Showing posts with label zinc. Show all posts
Showing posts with label zinc. Show all posts

Tuesday, March 12, 2013

Peru’s gold, silver and copper output fall in January 2013—Mining Ministry

Peru’s Ministry of Energy and Mines reported increased production of iron, lead and zinc in the first month of this year.

Author: Dorothy Kosich

Peru’s Ministry of Energy and Mines reported Monday the country’s gold production plunged 25.12% in January, as total silver production declined 7.27% and total copper output dipped 4.41% during the same period.

However, the ministry also noted that iron ore production was up nearly 13%, while zinc output increased 8.83% and lead was up 6.15% during the first month of this year.

In the first month of this year, Peru’s gold production was 11,762,163 grams (378,162 troy ounces), down from 15,708,384 grams (505,036 troy ounces) in January 2012. Minera Yanacocha reported a 25% decrease in gold production in January 2013.

The country’s silver production was 266,981 kilograms (8,583,638 troy ounces) during the first month of the year, 7.27% lower than the 287,918 kilograms (9,256,778 ounces) of silver production reported in January 2012.

Peru’s copper production was reported at 93,469 metric tons in January of this year, a 4.41% drop from the same period of 2012.

The Directorate of Mining Promotion of the ministry’s mining department noted that zinc production in January 2013 was 111,308 metric tons, up 8.83% from 102,280 metric tons of zinc output in January 2012.

Peru’s lead production was 19,837 metric tons in January 2013, a 6.15% increase compared to January 2012 lead output total of 18,689 metric tons.

The ministry reported that the country’s iron ore production for the first month of this year was 589,902 long tons, up 12.91% from 522,433 long tons for January 2012.

Source: Miniweb

Wednesday, November 28, 2012

Trevali to start Peruvian plant commissioning early in 2013

Zinc-focused miner Trevali Mining reported development at its Santander zinc/lead/silver mine, in west-central Peru is in the final phase with initial mining and milling operations scheduled to start early in 2013.

The company said all critical mill and processing infrastructure was now in place and underground development continued to progress, with 1.8 km of ramp completed.

About 100 000 t of ore averaging 5.6% zinc, 0.65% lead and 1.65 oz/t silver has been stockpiled on the surface for processing when commissioning of the 2 000 t/d plant starts.

Trevali said all core site infrastructure is also complete and fully operational, including accommodation units, catering facilities, and various mine planning and site offices.

Construction of the project's 65 km transmission line to the national grid has also been completed and energising the power line is currently being coordinated with the Peruvian regulator in order to reduce disruptions with local end-users.

The company expected the Santander mine to access power from the Peruvian grid before the end of the year. Before this takes place, the site is being powered by the company's run-of-river power station at Tingo and supplemented by a combination of generators and excess power from a neighbouring mining unit.

Underground development has found several zones of potentially significant footwall satellite mineralisation sites that would require additional drilling and, depending on the results, might provide additional mill-feed.

The company’s Toronto-listed shares on Tuesday closed almost 2% higher at C$1.03 apiece.

Edited by: Creamer Media Reporter

Wednesday, November 7, 2012

China base metal buys will hardly dent bulging stockpiles

Any buys for state reserves will take up some of the slack in China's supply chain, analysts said, rather than igniting demand.

China's plan to buy base metals for state reserves in an effort to cushion domestic smelters from slowing economic growth would support prices but would not significantly reduce bulging stockpiles, traders and analysts said on Wednesday.

China is the world's biggest consumer of base metals, but demand has faded this year as exports have weakened, pushing stocks of copper and aluminium to near-record highs and driving some smelters into loss-making territory.

Any buys for state reserves would take up some of the slack in China's supply chain, analysts said, rather than igniting demand, with purchases planned on a much smaller scale than in the wake of the 2008/09 financial crisis.

"It's a plea for some help. Obviously the smelters have requested some official assistance and we know stocks have gone up. Ostensibly it is to help the cash flow of the smelters," said analyst Robin Bhar of Societe Generale.

"On copper, it is difficult to see the move lifting prices on a sustained basis, but it probably means the downside is restricted. On aluminium, which is a much bigger market, it is neither here nor there."

Sources told Reuters this week that China's influential state planner could revive a stockpiling plan as soon as this month to buy around 400,000 tonnes of primary aluminium ingots and 165,000 tonnes of refined copper cathode for state reserves.

This volume equates to around 8 days of consumption for refined copper and nearly 7 days for primary aluminium, and compares to China's current stocks of more than one million tonnes of both copper cathode and aluminium ingots.


The stocks include metal held by Shanghai Futures Exchange warehouses, bonded warehouses, producers and end-users.

"Inventories hanging over the market are mainly bonded warehouses, estimated around 750,000 tonnes, compared with about 300,000 back in end-2011," Macquarie analyst Bonnie Liu said in a note this week, adding that fourth-quarter copper orders had been almost flat with the third quarter.

About 800,000 to 900,000 tonnes of refined copper cathode was stocked in bonded warehouses in Shanghai and the southern province of Guangdong, traders estimated last week.

The state purchase looks tiny against the market's annual consumption of more than 21 million tonnes of primary aluminium, analysts said.

