Precious Metals News - Metals Place

Gold rebounds as dollar drops lower

2010-02-09T19:35:43Z

Gold futures gained more than 1% on Monday, as soothed nerves over European debt woes pressured the dollar, lifting gold's appeal as a hedge.

Gold for April delivery rose $13.40, or 1.3%, to finish at $1,066.20 an ounce at the New York Mercantile Exchange. It earlier rose to an intraday high of $1,074.30 an ounce.

The move marked a rebound after gold lost more than $65 an ounce during a three-session losing streak.

"We're seeing a normal consolidation after last week's big sell-off but it lacked any kind of fire," said Bill O'Neil, managing partner at commodities brokerage Logic Investment Services.

Gold over the past year has shown strong correlations with equities, rising alongside gains in stocks and other commodities, and moving inversely to the U.S. dollar.

Martin Hennecke, an associate director at Tyche Group Ltd. in Hong Kong said demand for gold could rise as investors find out that U.S. and German bonds are not safe havens from Greek, Portuguese and Spanish bonds.

"With the safety of U.S. and German debt soon starting to become questioned, the default-and-inflation-proof asset class of precious metals will most certainly become an increasingly popular investment alternative again," he said in e-mailed comments.

U.S. stocks failed to hold onto gains Monday. The Dow Jones Industrial Average fell 103 points to 9,908, the S&P 500 fell 0.9%, while the Nasdaq Composite dropped 0.7%.

Supporting commodities, the dollar index edged lower for most of the session, even as it reversed to post minor gains in late trade.

March silver gained 26 cents, or 1.7%, to $15.09 an ounce. Copper was up 5.25 cents, or 1.8%, to $2.91 a pound.

Palladium rose $6.35, or 2.4%, to $407.65 an ounce and April platinum rose $5.90, or 0.4%, to $1,481 an ounce.

Gold futures dropped more than $10 last Friday, as the U.S. dollar rose to eight-month highs against the euro on fears about high debt levels in several European countries, including Greece, Spain and Portugal.

Metals conundrum, scandium surpise

2010-02-09T19:18:03Z

Last night at the London Metal Exchange all but one of the base metals (tin was the disappointment) showed strong gains, rebounding after the big falls at the end of the last week and helped by an easing in the greenback. Zinc sprinted away to put on 4.3 per cent, copper the next biggest winner with a 2.7 per cent gain.

This not only reflected good sessions on the European exchanges, but followed some good Asian buying yesterday. China was notably buying up copper.

Then Wall Street puttered along in low gear, until the end of the day saw it close well off, 103 points down on the session at 9908. The significant point is that commentary out of New York put the drop down to concerns about Europe (particularly the growing financial crises in Greece, Portugal and Spain) trumping any good US news.

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Australia is very lucky to be tied to China's apron-strings, not Europe's.

Tin's fall last night was a bit of a worry, especially after that metal shed 10 per cent of its value last week. And last night's gainers should also be seen against a backdrop of some serious losses over last week - 8 per cent in the case of zinc and nickel, 7 per cent for copper and 5 per cent for aluminium.

On the European story, the latest report from the commodities people at BNP Paribas highlights that Germany's December factory orders were disappointing, contracting by 2.3 per cent month-on-month. "This data suggests that growth in production will likely fade in coming months (orders lead production)," said BNP. We'll know more on Thursday night when German and Eurozone GDP figures for the fourth quarter of 2009 hit the screens.

And another thing: all the base metals are at or near their 52-week highs in terms of stockpiles at the LME.

BNP also points out that all precious metals lost ground last week. Many eyes were on gold (down 1 per cent on the week) but the worst performer was silver, which shed 6 per cent. It was all the fault of the US dollar, of course, the euro falling to $US1.3674 - the lowest the euro has been since last May.

While the metals are a conundrum, how about investors seeing the US dollar as a safe haven? In a world like that, you can still probably sell the occasional improbable story.

Angloplat earnings down 95 percent to 297 cents

2010-02-09T19:13:26Z

Anglo Platinum (Angloplat), the world's largest platinum producer, on Monday reported a 95 percent fall in diluted headline earnings per share to 297 cents for the year to end December 2009 from 5 586 cents in the year to end December 2008.

Headline earnings decreased by 95 percent to R710 million, or 298 cents, from R13.29 billion, or 5 609 cents a share, a year ago.

The company's refined platinum production was up 3 percent to 2.45 million ounces.

Refined platinum sales for the year amounted to 2.57 million ounces compared to 2.22 million ounces in 2008, representing an increase of 16 percent.

The increase was due to unsold metal at the end of 2008 being available for sale in 2009 and the achievement of higher refined production volumes.

Net sales revenue decreased by R14.1 billion to R36.7 billion, primarily the result of lower US dollar metal prices achieved on metals sold, which accounted for R21 billion, offset by higher volumes of metals sold increasing revenue by R7 billion.

Operating profit dived 95 percent to R921 million from R17.65 billion last year while profit for the year fell 79 percent to R3.13 billion from R14.66 billion a year ago.

No dividend was declared and the company said payments would be resumed when market conditions and the operating environment permit.

The company said the main factors contributing to the dive in headline earnings were lower US dollar prices realised on metals sold, offset by higher sales volumes and the receipt of insurance income.

Headline earnings exclude profits of R2.5 billion realised on the conclusion of Anglo Platinum's BEE transactions with Anooraq Resources Corporation and Mvelaphanda Resources.

Basic earnings per share, which include the profits on the transactions, amounted to 1 269 cents, down 79 percent on 2008's 6 011 cents.

"While the global financial crisis that started during the last quarter of 2008 curbed demand for platinum group metals (PGMs) and caused prices to decline significantly, the second half of 2009 brought early signs of economic recovery, with a consequential increase in demand and recovery in prices with platinum increasing by 60 percent from $922 per ounce at the beginning of 2009 to $1 475 at end December 2009," Angloplat said.

The average prices achieved on platinum, palladium, rhodium and nickel sales for the year were $1 199 per ounce, $257 per ounce, $1 509 per ounce and $14 424 per tonne respectively.

The 2009 average rand basket price achieved was R14 115 per platinum ounce, a reduction of 37 percent when compared with the R22 348 price in 2008.

The company's focus on cost management, inbound supply chain projects and asset optimisation initiatives started to bear fruit during the year with the cash operating cost per equivalent refined platinum ounce remaining essentially flat at R11 236 compared with 2008.

"This was achieved despite upward inflationary pressure caused by wage and electricity tariff increases in excess of consumer price inflation," Angloplat said.

Cost of sales increased by 3 percent to R34.7 billion.

Net debt at the end of 2009 increased to R19.3 billion from R13.5 billion at the end of December 2008.

While operating activities produced a positive cash flow of R4.7 billion, this was down 73 percent from 2008 and funding of some R9.7 billion of capital expenditure was largely through increased debt.

This cash outflow was mitigated by the proceeds from the successful conclusion of the BEE transactions with Mvela and Anooraq.

During the second half of 2009, the company said that it was considering balance sheet restructuring options and has consequently announced its intention to issue equity to the value of R12.5 billion in a rights offer.

"After considering the current level of Anglo Platinum's debt, our Board believes that raising additional equity through a rights issue will provide the company with a more balanced capital structure," Angloplat said.

The proceeds from the rights offer will be used to repay long-term debt.

As at end December 2009 Anglo Platinum had gross debt of R23 billion, of which R20 billion was outstanding under facilities provided by our largest shareholder Anglo American and R3 billion outstanding under facilities provided by other financial institutions.

"Anglo Platinum experienced very challenging market conditions during 2009 but used the opportunity to reconfigure the cost base, improve production and take a significant step forward in safety efforts," Angloplat said in its results commentary.

"While our financial results are significantly below those of previous years, our operating performance improved and we increased production and sales while keeping unit costs essentially flat," it said.

As part of the restructuring process, Angloplat optimised the source of ounces across its portfolio.

This included placing three of its high cost shafts into 'care and maintenance' indefinitely.

These shafts included Siphumelele 3 shaft, Siphumelele 2 Shaft, and Khuseleka 2 Shaft at Khuseleka Mine.

Overall the company reduced its labour complement by 15 752 people during the year or by 18 786 people from October 2008.

