The increase in coal consumption by state-controlled power utility Eskom, South Africa, could lead to a doubling of mined output by 2020 as a result of plans to add generation capacity, combined with increased demand from petrochemicals major Sasol's planned Mafutha coal-to-liquid project and the potential for an increase in coal exports from the country. Taking Eskom's needs alone, with an annual 4 percent growth in power demand, the company's consumption of 129 million tons in 2008 will rise to 200 million tons by 2018.

Speaking at the Coal, Carbon and Energy Indaba of the Fossil Fuel Foundation in Johannesburg, Johan Dempers, Eskom's chief geologist and coal specialist, said that an investment of between $9 billion and $11 billion is needed by 2020 to build at least 40 new coal mines. The nation's demand for coal by 2018 is estimated at 374 million tons. Dempers said that taking into account mine closures and new projects, there would be little excess coal production margin during the period. He said that two new 4,800-megawatt (MW) coal-fired power projects, Medupi and Kusile, were scheduled to enter commercial operation in 2015 and 2016, respectively, and that three potential sites were being studied for a third 5,000-MW coal-fired plant.

As chairman of the steering committee for an update on South African and neighboring countries' coal reserves, Dempers said the last estimate in 1987 showed the country with 121.2 billion tons of coal reserves with 55.3 billion recoverable. The study is important for planning in the industry and could take until May 2011. It would need support from mining companies, the Department of Minerals and Energy and geological surveys from neighboring countries in the Southern African Development Community region, he said.

The largest slice of revenue for the coal industry came from exports, said Xavier Prevost, Wood Mackenzie's senior coal analyst. He said there was a shift in market destinations. In 2006, Europe received 88 percent of exports but in 2007 Europe dropped to about 63 percent as exports moved to Asia and India. He said the main problem facing the export industry was a lack of rail infrastructure to carry coal to the country's coal terminal ports.

The country's state-owned Transnet Freight Rail is planning to invest $4.4 billion through 2014 to expand rail capacity and infrastructure and has spent $29 billion since 2004 on line upgrades, freight wagons, locomotives and monitoring centers. Picking up on a regular refrain of the past year Transnet Freight CEO Siyabonga Gama said that the commitment of long-term contracts from coal miners are necessary for the funds to be put into raising coal-carrying capacity above 81 million tons per year. With 110 new locomotives due for delivery soon, capacity on the line to the Richards Bay terminal on the Indian Ocean coast could be raised to 86 million tons. The current infrastructure would only handle 81 million tons.

Richards Bay terminal is in the process of expanding to a capacity of 91 million tons, making it one of the largest coal terminals in the world. The expansion from the current 76 million tons would allow new, smaller and medium-sized companies to use the export facility, although the coal has to be railed to the coast first.

ASIA

Inferred Diamond Resource of 37 Million Tons in Rio Tinto's Bunder Mines in India

Rio Tinto Limited, England, recently completed an order-of-magnitude study for the Bunder diamond project in Bundelkhand in Madhya Pradesh, India, and has identified an inferred resource of 37 million tons with a mineral grade of 0.7 carats per ton, yielding 27.4 million carats of diamonds. The study also indicated that the Atri lamproite pipe, one of the eight lamproite pipes found in the region, is amenable to open pit mining and diamond-processing technology. Rio Tinto has estimated capital and operating costs for a nominal production rate of 5 million tons per year of diamonds, but has not yet disclosed the figures.

The study follows an exploration target for diamond mineralization of 40 million to 70 million tons, with a grade of 0.3-0.7 carats per ton, as was announced by the firm in June 2008. Rio Tinto undertook drilling and sampling activities on the Atri lamproite pipe, which consists of two coalesced pipes over a surface area of 17 hectares. The Atri pipe is exposed along its southwestern margin, but is elsewhere covered by colluvium deposits, which are loose bodies of sediments up to 23 meters in depth. The inferred resource reported does not include deposits in the northern section of the Atri pipe.

