Skillings Mining Review May 2013

PROFILES IN MINING

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MD & Principal Consultant, Xstract Mining Consultants Mark Noppe

IRON ORE Gogebic Taconite Prepares For Exploratory Drilling

M I N I N G

MINING INDUSTRY FINANCE Mining Tax Revenue Remains Unpredictable

R E V I E W MAY 2013 • VOL. 102 NO.5

Global Mining Deals How 2013 Compares to 2012

IRON ORE PRICE REPORT MINING INDUSTRY PEOPLE Mining Analyst Roundtable MINING MATTERS STATISTICS

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CONTENTS

MAY 2013 VOL. 102 No. 5

Global Mining Deals: How 2013 Compares to 2012...6 Safety Innovations..24

This month, we take a look at Global Mining Deals.

MINING THOUGHT LEADERS.................................................................4 ADVERTISING INDEX............................................................................26 IRON ORE PRICE REPORT.....................................................................18 MINING ANALYST ROUNDTABLE.........................................................16 MINING INDUSTRY PEOPLE/MINING MATTERS...................................27 STATISTICS........................................................................................18,19 COAL Alpha Congratulates Affiliate...............................................................5 Federal “Sequestration” Budget Cuts Affect MSHA............................5 COPPER Conflict In Katanga Raising Concern....................................................8 Arizona And Minnesota Evaluating Sulphur Risks...............................8 GOLD BHP Could Be Halting Projects In Gabon............................................11 Central Bank Purchasing Seen As Good For Gold Mines...................11 Rescue Underway After China Gold Landslide...................................14 MINING INDUSTRY FINANCE Solomon Islands Setting Mining Framework........................................9 Government Says No To Vale.................................................................9 Mining Tax Revenue Remains Unpredictable.....................................10 MINING INDUSTRY SHIPPING Great Lakes Stay Low...........................................................................16 SA To See Trade Improvement In 2013...............................................16 Aussies To Ship Uranium Through Reef..............................................17

Publisher Chas Pitts Chas.Pitts@Skillings.net Associate Publisher John Edward john.edward@cfxnetwork.com Senior Sales Manager Stan Salmi Stan.salmi@Skillings.net Contributing Editors Anna Grant anna.grant@cfxnetwork.com Mary Claire Whitaker MC.Whitaker@cfxnetwork.com Carien Daffue Carien.Daffue@cfxnetwork.com Art Director Mo Shine mo.shine@cfxnetwork.com Circulation and Subscriptions Subscriptions@skillings.net Sales & Marketing Christine Marie Advertising@Skillings.net

Iron Range Region Iron Range’s Copper-Nickel Mining- Opportunity Or Threat?..........20 Swiss Firm Finances PolyNet Mine.......................................................20 IRON ORE Iron Ore: Ups And Downs....................................................................10 Gogebic Taconite Prepares For Exploratory Drilling..........................14 NON FERROUS METALS BIR’s New Committee Launched..........................................................21 Base Metals Soften On Global Trends.................................................21 PROFILES IN MINING Mark Noppe- MD & Principal Consultant, Xstract Mining Consultants.....12 Safety Labour Department Renew Safety Commitment...............................22 Miners Safety Takes Predominance In 2013.......................................22 STEEL Global Steel Production Declines........................................................26 CSN Shareholder Value Uncertain.......................................................26 Subscriptions: U.S.: $72 annually in U.S. funds. $109 annually in U.S. funds for 1st Class Service All other countries: $250 in U.S. funds for 7-21 day service. $335 in U.S. funds for air mail service www.skillings.net

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May 2013 SKILLINGS MINING REVIEW | 3

SKILLINGS MINING REVIEW

MAY 2013 | VOL. 102 No.5

Mining Thought Leaders Mr. Mark Noppe Managing Director and Principal Consultant of Xstract Mining Consultants

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or the May 2013 issue of Skillings Mining Review, we interviewed Mr. Mark Noppe, who has over 28 years of resource evaluation and mining geology experience. Mr. Noppe’s technical experience covers a wide range of commodities, geological, and mining settings, including coal, gold, nickel laterite and sulphide, alluvial, eluvial and hard rock diamonds, base metals and industrial minerals. Mr. Noppe previously worked in South Africa for Anglo American Corporation

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(1984-1997), in Western Australia and Queensland for Snowden Mining Industry Consultants (1997-2008) in exploration, mining geology, practical geostatistics applications, resource estimation, grade control, mine reconciliation, and professional training and mentoring, before starting Xstract Mining Consultants in early 2009 – now a +60 person consultancy within the listed Calibre Group of companies.

Xstract Mining Consultants provides independent, strategic advice and personalized professional services to exploration and mining companies, engineering firms, financial institutions and investors. Xstract prides itself on providing its clients with a

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.

consulting experience that not only delivers favorable technical outcomes but also emphasizes engagement and flexibility in delivery.

Xstract is a wholly-owned subsidiary of Calibre Group, a leading engineering services and project delivery group that designs and delivers mine, rail, and infrastructure projects for resources and infrastructure clients across Australia and select overseas markets. The Calibre Group of Companies collectively focus on delivering comprehensive engineering and delivery capability across the full asset lifecycle. The full interview is available on our website www.skillings.net - a summary is reproduced in the current issue.

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CoAL

Alpha Congratulates Affiliate

Federal “Sequestration” Budget Cuts Affect MSHA

By Carien Daffue

By Mary Claire Whitaker

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ollowing the U.S. federal budget cuts known as “sequestration,” the Mine Safety and Health Administration (MSHA) is to lose approximately $31 million of its annual $394 million in funding.

Joe Main, Assistant Secretary of Labor for Mine Safety and Health, recently detailed in a letter to stakeholders what he predicts will be the effects of the cuts.

The agency would be forced to cut back its participation in training and outreach activities, “as the agency realigns its available resources to conduct its core mandatory activities,” Main wrote in the letter.

Main also warned that the budget cuts would mean the agency—already understaffed, according to many—may not be able to fill vacant positions. “A delay or the inability to replace seasoned and highly-skilled employees who leave the agency will leave MSHA without sufficient experienced inspectors in the future,” Main’s letter said.

Main, who entered his position at the MSHA a few months prior to the 2010 Massey Energy Upper Big Branch disaster, reflected that understaffing was an issue that contributed to the agency’s shortcomings during that period failed to prevent the explosion Even without funding and personnel cuts, the MSHA faces enforcement challenges due to lack of regulatory backing. In a 2012 testimony arguing for the passage of stalled federal mining bills, Main told the House of Representatives that the MSHA needed stronger protections for safety-issue whistleblowers, federal subpoena power for investigations, and stiffer criminal penalties to meaningfully deter flagrant operators. Delinquent mines currently owe the MSHA nearly $74 million in fines from as far back as 1993.

lpha Natural Resources announced that Paramont Coal Co., Virginia, LLC has been recognized with two prominent environmental awards from state officials.

Presented by the Virginia Mining Association and the Division of Mined Land Reclamation, Paramont was awarded “The Best Post-Mining Land Use” for its work at the Hawk’s Nest Surface Mine near Prater, Va., where 1,000 acres of Buchanan County land has been reclaimed for homes and businesses. With easy access to the developing Coalfields Expressway and Poplar Gap Park, this land is fast developing into a growth center.

The “Best Active Surface Mine” award was granted for Paramont’s Red Onion Surface Mining operation on 950 acres of land near Pound, Va. The operation is in an area previously mined with surface and underground mining methods.

Several hundred feet of abandoned highwalls were eliminated with the current permit; multiple planned postmining lands will include farmland, commercial development, and fish and wildlife habitat. The company is working closely with the landowners for post-mining land usage.

“We care about the environment and are committed to doing what is right at all of our mining operations.

We pride ourselves on demonstrating how the land can bring opportunities to the region after our mining work is completed. We congratulate our employees for a job well done,” said Eddie Bateman, Alpha’s Senior Vice President Southern Operations.

Alpha Natural Resources has mining operations in Virginia, West Virginia, Kentucky, Pennsylvania and Wyoming.

It also supplies metallurgical coal to the steel industry and thermal coal to generate power to customers on five continents. www.skillings.net

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May 2013 SKILLINGS MINING REVIEW | 5

COVER STORY

How 2013 Compares to 2012

Global Mining Deals In 2013 Miners Remain Cautious 2012 was an exciting year for the mining industry in terms of mergers and acquisitions. The obvious deal-ofthe-year was the $54-billion blockbuster merger between Switzerland-based Glencore International plc and United Kingdom-based Xstrata plc, to form the world’s fourth-largest diversified miner.

Analysts do not predict any mega mergers happening in 2013. With a rash of write-downs in 2012 related to significant acquisitions completed in prior years, shareholders are wary, not willing to stomach the risks associated with mega-mergers. Many of the CEOs associated with the announced write-downs have been replaced by CEOs peddling a new mandate: bottom-line growth. “Investors are very wary of companies over-paying for deals. The result is a real chill on deals in the mining space,” John Nyholt, a PwC partner, told the Prospectors and Developers Association of Canada’s annual convention in April 2013.

That chill may relieve the Harper government of some tough decisions, such as its veto of BHP Billiton’s 2010 bid to buy Potash Corp of Saskatchewan, and if global consultancy PwC is correct, policymakers in Ottawa will be spared from pondering politically sensitive investments in Canada’s mining sector for some time to come.

Asset Rationalization Could Be Key Trend In 2013 However, asset rationalization will be a key theme amongst senior miners in 2013. Many senior mining companies such as Barrick, BHP 6 | SKILLINGS MINING REVIEW May 2013

By Anna Grant and Mary Claire Whitaker Biliton, Anglo-America, and Rio Tinto have disclosed the fact that they are in the market to sell and not to buy. As seniors look to divest non-key assets, intermediates with strong cash positions and a track record of successfully bringing projects on-line will be opportunistic, looking for strategic “tuck-in” acquisitions.