"I don't think the purchase of aluminium would have a big impact," said a source at a large aluminium producer who did not want to be identified in the absence of authority to speak to the media.

"Domestic prices may rise one or two days only. The market now is over-supplied and demand is far behind supply growth."

Markets are hoping Beijing's new top rulers will announce stimulus measures following the once-in-a-decade leadership change set to be ushered in by a Communist Party congress beginning on Thursday.

Although China racked up annual GDP growth of 7.4 percent in the third quarter of 2012, this was its slowest pace since the depths of the financial crisis in the first quarter of 2009.

The extra demand from the state purchases might lead investors and end-users to conclude prices had bottomed and the time for restocking was near, some analysts in China warned.

"A purchase by the State Reserves Bureau would have psychological impact," said Jing Chuan, chief researcher at Citic Futures, referring to high domestic prices of copper and aluminium, which resulted in record imports in 2009.

"We saw that in 2008/09, when the SRB buying pushed up prices strongly, although it did not change the real supply and demand situations."

A sales manager at a Chinese copper smelter said the purchases could signal the domestic market that prices had bottomed, encouraging speculators and end-users to build stocks.

Unlike the launch of the inaugural stockpiling in 2008, the SRB has not officially announced current purchase plans.

In December 2008 it said it planned to buy 1 million tonnes of aluminium, 400,000 tonnes of copper and a total of 400,000 of lead and zinc from domestic smelters over three years.

But it had only bought 235,000 tonnes of copper, 590,000 tonnes of primary aluminium and 159,000 tonnes of refined zinc by the end of that round.

(Editing by Clarence Fernandez)

© Thomson Reuters 2012 All rights reserved

Monday, November 5, 2012

Great expectations fill Greenland as China eyes minerals

Whether in iron, zinc or rare earth minerals, China is eyeing investments in the Danish-ruled country whose own, increasingly autonomous, national government is looking further afield for investors

Author: Alistair Scrutton

By a remote fjord where icebergs float in silence and hunters stalk reindeer, plans are being drawn up for a huge iron ore mine that would lift Greenland's population by four percent at a stroke - by hiring Chinese workers.

The $2.3-billion project by the small, British company London Mining Plc would also bring diesel power plants, a road and a port near Greenland's capital Nuuk. It would supply China with much needed iron for the steel its economy.

With global warming thawing its Arctic sea lanes, and global industry eyeing minerals under this barren island a quarter the size of the United States, the 57,000 Greenlanders are wrestling with opportunities that offer rich rewards but risk harming a pristine environment and a traditional society that is trying to make its own way in the world after centuries of European rule.

Great expectations could lead to greater disappointments, for locals and investors. Yet a scramble for Greenland already may be under way, in which some see China trying to exploit the icebound territory as a staging ground in a global battle for Arctic resources and strategic control of new shipping routes.

Whether in iron, zinc or rare earth minerals vital for 21st-century technology like smartphones, China, the emerging economic superpower is eyeing investments in the Danish-ruled country whose own, increasingly autonomous, national government is looking further afield for investors.

"This is not just a region of ice and polar bears," Prime Minister Kuupik Kleist told Reuters in the capital Nuuk, formerly known by its Danish name Godthab. "Developing countries are interested in a more political role in opening up of the Arctic. Greenland could serve as a stepping stone."

Talk in Europe or North America of a Chinese grand design to take over the Arctic is mocked as overblown by many in Greenland - an recent exhibition of cartoons recently in Nuuk featured one drawing of an iceberg, Greenland-shaped above the water line, and in the form of China below. Its caption: "Polar Paranoia".

Compared to its investments in Africa or Latin America, Beijing has a light footprint in the Arctic. In Greenland, not one mining or oil project has yet got off the ground. Appetite for exploration is tempered by political polarisation, as Greenland's leaders square off over how to regulate and tax new wealth under a self-government regime just three years old.

"There are great expectations in Greenland, but no results," said Rasmus Ole Rasmussen, a senior researcher specialising in Arctic affairs at the Nordregio institute in Stockholm.

Nonetheless, transformation is approaching rapidly for a land still mostly inhabited by indigenous Inuits engaged in an economy dominated by fishing. And China may play a larger role in this than Europeans and North Americans find comfortable.

"It's fair to say countries like China and South Korea are far more active than Americans and Europeans in showing their interest in investing," said Kleist, who adds that the West, for which Greenland remains part of its Cold War-era NATO defence pact, can appear complacent, despite new geopolitical currents.

In Nuuk, home to 16,000 people on the southwestern coast, 1,000 sea miles north of Newfoundland, there are just two traffic lights. But new construction is everywhere: gleaming office buildings that house foreign companies and even a new mall where one can buy olives and French cheeses - for a price.

Greenland's Bureau of Minerals and Petroleum (BMP) has now awarded overall some 150 licences for mineral exploration compared with only a handful in existence a decade ago, with around $100 million spent by companies last year alone. Oil companies have spent more than $1 billion in exploring offshore.

That includes exploration of rare earth minerals, used in products from wind turbines to hybrid-powered cars. China currently accounts for the vast majority of the world's supply.