The grade of diamond was determined from samples obtained through large diameter drilling of eleven core holes, eight inches in diameter, 250 meters in depth and spaced 50 to 75 meters apart. Price evaluation was based on a surface bulk sample of 320 carats and an additional 90 carats procured by large diameter drilling. The samples were processed by the use of dense media separation techniques to recover commercially sized stones of greater than 0.85 millimeters.

The Bunder diamond project is wholly owned and operated by Rio Tinto Exploration India Limited (Bangalore, Karnataka), the local subsidiary of Rio Tinto.

Rio Tinto will now continue with drilling activities in Bundelkhand to collect bulk samples from below the surface. The company will also undertake a prefeasibility study to assess the social and environmental impact of the project. The firm is awaiting environmental approval from the state government for use of a 10 ton-per-hour dense media separation plant that will facilitate the processing of bulk samples at the project site.

Over the last four years, Rio Tinto has spent nearly $60 million in exploration activities in India. Most of the investment was made in the Bunder project. In December 2008, the firm announced that it had detected a diamond deposit in the Chhatarpur district of Madhya Pradesh and that it would develop a project for production of diamonds in the region. The firm has applied for a mining lease to commence commercial operations in the region and expects the deposit to hold reserves of 30 million carats of diamonds. The proposed project is expected to generate annual royalties of more than $20 million for the state government. Rio Tinto has invested $25 million in exploration activities in the region.

China Metallurgical Begins Work at Afghanistan's Aynak Copper Deposit

China Metallurgical Group Corporation, Beijing, has begun developing mining infrastructure for the 28-square-kilometer Aynak copper deposit in Afghanistan. Workers are paving a $3 billion access track to the Aynak fields under the watchful eyes of U.S. troops positioned en route. The Aynak deposits are located about 25 kilometers away from Kabul in the Logar province, which continues to remain a stronghold of the Taliban. The U.S. troops, deployed to prevent Taliban infiltration into Kabul and its neighborhood, are also shielding the workers and their gated community quarters from attacks.

In November 2007, the U.S. Agency for International Development, Washington, D.C., which is monitoring the privatization programs in Afghanistan, with the approval of the Afghan government, awarded the development contract for the Aynak copper deposit to MCC. According to online reports of GeoJournal, an international academic journal on geography, the Aynak field has about 11 million tons of copper ore. However, unofficial reports peg the reserves at 240 million tons. These reserves will now be recovered by the Chinese using surface-mining techniques.

The package deal includes the development of a 400-megawatt power station to operate the copper mine, an associated smelter unit, a coal mine to fuel the power station and a fertilizer plant. The $500 million coal-fired power plant is expected to pump surplus power to the national grid. A freight railway line linking western China to the Gwadar port in Pakistan through Tajikistan and Aynak is also planned. The Gwadar port, located in a tax-free development region close to the oil shipping routes on the Persian Gulf, will serve as a shipping point for the mined copper. In 2008, the management of the Gwadar port was entrusted to PSA International Private Limited, Singapore, for a period of 25 years.

The Aynak mine is expected to be productive for another 30 years, yielding up to 200,000 tons per year of copper. It has an earnings potential of about $42 billion, with royalties to the government amounting to $400 million. In addition, the project is expected to generate 10,000 jobs for locals over five years. Chinese language classes have begun in Kabul, and local students have been promised education in Chinese universities.

Anrak Aluminium Acquires Land Approval for $1.6 Billion Refinery Project in Visakhapatnam

Anrak Aluminium Private Limited, United Arab Emirates, was recently handed land approval documents by the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) for a proposed aluminum refinery and smelter plant project in Makavarapalem, Visakhapatnam, in Andhra Pradesh. The $1.6 billion project involves setting up a 1.5 million-ton-per-year aluminum refinery, a 250,000-ton-per-year smelter plant, and a 90-megawatt gas-based captive power plant.