In addition, seniors and intermediates looking to de-risk projects will pursue joint venture partners. Chinese investors could display interest in these joint venture opportunities as they look into increase their global holdings in the resource sector. Jointventure arrangements offer Chinese investors many advantages to that of a straight-up takeover, including the much desired transfer of skills and knowledge.

As for juniors, the road will remain bumpy. In the absence of available equity, 2012 saw junior mining companies team up with one-another in an attempt to move their projects forward. Looking to pair the strength of one company with the strength of the other, junior mining CEOs are able to create a stronger, more resilient mining company, better positioned to ride out the equity down-turn.

“In 2013, miners will have their eyes on opportunities, but will consider risk factors such as rising costs, resource nationalism and potential political ramifications of buying and selling assets,” says John Nyholt.

He adds the appetite for controversy is decreasing, as miners are wary of joining the list of highly publicized write-offs from past deals, both friendly and hostile.

According to Nyholt, companies want to prove more than ever that they’re being prudent with their shareholders dollars.

“There is an expectation that most

deals will be smaller and more digestible, triggered by companies with successful track records from both deal and project development.”

Copper And Gold Remain Steady Copper was the most sought-after metal when measured by deal value in 2012, and evident in First Quantum Minerals Ltd.’s $6.7 billion hostile bid for Inmet Mining Corp. That said, copper could not outpace gold in terms of M&A deal volume. While 2012 did not yield any blockbuster gold deals, the mining community did witness plenty of interest in the gold space. The two largest gold deals in 2012 included Pan American Silver Corp.’s $1.4-billion purchase of Minefinders Corp.

Ltd. and B2Gold Corp.’s $1.2-billion purchase of CGA Mining Ltd. According to a recent analyst report, gold and copper dominated M&A activity in 2012 as miners with cash took advantage of lower valuations to fund future growth.Together, the two metals accounted for half of the top 20 deals last year, even before considering their mix in the diversified metal mergers.The researchers say the two metals are popular for different, but equally powerful reasons.

“Investors are turning to gold as a hedge against inflation and general economic uncertainty. While copper is considered a bet on the future health of the global economy, as the metal is used in everything from plumbing and power to automobiles,” PwC says.

Other commodities to watch this year, says the firm, are uranium and iron ore, which also appeared a few times among the top 20 deals of 2012, particularly among steelmakers looking to boost access to the latter.

Overall, those participating in the www.skillings.net

deal market will remain cautious not to overpay for assets or make investments that appear too risky to shareholders. While 2012 was already a disciplined year for M&A activity, miners will be equally cautious in 2013.

Iron Ore Giants Cutting Costs, Steelmakers Acquiring Mines As China’s growth slows to a more moderate rate, analysts expect iron ore and steel growth percentages to stabilize between four and five percent in 2013. Meanwhile, increases in global iron-ore supply are expected to further subdue the market.

The Chinese National Development and Reform Commission forecasts worldwide production 300 million tonnes higher in 2015 than current levels. The bulk of the predicted supply growth will be driven by three of the four largest iron ore producers—Rio Tinto, BHP Billiton, and Fortescue— who are planning on a combined 235 million tonnes of new mine capacity by 2015. China’s own iron ore production is likely to increase by 20 million tonnes in 2013 As a result of these factors, the price of iron ore for the year should be between $110 and $135 per metric tonne on average, possibly reaching $90 by December, analysts say.

Despite the drop, from iron ore’s alltime high in 2011 of $192 per tonne, mining companies continue to view predicted market trends as favorable, though several have discussed publicly the need to balance their costs carefully in order to protect profits.

“We’re seeing steel demand growth slowing inevitably. That is going to put downward pressure on iron ore prices... We certainly still forecast [China’s] steel demand growth over the next 5-10 years somewhere around 3 percent,” Greg Lilleyman, Rio Tinto’s Pilbara operations director, said.

Rio Tinto, which derives more than two-thirds of its revenue from iron ore, rests its profitability strategy amid volatile pricing on rich ores and low mining costs, according to Lilleyman, www.skillings.net

with leverage for cost control derived in part from the company’s size.

Rio Tinto’s iron ore production costs are about $24 per tonne, compared with average production costs for 62-percent-grade iron ore in the $60-to-$70 range per tonne. BHP reportedly spends about $30 per tonne, and Fortescue about $50. In China, production costs are between $90 and $100 per tonne, for lowergrade ore.

Though Vale is not currently investing in further economy-of-scale, it had made other investments production costs. Its truckless, all-conveyor system installed in Carajas, Brazil, expected to reduce iron ore costs to between $20 and $23 per tonne. The company, which faces higher transport costs to China and India than Australian mines, has also been said to be looking for an opening to purchase mining assets in Australia.

The large mines are following costreduction strategies at a time when Chinese steel companies have begun pursuing consolidation strategies.

Recognizing the advantages of large mines in raising capital and purchasing leverage, China saw $19.6 billion in domestic mining mergers in 2012, double the merger investment level of 2011.

In January, the Chinese government said it would promote mergers in nine industries including steel to create “globally competitive” enterprises.

Chinese steelmakers are integrating iron mines into their company holdings to avoid paying seller’s market prices. Heibei Iron and Steel Group, the Hanlong Group, and Wuhon Iron and Steel, have all recently sought to purchase iron mine stakes.

Heibei Iron and Steel purchased in April a quarter stake in Alderon Iron Ore’s Kami project in the Labrador Trough in eastern Canada. The stateowned company, also known as Hegang, is the largest steelmaker in China, producing 50 million tonnes of crude steel per year. Its partnership with Alderon will allow it a 60% offtake of Alderon’s 8-million-tonne annual production, planned to begin

in 2015. The Hanlong Group had been planning to spend $1.4 billion on Sundance Resources’ Mbalam iron ore project, on the border between Camaroon and the Republic of Congo, although the deal appears to have stalled due to scandal surrounding Hanlong.

Wuhan Iron and Steel, the fourthlargest steel producer in China, announced in January that it plans to provide 100 percent of its own iron ore by 2018. The company would seek to purchase resources in China, Australia, Canada and Brazil, including $2.4 billion in assets from its parent company, WISCO, WISCO Brasil Investimentos em Metalurgia and WISCO (Australia) Proprietary. In September 2012, Century Iron Mines in Canada announced it was entering a joint venture with WISCO, for $40 million to develop the Attikamegen project.

The Aquila West Pilbara project is partly owned by China’s biggest steelmaker Baoshan Iron and Steel, which has led to suggestions that the in light of a recent freeze on production due to high costs, Aquila could sell down its stake to Baoshan.

“With stronger and bigger Chinese players emerging, we could see a significant pickup in the volume of overseas acquisitions,” said Richard Tory, in charge of natural resources at Morgan Stanley in Hong Kong.

Steelmakers outside of China have been following a similar path. India’s Jindal Steel has also been reportedly talking to several iron ore mines in Africa, as it plans to spend $6.5 billion in the next two years to improve supply. The Indian Steel Ministry and its mining arm, the National Mineral Development Corporation, have been visiting Brazil and Uruguay in search of iron ore investments.

In January, ArcelorMittal Canada sold 15 percent of its iron ore mines to a group led by Posco of South Korea, one of the world’s largest steel makers, and China Steel, of Taiwan, for $1.1 billion. For China Steel, the move was a step in its goal to own stakes in 30 percent of its iron ore suppliers by 2015.

May 2013 SKILLINGS MINING REVIEW | 7

Copper/ MINING INDUSTRY FINANCE

Conflict In Katanga Raising Concern

By Anna Grant

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t least 35 people died when 250 Kata Katanga militants battled soldiers and police in Lubumbashi on March 23, 2013, before surrendering to the United Nations. The city of about 1.5 million people, less than 20 miles from the border with Zambia, has largely escaped the violence that plagues most of Congo’s eastern frontier.

Lubumbashi is a hub for copper and cobalt miners operating in Congo, including Freeport-McMoRan Copper & Gold Inc, Ivanplats Ltd. and Glencore International Plc. After years of conflict and instability, Congo’s mining industry has flourished

since 2009, with copper production doubling to about 600,000 metric tons last year, most of it coming from Katanga in the southeast. The Central African country was the eighth-largest producer of the metal in 2012, accounting for 3.4 percent of world output, according to the U.S. Geological Survey.

It also produces half of the world's cobalt, used in rechargeable batteries.

Most attacks by the separatists and other militia, known as Mai Mai, have taken place between the central Katangan towns of Manono, Pweto and Mitwaba, at least 200 miles north of Lubumbashi. The number of displaced people in the region has increased sixfold since January 2012 to 316,000,

Arizona And Minnesota Evaluating Sulphur Risks

according to the U.N. An estimated 1,500 children have joined Mai Mai groups in Katanga, according to the UN Children’s Fund.

Forty children aged between 10 and 17 were removed from the Kata Katanga ranks after their surrender, Cornelia Walther, UNICEF’s spokeswoman in Kinshasa, said by e-mail recently.

Democratic Republic of Congo’s mines minister reassured investors after separatists attacked the capital of mineral-rich Katanga province, raising concern among analysts that the region faces increased conflict.

“I am personally reassuring miners that these events are temporary and will be completely put to a halt,” said Mines Minister Martin Kabwelulu. “A psychosis will reign for several days, but that will pass as well.”

are done correctly,” he said, “and that the permit to mine is issued with the proper avoidance or mitigation techniques.”

By Mary Claire Whitaker

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s Minnesota communities are weighing how to permit new nickel-copper projects in its Iron Range, the Arizona town of Florence and the Arizona Department of Environmental Quality have recently made policy decisions addressing sulphur management.

