smr July 2017

2 0 1 7 J U LY I S S U E

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Vol:106.No:07

CHINA'S IRON & STEEL

BILLION DOLLAR

BET P 06

THE DRAW OF AFGHANISTAN MINING AS A MONETARY "OPEN DOOR." P 18

INSIDE STATISTICS

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SKILLINGS MINING REVIEW. 350 W. Venice Ave. #1184. Venice, Florida 34284

JULY 2017 VOL.106. NO.07

...From the Editorial Desk

Canada's Workforce Woes

C

anada's

Human

Mining Industry Resources Council

proclaims the joblessness

rate in mining, quarrying and oil

try watchers are women portrayal in almost 50% of the Canadian work-force, yet make up just around 19% of the workers in mining.

and gas has enhanced from the late spring of

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.

PUBLISHER CHARLES PITTS chas.pitts@skillings.net MANAGING EDITOR JOHN EDWARD john.edward@cfxnetwork.com SENIOR SALES MANAGER STAN SALMI stan.salmi@skillings.net SALES REPRESENTATIVE, CANADA RON SANDERSON ron.sanderson@cfxnetwork.com CONTRIBUTING EDITORS SARAH HART KATIE SIMS DAVID WILSON CAROLINE DAVIS ART DIRECTOR MO SHINE mo.shine@cfxnetwork.com CIRCULATION & SUBSCRIPTIONS Subscriptions@skillings.net SALES & MARKETING CHRISTINE MARIE advertising@skillings.net

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2016 –

from

10%

to

7%.

With projections of 87,830, mining specialists are still expected to be employed throughout the following decade, it will be trying for the business as it tries to supplant more seasoned laborers. More established laborers who have surged in 2007 to 2016, while more youthful specialists have dropped over that same period.

Mining developments demonstrates the requirement for mine workers and related callings ascensions to 130,410. To give some examples issues that likewise concern indus-

SUBSCRIPTIONS: U.S.: $72 annually in U.S. Funds. $109 annually in U.S. Funds for 1st Class Service.

A huge hazard to mining operations, the absence of work displays the possibility to crash ventures, drive up the cost of discovering laborers and at last undermine an operation's capacity to run intensely.

Mining operations frequently exist in remote parts of the nation with to a great degree low populaces lacking abilities. It is regular for businesses to source specialists from different locales of Canada. Financial downturns result in generally fluctuating interest for work and this shakiness can influence a mining manager's capacity to secure work.

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July 2017 SKILLINGS MINING REVIEW | 3

IN THIS ISSUE

P 14

CANADA'S WORKFORCE WOES

CHINA'S IRON & STEEL BILLION DOLLAR BET P 06

P 16

POLYMET LAND SWAP THANKS TO NOLAN COVERSTORY

IRON ORE

China's Iron & Steel Billion Dollar Bet............................ 06

Great Lakes/Seaway Iron Ore Trade Up 16 Percent in June......................................................... 18

FINANCE Canada's Workforce Woes............................................. 03 First Mining Finance Corp - time period regarding purchasing and offering................................................ 05

Mergers and Acquisitions Mid Year Look..................... 15 MINING INDUSTRY NEWS

Cliffs East Toledo steel-making mini mills $700-million plant......................................... 10

Allete Clean Energy announces $80 million turbine refurbishment initiative..................................... 09

Magnetation Iron Ore 2nd Life In Canada...................... 11

PolyMet Land Swap thanks to Nolan............................ 16

The Draw of Afghanistan Mining as A Monetary "Open Door."................................................ 12

DNR Open-File Project 400............................................ 18

Potain tower cranes construct massive new resort in Dubai’s Palm Jumeirah........................... 14

ALLETE Board of Directors declares dividend on common stock........................................... 21

Statistics.............................................................. 22/23 4 | SKILLINGS MINING REVIEW July 2017

Mineral Rights Worth..................................................... 19

Mining People............................................................ 20 www.skillings.net

MINING FINANCE

First Mining Finance Corp - time period regarding purchasing and offering

O

First Mining Corp moved 0.20% or 0.001 and the

ffers of

Finance

organization saw a current offer of

$0.5100

on

107450

volume.

Diving into the First Mining Finance Corp specialized pointers, the Williams Percent Range (an energy marker that is the reverse of the Fast Stochastic Oscillator) sat at - 28.57 (date of article) and sways in a range from 0 to - 100.

A perusing in the vicinity of 0 and - 20 would point to an overbought

circumstance. A perusing from - 80 to - 100 would flag an oversold circumstance. Financial specialists endeavor to make an exchanging system that produces results. They have to choose the time period regarding purchasing and offering.

Speculators will be making both longer term plays and here and now moves. Each financial specialist has choose when to pitch a champion and when to cut free a failure.

Financial specialists can anticipate "push back" when despite every-

thing they trust will provide some benefit around created portfolio.

Business sectors remaining enables speculators to settle on purchase or offer choices when the time comes.