Looking ahead, Angloplat said it expects the platinum market in 2010 to return to a position of deficit as a result of a moderate increase in supply but a significant recovery in demand.

"South African production is expected to remain constrained as producers adapt to a safer working environment and as lower rand metal prices result in production being restricted at high cost operations across the industry," the company said.

Given the market conditions Angloplat said it believes that the appropriate level of production for 2010 is 2.5 million ounces of refined platinum.

It said it is also aiming to produce this volume at a unit cost of just over R11 000 an ounce, the same level as in the preceding 2 years and with labour reductions largely complete, the company said it would spend the year working on improved productivity.

Vanadium continues to ride on the positive

2010-02-09T18:54:54Z

January 2010 can clearly be recorded in the books as a good month for vanadium and its associated alloys. The end of the month saw the price of ferro-vanadium ending up at US$ 6 per kg more than the opening price at the start of the month - from $24/$28 per kg to $26-$29 per kg.

Traders have explained the spurt as increased enquiries in this minor metal, leading, in turn, to a shortage in supply. February started off on a similar sentiment but towards the end of the first week, prices in almost all the 3 major markets have stabilised. The Asian markets, especially the Chinese, saw prices tail off as traders started winding down for the Chinese new year. European and the US markets, too, may not see much activity in the coming week.

The past week also saw some positive developments on the mining front. But before we get into that, as promised, here is an update on the political events in South Africa, where there is talk of nationalising its mines:

News agency Bloomberg reports that the youth wing of South Africa's ruling African National Congress (ANC) has been in contact with Anglo American Plc about its proposal to nationalize the country's mines. Quoting a ANC Youth League leader Julius Malema, the report says the league is more than convinced that the nationalization of mines would "happen in our lifetime," Malema told reporters after a weekend meeting to discuss the proposal. Malema is a member of the ANC's policy-making national executive committee.

South Africa is the world's biggest producer of platinum, ferrochrome, manganese and vanadium and the third-biggest supplier of gold. But Anglo American, one of the biggest investors in the South African mining business, has said any move by the government to "impair" the industry would have "serious economic costs", the report said. A company spokesman could not confirm nor deny whether whether the company has held talks with the league on the policy proposals.

In another dispatch on February 2, Bloomberg quoted South African Mines Minister Susan Shabangu as saying, "It won't nationalize mines in my lifetime." The same report carries on to say that traders, analysts as well as those in the actual business of mining in SA have, as of now, not shown any signs of panic by the treats of nationalization, perceived to be less of a risk to mining companies in South Africa.

At Vanadium investing news, we feel that nationalisation has its own set of problems but then again, it is the right of every nation to decide/change its policies to suit its own interests.

Speaking of SA, miningweekly.com reports from Johannesburg that Swiss-based diversified miner Xstrata that produces ferrochrome in a joint venture with Merafe Resources in South Africa, has reported that production had decreased by 30 per cent in 2009 compared to the previous year as a result of the venture's curtailment of up to 80 per cent of production capacity in late 2008 and early 2009, in response to the poor market conditions.

Ferrovanadium volumes fell by 37 per cent in 2009 owing to the suspension of production at Rhovan project - Xstrata's integrated vanadium operation in South Africa - during the third quarter for extended maintenance. The operation returned to full production in mid-October.

Moving on to other news… the past week saw the publication and announcements of several reports relating to several assays and initial surveys, most of them positive, likely to have an impact on vanadium prices.

Energizer Resources Inc (formerly Uranium Star Corp) (OTCBB: URST) announced that it had completed and filed its compliance technical report (SEDAR and EDGAR) for the explored portion of its Green Giant Vanadium Project in Madagascar.

The report was prepared by PEG Mining Consultants and confirmed that the exploration programs completed in 2008 and 2009 had established that at least two large-scale vanadium deposits exist on the Green Giant Property and that the Property merits an aggressive resource definition exploration program consisting of exploratory and infill diamond drilling over vanadium-bearing zones.

The company's recently reported and favourable assay results confirmed that the Manga zone has a high-grade core that is open along strike and at depth, and had been defined over a strike length of 500 metres. The 2010 drill program was expected to commence in May at the end of rainy season, and will focus on expanding the Manga zone over a strike length of 3,000 metres.

Energizer Resources Inc is an exploration company with assets in Madagascar (Vanadium) and Northern Quebec (Uranium).

Southern Uranium (ASX:SNU) has reported positive drill results as it found an outcropping of vanadium mineralisation at Calvert Hills in the Northern Territory. The Calvert Hills Joint Venture Project under tenement EL24837 is situated 100km west of the Westmoreland uranium field and has similar geological and structural ingredients for shallow-covered unconformity-style uranium deposits.

Southern Uranium has identified prospective locations similar to the Westmoreland setting but under cover by integrating modern geophysical techniques.

As previously reported, a four hole drill program was completed under collaborative drill funding from the NT Government at the end of the September Quarter.

The positive drill results encouraged the prospecting of similar geophysically delineated areas, resulting in the discovery of the Vanadis vanadium prospect.

Southern Uranium Limited is a listed resources company focused on copper gold and uranium exploration within its Australian tenements.

Cardero Resource Corp , listed on the Toronto Stock Exchange (CDU), as also on other stock exchanges, is commencing drill programs on both, its Longnose Iron-Titanium deposit and TiTac Iron-Titanium-Vanadium deposit, located in north-eastern Minnesota, USA. Previous work by BHP Minerals, a precursor to BHP Billiton (the world's largest mining conglomerate), had estimated that the Longnose deposit contained 27.57 million tonnes at 21.3 per cent titanium dioxide (TiO2).

This historical resource estimate is considered relevant by the company, both for the purposes of the company's decision to initially acquire the property and to guide the company in formulating its resource definition and exploration program for the project. The current drill program will seek to verify the historical resources and includes re-sampling, re-analysis and an independent NI 43-101 resource calculation, which will be completed by SRK Consulting (Canada) Inc.

Parallel with this work, planned metallurgical work will build on work previously completed by Pickands-Mather, Hazen Research and the Natural Resources Research Institute (NRRI). Results are anticipated by mid-2010.

A statement issues by the company said Cardero's focus through 2010 will be to realise the considerable value it believes is locked in its remaining iron ore assets in the Marcona District of southern Peru, the Baja district of Mexico and in Minnesota, USA, while continuing to progress its base and precious metal exploration projects in Argentina and Mexico and aggressively seek out and potentially acquire new advanced stage projects.

According to Marketwire, Apella Resources Inc (TSX VENTURE: APA) has reported that a further 1000 metres of diamond drilling on the Iron-t project had commenced. This program is a follow-up due to the positive findings from the previous round of drilling, results of which were released December 15, 2009.

Quoting Patrick D O'Brien, ICD.D, chairman, the report said Apella's recent mineralized drill intersects at Iron-T were suggestive of a significantly enriched Vanadium-Iron-Titanium system.

The Bell River Complex which hosts the Iron-t may be compared to the Lac Dore layered igneous complex (in part owned by Apella) in the Chibougamau district of Quebec, some 250 kms east, and to the Bushveld layered complex of South Africa, the world's most significant source of Vanadium.

At the Iron-T the Vanadium rich horizons are well defined on the ground and aeromagnetic surveys by their highly magnetic susceptibilities. Apella anticipates that at the Iron-T near Matagami the potential is excellent to substantially exceed the known mineralization of the Lac Dore deposit at Chibougamau of which Apella also controls a considerable interest.

Apella was in the news last week for another reason too. The company has been accepted as an associate member of the vanadium specific organization - The Vanadium International Technical Committee (VANITECH), headquartered in Kent, UK. VANITEC is a technical and scientific committee which brings together representatives of companies involved in the mining, processing and manufacture of vanadium-containing products for use mainly in the metals and materials manufacturing and chemical industries, world-wide.

Its objective is to promote the use of vanadium bearing materials and thereby to increase the consumption of vanadium. There are 16 current members of VANITEC.

Canadian Government moving forward with prosperity review process

2010-02-08T08:09:59Z

Taseko Mines Limited welcomes the decision by the Federal Review Panel to move forward with public hearings on the proposed $800 million Prosperity Gold-Copper mine near Williams Lake, BC.