The town council of Florence, Arizona, has unanimously rescinded an August 2012 ban on large quantities of sulphuric acid. Prior to the reversal, Florence had taken possession of Curis Resources property attempting to prevent the company from moving forward with its $500 million copper mine.

Curis has taken the council’s lifting of the ban as a signal that moving forward with the mine will be allowed.

The reversal also follows a settlement in February between the Arizona Department of Environmental Quality and Silver Bell Mining for the company to pay a $60,000 penalty and implement $50,000 worth of preventative measures after one of the company’s pipelines ruptured in 2010, leaking a concentrated solution containing 4,000 pounds of sulphuric acid and dissolved metals into a storm-water impoundment on the mine’s property.

Areas surrounding the Duluth Complex in Minnesota have begun debating how to administer the third-largest copper and nickel resource in the world, particularly how to deal with the threat of sulphuric acid runoff that would come with mining the deposits there. PolyMet and Twin Metals are two companies planning to work the deposit.

John Engesser of the Minnesota Department of Natural Resources summarized his opinion: “The ultimate responsibility is the DNR’s to make sure that the environmental reviews

8 | SKILLINGS MINING REVIEW May 2013

www.skillings.net

Solomon Islands Setting Mining Framework

By Mary Claire Whitaker

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ic Hou, the Finance Minister of the Solomon Islands, has said that the country expects mining soon to overtake logging as its primary source of export revenue, and that it will be examining models for how to regulate mining and derived income.

The Solomon Islands re-opened its only mine, a Gold Ridge Mining Ltd project, in 2010. St Barbara’s Gold Ridge, plus Axiom, Solomon Gold, and others have since been investigating possibilities for starting new mining projects.“Forestry we generally see as a sunset industry,” Hou told Radio Australia. “The mining sector is the sector we see as going to fill that gap.” In terms of negotiating with mines, Hou said the country would look to Papa New Guinea and East Timor for examples, and to the Secretariat of the South Pacific and other agencies for guidance.

One planned approach is putting

confirmed resource deposits up for public tender. Hou also mentioned the Extractive Industry Transparency Initiative.

“This is very vital for us… in terms of ensuring transparency and fair distribution, and accountability and governance of revenues.”

Rence Sore, Permanent Secretary of the Ministry of Mines, Energy and Rural Electrification, said in March that the Ministry was developing national and maritime minerals policies, to update the country’s existing Mines and Minerals Act. Sore said that parliamentary legislation creating a National Minerals Authority was also forthcoming.

Government Says No To Vale

By Carien Daffue

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n Argentine court has ordered Vale SA to refrain from dismantling its Rio Colorado project, which the company suspended recently saying it was no longer viable.

Vale, the world’s No. 2 miner, says the estimated $6 billion project has been hit by soaring costs it attributes to Argentina’s rampant inflation and controlled exchange rate, in a row that is threatening to renew trade tensions between South America’s two largest economies.

The Argentine government says Vale is demanding unrealistic tax breaks, and has barred the company from firing at least 6,500 workers and subcontractors on the fertilizer project. The government of Mendoza province said on its website that a provincial court had agreed to a petition filed

by Argentina’s main construction trade union, and ordered Vale to “abstain from ... dismantling installations (and) removing tools, machinery and other work implements” from Rio Colorado.

The company said in a press statement that the project was not “in line with Vale’s commitment to discipline in capital allocation.” Vale had put the project under formal review in December. Brazil, the largest global producer of coffee, orange juice and beef, imports about 90 percent of its potash needs. www.skillings.net

May 2013 SKILLINGS MINING REVIEW | 9

MINING INDUstry FINANCE/ GOLD/ IRON ORE

Mining Tax Revenue Remains Unpredictable

By Anna Grant

T

reasury boss Martin Parkinson concedes his department may not get a confident grip on forecasting revenue from the federal government’s controversial mining tax until companies make their tax returns for this financial year.

But academics who gave evidence to a Senate committee inquiry into Labor’s minerals resource rent tax believe that because of the impost’s design, revBy Carien Daffue

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ron-ore prices hovered at near three-month lows as buying from topconsumer China remains tepid, with concerns over increasing supply and lower steel-demand growth driving down shares of top miners Rio Tinto and BHP Billiton.

A weaker-than-expected recovery in China’s steel demand has left many steel mills operating at a loss, slowing down purchases of the key steelmaking raw material and keeping ironore traders on the sidelines.

“Record-high steel output and weak demand suggest steel mills are facing very tight cash flow, so they do not plan to purchase in the near term,” said an ironore official with an eastern China steel mill.

Traders are shying away from taking cargoes as many expect a further fall in iron-ore prices with few signs of an immediate pickup in steel demand.

Concerns over iron-ore prices in the coming years due to additional supply and lower Chinese steel-demand growth dragged shares in major miners to near fourmonth lows.

Rio Tinto fell as much as 3.7 percent in Australian

10 | SKILLINGS MINING REVIEW May 2013

enues are likely to remain low unless there is an unexpected spike in coal and iron-ore prices.

In the mid-year budget review, treasury had forecast that the MRRT would bring in $2 billion between 2012 and 2013, a downgrade from the $4 billion originally projected when a resources rent tax was first announced in 2010.

So far, the MRRT has only garnered $126 million in its first six months.

What the department still doesn’t

trade, and BHP Billton fell nearly 3 percent, mirroring losses in London. The price of iron ore is critical to the global economy because it feeds through into the price of steel and goods such as cars and washing machines.

It is also key to the profitability of large mining groups as well as steelmakers, including ArcelorMittal and Baosteel of China. Rio Tinto, BHP Billiton, and Fortescue

know are things it cannot see, like how much mining companies are depreciating assets and production costs under the tax scheme.

The next revenue collection of the MRRT will show whether the first two collection periods were driven by commodity prices, which fell more sharply than expected in the second half of last year, before rebounding.

Jonathan Pincus from the University of Adelaide says, “Modest MRRT revenue is to be expected in the next few years unless there is a sizable rise in coal and iron ore prices.”

$1.70 at the beginning of April to reach a more than 3-week high, despite persistent predictions of a sharp correction in the price of the steelmaking raw material.

The benchmark CFR import price of 62% iron ore fines at China’s Tianjin climbed to $137.60 its best level since March 13 and up over 55% up from three-year lows reached in September according to data provided

Iron Ore: Ups And Downs Metals Group, respectively the world’s second-, thirdand fourth-biggest iron-ore miners, are all aggressively expanding production. By 2015 they expect to add 235 tonnes of mine capacity, equal to around half of Australia’s entire iron-ore production last year. But analysts are increasingly worried that the seaborne iron-ore market will soon be in oversupply as output increases from Australia, the world’s biggest exporter of iron ore, and demand from China slows. The price of iron ore jumped 1.3% or

by SteelIndex.

The improvement came on the back of a new report showing China imported 19 million tonnes of iron ore from top supplier Australia in March, a 22% increase on February’s figure.

Jay Hambro, chairman of Russian iron-ore miner IRC, told the BBC in an interview recently that he believes that the iron-ore price is “going to stay stronger for longer”.

The reason is that despite rising output, it is in the best interests of the world’s Big 3 producers – Rio Tinto (LON:RIO),

BHP Billiton (LON:BHP) and Vale (NYSE:VALE) – not to let prices flounder because they are dependent on iron ore for the bulk of their earnings. For the world’s top five diversified miners, iron ore contributed twothirds of pre-tax profits, and for world number two, Rio Tinto that portion is upwards of 80%.

The iron-ore production world is highly concentrated; the big three control more than 60% of the 1 billionplus tonne seaborne trade.

Add Anglo American (LON:AAU) and Fortescue Metals (ASX:FMG) that portion rises to close to 75%, giving the globe’s top producers a great deal of pricing power. Rio Tinto expects new iron-ore supplies and slower growth in steel demand to weigh in on prices of the raw material in the second half of the year.

Rio will seek to sell assets and cut costs after commodity prices fell.

It plans to reduce capital expenditure to $13bn this year from $17bn last year, while targeting cash cost savings of more than $5bn by the end of next year. The firm’s iron-ore development projects include the $10bn Simandou mine in Guinea. www.skillings.net

BHP Could Be Halting Projects In Gabon

By Anna Grant

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ccording to unconfirmed reports, miner BHP Billiton is freezing all its projects in Gabon, dashing government hopes for sizable investments in manganese and iron-ore production.

The Belinga project, like other iron-ore developments in West Africa, has huge potential but faces political uncertainty and significant infrastructure hurdles.

Belinga could provide a significant economic boost

for Gabon as the government seeks to expand exports and diversify away from oil, but the project has faced a series of delays and setbacks.

The company holds licenses in the Central African country for the mining of manganese at Mounana, 650 km east of Libreville, the capital.

Government officials also said BHP signed a contract a year ago for the Belinga ironore mine, in northeastern Gabon, edging out China’s Comibel. BHP declined com-

ment.

“We respect the decision

by BHP to freeze its activities in Gabon,” said a senior official at the mining ministry who asked not to be identified. “At the same time this is a blow to the country, which hoped to become the world’s largest exporter of manganese.” Gabon is the world’s second-largest producer of the mineral, after South Africa.

The Australian miner has all but pulled out of Guinea, where Brazil’s Vale and Rio

Tinto have also put their investments on ice amid a government mining-sector review and sagging iron-ore prices.

BHP’s CE last year questioned West Africa’s ironore ambitions, saying that Australia and Brazil alone could feed global demand.

China’s CMEC, which had secured rights to Belinga in a 2007 deal, lost the concession following concerns about its environmental impact and the company’s ability to deliver.

