A prime example is the missing billionaire chairman of mining group Hanlong, Liu Han. His curious case also highlights the dangers faced by Western firms trying to do business with Chinese tycoons.

Signs that Liu, who is only 45 years old and founded the conglomerate in 1997, was in serious trouble first emerged last week when Reuters reported on a police investigation concerning accusations that Liu hid his brother – who has since been arrested in a triple murder investigation – from authorities.

Sichuan-based Hanlong has pursued a number of international mining deals– all of which now hang in the balance – including the $5 billion Mbalam iron ore project straddling Cameroon and Congo-Brazzaville in Central Africa with Australia's Sundance Resources (ASX:SDL), a deal to develop an iron ore and copper-molybdenum mine with Moly Mines (ASX:MOL) in the Pilbara and another molybdenum project with US-based General Moly (NYSE:GMO), of which it owns 25%.

Sundance has indicated that Hanlong's $1.4 billion takeover offer is unlikely to come to fruition, General Moly's legal counsel has suspended work on a $665 million loan from the Chinese firm and Moly Mines says it is still investigating the consequences of Liu's situation on its dealings with Hanlong and his seat on the Moly Mines board.

Naomi Rovnick writing in Quartz in a piece titled Curse of the Chinese billionaire argues Liu may just have been unlucky because China's Communist Party, under increasing pressure from its citizens to do something about the high levels of corruption makes a show of how it has graft under control and "every so often it claims a high profile scalp":

Coming so soon after China’s new president Xi Jinping was installed, analysts are saying Liu may have found himself on the wrong side of China’s new leaders. The influential Chinese business magazine Caijing reported, citing unnamed sources, that Liu may have helped wealthy Chinese to move money out of the country before the leadership transition. It’s also possible China’s new leaders may have wanted a big business scalp to prove to they are not beyond bringing tycoons to heel. Since last fall, the nation’s 1% have been dressing down and serving cheaper wine to dodge the spotlight. Alternatively, it may be that Liu simply ran afoul of a government official for reasons we’ll never know, or that he really is the subject of an entirely straightforward criminal investigation that has nothing to do with politics.

Image of Liu and Cameroon President Paul Biya July 2011: Sichuan Hanlong Group.

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The softening metal market is opening up big opportunities for gold and silver miners who now have chance to renegotiate deals with contractors, personnel and suppliers, says Dr. Andy Robertson, president and CEO of InfoMine and a technical consultant to many large miners.

Robertson told MINING.com (video is embedded below) that base metal prices for zinc, nickel and molybdenum are way down, which is creating an opportunity for precious metal producers as demand for services fall.

"[There] is this concern that there is this over supply . . . and purchasers are using this as an opportunity to get re-pricing that is favourable to them, so there is a lot of maneuvering that is happening in some of these markets."

Not all base metals are doing poorly. Robertson notes copper has held steady.

"Copper has softened but not to the extent that causes much distress. It's nice and stable. It's behaved in a very slow-moving fashion."

In conversations with large miners, Robertson observes that new projects are being put on hold but existing mines are ramping up production to increase revenues.

"When it comes to operating mines, there are those that are cranking up because we've got to get our volumes up, because we've got to get our incomes working. So some of them are pushing quite hard at mine optimization and improvements."

From his vantage point at InfoMine that operates a career services section for miners, Robertson has seen the effect of the tough junior market.

On Friday the S&P/TSX Venture Composite Index closed at 1,220.90, just above its 52-week low of 1,153.900.

"Right now we are seeing a lot of resumes coming in from exploration geologists," says Robertson.

"There is a loyalty improvement, which is great for the industry."

Chart from the TSX Group

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The deal allows Codelco to start developing one of the largest copper reserves in the world: the so-called district El Bronce-Río Blanco, where two key projects are located San Enrique Monolito and Los Sulfatos, with combined copper reserves of 2,100 million tonnes.

In a press conference, the copper giant announced this morning earnings of almost $7 billion before taxes, compared to $5.32 billion in the same period of 2011, reports local newspaper La Tercera (Spanish language).

Chief Executive Thomas Keller told reporters the company produced 1.188 million metric tons of copper, 5% less than in 2011 (1.25 million metric tons) due to declining ore grades.

The Chilean copper miner has recently announced bold expansion plans, including turning Chuquicamata — the world’s largest open-pit copper operation— into an underground mine. This project will extend the life of the mine by over 50 years, as Codelco has found reserves equivalent to nearly 60% of all the copper extracted in the mine’s history.

The underground section of the Chuquicamata mine is expected to start production in 2018.

Anglo American and Codelco made peace in late August with a multi-billion dollar deal that clearly favoured the Chilean miner.

