December Newsletter – 16.12.19



  • Two dozen people dead after landslide at DRC gold mine
  • Crisis is rocking Latin America. Peru is an island of uneasy calm
  • Peru creates new conservation area to protect glaciers from extractive operations
  • China graft watchdog probes CNMC executive for corruption
  • Miner BHP Group’s chief transformation officer to depart
  • Brazil Vale dam near site of January disaster has ‘cracks’ -TV station
  • Indian gold sold at discount as wedding demand disappoints
  • Australia taking baby steps towards nuclear energy
  • Rwanda to use Chinese experts for minerals exploration



Two dozen people dead after landslide at DRC gold mine

A report by the Agence France-Presse citing local authorities states that 24 people were killed by a landslide at the Ndiyo gold mine, located 40 kilometres from the town of Watsa in the northeastern Ituri province of the Democratic Republic of the Congo.

According to the AFP, the provincial minister of mining, Dieudonne Apasa, said that the incident took place on Saturday afternoon when the torrential rains that have been pouring over the area for weeks softened the terrain so much that it started to crumble.

Apasa said that two miners were rescued alive. Normally, these panners sell gold nuggets to local traders, who resell them to large foreign companies.

The news agency’s report states that a similar disaster killed 31 people just two months ago at an artisanal mine in Maniema, in the central-east region, while storm-caused landslides over the capital Kinshasa were blamed for at least 41 deaths at the end of November.

Crisis is rocking Latin America. Peru is an island of uneasy calm

Bloomberg News

Roadblocks of mud, sticks and steel wire bar the entrance to villages lining the northern side of the Rio Tambo, a sign of revolt in the fertile valley cultivated since Inca times.

For almost a decade, the farmers of this green strip wedged between the Andes mountains and the Pacific Ocean have resisted the construction of a copper mine they say will pollute the watercourse and destroy their livelihoods. Now they feel betrayed by Peru’s president after his government gave final approval to Southern Copper Corp.’s Tia Maria project.

“We can’t allow it,” said councilwoman Zulema Quispe, who was navigating the barricades on the back of a motorcycle. Fields tilled for centuries will be tainted for future generations by the mine to be located just half a mile away, she said. “The president is giving priority to a multinational company and we won’t accept it.”

To the outside, Peru looks like an island of calm in the sea of unrest sweeping South America. But the anger of farmers in the southern region of Arequipa shows the country isn’t immune to the kind of malaise beyond its borders—and that President Martin Vizcarra holds the key.

Vizcarra is engaged in a high-stakes experiment to harness public outrage over rampant corruption and blow up the establishment, while trying to keep Peru’s mining-dependent economy on track. His signature decision to dismiss the opposition-controlled Congress this fall has won him allies and emboldened his detractors at a time when protests have rocked neighboring Bolivia and Chile to the east and south, and Ecuador and Colombia in the north.

Vizcarra, whose government just lost a third cabinet minister in two months, acknowledges the threat of turbulence in Peru, but says dissolving parliament has helped ease “enormous” political tensions. Elections for its replacement on Jan. 26 will offer a first indication whether he’s correct.

“There’s a dead calm after the dissolution of Congress,” said Mercedes Araoz, who resigned as vice president to protest Vizcarra’s decision. “But people are going to start presenting their demands to a government that has no clear agenda.” Without better relations between mining companies, communities and the government, social conflict will probably increase, she said.

Peru creates new conservation area to protect glaciers from extractive operations

Peru’s National Service of Protected Natural Areas approved this week the creation of the Ausangate Regional Conservation Area (ACR Ausangate in Spanish), whose objective is to protect glaciers and Andean grasslands, as well as emblematic animals such as the condor and the vicuña, from damaging activities.

Spanning three districts and two provinces, the 66,000-hectare conservation area incorporates the Quelccaya glacier, which is considered the second largest tropical glacier in the world. It also includes the Vilcanota River, which provides 50% of Cusco’s drinking water and most of the hydroelectricity for Cusco itself and the adjacent Puno and Apurímac regions.

Mining, whether large-scale or small-scale, is not explicitly banned within the ACR Ausangate but, according to Cusco’s manager for natural resources, María Isabel Cazorla, mining projects are unlikely to get approved in the protected area.

Cazorla told local media that there are already a dozen concessions and mining permit requests to extract lithium close to ACR Ausangate.

