared to March 2012, it is 2.1 percentage points lower. The US produced 7.3 MT of crude steel in March 2013, down by 8.4 percent on March 2012. China’s crude steel production for March 2013 was 66.3 MT, up by 6.6 percent compared to March 2012. Elsewhere in Asia, Japan produced 9.4 MT of crude steel in March 2013, up by 1.3 percent compared to the same month last year. In March 2013, South Korea’s crude steel production was 5.7 MT, down by 7.0 percent over March 2012. In the EU, Germany produced 3.8 MT of crude steel in March 2013, a decrease of -2.2 percent on March 2012. Italy’s crude steel production was 2.2 MT, down by 18.4 percent compared to March 2012. Spain produced 1.3 MT of crude steel, 2.3 percent lower than March 2012. France’s crude steel production was 1.3 MT, a decrease of 9.6 percent on March 2012. In March 2013, Russia produced 6.0 MT of crude steel, a decrease of 2.8 percent compared to the same month last year. Ukraine’s crude steel production for March 2013 was 2.9 MT, 2.9 percent less than March 2012.. Statistics based on World Steel Association Report released on April 22, 2013.
Company
Ore Type
Iron Unit
Cliffs Natural Resources Inc
Pellets, FOB Michigan Mines
Cliffs Natural Resources Inc
Pellets, FOB Minnesota Upper Lakes Port
Per Gross Ton Iron Content Per Ton at 64% Reporting Date
$2.07
$132.48
12/31/12
$1.64
$104.96
12/31/12
Source: CLIFFS NATURAL RESOURCES INC
Weekly U.S. Raw Steel Production by district In thousands of Net Tons – Source – American Iron and Steel Institute
Week Ending
District
5/11
North East Great Lakes Midwest Southern Western
5/4
4/27
4/20
205 203 192 197 686 657 618 637 259 262 263 244 642 672 702 688 89 90 91 92
U.S. Raw Steel Production Week Ending
In Thousands of Net Tons - Source - American Iron & Steel Institute Weekly Production Year-to-Date Production Production
Percent Change* Capability Utilization Rate
Production
Percent Change
May 11, 2013 1,881 - 0.2 78.5 34,810 .- 7.3 76.4 Previous Year 1,970 - 4.5 79.2 37,661 .79.6 May 4, 2013 1,884 1.0 78.6 32,929 .- 7.5 76.3 Previous Year 1,988 - 5.2 79.9 35,591 .79.6 April 27, 2013 1,866 - 0.4 77.9 31,045 .- 7.6 76.2 Previous Year 2,014 - 7.3 80.9 33,603 .79.7 April 20, 2013 1,858 - 1.2 77.6 29,179 .- 7.6 76.1 Previous Year 2,014 - 7.7 80.9 31,589 .79.7 * Percent Change is a comparison between a given week and the previous week. The % change figure in the previous year row refers to the change from a given week compared with the corresponding week of the previous year. AISI’s estimates are based on reports from companies representing about 50% of the Industry’s Raw Steel Capability and include revisions for previous months.
Crude Steel Production, MARCH 2013 Monthly Crude Steel Production in the 62 Countries included in the report, in thousands of metric tons Source – World Steel Association
Country
March 2013
February 2013
March 2012
% change March 13/12
Canada............................... 1,200 e.... 1,080 e...........1,209....................-0.7 Cuba........................................25 e..........20 e................28................. -10.7 El Salvador..................................9 e............7 e..................6...................50.0 Guatemala...............................30 e..........25 e................26...................15.4 Mexico................................ 1,580 e.... 1,400 e...........1,559.....................1.3 Trinidad and Tobago...................35.............53................61................. -41.7 United States......................... 7,291....... 6,655...........7,961....................-8.4 Total - North America....10,170....... 9,240....... 10,850..................-6.3 Argentina................................. 468...........321..............497....................-5.9 Brazil...................................... 2,894....... 2,629...........3,132....................-7.6 Chile...................................... 160 e........125 e..............155.....................3.2 Colombia.............................. 100 e..........80 e..............134................. -25.4 Ecuador....................................40 e..........35 e................38.....................5.3 Paraguay....................................1 e............1 e..................3................. -66.7 Peru..........................................95 e..........75 e................78...................21.8 Uruguay.....................................7 e...............e..................7.....................0.0 Venezuela.............................. 200 e........155 e..............255................. -21.6 Total - South America.....3,965....... 3,421......... 4,299..................-7.8 Algeria.........................................62.............21................63....................-2.8
Country
February 2013
March 2012
% change March 13/12
Egypt........................................ 525...........530..............592................. -11.3 Iran........................................ 1,215....... 1,199...........1,163.....................4.5 Morocco......................................55.............56................52.....................5.0 Qatar........................................ 201...........179..............189.....................6.3 Saudi Arabia............................. 468...........437..............462.....................1.5 South Africa.......................... 570 e........515 e..............651................. -12.5 Total - Africa /Middle East....3,096....... 2,937......... 3,173..................-2.4 China ..................................66,293.....61,830........ 62,164.....................6.6 India.................................... 6,860 e.... 6,200 e...........6,441.....................6.5 Japan..................................... 9,446....... 8,317...........9,324.....................1.3 South Korea.......................... 5,664....... 4,981...........6,093....................-7.0 Taiwan, China.................... 1,770 e.... 1,600 e...........1,855....................-4.6 Total - Asia......................90,033.....82,928....... 85,877...................4.8 Australia................................... 387........425 e..............402....................-3.6 New Zealand...............................78..........80 e................61...................26.8 Total - Oceania.................... 465.......... 505............ 463...................0.4 Total - European Union(27)...14,597.....13,384....... 15,633..................-6.6 Total - Other Europe........3,138....... 2,787......... 3,335..................-5.9 Total - C.I.S. (6)..................9,419....... 8,055......... 9,865..................-4.5 Total (62 countries)......134,883...123,258.....133,495...................1.0
The 62 countries included in this table accounted for approximately 98% of total world crude steel production in 2011.