According to APIIC Chief General Manager Eswar Rao, nearly 2,100 acres of land has been acquired from farmers in Makavarapalem. About 300 acres of the total land will be utilized for rehabilitation projects, and 1,900 acres have been allotted to Anrak. As part of the compensation package, APIIC paid a little over $5,000 per acre and Anrak paid a little over $4,000 per acre to farmers who lost their land. Each family that lost land would also receive an additional $1,000 as part of the rehabilitation effort. About 2,000 families in the area are eligible for this package.

The Andhra Pradesh Mineral Development Corporation, Hyderabad, will supply bauxite ore for the aluminum project. The Visakhapatnam region is estimated to have about 700 million tons of bauxite reserves.

The proposal to set up the project was first mooted in 2007 and has been criticized by both the local people and the opposition parties of the government. At a public hearing organized in 2008, Anrak informed the people that more than $100 million would be spent on pollution control. The production process is expected to generate 5,800 tons per day of red mud and the company has assured the government that it would employ the latest technologies for waste disposal. The slurry would be safely stored in a designated area, which would be lined with geo-membranes so that seepage will not contaminate groundwater in the region.

Land acquisition in India for any public project is a process fraught with problems because of the high density of the population and the type of land use in the country, and is often foreseen as the biggest hurdle for any large project in India.

India to Allow Public-Private Joint Ventures to Trade in Domestic Coal Market

India's government recently announced that it plans to open up the coal-mining sector to commercial activity by permitting private companies to form joint ventures with state-owned firms such as NTPC Limited, Coal India Limited and mineral development corporations of various state governments.

State-owned companies have so far monopolized the sale of domestic coal in the open market. The new development will allow private companies such as GVK Power and Infrastructure Limited, Monnet Ispat and Energy Limited and Tata Steel Limited to sell coal in the domestic market. Private companies are currently allowed to mine coal only for captive consumption.

The Ministry of Coal is reported to have sought advice from the law ministry on whether the provisions of the Coal Mines (Nationalization) Act of 1973 allow the subleasing of government-allocated coal blocks or blocks allocated to joint ventures that are not necessarily associated with the government. It is further reported that the additional solicitor general of India advised the coal ministry that such a move may be allowed in joint-venture entities, provided the state-owned company retains a 26% stake in the joint venture and also decides on the composition of the joint venture's board of directors. The state-owned firm can nominate the joint venture's chairman and appoint the same number or a higher number of directors on the board as the private company.

Once the new norms are finalized and announced, private companies can own a 74 percent stake in coal-mining projects. The private partner of a joint venture will be permitted to sell and trade coal with the permission of the state-owned company. MIEL is already in talks with the Madhya Pradesh State Mineral Development Corporation to form a joint venture to mine underground coal.

Involving private firms in the mining and selling of domestic coal could ramp up India's coal production, narrow the gap between demand and supply, and subsequently reduce the country's dependence on imported coal. Higher availability of coal would also lead to an increase in the number of coal-based industries.

India's current coal production capacity is about 450 million tons per year. The current 2008-09 fiscal year is expected to see a production of about 500 million tons of coal. The government hopes to bridge the existing coal deficit of 50 million tons per year to fulfill the needs of the energy sector. To date, 42 billion tons of coal reserves spread over 198 coal blocks have been allocated to both public and private sector companies. While the central-government-controlled companies have rights to more than 9.6 billion tons of coal reserves spread across 22 blocks, state government-controlled companies have rights to more than 18 billion tons of coal reserved spread across 789 blocks.

EUROPE

The Czech Republic Mining Market

In 2008 uranium mining was attracting more attention and investment for expansion. With oil resources diminishing and coal contributing to environmental concerns, there is growing interest in nuclear power.

Uranium prices have been rising because of this and also because developing countries are exporting less raw materials in favour of using them domestically. In the Czech Republic this growing interest in expansion has split opinion between the Ministry of Environment and the Ministry of Industry and Trade over environmental concerns. At the Diamo-owned mine in Stráž pod Ralskem there are approximately 115,000 tonnes of resources out of reach since the mine closed since 1996.These deposits are expected to remain untouchable as long as there is opposition from environmentally-focused government parties.