"The decision represents the achievement of another important milestone in the development of Prosperity," said Taseko President and CEO Russell Hallbauer.

Over these past many months the Company has provided the Federal Panel with additional information and clarification on matters of specific interest to them. The Panel has determined this information, along with the many volumes of material already submitted in our Environmental Impact Statement, is sufficient to now move to the public hearing phase of the review process.

Mr. Hallbauer added, "Last month the Provincial Government, which has authority and responsibility for mine development in British Columbia, approved the project and we fully expect the Government of Canada to also approve the project once the review process concludes."

Public hearings, the primary purpose of which is to obtain information from interested parties, are set to begin March 22 in Williams Lake, BC. Once the hearing process concludes, the Panel will have 60 days to write and submit their findings to the Federal Minister of Environment.

Canadian mining companies combine their silver assets into new firm

2010-02-08T07:38:16Z

Four Canadian mining companies have agreed to combine their silver assets into a new company called Silver Predator Mines Inc.

Included in the share-swap agreement are Golden Predator Royalty & Development Corp. and Strategic Metals Ltd. and Rockhaven Resources Ltd..

Together the companies will transfer their silver assets into Platoro West Holdings Inc. which will then change its name to Silver Predator.

The new company will be headed by Louis Lepry, former president of Metallica Resources Inc. Financial terms of the combination were not disclosed.

URSA Major Minerals starts mining operations at Shakespeare Nickel Mine, Sudbury Area

2010-02-08T07:33:21Z

URSA Major Minerals Incorporated is pleased to announce that the Company has started mining operations at the Shakespeare Nickel Copper Mine located 70 km west of Sudbury, Ontario.

The Company has mobilized contractors to the site this week. Mining and crushing operations are currently underway. The Company plans to begin truck haulage in February to deliver 200,000 tonnes of ore for processing at Xstrata's Sudbury operations in 2010. Based on previous ore grades and metallurgical results it is expected that the 200,000 tonnes of ore should produce contained metals in concentrate of approximately 1.1 million lbs of nickel, 1.7 million lbs of copper, 55.7 thousand lbs of cobalt and 3,100 ounces of precious metals. The recovered and contained metals are subject to smelter recoveries and to further smelter deductions. Guidance on costs will be released once all contracts are finalized.

Richard Sutcliffe, URSA Major's CEO stated "The significant improvement in nickel, copper and platinum prices over the past year and the ratification of Xstrata's labour contract in Sudbury earlier this week allows URSA Major to move forward into commercial production. The cash flow from the Shakespeare Mine combined with our successful exploration record will place URSA Major in a strong position for growth. We have an active exploration program in the Sudbury area and are currently planning to resume drilling shallow, high-grade, massive sulphide targets at the past-producing Nickel Offsets property."

URSA Major is a Canadian mining company with two nickel sulphide projects containing significant 43-101 compliant nickel/copper reserves and resources. The Company is focused on becoming a mid-tier nickel producer and growing its nickel, copper and platinum group metal (PGM) deposits through exploration and development, primarily in Ontario, Canada. At the Shakespeare Mine, located 70 km west of Sudbury, the Company has completed a positive feasibility study on a 4,500 tonne/day open pit mining operation and on-site processing plant. The project has a diluted Probable Reserve of 11,828,000 tonnes grading 0.33% nickel, 0.35% copper, 0.02% cobalt, 0.33 g/t platinum, 0.36 g/t palladium and 0.18 g/t gold. URSA Major has an option to earn a 70% interest in the past-producing Nickel Offsets mine, a 100% interest in the Shining Tree nickel deposit, and has recently acquired PGM exploration properties in the Thunder Bay area, Ontario.

Nevsun raising $117m in private placement; to issue 52m common shares

2010-02-08T07:28:23Z

Nevsun Resources Ltd. says it plans to raise $117 million in a private placement aimed at developing its Bisha gold and base metals mine in Eritrea.

The private placement of 52 million shares at $2.25 per share is scheduled to close on or before Feb. 19. Other details were not given.

"The company is confident the funds from this private placement, together with its existing cash and the ongoing one-third contribution by the state of Eritrea to Bisha will be sufficient to see the Bisha project through to cash-positive operations," Nevsun said in a news release.

"The funding arrangements are in excess of estimated costs to complete so as to provide a reasonable cushion in the event of unforeseen events," it said.

The government-owned Eritrean National Mining Corp. has "reliably" provided its one-third contributing share of financing to Bisha as the project has progressed, Nevsun said.

Last month, Nevsun described the project as "very well advanced" approaching 50 per cent complete with costs now estimated to be about $260 million, close to the original budget of approximately $250 million.

Nevsun stock was up 12 cents or more than 5.6 per cent at $2.24 at midafternoon Thursday on the Toronto Stock Exchange in trading that saw more than 4.2 million shares change hands.

Simmers mulls First Uranium options

2010-02-08T07:25:19Z

Simmer and Jack Mines said on Friday that it is currently considering the various options available to it protect and optimise the company's investment in First Uranium.

In a shareholder update, the mining group said that the board has established an investment committee, headed by Bernard Swanepoel,and comprising Ralph Havenstein, David Brown, Stuart Murray and Peter Surgey, to review Simmers' options with regard to its holding in First Uranium.

This follows disclosures by First Uranium on the Securities Exchange News Service (SENS) on 2 February 2010 regarding the change to First Uranium's production and capital schedule as a result of the withdrawal of an environmental permit to build a tailings storage facility at its Mine Waste Solutions project.

"The investment committee is currently considering the various options available to Simmers to protect and optimise the company's investment in First Uranium."

"It is worth noting that the board has mandated the investment committee to actively work with First Uranium in finding sustainable solutions to its funding and permitting problems and this has been communicated to the First Uranium board," Simmers said.

Simmers owns 37 percent in First Uranium.

Meanwhile, the group said that production at Buffelsfontein Gold Mines Limited, which currently produces around 92 percent of the company's gold, is in line with guidance provided in the Q2FY2010 Project and Production update released on SENS on 19 November 2009, while production at Tau Lekoa exceeded management's expectations.

Production at Transvaal Gold Mining Estates Limited however, was lower than expected due to excessive rainfall in the Mpumalanga region which impacted on leaching operations. - I-Net Bridge

Teck Resources' sale of Waneta Dam gets approval nod news

2010-02-08T07:14:59Z

Canada's mining major, Teck Resources Ltd (Teck) has received the approval of British Columbia Utilities Commission for the sale of its one-third interest in the Waneta Dam to British Columbia Hydro and Power Authority (BC Hydro) for C$825 ($768 million).

The commission had concluded that the expenditure proposed by BC Hydro in connection with the transaction is in the public interest, a statement issued by Teck yesterday said.

This approval was a condition of closing of the transaction. Teck expects to complete the transaction within the next 10 business days.

The Waneta Dam is located on the Pend d'Oreille River near the city of Trial in southern British Columbia near to the US border, and houses a 490 megawatt (MW) power plant.

Through the deal, BC Hydro expects to get about 1,000 gigawatt-hours per year of power as part of the province's campaign to make itself energy self-sufficient by 2016.

Vancouver-headquartered Teck is Canada's largest mining, mineral processing and metallurgical company and a dominant global player in the production of copper, zinc, molybdenum, gold, specialty metals and metallurgical coal, apart from its interests in oil sands.

Gold miner Avoca to unveil maiden profit

2010-02-08T02:13:16Z

Gold miner Avoca Resources Ltd is expecting to unveil a maiden first half pre-tax profit of $40.5 million.

The Perth-based company says its unaudited pre-tax result for the first half of the financial year is $40.5 million compared to a loss of $21 million in the prior corresponding period.

Avoca managing director Rohan Williams said it was a "fantastic result" and a credit to the operational teams at its Trident gold mine.

The company said the estimated first half net profit was $29.38 million, compared to a loss of $14.65 million in the corresponding period in 2008.

Recovered gold production for the half is tipped to come in at 101,536 ounces, compared to 49,622 ounces in the first half of the 2008 fiscal year, Avoca told the stock exchange.

"The upward variation in operating results for the half-year is due to the commencement of steady state operations at Higginsville following a successful ramp up in production," the company said.

"The unaudited December 2009 half-year operating result does not include a potential fair value gain (non cash) adjustment to the book value of the company's investment in Dioro Exploration NL," it said.