The battle between the companies began in October 2011, when barely a week after Anglo American announced that the $2.8 billion Los Bronces investment would start to bear fruit, Codelco decided to exercise an option to acquire half of it.

RELATED

And it's over: Anglo and Codelco make peace >> >>

Chile’s Codelco kicks off $3.5 billion copper mine expansion >> >>

Chile’s largest open pit copper mine goes underground >> >>

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Teck Resources' capital expenditures are now expected to total $1.8 billion in 2012, down from previous guidance of $2.1 billion and original guidance of $2.3 billion.

The Vancouver-based miner also said it estimated coal production for the year to be around the lower end of its earlier forecast of 24.5 million to 25.5 million tonnes.

"The uncertainty in global economic conditions resulted in lower commodity prices and sales volumes of steelmaking coal compared with the third quarter of 2011,” said Don Lindsay, Teck president and chief executive officer, in the third quarter results statement.

“Notwithstanding our strong financial position, some of our planned capital spending has been deferred for a variety of reasons and we have also implemented a cost reduction program,” Lindsay added.

The company, whose main operations are in Canada, the United States, Chile and Peru, said market weakness in the steelmaking coal market is likely to continue into the first half of next year.

The main projects affected by Teck’s deferral include Quebrada Blanca (phase two) and Relincho copper projects in Chile, the Fort Hills oil sands project in Alberta and the Trail zinc operations in British Columbia.

The Canadian copper, coal, lead, and zinc producer fell 2.5% to Cdn $30.54 at the close in Toronto yesterday. Its shares have dropped 15% this year.

Image: Boxer Pelky knocked out, Library of Congress, Prints and Photographs Division, Washington, D.C.

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Lumina, which owns one of the world’s best undeveloped copper projects, announced Tuesday a $23.75-million private placement financing, and said it expects to complete a preliminary economic assessment (PEA) on the project early next year.

The company is part of entrepreneur Ross Beaty’s mining empire, which has a track record of selling copper miners at big premiums.

The Vancouver-based miner put itself up for sale in June this year after plummeting more than 50% from its all-time high of $17.01 a share three months before.

Lumina’s Taca Taca development, comprising 25 square kilometers (9.7 square miles) is located 120 kilometers (75 miles) east of BHP Billiton’s Escondida mine, which is the world’s largest copper mine and is located in Chile.

RELATED:

Lumina Copper: good things come to those who wait >> >>

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VANCOUVER, BRITISH COLUMBIA–(Marketwire – Oct. 5, 2012) - BCM Resources Corporation (TSX VENTURE:B) the "Company" announces that it has arranged to settle the outstanding debt owed to certain arms-length service providers by issuing an aggregate of 1,101,500 common shares at a deemed price of $0.10 Cdn. per common share. The amount of indebtedness settled by this arrangement is $110,136 Cdn.

Such arrangement is subject to approval from the TSX Venture Exchange.

The common shares that will be issued in connection with this debt settlement will be subject to a hold period of four months and one day from issuance. The amount of shares proposed to be issued for debt have been rounded to the nearest board lot.

About BCM Resources Corporation

BCM Resources Corp. is a Vancouver-based mineral exploration company, dedicated to advancing its Shan South molybdenum discovery. The Company is also the holder of a significant land package of 100% owned mineral claims comprising another five properties near Terrace, B.C. All of these are considered to be highly prospective for molybdenum and other base & precious metals.

On Behalf of the Board of Directors:

Dale McClanaghan, President & CEO

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Augusta's Rosemont Copper project near Tucson, Arizona now meets all federal, state and local requirements by operating with enhanced emissions controls at the mine site.

By early afternoon the miner was trading up 10.7% at $2.26 on the NYSE AMEX, after earlier spiking to $2.30. The Toronto TSX was closed on Monday for a public holiday in Canada.

After being hammered following the earlier denial of the environmental permit, Augusta has now added 24% in value to $325 million over the last month after analyst upgrades and an updated pre-feasibility study. The counter is still showing losses for 2012 – it is down 27% year to date.

According to the Rosemount update released last month, mine construction and commissioning is pegged at $1.23 billion of which $113 million has already been spent with planned production scheduled for 2015.

At full tilt Rosemont could account for about 10% of annual US copper output. Silver would be mined as a byproduct over a 21-year-mine life. Rosemont hosts a copper/molybdenum reserve of 5.9 billion pounds of copper and 194 million pounds of molybdenum.

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The $16 billion company was punished on New York markets on Wednesday with the counter sliding by more than 5% by midday on massive volumes of more than 4 million shares. Year to date investors in Teck are 22% poorer.