Meanwhile, in a bid to expand the extraction of indigenous energy resources, in April 2009 Euracoal released a report stating that the Ministry for Trade and Industry had submitted a proposal for a new national energy policy which means only partially keeping the geographical mining limits for lignite as outlined in the Government Resolution of 1991. Because of this, mining at the Bilina site, owned by Severoceske doly Chomutov, is now set to continue until 2037.

Expansion was also seen in Poland, when in August 2008 an agreement between the Czech Republic and Poland was signed allowing open exploration of deposits along the Czech – Polish border for coal companies. Coal company OKD will gain even more access through this agreement to deposits across the border. It complements the agreement already in place between owner of OKD New World Resources (NWR) and Jastrzebska Spolka Weglowa to explore deposits in this region.

RUSSIA

Russia's ARMZ Acquires Stake in Kazakhstani Uranium Assets

Atomredmetzoloto, Russia, (ARMZ Uranium Holding Company) has received approval from the governmental agencies of Kazakhstan for the firm's acquisition of uranium mining assets owned by Effective Energy NV, Netherlands, in the country. Kazakhstan's Ministry of Energy and Mineral Resources and the Agency for Protection of Competition of Kazakhstan have granted consent to the two firms to finalize the transaction.

In January of this year, ARMZ entered into a contract with Effective Energy to purchase the latter's stakes of 50 percent in TOO Qaratau and 25 percent in JSC Aqbastau, both joint ventures for uranium mining in Kazakhstan. With this transaction, ARMZ has increased the Russian stake to 50 percent in each of its three joint ventures—Aqbastau, Qaratau and Zarechnoye—with Kazakhstan's state-owned nuclear firm Kazatomprom.

ARMZ is a unit of OAO Atomenergoprom, which is part of Rosatom State Nuclear Energy Corporation, Moscow. Rosatom is the final beneficiary of the deal, having consolidated all the uranium-mining assets owned by Russia in Kazakhstan under the framework of an intergovernmental agreement between the two countries for cooperation in the nuclear energy sector for peaceful purposes. During the Soviet era, most of Russia's uranium deposits were located in Kazakhstan and Kyrgyzstan, while all the enrichment facilities were located in Russia. With the dissolution of the Soviet Union, these industrial ties were temporarily disrupted but subsequently renewed by the two nations.

According to the intergovernmental agreement, ARMZ and Kazatomprom are required to mine 6,000 to 8,000 tons per year of uranium in Kazakhstan. Zarechnoye, which commenced commercial operations in December 2006, is developing the Yuzhno-Zarechnoye uranium deposit in southern Kazakhstan. The Yuzhno-Zarechnoye field has estimated reserves of 30,700 tons of uranium. Zarechnoye produced 114 tons of uranium in 2007 and 166 tons in 2008. The joint venture is expected to achieve a mining capacity of 1,000 tons per year of uranium by 2012 and 6,000 tons per year by 2020.

AUSTRALIA

BHP Billiton to Expand Mt Arthur

BHP Billiton, the world’s largest mining company, said it would spend US$260 million to expand output at the Mt Arthur thermal coal mine in Australia by 30% amid a rebound in demand.

Power-station coal production will increase to 15Mt a year, from 11.5Mt, Melbourne-based BHPB said in an e-mailed statement today. Output from the expansion will start in the first half of 2011, the company said.

“The price of thermal coal has been firming above the contract level on the spot market and that’s a good sign for demand being real,” Peter Arden, an analyst at Ord Minnett Ltd.

in Melbourne, said by phone. “There is a window opening up there, China just can’t meet its own needs and is going to have to import more, so that’s what Mt Arthur is targeted for.”

Power-station coal prices at Australia’s Newcastle port, a benchmark for Asia, rose 6.4% on July 17, according to the global COAL Newc Index. It is the highest level since the week ended June 12. BHPB increased total energy coal production by 16% in the June quarter, compared with the March quarter, to 17.7Mt.