Greenland can look like ground zero for global warming. This summer many scientists were shocked as nearly all its massive ice sheet thawed. Hunters no longer prowl offshore ice that has grown too thin to support their dog sleds. A walrus was the talk of Nuuk this year, found drifting far south of its normal range.

But there also benefits from warmer weather - and it is not just dreams of growing strawberries and broccoli in the south.

With ice receding, some estimates suggest the polar ice cap may by 2040 be disappearing entirely during summer. Melting sea ice may open passages north of Canada and Russia and cut sailing distances by up to 40 percent between Shanghai and New York.

"Greenland used to be a big, white blob on the world map," said Aleqa Hammond, an opposition leader and former foreign minister of Greenland. "Now we have a global role."

But she criticised the government for keeping people in the dark about Chinese plans: "We see Chinese delegations everywhere and even the parliament does not know who they are," she said. "We seen them in our hotels, in our fjords and on our streets."

London Mining plans construction at the Isua iron ore deposit next year if Greenland gives the go-ahead. The project, which aims for finance from China, would ship some 15 million tonnes of iron ore annually from fjords near Nuuk to China.


An icebreaker completed China's first crossing of the Arctic Ocean this past summer, and diplomacy earlier in the year has also underlined China's interests in the north Atlantic.

Premier Wen Jiabao began a tour of Europe in April with a visit to Iceland, population 320,000, where there has been much talk of a Chinese developer's bid to lease a vast tract of land.

And it was little surprise when President Hu Jintao, leader of the world's most populous nation, paid a three-day visit in June to Denmark, home to just six million people. Many assumed Greenland's riches were on his mind, despite official denials.

Just days before, EU Industry Commissioner Antonio Tajani had flown to Nuuk to sign a letter of intent to cooperate with Greenland on its raw materials: "The letter of intent," said one senior Greenland official, "Was a political message that we would not lock ourselves into to supplying China with minerals."

In Greenland, Kleist spoke of European pressure, saying one EU politician had suggested he limit Chinese mining. The prime minister, whose nation is not part of Denmark's membership of the European Union, refused, saying modern trading rules would not allow it: "Could the EU do that?" he asked. "Of course not."

When U.S. Secretary of State Hillary Clinton visited last year, her bodyguards worried at the near absence of security measures in Greenland. But she had other things on her mind: "One of her first questions was, 'What is happening about rare earths?'" said another Greenland government official.

One deposit alone, in southern Greenland, being explored by Australia's Greenland Minerals and Energy, could contain more than 10 percent of the world's deposits of rare earths.

Oil could have an even greater impact.

Energy consultancy Wood Mackenzie says Greenland may have reserves of 20 billion barrels of oil. The BMP says reserves may be equivalent to as much half of the entire North Sea.

Greenland has approved a sovereign wealth fund on oil-rich Norway's model that would allow it to invest new earnings.


Yet a big question is whether such a tiny population can cope, and there are signs of local political unease that may hinder investment, whether Asian or Western.

Four hours north from Nuuk by ship, through melting icebergs and passing whales, lies Maniitsoq, a symbol both of the hope foreigners bring and a reality check for Greenland's ambitions.

U.S. giant Alcoa Inc is considering building an aluminium smelter there, strategically sited between European and North American markets. It would entail the import of thousands of workers, possibly from China.

The smelter would be fed from mines as far apart as Brazil and Australia and shipped out as aluminium to the world market. Alcoa has not decided to go ahead. Among several pending issues, it wants to see whether cheaper foreign labour will be allowed.

After it won greater self-rule in 2009, an annual grant from Denmark which has covered more than half of Greenland's public spending was effectively frozen at around 3.5 billion Danish crowns ($600 million) and will shrink in real value over time.

"There is a need to become independent economically," said Naaja Nathanielsen, a Greenland lawmaker. "Most people see it not as opportunity, but as necessity."

Villages like Maniitsoq are dotted along Greenland's western coast, relying on state subsidies for heating and communications. Unemployment is high and alcoholism rife.

Much of the Maniitsoq fisheries industry has vanished. Locals say shrimp have moved north as southern waters warm. The town is huddled on an outcrop of windswept rocks with Soviet-style housing blocks, empty streets and a few downtrodden bars.

"We need a Big Bang here," said Karl Lyberth, deputy major in Maniitsoq. "Alcoa is the only project that can help us.

The town's population, now 2,715, has fallen by around 200 in a decade. Few will speak against Alcoa, though a local hotel owner made headlines that were uncomfortable for some by saying the town would need a brothel for workers building the smelter.

"It was only half a joke," said Soren Lyberth of the Heilmann Lyberth Hotel. "But people don't want to talk about it."

He touched a sore point in Greenland - some fear that the country cannot absorb so many dollars and foreign workers, and that untrained and poorly educated Greenlanders will lose out.

"They think the holy grail is Alcoa, but it's not true," said Jens Moller, head of a community training project in Maniitsoq. "It could bring a lot of problems."


Locals also debate bringing in 2,000 Chinese workers to Nuuk for London Mining, and whether Greenland should let foreign employers undercut local wages. Such arguments stall projects.

To the dismay of investors, a consensus behind foreign companies has frayed. The opposition is calling for more taxes on miners. Environmentalists demand more consultations.