32 | SKILLINGS MINING REVIEW June 2013
March 2013
e – estimate r - revised
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Preliminary USGS Iron Ore Statistics for December 2012 By John Edward
According to the U.S. Geological Survey (USGS) report by Iron Ore Commodity Specialist John D. Jorgenson, U.S. mine production of iron ore in December 2012 was 4.65 million metric tons (MT), slightly less than in November. Production was 150,000 MT on a daily average basis, slightly less than November 2012 and nearly the same as December 2011. U.S. iron ore shipments were 5.50 MT in December 2012, 21 percent higher than those in November 2012. Shipments were 177,000 MT on a daily average basis, 17 percent more than those of November and 9 percent less than those of December 2011. Mine stocks at the end of December 2012 were 824,000 MT less than those held on November 30, a decrease of 27 percent. U.S. exports of iron ore were 758,000 MT and U.S. imports were 338,000 MT.
Mechanization: An Option To Increase Productivity & Manage Safety Issues By Anna Grant
L
abor issues continue to pursue the mining sector and recent news about South Africa’s labor challenges in their platinum and gold mines have brought them into sharp focus again. Since the first accidents were reported in 1904, more than 54,000 South African mineworkers have died in mine accidents, and many more have died from exposure to hazardous dust, gas and fumes. A proposed solution is mine mechanization, which aims not only to improve safety, but also to reduce direct costs and increase productivity. Mechanized mining is a predominantly South African initiative in the global mining industry and mining companies operating in other areas are increasingly recognizing the benefits of the same. Current successful products in mining mechanization include underground mining machinery with outboard access to motors, gear cases, controllers and other major components. Mining companies investing in mechanized mining in South Africa are also committed to developing mechanized mining in their overseas operations. Gold Fields is a prime example, with additional mechanized operations in Australia and Peru, and plans to expand mechanization further afield. Gold Fields has already embarked on mechanization to remove its employees from dangerous areas, and says that successful implementation requires mines to take into account considerations such as the attraction of workers to mines, union involvement, operator requirements, selection, training, managing change and setting realistic production targets.
Better Safety For WA By Carien Daffue
T
he Western Australian government has appointed seven new specialist safety inspectors to work specifically in the resources and mining sector. Mines and Petroleum Minister Bill Marmion said the State Government had boosted its safety inspector workforce by nearly 30 percent since late 2009, when the Reform and Development at Resources Safety strategy was introduced. “RADARS was established following a series of independent inquiries and mining deaths, and continues to ensure high safety standards are being maintained at WA’s 975 operational mines and 65 petroleum sites,” Mr Marmion said. The new safety specialists take the total number of Department of Mines and Petroleum inspectors to 107, including 63 mines safety inspectors, 16 petroleum safety assessors and risk analysts, and 28 dangerous goods officers. www.skillings.net
“These new expert safety inspectors are crucial to the ongoing health and wellbeing of the State’s 98,000 resources workforce. Last year, for the first time in a century, there wasn’t a single mining death in Western Australia – that’s a remarkable achievement and one that we would like to see repeated in 2013.” The new safety specialists share structural, mechanical, electrical, mining and petroleum engineering expertise. Four have been appointed to the mines-safety inspectorate team, which carries out 2,400 site inspections per year. Three are working as petroleumsafety assessors and risk analysts, performing safety documentation assessments, inspections, audits and investigations related to oil and gas operations. The new personnel are now undertaking a rigorous six-month training course, which includes familiarization with WA safety regulation, as well as stakeholder liaison, four-wheel-drive, and helicopter survival courses