This may include following major monetary information, considering organization basics, and monitoring chronicled value development and patterns. Speculators who can hold their feelings in line may end up in a superior position than the individuals who let feelings defeat them.

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July 2017 SKILLINGS MINING REVIEW | 5

COVERSTORY

China's Iron & Steel

BILLION DOLLAR

BET

The China Iron & Steel Association said China's iron ore supply is likely to fall by 70 million tons this year and imports rise 7.1 percent to reach 1 billion tons for the first time.

I

n the first seven months of the year

582

China

has imported

million tons of iron

ore, up

8.1 percent on the same period in 2015 and putting it on track for full-year imports near 1 billion tons, which would be an all-time high.

Last year, Western Australia exported 550 million tons of iron ore, 59 per cent of the total volume of China's iron ore imports. China has long been the top market for sea-traded iron ore, importing close to 1 billion tons a year, out of a global market of 1.4 billion tons.

6 | SKILLINGS MINING REVIEW July 2017

Iron ore is among China's biggest imports from the North after it stopped buying coal this year due to the sanctions. In 2012, China's iron ore shipments rose 8.4 percent to a record 743.5 million metric tons and similar growth would lift imports to just over 800 million metric tons this year.

The miscalculation of iron ore demand out of China by our big miners is one of the reasons WA is currently enduring a domestic recession. China produced a total of 594 million tons of iron ore in the first six months of 2016, accord-

ing to official figures, suggesting it may reach about 1.2 billion tons for the full year. China's total iron ore imports were 80.8 million tons in October 2016, the lowest since February, but the biggest volume ever for the month of October.

India mostly exports raw materials to China and is one of the largest iron ore exporters to China. That could potentially replace around 200 million tons of iron ore, equivalent to about a fifth of China's imports of the commodity last year. China has a large number of small private iron ore mines

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with low efficiency, making them uncompetitive compared with top miners. This point supports China's iron ore oversupply in 2017 when imports and domestic productions are put together.

involved in trading and facilitating iron ore swaps with predictions of explosive growth in iron ore derivatives/futures just around the corner. Rio Tinto accounts for about a third of China's imports.

The Chinese government has also encouraged steelmakers such as Baoshan Iron and Steel and Wuhan Iron and Steel to gain more control over foreign iron ore.

Morgan Stanley is already deeply

If 1 billion tons comes from the seaborne market, that leaves only 200 million tons to be supplied

by China's own mines. Vale is the world's largest iron-ore producer and supplies more than a quarter of

the world's approximately 1 billion metric tons (1.102 billion tons) a year of sea-borne iron-ore exports.

By comparison, top global iron ore miner Vale now sees China's economy growing at 6-7 percent a year over the rest of this decade.

Outside Asia, Africa also has plenty of available iron ore led by South Africa which produces more than half of the continent's supply with reserves put at 9.3 billion metric

IRON ORE IS AMONG CHINA'S BIGGEST IMPORTS FROM THE NORTH AFTER IT STOPPED BUYING COAL THIS YEAR DUE TO THE SANCTIONS. IN 2012, CHINA'S IRON ORE SHIPMENTS ROSE 8.4 PERCENT TO A RECORD 743.5 MILLION METRIC TONS AND SIMILAR GROWTH WOULD LIFT IMPORTS TO JUST OVER 800 MILLION METRIC TONS THIS YEAR.

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July 2017 SKILLINGS MINING REVIEW | 7

tons. Chinese imports of Philippine ore were down by 27 percent in the first five months of the year.

While iron ore is Australia's single largest export item to China, worth $35 billion in 2010, energy exports are also significant as in 2010 Australia exported 17 million tons of coking coal to China, accounting for 37 percent of China's total coking coal imports, a trade that is expected to increase by around 20 percent by 2015 as new mining and infrastructure investments in Queensland and New South Wales come online.

China's increasing use of scrap steel later this decade should also curb its demand for iron ore. Another big contract to mine an estimated 1.8 billion tons of high-quality iron ore in the remote mountainous region of Hajigak is expected to open for international bidding this year.

sector, which analysts and industry officials estimate has excess capacity of around 200 million metric tons of steel a year.

China's imports could peak at between 800 and 850 million metric tons, said Li Xinchuang, deputy secretary general of the China Iron and Steel Association, which represents mills accounting for about 80 percent of China's steel output.

China's own ambitious domestic infrastructure and construction projects will keep increasing its appetite for iron ore. Iron ore is heavily reliant on China's

growth, but in a slower economy its uses are more limited. China currently imports about two-thirds of the world's iron ore and has an estimated excess steel capacity that would be enough to build about 3,500 of New York's Empire State Building.

China has long suspected that iron ore pricing is manipulated by some miners and traders and wanted a platform that it deems more transparent, although miners may be wary of Beijing gaining control if more business flows to the exchange, particularly after Chinese pressure over ore price levels.