Minmetals Studying Restart of Avebury

China Minmetals Corp, the nation’s biggest metals trader, is studying the restart of the Avebury nickel mine in Australia after a rebound in prices.

The company "has recently committed a team to review the operations there in the hope of recommencing the operation when economic conditions improve," Andrew Michelmore, chief executive of the company’s Australian unit Minerals & Metals Group, or MMG, said in a statement.

Former owner OZ Minerals Ltd shut the mine in Australia’s Tasmania state in December because of a slump in nickel. The price has rebounded 44% this year as plants that make stainless steel, the biggest use of nickel, boost production.

Mount Gunson Copper Project Successful Completion of First 2009 Drill Hole

Gunson Resources report the first hole of the 2009 drilling program at Mount Gunson, MGD 55, was completed today at 1,108 m. This hole tested the 400 m wide peak zone of the Emmie Bluff gravity geophysical anomaly, first identified by Mount Isa Mines (MIM) in the early 1980s. MGD 55 intersected strongly hematitic basement rocks from 736 m, beneath interbedded sandstone and shale units of the cover sequence. The mineralised core from MGD 55 will be trucked to Adelaide for sampling and assay next week, with assay results expected in late August. Drilling continues. The project is located in South Australia.

The drilling is being funded by Noranda Pacific Pty Limited (Noranda), a company within the

Xstrata Copper Business Unit. Noranda has the right to earn a 51% interest in the Mount

Gunson Copper Project by spending $3.5 million on exploration by 15th June 2010. At the

end of June 2009, Noranda had spent $2.3 million.

Australia Expects Rise in Uranium Production by 2012

Australia's domestic production and exports of uranium are estimated to increase by 37,000 tons per year by 2030 in response to the rising global demand for nuclear energy, Michael Angwin, Executive Director of the Australian Uranium Association said at the Paydirt 2009 Uranium Conference in Adelaide, South Australia. He said this is expected to boost Australia's gross domestic product (GDP) by $11.75 billion by 2030. Australia ended 2008 with a GDP of $753.5 billion.

Australia's government and its mining industry have both said that they believe domestic uranium output could rise by 20 percent in the next three years, from 10,101 tons per year in 2008 to 12,460 tons per year by 2012. Australia currently exports 10,000 tons per year of uranium. This is expected to rise to 10,740 tons per year by June 30, 2010, and further to 14,000 tons per year in 2014, generating revenues of nearly $1.18 billion.

Australia, the world's second largest producer of uranium after Canada, is home to 38 percent of the world's low-cost uranium resources and accounts for 19 percent of the global uranium supply. The country's uranium industry has been plagued by political hostility to the nuclear sector since the 1980s. However, in the face of the global economic recession and with 64 nuclear power reactors expected to be commissioned worldwide over the next six years, the country is looking to tap into the imminent increase in global demand for uranium. There are 439 nuclear power plants currently in operation worldwide, with 43 new plants being developed and a further 106 in the pipeline. The global nuclear industry requires an estimated 181 million pounds per year of uranium to feed its nuclear power plants.

Australia has three operational uranium mines -- the Ranger mine in the Northern Territory, and the Olympic Dam and Beverly mines in South Australia. The ongoing expansion of the Ranger mine, operated by Energy Resources of Australia Limited, Canberra, is expected to boost domestic production of uranium oxide by 5 percent to 10,583 tons per year by June 30, 2009. BHP Billiton Limited, Australia, is also looking to increase production at the Olympic Dam mine by 2013, but this is likely to be delayed because of the global economic recession. Heathgate Resources, Adelaide, a subsidiary of General Atomics, California, operates the Beverly mines.

Uranium One Incorporated, British Columbia, is likely to commission its Honeymoon project in South Australia by 2009 to produce 400 tons per year of uranium beginning in 2010. In December 2008, Mitsui & Company Limited, Japan, invested $71.89 million for a 49 percent stake in the project.