"We need more royalties," said opposition leader Hammond. "The polluter should be paying."

The leftist, pro-independence coalition led by Kleist has more technocratic ministers than a previous government criticised by opponents as nepotistic and inward-looking.

But Kleist, born to an Inuit mother and Danish father in a now abandoned mining village, is aware of communities' problems and his coalition is split on whether to let in low-paid foreign labour. Several mining executives and Greenland officials expressed frustration at the slow pace of projects.

"Our dream is about to come true," said one senior Greenland official, who spoke on condition of anonymity. "But people are getting nervous, asking whether they are ready for this."

Take rare earths. Because they are massed with uranium, neither could be mined without ending Greenland's prohibition on extracting radioactive materials - a policy inherited from Denmark. Greenland's politicians are split on the issue.

"The policy of zero tolerance is the main issue for us," said Ib Laursen, operations manager at Greenland Minerals and Energy. Only by ditching the ban could his project be feasible.

Today there is only one operational mine in Greenland, a gold deposit, which opened in 2004. Oil drilling in 2010 and 2011 has failed to yield any discoveries despite a $1.2 billion campaign led by Britain's Cairn Energy [ID:nL5E8CN0BI].

While Greenlanders wait for any bonanza to start, the notion that it may bring Chinese dominion seems far-fetched to many in a country whose European links stretch back a thousand years to Viking colonists and whose ties to the Americas include the Cold War-era U.S. Thule Air Base, deep inside the Arctic Circle.

Some analysts say China's role in Greenland is exaggerated - and that its ambitions are more economic than geopolitical:

"Many non-Arctic countries, like in Europe, are seeing ghosts and troubles ahead," said Rasmussen at Nordregio, describing such fears as having "little to do with reality".

Greenland's prime minister also stresses the limits to his ambitions for the pace of development: "Our situation is uncertain," said Kleist. "I would say five projects in 10 to 15 years are realistic in terms of the global economic situation and the capacity of Greenland society."

Among capacity constraints are concerns over its ability to protect an ecosystem which, global warming aside, is largely unsoiled by human industry. Some big oil executives say it is simply not worth the risk of a spill to drill in a region where its effects could be devastating and clean-up facilities scarce.

For Mikkel Myrup, chairman of local environmental group AvataQ, the country is unready for industrial development: "Greenland simply does not have the regulatory capacity to take responsibility for monitoring the industry," he said.

Standing on a cliff in Maniitsoq, hotelier Lyberth has put off building a new hotel with a view of snow capped mountains. Alcoa and its foreign executives, for the moment, seem far away.

"This is my dream," he said, smiling as he pointed to a barren piece of flat rock where the hotel would be.

"But so far it's only a dream."

Wednesday, September 12, 2012

New Peru zinc mine expected complete by year-end

Zinc-focused miner Trevali Mining expected construction of its Peruvian Santander zinc/lead/silver mine to be complete by the end of the year, when commissioning was expected to start.

The company on Wednesday said in a construction update that construction of the 2 000 t/d plant was progressing well. To date, the mills were installed, the flotation building erected and the flotation cells installed, the crusher and zinc and lead thickener foundations had been completed, and new steel for the mill and crusher buildings was on site and were being erected.

Further, sealing of the tailings dam was ongoing and mineral stockpile preparation was advanced.

Merit Consultants International supervised the construction of the processing plant by Lima-based specialist construction firm Cempro Tech on behalf of the Santander project development team, which comprised a joint development between Trevali and Glencore International.

The company said mining contractors JRC Ingenieros had advanced underground development on the three Magistral deposits with three crews fully staffed and equipped. All key underground service and support facilities were in place, namely water, air, underground offices and training rooms, a lamp-room, various explosive magazines and equipment shops.

The company expected about 95 000 t of mineralised material grading 5.61% zinc, 0.65% lead and 1.65 oz/t of silver would be stockpiled and available for mill commissioning by the end of the year.

Glencore in March bought a 7.8% share in Trevali, which also owns a zinc mine in New Brunswick.

The company’s shares climbed 6.32% to C$1.01 apiece on the TSX on Wednesday.

Edited by: Creamer Media Reporter

Tuesday, July 31, 2012

Xstrata copper volumes down, sees stronger H2

Miner Xstrata reported an 18% drop in copper volumes in the first six months of 2012, as it replaces ageing operations and undertakes expansion that will boost production in the second half.

Xstrata is in the throes of a merger with commodities trader Glencore, which made a $26-billion takeover bid for the miner earlier this year. Glencore, Xstrata's top shareholder, is currently locked in talks with rival investor Qatar Holdings over the terms of the proposed deal..

Xstrata, the world's fourth-largest copper miner, said production of the red metal dropped to 354 612 t from 434 046 t/y ago.

It was hit by the transition from mines like the Ernest Henry openpit in Australia to new mines and expansion projects. It was also dented by lower recoveries at the world's third-largest copper mine, Collahuasi, jointly owned with Anglo American, hit by poor weather, safety stoppages and a broken ball mill.

Mined coal, a key earner for Xstrata along with copper, saw consolidated production rise 13% to 43.4-million tons in the first half, as volumes for both thermal and coking coal improved in the second quarter in relation to the first.

