Engineering & Mining Journal

JUL 2014

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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The first half of 2014 is history and, despite all of the moaning from groups not actively involved in mining and mineral processing, the mining business has stabilized from the shakeout it experienced starting in 2013. The news department and the opening spread (See Leading Developments, p. 4-5) in particular showcase the cur- rent state of the mining business. E&MJ; leads off this month with the best news South Africa could have received, which came toward the end of June when strik- ing platinum miners agreed to return to work. Hopefully, they have reached a lasting agreement and can begin working toward restoring that segment. E&MJ; also provides a synopsis of a PwC report, titled Mine 2014: Realigning Expectations . The report summarizes what the mining industry experienced recently by analyzing the top 40 mining companies by market capitalization. In it, PwC said the global mining industry has endured one of the most difficult operating environments "in recent memory." That qualifier prevents compar- isons with the 1990s, 1980s and farther back for longtime E&MJ; readers. They make this evaluation based on the lack of mergers and acquisitions (M&A;) activ- ity, the number of ousted C level executives, and falling metal prices. A lack of M&A; activity should correlate to stability. Seeing a dozen or so CEOs lose their jobs is not a sign of a healthy industry, but the industry should also look at who kept their jobs and why. Yes, metal prices, particularly gold and silver, slid in 2013. So far this year, prices have stabilized for precious metals and non-fer- rous base metals. Iron ore would be the exception that proves the rule. Oversupply has had a big impact on prices and iron ore is the largest segment of the mining business on an investment basis. What will happen in the second half of the year? To gain some perspective, readers should take stock in what's happening around them. The uprising of mil- itant Muslim fanatics in the Middle East could impact the price of oil and gold. The situation with Ukraine and Russia could worsen, impacting some commodi- ties, such as coal, iron ore, potash and nickel. For the moment, Chinese growth has slowed. The questions surrounding Indonesia are starting to have an impact (See Newmont Suspends Operations at Batu Hijau, p. 20). The previously men- tioned oversupply of iron ore (and coal) is hurting the Australian mining sector. On the bright side, the U.S., Japan and Germany are seeing manufacturing lev- els grow again. Similarly, for the most part, the mining business is steady throughout Latin America, the U.S., Canada and the Nordic Region. Getting back to that PwC report, it also asks: Who will be bold enough to thrive during these times? E&MJ; routinely showcases bold leaders in the mining business. This month, that group would be Sibanye Gold (See Sibanye Sets its Sights on Burnstone, p. 50). Spun-off from Gold Fields, over the last year the company has established an enviable position as a low-cost gold producer. They acquired Burnstone, a troubled South African gold-mining operation, which has the potential to drag the company's earnings down. Sibanye believes they can make the mine work using a more selective mine plan. When asked why they would risk what they have worked so hard to establish, the answer was simply: How could we not? Steve Fiscor, E&MJ; Editor-in-Chief, sfiscor@mining-media.com www.mining-media.com ENGINEERING AND MINING JOURNAL Engineering & Mining Journal , Volume 215, Issue 7, (ISSN 0095-8948) is published monthly by Mining Media, Inc., 10 Sedgwick Drive, Englewood, Colorado 80113 (mining- media.com). Periodicals Postage paid at Englewood, CO, and additional mailing offices. Canada Post Publications Mail Agreement No. 40845540. Canada return address: Station A, PO Box 54, Windsor ON N9A 6J5, Email: circulation@mining-media.com. Current and back issues and additional resources, including subscription request forms and an editorial cal- endar, are available on the World Wide Web at www.e-mj.com. SUBSCRIPTION RATES: Free and controlled circulation to qualified subscribers. Non-qualified persons may subscribe at the following rates: USA and Canada, 1 year, $82.00, 2 year, $139.00. Outside the USA and Canada, 1 year, $134.00, 2 year, $249.00 sur- face mail (1 year, $191.00, 2 year, $352.00 airmail delivery). For subscriber services or to order single copies, write to E&MJ; , 8751 East Hampden, Suite B1, Denver, CO 80231 USA; call +1.303.283.0640 (USA) or visit www.mining-media.com. ARCHIVES AND MICROFORM: This magazine is available for research and retrieval of select- ed archived articles from leading electronic databases and online search services, including Factiva, LexisNexis, and Proquest. For microform availability, contact ProQuest at 800-521- 0600 or +1.734.761.4700, or search the Serials in Microform listings at www.proquest.com. POSTMASTER: Send address changes to E&MJ; , P.O. Box 1337, Skokie, IL 60076 USA. REPRINTS: Mining Media Inc, 8751 East Hampden, Suite B1, Denver, CO 80231 USA phone: +1.303.283.0640, fax: +1.303.283.0641, www.mining-media.com PHOTOCOPIES: Authorization to photocopy articles for internal corporate, personal, or instructional use may be obtained from the Copyright Clearance Center (CCC) at +1.978.750.8400. Obtain further information at copyright.com. EXECUTIVE OFFICE: Mining Media, Inc., 8751 East Hampden, Suite B1, Denver, CO 80231 USA phone: +1.303.283.0640, fax: +1.303.283.0641, www.mining-media.com COPYRIGHT 2014: Engineering & Mining Journal, incorporating World Mining Equipment, World Mining and Mining Equipment International. ALL RIGHTS RESERVED. The Mid-year Report 2 E&MJ; • JULY 2014 F R O M T H E E D I T O R Editor-In-Chief—Steve Fiscor, sfiscor@mining-media.com Managing Editor—Russ Carter, rcarter@mining-media.com European Editor—Simon Walker, simon.emj@btinternet.com Latin American Editor—Oscar Martinez, omartinez@mining-media.com South African Editor—Gavin du Venage, gavinduvenage@gmail.com Australian Editor—John Miller, john@asiaminer.com News Editor-Mining—Joseph Kirschke, jkirschke@mining-media.com Assistant Editor—Jennifer Jensen, jjensen@mining-media.com Graphic Designer—Tad Seabrook, tseabrook@mining-media.com Mining Media International—Editorial Office 11555 Central Parkway, Suite 401; Jacksonville, Florida 32224 USA Phone: +1.904.721.2925 / Fax: +1.904.721.2930 Mining Media International—Corporate Office 8751 East Hampden, Suite B1; Denver, Colorado 80231 USA Phone: +1.303.283.0640 / Fax: +1.303.283.0641 President/Publisher—Peter Johnson, pjohnson@mining-media.com VP-Sales and Marketing—John Bold, jbold@mining-media.com Midwest/Eastern U.S. & Canada, Sales—Victor Matteucci, vmatteucci@mining-media.com Western U.S. & Canada, Sales—Mary Lu Buse, mlbuse@mining-media.com Scandinavia, UK & European Sales—Colm Barry, colm.barry@telia.com Germany, Austria & Switzerland Sales—Gerd Strasmann, info@strasmann-media.de Australia & Asia Sales—Lanita Idrus, lanita@mining-media.com Japan Sales—Masao Ishiguro, ishiguro@irm.jp Indonesia Sales—Dimas Abdillah, dabdillah@mining-media.com Classified Advertising—Norm Rose, nrose@mining-media.com Production Manager—Dan Fitts, dfitts@mining-media.com Steve Fiscor/Editor-in-Chief EMJ_pg02_EMJ_pg02 7/2/14 4:56 PM Page 2

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