The good, the bad, and the ugly in mining industry news
If Apple, Exxon and Google all tanked, the recent mining losses of $1.4T would still be bigger…
World leaders in commodity production have invested decades in constructing new mines “from the Andean Mountains to the West African jungle.” With an engine of global growth like China is your biggest client, their economic slowdown may spell an 11-year low for the Bloomberg World Mining Index. Investors are hopeful for stabilization, but as the yuan suffers and raw material prices drag lower than 1999, even the biggest players are devalued.
- Anglo American Plc, worth nearly $73 billion in 2008, is now valued at $3 billion. The 99-year-old company, which is the world’s biggest diamond and platinum producer and owns some of the best copper and coal mines, is now worth less than mid-tier Randgold Resources Ltd. and copper miner Antofagasta Plc.
- Once two of world’s largest companies, BHP Billiton Ltd. and Rio Tinto Group’s shares are now at least twice as volatile as the U.K.’s benchmark stock index.
- Apple, the world’s most valuable company, is worth about $549 billion. Alphabet is valued at $510 billion and Exxon $321 billion.
Interior hit the pause button all new coal mining on public land…
- In the first major review of the U.S. coal program in thirty years, the Obama administration ordered a pause on issuing coal mining leases on federal land.
- “Given serious concerns raised about the federal coal program, we’re taking the prudent step to hit pause on approving significant new leases so that decisions about those leases can benefit from the recommendations that come out of the review,” said Interior Secretary Sally Jewell.
- Over 40 percent of U.S. coal is mined on Wyoming’s public land.
- Over 50 coal companies have filed for bankruptcy since 2012 due to the steep competition from raised costs due to cheap natural gas and clean air regulation.
- Reserves already under lease are enough to sustain current levels of production from federal land for 20 years.
Meanwhile, renewable energy opportunities are on the rise …
With cheaper advances in tech and more storage solutions emerging every day, the mining sector is projected to spend 5 to 8 percent of its $50-billion annual energy budget on renewables. It may not happen overnight, but as efficiency improves and carbon taxes and tighter carbon emissions caps become more prevalent, mine technology suppliers have already started to adapt to huge changes in renewables ahead.
All 17 salt mine workers were rescued in New York…
Seventeen miners were safely rescued after being trapped 900 feet underground for 10 hours during the start of their overnight shift in the Cayuga Salt Mine. The Lansing mine was opened in 1915, is 2,300-feet deep, and provides road salt. The Cayuga will remain on hold with no estimate on when mining operations will start back up.
Dominion Diamond will boast new leadership from ex-De Beers vet…
Dominion Diamond Corp’s co-founding executive chairman Robert Gannicott is set to be replaced with former De Beers Canada chief executive Jim Gowans. Gowans was most recently Co-President and Chief Operating Office of Barrick Gold Corp, the world’s biggest gold producer. Dominion is Canada’s largest publicly traded diamond miner, which owns the Ekati diamond mine as wells as a 40 percent stake in Canada’s largest diamond mine, Diavik.
Higher U.S. dollar and lower fuel costs mean more profits for Australian miners…
Some Australian mine operators have been able to boost their bottom line by over 30 percent due to the appreciating dollar, political stability in Australia, and the perfect environmental storm—mainly warm climate and oxide mineralization—for companies to operate smaller pits down under.
Iron ore is aiding the surge in rare earth prices…
China’s crackdown on illegal mining and pollution has given its industry a modern edge. The newly-consolidated Chinese rare earth industry includes the world’s leading rare earth producer, China North Rare Earth Group Co. CNRE’s vast mine in Inner Mongolia actually produces more than all other global rare earths mines combined, and incredibly, it’s merely a byproduct of iron ore mining. A solid cerium price means other more profitable, less common rare earths can be mined for more value as economics of the projects improve.
- A 470 million tonne iron deposit was discovered back in 1927 and rare earth elements (REE) 10 years afterward.
- Bayan Obo mine in Inner Mongolia boasts 70 percent of the world’s proven REE reserves at more than 40 million tonnes.
- The price of iron ore recently fell to below $40 a tonne, a level last seen in 2007 and down 8 percent already in 2016 following a near 40 percent decline last year.
- The flood of cheap new supply, mainly from Australia and Brazil have hit smaller producers hard, but domestic Chinese mines which struggle with low grades (only around 20 percent Fe) and high production costs have been most affected.
- The light REE erium and neodymium, Bayan Obo’s other main product, account for more than 50 percent of total demand.
