Silver ETF holdings soar as retail interest returns

The world's largest silver-backed exchange-traded fund iShares Silver Trust posted its biggest one-day jump in holdings since January as a rebound in silver prices triggered resurgent buying from longer-term retail investors, analysts said on Thursday.

The tonnage of silver bullion bars held by the U.S. silver ETF increased 144 tonnes, or 1.4 percent, on Wednesday to 10,428 tonnes, a two-month high.

The move stands in sharp contrast to a month ago when the silver ETF's tonnage tumbled to a 2013 low of 9,882 tonnes, sparking fears that mom-and-pop investors were beginning to lose faith in the metal.

Silver has long been a favorite for smaller retail investors and speculators who want to gain exposure to gold at a fraction of the price. They also tend to buy and hold.

After falling toward technical support at $18 twice and holding there each time, the price of silver has gained 11 percent in the past 30 days. Year to date, the gray metal is still down 33 percent, underperforming gold which is down 21 percent.

"Silver investors had been concerned about another leg down. Since we've had a few weeks of relative price stability, there is more confidence for them in making the switch back into the ETFs," said Erica Rannestad, analyst at commodities research and consultant CPM Group.

However, there are no signs of abatement in the outflows of gold ETF holdings.

Gold ETFs have lost about a quarter of their holdings as funds and institutional investors - major shareholders in gold ETFs - dumped the traditional inflation hedge as the U.S. Federal Reserve laid out a plan to scale back its bond-buyback stimulus.

Despite a rebound in gold prices in the past 30 days, total tonnage of gold in ETFs continued to fall and remained at its lowest level since February 2011.

On Thursday, spot silver was up 0.2 percent at $20.18 an ounce, while gold gained 0.6 percent to $1,328 on the back of the U.S. dollar's weakness.

Kenya: New Mining Law to Save State Billions

LUNGALUNGA MP Khatib Mwashetani has said the government may have lost billions of shillings to mining companies because of the 1940 mining law.

Mwashetani said the current mining bill will ensure Kwale residents, and the county and national governments benefit from minerals. "The government may have lost a lot of money to mining companies because of loopholes in the colonial mining bill but the current one is the best," he said.

Speaking in Kwale, Mwashetani said the 1940 law did not give the state the authority to find out the amount of minerals being exported from the country.

Read more: Africa: Nuclear Future Requires Urgent Clarity

Observers hoping to gain insights into South Africa's nuclear energy plans have had their hopes dashed. Two International Atomic Energy Agency (IAEA) conferences have recently taken place in quick succession. The first, an International Ministerial Conference on Nuclear Power in the 21st Century held in St Petersburg Russia from 27 to 29 June 2013, saw the last minute withdrawal of both the Energy Minister and the CEO of Eskom.

This seemed to indicate that the tussle between the Department of Energy (DoE) and the National Planning Commission (NPC) on the future of nuclear energy in South Africa is yet to be resolved. This policy disagreement made headlines in April 2013, on the back of a report drafted by the Energy Research Centre for the National Planning Commission. The report argued for a revision of the country's Integrated Resources Plan of 2010 (IRP2010). It specifically questioned the financial viability of nuclear expansion and argued that future energy demand should rather be met with imported hydropower, wind and natural gas. Director General in the Department of Energy Nelisiwe Magubane responded by telling the parliamentary oversight committee that the country's nuclear energy plans were "non-negotiable".

The sudden withdrawal of then Energy Minister, Dipuo Peters, from the St. Petersburg conference made more sense in the light of the subsequent cabinet reshuffle. Barely a week after the conference, she and the Minister of Transport swopped portfolios. Even before the new Minister of Energy, Ben Martins, was made Minister of Transport, he, as Deputy Minister of Public Enterprises announced in May 2012, that the fate of the Pebble Bed Modular Reactor (PBMR) would be decided during 2013. Government indicated that, though they had pulled support for the PBMR, they remained committed to protecting and preserving intellectual property and assets related to this technology. To that end, the Departments of Public Enterprises and Science and Technology pursued intellectual property and skills audits of the PBMR.