Avoca is expecting to reveal its audited half-year results to the Australian Securities Exchange before the end of this month.

PGE gains momentum in India

2010-02-08T02:05:10Z

"There is enough scope for exploration of Platinum group elements (PGE) in the country due to their extensive utility in high technology applications and commercial use," said Dr V Balaram of National Geophysical Research Institute, Hyderabad on the penultimate day of four-day 6th International Dyke Conference (IDC), being organised by department of Geology, Banaras Hindu University on Saturday.

Referring to the PGE exploration studies in the country, Balaram said not much progress has been made due to non-availability of sufficient number of laboratories capable of precise estimation of PGE at their natural abundance levels and other related mineralogical studies. However, he maintained that due to growing demand and increasing applications of PGE including Rubidium, Osmium, Iridium and Platinum, their explorations have gained momentum in recent years.

Speaking that so far the PGE exploration has centred around Baula-Nuasahi layered complex in Orissa, Hanumalapur complex in Karnatka, Sittumpundi complex in Tamil Nadu, Bundelkhand craton along UP-MP border and Naga-Manipur hills, he added that recent studies have shown that Deccan Volcanic Province (DVP) are emerging as potential sources of PGE along with nickel (Ni) and copper (Cu).

There are enough evidences based on dyke research to suggest that Khetri lineament, Dharwad and Singhbhum craton along with equatorial Indian ocean offer scope for continuing research on magmatic Ni-Cu-PGE deposits in the country, he said dykes and dyke swarms consisting of ultramafic rocks have proven to be hosts of magmatic Cu-PGE sulphide deposits.

Earlier, presentations on basic dykes of granite greenstone belt of Vellore, petrology and geochemistry of metamorphosed basic intrusives from Chilka Lake granulites and other developments in peninsular India were discussed.

Blackwell officials accept $54m settlement with Freeport over contamination

2010-02-08T01:48:10Z

Blackwell officials have accepted a $54 million settlement in a lawsuit against an international mining company whose entity was blamed for pollution in the northern Oklahoma city.

The city sued Freeport-McMoRan Copper & Gold Inc. in October, alleging that area soil and groundwater were contaminated with lead, zinc, cadmium and arsenic as a result of mining operations by Blackwell Zinc Co. from 1916 to 1974.

According to a statement released Friday, Freeport-McMoRan will be reponsible for remediating soil and groundwater in accordance with Oklahoma Department of Environmental Quality requirements.

A spokesman for Phoenix-based Freeport didn't immediately return a message seeking comment.

Blackwell Mayor Mark Cordell called the settlement "historic in scope," and said the settlement will be used to develop groundwater, smelter material and soil management programs.

Proposed copper-nickel mine draws 'extraordinary' interest

2010-02-08T01:46:37Z

State and federal regulators will take several months to review voluminous public feedback about the PolyMet project.

More than 3,500 comments in 45 days. The Minnesota Department of Natural Resources has received a mini tidal wave of letters, e-mails and oral comments about a proposed copper-nickel mine in north-eastern Minnesota. It's not a surprise, since everything about the $600 million PolyMet project is big.

"This is certainly an extraordinary level of comments," said Stuart Arkley, the project's environmental study manager. "Normally a couple hundred might be considered a lot."

The comment period ended Wednesday for the lengthy environmental impact study for the PolyMet mining and ore processing project near Hoyt Lakes.

The U.S. Army Corps of Engineers is the federal partner with the DNR in preparing the study, which began nearly four years ago.

The draft report must be finalized before the mine can receive any of the mining, water, air and wetlands permits needed to begin construction.

Arkley said it will take months to organize and respond to the comments, which range from short e-mails to lengthy, point-by-point critiques, some of them by expert scientists.

Those in favour of the project include labor unions and nearby Iron Range communities such as Virginia that would benefit from 400 new jobs and additional spending. U.S. Sens. Amy Klobuchar and Al Franken and Rep. James Oberstar also approve of the mine.

The project would open a new kind of mine and refurbish the mothballed LTV taconite processing plant nearby to produce copper, nickel and the precious metals cobalt, platinum, palladium and gold. It would be the first large nonferrous mine in the state that processes sulfide rock.

Environmentalists said that the draft environmental study, detailed as it is, does not adequately address concerns that the open-pit mine and processing operation would increase mercury in fish and contaminate rivers and groundwater with acidic runoff from waste rock. They also want stronger financial guarantees that the company will pay for water treatment and environmental protection for decades.

"PolyMet is the first in a long list of new proposed mining operations in Minnesota," said Scott Strand, executive director of the Minnesota Center for Environmental Advocacy. "We have to get this first one right."

PolyMet officials have said that the mine will have minimal effect on the environment and will use state-of-the-art technology to process the ore and manage the waste rock.

Chinese factor behind up and down of gold

2010-02-08T01:11:24Z

Currently, the metal markets are correcting as most pundits are calling for a bubble collapse in all commodities. The prices of metals both precious and base moved up rapidly throughout 2009 resulting in rapid gains.

The market needed a healthy correction from these fantastic gains and late January has been the time for it possibly compounded by the Chinese New Year holidays beginning February 14, 2010. Rising stockpiles in the LME warehouses have also contributed to the correction in base metals.

As usual, the drop in metal prices is accompanied by a strong U.S. dollar as the speculative funds and investors divest themselves of commodities and stocks to buy U.S. dollars, a well-established market play that continues to reward the big speculators regardless of the fundamentals.

The current slide in commodities and stock markets was ignited by China's announcement on January 13, 2010 that it would tighten the banks' reserve requirements by ½ of a percentage point which is perceived as a sign of further monetary tightening creating fear that the Chinese economy will slow further cutting off global recovery. China's economy grew at only 6% in 2009 furthering the belief that China's growth is slowing. The basic fundamentals of supply and demand argue for China and India to continue their modernization and put further pressure on demand for metals. Those same fundamentals as well as the following list are the basis for our continuing emphasis on a 30 year bull market:

Iron production and sales continue to escalate as major producers such as Rio Tinto Ltd./LLC, BHP Billiton and Fortrescue Metals Group step up the world production of iron in 2010 and 2011. China now consumes over 50% of all iron production.

Steel demand and prices continue to strengthen.

China Investment Corp., a Sovereign wealth fund, has invested approximately $50 billion in mining as the $300 billion dollar fund moves out of the financial sector.

Other Sovereign funds are shifting portfolios away from financials to commodities and natural resources. Vast sums of 10's of billions of dollars are and will be invested in mining related activities.

Gold continues to be the first choice by wealthy individuals (and now funds) as a safe haven. Commodities, especially metal, are now beginning to attract these same investors.

New mines can take up to eight years to develop which will restrict the supply side.

The Western world appears to be intent on stifling the development of new mines rather than encouraging investment. In today's world, mining companies have proven to be good corporate citizens concerned about the environment, the creation of jobs, and adding to the wealth of their jurisdictions. To continue to stifle the advancement of mining in the free world only makes us vulnerable and dependent on more hostile countries that are building their minerals wealth.

China will become more aggressive in securing mineral resources off shore for their decades of modernization. India will soon become a serious competitor with China in this regard.

Idled mine capacity has now been reinstated with existing brownfield operation (especially in iron and manganese) substantially maximizing production.

Large LME stocks of metals work well for the major consumer China to mediate the rise and volatility of base metal prices, otherwise China could purchase those stockpiles with ease.

If we monitor and follow the lead that China is adopting there should be little doubt that China is concerned about future supply and taking steps to secure the metals it requires offshore.

2009 has been the best year for commodities since the early 1970's as the vastly oversold sector from precious, base and specialty metals rapidly appreciated in price reversing the fortunes of some of our largest mining giants around the world as well as focusing attention on the continuing demand by China for all metals.

Gold

Gold, the leader of the metals pack, recorded a record high of $1,226/oz. in 2009. 2010 should see a breakthrough of $1,500/oz. on its way to $2,000/oz. Eventually as the world turns to a new gold backed currency the price of gold will be pegged at much higher prices. The realization that gold is the safest haven in these economic times has finally crystallized and will underpin the gold market for years to come. China is again taking the lead not only in world gold production but consumption as well. China narrowly beat out India in household consumption at 432 tonnes versus 422 tonnes. Now that China encourages its citizens to invest in precious metals as well as central bank purchases it will be a driving force in the future price of gold.