However, according to Jean Paul Benavente, Cusco’s governor, most of the concessions and mining permit requests approved between 2018 and 2019 should be revoked to fulfil the mandate of the protected area. Benavente said he will personally ask the Geological, Mining and Metallurgy Institute to go ahead with the reversals.

China graft watchdog probes CNMC executive for corruption

BEIJING (Reuters) – The deputy general manager of China Nonferrous Metal Mining Group (CNMC) has been placed under investigation on suspicion of breaching discipline after only three months in the job, the ruling Communist Party’s top graft watchdog said on Wednesday.

Yang Qi, who on Dec. 4 resigned as chairman of CNMC listed unit China Nonferrous Metal Industry’s Foreign Engineering and Construction Co Ltd for personal reasons merely a week after taking up the post, was named CNMC deputy general manager on Sept. 9.

According to a brief statement by the Central Commission for Discipline Inspection (CCDI), Yang is suspected of serious breaches of discipline, a common euphemism for corruption.

Yang, who is in his early 50s, previously served as deputy general manager of China National Gold Group for more than six years and also has experience in the aluminum sector, a brief resume provided by the CCDI showed.

Chinese President Xi Jinping has waged a war against graft since coming to power in 2012, locking up dozens of senior officials and executives.

Reuters was unable to reach Yang or a representative for comment.

Miner BHP Group’s chief transformation officer to depart

MELBOURNE – BHP Group said on Friday that its Chief Transformation Officer Jonathan Price would be leaving next year, as the miner shifts responsibility for the strategy away from the executive leadership team.
Price’s departure is the second leadership exit announced in a week, after BHP said on Monday Chief Technology Officer Diane Jurgens would depart the company early next year.

The shake-up comes as incoming CEO Mike Henry prepares to take the reins of the world’s biggest miner when Andrew Mackenzie officially steps down at the end of the year.
Over the past 18 months, BHP’s transformation strategy has allowed it to improve safety and reliability, lower costs, and boost returns, the company said in a statement on Friday.

BHP had highlighted the strategy as recently as October, when Price gave a speech at a Melbourne mining conference about the ways the company was “transforming the core” of its business.
A successful execution of that strategy was expected by investors and analysts to position Price as a strong contender for the top job after Henry.
“Transformation” is now the responsibility of individual asset and function leaders, the company said.
Price will oversee the transition of the transformation programs over the first half of 2020, after which he will move back to the United Kingdom with his family, BHP said.

Brazil Vale dam near site of January disaster has ‘cracks’ -TV station

State prosecutors in Brazil have identified cracks in a tailings dam owned by iron ore mining company Vale SA and have asked the firm to hire an independent auditor to look in to the matter, a television station reported on Friday night.

The report on Brazil’s TV program “Jornal da Band” said it obtained the documents regarding the B-5 dam from prosecutors in the state of Minas Gerais through a freedom of information request. The dam is located near the town of Brumadinho, where a Vale tailings dam burst in January, killing hundreds. As a result, the mining-dependent region is on high alert for any possible deficiencies in the hundreds of tailings dams that spot the area.


During an October meeting with prosecutors, Vale declined to commit to an independent audit, the station reported.

The station quoted Vale as saying the cracks “have not been presenting any changes and do not compromise the structure.” The company also said three separate firms are already attending to the security of the B-5 dam.

In comments to Jornal da Band, the company added that the cracks were superficial, presented no risk to the dam’s integrity and had been self-reported to the nation’s mining regulator.

“Currently, (the dam’s) security level is appropriate as attested to by the most recent regular inspection, carried out by an independent company in August 2019, which confirmed the stability of the structure,” Vale said in an email to Reuters.

The dam, located at Vale’s Mutuca mine, is responsible for the containment of about 11 million cubic meters of tailings waste, similar to the amount of waste that was released at Brumadinho, Jornal da Band said. It said 93 people lived in an immediate danger zone downstream of the B-5 dam.



Indian​ gold sold at discount as wedding demand disappoints

Gold dealers in India offered a discount this week due to plentiful supplies and slack demand during the wedding season, with other regions in Asia expecting improvement in buying ahead of the Christmas and Chinese New Year festivities.

Dealers in India offered a discount of up to $2 an ounce on official domestic prices, compared to a premium of $1 last week. Domestic prices include 12.5% import tax and 3% sales tax.


“Demand is modest from jewellers, but there is ample supply from refiners that are aggressively selling in the market,” said Harshad Ajmera, a gold wholesaler in Kolkata.

