Slow growth for Europe’s mining sector — report

European miners will maintain their position at the forefront of integrating technology, particularly in more developed markets, due to a highly skilled workforce and high levels of connectivity among the more developed economiesa regional overview published by Fitch Solutions reports. 

On a more sombre note, analysts predict high costs, a weak project pipeline and conservative company strategies will drag on mining investment levels in Europe over the coming months, despite an improved commodity price environment.

Growth opportunities stand to be further impeded by a continued lack of investment in the European mining industry, and the outlook for Poland and Ukraine specifically will be hindered by EU environmental regulations and an ongoing armed conflict, Fitch forecasts.

In Q2 2019, analysts expect investment levels across the European mining sector will be sluggish as miners continue to pursue balance sheet improvements over expenditure, while macroeconomic risks increase.

Tightening environmental regulations will pose headwinds to mining sector growth prospects of coal-producing countries in the EU, particularly in the west. Fitch forecasts, while Ukraine's steel outlook will remain bleak in the coming quarters, as disruptions from the Donbas blockade remain in place, as tensions with Russia continue to run high.

According to Bloomberg, mining mergers and acquisitions in the reg ion over the first three quarters of 2018 totalled 9.47 billion, compared with 17.9 billion over the same period in 2017, reflecting European miners ' ongoing restraint. Europe only counts with 149 new mining projects in the pipeline according to Fitch’s Global Mines Database, tailing behind North America, Latin America, Africa and Asia.

Read the full report here.

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Russia’s Alrosa, China’s Anjin to dig for diamonds in Zimbabwe

World’s top diamond producer by output Alrosa (MCX:ALRS) and China’s Anjin have been chosen by Zimbabwe's government to partner with the state-owned diamond miner in exploring and digging for precious stones in the country.

According to local paper The Herald, the move is part of the Zimbabwe National Diamond Policy, approved in December last year, aimed at reviving revive the country’s diamond industry.

Together with allowing two new private diamonds miners operate in the country, mines minister Winston Chitando said at the time his office might also allow foreign investors to hold majority stakes in local operations on condition that part of their output is reserved for domestic downstream industries.

Chitando didn’t name the two firms then, but the other two diamond-mining companies already operating in Zimbabwe are Murowa Diamonds, a unit of RioZim, and the state-owned Zimbabwe Consolidated Diamond Company (ZCDC).

The news comes on the heels of Russia’s Alrosa launching a local subsidiary in the southern African nation. The company, which says it is responsible for 27% of the global rough diamond production in terms of carats, already has operations in Angola and Botswana.

Marange’s revival

Most of the diamond fields are in Marange in eastern Zimbabwe, where production is dominated by ZCDC.

In 2008, hundreds were killed and thousands had to leave their homes as the military forced artisan miners to leave Marange after the early stages of the diamond rush.

In early 2016, former long-time leader Robert Mugabe went further, evicting all diamond mining firms from Marange, including Anjin. His government said at the time their licenses had expired after they declined to merge with ZCDC.

Since taking office a year ago, new President Emmerson Mnangagwa has moved to end the country’s international isolation and attract foreign investment to boost an economy in tatters. Part of the measures taken include allowing new private investment in the diamond fields.

Campaign group and accountability watchdog, Global Witness, said last month that Mnangagwa’s handling of the nation’s diamond industry would be the ultimate test for his alleged commitment to economic reform and anti-corruption.

According to the organization, good governance of the country’s diamond sector is a barometer of the direction that Zimbabwe is taking more broadly in the post-Mugabe era.

“It will attest to the credence of President Mnangagwa’s claims of a zero tolerance approach to corruption and transformed economic governance,” Sophia Pickles, Campaign Leader at Global Witness, said.

Zimbabwe expects to produce 12 million carats by 2023, compared with a forecast of 3.5 million carats this year.

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Alrosa names female exec to lead US business

Following the reopening of its offices in New York last year and the announcement of growing sales in the US, Alrosa (MCX:ALRS) decided to recruit an experienced female executive to lead operations in American territory.

Rebecca Foerster, former Vice President of Strategic Planning and Marketing at Leo Schachter Diamonds, was appointed President Alrosa USA Inc.

Besides her previous position, which she held for four years, Foerster was Vice President at the US Representative office of Rio Tinto (ASX, LON:RIO). She has also performed leadership roles at Frederick Goldman Inc., Revlon, Unilever, and Benckiser.

