Skillings Mining Review December 2016

2016 DECEMBER IN REVIEW

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Vol:105.No:12

1912-2

016

NEW MINING EQUIPMENT TECHNOLOGY P 16

THE BIGGEST NAMES & PRODUCTS AT MINE EXPO

P 10

INSIDE STATISTICS

...From the Editorial Desk

T

DECEMBER 2016 VOL.105. No.12

he risks of mining speak for themselves: dangerous conditions, remote locations, unsure markets, and difficulty in raising funds from stubborn bankers.

2016:

political stability.

As

A

fresh risk may be on the horizon for

more and more miners look to new locations,

form or another. Rising tensions between Saudi Arabia and Iran have forced financiers to pull up the stakes in the Middle East; Chinese economic slowdown makes it difficult for miners to find a willing buyer for their products; South American corruption scandals complicate the process of permits and authorizations.

each location carries troubles in one

Verisk Maplecroft annually releases a report on political risk across the globe. Their predictions for 2016 read like a laundry list of headaches for miners. 31 of the 49 countries in sub-Saharan Africa fall within “high” or “extreme” risk, despite having huge reserves of iron as well as gold, diamonds, oil, and platinum. Brazil, Argentina, and Venezuela are withering under recession as well as protests against elected officials; six total South American countries (out of just 12 in the continent) also have the notorious “high” or “extreme” risk tags. Public financing for mining projects appears to be under severe pressure for a number of nations throughout 2016, and as funds dry up the risk of discontent grows ever greater. Many mining operations will need to turn to private investment in order to bridge the gap between under-funded state institutions and the operational costs of digging, extracting, and shipping their products.

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In this Issue

NEW MINING EQUIPMENT TECHNOLOGY

P 16

P 10

THE BIGGEST NAMES & PRODUCTS AT MINE EXPO

P 06

P 20

2016 ANNUAL INDEX

ALASKA MINING TAX FUELS DEBATE FROM EDUCATION LEADERS

COVERSTORY

Tsurumi Pumps.............................................................. 04

New Mining Equipment Technology............................. 04

Donald Elsenheimer, Economic Geologist Minnesota Department of Natural Resources’ Division of Lands and Minerals..................................... 08

The Biggest Names & Products at Mine Expo............. 10 MINING FINANCE Alaska Mining Tax Fuels Debate From Education Leaders......................................................... 06 PROFILES IN MINING

Thomas Rayburn, Director of Environmental and Regulatory Affairs, Lake Carriers’ Association............................................. 12

Glenn Wieczorek Maanaging Director,

2016 ANNUAL INDEX .................................................... 20

MINING PEOPLE............................................19

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Statistics.............................................. 14/15

December 2016 SKILLINGS MINING REVIEW | 3

Reputation for Quality & Service PROFILES IN MINING

Glenn Wieczorek (MAANAGING DIRECTOR, TSURUMI PUMPS)

SMR: At the 2016 American Rental Association Rental Show in Atlanta, Georgia, USA, Tsurumi confirmed its entrance into the equipment rental market. What does this mean for Tsurumi's retail inventory and what was behind the decision to offer rental products?

GW: Actually Tsurumi America, Inc. (TAI) has been supplying products for the rental market since its establishment in 1979. We have become an industry leader in supplying quality electric submersible pumps at a competitive price. In addition we introduced engine driven pumps and generators in the 1980s to broaden our product offering. All of these products cross over to mining applications. We sell our pumps to thousands of rental stores across the US so our distribution footprint is very wide.

There are some advantages of renting capital equipment. The whole cost of renting equipment can be expensed the same year as the cash outlay. This opposed to depreciating the cost over the life of the equipment can be an advantage for some companies. Additionally the rental company is responsible for repairs due to normal use. Tsurumi has 8 inven-

4 | SKILLINGS MINING REVIEW December 2016

tory locations in the US and carries more inventory than any other manufacturer. This allows us to ensure quick delivery when customers need pumps.

SMR: Tsurumi America introduced its new FM Approved explosion proof pumps in 2015. How will the company advance the pump in other markets, including mining and industrial markets that require strict safety standards?

GW: In 2015, TAI introduced the new explosion proof pumps for wastewater applications. The pumps will be ready for delivery in the second quarter of 2016. We are evaluating applications beyond the wastewater market such as mining to determine the optimal models for that environment. Moving forward we are developing additional products to be offered in an Ex-proof configuration in order to expand the coverage of applications.

SMR: Our last count shows Tsurumi is active in 45 countries and produces leading pumping technologies for various sectors from mining to scenery creation fields. What are Tsurumi's plans for market share growth and product expansion?

GW: Currently Tsurumi has a number of new products

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in development that should be ready for the market within the next two years. It is exciting to see the development of these products so we can continue to provide water handling solutions. Products such as our new line of 316 stainless steel pumps ranging up to 150HP will be stocked in our Chicago and Salt Lake City warehouses. This sets us apart from other suppliers. Our philosophy is to maximize great service to our customers and deliver pumps when they are needed.

SMR: Engineering can be the cause and the solution to many societal ills. What sort of engineering solution could a company like Tsurumi offer to the residents of Flint, Michigan USA to provide clean water?

GW: Competent engineering services are a must in the pump business. Daily our customers are contacting Tsurumi for help in solving their water problems.

We recognize the importance of providing proper solutions for complicated issues. Tsurumi specializes in delivering proper equipment solutions to meet the pumping needs of our customers.

We also recognize we are not experts in solving issues dealing with the delivery of clean water for human consumption. Our expertise lies in dealing with dirty water; waste water, ground water, and water containing solids. We would never offer a solution unless we were confident we have the proper expertise to handle a given request for help.

ment, operations, and now as managing director. This experience added to my background with DOL gives me a unique insight when analyzing our position within markets as well as evaluating how the macro economy affects TAI. I would like to see all of our politicians recognize we need to work together in order to achieve our goals as a country.