India’s gold imports in November jumped 78% from a month earlier to the highest level in five months as jewellers in the world’s second-biggest market for the metal restocked after a fall in prices.

“Assuming good demand during wedding season, banks and refiners have raised imports in the last few weeks,” said a Mumbai-based dealer with a private bullion importing bank.

Weddings are one of the biggest drivers of gold purchases in India as bullion in the form of jewellery is a popular gift.

Demand is expected to recover in top consumer China, where traders charged premiums of $4-$6 an ounce over benchmark prices from $4-$5.5 last week.

“Demand has dried up compared to last week, but is still higher than late last month and earlier this month,” said Samson Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS.

The Chinese new year beginning on Jan. 25 is expected to lift demand starting the end of December, he added.

The Chinese festival is also expected to improve demand in Singapore, with many retailers offering promotions for bullion, Silver Bullion sales manager Vincent Tie said.

Sellers in Singapore charged premiums of $0.60-$0.80 an ounce over the benchmark, versus last week’s $0.60-$0.70.

“If (benchmark) prices come down a little bit, we will see some buying on the wholesale side,” said Brian Lan, managing director at Singapore dealer GoldSilver, adding that lower prices would also support demand during Christmas.

International benchmark spot gold prices were on track for their biggest weekly gain since late-October.

Premiums in Hong Kong rose to $0.50-$0.60 an ounce from $0.30-$0.55 in the prior week, amid ongoing unrest in the Chinese-ruled city.

“The shops are still opening, but people visit less,” said Dick Poon, general manager, Heraeus Metals Hong Kong Ltd.

In Japan, gold was sold at a premium of $0.50, the same as last week.


Australia taking baby steps towards nuclear energy

Australia’s Parliament presented this week a report that outlines a series of measures to take into consideration if the country wants to move forward with the development of nuclear energy.

The report, which arose from a legislative committee’s inquiry into the matter, states that it is important for the island nation to consider the prospect of nuclear technology as part of its future energy mix and that to do so, relevant institutions would have to undertake a body of work to progress the understanding of nuclear technology in the Australian context.


Such an understanding -the report states- should lead authorities to consider lifting the current moratorium on nuclear energy partially -that is, for new and emerging nuclear technologies only, and conditionally-, subject to the results of a technology assessment and a commitment to community consent for approving nuclear facilities.

According to the document, most of this work should be undertaken by the Australian Nuclear Science and Technology Organisation ANSTO, whose experts should also advise the federal government on the feasibility and suitability of installing Generation III+ and Generation IV reactors, including small modular reactors, as well as on the formulation of a framework to monitor the status of new and emerging nuclear technologies.

“The report identifies a clear pathway for Australia to properly consider nuclear energy by addressing knowledge gaps in Australia about this important energy source. Importantly, it acknowledges the critical role for community engagement on what is a contentious policy and political issue,” said Tania Constable, CEO of the Minerals Council of Australia, in a media statement.

In Constable’s view, her country should take advantage of nuclear energy by moving into small modular reactors as a potential replacement for retiring coal baseload plants.

“Not only are they capable of complementing intermittent power sources, they can safely meet large-scale industrial demand for affordable and reliable power,” the executive said. “More broadly, the current ban means Australia -with the world’s largest deposits of uranium- is missing out on a potential industry which could employ tens of thousands of Australians.”

Despite the controversy around nuclear energy, earlier this year, the federal government gave the go-ahead to Cameco’s (TSX:CCO, NYSE:CCJ) vast Yeelirrie uranium project, considered one of the country’s biggest undeveloped uranium deposits in the midwest region of Western Australia. The Canadian miner, however, has said it is in no rush to develop it.

Rwanda to use Chinese experts for minerals exploration

China has dispatched mining experts to Rwanda to implement a three-year cooperative project to carry out geochemical survey to determine the full mineral potential across the country by using satellite remote sensing technology.

The project dubbed “Geological Survey and Mineral Assessment in Rwanda” is a result of an agreement that was signed by Rwanda and China during the visit of Chinese President Xi Jinping to Rwanda two years ago according to Francis Gatare, the CEO of Rwanda Mines, Petroleum and Gas Board.

“They will be picking samples in valleys, river streams and hills to determine what mineral exist across the country. We will measure 56 elements of different minerals. The Chinese have got satellite remote sensing technology that is going to be employed in carrying out an understanding of the geological map of Rwanda,” he said.

He noted that the technology will be used to complement the existing geological map of Rwanda and other information to understand the mineral potential in the Country, he said