More and more central banks are increasing their purchases of gold as western banks are selling less. The fundamentals of supply and demand have had demand overpowering supply and only central bank selling has filled this short fall. There will come a time when the only gold available for sale will be from producers with receding production and reserves, who will want to sell their gold assets and for what? ...Paper? Dehedging of gold also will put upward pressure on the gold price as the total world hedge book drops to 11.5 million ounces.

Financing

North American gold financings came close to $20 billion in 2009, not accounting for base and specialty metal financings. This is the tip of the iceberg when you think of huge amounts of cash from individuals, institutions, sovereign funds and now China's mandate for their resource companies to invest offshore, all to be utilized by metal companies in exploration, development and production.

Although the metal prices have been correcting for the past few weeks with the indication the bottom has been reached, on January 29, 2010 the prices are all up with the exception of molybdenum since my last letter dated August 5, 2009.

Rare earths metals

China has been cutting exports of rare earth metals for several years and the threat of further reductions in rare earths could compromise the growth of the green economy. The western world is on notice that their reliance on China is coming to an end. As China builds out its own economy and requires more and more metals including rare earths one must assume those days are not too distant when strategic metals will no longer be available for export.

Not that China is trying to squeeze the West, but will no longer have the capacity to meet their own needs. The US Government has addressed the situation by providing incentives for industry (Restart Bill) to locate and develop their own resources of rare metals. In the U.S. the time it takes to permit and construct new developments may not coincide with the closing of the door to export from China. This will create a desperate scenario for crucial sectors of our economic advancement.

Are rare earths the only segment which could become affected if China's need for metal continues to grow? There are other strategic metals that are controlled by China that should also raise alarm bells with the rest of the world and could affect our standard of living, progression of manufacturing, the military and economy as a whole.

China depends on the rest of the world for their supply of iron, manganese, copper and oil just to name a few where they have inadequate production. Some of the metals that China exports and controls as well as rare earths are electrolytic manganese and magnesium.

The Chinese production of electrolytic manganese metal (EMM) from dwindling low grade domestic resources of manganese with a production cost of approximately US$0.95/lb. to produce. China produces 97.44% of the worlds' supply of 2.5 billion lbs. per year. Electrolytic manganese production and demand have grown 26%/year for six years up until 2008. Outside of China the rest of the world utilizes approximately 350,000 T's (770 million lbs. per year). The world is almost totally dependent on China for their EMM requirements. EMM's greatest use is in upgrading alloys of steel 47%, aluminum industry 32% and electronics such as batteries 14%.

Magnesium - China controls 78% of the worlds' magnesium utilized in strengthening and weight reduction in fabricating steel.
Rare Earths - China controls the production of rare earth metals required in hybrid vehicles and numerous high tech applications.

The Rare Earth metal scarcity shows how quickly the world could be turned into turmoil. We should be concerned about this and the other critical aspects of strategic metals that one country monopolizes.

The prices of these metals will obviously go much higher either through price increases or higher export duties.

It is now time for governments to pre-empt rather than be reactive to the situation with rare earth metals and develop alternative sources of supply.

The three "M's"

Earlier I talked about the increasing demand for iron for steel fabrication. As steel production increases it will create a demand for specialty metals thereby positively affecting the prices of all strategic metals including the three "M's", Manganese, Magnesium and Molybdenum as well as cobalt, niobium, tungsten, vanadium and titanium.

Production and prices of the three "M's" are:

The general direction for all metals, precious, base and specialty will continue upward as more money than we have ever experienced chases metal commodities and metal stocks while production and reserves dwindle.

Value-added production and diversification hold keys for growth in Western Canada

2010-02-08T01:04:26Z

With $216 billion in resource-based projects under construction or planned, Alberta has become the leading location in the Western Hemisphere for energy development.

The only question now is: Can Alberta and Western Canada show the world that the region is primed for a healthy mix of diversified industry?

A top Canadian official says yes, and he points to a variety of recently announced projects to bolster his claim.

"A lot of investment is going on across the West," says Brant Popp, executive director of policy, planning and performance measurement for Western Economic Diversification Canada in Edmonton, Alberta. "Some of it is driven by the government of Canada's stimulus plan, but it is also coordinated with other agencies of government to modernize the infrastructure."

Popp cites new investments in biotechnology, financial services, aerospace, agriculture and food processing, nanotechnology, metallurgical processing, distribution centres, renewable energy and genomics. Large investments have come from companies such as Magellan Aerospace, which announced a $104-million, 100-job expansion in Winnipeg, Manitoba, earlier this year.

In British Columbia, Maher Terminals announced that it would construct a $516-million container terminal in Prince Rupert. In Alberta, LaFarge Canada announced a $485-million expansion of its cement plant in Exshaw. And in Saskatchewan, International Debranning Inc. announced it would build a new $172-million barley plant in Rosthern.

Still, the largest capital investments in the West continue to rise from the resource-based industries. In Alberta alone, six resource projects of more than $1 billion each were announced during 2009. The two largest were both unveiled by UTS Energy/Teck Cominco in Wood Buffalo. The twin oilsands investments are $5.176 billion and $2.156 billion, respectively.

'We Have Weathered the Worst'

"We are poised for recovery," Popp says. "The forecast for next year and 2011 is pretty positive, with growth expected in the three- to four-percent range. We have weathered the worst of the recession, and we are seeing big investments in Alberta coming back on line after they were put on hold for a while. The recovery is starting to take hold. Imports of technology equipment are beginning to rise again."

The big gains are occurring in the mining and energy industries. Approximately $130 billion of Alberta's resource-based projects are in oil sands investments. "The investors are coming back," says Popp, noting that "the Firebag oilsands project (by Suncor Energy Inc.) is $9 billion. That was suspended in 2009, but it has been reinstated."

Throughout the West, about 31 oil and gas pipeline projects represent some $9 billion in construction. The largest is the Alberta Clipper Pipeline from Alberta to the U.S. "It provides capacity to export heavy oil from the oil sands much cheaper," explains Popp. "As these pipeline projects get established, the product gets more competitive on price in the world market."

In Saskatchewan, Popp says, "we are seeing new investment in potash. There is some retail expansion going on in Regina, and there is a major distribution center going up there too. Plus, a $150-million metallurgical processing facility is coming on line soon."

Fortune Minerals Ltd., which will build the plant between Langham and Saskatoon, credited the Government of Saskatchewan with passing several new tax incentives - including a corporate income tax incentive - to make the facility investment possible. The gold, copper, cobalt and bismuth refinery will employ 85 people in highly skilled positions, the company said.

The plant site has access to a main line of the Canadian National Railway and is near the Trans-Canada Highway and all essential utilities. "With a diversified economy, a highly skilled work force and respected post-secondary institutions, Saskatoon can accommodate everything that is required to construct and operate this process plant," said Robin Goad, president of Fortune Minerals.

In Manitoba, Popp notes, "there is a major investment at the airport in Winnipeg and related expansion around it. This is a $307-million airport expansion, and Standard Aero is coming in with a $19-million expansion of its own."

A Golden Moment for Vancouver

British Columbia, meanwhile, may end up as the region's biggest winner of 2010, explains Popp, after the eyes of the world focus on Vancouver for two weeks in February to watch the Winter Olympic Games.

"Some 833 capital projects are either already on the books or under way in British Columbia," Popp says. "These represent an estimated total of $179 billion in capital investment. A lot of infrastructure development is connected to the 2010 Olympics, including $2 billion for a rapid transit line."

Phil Heard, head of Vancouver Economic Development, tells Site Selection that "the Olympics could not have come at a better time for Vancouver. Our new convention center is a huge expansion and it is covered by one of the largest 'green' roofs in the world. It is a beautiful new place that will serve as the communications center for the Olympics."

Popp says the Olympics will shine a bright light on the efforts of Western Canada to diversify its resource-based economy and make inroads in fields such as aerospace and life sciences.

"The National Institute of Nanotechnology is located at the University of Alberta and supports the growing biotechnology sector of Western Canada," he notes. "Genomics is a growing field here too, as evidenced by the new Academic Health Sciences Center at the University of Saskatchewan. They have recently opened a new vaccine research center for work on animal vaccines."