I believe most people are fed up with our elected officials playing political games with our lives to enhance their political positions. Instead of working together they are concentrating on competing against the other side. It looks like the main political parties are being greatly influenced by the extremes in their parties. The extremes can’t find a political middle ground therefore they dig in their heels and decide to simply not “give in” to the other side. I want our contemporary politicians to realize they will more effective in finding solutions if they work as a single team together rather than working as two teams with different agendas.

SMR: In 2011, Tsurumi introduced its strongest ever pump cable to Europe, designed to work with pumping equipment in the construction, quarrying and mining sector. Are there plans to bring this technology to other markets like the US and Canada?

GW: TAI offers cable options that will stand up to the toughest applications. We have access to the cables offered in Europe as well as other cables designed for specific applications.

SMR: You spent 8 years as an economist for the US Department of Labor serving through the administrations of Regan, Bush and Clinton. In your current capacity as managing director, how have your past talents merged to lead Tsurumi today?

GW: My experience in the pump business extends over 20 years in capacities ranging from sales, sales manage-

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December 2016 SKILLINGS MINING REVIEW | 5

Alaska Mining Tax Fuels Debate From Education Leaders

S

ometimes the biggest voices in an industry have the most sway. Miners throughout Alaska are hoping that the head of the University of Alaska-Southeast's mine training program will be the big voice to provide the sway for a new bill on mine taxes and training. Governor Bill Walker has put a new bill through the Alaskan senate that seeks a tax increase on the state's mining industry, which industry experts believe will affect the current investment in training and education. It's proMMMven to be such a big debate throughout the Last Frontier State that Graham Neale, director of the university's Center for Mine Training, has come into the public eye to testify and protest the tax decision.

THE NUMBERS House Bill 253 contains the crucial language for the tax on Alaska mines. It's meant to be a broad tax for the largest providers working in the state, only affecting the mines with a net income of one hundred thousand dollars or more per year. The increase in the state tax rate from seven percent to nine percent would only apply to fourteen mines in total based on 2014 income, but threatens a large number of jobs.

The Donlin mine alone, for instance, employs over three thousand Alaskans. Currently, Alaska offers a 3 year tax exemption for new mines, but

6 | SKILLINGS MINING REVIEW December 2016

HB 253 would eliminate this exemption as well as adding a new fee for mine licensing, which would affect mines of all size and operations throughout the state. The state's mining tax collected about forty million dollars last year; the increase would garner about an extra six million dollars.

PUBLIC FORUM Neale's opposition to the mining tax took center stage when he spoke to the Alaska House Resources Committee. Neale argued that it was critical for the state's budget offices to re-evaluate the purpose of the tax in order to determine how Alaska can draw fresh investment for an ailing

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industry. The director, as well as the university itself, fears that mine developers will be willing to set up shop in other states -- or even across the border in Canada -- and leave UAS students without a course for success after graduation. Neale claimed the tax, which appears on House Bill 253, puts students on a "pathway to careers that no longer exist."

REACTIONS Despite Neale's criticism of the tax increase, the House Resources Committee pointed out that the tax would be more beneficial to Neale and his students than appears on the surface. Democrat Andy Josephson noted that as Alaska-Southeastern is a public school, it would stand to gain a portion of the six million dollars per year boost from the tax increase. While the increased revenue would be a boost for the school overall, Josephson's point didn't apply as persuasively as he had hoped.

Neale noted that the Center for Mine Training relies primarily on federal grants and industry donations, making it almost independent of the state's budget. Not only would the students at the Center see little benefit from the tax increase, but they would suffer from the lack of job opportunities if businesses decided to choose another location with more appealing tax rates.

ALTERNATIVES In a state that has fifty billion dollars in oil revenue but managed to run a four-billion dollar deficit during 2015, it's not clear how the state could develop an alternative to the mining tax in order to maintain revenue while also keeping mining industries happy.

serving as the chairman for the Prince Edwards Islands chapter of the Alaska Miners Association.

OUTSIDE OPINIONS Neale and the Center for Mining Training aren't the only voices arguing against the new mining tax. Donald Stevens, an Anchorage-based geologists, claimed that this was the worst time within the past forty-five years for a mining tax given the collapse of the metals market.

Jason Brune, a former spokesman at the Pebble Mine complex who was laid off due to decreased revenue, claimed that his story would become typical if the state put additional pressure on miners. The opposition to the bill was so fierce, in fact, that the Committee had to announce that anyone who did not get a chance to testify would be able to do so when the hearing re-opened the next week.

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Neale expressed the desire to keep the Center for Mining Training functional for graduates, but did not come up with solutions for the Resources Committee, claiming it was his job to put other people to work, not his job to balance the budget.

Even without a suitable alternative, Neale's experience as both an educator and a miner makes him an authority on the subject. His resume includes time working as a project manager at the Niblack mine on Prince Edwards Island, and

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Mining Infrastructure Natural Resources Science Waste Rock and Tailings Design, Reclamation, and Closures Water Resource Management

sehinc.com 800.325.2055 Engineers | Architects | Planners | Scientists

December 2016 SKILLINGS MINING REVIEW | 7

PROFILES IN MINING

DONALD

ELSENHEIMER Economic Geologist

Minnesota Department of Natural Resources’ Division of Lands and Minerals SMR: Your current charge, The Minnesota Department of Natural Resources (DNR), is responsible for administering more than twelve million acres of State-owned, State-managed mineral rights and your previous tenure at the Geological Survey of Japan (GSJ), the mission was to promote a safe and sustainable society. As an Economic Geologist concerned with earth materials that can be used for economic and industrial purposes, with a significant discovery on your watch and now the oversight of the Gold Mineralization Project and Regional Gold Surveys, is this model and objective feasible for other regions in the US and globally?