We Support the Mining Industry

Assuming Chinese steel output of about 800 million tons in 2016, which would be above the level the market expected at the start of the year, about 1.2 billion tons of iron ore, on a 62-percent iron content basis, will be required.

By also figuring out how common these events are across the universe (about one every few days), they claim that all of the gold in the universe could have been produced this way! That brought total imports to 843.31 million tons in January to October, up 9 percent from a year earlier, and on track to top last year's 952.84 million tons.

Iron ore has been propped up by the appetite of China's huge steel

8 | SKILLINGS MINING REVIEW July 2017

RMS-Virginia

315 N. Hoover Road Virginia, MN 55792 218-741-9011

RMS-Negaunee

75 US Highway 41 E. Negaunee, MI 49866 906-475-6488

RMS-Duluth Duluth, MN 55802 218-727-8611

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Allete Clean Energy announces $80 million turbine refurbishment initiative PROJECT WILL ENHANCE TURBINE PERFORMANCE AND RELIABILITY, GENERATE TAX CREDITS

A

LLETE Clean Energy, a wholly-owned subsidiary of ALLETE Inc. (NYSE: ALE), announced a strategic initiative to refurbish

385

wind turbines at three wind

farms in

Minnesota

and Iowa.

The project includes replacing select blades, gearboxes and generators on turbines at the Lake Benton wind site in Lincoln County, Minnesota, and the Storm Lake I and II wind sites in Buena Vista and Cherokee counties, Iowa. The project will improve turbine performance and reliability, generate federal production tax credits at each site and support the renewal of power sale agreements at the Storm Lake sites.

The refurbishment will be staged from 2017 through 2020 to minimize turbine downtime and maximize safe energy production at each site.

In total, the sites produce approximately 700,000 megawatt hours of energy per year, representing about 50 percent of ALLETE Clean Energy’s current electricity sales.

“As a central part of ALLETE Clean Energy’s multifaceted growth strategy, this $80 million reinvestment will contribute to future earnings growth,” said Allan S. Rudeck Jr., president of ALLETE Clean Energy. “Revenue from our existing wind sites such as Lake Benton and Storm Lake is the foundation for ALLETE Clean Energy’s momentum and growth.

In addition to the turbine refurbishments, the project includes installing new communications infrastructure at the sites to better integrate them into ALLETE Clean Energy’s corporate operations structure. New fiber optic connections, servers, and data acquisition and management systems will improve the operation of each site and secure the best performance.

Neighboring communities also benefit by keeping these older sites viable and valuable, which maintains jobs and landowner lease payments.”

Energy from the Lake Benton site is fully contracted through 2028, and approximately 8 megawatts of Storm Lake I production is contracted

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through 2032. ALLETE Clean Energy is working to recontract the balance of the Storm Lake I and II power sale agreements which expire in 2019.

The turbine refurbishment project follows ALLETE Clean Energy’s December 2016 $100 million investment in wind turbine components that meet the standards for the production tax credit “safe harbor” provision.

The investment in safe harbor turbines allows ALLETE Clean Energy to pursue a three-pronged production tax credit strategy before the 2020 federal production tax credit phase-out. The strategy includes building and operating new wind farms based on long-term power sale agreements, building wind farms for other companies for a development fee, and refurbishing its existing wind farms while extending power sale agreements.

July 2017 SKILLINGS MINING REVIEW | 9

Cliffs East Toledo steel-making mini mills $700-million plant James Tuschman, board chairman of the Toledo-Lucas County Port Authority, during a press conference to announced that Cliffs Natural Resources (Cliffs) has selected the Port of Toledo and East Toledo's Ironville site as the location for the company's new Hot Briquette Iron processing facility back in mid June.

James Tuschman, center, board chairman of the Toledo-Lucas County Port Authority, speaks during a press conference to announce that Cliffs Natural Resources (Cliffs) has selected the Port of Toledo and East Toledo's Ironville site as the location for the company's new Hot Briquette Iron processing facility.

C

liffs revealed the location for the

$US700

million

plant earlier this month,

stating it had chosen a plot of land along the

Maumee River

Toledo, Ohio,

near the south-

western shores of

in

Lake Erie.

The Mesabi Nugget plant in Hoyt Lakes, Minnesota, will be the world's first commercial iron-making facility to use Kobe's new iron-nugget production technology known as ITmk3. ITmk3 process produces high purity granular iron (Iron nuggets by using iron ore fines and non coking coal).

In the iron ore production process beneficiated in order to produce high grade iron ore concentrate.

The plant is being designed to produce 1.6 million tons annually with plans to enter production in 2020. The ITmK3 technology will also utilise dump iron ore fines,

10 | SKILLINGS MINING REVIEW July 2017

disposal of which has become an environmental issue. The direct discount of iron by this course of is more vitality environment friendly & more environmentally friendly than traditional iron making processes and this process produces slag free Iron nuggets which have related chemical and physical properties to those of pig iron.