Central Bank Purchasing Seen As Good For Gold Mines

By Mary Claire Whitaker

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hile the price of gold and gold-backed funds have shown a steady decline over the last six months, reaffirmed in April with a strengthening dollar and the salvage of Cyprus in the European Union, data from the World Gold Council shows that 2012 net gold purchase by central banks was up 17 percent over 2011.

Gold demand typically goes up amid fears of inflation; when inflation is not as much of a concern, the market has seen gold prices level off. However, analysts have pointed recently to the central bank tendencies as a sign that gold prices are not on a permanent downturn, which explains why professional stock tippers have started to look at mine stocks as offering potential for great reward, assuming gold swings back up.

Jeff Uscher explained the phenomenon on the stocks website Money Morning. “If it costs a mine $1,200 to www.skillings.net

produce an ounce of gold,” he wrote, “and the price of gold falls from $1,700 per ounce to $1,600 per ounce, the miner’s profit per ounce falls by 20 percent when the price of gold has fallen by only six percent.”

Uscher goes on to point out that the reverse is true when gold prices increase: the returns of strong mines should show a proportionately higher increase than the price of gold itself.

“If the price of gold rises from $1,600 per ounce to $1,800 per ounce and it still costs a mine $1,200 to produce an ounce of gold, the 12.5 percent increase in the gold price results in a 50 percent rise in the miner’s profit,” he said.

As such, facing the prospect that gold prices may continue to climb, investment analysts are considering mining companies that show strong performance results, while factoring in changes in gold production costs, as a bet on strong potential pay-offs.

May 2013 SKILLINGS MINING REVIEW | 11

PROFILES IN MINING

Mark Noppe Managing Director and Principal Consultant of Xstract Mining Consultants

SMR: For a consulting company, the main asset is your staff. How do you select your staff and what are some of the HR practices you uphold to retain talent?

SMR: You offer clients the benefit of `integrated service delivery’. Can you define this please?

MN: Xstract offers clients services across a range of disciplines and specialties, including: - Geology (exploration, resource estimation, grade control); - Geotechnical engineering; - Mining engineering (mine planning, scheduling, ore reserve estimation, ore and waste management, drill and blast, production planning and operation, corporate advisory); - Process engineering; - Environmental management; and - Project management and control.

While our specialists in the company work within a matrix structure whereby they are supported and developed within their core technical areas, our client project teams are formed by selecting the required experts and level of expertise from the core disciplines, and they then work closely with each other and with the clients to deliver the required outcomes…

12 | SKILLINGS MINING REVIEW May 2013

MN: …While the balance of technical capabilities of our staff are key to delivering quality outcomes – a ‘must do’ in our line of work – we are also very focused on the personality, culture and style of how we work.

Looking for like-minded staff who share our vision to be a multidiscipline, multi-commodity and geographically diverse group working for great clients on interesting projects and mines in a collaborative and communicative environment makes all the difference!

SMR: What are some of the typical challenges a consulting firm like Xstrata can face?

MN: The very nature of our business, namely a multidiscipline, multi-commodity and geographically diverse group working on a balance of work types from early assessments to operations, is both a positive hedge against the traditionally cyclical resource sector, and a self-created challenge – a challenge which we have willingly embraced and look forward to seeing develop further.

SMR: Do you believe that productivity will be the key driver for the mining industry for the next 10-15 years?

MN: Absolutely – improved productivity while maintaining quality and safety is the only logical solution to manage the rising costs of doing business in the resources sector. This applies

equally to producing mines and service providers. Besides having the technology to improve productivity, it is also about having ‘the right people in the right roles doing the right things’.

SMR: This ‘real-time data collection’ system that you are working on…will you at some stage think of selling it as a product or service offering to the mining industry?

MN: Our technology innovations, including data collection, data management and data use with the open source Xstract Open Database (XODB) platform, are planned to assist both our consultants and our clients in performing more effectively by challenging the way things have always been done. Quite obviously, we intend to capitalise on these developments as they take root and develop around the industry’s real needs and real solutions.

SMR: How would you characterize some of the challenges Xstract is most frequently called upon to resolve?

What are some examples?

MN: As you can appreciate, working on over 200 projects a year for some 100 clients in over 22 different countries provides quite a choice for this question!

My favourite theme, though, is our ability to assess projects merits and place them in a realistic context with respect to project maturity, project accuracy or reliability (risk) and opportunity assessment. Our views have often been challenged, but have seldom been proven wrong! Our clients have been impressed with our analysis and appreciate our professional opinion. www.skillings.net

SMR: What about consulting work do you think attracts mining professionals to become consultants?

MN: Interestingly, only a small percentage of technically capable professionals gravitate towards consulting and in turn become good consultants. It tends to be those who dig a little deeper into the why, how, who, where and when things are done. Those who put in the extra time to research, understand, model and improve their capabilities and/ or work practices. Those who find themselves in technical services functions more than operational roles. These people may be extraverts and like to share their knowledge and network with others, or be more introvert and prefer to simply get on with the job. But either way, both characters can make good consultants.

SMR: What are some ways that you and your colleagues ensure you continue learning and providing the

www.skillings.net

type of fresh perspective consultancy clients seek?

MN: Our internal peer review process and project team structures provide for ongoing knowledge sharing and on-thejob learning. Further to this, we actively encourage knowledge sharing through training courses, technical talks, conference participation and membership of professional organisations.

Together with our personal continued professional development, we research industry data and collate and share this through our matrix business structure. This approach, and our staff’s passion for what they do, finish off their ability to provide very special consulting and technical services.

SMR: What have been some of your most instructive consulting projects and why?

MN: There is almost never

a project where I don’t learn something new.

For this reason most projects are in themselves instructive and exciting.

In particular, projects where I or the team have been able to identify that one special item or step, which has either been critical to identify and then mitigate to avoid a major risk, or more exciting, to identify that one special piece of data that unlocks the potential of a project and drives the project and our client forward.

I have been fortunate to have been instrumental in identifying resource potential that, in one case, extended the remaining mine life from two to three years to well over 15 years, and in another case identified early stage mine grades that provided the payback to advance an otherwise marginal project which had been on hold for 20 years to an operating mine with over 12 years of life.

May 2013 SKILLINGS MINING REVIEW | 13

IRON ORE/GOLD

Gogebic Taconite Prepares For Exploratory Drilling

By Mary Claire Whitaker

F

ollowing authorization in March of relaxed application processes for iron mining by the state of Wisconsin, Cline Resources and Development’s Gogebic Taconite LLC has said it will file exploratory drilling paperwork once the snow on its proposed mine site has melted. Most sources expected that boring would begin by the end of April.

The drilling would be in preparation to develop taconite mining along a fourmile stretch in the Penokee-Gogebic mountains of northern Wisconsin, in the counties of Ashland and Iron. As planned, the mine could become the largest open-pit project in the world, with an expected life of 35 years for the first phase.

The company, according to its president Bill Williams, will bore thirteen holes totaling approximately 10,000 feet. The deepest hole would be 1,200 feet, dug at an angle, in line with the proposed trajectory of the mine. In 2011, the company had applied for and been granted a

license to install eight boreholes starting in June of that year; however, the company suspended exploration activities before the holes were installed. Documents from the previous permitting phase published by the Wisconsin Department of Natural Resources showed that the eight planned boreholes would have been primarily on old logging roads and a railway bed.

Municipal water was to be trucked to the site from the nearby town of Mellen as the drilling water source. The department’s Mining Coordinator for Madison conducting the 2011 inspection, Philip Fauble, foresaw the need for the company to use drilling muds, for which he noted the company’s drilling contractor would need to consult with the department on approved mud additives.

Fauble also recommended that spent drilling fluids, which according to the 2011 plan were to be collected in tanks, be transported to an offsite wastewater treatment plant.

Gogebic is currently focusing potential development on a stretch between

the Tyler Forks River and Ballou Creek.

The site is on watershed area of the Bad River, which flows north into Lake Superior, crossing through Copper Falls State Park and reservation land belonging to the Chippewa tribe.

The Wisconsin Department of Natural Resources’ top mining regulator Ann Coakley said that the department would inspect the site again before authorizing a new drilling proposal.

“We will look at each boring to make sure they are avoiding wetlands,” Coakley said. Williams told local papers that the company expected to start environmental analysis work this spring, and that it would carry out bulk sampling later this year.

While the new Wisconsin regulations require a one-year waiting period after bulk sampling permit authorization before mining applications can be submitted, Williams expected that groundwater analysis would take longer than a year and probably delay the company’s mining application into 2015.

Rights to develop the deposit have been optioned to Gogebic Taconite largely by LaPointe Iron Company. The deposit, comprising a 21-mile segment on the western end of the Gogebic Iron Range, dips an average of 65 degrees north and contains 20-30 percent iron in magnetite form.

Rescue Underway After China Gold Landslide

By Carien Daffue

C

hina Gold International Resources Corp.

Ltd. reports that the Company and its controlling shareholder China National Gold Group Corporation (“CNG”) are fully engaged in assisting the government with rescue work after the landslide occurred in Ze Ri Mountain, Pu Lang Valley, Si Bu Village, Zha Xi Gang Town, Mozhugongka County, Lhasa City, Tibet Autonomous Region of the

14 | SKILLINGS MINING REVIEW May 2013

People’s Republic of China.

The landslide occurred on March 29, 2013 at about 6 a.m. Beijing time.

The rescue work is top priority for the Chinese Central Government and the Government of the Tibet Autonomous Region who are heading the onsite emergency rescue. The 83 workers buried in the landslide are employed by four external independent contractors engaged by Tibet Huatailong Mining Development Ltd, the Company’s wholly-owned

subsidiary.

