Paladin Energy suspends production at Malawi uranium mine |
- Paladin Energy suspends production at Malawi uranium mine
- VIDEO: Drummond: Economic lifeline or epic polluter?
- BHP slashes more Australian coal jobs
- Northern Dynasty's new CEO is a former interior dep't mandarin
- World's biggest steelmaker 'cautiously optimistic' about 2014
- Platinum sector strike in South Africa leads to first death
| Paladin Energy suspends production at Malawi uranium mine Posted: 07 Feb 2014 03:52 PM PST The low price of uranium is more than some can handle. Australia's Paladin Energy (TSE:PDN) announced late Friday afternoon that it would suspend operations at its Kayelekera mine in Malawi. "The suspension will involve placing the Operation on care and maintenance until the price of uranium recovers," the company wrote in a news release. "This decision will preserve the remaining ore body until a sustained price recovery occurs and Paladin determines that production may be resumed on a profitable basis." Paladin has notified the Malawi government – a 15% share holder – of its decision. Two factors influenced the decision, Paladin explained. "The continuing depressed price for uranium oxide, which has been severely negatively impacted since March 2011 following the nuclear reactor damage caused by the Fukushima earthquake and tsunami; and the unsustainable cash demand to maintain the loss:making Operation at KM." CEO John Borshoff said it would be in the best long-term interest of all stakeholders and that Paladin would only resume operations once it becomes profitable to do so. Following the Fukushima diaster, uranium prices tanked, dropping from a spot price of around $72 per pound to $35 at present. Kayelekera has not been breaking even despite performing "exceptionally well technically," Borshoff said. The move will render many jobs redundant and the retrenchment process has begun. "Retrenched national employees will receive generous redundancy packages that exceed Malawi's minimum legal requirements," Paladin wrote. The financial impact on the company will include an impairment charge of approximately $32 million. Though the financial impact on Paladin's balance sheet will be immaterial because the value of the mine has already been written down to zero. The company took a $180 million write down on the project in August last year. The company also noted that its flagship Langer Heinrich mine in Namibia – which it tired but failed to sell last year – would not be affected because it has a "significantly" lower cost profile than Kayelekera. Paladin was<ahref="http://redirect.viglink.com?key=11fe087258b6fc0532a5ccfc924805c0&u=http%3A%2F%2Fwww.mining.com%2Fchinas-leading-nuclear-utility-buys-25-stake-in-paladins-namibia-uranium-mine-77912%2F" target="_blank"> eventually able to sellpart of Langer Heinrich to a subsidiary of China National Nuclear Corporation (CNNC); the Chinese company bought a 25% stake in January. Paladin's projects are low grade and high cost open pit mines which makes them more vulnerable to weak uranium prices.  |
| VIDEO: Drummond: Economic lifeline or epic polluter? Posted: 07 Feb 2014 03:17 PM PST Alabama-based coal miner Drummond has, over the past two decades, become Colombia's second-biggest coal producer. But according to the Colombian government, it's also become one of the country's biggest polluters. Last month the government forced Drummond to stop loading coal because the company was not in compliance with new loading system rules. In an attempt to cut pollution from coal loading activities, the country passed a law in 2007 which states that by January 1 2014, companies must load coal onto ships using a direct-to-vessel system, rather than cranes. Drummond, having missed the deadline, declared a 'force majeure,' though it's apparently still shipping some of its coal through Puerto Nuevo – a port operated by a subsidiary of Glencore Xstrata. Drummond plans on completing its new conveyor belt loading system by March. The coal company doesn't have a clean record in Colombia. In 2013, Drummond spilled hundreds of tonnes of coal into the Caribbean sea as a barge was sinking. Six employees are now being charged and the company has been ordered to pay $3.5 million, according to the BBC. The Wall Street Journal has released this video report on Drummond's public relations fiasco in Colombia. Image featured on homepage: Screenshot from Drummond Co. YouTube video |
| BHP slashes more Australian coal jobs Posted: 07 Feb 2014 12:05 PM PST Slumping coal prices and weak Asian demand are forcing one the world's biggest resource companies to lay off more than 200 employees at an Australian coal mine. BHP Billiton (ASX:BHP) said on Friday that it would cut 230 jobs at its Saraji mine in Queensland, which it owns with Japanese trading house Mitsubishi Corp, Reuters reported. Saraji produces up to 8 million tonnes of coking coal per year. The company said the move isn't an indication that the mine will close, the Sydney Morning Herald reported. BHP has already closed two other mines in Australia - Norwich Park and the Gregory open-cut mine in 2012. But it also opened a new mine, the $1.4 billion Daunia project, in 2013. Daunia is expected to produce 4 million tonnes of metallurgical coal per year. Australia has been hit with a slew of coal mine staff reductions and closures over the past few years, and it's clearly not over. Just last week America's