DE: The DNR’s approach towards mineral exploration fits within its broader mission to integrate and sustain the interdependent values of a healthy environment, a sustainable economy, and livable communities

8 | SKILLINGS MINING REVIEW December 2016

within Minnesota. DNR’s integrated resource management strategy shares stewardship responsibility with citizens and partners to manage for multiple interests.

Trusts established to benefit local schools and governments are one of these multiple interests, since they own a good portion of the mineral rights managed by the DNR. As the trustee of this mineral estate, we have a fiduciary obligation to generate revenue from these holdings. Now, neither the State of Minnesota nor the Trusts have the financial resources and risk tolerance that is required to discover, delineate and potentially develop a revenue-generating mineral deposit. So we’ve adopted a far more conservative management model, that has State-employed geologists like myself working with relatively modest budgets to search for areas within the mineral estate that have high potential for developable ore bodies.

The goal is to attract private exploration companies to come to Minnesota and invest the necessary capital to discover and delineate mineral deposits on state-leased mineral rights. This pro-active approach also supports broader land management strategies, and better enables us to conserve those areas of highest mineral potential for future exploration and development. I think that it has worked well for both the State of Minnesota and the Trusts.

SMR: In 2007, you filed the first Gold Mineralization Project 370 report which compiled data in the St. Louis County, Minnesota area indicating concentrations of gold in the soil. What has occurred over the past 9 years to indicate the project remains applicable and advances DNR’s objectives?

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DE: As a State of Minnesota geologist, I have the luxury of starting each new mineral potential project with a wealth of historical exploration data and archived drill core already in hand. Mineral explorers are required by law to submit a portion of drill core from every exploratory borehole in Minnesota to our public drill core library in Hibbing (a modern, heated facility that provides public access to more than 3 million feet of drill core from thousands of drill holes).

A company exploring for minerals on State-managed mineral rights is also required to provide copies of any maps, laboratory reports, or other exploration-related data to the State upon lease termination. Our basic strategy over the past decade has been to go into areas where there has been historical exploration, and to leverage this publically-available exploration data and archived drill core with new assays and new geochemical data, typically using maps, exploration methods, and mineralization models that weren’t available back in the day.

One possible indication that this approach has been successful is the fact that private exploration companies have come in behind each of my projects and actively leased these areas for gold exploration. Now, I certainly can’t take all (or even most of the credit) for generating this level of interest; these were all areas of historical gold exploration, and Minnesota certainly wasn’t the only region to see increased levels of gold exploration over the past decade. But I can say that the new data does add value to the state’s mineral estate, and, more generally, that mineral exploration stimulates private investment and boosts local economies (often in parts of the State where that help is needed the most).

SMR: Department of Natural Resources contractor, Overburden Drilling, Ltd. has been brought on board for the Gold Mineralization Project. What is the significance of their skills and the latest achievement directly attributed to their presence?

DE: My DNR project work supports mineral lease sales and attracts private company investment and exploration within Minnesota. It is also used to support and defend DNR land management decisions, sometimes involving parcels that have competing interests. Having all of our laboratory work and sample processing completed by industry-respected external laboratories and contractors helps maintain high levels of public and private stakeholder confidence in the validity and integrity of our findings. So we have a third party count the gold grains for us. Of course, contracting with external vendors is also extremely cost-effective when they can provide services that require specific expertise and/or expensive equipment.

SMR: Now that the PolyMet Environmental Impact Statement has been completed and deemed Adequate, what are the remaining steps and timetable for DNR’s Pollution Control Agency environmental permitting process?

DE: The State of Minnesota has just rolled out a new website (mn.gov/polymet) to provide up-todate information about the on-going regulatory process and the project-related state permits that would be issued by the DNR or the Minnesota Pollution Control Agency (MPCA).

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December 2016 SKILLINGS MINING REVIEW | 9

T

he next generation of mining technology has arrived and is on display. The Mine Expo in Las Vegas showcases the biggest names in the industry and the coolest new tech trends that are helping miners to bring more ore to their customers. In addition to the normal titans, there are several new players pushing their way in to capture a share of the market.

10 | SKILLINGS MINING REVIEW December 2016

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The Biggest Names & Products at Mine Expo FLEET MANAGEMENT The automation of trucks, trains, and vehicles has reduced the costs of mining by eliminating drivers in favor of efficient and reliable machines. Yet this hasn't totally kept people out of the process given the need to ensure that each truck gets to each pit and each train gets to each city. MICROMINE is taking the next steps forward to create a fully automatic supply chain, so that human error and liabilities can be minimized, if not erased altogether.

MICROMINE has launched a new fleet management protocol called Pitram, which, after testing in the field, appears to provide solutions for mine fleets and vehicles that currently cannot be automated efficiently or comprehensively.

Pitram cut its teeth on the Mongolian mining site Erdenet, integrating the protocol into the Erdenet fuel management and payload systems as well as their drilling and loading equipment and hauling systems. Pitram passed with flying colors, allowing managers to be able to direct vehicles on the same screen as machine guidance.

With real-time operational management, Pitram allows development

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to become faster, smarter, safer, and more efficient. Their presentation at Mine Expo is certain to turn heads.

SMART IRON Hitachi is pulling out a lot of stops in order to stake their claim as one of the industry leaders for mining equipment. Their roll-out for the 2016 Mine Expo will match the Japanese company's ambitions for 2017 and beyond, with a presentation booth that straddles over 22,000 square feet.

complement the EX-6 mining excavator's autonomous hauling capabilities. The company has jealously guarded details of this new tech, but has promised a number of improvements that will vertically integrate mining systems and provide superior performance and durability.