Nickel rose 3% year-on-year to 52 800 t. Zinc, in which Xstrata will become the world's top player following the Glencore tie-up, was flat.

Source: Reuters

Friday, June 15, 2012

Rough times ahead for zinc, nickel-S&P

While the world's mining sector faces tough times ahead, the absolute decline will not be as severe as it was during the global financial crisis, S&P forecasts.

In what likely will be a period of ups and downs, mining companies around the world share significant hurdles: slowing growth in the Chinese economy as well as economic uncertainty in Europe and the United States.

"Slowing growth in the Chinese economy will, in our view, almost certainly have an outsized effect on metals and mining companies around the world," Standard & Poor's warned in a recent report.

"And slowing economic growth in other markets will likely affect metals and mining companies too. It may be only a matter of the degree to which they suffer," S&P Primary Credit Analysts Michael Scerbo and Suzanne G. Smith advised.

The good news is Standard & Poor's Ratings Services only see a 10% chance that the Chinese economy could suffer a hard landing with growth slowing from the annual average of more than 9% in the past few years to 5%. However, even if the Chinese economic expansion slowed to only 8%--and because growth could even be slower in China's construction sectors, "the world's world steel producers could suffer most."

In North America, much of the current risk for mining stems from domestic conditions, says S&P. Construction steel markets are still weak, although industrial demand has picked up a bit, thanks to auto production and equipment manufacturing. "But even with demand slowly improving, the risk of oversupply and pricing volatility remains," the analysts advised.

Meanwhile, U.S. coal producers have already felt the impacts of an unusually warm winter and the fact power generators have been switching from coal to natural gas because of lower gas prices, S&P noted. The bad market for steam coal, which power plants use to generate electricity, has caused prices to plummet.

At the same time, global prices for met coal, which producers used to make steel, have declined and earnings from met coal will not offset the significant decline in steam coal demand and pricing,

Nonetheless, S&P forecasts not all steel-related industries will suffer at the same rate.

Brazil will benefit because it hosts some of the world's most prolific reserves and quality iron ore. Although China has tried to exploit its own iron ore reserves, domestic production meets just 30% of its needs.

Even with Chinese steel production at record highs, large Chinese steel companies are losing money for the first time in 10 years "and overcapacity and slowing demand may continue to weigh on steel prices, perhaps pushing them further down," the analysts observed.

"Standard & Poor's believes that while a sharp slowdown in Chinese economic growth could reverberate through the iron ore market, we don't expect prices to weaken significantly. Even if Chinese steel production grew at a much slower pace, iron ore producers would have to increase capacity significantly to meet demand."

However, in the Asia-Pacific region, S&P says the slowdown in China and weakening commodities prices could hurt metals and mining companies, which face rising costs, softening prices, and oversupply problems.

"Times could be very tough, in our view, for producers of commodities such as zinc and nickel, which are used in heavy industry," according to Scerbo and Smith. "We think prices on these could suffer the most in a medium- or hard-landing scenario in China.

"And we have a negative outlook on the metals sector, reflecting our view that steel and aluminum producers will continue to struggle with softening demand growth and abundant supply. Aluminum prices, in particular, show no immediate signs of having reached bottom-or doing so any time soon."

"Still , while we are forecasting a deceleration in demand in the Asia-Pacific metals and mining sectors due primarily to the slowdown in property development and infrastructure investment in China, we believe the absolute decline may not be as severe as it was during the global financial crisis," the analysts advised.

Thursday, June 7, 2012

Zinc may breach the $1.50/lb mark within five years

Zinc may be headed for the $1.50/lb-mark by 2016, buoyed by an approaching supply bubble, mining analysts at Hallgarten & Company said in a research note.

The company said that since iit bottomed in 2008, zinc had rebounded to over $1/lb, only to slip back during May 2010 when the first wave of European economic woes surfaced, and then again on the recent global market weakness.

The metal seems to have found stability in a band of between 85c/lb and $1/lb.

“This relative stability is good but not much consolation to anyone in the space. This includes end-users. The zinc complex has needed a sustained recovery in prices to tease new projects off the drawing boards and into the financing phase,” the company said in a research note.

Analysts said there is no new significant production scheduled to come on line during the next three years, except for strong byproduct credits from silver and lead mines, while many significant zinc mines are scheduled for exhaustion by 2015. Mine closures are expected to result in a net loss of about 1.4-million tons of zinc over the next few years.

In Canada, the Xstrata-owned Brunswick and Perseverance mines are destined to close in 2013, after Brunswick mine had already been stretched beyond its original life-of-mine.

A shutdown of the two mines would remove a combined 350 000 t of yearly metal capacity.

To counter such closures there are new mines such as Glencore’s Perkoa project, in Burkina Faso, with a capacity to produce about 90 000 t/y and Talivivaara, in Finland, at just over 25 000 t/y.

“Mega-mines that lasted for decades, are, in modern times, being replaced by much smaller mines with more limited mine lives,” the analyst said.

Source: Creamer Media Reporter

Tuesday, May 29, 2012

Selwyn more than halves output plans for its 8,000t/d Yukon zinc-lead mine

Selwyn to look at 3,500 tonne per day option for the Selwyn zinc-lead project in the Yukon as it also looks to make a deal happen on all or part of its assets.