With Western Canada known worldwide for its rich natural resources, Popp says that increasing "value-added production, through new technology adoption," is one of the region's primary goals for 2010 and beyond. "Our goal is to increase the value of production in Western Canada and attract new types of investment."

Another top goal of WEDC, he said, is to "transfer knowledge into commercial opportunity" by working directly with the region's research universities and institutions. "We call it capacity building," he adds. "There is an awful lot of potential to do more to commercially exploit the research and development that is going on in Western Canada."

Debate on nationalising the mines in South Africa

2010-02-08T00:24:32Z

A storm erupted in policy circles in South Africa after Julius Malema the leader of the African National Congress Youth League (ANCYL) boldly proclaimed the need for the mining industry in South Africa to be nationalized. The demand was predicated on fulfilling the vision of the Freedom Charter, which was adopted at Kliptown in 1955 as the 'manifesto' of the liberation struggle. According to the Charter "The wealth of the country shall be shared among all who live in it!" (Note: the full ANC YL document on nationalisation of the mines can be read here in a PDF version)

Not surprisingly Malema has faced a barrage of criticism from free marketers and other apologists of capitalism. What was surprising, however, were the attacks he had to face from Ben Turok and Jeremy Cronin, leading figures of the Communist Party. Both Turok and Cronin quickly claimed that the notorious Minerals and Petroleum Resources Development Act [28 of 2002] (MPRDA) brought mineral rights under state control, therefore it is not necessary to nationalize mines, as this piece of legislation means that all South Africans through state ownership of the mineral rights already share in the wealth of the mining industry.

The attack on Malema from the leading SACP cadres was so vicious and unexpected that Malema responded by promising that he will defend the ANC against communist takeover with his life, reflecting his and the ANCYLs ideological confusion. However, it is important to note that Malema felt it necessary to pose such a radical demand as mine nationalization, possibly due to pressure from the ANCYL ranks. This also shows that the YCL, basing itself on radical socialist demands, can gain a wide layer of support amongst youth in the alliance organisations. Malema has taken it a step further by demanding the progressive nationalisation of the entire commanding heights of the economy, starting with mining and then moving on to banking. Malema reiterated his demands on the eve of the Mining Indaba in Cape Town. This is an annual event for mining capitalists planning their scramble for African minerals. Susan Shabangu the Minister of Mineral Resources publicly backtracked on Polokwane Resolutions by stating that nationalisation is not ANC policy, and that the nationalisation "will not happen in her lifetime!"

Not surprisingly the Chairperson of De Beers, Nicky Oppenheimer jumped to the defence of Susan Shabangu. Julius Malema's response to the head of the capitalist family which has dominated the mining industry for close to a hundred years, manipulated colonial, apartheid and post apartheid governments in the interest of private profit, shows a high level of class consciousness permeating the ANCYL and its leadership. Malema is reported to have said, "Who is Nicky Oppenheimer? We don't respect him. He has never been a leader of our people. Ours is to take from his family what belongs to the people of this country." The leader of the Youth League demonstrated that his level of revolutionary consciousnesss is light years ahead of that of the leadership of the SACP through comments directed at Susan Shabangu. "Her pronouncements show that she has committed her own life to capital; capital continues to take care of her. What she is saying is that in her lifetime our economy will never be decolonised. She leads the most untransformed sector in our economy and should know better." He accused the mining minister of "sucking up to monopoly capital" (Mail and Guardian, Feb 5-11, 2010.p.10).

The ANC Youth league and its young supporters are running miles ahead of the leadership of the South African Communist Party, and even COSATU. The SACP slogan of "build socialism now", is meaningless without a detailed programme and strategy for doing exactly that. Malema and the ANCYL are putting forward the content of what the building of socialism actually requires, and it certainly does not require a deepening of capitalism. Especially now that global capitalism stands exposed and naked in its bankruptcy. Jeremy Cronin's defence of the MPRDA ignores the fact that the minerals mined are privately owned and disposed off by multinational mining companies, and that the value of the minerals are realized in London, New York, Tokyo, and Toronto where these companies are listed or based. While South Africa sits with the enormous costs of mining, the profits of mining is realized in the First World. The costs include costs to communities surrounding mines, including being pushed off their land; of the destruction of their traditional economies and culture, the destruction of their natural environment, the consumption and pollution of their water sources and the destruction of their health.

The parliamentary offices of Turok and Cronin are situated in the fairest Cape a thousand miles south of the misery and destruction wrought by the mining industry on the land of rural peasants, well removed from the scourge of HIV/Aids associated with mining. HIV/Aids infection levels in mining towns are double the national rates. Mine workers reside in "informal settlements" or squatter camps similar to the one depicted in the Sci-Fi movie District Nine. The tragedy is that the real life aliens are migrant workers from Mozambique, Malawi, Zimbabwe, Lesotho, Swaziland and the Eastern Cape.

The Mining Industry in Southern Africa

Surface workers on South African mines earn roughly R1 500 (US$200) per month, while underground workers earn R3 000 (US$400) per month, figures which have not changed much since 2005 (Hlekiso & Mahlo, 2006). In 2005 the average wage of a Canadian mine worker was US$ 2607 per month (Worldsalaries.org). Canadian mine workers therefore earned 6.5 times more in 2005 than South African mine workers in 2009. Gold is currently trading at around US$ 1200 (SAR 9 000) an ounce, which translates into US$ 38,400,000 per ton, while platinum is trading at US$ 1450 (SAR10 875) an ounce, which translates into US$ 46,400,000 per ton for platinum.

South Africa, like most of the other countries in the SADC region is highly dependent on minerals. Since the late 19th century, South Africa's economy has been based on the production and export of minerals, which, in turn, have contributed significantly to the country's skewed industrial development. Most industries that developed are interlinked with the supply side of the mining industry, with little diversification away from mining. In 1952 the Trade Union organiser and champion of the working class Solly Sachs noted that, "It is abundantly clear to anyone who has the welfare of South Africa at heart that the future of the people and the whole country depends on extensive and intensive industrial development, and that the mining of precious minerals can serve the interests of the country only as a stimulus for the development of other branches of the national economy." Yet he concludes that "It has always been the policy of the Chamber of Mines to subordinate the entire economic life of the country to the selfish interests of the mine owners" (Sachs, 1952, pp. 102-103).

In 2000, mineral commodities accounted for 47% of the $30.8 billion in total exports. Gold, diamonds, platinum, and other metals and minerals were the top export commodities in 2002. The total value of sales of primary minerals was $14.2 billion in 2000 ($12.3 billion in 1999); $11 billion worth was exported ($9.5 billion in 1999). Processed mineral materials added another $2.98 billion to sales in 1999 and $2.43 billion to exports. The leading export earners in 2000 were PGMs [platinum group metals] ($3.9 billion), gold ($3.4 billion), coal, ferroalloys, aluminum, iron ore, vanadium, and copper. The year 2000 was the first in which the value of PGM exports exceeded that of gold. The recent sharp increase in PGMs has helped compensate for the declining role of gold (Encyclopedia of the Nations). Given these staggering export figures one is left with the uncomfortable question as to why in such a wealthy country have the issues of unemployment, poverty, disease, homelessness and crime assumed such equally staggering proportions?

A number of myths have emerged about the South African economy, much of these stem from the ideological desire by the ruling class, particularly during the Mbeki terms in the presidency, to perpetuate neo-liberalism, to reverse the gains by the working class and to commodify even the most basic services such as health, education, electricity supply, water, transport and housing. Thus Wikipedia repeats some of these myths "South Africa has a two tiered economy; one rivalling other developed countries and the other with only the most basic infrastructure. It is therefore a productive and industrialised economy that exhibits many characteristics associated with developing countries, including a division of labour between formal and informal sectors and an uneven distribution of wealth and income. The primary sector, based on manufacturing, services, mining, and agriculture, is well developed" (Wikipedia, -) A well developed primary sector is surely indicative of an extractive economy which is typically Third World, Extractive economies depend on abundant supplies of cheap labour, hence the country has a large pool of unemployed lumpen proletarians, who are absorbed into the informal sector, which sector acts as a safety valve against revolution. The two Southern African countries, lauded for being democratic, capital friendly and responsible, South Africa and Botswana are also two of the most extractive industry dependent countries in the world, with the between them the worst gaps between the rich and poor world in the world, the worst HIV infection levels in the world and both suffering massive unemployment levels. There is no second tier in the South African economy. Those classified to be in the "second tier" are the working class, the poor, the unemployed, the excluded, the majority black African part of the population i.e. they are a product of the form that capitalist development has taken in South Africa since the discovery of minerals in the late 19th century.