Alliance Resources Limited, Australia, is raising funds to invest $15.55 million in the new $62.21 million Four Mile uranium mining project in South Australia. Alliance Resources owns a 25 percent stake in the project while Quasar Resource, Adelaide, an affiliate of Heathgate Resources, owns 75 percent. The Four Mile mine has current reserves of 32 million pounds of uranium oxide and will produce 3 million pounds per year of uranium oxide.

Sinosteel Corporation, Beijing, and PepinNini Minerals Limited, Australia, are developing the Crockers Well project in South Australia.

Gindalbie Gets Key Approvals for Karara Project

Key appeals lodged by Australian iron ore producer Gindalbie Metals against objections to the hematite and magnetite phases of its Karara iron ore project in Western Australia have been upheld.

The approval by the Western Australian Environment Minister Donna Faragher was granted after Gindalbie appealed against recommendations of the Environmental Protection Authority to exclude the Terapod deposit from the company’s plans.

With these approvals Gindalbie and AnSteel can now get on with the job of building the project, Gindalbie managing director Garret Dixon said.

“We are looking forward to working closely with the Minister and her colleagues to agree on the conditions required to secure final ministerial approval to enable the Karara Project development to proceed,” Dixon said.

The government upheld the majority of appeal points lodged and final approval is expected in the coming months.

NORTH AMERICA

Barrick Gold’s Cortez Hills Site Expansion

In fourth quarter 2008, a number of opponents of the Cortez Hills expansion filed suit in the United States District Court for the District of Nevada seeking to overturn the Bureau of Land Management’s approval of the Cortez Hills project on environmental and religious grounds. The plaintiffs unsuccessfully sought to enjoin construction of the project pending consideration of their claims. The District Court’s denial of the requested injunction is currently being appealed.

Cortez Hills is about 100 kilometres from Goldstrike in Nevada on the Cortez property, which covers approximately 2,800 square kilometres on one of the world’s most highly prospective mineral trends. Located next to the existing Cortez Pipeline mine on the Battle Mountain trend, Cortez Hills is expected to be a significant contributor to Barrick’s clustered Nevada production base. First gold production is expected in Q1 2010, assuming the satisfactory resolution of pending litigation regarding the project. Once in production, the Company’s average annual production from Cortez (including Pipeline) is expected to be about 1 million ounces of gold for the first full five years2. The project is on schedule and in line with its capital budget of $500 million. Cortez Hills open pit will be mined by conventional open-pit methods and the ore from the mine will be conveyed across the valley to be processed at existing facilities.

US Soda Ash Industry Fights Recession, Chinese Rivals

Beneath the arid sagebrush flats of southwest Wyoming, miners work around the clock to grind out millions of tons of trona rock that's processed into a key ingredient for everything from baking soda and detergent, to glass and paper. According to the Associated Press, four of the United States' five soda ash producers are located above the Wyoming's vast trona reserves, which were formed by an evaporating lake 50 million years ago. Soda ash, or sodium carbonate, has been an anchor of the region since the 1940s, but these days, the industry is facing a confluence of difficult challenges.

The economic recession, including weak demand for glass in the auto and construction sectors, contributed to a 24 percent drop in U.S. soda ash production between the last three months of 2008 and the first quarter of this year, according to the U.S. Geological Survey. American producers say their competitors in China have flooded the international market with help from a Chinese government export incentive. Chinese soda ash exports grew 40 percent in the first three months of 2009 versus the same period last year, according to industry figures.

The four soda ash producers in Wyoming's Green River Basin -- FMC Corp., General Chemical, OCI Chemical Corp. and Solvay Chemicals -- account for 92 percent of the U.S. industry. Searles Valley Minerals in California is the nation's only other producer. The United States produced a record 11.3 million metric tons of soda ash in 2008 and exported about 47.6 percent of that, according to the USGS. Trona production in Wyoming for the January-May period was down more than 13 percent from the previous year, according to the USGS.