Death rates in WA mine sites are three times more than any other state in Australia, the latest figures from Safe Work Australia reveal. Former Department of Environment director-general Keiran McNamara gave recommendations in a confidential submission in 2010 to the Environmental Protection Agency. The state’s 10,000 underground miners are being put at risk by breathing in a cancer-causing chemical known as diesel particulate that could “eclipse asbestos’’ as an industrial killer. While the department has known of the dangers of diesel particulate for years, it is still drafting guidelines. Nearby residents complain of asthma and breathing problems after the operators of Kalgoorlie’s Super Pit failed to prevent toxin-rich dust from blowing over homes. McNamara recommended a limit on emissions, more stations for air monitoring, a one-kilometer exclusion zone and better smokestack filtering at the Gidji Roaster, run by operator KCGM. None of the recommendations was implemented. June 2013 SKILLINGS MINING REVIEW | 33
mining Matters/ mining INDUSTRY People/ Advertising Index/STEEL
Kennametal Acquires Tungsten Processing Operations In Bolivia By John Edward
K
ennametal Inc. announced on May 13, 2013, that it had signed a definitive agreement to acquire the operating assets of La Paz-based Comercializadora Emura S.R.L. and certain related entities, while securing related material sourcing agreements. Emura is the region’s principal operation engaged in collection, testing, processing and exporting tungsten-ore material, and is a long-standing supplier to Kennametal. The company expects to complete the transaction in July 2013, subject to customary regulatory approvals and negotiated conditions. The acquisition would be immediately accretive to earnings and further Kennametal’s efforts to diversify and balance its tungsten sourcing capabilities, following the company’s November 2012 announcement outlining plans to develop an advanced carbide recycling facility in the United States. The facility is expected to serve global markets and to add tungsten-cobalt powder capabilities at the company’s Tianjin facility to serve growth in Asia. “Tungsten is a key ingredient for the technologies we develop, and ultimately vital to virtually every kind of manufacturing,” said Kennametal Chairman,
President and CEO Carlos Cardoso . “We look forward to welcoming the employees of Emura to our company family, and adding these assets to serve customers with the most advanced capabilities in our industry.” Emura currently supplies the material which Kennametal uses to produce composite alloys and high-performance cutting tools for rugged earthworks applications. The addition of Emura would enhance Kennametal’s strategic sourcing of material to serve growth globally without incurring risks associated with owning mining operations. Celebrating its 75th year as an industrial technology leader, Kennametal Inc. delivers productivity to customers seeking peak performance in demanding environments. The company provides innovative wear-resistant products, application engineering and services backed by advanced material science, serving customers in 60 countries across diverse sectors of aerospace, earthworks, energy, industrial production, transportation and infrastructure. With approximately 13,000 employees and nearly $3 billion in sales, the company realizes half of its revenue from outside North America, and 40 percent globally from innovations introduced in the past five years. Recognized among the
Advertising Index Azcon ................................................. 23 Boldt...................................................... 4 Barr Engineering.................................. 24 CR Meyer............................................. 23 COREM................................................ 18 Electric Power Door.............................. 20 Eriez Magnetics ................................... 12 Global Minerals Engineering................. 21 Golder Associates................................... 2 Hallett Dock Company.......................... 17 Hydro-Klean......................................... 25 34 | SKILLINGS MINING REVIEW June 2013
“World’s Most Ethical Companies” (Ethisphere); as an “Outstanding Corporate Innovator” (Product Development Management Association); and one of “America’s Safest Companies” (EHS Today) with a focus on 100 percent safety, Kennametal and its foundation invest in technical education, industrial technologies and material science to deliver the promise of progress and economic prosperity to people everywhere. For the fiscal third-quarter of 2013, Kennametal Inc. had previously reported earnings per diluted share (EPS) of $0.67 compared with the prior year quarter EPS of $0.93. “In the March quarter, we again delivered double-digit margin performance and generated strong cash flows, despite another difficult period for industrial and infrastructure activity globally...We’re navigating well in a challenging economic environment, while strengthening our business to be ready to serve our customers as growth returns...Our company-specific initiatives will continue to provide opportunities for maximizing revenues, earnings and cash flows” said Kennametal Chairman, President and Chief Executive Officer Carlos Cardoso.