The diversified miner suffered lower realized prices across the board with copper down 14% to $3.57 a pound, its realized coal price was 26% below Q2 2011 at $202 a tonne. Zinc (-15%), silver (-24%), lead (-22%) and molybdenum (-18%) prices all declined.

Don Lindsay, President and CEO (pictured) said in a statement that the company was nevertheless pleased with operating results as it achieved record quarterly copper production and significantly increased coal sales. The firm said its balance sheet remains strong with $3.6 billion of cash.

The company also trimmed capex plans for 2012 and is now expected to spend $2.1 billion, slightly lower than previous guidance of $2.3 billion. $220 million have been set aside to advance the company's first foray into the oil sands business at Fort Hills.

The Ottawa Citizen quotes Greg Barnes, an analyst at TD Securities as saying "Teck should face headwinds from falling coal prices, which have been down sharply in recent weeks. Spot prices for hard coking coal have reportedly dropped 11% in the last month alone."

Teck said it has already reached agreements with coal customers to sell 5.0 million tonnes of coal in the current quarter expect to conclude additional sales over the course of the three months. Prices for its premium coal have been agreed at $225 per tonne and the average price for all products is approximately $198 per tonne.

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According to Bloomberg, the EU, US and Japan have requested that a dispute settlement panel be established to investigate export curbs on vital rare earth elements as well as tungsten and molybdenum.

China has responded to the request by expressing its regret at the decision, and asserts that its policies are "aimed at protecting natural resources," while denying any intention to unfairly impact trading patterns:

China's policies concerning the products at issue are aimed at protecting natural resources and achieving sustainable economic development, and China has no intention of protecting the domestic industry through means that would distort trade

China had previously rejected a request by the US, EU and Japan on June 10 for a panel to rule on their rare-earth export curbs last month, yet under WTO rules China is not permitted to reject a second request.

The dispute will hinge upon whether the purpose of China's rare earth quotas is protection of the environment or protection of domestic industries, the latter of which is considered a form of trade distortion.

Following the establishment of a WTO panel to probe the matter judges will have six months to draft a report, after which parties may then submit appeals.

China has recently undertaken broad efforts to reform and consolidate its rare earth mining industry, slashing the number of mining permits in half earlier this month.

This is not the first time that rare earths have been a source of contention for the leading economies. Tensions flared between China and the US and Japan in July 2010, when China cut domestic output and slashed export quotas for rare earths by 40%.

China currently produces 90% of the world's rare earths, which are key ingredients in defense, renewable energy and electronics.

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It is arguably the richest prize in mining. The deposit hosts 55 billion pounds of copper, 76 million ounces of gold, 3.3 billion pounds of molybdenum, and quantities of silver, palladium and rhenium.

So far the Pebble Partnership has invested about $500 million over almost a decade and the project has its backers including former Alaska governor Sarah Palin, but has run into strong resistance from environmental groups.

Frontline finds many against Pebble including a former Alaska state senator named Rick Halford:

He cleared his land with dynamite. He calls himself the "ideal redneck Republican". As a longtime leader in the state legislature, he never met a hard-rock mine he didn't like.

That is, until he took a long look at the proposed Pebble Mine in south-west Alaska. It is a phenomenal prospect, the biggest and richest in North America. But to dig a mine there is to make a Faustian bargain that involves an agonizing Alaskan twist.

In return for copper and gold worth an estimated $500bn, state and federal regulators risk poisoning what scientists describe as the last best place on earth for millions of wild salmon.

"If God were testing us, he couldn't have found a more challenging place," said Halford, who helped write Alaska's industry-friendly mining laws when he was president of the state senate.

But the project also has its supporters, including among locals:

"If Pebble wasn't here, I don't know where I would be working," said Sheena Ishnook, 23. She has a $17.50-an-hour job operating an incinerator in Newhalen, a village on the lake. The job is funded by the Pebble Partnership, as part of its campaign to win over local support.

With her savings, Ishnook bought an iPad and is saving for a snow blower and a pick-up truck. She knows that the mine might harm the salmon she and her family rely on for food. "It is kind of a big risk," she said. "But other than that, it gives us job opportunities, makes us stay here at home instead of moving away."

Pebble was slammed in an EPA report released in May concerning the proposed open pit mine and 140 km slurry pipeline upstream from Lake Iliamna – part of a water system where 30–40 million sockeye salmon spawn each year – and the impact on the world's largest salmon fishery, 80 km south of the lake in Bristol Bay.

Last November, 81% of the Bristol Bay Native Corporation —  the largest private landholder in southwest Alaska — rejected the mine on the basis that it will "unavoidably put at risk the 'fisheries and our Native way of life."

A month earlier, voters in the Lake and Peninsula Borough narrowly supported (by 34 votes) a ballot measure put forward by anti-Pebble activists that would restrict future development that affects more than one square mile of land within the 31,000 square mile borough.