The senior management of the Company and CNG are assisting the rescue operation at the Site. Approximately 10,000 pieces of relief materials, 129 sets of machinery, equipment and vehicles, and more than 1,000 experts were deployed by the Company to the site, immediately after the landslide. CNG assembled the emergency rescue team which belongs to its subsidiary, the Inner Mongolia Bao Tou Xinda Gold Mining

Industry Co., Ltd., and rushed the professional rescue equipment to the disaster site. About 2 million cubic meters of rock and debris covered an area measuring about three kilometers in length.

Jiama Mine production facilities are about 10 km away from the geological disaster site. No substantial impact and no damage on Jiama Mine’s facilities occurred.

While continuing operations, some personnel as well as machinery and equipment have also been mobilized for rescue efforts at the same time. www.skillings.net

www.skillings.net

March 2013 SKILLINGS MINING REVIEW | 15

MINING ANALYST ROUNDTABLE/ MINING INDUSTRY SHIPPING

Mining Analyst Roundtable we compiled the different opinions of prominent mining analysts on various aspects of mining - a summary of their take on these issues is reproduced below:

Lazslo Birinyi President of Birinyi Associates, Inc

Skillings: You think the bull market will keep going this year. Why? Birinyi: As long as you have this sort of hesitancy or reluctance instead of acceptance [that a bull run has ended], the positive case is still very much intact.

Skillings: Where do you expect momentum?

Birinyi: The industrials, the cyclicals, light on the defensive stocks like consumer staples, utilities and so on… But I wouldn’t buy any more of the cyclical and manufacturing as the economy comes back, because I think the economy looks better from the bottoms-up basis than from the topdown basis.

Christos Doulis International Gold Analyst For Stonecap Securities

Skillings: Given gold’s price trajectory over the last decade, why haven’t all mines been successful?

Doulis: In the last 10 years, the operating margin for mining companies has not kept up as expected with the price of gold, which has more than quadrupled.

Costs are going up at a similar pace to the rise in the gold price.

Skillings: Any mines that have managed their costs well?

Doulis: While Argonaut has been experiencing margin pressure, it has done a very good job of keeping costs tight and has generated a very good return from operations.

16 | SKILLINGS MINING REVIEW May 2013

Great Lakes Stay Low

By Carien Daffue

A

s the 2013 Great Lakes shipping season begins, the latest waterlevels forecast offers little encouragement for commercial carriers.

Shippers should expect to encounter continued low water levels over the next six months, and the possibility of having to leave some of their cargo dockside.

Lakes Superior, Michigan, and Huron will continue what is the longest stretch of continuously below-average water levels. And lakes Michigan and Huron, which have seen the harshest declines, will remain just two to four inches above record lows over the next six months.

Those figures, coupled with harbors and marinas in need of dredging, paint a rough outlook for the region this year. Thirty-six of the 60 federal commercial harbors in the Great Lakes are in need of dredging work. And 48 of the 80 federal shallow-draft harbors on the lakes need work as well.

Keith Kompoltowicz of the Army Corps of Engineers says levels are up a bit in the past few weeks, and may be rising more soon. However, John Allis of the Corps of Engineers says, by and large, Great Lakes water levels will remain below normal.

The most recent statistics on Great Lakes water levels are not promising. At the close of March, Lake Superior’s mean for the month was 600.1 feet—13 inches below its long-term average and just seven inches above the all-time low for the month.

SA To See Trade Improvement In 2013

By Anna Grant

T

he South African division of the world’s largest container shipping company, Maersk Line (itself part of the AP Moller-Maersk group), believes that South African exports will grow by about 4% this year and that imports will also rise.

The company has a market share in southern Africa’s container traffic of 30% to 35%, amounting to more than 350,000 forty-foot-equivalent units last year, if Safmarine (also part of the AP Moller-Maersk group) is included. The exports handled are overwhelmingly mining ores, metals, and agricultural and fishery products.

“Maersk only does containers,” highlights Maersk Southern Africa trade-and-marketing manager Matthew Conroy. “Chrome ore and scrap metal are big exports. Agricultural products, especially fruit and fish, are also quite big.”

Last year, South African exports grew between 3% and 4%. But it was very much a tale of two halves – during the first semester, the country’s exports rose by 8% to 9%, but during the second semester, the growth turned slightly negative. This downturn was the result of less demand in China and strikes in the South African mining sector. “The downturn in the second half of last year was definitely mostly in mining products,

www.skillings.net

Aussies To Ship Uranium Through Reef

By Carien Daffue

A

ustralia is ramping up its production of uranium, which has prompted Queensland’s uranium implementation committee to release a report calling for an end to the 24-year ban on transporting uranium through the World Heritage-listed Great Barrier Reef.

The six-person independent committee, chaired by Central Highlands Regional Councillor Paul Bell, found the state’s “existing system for regulating mining and radiation safety is appropriate for uranium mining,” and a new legislative framework was not necessary.

“A comprehensive regulatory system for the uranium industry is also in place at a federal government level,” the committee reported.

Which is why the committee has recommended using the already authorised ports in Adelaide and Darwin to export Queensland uranium. Authorising the Townsville port would not only mean taking the controversial mineral through

the Great Barrier Reef, it would also necessitate going through the federal government approval process.

Uranium has not been mined in Queensland since the closure of the Mary Kathleen mine in 1982. When Labour’s Wayne Goss came to power seven years later, the industry was essentially banned.

A bill to outlaw new ports on the Great Barrier Reef will be introduced by the Greens in parliament. While the bill is unlikely to get wide support outside the Greens party, the reef may be prevented from addition to the WHC Heritage Sites in Danger list, before the committee meets in late June.

But the possibility of mining Queensland’s rich deposit became a reality again when the federal government began talks to lift its ban on exporting uranium to India in late 2011. The ban was officially lifted in October 2012 and a few days later Premier Campbell Newman announced

Queensland would once again allow uranium mining. The report also recommended that an Indigenous Training and Development trust be established with the royalties from uranium mining. Mining royalties would be set at 5 percent, with a view to increase over time, but the rate may be slashed to 2.5 percent for the first five years as an investment incentive.

The committee delivered 40 recommendations to government, including for all mining proposals go through the Coordinator-General’s office for tighter scrutiny, that emergency training be in place in case of emergency and interestingly, and that Darwin or Adelaide be used as export ports. According to its findings, mining uranium was similar to pulling any other metal from the ground, including the need to manage waste, water, and rehabilitating sites once exhausted.

“These are key issues in many other mining operations in Queensland and the mining industry has significant experience and capacity to management these concerns..,” the report stated.

owing to the lack of production in the mining sector,” he explains.

Things are, however, looking up. “Since December 2012, volume has started to come back,” he reports.

“Chrome exports have picked up. If we have more labor stability in mining, there will definitely be growth this year. South Africa is very much linked to how economies in the rest of the world are doing. I forecast that export growth this year will be a little stronger than last year.”

The pattern with imports is similar. During the first half of 2012, they grew by around 8% but stagnated in the second half. In this case, the cause was the weak rand exchange rate, which drove up the cost of imported goods. The growth figure for the year as a whole averaged to 4%. Most of the goods imported into South Africa through ocean containers are finished products, including retail goods, automotive components and parts, and food.

Since December, growth has returned. “With imports, with the positive start we have seen so far, I am reasonably confident that we are heading in the right direction, but there is the concern that people may have less money in their pockets,” says Conroy. “I would say that import growth this year will be similar to last year – about 4%.

One of the key things is the rate of exchange. If the rand strengthens even a little, it will make imports cheaper.”

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May 2013 SKILLINGS MINING REVIEW | 17

STATISTICS

Feb. 2013 Crude Steel Production

IRON ORE PRICE REPORT

By John Edward

NORTH AMERICAN MARKET (LTU)

World crude steel production for the 63 countries reporting to the World Steel Association (worldsteel) was 123 million tonnes (Mt) in February 2013, an increase of 1.2% compared to February 2012. The crude steel capacity utilisation ratio for the 63 countries in February 2013 rose to 80.5% from 76.7% in January 2013.

Compared to February 2012, it is 0.8 percentage point lower. The US produced 6.7 Mt of crude steel in February 2013, down by -11.8% on February 2012. In February 2013, Brazil produced 2.6 Mt of crude steel production, a decrease of -6.2% compared to the same month last year. In the EU, Germany produced 3.4 Mt of crude steel in February 2013, a decrease of -3.7% on February 2012. Italy’s crude steel production was 2.1 Mt, down by -15.0% compared to February 2012. France’s crude steel production was 1.3 Mt, a decrease of -0.8% on February 2012. Spain produced 1.2 Mt of crude steel, -1.7% lower than February 2012. China’s crude steel production for February 2013 was 61.8 Mt, up by 9.8% compared to February 2012. Elsewhere in Asia, Japan produced 8.3 Mt of crude steel in February 2013, down by -3.4% compared to the same month last year. South Korea’s crude steel production was 5.0 Mt in February 2013, a decrease of -8.5% over February 2012.

Statistics based on World Steel Association Report released on March 20, 2013.