The conference in Russia was followed soon after by the International Conference on Nuclear Security of the IAEA, which took place from 1 to 5 July 2013 in Vienna, Austria. This time South Africa had high-level representation from International Relations and Cooperation Minister Maite Nkoana-Mashabane. The Minister's statement on the occasion focused not only on the country's continued commitment to the military security aspects of nuclear use, but also referred to South Africa's need for energy security and diversification away from coal. She alluded to the policy of beneficiation of mineral resources, with specific reference to uranium - one of the minerals the country has declared as strategic.

Minister Mashabane's remarks seem to imply continued commitment to the nuclear energy expansion programme planned in the IRP2010. However, the country's non-committal stance in Russia would suggest that nothing is yet final. Those who have indicated their interest in investing in nuclear equipment and expertise in South Africa - including Russia's state energy group Rosatom and the French Areva - will be watching upcoming developments in South Africa with interest. In addition to safety and financial viability, concern has also been raised around the opacity of the government's nuclear plans. All of these issues are discussed in a recent Occasional Paper titled, "South Africa's Nuclear Future", published by the South African Institute of International Affairs (SAIIA). The paper argues that unless South Africa's nuclear planners meet the concerns mentioned above head-on, their programmes will fail to inspire confidence, both at home and abroad.

Upcoming opportunities for public engagement include an extensive consultation process to be conducted after the submission to Cabinet of a long-awaited Integrated Energy Plan. On the international stage, the 57th Annual General Session of the IAEA General Conference - the highest policymaking body of the IAEA and composed of all member states of the agency - will take place from 16 to 20 September 2013 in Vienna, Austria. All South African stakeholders involved in the nuclear debate must seize these and other opportunities to seek greater clarity on the country's nuclear future. After all, this is an important question connected to not just power generation but also the all-important question of national economic competitiveness.

Mari-Lise du Preez is Programme Manager of the Governance of Africa's Resources Programme at the South African Institute of International Affairs (SAIIA).

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S. Africa gold mining unions reject wage offer

South Africa's labor unions representing gold mineworkers on Wednesday rejected a wage offer from seven companies.

The seven companies proposing a wage hike from 4 percent to 5 percent are represented by the Chamber of Mines of South Africa (CMSA) in the negotiations. The wage dispute was declared by the National Union of Mineworkers (NUM), Solidarity and the United Association of South Africa (UASA), while the Association of Mineworkers and Construction Union (AMCU) asked for extra information before making a decision.

NUM General Secretary Frans Baleni said the dispute comes after the gold companies insulted mineworkers by offering a 1 percent increase.

"The effect of this offer would be to raise the guaranteed pay of entry-level underground employees for major gold-producing companies to at least 980 U.S dollars per month," the CMSA said in a statement.

Since last year, the South African gold industry has been hit by labor disputes and strikes over low wages and poor working conditions.

Baleni said the dispute will be referred to the Commission for Conciliation, Mediation and Arbitration (CCMA) for facilitation and is one step away from a legal, protected strike action.

"The gold producers failed to entertain all other worker demands whilst at the same time being unable to move significantly on basic wages. As far as we are concerned, negotiations have not yet begun," Baleni said

"It remains our intention to find an amicable solution but the gold producers are just not prepared, they are demanding a strike, said Baleni.

Meanwhile, members of the NUM who have been protesting against the c chamber's pittance offer have vowed to bring the chamber "down on its knees."

"Should the Chamber be unable to meet the union demands, it would be the beginning of the end for South Africa's gold mining as we know it," NUM spokesman Lesiba Seshoka said. "The NUM, Solidarity and UASA have declared a dispute and referred the matter to the CCMA for mediation. This will give the parties an opportunity to engage with the assistance of a mediator for about a 30-day period," the chamber said in a statement

Solidarity General Secretary Gideon du Plessis said the small increase in the producers' offer meant "facilitating should take place sooner rather than later to give negotiations a boost."