Selwyn Resources (TSX-V: SWN) may need to rethink its corporate slogan "A Zinc-Lead Giant in the Making" following a massive downsizing of its namesake project in the Yukon.

Selwyn said on Monday the Selwyn project would not fly as an 8,000-tonne-per-day mine given the results of a feasibility review by the joint venture company - between it and Chihong Mining - that owns the project. Selwyn stated that given such factors as zinc and lead prices and market conditions the 8,000-tonne-per-day Selwyn project "will not provide an economic return."

Now in lieu of that scenario Selwyn said it would consider the project at less than half the rate, 3,500 tonnes per day, in ongoing feasibility work.

It is the second time Selwyn has cut the project scope down so drastically. Selwyn initially proposed the project as a 20,000-tonne-per-day open pit project in a 2007 scoping study. But then in 2010 it shifted gears to take a look at an underground operation - the 8,000 tonne per day case - that would tackle higher grade portions of the numerous deposits that make up the Selwyn project.

Now with 8,000-tonnes-per-day scratched off the drawing board, Selwyn said the new 3,500-tonne-per-day permutation "has a good probability of providing a satisfactory economic return."

In the same press release outlining the change to project scope, Selwyn also said it had engaged Cutfield Freeman to advise it "in evaluating its financing and strategic options in relation to the Selwyn Project and the ScoZinc mine (its other chief asset)." Selwyn said it would consider debt, equity and other ways of financing and that it had given Cutfield Freeman the green light to talk to buyers interested in Selwyn.

The project comes with sizeable zinc-lead resources in a series of deposits that also contain notable high-grade pockets. In all indicated resources are 181 million tonnes @ 5.25 percent zinc and 1.83 percent lead about the same again in inferred resources. Within that, however, there are some 16 million tonnes @ 10.25 percent Zn and 4.23 percent Pb, in indicated resources, and 28 million tonnes @ 8.71 percent Zn and 2.74 percent Pb, in inferred resources.

The larger resource may not, however, be as much an attraction anymore. Selwyn made clear its original scoping that covered the larger open pit operation was no longer relevant. "Since the initial PEA (scoping study) was prepared there have been significant movement in exchange rates, metal prices and capital and operating cost assumptions that would make the development plan described in the PEA no longer viable and investors should not rely on the findings of that economic evaluation," Selwyn stated

On news of the change in project scope Selwyn's shareprice was down 17 percent as of presstime to C$0.10 on moderate trading volume.

Thursday, May 17, 2012

Glencore tightens grip on global zinc market

LONDON - Commodity trader Glencore is tightening its grip on the global zinc market by moving material to inaccessible locations, forcing industrial users to pay high physical premiums for a metal that is in surplus.

The matter is under scrutiny because Glencore, which controls 60% of the world's zinc trade, is using warehouses monitored by the London Metal Exchange (LME) to stow away the metal and support premiums, sources told Reuters.

The LME, the world's biggest metals marketplace, has come under strong criticism recently because metal sitting in some of the warehouses that it monitors is unavailable in practice, backlogged in some cases for up to a year.

The criticism has centered on the bottlenecks in aluminium, and the LME has introduced new rules recently aimed at combating the problem. But the matter of unavailable metal persists, and is arguably getting worse.

Glencore's tactics, however, do not contravene any market rules and are seen by many as legitimate business practice.

Latest LME data shows a sharp increase in zinc inventories in New Orleans, a dead-end destination for the galvanising metal not because of backlogs, but because it is out of reach of industrial hubs, even in the United States.

In fact, more than 80% of the 196 000 t increase in zinc stocks since late last year has been in New Orleans, with around 30 000 t arriving in the last two weeks alone at the location that already holds two thirds of LME zinc stocks.

"Glencore has always controlled zinc in Europe. They don't want a surplus there, they want higher premiums, so they're shipping all the surplus from Asturiana de Zinc (in Spain) to New Orleans, where no one wants it," said a London-based source.

Glencore declined to comment.

LME data shows the Swiss-based commodity trader owns just under half the warehouses in New Orleans through its Pacorini subsidiary. The warehousing business, thanks in part to the specifics of the LME system, is becoming very lucrative.

The LME is set up as a market of last resort, meaning there is always a buyer for every seller. In other words, when the zinc arrives in New Orleans, Glencore as the owner of the metal always has the option to sell it.

In market parlance, this is called putting zinc warrants or ownership titles 'back in the clearing'.

The crux is that this type of selling, in zinc at least, leaves market balances tight and premiums high, as market players are loathe to pay to ship metal from New Orleans to a more convenient location.

Moreover, this kind of selling allows Glencore, as a warehouse owner, to collect lucrative rent from any counter-party to an LME trade that gets dumped with New Orleans zinc warrants.

"Glencore is moving zinc to New Orleans, putting it back on warrant and collecting rent. They're not trying to build a queue necessarily, they don't really need to as the metal is not going to get out of there," said another London-based source.