Noted in several countries,ITmK3 technology has successfully replaced coal as an input material for iron making and is recognised for its low energy consumption. It is expected to generate between 100 and 120 ship calls each shipping season for delivery of iron-ore pellets from

Cliffs mines in Michigan or Minnesota, while its estimated 1.6 million tons of hot-briquetted iron will be hauled out mostly by trains and some by trucking. However, even the Eastern Canadian mines are located outside the Great Lakes system, and selling their pellets located in the Great Lakes area comes with a big logistical cost that Cliffs is not subjected to.

Cliffs Natural Resources plans to break ground in early 2018, with the plan becoming operational in 2020. Our HBI will be produced by feeding the Toledo plant with our own low-silica DR grade iron pellets, reducing the iron oxide with natural gas and producing a 90-plus percent iron briquette. Cliffs is the dominate merchant supplier within the Great Lakes markets, and has direct access to well established clients whom many are under long-term contracts. That fact, well understood by competitors, covers pretty much all their pellet requirements.

www.skillings.net

Magnetation Iron Ore 2nd Life In Canada

T

he previous owners of the

Magnetation

iron ore

firm and bought the belongings of the defunct Scully ore mine.

processing operations on

Minnesota's Iron Range are transferring north, starting a brand new firm working to reopen an idled iron ore mine in

Canada.

Grand Rapids-based Magnetation LLC in 2006 and was a three way partnership between Magnetation Inc. and Virginia Mines Inc. The new 1st and 2nd generation team, Magnetation CEO Larry Lehtinen and his son, Magnetation President Matt Lehtinen, formed a new

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Magnetation recovered worthwhile iron ore from waste dumps left behind by lengthy-closed mining operations. Magnetation converted iron ore waste tailings on Minnesota's Iron Vary into usable ore that was then brought to steel making corporations.

The mining venture, which is backed by Tacora and its Minneapolis non-public equity firm Proterra Investment Companions, gives the

former founders of Magnetation a new project in a well-known field. Cargill will purchase one hundred pc of the mine's iron ore underneath a five-year contract with the new firm, Tacora Assets.

The Scully mining property was shut in 2014 by Cliffs Natural Assets, which cited high production costs and low taconite costs.

Under new ownership, collectively will develop and apply Magnetation expertise to market the recovered iron concentrate to its international iron ore clients.

July 2017 SKILLINGS MINING REVIEW | 11

The Draw of Afghanistan Mining as

A Monetary "Open Door."

Following 16 years of war in Afghanistan, numerous nations have locked onto a prospect that tempted past governments: Afghanistan's tremendous mineral riches, could be beneficially separated by Western organizations. ment, and additionally security issues and the absence of streets, scaffolds or railways. This White House intrigued likewise reflects how military consultants have attempted to provide other influential motivations to send troops to the nation, where the United States has been at war since 2001. Internal meetings have turned out to be progressively antagonistic, as Mr. Trump and his central strategist, Stephen K. Bannon, have squared off against General McMaster.

Secretary of State Rex W. Tillerson is additionally said to be troubled with the present recommendations.

G

7

nations have talked about

the nation's mineral stores with

Ghani,

President Ashraf

who advanced mining as a

monetary "open door."

The draw of Afghanistan as a war-torn Klondike is entrenched: In 2006, the George W. Hedge organization led aeronautical studies of the nation to delineate mineral assets. Under President Barack Obama, the Pentagon set up a team to endeavor to assemble a mining industry in Afghanistan — a test that was frustrated by wild debase-

Mr. Trump has said little freely in regards to Afghanistan. However, his reasoning about what the United States should procure for its military endeavors was clarified in another setting not long after January.

Addressing workers of the C.I.A., the president said the United States had blundered in pulling back troops from Iraq without clutching its oil.

Numerous

nations are profoundly doubtful about sending more military troops to

with mining authorities. Three White House associates met with American Elements, to examine the potential for extricating rare earth minerals.

Afghanistan's stores of copper and iron metal are exchanging at about 33% of their 2010 value.

The majority of the unfamiliar stores of uncommon earth minerals are accepted to be in Helmand Province, extensive parts of which are controlled by the Taliban.

Afghanistan, however

this could

be one defense for western forces to remain occupied with the nation.

To investigate the conceivable outcomes, nations, including the US, are thinking about sending an emissary to Afghanistan to meet

12 | SKILLINGS MINING REVIEW July 2017

www.skillings.net

Iron Range Service Center 4100 P&H Road, Virginia, MN 55792 1 218 742 1400 www.skillings.net

July 2017 SKILLINGS MINING REVIEW | 13

Potain tower cranes construct massive new resort in Dubai’s Palm Jumeirah A fleet of 10 Potain MR 418 tower cranes is helping construct a massive new project: the Royal Atlantis Resort and Residences, which is located on the crescent of the Palm Jumeirah island in Dubai, United Arab Emirates. Potain business partner, Abu Dhabi-based NFT, supplied the cranes on a rental contract to the joint venture ( JV) building the development.