EJECTOR CAPABILITIES Raw power always takes center stage at Mine Expo. Caterpillar, long a company that markets the sheer strength of its products, intends to keep it that way. The centerpiece of their contribution to the Mine Expo will be the showcasing of the AT18E payload ejector, which, as the name suggests, can manage up to 18 metric tons of earth in one go. Caterpillar makes ejectors that can handle up to 20 tons and is field testing a 22-ton ejector, set to launch on the market in 2017.

Hitachi has had poor luck in the past two years, with their stock price falling by half (despite the fact that it rose following the end of the commodity boom in 2011).

To re-capture valuable market share, they've rolled out a new series of products and technologies dubbed "smart iron".

Front and center in the smart iron technology is a tool to provide better peripheral vision support for machines, increasing the range of their direction by ramping up the area of sensors and cameras.

In addition, Hitachi has created a number of devices to aid in automatic trolley loading, a series of robotics tools that promise to

Caterpillar is gambling quite a bit on the success of their heavyduty ejectors, having paid a pretty penny to acquire the intellectual property of Idaho-based Ground Force Worldwide. Will bigger be better? It remains to be seen but Caterpillar is hedging its bets, and will go big rather than go home.

December 2016 SKILLINGS MINING REVIEW | 11

SMR: Tell us about your role with the Lake Carriers' Association.

Rayburn: I became the Director of Environmental and Regulatory Affairs in 2015. Prior to that, I spent seven years with the Great Lakes Commission, a year with Marine Safety Response of the United States Coast Guard's Ninth District headquartered in Cleveland, OH, and 15 years as an environmental consultant. My background is in environmental science and engineering. My work on regulating ballast discharge is particularly important given the environmental risks of invasive species.

SMR: What types of ballast laws affect the Great Lakes?

Rayburn: Right now, both the Environmental Protection Agency and the Coast Guard impose regulations from two separate laws on ships entering and operating on the Great Lakes, as do a number of the states. This confusion has made the uncertainty about how, when, and where to discharge ballast water into a nightmare. Our industry, as do all sectors, need certainty and consistency in regulatory implementation and oversight. Without VIDA all eight Great Lakes states could separately regulate ballast water in addition to the two federal agencies.

In fact, Minnesota and Wisconsin already double regulate ballast water; first under their Clean Water Act designated authorities and second with their garbage regulations. On the Canadian side they will begin to implement their own regs based on an international agreement that is for shipping on the high seas, not a closed freshwater system like the

PROFILES IN MINING

THOMAS RAYBURN

Director of Environmental and Regulatory Affairs, Lake Carriers’ Association

Dispelling Myths About Vessel Incidental Discharge Act Great Lakes. The Coast Guard is uniquely suited to be the single regulator of ballast water. They already enforce environmental protection requirements for EPA and the National Oceanic and Atmospheric Administration and they are the only federal regulatory agency that understands both vessel operations and environmental protection. VIDA will be the most comprehensive and rigorous national standard in the world. I’m baffled why anyone would object to this.

SMR: What makes ballast regulation so important?

Rayburn: First let me state that ballast water is vitally critical for the safety of our crews and the ships they sail on. There are so many stories about the introduction of harmful new species into ecosystems. True, some species like the zebra mussel introduced by foreign ocean-going vessels in the 1980s had profound impacts on the Great Lakes. We all get that and wish it did not happen. But, as an industry the U.S. Great Lakes fleet has learned from

12 | SKILLINGS MINING REVIEW December 2016

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that and worked with EPA and the Coast Guard to develop best management practices to eliminate the introduction and spread of invasives. It’s worked.

We see passions flaring about species like Asian carp that have nothing to do with ballast-mediated introduction but go on to be the next poster child for invasions that people equate erroneously to regulating ballast water. Ballast water is only one of 64 separate vectors identified as a means of invasive introduction. As far as the Great Lakes are concerned, it looks like the industry and Coast Guard have effectively closed that door. VIDA codifies current Coast Guard regulations, but also puts in place a continuous and inclusive feedback process to ensure we continue to refine and tighten management strategies.

SMR: You mentioned VIDA. There's lots of negativity around its inclusion in the National Defense Authorization Act. Rayburn: The NDAA routinely includes maritime legislation, and the U.S. maritime industry is an essential element of national security, so implementing a national ballast water discharge standard is consistent with national security. The most important thing is to get ballast water regulation right, not the legislative vehicle in which it is enacted.

SMR: Is seven years enough time to develop a new discharge standard?

Rayburn: The current Coast Guard ballast water discharge standard was promulgated in 2012, so VIDA would require a revised standard less than 10 years after that. The revised discharge standard will be driven by the ability of technology at that time.

The past ten years of quality controls, some mandatory and some voluntary, have been extremely successful.

In Lake Superior, for instance, there have been sixty billion gallons of ballast water discharged by Great Lakes vessels since 2007 without a single documented introduction of any new invasive species during that period.

The VIDA requirement that ocean-going vessels continue to exchange ballast water in salt water in addition to also having to treat their ballast water will be a key component of safeguarding the Great Lakes for the future so that new invasive species cannot threaten our Great Lakes ecosystem.

SMR: Updates to the ballast water discharge standard in VIDA seem to be an issue of contention.

Rayburn: he language of the bill in the NDAA has been misinterpreted by VIDA’s opponents. Under VIDA, the current Coast Guard discharge standard must be revised prior to 2022. Some say that this means there will be seven years without any changes, when in reality VIDA allows the discharge standard to be changed whenever it becomes technologically practicable to do so.

The states and EPA will be able to actively participate in that process. It is completely false that any of this will or even can be done in a vacuum or behind closed doors.

The control of the introduction of invasive species is critical, but it is also extremely important to note that U.S. Great Lakes vessels have never introduced any new species into the lakes and regulating us as if we do is an undue burden.

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December 2016 SKILLINGS MINING REVIEW | 13

Statistics

November 2016 Crude Steel Production

By John Edward, Associate Publisher

of 6.8% compared to November 2015.