"The United States is the world's largest market for diamond jewelry consumption. For this reason, special requirements are placed on the person who will represent ALROSA's interests there. Ms. Foerster has a wealth of experience in companies that represent almost all parts of the diamond pipeline, from diamond mining to diamond jewelry sales. She knows the specifics of the diamond business and is well aware of American market needs," Yury Okoemov, Deputy CEO of Alrosa, said in a media statement.

The world’s No.1 diamond producer by output cited “organizational reasons” for the closure of its offices in the Big Apple in 2016. However, the 2018 reopening is said to have been so successful that from two rough diamond auctions held there last year, the firm will increase its competitive sales events to four in 2019. The miner also plans to offer polished diamonds to the US.

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Alrosa made big bucks at international auctions

Alrosa (MCX:ALRS), the world’s No.1 diamond producer by output, made $463 million only at the international auctions it held in five countries in 2018.

Following the publication of its overall sale results for the year, with rough and polished diamonds generating $4.5 billion, the Russian miner issued a press release highlighting the importance of the competitive sales it held abroad, especially those held in the United States following the reopening of its offices in New York.

Besides the North American country, Alrosa held auctions for special size rough diamonds that weigh over 10.8 carats, in Belgium, Israel, Hong Kong, and the United Arab Emirates. Ramat Gan held most of the international auctions, with a total of six.

"International auctions are an integral part of our trading activity since large rough diamonds in accordance with Russian law should be sold only in this way. Large diamonds are usually in good demand in the market, so each of our auctions collects up to 100 participants. In general, we are pleased with the results of 2018, and we found opportunity to increase the number of auctions in 2019 to 37 against the background of stable demand,” Evgeny Agureev, Director of the United Sales Organization at Alrosa, said in the media brief.

Agureev added that given the positive feedback received following the sales events in the Big Apple, the company decided to increase the number of auctions in the United States this year.

In total, Alrosa held 32 events last year but 15 of them were held locally in Moscow and in Vladivostok.

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ALROSA earns $463m at international auctions in 2018

In 2018, ALROSA, the largest diamond mining company in the world, held 32 international auctions receiving a total revenue of $463 million for the year, for its special size (over 10.8 carats) rough diamonds.

Alrosa traditionally holds its auctions in Russia, Belgium Israel, Hong Kong, the United Arab Emirates and the United States. For the first time in many years, the company held two of its auctions at its sales office in New York, which resumed its operations last year. Another six auctions took place in Israel, Hong Kong, Dubai and in Belgium.

Positive feedback about the auctions and stable demand has encouraged the company to increase the total number of planned auctions to 37 in 2019,  adding four more to its New York office.

The complete schedule of international auctions for special size rough diamonds in 2019 is posted on ALROSA's  website.

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Russia’s Alrosa back to mining diamonds in Zimbabwe

Russia’s Alrosa (MCX:ALRS), the world’s top diamond producer by output, is returning to Zimbabwe after almost two years, as the company continues to expand in Eurasia.

The miner will develop exploration and extraction operations in the country as long as it counts with support of the government, it said on the eve of talks in Moscow between Zimbabwe's President and Vladimir Putin.

Alrosa opened an office in the country’s capital Harare in early December, but the first employees, including geologists and mining engineers are expected to arrive later this month.

Most of the country’s diamond fields are in Marange in eastern Zimbabwe, where production is dominated by the state-owned Zimbabwe Consolidated Diamond Company (ZCD). It is expected to produce 3.5 million carats in 2018, up from 2.5 million in 2017.

In 2008, hundreds were killed and thousands had to leave their homes as Zimbabwe’s military forced artisan miners to leave Marange after the early stages of the diamond rush.

Alrosa, which says it is responsible for 27% of the global rough diamond production in terms of carats, already has operations in Angola and Botswana.

In early 2016, ex-president leader Robert Mugabe went further, evicting all diamond mining firms, including two Chinese joint venture companies from Marange. It said at the time their licenses had expired after they declined to merge under a newly created state-owned mining firm.

Mugabe’s administration was frequently accused by human rights groups and other critics of giving the army and security forces access to mineral wealth following the operation.

Zimbabwe’s new President Emmerson Mnangagwa is already making moves to end the country’s international isolation and attract foreign investment to boost an economy in tatters, including allowing new private investment in the diamond fields.

His government is also considering waiving a rule that prevents foreign investors from holding controlling stakes in its diamond mines.

“We also seek to support Zimbabwe in the development of its diamond-mining industry in line with industry’s best practices,” Alrosa’s Chief Executive Officer Sergey Ivanov said in the statement.

In late October, the company began production at its new Verkhne-Munskoye diamond field in eastern Siberia, which will partly substitute suspended output at the company’s underground Mir mine. That operation was flooded when water seeped in from an open-pit mine above it in 2017.