The ordinance, however, is being challenged in court by the State of Alaska which argues that it seeks to undermine state authority over large-scale resource development.

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In a ceremony held at the presidential palace of La Moneda, in Santiago, President Sebastián Piñera tele-triggered Friday the first explosion (image) for one of the access tunnels to the underground operation.

"Chuquicamata and El Teniente will be the two largest underground mines in the world, which will keep an old and a strong mining vocation in the country into the future," said President Piñera according to Codelco’s press release.

To finance the expansion of its century-old Chuquicamata mine, Codelco raised $2 billion in a sale of debt that includes its first 30-year bond in over five years.

The Chile-owned miner sold $750 million 30-year bonds at an extra yield, or spread, of 180 basis points above U.S. Treasuries. Codelco also placed $1.25 billion of 10-year bonds at a 165-basis point spread.

Early works at the project started earlier in the year with an estimated cost of $234 million, as Codelco stated at the beginning of March.

The underground section of the Chuquicamata mine will allow access to a reserve calculated at 1.7 billion tons of copper ore, with an annual production capacity of 340,000 tonnes of fine copper and more than 18,000 tonnes of fine molybdenum. It is expected to start production in 2018.

Due to the age of Chile's mines, Codelco needed to go deeper in its open pits, as the cost of waste removal continues to grow. There is also a need to get more ore out of existing mines since, for legal and political reasons, the state-run company cannot buy new ones.

Currently, Chuquicamata, which is located 1,650 km north of the Chilean capital of Santiago, is the largest open pit copper mine in the world. It started operations in 1910 and forms the core of Codelco’s Chuquicamata division, which also includes a second open pit mine, Mina Sur.

(Image courtesy of Codelco)

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In an interview with local newspaper La Tercera, CEO Thomas Keller (photo) said the company, the main copper producer worldwide and world's No 2 molybdenum miner, is adding value to its business.

“We're paving the way to consolidate Codelco as the second- and first-biggest producer of molybdenum in the world," Keller said.

In 2011, Codelco sold 22,800 tonnes of the metal used to harden steel and will ramp up production of molybdenum once it coverts its Chuquicamata mine to an underground operation.

“The [Chuquicamata] project will allow us to directly sell a good chunk of our molybdenum production as commercial molybdenum because what we sell currently is molybdenum concentrate,” Keller added.

Asked about Codelco's dispute with Anglo American over copper assets in southern Chile, the executive said he is committed to achieving an agreement with Anglo and that hopes a long court trial can be avoided.

Read more on the conflict between Anglo American and Codelco >> >>

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In a statement, the miner said the additional spending over seven years will allow average annual production of 180,000 metric tons of copper, 185,000 ounces of gold and 13,800 tons of molybdenum from 2019 to 2029.

Rio Tinto Copper's Chief Executive, Andrew Harding, said the investment will secure low cost copper, gold and molybdenum production for the company in next two decades.

Harding added the company continues to evaluate underground options that will further extend the life of the mine, which has already been in operation for over 100 years.

The Bingham Canyon Mine, also known as the Kennecott Copper Mine, is located southwest of Salt Lake City. According to estimates, the area may hold about $5 billion worth of copper.

(Image: Bingham Canyon copper mine in 2005, Wikipedia)

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Lumina Copper's stock was largely unchanged by the news, starting the day up but then finishing the day down 1.51% to $9.14.

On Monday Ross Beaty, who owns about a quarter of Lumina Copper, lamented the political climate in Argentina, which he said is hindering development of the project.

Lumina's news release discussed the intersect:

The first zone is located approximately 250 meters northwest of the current National Instrument 43-101 ("NI 43-101") mineral resource estimate and has been defined to date by 24 holes (assay results for 4 holes received to date) over an area of 600 meters in a east/west direction by 600 meters in a north/south direction. The zone is characterized by high grade supergene copper mineralization associated with a broad north/south trending fault zone. Drill results received to date are highlighted by hole RC-19 that intersected 222 meters grading 0.69% copper, 0.13 g/t gold and 0.01% molybdenum (0.83% copper equivalent(1), including 40 meters grading 1.67% copper, 0.38g/t gold and 0.02% molybdenum (2.01% copper equivalent).

The second zone is located 750 meters to the north of the current NI 43-101 mineral resource and has been defined to date by hole 96, which intersected supergene copper mineralization starting 28 meters below surface over a length of 116 meters and graded 0.40% copper and 0.53g/t gold (0.71% copper equivalent) including, from 28 meters below surface, 18 meters grading 1.10% copper and 2.1g/t gold (2.32% copper equivalent).

Read the full news release

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