As soda ash producers wait for domestic and global demand to pick up, they're lobbying for the federal government's help in fighting the Chinese government's new export incentive. China overtook the United States as the world's top soda ash producer in 2003. The Chinese currently produce about 18 million metric tons of soda ash per year. In April, the Chinese government introduced a 9 percent rebate on its 17 percent value-added tax on soda ash exports. American producers say the action gave Chinese producers an unfair advantage in the global marketplace and drove down prices for American exports.

Wyoming's congressional delegation recently sent letters to U.S. Trade Representative Ron Kirk and Secretary of State Hillary Rodham Clinton trying to influence the Obama administration's trade discussions with the Chinese. Meanwhile, the American Natural Soda Ash Corp. is working to catch up with Chinese exporters. Making soda ash from trona is cheaper than synthetic methods, which account for most of China's production, according to the industry.

Virginia Uranium Mining Study Approved

A study of uranium mining in Virginia is moving forward, to the dismay of some mining opponents. A subcommittee of the Virginia Commission on Coal and Energy approved the study yesterday after fine-tuning the issues to be studied. The study arises from a proposal by Virginia Uranium Inc. to mine uranium in Pittsylvania County in south-central Virginia. During a meeting in the General Assembly Building, opponents told the panel that mining could cause air and water pollution and turn a pastoral landscape ugly.

Some opponents asked the panel to vote against the study, hoping that would kill the mining proposal.

The panel made clear that one of the most important issues they want studied is mining's effects on people's health. The study also will investigate the safest ways to mine uranium; review mining regulations; identify pollution issues; and delve into effects on ecosystems, among other things. The study will be conducted by the National Research Council, the operating arm of the National Academy of Sciences, a respected institute that advises government agencies. The study could cost $1.5 million and last about 18 months. It was unclear yesterday how the study would be funded.

Virginia Uranium, formed by Pittsylvania landowners, says 119 million pounds of the ore, worth about $8 billion, lie underground near Chatham, about 145 miles southwest of Richmond. Uranium is used to fuel nuclear power plants. Virginia has banned uranium mining since the 1982.

Officials in Hampton Roads also have expressed concerns about the mining. Much of the water serving Virginia Beach, Norfolk and Chesapeake comes from Lake Gaston, which lies downstream from the proposed mine.

SOUTH AMERICA

Argentina's Mining Sector Is Forecast To Grow

Argentina’s mining sector is forecast to grow at an annual rate of 3% during 2009 to 2013, according to a report from countries and markets.com.

The year 2008-2009 saw the ramping up of five major mines in Argentina, suggesting that the sector will continue to form an important, if small, part of the country’s economy and should still attract foreign investment despite various disincentives.

The sector was given a particular boost when global mining giant Barrick Gold finally gave a green light to the much discussed and equally delayed Pascua-Lama project on the Argentine-Chilean border in May 2009. A long-running tax dispute between the two countries had stalled plans, but the bilateral resolution of the dispute was welcomed as a successful application of the 1997 Mining Integration Treaty.

Development of the gold and silver deposit – one of the last known mega-gold finds in the world – is expected to cost between US$2.8bn and US$3.0bn, and is believed to contain some 17.8mn ounces (oz) of gold, with annual production in the first full five years forecast to reach some 800,000oz of gold and 35mn oz of silver. Barrick said that commissioning would begin in 2012, with production launched soon after in 2013.

In addition, several other mines have gone live or are in the process of ramping up, bringing the number of world-class mines in production to 14, reportedly the highest yet. In early 2009, the first silver was poured at both Silver Standard’s Piriquitas mine in Jujuy province, and Pan American Silver’s Manantial Espejo mine in Santa Cruz. Mining at Yamana Gold’s Gualcamayo property in San Juan province began in 2008, while the processing of ore began in early 2009. The mine is projected to begin production at commercial levels in mid-2009, with an annual forecast of some 200,000oz of gold.