T

he

JV

is made up of two

contractors—the

BelgiumBESIX and South Korea’s SsangYong Engineering & Construction—and the project marks the first time that MR 418 cranes have been used in the UAE. based

The Royal Atlantis Resort and Residences will reach 193 m in height when completed. The 43-story resort will include 795 rooms, 231 of which will be residential units.

The project will have 65 outdoor pools in the residential section and a “sky pool” at a height of 100 m at the hotel. There will also be parking space for 1,500 cars. Bassem Kini, operations director at NFT, said the company specified MR 418 cranes for the project for their hoist and lifting speeds, which are especially useful when working on high-rise projects.

“Having worked on several successful projects with BESIX in the past, we are delighted to once again be chosen as the main supplier of tower cranes for this impressive project,” he explained. “We are using a fleet of Potain MR 418 cranes because of their excellent capabilities on high-rise building projects. Their high-speed and high-capacity hoists are exactly what’s needed to ensure maximum productivity on site.”

14 | SKILLINGS MINING REVIEW July 2017

The Potain MR 418 has a 24 t maximum capacity, 60 m boom and 5 t capacity at the jib end. Its 270 LVF 120 hoist offers excellent capabilities for work on high-rise projects, including a 254 m per second hoisting speed. The 830 m rope capacity on the winch’s drum means that in single-fall configuration a hook path of 830 m is possible.

Further boosting the crane’s class-leading performance is a 150 VVF 56 luffing winch which delivers an impressive luffing speed of just 1 minute and 15 seconds to maneuver the jib from 15˚ to 86˚with or without load. The uniquely-mounted luffing mechanism and

hoist ensure there is plenty of room for operation on tight job sites, or on projects like the Royal Atlantis Resort and Residences, where 10 units need to work together.

NFT delivered the cranes to the project in October 2016 and the company’s erection team set them up on the job site. The MR 418s were assembled quickly and working soon after.

“The cranes’ erections went smoothly and they are now working beautifully,” Kini said. “We have plans for 24-hour, non-stop crane operation with double shifts in place and full-time technicians on site.”

www.skillings.net

Mergers and Acquisitions Mid Year Look

M

&As

are currently de

rigeur in the mining industry, as high

commodity prices are encouraging the larger companies to consolidate.Canadian mergers and acquisitions activity remained

tion through M&As. In the last 18 months, the market has witnessed a number of hostile takeovers, increased cross-border activity, some very large private acquisitions and continued mergers and acquisitions activity in the mining sector.

vigorous over the last few years.

The

value of global mergers and

3.24 2016.

acquisitions deals reached trillion

U.S. dollars

in

Gottesman Company global mergers and acquisitions firm with a local Canadian presence looked at some of the companies that desperately need to raise produc-

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Recent years, mergers and acquisitions activities have become an important channel for investment in Africa for both global and local market players.

Australia's mining sector grew 31 per cent last year to 96 deals.

Energy, mining and utilities replaced

financial services as the most active M&A sector in 2016 with deals totaling $17.1 billion - this is almost three times that of the year before.

Energy, mining and utilities sectors: Of the 236 M&A transactions in Africa tracked by Thomson Reuters, energy, mining and utilities sectors registered the highest level of activity. In new analysis from Ernst and Young, the consultancy firm finds that M&A deal activity within the global mining and metals industry is significantly down on last year, with the largest activity seen in the Asia-Pacific region.

July 2017 SKILLINGS MINING REVIEW | 15

Iron Range Region

PolyMet Land Swap thanks to Nolan The U.S. Forest Service announced the approval of a land swap with the PolyMet Mining Corporation. The government will release 6,650 acres of federal land in Northern Minnesota to PolyMet in exchange for 6,690 acres of non-federal lands.

U

.S. Representative Rick Nolan, D-MN-8 introduced bipartisan legislation to

force completion of a land swap needed for the proposed

PolyMet

copper-nickel mine in northeastern

Minnesota. PolyMet

has proposed

an open-pit mine there on what is now

Forest Service

land.

16 | SKILLINGS MINING REVIEW July 2017

PolyMet welcomed the move by Nolan in a statement, saying the transaction is not moving forward as quickly as it could be� since the U.S. Forest Service approved the land exchange in January. The argument for the land swap - the government will acquire other lands in exchange - is economic development and jobs.

We are committed to moving the project forward in a thoughtful and expeditious manner and are pleased Congressman Nolan is taking this step to bring closure to the land exchange process,� said Jon Cherry, president and CEO of PolyMet. PolyMet needs the land exchange in order to access minerals it owns

www.skillings.net

below the surface. The biggest deviation is that PolyMet will not get an additional $450,000 from the federal government as part of the land swap.

secure more than 20 state and federal permits for the mine, with those expected later this year.

ists, said the government is giving up too much and getting too little in return for the mine site land.

Nolan has been advocating hard for the project — saying PolyMet has demonstrated its ability to meet environmental standards. Rep.

And before the land could be mined, however, PolyMet would have to control the surface rights, which it could obtain in a proposed land swap with the Forest Service.

