March 14, 2007

Mar. 14, 2007: Updated: Mining, Copper-Gold, DRC, Gobi

I moved a post from yesterday to go with this update.

Update - More re: Mining, Copper, Congo, Gobi, Myanmar, Africa, Gold, Banro, AMEC, Peter Lighthall -- who was mentioned below in "Mining Africa Congo DRC" as being with "global engineering consultants AMEC" -- The complete article is worth reading before the update article.

What intrigued me were phrases such as "the social and community aspects of mining" and the mention of the environment, environmental monitoring, communications in Africa, concern for natives or Africans, that kind of thing ... how shall I put it? As I read, a certain tone, "doing good", "responsible development", while mining and making money. It just draws some of us like a flies to honey.

If you search Banro or Banro, AMEC, there are some articles of interest. For example:

Nothing Like it on Planet Earth - Robert Friedland's Tour d' Tolgoi , By Resource Investor, 07 Mar 2005 at 09:03 AM GMT-05:00 -- or here


Note: this address was delivered at the BMO Nesbitt Burns 2005 Global Resources Conference, Tampa, Fla. Stream the audio recording of this presentation -- The audio may be no longer available.

I believe that, previously, I have mentioned Warren Buffet buying up coal or coal bearing areas.

Note: Myanmar, Gobi, China, copper, gold, diamonds, steel, coal ... and more.

[....] Ivanhoe Mines recently listed on the New York Stock Exchange and trades in Toronto. We want to remind you that we really are an international mining company. We produce copper in Myanmar, we're the lowest cost primary copper mine in the world according to Brook-Hunt.

We are also developing our Oyu Tolgoi copper-gold project which I am going to be telling you about in Mongolia, and we are still own a very large gold asset in Kazakhstan which we are going to be daylighting.

Our project in Myanmar [....]

We recently discovered what we believe is the richest copper discovery in the world.

[....] Now I'm going to tell you a little about Oyu Tolgoi in the south Gobi region. This is in fact at this conference, the only world class development project. As have been saying year in and year out, the real wealth in this industry is generated by developing a new resource; the real money for shareholders.

Mongolia is three times the size of France, twice the size of Texas, 2.6 million people, and our lands there in yellow are about the same size as Japan, or Italy, about 135,000 square kilometres, the largest land position in the mining industry. When we staked it for copper and we had copper on the brain, we never dreamed that we wound find metallurgical and steam coal. But we are now an energy company as well as a mining company. We own the coal rights, the nickel rights, the zinc rights, the copper and the gold rights throughout this highly mineralised region rich.

.... But we're not in China, we're in the independent country of Mongolia. So we're of China, but not in China. Mongolia is big, [....]

We still believe that we haven't found the guts of the Oyu Tolgoi ore body. There is a danger that subsequent drilling is vectoring in on extremely high grade gold zones. They are supported by this form of mineralization, and we've had geologists from the likes of Phelps Dodge and Rio Tinto hold our core in their hands and said, “never on Plant Earth has anything like this been found!”

[....Ladies] and gentlemen, what we are looking at here is a copper factory. But the interesting thing about it is, in order to build our copper factory, we need steel from China, and in order to build the steel, we need iron ore and in order to make the iron ore, we need metallurgical coal. And we just had a 71.5% increase in iron ore prices. Now this is a very boring commodity, iron, but in the last two years it’s up 100%. Iron has out-performed gold.

Virtually everything has out-performed gold. [....]

Thinking people want exposure to stuff the world needs like cooper, and of course, it's often said, real men mine copper, not gold. Gold is you know, it’s okay, it’s okay, it's okay as a byproduct, but what you really want is this commodity, copper, which has far out-performed gold.

And the great gold mines - like Wheaton River has exposure to buy at Alumbrera or Newmont was rescued by its Btu Hijau holding; they’re really just copper mines in disguise. So I still would want to tell you that I would much rather own a copper mine than a gold mine. [....]

End of Update

Mining Africa Congo DRC

Africa's DRC back on map for miners -- 'Companies who are there are going to reap rewards' , Drew Hasselback, Financial Post, March 05, 2007

The Democratic Republic of Congo was once one of the world's largest copper producers. .... mining was responsible for one-quarter of the African nation's gross domestic product.

A brutal civil war in the 1990s ... Canadian miners are helping lead the way.

[....] "I think the conditions are difficult," says Jamie Kneen, a spokesman for Ottawa-based industry critic Mining Watch. "I think there needs to be much better evidence of the way things are being done. When you look at the Gecamines arrangements, they don't look terribly advantageous to the Congolese government or the Congolese people."

[....] A Parliamentary committee last summer held a series of round tables that among other things tried to shed some light on the practices of Canadian-based mining companies operating in developing countries. Such attention is gold for industry critics who are keen to use a surge of public attention to advance their agendas.

[....] "Probably the thing we're growing fastest right now is working with clients on talking about the social and community aspects of mining," says Peter Lighthall, a Vancouver-based vice-president with global engineering consultants AMEC. "That means helping develop relations with First Nations or indigenous communities, either in Canada or overseas. I think that's something that has been very good business for us, but also a great necessity for our clients."

[....] Banro's Mr. Cowley believes the return of a mining industry will spark development of other aspects of the DRC's economy. The country needs private investment to make that happen, he says.

"It's on the back of the private sector that the country will develop. It's gone through torrid times and it's really just come out of it no w," Mr. Cowley said. "Besides the minerals, I know some of the South African communications and mobile phone companies think there's extraordinary and huge potential."

Search: Kinross Gold Corp. , former Kinross executive, Art Ditto , Katanga Mining Ltd., which acquired that copper- cobalt project , free elections , Vancouver-based Tenke Mining Corp., Paul Conibear, president of Tenke. , Arizona-based Phelps Dodge Corp. , Lundins' Congolese project , Toronto-based Banro , 3.7 million ounces of gold at its four properties in the DRC.

Why did I expect the next words to be "sustainable development", along with the "private investment"?

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