Companies have also been attracted to Argentina’s potential for both potash and uranium mining. In February 2009, Brazil-based mining giant Vale acquired debt-burdened Rio Tinto’s potash assets in Argentina for US$850mn. While the assets are still at the feasibility stage, the yield of the Rio Colorado project is reportedly expected to propel the country up into the top five potash producers in the world. A number of juniors have been exploring for uranium mineralisation and reporting satisfactory results.

Argentina is one of the world’s leading producers of lithium and boron. However, in a global context, it is a fairly insignificant player in the markets for gold, silver, copper, base metals, iron/steel and aluminium.

Barrick Gold Pascua-Lama Project/ Cerro Casale JV

On May 7, 2009, Barrick announced that the Pascua-Lama project is proceeding to construction. The company has finalized the project's economic parameters, received key construction permits, satisfactorily resolved outstanding fiscal matters with the governments of Chile and Argentina, and is engaged in discussions for project financing.

Pascua-Lama's pre-production construction estimate is $2.8-$3.0 billion, with expected average annual production of about 750,000-800,000 ounces of gold and 35 million ounces of silver in the first full five years. The anticipated total cash costs in the first full five years are $20-$50 per ounce - which would make Pascua-Lama one of the lowest cost gold producing mines in the world. The company will immediately begin to award contracts, mobilize for infrastructure such as roads, power line, camps and basic services, hiring of workforce and ramp-up construction by September or earlier, weather permitting.

Commissioning expected in late 2012 with first gold expected early 2013.

Pascua-Lama Factsheet

Another project in South America, Cerro Casale, is one of the world's largest undeveloped gold and copper deposits, and is located in the Maricunga district of Region III in Chile, 145 km southeast of Copiapo. In December 2007, the Company acquired a 51% interest in Cerro Casale through the acquisition of Arizona Star; Kinross Gold Corporation owns the remaining 49%. Barrick’s share of gold reserves and contained copper within gold reserves as of December 31 2008, are 10.8 million ounces and 2.7 billion pounds respectively. A feasibility study is expected to be complete in the third quarter 2009.

Latin America Heats Up

The Australian reports that explorers are now starting to make big headway in Central and South America - both known for huge mineral and energy riches, and a region still far from completely explored. Certainly one of the darlings for investors has been Andean Resources (AND) and its Cerro Negro high-grade gold and silver deposit. Development news continues to flow in.

Troy Resources (TRY) reports a 32 per cent increase in the resource at its Casposo project in Argentina. It now has 2.37 million tonnes at 5.4 grams/tonne gold and 201.7g/t silver, or 414,600oz of contained gold and 15.3 million contained ounces of silver. Troy made a name for itself a few years back by being the lowest cost - by far - gold producer in Australia.

EnviroGold (EVG) is bringing technology to bear on a large gold tailings project in the Dominican Republic. This company has come up with three other potential projects - old gold or silver operations where new technology can extract the gold left behind. EVG said recently it was negotiating with the Venezuelan government’s mining company for a 50:50 joint venture that would see the Australian company reprocess gold tailings in Bolivar province.

In other recent Latin American news, Avanco Resources (AVB) said it expected to get a trial mining licence for its Carajas copper project in Brazil by next year. It has a resource so far of 210,000 tonnes at 11.65 per cent copper.

Mirabela Nickel (MBN) expects to begin construction of its Santa Rita nickel mine in Brazil by September. It recently announced that project financing had been completed and $117m raised. Meanwhile, Golden Cross Resources (GCR) is optimistic it now has all the paperwork in place for its application in Panama for six properties prospective for copper.

Azure Minerals (AZS) makes progress in Mexico. The company said it has established that its Promontorio project (502,000 tonnes at 4.7 per cent copper, 2.1g/t gold and 90g/t silver) can be developed and operated at a profit. Azure is also in a joint venture with Japan’s government-owned Jogmec at the La Tortuga copper project.

McIlvaine Company

Northfield, IL 60093-2743

Tel: 847-784-0012; Fax: 847-784-0061

E-mail: editor@mcilvainecompany.com

Web site: www.mcilvainecompany.com