The land PolyMet would receive has been valued at just $550 per acre, well below its actual value as land essential to a mining proposal.

Nolan brought Congress to the heart of the effort to overturn a federal mining moratorium and renew mineral leases for Twin Metals, both issues centered around land near the Boundary Waters Canoe Area Wilderness.

Even after Monday's land swap announcement, PolyMet still must

But even if Minnesota senators don't push back, PolyMet still has a long way to go before realizing an actual mine. The NorthMet Project will be the first mine ever operated

by PolyMet and would occur on land that has never been mined before. Critics of the PolyMet plan, especially among environmental-

www.skillings.net

Proponents of the measure site the economic benefit to the region, as well as the land swap that will keep the park with as much reserved land as before.

If this land swap sounds familiar, it's because it was first proposed seven years ago by PolyMet and the Forest Service.

July 2017 SKILLINGS MINING REVIEW | 17

Mining Industry News

Great Lakes/Seaway Iron Ore Trade Up 16 Percent in June

S

hipments of iron ore on

Great Lakes and St. Lawrence Seaway totaled 6.7 million tons in June, an increase of 16 percent compared to a year ago. Shipments also bettered the month’s 5-year average by 8 percent. Shipments from U.S. Great Lakes ports totaled 6 million the

tons in June, an increase of 15 percent compared to a year ago.

Loadings at Canadian terminals in the Seaway totaled 698,000 tons, an increase of nearly 25 percent.

Year-to-date the iron ore trade stands at 23.7 million tons, an increase of nearly 12 percent compared to the same point in 2016. Year-over-year, loadings at U.S. ports total 21.45 million tons, an increase of 12.4 percent.

Shipments from Canadian ports in the St. Lawrence Seaway have risen 6.5 percent to 2.3 million tons.

Lake Carriers’ Association represents 13 American companies that operate 49 U.S.-flag vessels on the Great Lakes and carry the raw materials that drive the nation’s economy: iron ore and fluxstone for the steel industry, aggregate and cement for the construction industry, coal for power generation, as well as sand, grain and other dry-bulk cargos.

Collectively, these vessels can transport more than 100 million tons of cargo per year. More information is available at www.lcaships.com.

18 | SKILLINGS MINING REVIEW July 2017

DNR Open-File Project 400 Establishing the Potential for Lithium Mineralization on StateManaged Mineral Rights Background: Lithium is playing an increasingly important role in our lives—especially in the form of rechargeable batteries. It may be possible to find lithium in Minnesota.

This is the latest data release for a pilot project to gauge the potential for lithium deposits in Minnesota on State-managed mineral rights. These documents and a more detailed description of Project 400 is available at the DNR’s web site.

The DNR’s Reason For Collecting This Data: We will use this data to help make land management decisions. In addition, the results from this study may also aid the future growth of funds for the Public School Trust, the University Trust, tax-forfeit lands, and the General Fund.

Data Contained In This Release: Laser-induced breakdown spectroscopy (LIBS) and electron microprobe (EMP) analyses were completed in the late spring and early summer of 2017.

Four granitic pegmatite samples (from the same pegmatite), were analyzed using LIBS. 22 feldspar samples (from three pegmatites)

were analyzed using EMP. All of the samples were collected near the town of Orr, Minnesota in the fall of 2016. This data release contains the results from those analyses and a map of the sample collection sites.

LIBS Data Includes: • Raw LIBS spectra • pegmatite sample photographs EMP Data Includes: • EMP feldspar analytical results • EMP operating conditions • images of the feldspar samples This release only contains raw data. It does not contain any conclusions or interpretations. The next steps will be to collect LIBS data from glacial till as well as from additional granitic pegmatite feldspar samples from Minnesota.

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Mineral Rights Worth

attorneys general in several states.

If you happen to own mineral rights in the area of oil production or gas production has been found, those mineral and royalty rights have value. It's important to see what the true market value for mineral rights are. Sometimes the terms of the conveyance of the mineral rights restrict the mineral owner's rights.

How much are your mineral rights are worth? When you sell mineral rights it's important to understand the market value.

M

inerals and the aptitude to transform them into metals are fundamen-

owners of the aforementioned rights can do with their sources abound, as well as legal confusion.

tal to both infrastructure and the manufacturing sector.

As an increasing number of Individuals are learning that new drilling technologies could quickly flip the land below or subsequent to their property into an oil reserve, questions about who owns mineral rights and what the

The Basic Mining Regulation of 1872, which the federal authorities granted permanent and unique mining rights with no royalty obligations. Manufactures have built tens of thousands of homes throughout Minnesota and severing the mineral rights from properties has introduced attention from

When mineral owners want to know how much are mineral rights worth, a recommended review of US Mineral Exchange listing on their property provides how much mineral rights are worth. Mineral Owner Mart is the premier mineral rights purchaser in the United States.