Peabody Energy warned that some Australian mines were unsustainable at current prices. "While there is a degree of optimism in the metallurgical market that 2014 could be the year of price recovery, it should not be forgotten that market fundamentals, if anything, continue to get worse," analysts at Australian investment bank Macquarie wrote in a note to clients, The Australian reported last week. The Australian economy is highly dependent on the black rock: coal is Australia's second-biggest export commodity and the industry is one of the country's largest employers. A recent study from Oxford University – commissioned by HSBC's Climate Change Centre of Excellence – speculated that Australia's coal investments are at risk of becoming 'stranded assets' as China tries to curb its coal consumption. Energy giant BP also predicts slowing demand for coal. |
| Northern Dynasty's new CEO is a former interior dep't mandarin Posted: 07 Feb 2014 11:29 AM PST Northern Dynasty (TSE:NDM) has brought on a political savvy operator to get their Pebble Mine project approved. Thomas Collier, who used to work as chief of staff at the US Department of the Interior during the Clinton era, is the miner's new CEO and has replaced outgoing John Shively. The company announced the change on Tuesday. Collier said his priorities are finding a partner for Northern Dynasty and securing federal and state permits for the mine to proceed. In an interview with E&E, Collier admitted he does not have much mining experience. After leaving the US Department of Interior he worked at the law firm of Steptoe & Johnson in Washington DC, which has an arm focussed on mining and permitting. Last month the Pebble Mine project suffered a setback when the US Environmental Protection Agency (EPA) released its final assessment on the proposed mine finding that "large-scale mining in the Bristol Bay watershed poses risks to salmon and Alaska Native cultures." Since making the announcement, Northern Dynasty has dropped about 3.36% this week to $1.44. Junior gold miners moved sideways this week. The GDX gained 0.97% over the past five days. Northern Dynasty news release below.
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| World's biggest steelmaker 'cautiously optimistic' about 2014 Posted: 07 Feb 2014 10:50 AM PST
The loss is largely the result of impairment charges and restructuring costs. Operating profit – earnings before interest, tax, depreciation and amortisation (EBITDA) – of $6.9 billion were slightly lower than the year before and net debt decreased by more than 25%. The company ended the year with its lowest net debt level since its creation in 2006. Lower steel prices dragged sales down by 5.7% to $79.4 billion. Outlook ArcelorMittal says it's "cautiously optimistic" for 2014 and is forecasting EBITDA earnings of approximately $8 billion. But the steelmaker cautions that this performance hinges on several key conditions. Most importantly, steel shipments need to increase by 3% and marketable iron ore shipments must rise by 15%. Canadian mines, having reached full ramp-up in December, should help boost iron ore volumes. Based on the current economic outlook, especially in regards to European manufacturing activity, ArcelorMittal excepts global steel consumption to grow by as much as 4% this year. The outlook is also based on an average iron ore price in line with the market consensus (approximately $120 per tonne for 62% Fe CFR China) and a moderate improvement in steel margins. "While there remain risks to the global demand picture, ArcelorMittal expects the fundamentals, particularly in our key markets in the developed world, to be more supportive in 2014 than in 2013," the company wrote in its 2013 report. The company is targeting net debt of $15 billion in the medium term and will not increase dividend payments until that point. In a separate announcement, the steelmaker announced a yearly gross dividend of 20 cents per share, to be paid out in July 2014. The Luxembourg-based company's share price spiked early Friday morning on the New York exchange but by mid-afternoon was trading down to Thursday's range of around $17 per share. |
| Platinum sector strike in South Africa leads to first death Posted: 07 Feb 2014 10:24 AM PST A man has been killed outside a South African mine owned by Anglo American Platinum (LON:AAL), the world's No. 1 platinum producer, after police fired rubber bullets and stun grenades to disperse a crowd of protesters. A police spokesman told Bloomberg that officers went to the Amplats mine in the northern South Africa province of Limpopo as soon as they saw smoke coming from the area. Protesters allegedly began throwing rocks at police, who responded shooting rubber bullets and stun grenades at the crowd, reports AFP. An investigation is already under way to determine whether police officers or the mine's private security firm were responsible for the miner's death. In the last two weeks, South Africa's platinum sector has been affected by one of the worst strikes since August 2012, forcing miners to halt most operations. Since the 2012 strikes, remembered by the death of 34 miners shot by police at Lonmin's (LON:LMI) Marikana mine, labour disputes have remained fierce and police have responded aggressively. South Africa, the world's largest platinum producer, accounts for nearly 70% of global output of the metal. |
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