In 2000, Anglo Platinum spent $193 million on expansions and two new mines, and $450 million was spent in 2001 (Encyclopedia of the Nations). If we consider than one ton of platinum currently sells at US$ 46,400,000 and multiply this with Anglo Platinum's proven reserves of 145.56 million tons the astronomical income of this multinational corporation from South Africa's platinum reserves is realised once more begging the question - why are the majority of South Africans faced with poverty, unemployment, ill health, poor education, homelessness and crime?

Impala Platinum Holdings Ltd. (Implats), South Africa's second-largest producer, operated 13 shafts within the Merensky and UG2 Reefs, and planned on investing $486 million by 2004 to maintain its capacity at 31,110 kg per year until 2030-from 112 million tons of ore reserves. Lonmin PLC, the third-largest PGM producer in the world, divested its nonmining interests in 2000, restructured itself as a focused PGM producer, and announced plans to increase production by 43% within a 7-year period, to 27,060 kg per year of platinum, at a cost of $550 million. The country's total reserve base of PGMs (metal content) was 62.8 million tons (Encyclopedia of the Nations). Freedom Park is situated in the shadow of Implat's Rustenburg operations. It is a sprawling informal settlement and a festering sore of HIV/Aids, STIs, sex work, alcohol and substance abuse and crime - it is also where Implat's workforce resides.

Primary gold output in 2000 was 430,778 kg, down from 491,680 in 1997 and the 1970 peak of 989 tons. Anglogold Ltd. (the gold division of Anglo American) accounted for 37% of output; Gold Fields Ltd., 25.7%; and Harmony Gold Mining Co., 15.3%-the three companies had capacities of 161 tons per year, 125 tons per year, and 87.1 tons per year, respectively. Gold, discovered in 1886, occurred along a 430-km arc that stretched across Gauteng, the North-West, Mpumalanga, and the Free State. Production of gold rose steadily through the 1960s and 1970s, as newer mines opened to keep pace with burgeoning world-market demands. Gold production declined in the 1990s, because of reduced ore grades, increased mining costs and industry restructuring. In 1996, production reached its lowest level (496,846 kg) since 1956, although South Africa was still the world's largest producer. The world's deepest mine (3,777 m) was the Western Deep Levels gold mine, at Carletonville (Gauteng).

Natural gem diamond output in 2000 was 4.75 million carats; and natural industrial diamond, 6.06 million carats. De Beers mines produced 10.29 million carats, from 23.3 million tons of material treated. Alluvial diamonds were discovered along the Orange River in 1867, and surface diamonds, at Kimberley, in 1870; both types were later discovered in other parts of South Africa. The Big Hole Mine, at Kimberley, was the world's largest hand-dug mine; by the time it ceased production, in 1914, 14.5 million carats of diamond had been extracted from 22.6 million tons of earth (Encyclopedia of the Nations). Diamonds from Southern Africa made Great Britain the biggest exporter of rough diamonds for more than a century. Southern Africa diamonds give employment to 2 million cutters and polishers in India, whereas in South Africa there are roughly 2000 cutters and polishers, 50% of whom are unemployed because they cannot access rough diamonds. Southern African diamonds make a significant contribution to the GDP of both Belgium and Israel. Southern African diamonds partly fund the oppression of Palestinians. Southern African diamonds contribute to non-unionized child labour in India.

The wealth derived from the sale of diamonds provided the initial capital for the development of the Witwatersrand gold mines. The market created by the gold mines, in turn, provided the impetus for coal mining, and, later, for the development of the iron and steel industry, which, in its turn, required the development of other minerals. Taxation of mining enterprises has supported South African agriculture, and financed many of the country's administrative and social needs.

The South African minerals industry operates on a free-enterprise, market-driven basis. Government involvement was primarily confined to ownership of the national electric power supply and the national oil and gas exploration company; under the MPRDA, mineral rights reverted to the state. The bulk of mineral land holdings and production has historically been controlled by five mining investment houses. Since 1994, the industry has undergone a major corporate restructuring, or "unbundling," aimed at simplifying a complex system of interlocking ownership, at establishing separate core-commodity-focused profit centers, and at creating an entry point for the aspirant comprador bourgeoisie, that native bourgeoisie which is dependent on and serving in the interest of imperialism, into the mining industry. The move from Johannesburg to London of two major corporate financial headquarters, Anglo American PLC and Billiton PLC, caused concern over "capital flight," and the government in 2000 blocked the $3 billion merger of Gold Fields Ltd. and Franco-Nevada Mining Corp., of Canada; in 2001, though, the government approved a $19 billion takeover of De Beers Consolidated Mines Ltd. by Anglo American. The leadership of the SACP should be careful that is is not found defending the interests of a comprador bourgeoisie instead of advancing the class interests of the working class. It should also be careful that the lack of substance of its strategies and tactics do not cause it to be marginalised by the much more dynamic and forceful shift to the left in the ANCYL.

For the nationalization of mining under the control of the working class

The MPRDA was designed to release the monopoly stranglehold of five mining investment houses and allow entry by the aspirant black middle class, mainly ANC leadership figures, into the mining industry. Thus instead of benefitting the population as a whole this limited 'nationalization' has benefitted only a small comprador elite. This elite has entered mining in alliance with financial and mining interests from the USA, Canada, Australia, Russia and China. This elite faction of the capitalist ruling class sees Malema's call for a more comprehensive nationalization as a threat to their attempts to accumulate capital. Malema will face significant opposition from the bourgeois elements within the ANC. The SACP needs to stand only for the interests of the working class, both the miners and masses of South Africa as a whole. It must not feel pressured by the mining companies and the class interests of the bourgeoisie. Instead it should enter a constructive debate with the ANCYL on the important issue of nationalization.

Malema's call for nationalization represents a step forward. However, in the face of massive bourgeois opposition the ANCYL has retreated, claiming that South Africa should emulate the Botswana model. The Botswana model is not really the answer to the key questions that arise from the need to build a socialist economy and society in South Africa. However, Malema is a step ahead of Cronin and Turok in this regard. The events of the last week, particularly the remarks by Shabangu at the mining indaba and Oppenheimer's defence of her is pushing the Youth League into an increasingly more radical position. It also shows that Oppenheimer is not even prepared for the limited nationalisation represented by the Botswana model, thus contradicting his oft quoted lofty praise for the relationship between De Beers and the government of that country. The SACP leadership needs to back Malema's call, but also point out the limitations of mine nationalization in isolation. It is important therefore to note the positive development in the thinking of the ANCYL in its realisation that nationalizing the mining sector would be an important gain for the working class, but should be accompanied with nationalizing banking and major industry in the interests of the masses. This would be the only way to realise the Freedom Charter's demand that "The mineral wealth beneath the soil, the Banks and monopoly industry shall be transferred to the ownership of the people as a whole."

Botswana is a poor example, and it is important that we reiterate this. The fact that the Botswana government has a 50% share along with DeBeers in Debswana does not mean that the people of Botswana are benefitting from the fabulous wealth produced in that country's diamond mines. Botswana has an unemployment level ranging between 25% and 30%, it has the highest poverty gap in the world, it has after South Africa and Swaziland the highest HIV/Aids infection rate, almost half of households in Botswana live below the official poverty datum line, and most households do not have water borne sewage. At the same time it has had one of the highest economic growth rates in Africa over the past two decades. Given that it is a capitalist country the economic wealth generated in the country is usurped by a comprador bourgeoisie and international capital. The state's role in the economy is to police the Botswana public in general and the working class in particular - "creating favourable conditions for investment". State ownership is not the answer if the state is an instrument of the capitalist ruling class. Only when the state becomes the instrument of the working class intent on abolishing class exploitation and oppression, and redirecting the income generated by the economy in general and mining in particular to address the challenges of poverty, unemployment, disease, illiteracy, environmental destruction will the socialization of the mining industry be useful.