THE partner for a complete and innovative solution

COMMINUTION PHYSICAL SEPARATION FLOTATION EXTRACTIVE METALLURGY PELLETIZING THERMAL PROCESSES CHARACTERIZATION MINERALOGY

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• Ministère de l’Énergie et des Ressources naturelles • Ministère de l’Économie, de l’Innovation et des Exportations

July 2017 SKILLINGS MINING REVIEW | 19

MINING INDUSTRY PEOPLE Great Panther Silver Limited appointed Jim Bannantine as President and CEO, effective August 16. Mr. Bannantine will succeed Robert Archer who had announced his

ADVERTISING INDEX Azcon ................................................. 19 Barr Engineering................................. 12

intention to step down in April 2017. Most recently, Jim was President and CEO of

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

Aura Minerals Inc., a publicly traded Canadian copper and gold mining company

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

with $200 million in revenue and 2,000 employees in Canada, Brazil and Mexico.

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

Over the recent five-year bear market in the mining industry he led a restructuring effort to significantly reduce both operating and G&A costs, while maintaining or

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

increasing production.

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

Columbus Gold Corp. appointed Blaine Monaghan has been appointed as Vice President, Corporate Development. Mr. Monaghan has over 15 years of experience

industrial Lubricant............................ 07 Lake Superior Chapter ISEE............... 19

working with mineral exploration and development companies, including True

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

Gold Mining Inc., acquired by Endeavour Mining Corp., Canplats Resources Corp.,

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

acquired by Goldcorp Inc., Western Prospector Group Ltd., acquired by a subsidiary

Mielke Electric Works......................... 13

of China Nuclear National Corp., and Wheaton River Minerals Ltd., which merged with Goldcorp in 2005.

Naylor Pipe......................................... 08 NBC..................................................... 12

New Gold Inc. announced new appointments to its senior management team as the company looks forward to the Rainy River project's scheduled transition from construction into operation beginning in September. Paula Myson will join New Gold

Neo Solutions..................................... 18 Northshore steel................................ 07

as Executive Vice President and Chief Financial Officer and Peter Woodhouse will

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

join as Vice President (Projects). Barry O'Shea has been appointed Vice President

Northern Engine & Supply................. 22

(Business Development) while Marilyn Schonberner has been appointed to the

S.E.H................................................... 15

Board of Directors. ď Ž

20 | SKILLINGS MINING REVIEW July 2017

wp & rs Mars....................................... 23

www.skillings.net

ALLETE Board of Directors declares dividend on common stock

T

ALLETE, Inc. (NYSE: ALE) board of directors he

has declared a quarterly

dividend of

53.5

cents per share

of common stock.

On

an annual

basis the dividend is equivalent to

$2.14

per share, unchanged

from the previous quarter.

The regular quarterly dividend is payable September 1 to common stock shareholders of record at the close of business August 15, 2017.

ALLETE is an energy company headquartered in Duluth, Minn.

In addition to its electric utilities, Minnesota Power and Superior Water, Light and Power of Wisconsin, ALLETE owns ALLETE Clean Energy, based in Duluth, U.S. Water Services headquartered in St. Michael, Minn.,

BNI Energy in Bismarck, N.D., and has an eight percent equity interest in the American Transmission Co. More information about ALLETE is available at www.allete.com.

Equipping the mining industry with legal services since 1893. · Mineral purchase agreements, leases and options · Land assembly and mineral rights acquisition · Severed mineral registration and title work · Environmental permitting and compliance ° MINING & MINERALS LAW °

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.

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

›› Paul Kilgore ›› Paul Loraas

(800) 496-6789 or fryberger.com

www.skillings.net

July 2017 SKILLINGS MINING REVIEW | 21

Statistics

June 2017 Crude Steel Production

By John Edward, Associate Publisher

W

orld crude steel production for the

67

countries reporting

World Steel Association (worldsteel) was 141.0 million tonnes (Mt) in June 2017, a 3.2% increase compared to June 2016.

The crude steel capacity utilisation ratio of the 67 countries in June 2017 was 73.0%. This is 1.4 to the

percentage points higher than June 2016. Compared to May 2017, it is 1.3 percentage points higher.

China’s crude steel production for June 2017 was 73.2 Mt, an increase of 5.7% compared to June 2016. Japan produced 8.4 Mt of crude steel in June 2017, a decrease of -4.3% compared to June 2016. South Korea produced 5.9 Mt of crude steel in June 2017, an increase of 7.7% compared to June 2016.

In the EU, Germany produced 3.6 Mt of crude steel in June 2017, a decrease of -1.7% compared to June 2016. Italy produced 2.1 Mt of crude steel, up by

1.8% on June 2016. France produced 1.3 Mt of crude steel, up by 1.3% compared to June 2016. Spain produced 1.3 Mt of crude steel, up by 8.1% on June 2016.

Turkey’s crude steel production for June 2017 was 3.0 Mt, up by 7.1% on June 2016. The US produced 6.7 Mt of crude steel in June 2017, a decrease of -1.7% compared to June 2016. Brazil’s crude steel production for June 2017 was 2.6 Mt, up by 4.0% on June 2016.