Brazil’s crude steel production for November 2016 was 2.4 Mt, down by 4.8% on

World crude steel production for the 66

produced 3.3 Mt of crude steel in Novem-

countries reporting to the World Steel

ber 2016, a decrease of -4.2% compared

Association was 132.4 million tonnes in

to November 2015. Italy produced 2.1 Mt

November 2016, 5.0% up on November

of crude steel, up by 11.2% on November

2015. The crude steel capacity utilisation

2015. France produced 1.3 Mt of crude

ratio of the 66 countries in November 2016

steel in November 2016, up by 11.8%

was 69.6%. It was 67.1% in November

year-on-year. Turkey’s crude steel produc-

2015. The November 2016 capacity utili-

tion for November 2016 was 2.9 Mt, up

sation ratio is 0.1 percentage point lower

by 10.4% on November 2015.

than the October 2016 ratio. China’s crude

In November 2016, Russia produced 6.0 Mt

steel production for November 2016 was

of crude steel, up by 5.0% on November

66.3 Mt, an increase of 5.0% compared to

2015. Ukraine produced 2.0 Mt of crude

November 2015. Elsewhere in Asia, Japan

steel, up by 3.1% compared to the same

produced 8.6 Mt of crude steel in Novem-

month in 2015.

ber 2016, a decrease of -1.4% compared

The United States produced 6.2 Mt of

to November 2015. In the EU, Germany

crude steel in November 2016, an increase

November 2015.

Statistics based on World Steel Association Report released on November 21, 2016. 

Preliminary USGS Iron Ore Statistics for August 2016

By John Edward, Associate Publisher According to the U.S. Geological Survey (USGS) report by Mineral Commodity Specialist Christopher A. Tuck, U.S. mine production and shipments of iron ore in August 2016 were 3.10 million metric tons (Mt) and 4.26 Mt, respectively. Average daily production of iron ore was 99,900 metric tons (t), 17% less than that of July, and 8% greater than that of August 2015. Average daily shipments of iron ore were 138,000 t, 4% less than those in July, and 6% less than in August 2015.

Mine stocks at the end of August 2016 were 13% less than those held at the end of July and 5% less than those held at the end of August 2015. U.S. exports of iron ore totaled 996,000 t in August 2016, nearly double those in July and 3% less than those in August 2015.

U.S. imports of iron ore totaled 385,000 t in August 2016, 34% greater than those in July and 33% less than those in August 2015. 

14 | SKILLINGS MINING REVIEW December 2016

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NOV 2016

OCT 2016

NOV 2015

% CHANGE NOV – 16/15

COUNTRY

NOV 2016

OCT 2016

NOV 2015

% CHANGE NOV – 16/15

Canada

930 e

1,035 e

963

-3.4

Total - European Union (28)

13,492

14,051

13,144

2.6

Cuba

20 e

20 e

29

-31.0

Total - Other Europe

3,173

3,200

2,825

12.3

El Salvador

8e

10 e

13

-36.8

Total - C.I.S. (6)

8,546

8,463

8,198

4.2

Guatemala

25 e

25 e

41

-39.3

Total (66 countries)

1,635e

1,650 e

1,364

19.9

0

0

62

-100

United States

6,226

6,382

5,832

6.8

e – estimate | r – revised Monthly Crude Steel Production in the 66 Countries included in the report, in thousands of metric tons. The 66 countries included in this table accounted for approximately 99% of total world crude steel production in 2015.

Total - North America

8,844

9,122

8,304

6.5

U.S. RAW STEEL PRODUCTION

Argentina

365 e

377

405

-9.8

Brazil

2,426

2,720

2,548

-4.8

Chile

90 e

90 e

101

-10.7

Colombia

105 e

105 e

125

-16.3

Production

Percent Change*

Capability Utilization Rate

Production

CRUDE STEEL PRODUCTION, NOV 2016. Source – World Steel Association

Ecuador

45 e

50 e

75

-39.7

December 24,2016

1,636

- 3.4

69

86,380

- 0.6

70.8

Paraguay

2e

2e

5

-61.0

Previous Year

1,485

10.2

62.1

86,935

-

70.1

105 e

110 e

95

10.6

December 17,2016

1,694

1.2

71.4

84,744

-0.8

70.8

Uruguay

6e

5e

11

-43.0

Venezuela

40 e

55 e

100

-59.9

Previous Year

1,485

14.1

62.1

85,450

-

70.1

Total - South America

3,184

3,514

3,464

-8.1

December 10,2016

1,674

2.4

70.6

83,050

-1.1

70.8

Egypt

428

380 e

403

6.2

Previous Year

1,485

12.7

62.1

83,966

-

70.1

Libya

45

19

36

23.6

December 3,2016

1,635

2.3

68.9

81,376

-1.3

70.9

Morocco

50 e

50 e

30

66.7

Previous Year

1,493

9.5

62.5

82,481

-

70.8

South Africa

498 e

534 e

483

3.1

Total - Africa

1,021

983

953

7.2

1,585 e

1,640 e

1,255

26.3

Qatar

171

-

192

-10.9

In thousands of Net Tons – Source - American Iron and Steel Institute * 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.