If we are going to demand socialization then we need to fill this vague term out with concrete demands. Mining in South Africa will only benefit the majority of South Africans if it is placed under the control of the working class, along with banking and the commanding heights of the economy, as nationalized concerns planned in the interest of the masses. In the final analysis the bourgeois state is unable to do this. By putting itself at the head of the working class with a bold socialist programme the SACP can struggle to bring about a real transformation of society. Instead of condemning the ANCYL for its progressive vision, the SACP should take up the challenge and provide revolutionary leadership to the working class. Smashing the bourgeois state machinery and replacing it with a socialist planned economy is the only genuine road to socialism in South Africa.

Gold slides as dollar jumps to 8-month highs

2010-02-08T00:07:45Z

Gold futures slumped on Friday as a drop in the U.S. jobless rate couldn't offset a surge in the dollar, which jumped to 8-month highs against the euro on fears about sovereign debt in Europe.

Gold for April delivery fell $10.20, or 0.9%, to end at $1,052.80 an ounce on Friday. The precious metal lost 1.9% over the past week.

On Thursday, gold saw its biggest one-day drop in 16 months, joining other metals in a broad sell-off as investors fled to the safety of the U.S. dollar over mounting concerns about the debt of several European countries.

The dollar, which has been used as safe haven lately, briefly came off highs earlier after the Labor Department said the unemployment rate fell to 9.7% in January from 10% in December.

Economists surveyed by MarketWatch had expected the unemployment rate to remain steady in double-digits. But the U.S. economy still shed 20,000 jobs in January, while economists expected the economy to add jobs last month.

The dollar index, which measures the U.S. unit against a basket of six major counterparts, was last up 0.4% at 80.33. The euro slumped to $1.3657, or 0.5%.

A stronger U.S. currency typically pressures gold and other dollar-denominated commodities as it makes them more expensive for holders of other currencies. Gold also loses its appeal as a hedge against weaker currencies.

Gold saw its biggest slide in 16 months Thursday, joining other metals in a broad sell-off of commodities and stocks, as investors fled to the safety of the U.S. dollar over mounting concerns about the debt of several European countries.

"This may be another upcoming buying opportunity as we look at open interest and delivery notices later after the drastic selling," said George Gero, metals analyst at RBC Wealth Management, in emailed comments.

But for commodities overall, concerns about global economic conditions and demand have returned to the front burner over the past few weeks, sparked by China's moves to slow down its economy.

Crude-oil futures also continued to slide on Friday, off nearly 3% after briefly slumping below $70 a barrel.

Among other metals Friday, copper for March fell 1 cent, or 0.3%, to $2.86 a pound. Silver for March fell 52 cents, or 3.5%, to $14.83 an ounce.

Platinum futures also slumped, with the April contract down $30.2, or 1.9%, at $1,475.10 an ounce. Platinum, used in vehicles, has been selling off on concerns about the safety of Toyota vehicles.

Jubilee Platinum and Sylvania Resources formalise ConRoast PGM smelting partnership, create 2 new JVs

2010-02-05T06:55:33Z

Jubilee Platinum and Sylvania Resources have now formalised their previously announced partnership for the smelting and refining of low grade and high chrome concentrate resources using Jubilee's ConRoast technology. The companies will establish two separate joint ventures to exploit PGM resources which have previously been deemed uneconomic on the Bushveld complex in South Africa.

"These new companies combine the joint operating capability of Jubilee and Sylvania to take PGM containing dump material into metal. The ongoing arrangement provides the platinum industry with a formidable total capability solution for the processing of PGM tailings and high chrome concentrates", Jubilee CEO Colin Bird said.

Firstly, a new JV smelting company will be incorporated, with the ownership structure split 70% to Jubilee and 30% to Sylvania. All uncommitted concentrate from Sylvania's existing tailings operations and Northern Limb projects will supply the Smelting Company. Another JV company will be incorporated with the equity split 50-50. The Tailings Processing Company will exploit future platinum tailings opportunities and will not incorporate Sylvania's current tailings and Northern limb operations.

"The formation of the joint venture companies offers Jubilee and Sylvania the benefit of fully exploiting the synergies offered by a mine-to-metal strategy free of the traditional constraints imposed on high chrome, or relatively low grade concentrates", Sylvania Resources MD Terry McConnachie said, "Any future platinum tailings processing opportunities will be jointly exploited combining Sylvania's significant tailings treatment experience and Jubilee's smelter technology and experience. This allows the combined entities to tackle new tailings projects that are not currently exploitable by either Sylvania or Jubilee individually".

Jubilee acquired Braemore Resources in the second half of 2009. The company has since moved quickly to progress the ConRoast technology, Braemore's key asset. In November 2009, Jubilee and Sylvania initially began their partnership. Jubilee confirmed that Sylvania's previously uneconomic low grade platinum group metal (PGM) concentrate was successfully treated through the ConRoast Smelter. In December, Slyvania reported that 99% of PGMs were recovered and that the high chrome content posed no risks.

Today's framework agreement also defined shareholder agreements for each company, and issues surrounding the management, technology and intercompany off-take agreements between the partners. It is anticipated that the Smelter Company and the Tailings Processing Company will be operational within 3 months. At this point the respective companies should have completed the necessary knowledge transfer between the partners and the newly established companies.

The Smelting Company will fund and procure the construction of three ConRoast Technology supporting furnaces, which are specifically designed for the roasting and smelting of Sylvania's PGM concentrate. Each furnace is expected to have a capacity up to a nominal 10MW and shall have associated roasting, infrastructure and refining equipment. Subsequently, Sylvania will conclude off-take agreements with both new companies for the respective sources of PGM concentrate.

Jubilee will be appointed as manager of the Smelting Company in return for a management fee related to its profitability. The parties will be jointly responsible for the management of the Tailings Processing Company.

Nortec Minerals Corp.: Rock chip sample returns 69.8g/t gold from Seinajoki Project, Finland

2010-02-05T06:25:14Z

Nortec Minerals Corp. is pleased to announce the excellent results from rock chip samples taken from the Seinajoki Gold Project in December last year.

High grade gold mineralisation was encountered in two lines of rock chip samples taken from outcropping bedrock on the Sikakangas prospect. A 0.5m chip line returned 69.8g/t gold hosted in quartz veins within altered metavolcanic rocks (mica gneiss). A second sample taken 25m to the south, returned 21.1g/t gold also hosted in quartz veins within altered mica gneiss.

Ian F. Laurent, Nortec's Executive VP commented, "We are very excited at these results. We are looking forward to drill testing these targets. We have always believed that Seinajoki has the potential to become a multi-million ounce gold district."

Nortec conducted a reconnaissance surface sampling programme over several prospects identified within the 10,000 hectare claim reservation covering the Seinajoki Gold Project. A total of 29 rock chip samples were collected from the Sikakangas, Marttalanniemi, Kalliosalo and Kaatiala prospects during a field visit by Nortec. The samples collected were representative of the several styles of mineralisation already identified within the Seinajoki Project, including:

1. Native GOLD in dacitic to rhyodacitic metavolcanic rocks and graphitic schists, associated with native antimony, minor arsenopyrite and pyrrhotite;
2. Disseminated stratabound antimony-gold mineralization associated with shear zones in metasediments;
3. Native GOLD in quartz-tourmaline veins in metavolcanic rocks;
4. Antimony mineralization in pegmatites and metavolcanic rocks; and,
5. Tin, tungsten, lithium, tantalum, beryllium, niobium and other REE mineralization in pegmatite dykes.

Anomalous gold mineralisation (>0.2g/t) was also returned from rock chip samples at the Marttalanniemi and Kalliosalo prospects. Both prospects lie along a 5km long, northwest trending "Shear Zone". One rock chip sample from the pegmatite dyke at Kalliosalo returned lithium mineralisation (1.47% Li) and another rock chip sample from the southern part of Marttalanniemi returned elevated values (0.04%) in rare earth elements ("REE").

The Company has already begun staking claims in the Seinajoki district and will complete staking the most prospective areas before the end of February. The Company has begun discussions with drill contractors in Finland with the aim of commissioning an initial small exploration drill programme targeting these high grade gold zones identified on surface.