Company

Ore Type

Iron Unit

Cliffs Natural Resources Inc

Pellets, FOB Michigan Mines

Cliffs Natural Resources Inc

Pellets, FOB Minnesota Upper Lakes Port

Per Gross Ton Iron Content Per Ton at 64% Reporting Date

$2.07

$132.48

12/31/12

$1.64

$104.96

12/31/12

Source: CLIFFS NATURAL RESOURCES INC

Weekly U.S. Raw Steel Production by district In thousands of Net Tons – Source – American Iron and Steel Institute

Week Ending

District

4/13

North East Great Lakes Midwest Southern Western

4/6

3/30

3/23

202 199 192 194 656 690 656 650 238 243 262 261 692 637 621 620 92 89 88 84

U.S. Raw Steel Production Week Ending

In Thousands of Net Tons - Source - American Iron & Steel Institute Weekly Production Year-to-Date Production Production

Percent Change* Capability Utilization Rate

Production

Percent Change

April 13, 2013 1,880 1.2 78.5 27,321 .-7.6 76.0 Previous Year 2,014 - 6.7 80.9 29,576 .79.7 April 6, 2013 1,858 2.1 77.6 25,441 .- 7.7 75.8 Previous Year 2,014 - 7.7 80.9 27,562 .79.7 March 30, 2013 1,819 0.6 75.9 23,583 .- 7.7 75.7 Previous Year 1,982 - 8.2 79.6 25,549 .79.3 March 23, 2013 1,809 1.3 75.5 21,764 .- 7.7 75.6 Previous Year 1,982 - 8.7 79.6 23,567 .79.3 * Percent Change is a comparison between a given week and the previous week. The % change figure in the previous year row refers to the change from a given week compared with the corresponding week of the previous year. AISI’s estimates are based on reports from companies representing about 50% of the Industry’s Raw Steel Capability and include revisions for previous months.

Crude Steel Production, February 2013 Monthly Crude Steel Production in the 62 Countries included in the report, in thousands of metric tons Source – World Steel Association

Country

February 2013

December 2012

February 2012

% change Feb 13/12

Canada............................... 1,080 e.... 1,200 e...........1,145....................-5.7 Cuba........................................20 e.............30................28................. -28.6 El Salvador..................................7 e.............10..................8................. -12.5 Guatemala...............................25 e.............33................26....................-3.8 Mexico................................ 1,400 e.... 1,700 e...........1,393.....................0.5 Trinidad and Tobago...................53..........40 e................48...................11.0 United States......................... 6,655....... 7,074...........7,544................. -11.8 Total - North America......9,240.....10,087....... 10,191..................-9.3 Argentina................................. 321...........334..............450................. -28.7 Brazil...................................... 2,629....... 2,604...........2,803....................-6.2 Chile...................................... 125 e...........134..............136....................-8.1 Colombia.................................80 e...........115................98................. -18.4 Ecuador....................................35 e.............57................34.....................2.9 Paraguay....................................1 e...............5..................3................. -66.7 Peru..........................................75 e.............88................75.....................0.0 Uruguay........................................e.............15..................7............... -100.0 Venezuela.............................. 155 e...........251..............172....................-9.9 Total - South America.....3,421....... 3,603......... 3,778..................-9.4 Algeria.........................................21..........15 e................65................. -67.4

Country

December 2012

February 2012

% change Feb 13/12

Egypt........................................ 530...........587..............535....................-0.9 Iran........................................ 1,199....... 1,189...........1,229....................-2.5 Morocco......................................56..........45 e................55.....................1.7 Qatar........................................ 179...........451..............178.....................0.6 Saudi Arabia............................. 437........570 e..............432.....................1.0 South Africa.......................... 515 e................-..............617................. -16.6 Total - Africa /Middle East....2,937....... 2,857......... 3,112..................-5.6 China ..................................61,830.....57,656........ 56,311.....................9.8 India.................................... 6,200 e.... 6,600 e...........6,229....................-0.5 Japan..................................... 8,317....... 8,569...........8,612....................-3.4 South Korea.......................... 4,981....... 5,811...........5,441....................-8.5 Taiwan, China.................... 1,600 e.... 1,770 e...........1,714....................-6.7 Total - Asia......................82,928.....80,406....... 78,308...................5.9 Australia................................ 425 e...........368..............388.....................9.4 New Zealand............................80 e.............83................65...................22.6 Total - Oceania.................... 505.......... 450............ 454.................11.3 Total - European Union (27).. 13,384.....11,975....... 14,171..................-5.6 Total - Other Europe........2,787....... 2,991......... 2,899..................-3.9 Total - C.I.S. (6)..................8,055....... 8,925......... 8,918..................-9.7 Total (62 countries)......123,258...121,293.....121,831...................1.2

The 62 countries included in this table accounted for approximately 98% of total world crude steel production in 2011.

18 | SKILLINGS MINING REVIEW May 2013

February 2013

e – estimate r - revised

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Preliminary USGS Iron Ore Statistics for November 2012

By John Edward

According to the U.S. Geological Survey (USGS) report by Iron Ore Commodity Specialist John D. Jorgenson, U.S. mine production of iron ore in November 2012 was 4.58 million metric tons (Mt), 4% less than that in October. Production was 153,000 metric tons on a daily average basis, nearly equal to that of October 2012 and November 2011. U.S. iron ore shipments were 4.53 Mt in November 2012, slightly higher than those in October 2012. Shipments were 151,000 Mt on a daily average basis, 5% more than those of October and 10% less than those of November 2011. Mine stocks at the end of November 2012 were 47,000 Mt more than those held on October 31, a slight increase. U.S. exports of iron ore were 1.05 Mt and U.S. imports were 452,000 Mt.

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May 2013 SKILLINGS MINING REVIEW | 19

Iron Range Region/ NON FERROUS METALS

Iron Range's Copper-Nickel Mining- Opportunity Or Threat?

By Anna Grant

A

fter more than a century in which iron mining has played a central role in the economy and culture of northeastern Minnesota, a new kind of mining is poised to join the taconite industry.

Northeastern Minnesota could hold world-class deposits of copper and nickel as well as iron ore.

Generally known as copper-nickel mining, for its two main product metals, the process is hailed for bringing jobs to the region.

Miners unearth sulfide rock which, once exposed to oxygen in the air and water, undergoes a chemical reaction to become sulfuric acid—a process known as “acid rock drainage.”

Sulfur is at the heart of the controversy over copper-nickel mining—in Minnesota and elsewhere. Minnesota regulators have known about the environmental risks associated with coppernickel mining for decades. For the past 25 years at a lab in Hibbing, the state’s Department of Natural Resources has measured the runoff from different samples of sulfide ore taken from across the region.

Researchers flush rock samples taken

from throughout the Duluth Complex with water after exposing them to oxygen, and then test the water for metals, sulfate, and acidity to assess environmental impact.

They can then determine how much sulfur from a particular area creates acid, and extrapolate how long it takes runoff to become acidic.

Opponents of copper-nickel mining prefer to call it “sulfide mining,” to highlight the kind of ore in which the metals are found—and because unearthing sulfide can cause toxic water pollution.

Pictures of potential acid environmental devastation have shown up on billboards to warn about the risk of this kind of mining.

Swiss Firm Finances PolyNet Mine

By Carien Daffue

P

olyMet Mining’s long-awaited plans for a coppernickel mine in the Iron Range received welcome news Wednesday when a Glencore AG, a Swiss-based commodity trading and mining firm pledged to invest $20 million in bridge loans and help raise another $60 million in new equity financing. The deal is expected to be finalized in June, pending regulatory approvals in the United States and Canada.

Glencore’s financing arrangement will involve the issuance of new stock to existing and new shareholders through a secondary offering process known as “a summary of rights offering.” It is not yet known how many PolyMet shares Glencore will ultimately own, but it will not exceed 49.99 percent The investment will allow PolyMet to complete the lengthy environmental review and permitting process that has already been six years in the making at a cost of $50 million to date.

Environmental permits and state regulatory approvals are required before mill work and mine construction can begin.

In February, PolyMet announced that it had improved its environmental impact statement and re-engineered plans so that any sulfur dioxide, mercury, and gas emissions would be reduced by 50 percent. Those changes were on top of environmental-impact improvements announced in January, officials said. PolyMet must complete its supplemental and its final environmental-impact statements and get through future public hearings and regulatory reviews. The company expects to begin construction next year.

20 | SKILLINGS MINING REVIEW May 2013

www.skillings.net

BIR’s New Committee Launched

By Carien Daffue

B

IR’s new electronic scrap committee will be launched at the world organisation’s forthcoming Convention in Shanghai.

As part of the BIR Non-Ferrous Metals Division, its remit will be to inform members about a sector that is growing and changing rapidly, and specifically about ‘the myriad of regulations’ that pertain to the recycling of such scraps, explains divisional president Robert Stein of Alter Trading in the U.S. On the issue of controls and regulations, a crackdown on lower grades of mixed scrap metals, shredded harness-insulated copper wires and shredded material containing harness-insulated wires has been implemented in the south of China. It has been decreed that importers must return these materials to Hong

Kong for further cleaning and separation before they can be allowed to reenter the Chinese market.

The scrap trade in India has witnessed very low volumes because of money flow tightness ahead of financial year-end.

The market for import-based raw materials has been ‘very challenging’ with ‘some astronomical numbers’ quoted for any scrap becoming available. On the back of stronger enquiries for raw material, aluminum scrap supply has also tightened in Japan, leading to an increase of US$ 200-250 per tonne over the past two months.

Tightness of supply has prompted ‘aggressive’ purchasing among domestic consumers in South Africa, and as a result, further margin compression and reduced exports. In the Middle East,

meanwhile, supply of scrap has dropped and discounts have narrowed, with financial incentives for collectors said to be ‘simply not there’. Morale among the region’s traders is described as ‘very low’ given that many have been forced to cover their long-term contract volumes either at break-even or at a loss.

Base Metals Soften On Global Trends

By Anna Grant

B

ase-metal prices fell for the third day in a row in April 2013, on the local non-ferrous metals markets as a result of increased selling by stockists, which happened in tandem with a weak global trend.

Sentiment remained weak after copper slipped to the lowest price since August 2012, as inventories expanded. Meanwhile, copper for the three-month copper contract fell 0.8 percent to $7,404.50 USD a tonne, on the London Metal Exchange.