Saudi Arabia (HADEED only)

496

438

82

502.1

WEEKLY U.S. RAW STEEL PRODUCTION BY DISTRICT

Total - Middle East

2,555

2,378

1,780

43.6

China

66,290

68,510

63,133

5.0

India

8,010 e

8,267

7,234

10.7

Japan

8,618

9,062

8,740

-1.4

South Korea

5,770 e

5,961 e

5,847

-1.3

Taiwan, China

1,765 e

1,860 e

1,515

Total - Asia

91,073

94,300

Australia

458

New Zealand Total - Oceania

Mexico Trinidad and Tobago

Peru

Iran

www.skillings.net

132,402 136,523 126,114

Weekly Production WEEK ENDING

DISTRICT

5.0

Year-to-Date Production

Percent Change*

COUNTRY

WEEK ENDING 12/24

12/17

12/10

12/3

North East

204

209

204

199

Great Lakes

652

664

666

652

16.5

Midwest

168

167

160

154

86,975

4.7

Southern

547

581

576

563

482

424

8.0

Western

65

73

68

67

55

31

48

13.1

Total

1,636

1,694

1,674

1,635

513

513

473

8.5

In thousands of Net Tons – Source – American Iron & Steel Institute.

December 2016 SKILLINGS MINING REVIEW | 15

Artists’ vision of an active asteroid mine. Image Credit Don El Greeko

16 | SKILLINGS MINING REVIEW December 2016

www.skillings.net

T

he advances in mining continue over land, sea, and air, as the global business seeks out ever-richer veins of ore at the tops of mountains or within the Earth's crust or beneath the waves of the ocean. Yet there's a brand-new arena for iron mining, one that may prove the most lucrative of all: space.

L

ong the domain of science fiction, space mining increas-

The United Nations penned an agreement that the Moon would forever be closed to resource extraction to keep it preserved, much as international agreements keep Antarctica from settlement and mining projects.

prototype of a 3D printed object from the metal dust of asteroids.

ingly looks not only like a

realistic possibility but an exciting future for resource development.

There's

plenty of resource extraction

-- it's believed Titan has more petroleum than all of Earth -- but current projects focus on mining asteroids. The asteroids whizzing about the Earth and the solar system contain huge quantities of all manner of ore, including iron but also gold, iridium, cobalt, manganese, silver, titanium, and rhodium, to name just a few. How can we begin to draw ore from these asteroids? It's not as far-fetched as you may think. options to choose from that

Saturn's

moon of

Harvested from meteors that have fallen in Argentina, Planetary Resources used asteroid particle matter containing iron, nickel, and cobalt (in similar composition to industry-grade steel) to 3D print a miniature device that mimics a zero-gravity mining facility.

Revealed at the Las Vegas Consumer Electronics Expo, Planetary Resources will use their 3D printed model to drum up support (both political and financial) of future projects by demonstrating the capability of building a self-sustaining mining outpost on an asteroid.

PROTOTYPES As you may be able to guess from their name, Planetary Resources represents one of the biggest outfits in develop space mining technology and projects. Their most recent development proves to be a groundbreaking advance in the pursuit of asteroid mining, as the company announced that they had successfully developed a

www.skillings.net

The continued advancement of private space firms, such as Planetary Resources and SpaceX, suggests that government space exploration may be on the way out as corporations step in to fill the void.

LEGALITIES Resource extraction in space represents, at best, a tricky topic.

While the agreement in principle is sound, in practice it is less than airtight. Russia's space program aims to build a mining base on the moon in the next twenty years and will spend an estimated ten billion dollars on the project.

Likewise, President Obama signed a controversial bill into law in December that allows any individual to own, sell, and mine space objects not currently defended by international agreement. The Moon is currently off-limits (as well as, for that matter, moon rocks, which are illegal to buy and sell) to prospectors both American and foreign, but asteroids certainly are not. Indeed, the next great Space Race may be the rush to put mining probes onto asteroids before another outfit claims the largest, closest, and richest rocks in our Solar System.

December 2016 SKILLINGS MINING REVIEW | 17

GETTING THERE While we think of most asteroids occupying the space between Mars and Jupiter, there are far more asteroids rich with metal that float further in the interior of the Solar System. The Amor group of asteroids, for instance, float between the orbits of Mars and Earth; the famous asteroid that wiped out the dinosaurs is believed to have been one of the Amor group that fell too close to Earth's gravity well.

Indeed, the only asteroid to have ever been landed upon by a probe, the NEAR Shoemaker, was able to be studied due to its close proximity

to Earth. Asteroid mining projects, as such, don't need to fly as far out into space as one might think.

Planetary Resources recently launched a spacecraft known as the

18 | SKILLINGS MINING REVIEW December 2016

Arkyd-3R, a testing satellite that will mimic the conditions of an asteroid in order to determine proper power supply, avionics, movement controls, and software that will be necessary in order to harvest ore from incoming and outgoing asteroids.

The Arkyd (famously funded by Kickstarter) ran a successful 90-day mission; the company will now begin to move forward on their next project by targeting specific asteroids coming near to Earth's orbit in order to run diagnostic probes that will orbit and perhaps touch down on ore-rich asteroids to measure composition and gather data.

www.skillings.net

MINING INDUSTRY PEOPLE

ADVERTISING INDEX

Following the completion of the merger with Newmarket Gold Inc., Kirkland Lake

Azcon ............................................... 19

Gold Ltd. announced additions to the Company's management team that will enable

Barr Engineering............................... 12

the latter to optimize the performance of its portfolio of gold mines in Canada and

CR Meyer.......................................... 10

Australia. The company appointed John Landmark as Vice President, Exploration, Australia, Jason Gregg as Vice President, Human Resources, Ryan King as Vice Presi-

Fryberger.......................................... 19

dent, Investor Relations and Galina Meleger as Director, Corporate Communications,

Global Minerals Engineering........... 22

to complement the existing management team.