Premiums - the amount paid over the LME cash price for physical metal - are currently at around $130-135 a ton for zinc in Rotterdam. By contrast, premiums for copper, a metal in deficit which trades at four times the price of zinc, are only at around $70-80 a ton.

Sources said that while Glencore has sold some of the zinc warrants in New Orleans, it is at the same time holding onto a fair portion of the others because of its long-term punt on rising zinc demand.

The punt is not outrageous. Miners have been betting that the zinc market will be in a deficit within five years as old mines run dry, resulting in massive investment in new zinc projects lately.

Should this view transpire, premiums for physical zinc would likely shoot up even further, with customers forced to pay extra even for zinc located in inaccessible places such as New Orleans.

Taking the view that it will be able to profit from a rise in zinc prices, Glencore agreed in February to buy zinc concentrates from Peruvian miner Volcan without even charging for processing the metal.

The risk, however, is that should demand recover strongly, premiums could shoot up, resulting in hundreds of thousands of tonnes of zinc held in warehouses suddenly flooding the market, stemming a price recovery or even spurring a crash.

"What will happen when financial markets return to a healthy state? What will happen to volumes in bonded in warehouses? Will they run into the physical markets? What will happen to the premiums then? It is a game that will end one day," said a Europe-based physical zinc trader.

Source: Reuters

Tuesday, May 15, 2012

Peru must address risks or lose out to other countries - Buenaventura CEO

Peru has the conditions to benefit from a sustainable mining industry but several risks must be addressed, according to the CEO of local precious metals miner Buenaventura (NYSE: BVN), Roque Benavides.

Peru has been subject to certain global trends such as labor disputes and strikes, like the one took place at the Buenaventura's 19.3%-owned Cerro Verde operation last year.

In addition, the country has adhered to a worldwide trend of raising taxes as higher metals prices have prompted governments to seek a larger share of profits.

Growing cash costs, in this case for gold production, is a further risk. In 2010, the global average cash cost was US$560/oz, Benavides said. However, due to factors such as lower grades, exchange rate fluctuations, and higher taxes and labor costs, the figure rose to US$643/oz last year.

Meanwhile, miners are looking at opportunities in other parts of the world, according to Benavides. "Competition is big," he said, pointing to opportunities in countries such as the Dominican Republic, the Democratic Republic of the Congo and Mongolia.

Peru is ranked as the sixth most attractive country in the world for mining, according to studies carried out by the Fraser Institute. Chile, the US, Mexico, Canada and Brazil are considered to be more competitive, according to Benavides.


Peru is the world's second biggest producer of silver, copper and zinc, and sixth largest gold producer.

"Over the last three years, gold, silver, copper and zinc production have fallen," Benavides said.

Peru's mineral exports totaled a record US$27bn last year but high metals prices are "hiding the lack of competitiveness," Benavides said.

"In terms of dollars we have increased but the permanent and fundamental value is volume," he added.


Peru's mining portfolio stands at US$53.4bn in 46 projects, according to the mines and energy ministry (MEM).

However, "projects are being delayed," which could affect the 2.5mn people that depend on the mining industry, roughly more than 10% of Peru's population.

A slowdown in mining development would also affect local suppliers. "Miners buy 90% of their inputs locally," according to the CEO. Only 9% is provided by imports.

A mere 1% of the national territory has mining exploration or activity, just 13.6% is under concession to miners and only 0.84% is in production.

"If we want to compete, if we want to win over other countries... we have to make an effort," Benavides said.

Mining represents over 60% of Peru's exports.

Benavides was speaking at the 10th International Gold Symposium, being held in Lima from May 14-16.

Monday, May 14, 2012

First Quantum scoops up 19.9% of Zincore

Peru figures larger in First Quantum plans as it buys a sizeable stake in junior explorer Zincore Metals

First Quantum Minerals (TSX: FM) now owns 19.9 -percent of junior explorer Zincore Metals (TSX: ZNC), after a private placement and share sale.
The two had previously announced a 19 million share private placement struck at C$0.20 a Zincore share.
But subsequent to the private placement, First Quantum bought that much and a little more in a private acquisition from Zincore's largest shareholder, Inversiones Pacasmayo.
First Quantum bought a further 23 million shares @ C$0.16 from Inversiones Pacasmayo the day after the private placement on May 10.
In Zincore, First Quantum increases its asset base in Peru where it is already developing the Haquira copper project.
Along with the private share purchase, First Quantum and Zincore also signed a memorandum of understanding that allows the former to earn up to 80-percent ownership of Zincore's Dolores copper-molybdenum porphyry.
Dolores, about 40 kilometres away from Haquira, is one of Zincore's early-stage projects in Peru. Its main assets are the Accha and Yanque deposits, which hold some 2.1 billion pounds zinc and lead.
In the near term, First Quantum gets 30 percent of the Dolores project if it spends C$3 million on exploration.