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Idea International Drilling..................... 29 Industrial Lubricant............................... 16 Krech Ojard & Associates, P.A................ 29 Lake Superior Chapter ISEE................... 27 L & S Electric Inc..................................... 2 Lakehead Constructors, Inc................... 10 ME Electmetal...................................... 14 Malton Electric Company...................... 23 Mining IQ............................................... 4 Minnesota Power................................... 8 Mielke Electric Works.............................. 2
Naylor Pipe.......................................... 36 NBC..................................................... 20 Neo Solutions........................................ 5 Noramco Engineering Corp................... 27 North Shore Steel................................. 16 Northern Engine & Supply.................... 27 Viant (RJS)............................................. 2 S.E.H.................................................... 21 WP & RS Mars...................................... 13
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Mining Matters BHP Billiton BHP Neutral Rating
BHP Billiton (LON: BLT) stock had its “neutral” rating restated by equities researchers at Goldman Sachs in a report issued recently. They currently have a GBX 2,150 ($33.46) target price on the stock. BHP Billiton has a one-year low of GBX 1622.16 and a one-year high of GBX 2237.50.
Mining Supply Chain HP Conflict Free
HP is facing its supply-chain issue head on. The firm announced plans to achieve a conflict-free supply chain by encouraging suppliers to earn certification as a ConflictFree Smelter (CFS). HP is hoping to lead the industry in the use of conflict-free smelters and refiners, an important component in an ethical supply chain in the IT industry.
Mining Policy and Law Norm Dicks Joins Law And Lobbying
Firm
The Bremerton Democrat Norm Dicks—who announced his surprise retirement after 36 years in Congress last year—has taken up the position of senior policy counsel with Van Ness Feldman, a law firm and lobbying shop specializing in energy and environmental issues.
Mining Amid falling mine fund shares and global insecurity over metals demand, spikes such as the ones seen on the London Stock Exchange with BHP Billiton, Rio Tinto and the ENRC at the beginning of May gave value traders who had purchased low an opportunity to sell at a handsome profit.
Mining Investment Investment analysts have come up with some new ideas on mining versus metals investment since gold fell off in April. One take: well-managed mines operating under stable conditions can be good bets, safe even from metals price fluctuations. Another: gold and
Timken Votes To Spin Off Steel Division By Mary Claire Whitaker
S
hareholders of the Canton, Ohio-based Timken Company, an industrial-materials, bearings, and power-transmission company, voted in May to create a steel business by splitting its steel division into a separate company. Timken Alloy Steel and Steel Components division customizes engineered steel as well as standard ASTM grades. The company has 64 plants globally. The move, proposed by the company’s largest shareholder, Relational Investors LLC, one of whose major investors is the California State Teachers’ Retirement System, was approved with 53 percent of votes cast. The company said it would finalize the decision by late June. United Steelworkers District 1, which represents 2,300 Timken workers, opposes the plan. The Timken board has opposed the plan since its introduction in November 2012, saying it would raise costs and reduce efficiency of the 112-year-old company. Relational Investors maintains that the plan will boost value for shareholders. “It would come out basically unleveraged, it would have significant financial capacity, and we think it would trade in the marketplace at a value that is superior to its peers,” said David Batchelder, co-founder of Relational. www.skillings.net
Disclaimer: While every effort has been made to ensure the accuracy of the information supplied herein, Skillings Mining Review cannot be held responsible for any errors or omissions. Unless otherwise indicated, opinions expressed herein are those of the author of the page and do not necessarily represent the corporate views of Skillings Mining Review.
silver, as commodities, do not have to answer to shareholders.
Rio Tinto Rio Tinto Opens Argyle Underground Mine
Rio Tinto has opened the new Argyle underground diamond mine in Western Australia. The move from open pit mining to an underground operation will extend the life of Argyle until at least 2020, and is likely to produce 20 million carats per year.
Vale Vale Obtains Installation License for Railway Spur
Vale has been granted the installation license and vegetation-clearing permit for the rail spur to connect Carajás mining to the Carajás railway in the state of Pará, Brazil. This will allow the iron-ore capacity expansion to 230 million metric tons per year.
Mining Industry People G
reat Panther Silver appointed Mr. Geoff Chater to its Board of Directors along with adding two senior personnel to the Vancouver-based miner’s management team in Mexico. Mr. Chater, who serves as director of several resource companies including Luna Gold, brings with him more than 24 years of experience in the mineral and mining industries of North America, South America and Africa. He is the principal of Namron Advisors consultancy, and recently served as president of Valley High Ventures.
E
ro Mining appointed former Ramelius Resources head— Mr. Joseph Houldsworth—as the junior explorer’s new Managing Director. Mr Houldsworth, who served as managing director of Ramelius Resources from its founding until 2010, has over 40 years experience in the minerals and gold mining industry.
M
r. Tony Hayward has been appointed Interim Chairman of GlencoreXstrata, the newly formed FTSE 100 resources titan, less than three years after he was forced to resign as BP’s chief executive in the wake of the Gulf of Mexico disaster. GlencoreXstrata was born of the recently completed merger of commodity trading giant Glencore and mining group Xstrata. June 2013 SKILLINGS MINING REVIEW | 35
36 | SKILLINGS MINING REVIEW June 2013
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