Golder Associates............................ 20

Artemis Resources has appointed Alex Duncan-Kemp to its board as executive direc-

Hallett Dock Company..................... 11

tor as the company looks to commercialize its existing gold, copper, iron ore and

industrial Lubricant.......................... 07

platinum assets in Western Australia. Mr Duncan-Kemp will also assist the company advance and finalize due diligence on the Radio Hill nickel/copper mine Artemis

Lake Superior Chapter ISEE............. 19

has entered into an agreement to acquire. Mr Duncan-Kemp has previously served

L & S Electric Inc.............................. 15

as mine superintendent at Plutonic's Darlot gold mine and Mt Edon Gold's Tarmoola

Malton Electric Company................ 22

gold mine, WMC Fertilizer's Phosphate Hill and more recently has occupied senior mining engineering roles specifically in the Pilbara region with Rio Tinto, Sino Iron,

Mielke Electric Works....................... 13 Naylor Pipe....................................... 08

Iron Ore Holdings and mid-tier mining contractors.

Excellon Resources Inc. - Mexico's highest grade silver producer - appointed Daniella

NBC................................................... 12

Dimitrov and Laurence (Laurie) Curtis to its Board of Directors. Ms. Dimitrov has

Neo Solutions................................... 18

over 20 years of experience in building, operating and streamlining businesses in

Northshore steel.............................. 07

mining and financial services. Dr. Curtis brings over 40 years of experience in the

Noramco Engineering Corp............. 20

mining industry and capital markets, with a proven track record in corporate development, mine development and project financing. ď Ž

Northern Engine & Supply............... 22 S.E.H................................................. 15 wp & rs Mars..................................... 23

www.skillings.net

December 2016 SKILLINGS MINING REVIEW | 19

Annual Index

2016 ANNUAL INDEX OF SKILLINGS MINING REVIEW Perusing through our 2014 annual index will give the reader a good retrospective of 2016. New headings reflect trends unique to what has been an extremely interesting year. There is an increasing emphasis on sustainability - clean technologies, waste water management, re-vegetation and adherence to legislation.

IN DEPTH

COMMENTARY ARTICLE

MONTH

Rio Tinto and Simandou: History in Progress

PAGE

June

2

COPPER ARTICLE

MONTH

ARTICLE

MONTH

Cliff’s Natural Resources Performance and Stock

June

16

Era of ESSAR steel

July

12

INDUSTRY INSIDER

PAGE

Iron Range Copper Mine Controversy

May

10

ARTICLE

Is Copper the New Precious Metal?

June

19

Al Rudeck named President of ALLETE Clean Energy

October

12

February

5

Metso is supplying key minerals processing equipment to Tibet Julong Copper Twin Metal Project on Political Hold

COVER STORY ARTICLE

MONTH

Alaska Mining Tax Fuels Debate From Education Leaders

PAGE

20

November

16

March

8

July

14

Bob Adams promoted to ALLETE CFO effective March 2017

November

14

DNR – State Receives Permit to Mine Application and Financial Assurance Proposals from PolyMet

November

18

January

14

Exploration proposed on state nonferrous metallic minerals leases

November

12

Genscape Maritime Offers Exclusive Vessel Coverage of U.S. Inland Waterways

November

23

March

8

November

17

August

13

March

9

November

13

August

14

November

19

February

8

ALLETE, Inc. reports third quarter 2016 earnings ALLETE, Reports Increased 2015 Earnings Ballast water facts, not hype

18

March

18

November

4

Global Iron Ore Prices

April

6

Global Iron Ore Production Report

July

16

Human Resources: Recruiting Skilled Workers

April

18

August

4

February

6

May

6

January

18

Heavy Iron Cranes & Equipment Sign Agreement with Tadano

May

18

Improving Productivity At Boliden Harjavalta

March

6

June

4

Metso recognized by Freeport-McMoRan as long-term partner

January

6

Extensive Handling Equipment Range Features Explosion Protection As Standard

Improvements and Delays: Environmental Issues in the Iron Mining World Iron Ore Exploration Around The World Mergers & Acquisitions In Iron Ore Mining New Mining Equipment Technology Safety Innovations Shipping on The Great Lakes and Global Markets The Global Iron Push of 2016 What’s Ahead for Iron Ore JANUARY 2016 06

GLOBAL INTEREST ARTICLE Mining Industry in Cuba

MONTH

PAGE

January

20 | SKILLINGS MINING REVIEW December 2016

10

MONTH PAGE May

February

Educating Mining Professionals

PAGE

Exploration Proposed on State Minerals Lease

Government Study Sees Unemployment Rate Topping Great Recession if Poe Lock Fails Great Lakes/Seaway Iron Ore Trade Unchanged in October

Metso Signs Landmark Deal with the World's Largest Copper Miner Codelco in Chile Metso supplying key minerals processing equipment to Tibet Julong Copper Ohio House of Representatives’ Support for Second Poe-Sized Lock

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Outotec Introduces Electrochemical Water Treatment The Interlake Steamship Company Launches 2016 Sailing Season The Interlake Steamship Company Launches Phase II of Pioneering Emission-Reduction Technology

May

20

March

9

January

16

The Minnesota Geologic Survey publishes Washington County Geologic Atlas, Part A

November

15

Too Few Icebreakers and Lack of a Second Poe-Sized Lock Threaten Shipping on Great Lakes and St. Lawrence Seaway

February

17

U.S.-Flag Cargo Movement on Lakes Down 23 Percent in January

14

May

20

August

19

November

1

Weir Minerals North America Announces New Dealer

July

7

Weir Minerals powerful presence at MINExpo

August

8

World’s best mine rescue squad from Kirkland Lake Gold

August

7

Weir Minerals Celebrates 20 Years of Hydrocyclone Excellence Weir Minerals Lewis Pumps celebrates 125 years

IRON ORE ARTICLE

MONTH PAGE

Cliffs Natural Resources, Inc. Released Its First Quarter Results Economic Decline Continues to Rattle the Iron Range