Tuesday, May 8, 2012

Peru Mining - Project Profiles

Name Project Type Investment Startup date Project stage Capacity / Output
Alicia   Other   Exploration  
Antamina Expansión   US$1bn - US$3bn   Construction  
Antapaccay Expansión Tintaya Zinc US$1bn - US$3bn 2012 Construction 215,000 Zinc t/y tons per year
Azulcocha Copper Other 2013 Construction 160,000 Copper t/y tons per year
Bayóvar (En Operación)   US$500mn - US$1000mn   Operation  
Cañariaco Norte Phosphates US$1bn - US$3bn 2010 Feasibility Study 4 Phosphates Mt/y million tons per year
Cerro Ccopane Silver US$1bn - US$3bn 2015 Exploration 911,000 Silver oz/y ounces per year
Cerro Verde - Proyecto plataforma de lixiviación 4B (En Operación)   US$0mn - US$70mn   Operation  
Chucapaca Copper US$500mn - US$1000mn 2010 Pre-feasibility Study 30 Copper Mt/y million tons per year
Cobrecon Gold Other 2015 Exploration 500,000 Gold oz/y ounces per year
Constancia   US$1bn - US$3bn   Feasibility Study Update  
Corani Silver US$500mn - US$1000mn 2014 Feasibility Study 2 Silver oz/y ounces per year
Crucero Silver Other 2015 Exploration 15 Silver Moz/y million ounces per year
Esquilache   Other   Exploration  
Etapa de Sulfuros de La Arena   US$100mn - US$500mn   Feasibility Study  
Expansión Cerro Verde Molybdenum US$3bn - US$5bn 2016 Environmental Impact Study (EIS) 17 Molybdenum Mlb/y Million pounds per year
Haquira Molybdenum US$1bn - US$3bn 2016 Exploration 17 Molybdenum Mlb/y Million pounds per year
Hierro Apurímac Copper US$1bn - US$3bn 2013 Advanced Exploration 230,000 Copper t/y tons per year
Hilarión Iron US$100mn - US$500mn   Pre-feasibility Study 20 Iron Mt/y million tons per year
Inmaculada   US$100mn - US$500mn   Feasibility Study  
La Granja Silver US$3bn - US$5bn 2013 Pre-feasibility Study 12 Silver Moz/y million ounces per year
La Zanja (En Operación) Copper US$0mn - US$70mn 2016 Operation 300,000 Copper t/y tons per year
Las Bambas Silver US$3bn - US$5bn 2009 Installation License Approved 200,000 Silver oz/y ounces per year
Los Calatos Copper US$1bn - US$3bn 2014 Exploration 400,000 Copper t/y tons per year
Los Chancas   US$1bn - US$3bn   Feasibility Study  
Magistral Copper US$100mn - US$500mn 2013 Tender Awarded 53,000 Copper t/y tons per year
Marcona Expansión Molybdenum US$1bn - US$3bn 2012 Detail Engineering 2,860 Molybdenum t/y tons per year
Michiquillay Iron US$500mn - US$1000mn 2012 Social and Environmental Impact Assessment (SEIA) 10 Iron Mt/y million tons per year
Mina Justa Copper US$500mn - US$1000mn 2016 Tender 155,000 Copper t/y tons per year
Minas Conga Copper US$3bn - US$5bn 2013 Suspended 110,000 Copper t/y tons per year
Ollachea Gold US$100mn - US$500mn 2014 Financial Assessment Study 117,000 Gold oz/y ounces per year
Pampa de Pongo Gold US$3bn - US$5bn 2014 Exploration 117,000 Gold oz/y ounces per year
Pampa el Toro Iron Other 2015 Exploration 10 Iron Mt/y million tons per year
Pico Machay   Other   Feasibility Study  
Proyecto Galeno Gold US$1bn - US$3bn   Environmental Impact Study (EIS) 50,000 Gold oz/y ounces per year
Proyecto Polimetálico Santander Copper Other 2016 Construction 144,000 Copper t/y tons per year
Pucamarca   US$70mn - US$100mn   Construction  
Pucará (En Operación) Gold Other 2012 Operation 70,000 Gold oz/y ounces per year
Pukaqaqa   US$100mn - US$500mn   Feasibility Study  
Quechua   US$500mn - US$1000mn   Environmental Impact Study (EIS)  
Quellaveco Copper US$3bn - US$5bn 2014 Feasibility Study 76,000 Copper t/y tons per year
Río Blanco Copper US$1bn - US$3bn 2014 Postponed 225,000 Copper t/y tons per year
San Luis Molybdenum US$70mn - US$100mn 2015 Environmental Impact Assessment 1,800 Molybdenum t/y tons per year
Santa Ana Silver US$70mn - US$100mn   Suspended 2 Silver Moz/y million ounces per year
Shahuindo Silver US$70mn - US$100mn 2013 Feasibility Study 4 Silver Moz/y million ounces per year
Tajo Norte Expansion   US$100mn - US$500mn   Construction  
Tantahuatay (En Operación)   US$0mn - US$70mn   Operation  
Tesoro Gold Gold Other 2011 Exploration 100,000 Gold oz/y ounces per year
Toro Blanco   Other   Exploration  
Toromocho   US$1bn - US$3bn   Construction  
Tía María Expansión Copper US$1bn - US$3bn 2013 Environmental Impact Assessment 1 Copper Mt/y million tons per year
Urumalqui Copper Other 2015 Exploration 120,000 Copper t/y tons per year
Yanque    US$500mn - US$1000mn   Pre-feasibility Study  
Zafranal   Other   Exploration