Select base-metal prices eased further at the non-ferrous metal market on sustained stockist selling amid weak demand from industrial users on back of lower London Metal Exchange (LME) cues. Meanwhile, aluminum utensils and lead prices edged up on better off-take from consumers industries.

The industrial metals fell to an eight-month low at the London Metal Exchange (LME) as concerns about economic growth cast doubts over the global industrial-metals demand outlook and pushed speculators to open more short positions ahead of a two-day holiday in China. Copper armiture, copper sheet cutting, aluminum ingots, and zinc all softened slightly.

However, aluminum utensils scrap climbed up slightly and lead inched up behind it.

The Australian Dollar fell by $0.01 USD as base-metals prices fell lower, and as markets became concerned about the pace of global growth. www.skillings.net

May 2013 SKILLINGS MINING REVIEW | 21

Safety

Labour Department Renew Safety Commitment

By Carien Daffue

T

he Department of Labor is renewing their commitment to promote safe mines. Every mining death that occurs leaves a lasting impact not only on the victim’s family, but on the community where that miner lived and worked.

Anniversaries of mine accidents often serve as a painful reminder of the tragic moment that took the life of a loved one, and can resonate forever.

They began taking action with enhanced enforcement programs, such as impact inspections at mines with compliance problems, and the first use of the revised Pattern of Violations (POV) process in the history of the Federal Mine Safety and Health Act of 1977.

In their first screening following those revisions in 2010, seventeen mines received potential POV notices. By October 2012, during the third screening, that number had fallen to four.

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Recent reviews have found that mines that received a potential POV notice have shown signs of improved compliance and lower injury rates.

They reminded the mining industry of their obligations through policy alerts – miners’ safety rights, proper mine ventilation and not providing advance notice of MSHA inspections. They targeted specific rule-making on spreading rock dust in mines to prevent explosions, requiring examinations by mine operators for better compliance, and overhauling the POV program to rein in chronic violators.

They implemented organizational and administrative changes, splitting the southern West Virginia coal district into two offices to better manage enforcement, and they upgraded the Mt. Hope dust laboratory to a national lab to better manage coal dust and gas analyses.

In partnership with the department’s solicitor of labor, they have resolved more than 100,000 cases of

contested violations that had piled up before the Mine Safety and Health Review Commission.

And they have better education and outreach efforts underway, to encourage mine operators to undertake greater responsibility to find and fix hazardous conditions at their mines, improve industry response in the wake of mine emergencies, and give miners a greater voice in the workplace without the fear of retaliation.

In 2012, MSHA filed the most temporary reinstatements than in any other year on behalf of miners who had been fired or otherwise retaliated against for reporting violations.

Most importantly, more miners are going home to their families safe and healthy. Fatality and injury rates in mining reached the lowest level ever in 2011, and preliminary data show that those rates fell even further in 2012.

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Miners Safety Takes Predominance In 2013

By Anna Grant

T

he grants from the Mine Safety and Health Administration (MSHA) play an important role in training miners to avoid deadly accidents in mines as well as life-threatening health dangers like black lung disease.

At least 19 coal miners died in 2012, along with at least eight so far in 2013, according to MSHA. Every year, hundreds of miners die from black lung disease, according to the Centers for Disease Control.

In a cruel bit of sequester irony for miners, the safety grant cuts come at a time when mining companies already owe the feds some $70 million in safety fines that MSHA still has not collected.

Many of these fines remain outstanding because companies declare bankruptcy, go out of business, or fight the penalties in court.

Critics of the current mine safety system say the backlog of uncollected fines gives unscrupulous mining companies little incentive to play by the rules.

But it is the nation’s miners who will be among those paying a high price for

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Congressional sequestration, with the head of the federal agency for mine safety informing states that much of their grant money for safety will be disappearing under the budget cuts.

In a letter to stakeholders in April 2013, Joe Main, assistant secretary of Labor for Mine Safety and Health, told state officials to brace themselves as “the agency cuts back its participation in training and outreach activities.”

The letter was obtained by Mine Safety and Health News, which shared it with The Huffington Post. Although the letter does not detail how much grant money will vanish, Main said the cuts would be “substantial,” and officials in 49 states and the Navajo Nation are expecting their money to be cut by as much as two-thirds.

In his letter, Main said that the agency may not be able to fill safety positions that go vacant. As federal investigations have found, bad-actor coal companies already find plenty of ways to skirt safety inspections, and sequestration will probably leave them with even less to worry about.

The agency “will have to make

tough choices about what positions to replace, and when,” Main wrote. “A delay or the inability to replace seasoned and highly-skilled employees who leave the agency will leave MSHA without sufficient experienced inspectors in the future.”

As for being understaffed, Main notes, “this was the same position the agency was in during the months leading up to the Upper Big Branch tragedy.”

In that disaster, the worst of its kind in four decades, 29 miners perished at a West Virginia mine operated by Massey Energy in 2010.

A series of government investigators all found that Massey put profits before miners’ lives, and MSHA’s own internal review in the wake of Upper Big Branch found that the agency had failed to identify the dangerous conditions that led to the explosion.

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Safety Innovations

Safety Innovations T

By Carien Daffue and John Edward

he dangers associated with mining are on the rise, particularly as companies move to more remote and less hospitable regions. Industry leaders have long focused on enhancing their safety management systems and building a safety culture. Beyond holding managers accountable for safety performance, companies invest in education, training, communication, and behavioral-based safety programs.

Responses range from compliancebased safety committees to management-and-control programs aligned with internationally recognized safety standards. Despite this level of investment, many organizations have seen their safety performance plateau, and some continue to experience serious safety incidents and fatalities.

While mining companies may believe they have brought the safety issue under control, it is time for many organizations to revisit their safety programs, particularly as the severity and cost of claims continue to rise. Significant advances in data analytics and increasingly affordable sophisticated software capabilities can help organizations gain insight into causal factors and improve their safety outcomes.

Through the application of predictive modeling techniques and the ability to analyse a range of inputs, organizations can begin to identify the driving factors of workplace incidents with the goal of developing targeted prevention strategies.

Advances in technology help cut down on safety incidents, but only if they are integrated into existing processes. To address this issue, one company revisited its ore-shipping process by looking holistically at non-traditional metrics to determine how to improve safety, enhance efficiency and reduce employee exposure to hazardous outputs.

It was then able to develop an inte24 | SKILLINGS MINING REVIEW May 2013

grated operating system that addressed not only operational procedures and controls but also environmental, health and safety, quality, and community relations – linking processes such as data management, incident reporting, auditing, and performance measurement.

Mining technologies may allow future mining production to be run almost entirely by people safely above ground. Such advances may prove crucial as easy-to-exploit deposits run dry, and miners drill deeper in more remote places to supply China, India, and other emerging economies. The technology could make mining cheaper and safer, avoiding the need to dig wide tunnels and hire large numbers of expensive, skilled workers.

Some examples of safety innovations include a hazard-management system, which predicts methane gas in coal seams for effective gas control, and development of advanced automated underground mining vehicles.

New South Wales has also pioneered a new virtual-reality safety-training system that allows mine workers to practice in a simulated mine environment. Safety for mine workers is very important to the Australian community and is one of the highest priorities for the industry. The industry’s goal is to achieve zero harm in every work site through continuous improvement, intensive training of workers and managers, introducing advanced work practices and new technology.

Some recent areas of reform in New South Wales include hours of work, fatigue management, hazard exposure, monitoring, hazard reporting and workforce participation in the development of safety management systems.

In Australia, Rio Tinto Ltd, one of the world’s largest miners and an automation pioneer, is rolling out a fleet of self-driving trucks and trains at its ironore operations. Vale, BHP Billiton, and Chile’s Codelco are in hot pursuit.

Gold miner AngloGold Ashanti is eyeing automation in South Africa, where miners spend hours each shift traveling up and down shafts, and significant ounces of gold are left behind in support pillars each year.

Organized labour has made its peace with the automation drive, although there were some concerns that robots would displace humans. Making the shift is not easy for an industry steeped in tradition, especially when change doesn’t come cheap. Rio Tinto is spending more than $500 million on train automation alone.

Diversified miner Anglo American recently signed a five-year agreement with U.S.-based Carnegie Mellon University (CMU) to develop automated technologies that would improve safety in the mining industry.

Applications such as robotic mining equipment, mine mapping and automated inspections would be explored as part of the agreement. The innovations would enable operations to reach mineral deposits that cannot be economically extracted using existing methods and mine layouts.

Anglo American’s Technology Development Group and CMU’s Robotics Institute, through its National Robotics Engineering Centre (NREC) and Field Robotics Centre, is to design, build, and deploy mining robots, robotic tools, and autonomous technologies.

What that “next era” will look like is still up for debate. Some innovators believe robots will do most of the labor in mines of the future, as in automobile assembly plants. This would ease likely shortages in skilled labor in many countries.

Overall, and while the costs and associated challenges involved in mine automation are substantial, they are potentially far outweighed by the benefits they can deliver. Such innovations can significantly reduce the risks to human health and safety, as well as www.skillings.net

deliver process and systems efficiencies and environmental benefits.

These benefits may help to counteract a number of the challenges currently faced by the industry, including persistent skills and labour shortages, declining ore grades and more complex mining environments, as well as environmental challenges arising from the need to reduce emissions and impacts on the environment.

As technologies have progressed, the range of applications has also widened and a number of companies now supply industries beyond mining. This industry is set to become a major export earner as a spin-off from the mining industry.

Longer-term, and if trends over the past decade are anything to go by economic benefits are likely to be substantial.

Introduction Of Safety Improvement Database Mining fatalities in recent years have increasingly pushed safety concerns to the forefront in Australia. In his 2012 report, Stewart Bell – the Commissioner for Mine Safety in Queensland – averred that the continent had been witness to “…a disturbing rise in dangerous behavior in underground coal mines”. In a bid to counter this trend, the Australian Coal Association Research Program (ACARP) has launched RISKGATE - an online information database which will allow different coal mining companies to capture and share knowledge about how to manage the risks associated with open-cut and underground coal mining operations.