May

16 13

May

11

Iron Ore Sees Gains in 2016

February

14

State Waterways Subject of Controversy and Concern

February

14

April

17

Steel Mills Are Over-Capacity

IRON RANGE REGION ARTICLE Area Lawmakers Hear About Region’s Woes

MONTH PAGE January

15

Businesses Optimistic for Iron Range Economic Recovery

March

12

Copper Mine Controversy in the Iron Range Sparks Outrage

March

10

January

5

Dire Mining Warnings Come From Canada www.skillings.net

11

Iron Range Region Reality

March

13

July

11

Mine Located in Camp Breton Looks to Hire Alberta Workers

January

9

Mining Among Minnesota’s Top Environmental Concerns in 2016

January

13

Minnesota’s Mines Face Troubling Delays

February

9

NorthMet Mining Project Promises Jobs, Incites Criticism

February

15

June

15

February

11

United Taconite Breaks Ground on New Site

July

9

US-China Cold-rolled Steel Wars Escalate

June

17

Japanese Company Buys Joy Global

The Iron Range is in a Time of Transition

MINE EXPO ARTICLE

MONTH PAGE

The Biggest Names & Products at Mine Expo

August

16

MINING FINANCE ARTICLE

MONTH PAGE

2015 Annus Horribilis

January

17

ALLETE to announce third quarter financial results on November 4

October

6

May

9

February

10

March

5

August

6

Financial Analysts Hold Differing Opinions On The Trajectory That The Price Of Iron Ore

April

5

Hecla’s Big Acquisition

June

22

August

6

MSHA launches new initiative to reduce mining fatalities

July

13

New Trends in Mining Finance

June

17

Recovery To Last Into The 2nd Half Of 2016

April

9

Rio Tinto: A Day Late, A Dollar Short

May

5

Telestra: In For A Pound

July

13

ArcelorMittal’s Hottest New Toy Australia’s Reduction Planning

February

Iron Highs, Iron Lows

March

Northshore Mine Workers Back on the Job January

Update for Draft Silica Sand Rule

Iron Range Economy Still on the Decline

Currency and Oil Price Rise Putting Pressure on Miners Essar Steel Files Bankruptcy

Iron Ore Faces Risk on Drop in China Steel Production

December 2016 SKILLINGS MINING REVIEW | 21

MINING INDUSTRY NEWS ARTICLE

MONTH PAGE

Heart Disease and Lung Scarring Plague Current Taconite Miners

June

14

Improved Student Safety in collecting Core Samples

March

16

January

12

April

9

August

12

February

16

June

14

Global Shipping & Great Lakes

April

8

Ideas for Iron Range Region Economic Development

May

14

In-depth: Essar Steel late on $10 Million Reimbursement to the State of Minnesota

April

10

Minnesota Mining Job Losses Continue in May 2016

July

8

Safety for Coal Miners Increasing

U. S. Steel Threatens to Sue over Minnesota's Sulfate Pollution Standard

May

9

University of Minnesota Researchers Study Health of Taconite Miners

US Forestry Service Joins Environmental Chorus Against Twin Metals Lease Renewal

July

9

SHIPPING

Miner Killed in Fall of Ground Incident New Funding for Miner Safety in Minnesota

ARTICLE

MINING PEOPLE ARTICLE

Mine Deaths Down in 2015

MONTH PAGE

MONTH PAGE

China’s fall in trade hits Shipping

February

20

Global Shipping Takes Action

February

12

September

17

Mining People

January

21

Mining People

February

21

Great Lakes/Seaway Iron Ore Trade Up Nearly 3 Percent in August

Mining People

March

21

Iron Ore Prices: Product Of Supply And Demand

May

17

Mining People

April

21

Two Senators Urge Soo Locks Repairs

June

19

Mining People

May

21

What Would Happen If the Soo Locks Closed

June

18

Mining People

July

22

Mining People

August

22

ARTICLE

Mining People

November

22

North American Iron Ore Report

MONTH PAGE

Donald Elsenheimer: Economic Geologist Minnesota Department of Natural Resources’ Division of Lands and Minerals

April

12

March

14

Interview with Eric Anderson- the Co-Founder and Co-Chairman of Planetary Resources, Inc

July

10

Interview with Luke Popovich, Vice President National Mining Association [NMA]

August

10

Thomas Rayburn: Director of Environmental and Regulatory Affairs, Lake Carriers’ Association

May

12

US Forestry Service Joins Environmental Chorus Against Twin Metals Lease Renewal

July

9

Glenn Wieczorek, (Managing Director, Tsurumi Pumps)

July

4

ARTICLE

MONTH PAGE

Statistics

January 22/23

Statistics

February 22/23

Statistics

March 22/23

Statistics

April 20/21

Statistics

May 22/23

Statistics

June 20/21

Statistics

July 20/21

Statistics

August 20/21

Statistics

November 20/21

STEEL ARTICLE

SAFETY ARTICLE

MONTH PAGE

STATISTICS

PROFILES IN MINING ARTICLE

SPECIAL ISSUE

MONTH PAGE

2015 Safest Year on Record for Miners Air Quality Violations at Keetac

22 | SKILLINGS MINING REVIEW December 2016

March

17

August

12

MONTH PAGE

2016: Global Steel Industry

July

6

Analysts Expect Chinese Steel Production in 2016 to Fall an Additional 2 Percent

May

15

www.skillings.net

In-depth: Essar Steel late on $10 Million Reimbursement to the State of Minnesota

April

16

US Labor Department Cracks Down on Mine Safety

July

19

NORTH AMERICAN MARKET (LTU) Company Ore Type Cliffs Natural Resources Inc. Cliffs Natural Resources Inc.

IRON ORE PRICE REPORT

Pellets, FOB Michigan Mines Pellets, FOB Minnesota Upper Lakes Port Source: CLIFFS NATURAL RESOURCES INC.

www.skillings.net

Per Iron Unit $1.29

Per Gross Ton at 64% $82.56

Per Ton at 64% Reporting Date 12/31/16

$1.13

$72.32

12/31/16

December 2016 SKILLINGS MINING REVIEW | 23