"Solidarity still hopes that an agreement within the best interests of the gold sector could be reached and has urged the executives of the employers in the gold sector to put their negotiators in a better bargaining position so that an agreement could be reached," he said.

It is feared that if relevant parties take long to resolve the mater the strike might develop into a tense situation as miners are likely to imitate the gallantry stance taken by their colleagues at Lonmin Marikana Platinum near Johannesburg.

Strikes at Marikana turned violent last year, claiming 44 lives.

Lawsuits against mining company alleging shootings, gang rapes can go ahead in Canada

Three lawsuits against a Canadian mining company over alleged shootings and gang rapes at a Guatemalan project will be allowed to proceed in Canada following a ruling that makes it possible for firms to face liability at home for incidents that occur overseas.

Lawyers for the plaintiffs, 13 Mayan Guatemalans, said the decision is a “wake-up call” for Canadian companies about their responsibilities at foreign mining projects.

“This step in the case uses existing legal rules that have not been applied in this way before,” lawyer Murray Klippenstein said in an interview Tuesday.

The suits allege that security personnel, along with members of the police and military, attacked and raped 11 women in 2007 who were forcibly removed from their village in relation to the Fenix project.

Two related lawsuits seek to hold HudBay Minerals Inc. and a subsidiary responsible for the subsequent killing of community leader Adolfo Ich as a result of a land dispute and the shooting and paralysis of local resident German Chub.

HudBay, which didn’t own the mining operations when most of the alleged incidents occurred, has said the accusations contradict available information and that it would defend itself “vigorously against them.”

None of the allegations have been proven in court.

The Toronto-based company bought the Fenix project nickel mine in Guatemala in a corporate takeover of Skye Resources in 2008, but sold it in 2011 to Russian firm Solway Investment Group to focus on its Canadian and Peruvian projects.

HudBay is denying any responsibility and relying on the legal defence that a parent company is not responsible for the actions of its subsidiary.

In her decision, Superior Court of Ontario Justice Carole Brown ruled Monday that the three lawsuits against HudBay shouldn’t be dismissed and should be allowed to proceed to trial because necessary standards were met.

Klippenstein said the ruling was a good reflection on the Canadian justice system, and gave hope to plaintiffs who’d felt victimized in Guatemala’s “broken” system.

Officials at HudBay were not immediately available for comment, but the company has said on its website that it “does not believe the allegations that sexual assaults occurred during (the) evictions is credible and no complaints of this nature have been filed with the authorities in Guatemala.”

It also says that “according to the prosecutor and police reports . . . the evictions were carried out peacefully and without any injuries,” and denies that any of its personnel was involved in Ich’s death in 2009.

“HudBay takes its role as a corporate citizen seriously and respects and protects human rights wherever HudBay operates,” the site says.

More headaches for Barrick: Chile’s indigenous group appeals Pascua-Lama ruling

As anticipated last week, the Chilean indigenous group that has led the legal battle against Barrick Gold’s (TSX:ABX) (NYSE:ABX)$8.5 billion Pascua Lama project has asked the country’s Supreme Court to revoke the environmental license for the mine.

The Diaguita community, which claims Pascua Lama threatens its water supply and it is polluting glaciers, submitted Monday a formal claim asking authorities to force the world's largest gold mining company to prepare a new environmental impact study.

The scenario, according to Juan Carlos Guajardo, head of mining think tank CESCO, is “the most serious” of all the possible outcomes for Barrick so far.

"The fact that the Diaguitas won their case unanimously in the Copiapo court sets a complicated precedent (for the project) should the case land in the Supreme Court," he told Reuters on Friday.

In an interview with local newspaper La Tercera (in Spanish) the lawyer representing the Diaguitas, Lorenzo Soto, said his 3,000 plaintiffs want Barrick to apply for a new permit, which takes into account their anthropological and cultural claims to the watershed below the mine.