Statistics based on World Steel Association Report released on July 20, 2017.

Preliminary USGS Iron Ore Statistics for Feb 2017

By John Edward, Associate Publisher

A

U.S. Geological Survey (USGS) report by Mineral Commodity Specialist Christopher A. Tuck, U.S. mine production and shipments of iron ore in February 2017 were 3.42 million metric tons (Mt) and 179,000 metric tons (t), respectively. Average ccording to the

daily production of iron ore was

122,000 t, 17% greater

than that of January and 19% greater than that of February 2016. Average daily shipments of iron ore were 6,390 t, almost one-tenth of those in January, and 78% greater than those in February 2016.

Mine stocks at the end of February 2017 were 48% greater than those held at the end of January and 16% less than those held at the end of February 2016.

U.S. exports of iron ore totaled 171,000 t in February 2017, about one-quarter of those in January and 61% greater than those in February 2016. U.S. imports of iron ore totaled 114,000 t in February 2017, nearly one-fifth of those in January and 25% greater than those in February 2016.

22 | SKILLINGS MINING REVIEW July 2017

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CRUDE STEEL PRODUCTION, JUNE 2017. Source – World Steel Association Cuba

15 e

20 e

20

-25.9

El Salvador

10 e

10 e

9

16.3

Guatemala

25 e

25 e

27

-7.4

1,685 e

1,630

1,668

1.0

0

0

0

..

United States

6,707

6,995

6,824

-1.7

Total - North America

9,412

9,760

9,644

-2.4

372

394

372

-0.1

Brazil

2,649

2,931

2,546

4.0

Chile

95 e

95 e

93

1.7

Colombia

100 e

110 e

111

-9.6

Ecuador

45 e

45 e

45

0.0

Paraguay

1e

1e

4

-75.0

100 e

100 e

97

2.9

5e

5e

6

-13.8

45 e

10 e

26

71.9

3,412

3,691

3,301

3.4

Egypt

531

530 e

377

40.9

Libya

17

39

29

-42.7

45 e

45 e

45

0.0

South Africa

458 e

561 e

545

-15.9

Total - Africa

1,051

1,175

996

5.5

Iran

1,785

1,790 e

1,534

16.4

Qatar

207

195

178

16.3

Saudi Arabia (HADEED only)

401

324

507

-20.9

2,662

2,597

2,433

9.4

China

73,231

72,259

69,299

5.7

India

7,950 e

8,500 e

8,036

-1.1

Japan

8,391

8,951

8,769

-4.3

South Korea

5,906

5,665 e

5,482

7.7

Taiwan, China

1,930 e

1,900 e

1,828

5.6

Total - Asia

98,719

98,931

94,427

4.5

449 e

432

535

55

61

504

Mexico Trinidad and Tobago

Argentina

Peru Uruguay Venezuela Total - South America

Morocco

Total - Middle East

Australia New Zealand Total - Oceania Total - European Union (28) Total - Other Europe

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JUNE 2017

COUNTRY

Total - C.I.S. (6)

MAY 2017

7,639

Total (67 countries)

% CHANGE JUNE – 17/16

JUNE 2017

8,363

8,307

-8.0

141,046 143,325 136,633

3.2

e – estimate | r – revised Monthly Crude Steel Production in the 67 Countries included in the report, in thousands of metric tons. The 67 countries included in this table accounted for approximately 99% of total world crude steel production in 2016.

U.S. RAW STEEL PRODUCTION Weekly Production

Year-to-Date Production

July 29, 2017

1,769

- 0.2

75.9

52,108

2.6

74.5

Previous Year

1,667

6.1

71.3

50,793

-

72.4

July 22, 2017

1,773

0.6

76.1

50,339

2.5

74.5

Previous Year

1,667

6.4

71.3

49,126

-

72.4

July 15, 2017

1,763

1.7

75.6

48,566

2.3

74.4

Previous Year

1,667

5.8

71.3

47,459

-

72.4

July 8, 2017

1,733

0.9

74.3

46,803

2.2

74.4

Previous Year

1,667

4.0

71.3

45,792

-

72.4

WEEK ENDING

Percent Change*

-11.5

Production

1 096

Capability Utilization Rate

1,080 e

Percent Change*

970 e

Production

Canada

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.

WEEKLY U.S. RAW STEEL PRODUCTION BY DISTRICT DISTRICT

WEEK ENDING

7/29

7/22

7/15

7/8

North East

213

214

212

213

Great Lakes

672

677

669

654

-16.1

Midwest

168

166

168

163

46

20.6

492

581

-13.2

Southern

640

637

639

630

14,387

14,758

13,845

3.9

Western

76

79

75

73

3,261

3,558

3,100

5.2

1,769

1,773

1,763

1,733

Total

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

July 2017 SKILLINGS MINING REVIEW | 23