Alrosa, which says it is responsible for 27% of the global rough diamond production in terms of carats, already has operations in Angola and Botswana.

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ALROSA increases rough and polished diamond sales to $4.5B

ALROSA today announced its rough and polished diamond sales results for December and preliminary results for 2018.

ALROSA saw a 6% growth in its diamond sales last year due to high demand and positive price dynamics in the first half of 2018. With total sales growing to $4.5 billion. Rough diamonds grew to $4.4 billion and polished diamond sales stood at $95.3 million.

In the second half of the year the company increased its sales despite an 8% decline in production because it optimized its stocks at a time when there was reduced buying activity in the low-priced product segment and destocking at multiple Indian midstream companies.

“In December, sales in value terms increased by 20% compared to November 2018 due to a flexible pricing policy against the background of seasonal renewed demand and replenishment of stocks by the companies in the cutting sector,” said Evgeny Agureev, director of united sales, ALROSA.

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Russia’s Role in the Gold Market

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By Dan Popescu
Goldbroker.com

We say a picture is worth a thousand words. President Putin holding a gold bar in front of the media is no accident nor a coincidence. By this image, he intends to show the world the importance Russia grants gold. Russia was, in 2013, for the second successive year, the largest announced gold buyer. This was partially achieved by regular acquisitions of its local mine supply. Russia and Kazakhstan bought more than half of the gross increase in gold reserves in 2013, according to CPM Group.

At the 2009 G8 gathering in Aquila, Italy, then-Russian President and now Vice President Dimitry Medvedev showed reporters an example of a gold coin of a supranational currency, which he called a “united future world currency”. The Royal Mint of Belgium created the coin and a special gold edition was presented as a gift to the G8 world leaders. Only President Medvedev was more than happy to appear in front of the media holding one.

Russia’s President Vladimir Putin said in 2011, “They [US] are living beyond their means and shifting a part of the weight of their problems to the world economy… They [US] are living like parasites off the global economy with their monopoly of the dollar.” He also recently told foreign journalists at the St. Petersburg Economic Forum 2014, “For us [Russia and China], it is important to deposit those (gold and currency) reserves in a rational and secure way, — and we [China and Russia] together need to think of how to do that keeping in mind the uneasy situation in the global economy.” While Evgeny Fedorov, lawmaker for Putin’s United Russia party in the lower House of parliament, said, “The more gold a country has, the more sovereignty it will have if there’s a cataclysm with the dollar, the euro, the pound or any other reserve currency.”

Continue reading . . .

Montana firm helps Russian gold miner

Brian Sheridan, Modern Machinery president, stands next to an articulated truck in Modern Machinery’s repair shop in Missoula last week. In addition to the bulldozers, Modern is currently working on shipping a dozen substantially larger 240-ton trucks to the gold mine project. The trucks have tires that are 12 feet in diameter.

Brian Sheridan, Modern Machinery president, stands next to an articulated truck in Modern Machinery’s repair shop in Missoula last week. In addition to the bulldozers, Modern is currently working on shipping a dozen substantially larger 240-ton trucks to the gold mine project. The trucks have tires that are 12 feet in diameter.

By Jenna Cederberg
The Montana Standard

MISSOULA, Montana — The search for ore at the third-largest gold mine in the world — located in a subarctic, far eastern region of remote Russia — goes on 24 hours a day.

Surface mining operations began recently at the 16,000-acre Natalka mine located in Siberia, hundreds of miles from the coastal Russian city of Magadan. The gold found there is precious enough to push production nonstop around the clock, although infrastructure to support crews is almost nonexistent and the average winter temperature is negative 30 degrees Fahrenheit.

“It’s primitive, it’s cold, it’s tough,” said Brian Sheridan, Modern Machinery Co. president.

As the mine’s main supplier of heavy equipment, Missoula-based Modern recently began shipping millions of dollars worth of giant bulldozers, excavators and 240-ton haul trucks to Natalka.

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Investor puts $1bn in Russian gold mine

Russia Today

In an effort to double gold production by 2018, Russia’s largest gold producer, Polyus, has attracted $1bn in investment for the 3rd largest undeveloped gold deposit in the world.

Russian Federation Deputy Minister for the Development of the Far East Dmitry Shelekhov confirmed the 32 million rouble investment, but would not disclose the source, ITAR-TASS reported.

The Natalka mine is the newest development from Polyus, and is located 400 km from the seaport of Magadan, in the remote and barren northeast corner of Russia.

The mining of precious metals is a lifeline for the local economy, Magadan Oblast Governor Vladimir Petcheny told ITAR-TASS.

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