Pascua Lama, which would produce about 800,000 to 850,000 ounces of gold a year in the first full five years of its 25 year life, was scheduled to start production in the second half of 2014. The mine is set to become one of the top gold and silver mines in Chile, the world's top copper producer.

Malawi hires international experts as it negotiates niobium mine deal

The Malawi government has hired international legal experts to assist it in negotiating a ‘win-win deal’ with Australian company Globe Metals & Mining, which has applied for a licence to mine niobium at Kanyika, in the north of the country.

Mines Minister John Bande says the deal with Globe will form the basis for future deals with mining companies.

Globe plans to invest $300-million in the Kanyika project, which will be Malawi’s second major mining investment, after the Kayelekera uranium mine, which was commissioned in 2009 and is owned by another Australian firm, Paladin Energy.

Globe has already presented a draft development agreement to the Malawi government, which, Bande says, is being scrutinised before negotiations start.

Bande says the Malawi government has proposed a 5% royalty from the project rather than the 3% royalty received from Paladin’s Kayelekera mine.

The Malawi government is also pushing for a 30% local shareholding in the mine – up 15% in Kayelekera.

“We hope the international legal experts we have invited will help us in negotiating effectively . . . and, in the long term, building capacity in the Malawi government in terms of negotiating mining deals,” says Bande.

Mark Goodrich, of International Senior Lawyers Project (ISLP), who has been engaged by the Malawi government to scrutinise the Kanyika draft development agreement, tellsMining Weekly: “Governments all over the world have to create a win-win situation with mining companies.”

The Kanyika project is scheduled to produce 3 000 t of niobium oxide and 150 t of tantulum a year.

Niobium is mainly used in the manufac- turing of special steels for gas pipeline construction. It is also used in the welding of stainless steel and other special steels as well as in the nuclear, electronics and optics industries. Niobium also has a surprising role in numismatics (coin) production because of its low toxicity and unusual ability to change colour through anodisation.

World demand for special steels – including niobium – is certain to escalate in coming years. Global niobium production is currently around 63 000 t/y, with 92% (58 000 t/y) coming from Brazil’s Araxa and Goias mines and 7% (4 400 t/y) from the Niobec mine, in Quebec, Canada.

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Mining slowdown puts squeeze on Sandvik orders

STOCKHOLM – Deep spending cuts across the mining industry pushed machinery and tool maker Sandvik to a deeper than expected fall in order bookings in the second quarter, putting pressure on it to cut costs.

Sandvik and fellow Swedish rival Atlas Copco, which together supply more than half the world market of underground mining equipment, have faced slumping order intake in recent quarters as mining companies cut capital investment.

Order bookings at Sandvik's mining business fell 36% year-on-year in the second quarter compared to an 21% decline posted this week by Atlas, and Sandvik said orders had slid by double digits also since the first quarter.

"This only emphasizes the importance to continue to adjust our costs in accordance with the changing market conditions," CEO Olof Faxander said in a statement.

The sombre picture of demand for mining gear painted by Atlas Copco earlier this week weighed on shares in the Nordic region's suppliers to the industry on Thursday, including those of Sandvik and Finland's Metso.

The mining industry, facing softer metals prices and pressure by their owners to boost returns, is pulling back from a decade of expansion with the likes of BHP Billiton and Rio Tinto slashing billions of dollars in spending.

Sandvik also makes a wide range of metal-cutting tools and speciality steels, but the mining slowdown weighed heavily as group order intake fell 21% on the year to 20.7-billion crowns, below the 21.5-billion seen by analysts.

Sandvik, a top supplier of mining gear such as drill rigs and loaders, said operating earnings fell to 2.96-billion Swedish crowns ($448.57-million) from a year-ago 4.21-billion to marginally top a mean forecast of 2.94-billion in a Reuters poll of analysts.