According to Project Manager Philipp Kirsch, the first version of RISKGATE was officially released in December 2012 after “two years of solid work”.

RISKGATE will enable companies to access industry-wide best practices and bring in the latest information when carrying out risk assessments.

At the start of the project, the Australian coal industry identified 12 key target areas. These were later expanded to 17 areas of major risk including tyres, isolation, collisions, strata control, ground control, fires, explosives, explosions, manual tasks, slips, trips and falls, outbursts, inrush, coal bursts, interface controls and displays, hazardous chemicals, and tailings dams. A recent www.skillings.net

investment of A$1.3 million has pushed ACARP’s total investment into RISKGATE to $3.5 million. The companies involved, which include Anglo American and Centennial Coal, have also contributed over four hundred days of individual expert time. The individual company experts benefited considerably from interaction with their peers from other companies.

The Australian coal industry is facing difficult times, with operating and labor costs rising at a time when exports are being squeezed by the strength of the Australian dollar and increased international competition. It is to the industry’s credit that RISKGATE is moving forward despite this background.

Capital Safety Australia Introduces Rollgliss Technical Rescue Range Capital Safety has announced that it will be launching its refreshed Rollgliss® Technical Rescue range shortly. The Rollgliss® Technical Rescue range of products builds on the legacy of SRTE, a

well-known Australian brand of rescue equipment which was recently purchased by Capital Safety. Sources claim that the latter has invested heavily in R&D across the range to ensure that all products meet the relevant standards and provide an unrivaled user experience. This is evident in the overhaul of the NoWorries™ Double stop Descender, the OzPod™ Rescue Frame and the introduction of the new lightweight and robust ExPlorer™ Chest Ascender.

To complement the products a specialist range of Rescue and Rope Access harnesses have been purpose built to include all the vital features for rescue and rope access work.

Rollgliss™ Technical Rescue delivers a diverse range of technical rescue equipment including ascenders; descenders; rigging, roping & anchorage equipment; pulleys; haul kits; tripods; rescue frames, and much more. The collection incorporates all the necessary gear to supply emergency services, military, mining, oil & gas, arborists, professional riggers and the utilities industries both locally and overseas.

May 2013 SKILLINGS MINING REVIEW | 25

steel/ Advertising Index

Global Steel Production Declines

By Anna Grant

T

he latest figures indicate that steel production is on a modest downward swing in most of the major steelproducing regions of the world, continuing the relatively weak start to 2013 for the global steel industry.

The only sizable gains last month were in China.

Steel output from China, the world’s largest steel producer, rose to 61.8 million tons in February, up from 59.3 million tons in January and representing a 9.8 percent gain over the total for February 2012. “Growth in demand for steel in China, the world’s biggest consumer, is set to rebound from a fouryear low, supporting earnings for mills and the iron ore producers that supply them,” Bloomberg News reports. “Apparent consumption, which includes production and net imports, may rise 4.6 percent to 708.8 million metric tons in 2013.”

Elsewhere in Asia, Japanese production totaled 8.3 million tons of steel, down from 8.8 million tons and 3.4 percent below the prior-year level. So far this year, Asian countries have produced 169.7 million tons of crude steel.

Manufacturers in the E.U. produced a combined total of 27 million tons of crude steel in the first two months of 2013, a 4.5 percent decrease from the same period last year. In line with the broader global slowdown, monthly crude steel output in the U.S. dropped to 6.7 million tons. So far this year, U.S. steelmakers have produced 14 million tons of crude steel. “The steel market in 2013 is off to a slow start, but signs of strength in some of the most important steel consuming market such as autos and energy (with a large inventory overhang at this point), provide some reason for optimism as we move into the usually seasonally stronger second quarter,” David Phelps, president of the American Institute for International Steel, noted.

Advertising Index

CSN Shareholder Value Uncertain

By Mary Claire Whitaker

D

espite a positive earnings report and outlook for 2013, shares in Brazil’s second-largest steelmaker, Cia. Siderurgica Nacional (CSN), dropped in April to a seven-year low after a Goldman Sachs downgrade citing the possibility of disappointing iron-ore results.

“Declining iron-ore prices, low investment returns and high leverage should significantly dilute the company’s consolidated returns,” was the firm’s explanation, written from its Sao Paolo office.

CSN shares fell 23 percent in the first quarter of 2013, partially because of delays in iron output related to equipment problems at its Casa de Pedra mine. Goldman analysts cited the possibility of further delays on iron-ore projects this year that could lower CSN operating results.

Following the market downgrade, the company was fined approximately $17.6 million for placing employee residences on heavily contaminated land.

Shares had picked up briefly after the company filed fourth-quarter earnings that were better than expected and increased iron-ore sales revenue, although it reported a net profit loss for the year related to bad performance of company investment holdings. CSN also said on April 1 that it expected steel sales to rise by seven percent in 2013.

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Mielke Electric Works.............................. 9

Hydro-Klean......................................... 23

Naylor Pipe.......................................... 28

Idea International Drilling..................... 21

NBC..................................................... 23

26 | SKILLINGS MINING REVIEW May 2013

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mining Matters/ mining INDUSTRY People

Mining Matters BHP BILLITON BHP Hedge Funds Decrease

BHP Billiton Limited was in 14 hedge funds’ portfolios at the end of December. The company said investors should be aware of a recent decrease in hedge-fund interest. There were 20 hedge funds in their database with BHP holdings at the end of the previous quarter.

References: http://www.insidermonkey.com/blog/ hedge-funds-are-dumping-bhp-billiton-limitedadr-nysebhp-102127/

MINING SUPPLY CHAIN Sanvik Builds Shiploader

Diversified engineering group Sandvik Materials Handling is working on a contract to provide Transnet Port Terminals with a 2,500-t/h-capacity ship loader to be located at the Port of Richards Bay in South Africa. The contract was awarded in June, and work started in August. The scope includes the design, manufacture, installation, and commissioning of the ship loader.

Mining Stocks After the benchmark Chinese iron-ore spot price dropped steeply on March 14, falling 4.4% to $132 per tonne, major producer

Disclaimer: While every effort has been made to ensure the accuracy of the information supplied herein, Skillings Mining Review cannot be held responsible for any errors or omissions. Unless otherwise indicated, opinions expressed herein are those of the author of the page and do not necessarily represent the corporate views of Skillings Mining Review.

stocks were able to recover; the day following, Rio Tinto was up 1%, BHP 1.33%, and Fortescue metals was up by 2.33%.

Source: http://www.abc.net.au/news/2013-0315/share-market-wrap-friday/4576438 http://www.abc.net.au/news/2013-03-15/bigfall-in-iron-prices-overnight/4575686

Mining Investments At the end of 2012, Australian mining investment had risen to 6.6 percent of GDP, up from 1.1 percent in 2004. Former Reserve Bank board member Bob Gregory warned that the country’s economy risks falling off a cliff as minerals prices and future mining investment fall back to normal levels.

Source: http://www.theage.com.au/business/ some-fear-the-mining-boom-will-turn-to-bust20130329-2gz2o.html

com/Australia-calls-for-review-of--mininglaws/-/539546/1738822/-/lxubfa/-/index.html

RIO TINTO French minister warns Rio Tinto over plant

French Industrial Renewal Minister Arnaud Montebourg demanded that Rio Tinto rule out closing an unprofitable aluminum plant in southern France. It has been on a push to unload aluminum operations globally as it looks to pull out of buying Canada’s Alcan for $38 billion USD. References: http://news.ninemsn.com.au/ world/2013/03/30/07/35/french-ministerwarns-rio-tinto-over-plant

Vale SA

Mining Policy and Law

Brazil's Vale Re-Elects CEO Murilo Ferreira

Australia Calls For Review Of Kenyan Mining Laws

The board of Brazilian mining giant Vale approved the re-election of Murilo Ferreira as chief executive officer, the company said in a statement. Vale’s board has also approved the re-election of other executive directors References: http://www.4-traders.com/VALESA-6492836/news/Vale-SA-Brazil-s-Vale-ReElects-CEO-Murilo-Ferreira-16586020

Australia wants Kenya to review its mining laws to attract more investors from Down Under. The High Commissioner to Kenya Geoff Tooth said red tape in the mining legislation had hampered efforts by international investors to explore local resources.

Source: http://www.businessdailyafrica.

Sources: www.juniorminingnetwork.com http://ca.finance.yahoo.com http://www.timeslive.co.za

Mining Industry People K

inross Gold Corporation appointed Mr. John Macken, Ms. Una Power, and Ms. Ruth Woods to its Board of Directors. Mr. Macken, Ms. Power, and Ms. Woods will be nominated as Directors for election by shareholders at the Kinross Annual General Meeting on May 8, 2013.

The appointments bring membership on the Kinross Board of Directors to 12, following the retirement of Mr. George Michals in 2012.

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F

DG Mining Inc. has appointed Mr. Philipp D. Hoch as the Chief Financial Officer of the Company.

Mr. Hoch is an M.B.A. (lic. oec.) graduate of the University of Zurich, and started his career in 1991 with Price Waterhouse. He has previously worked for Swiss Re, the Banca Del Gottardo Group and Deutsche Bank (Suisse) AG.

S

outh African platinum producer Lonmin PLC appointed Mr. Ben Magara as its new Chief Executive.

Mr. Magara, who will start in July, will be tasked with guiding Lonmin’s turnaround and improving industrial relations at the company after illegal strikes last year triggered violence which resulted in the death of 46 people at the Marikana mine.

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