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A report released today by the US EPA does not paint a favourable picture of the proposed Pebble Mine in Alaska.

The report, titled “An Assessment of Potential Mining Impacts on Salmon Ecosystems on Bristol Bay, Alaska”, says the Pebble Mine, a huge copper-gold deposit being shepherded through a 50-50 partnership between Anglo American and Northern Dynasty Minerals, would have significant impacts on fish populations and streams surrounding the mine site, located near Bristol Bay.

The study looked at the potential impacts of large-scale mining in the Bristol Bay and two other river watersheds, considering a potential open-pit mine producing 2-6.5 billion tonnes of ore and a 139-km transportation corridor:

Based on this mine scenario, we conclude that, at a minimum, mining at this scale would cause the loss of spawning and rearing habitat for multiple species of anadromous and resident fish. A mine footprint of this scale would likely result in the direct loss of 87.5 to 141.4 km of streams and 10.2 to 17.3 km2 of wetlands.

The report abstract notes that even if mining did not result in any accidents or failures, the mine “would result in significant impacts on fish populations in streams surrounding the mine site.” Accidents or failures could include the release of contaminants or the catastrophic failure of a tailings dam.

The release of the report coincides with an announcement this week by Northern Dynasty stating that the Pebble Partnership is planning to spend $107 million to advance the mine in 2012, with the objective of achieving permitting by the end of this year.

The Pebble Mine is one of the largest undeveloped polymetallic mineral deposits left in the world.

According to a project website, 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. Comparing the world’s undeveloped gold deposits, Pebble ranks no. 1, dwarfing even Rio Tinto’s Oyu Tolgoi project in Mongolia, which is ranked fourth at just over 40 million gold ounces.

So far the Pebble Partnership has invested about $500 million into the project, including about $150 million on studies.

The size of the proposed mine and its location near salmon-bearing streams has attracted considerable controversy and opposition from some quarters.

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.

A report released today by the US EPA does not paint a favourable picture of the proposed Pebble Mine in Alaska.

The report, titled “An Assessment of Potential Mining Impacts on Salmon Ecosystems on Bristol Bay, Alaska”, says the Pebble Mine, a huge copper-gold deposit being shepherded through a 50-50 partnership between Anglo American and Northern Dynasty Minerals, would have significant impacts on fish populations and streams surrounding the mine site, located near Bristol Bay.

The study looked at the potential impacts of large-scale mining in the Bristol Bay and two other river watersheds, considering a potential open-pit mine producing 2-6.5 billion tonnes of ore and a 139-km transportation corridor:

Based on this mine scenario, we conclude that, at a minimum, mining at this scale would cause the loss of spawning and rearing habitat for multiple species of anadromous and resident fish. A mine footprint of this scale would likely result in the direct loss of 87.5 to 141.4 km of streams and 10.2 to 17.3 km2 of wetlands.

The report abstract notes that even if mining did not result in any accidents or failures, the mine “would result in significant impacts on fish populations in streams surrounding the mine site.” Accidents or failures could include the release of contaminants or the catastrophic failure of a tailings dam.

The release of the report coincides with an announcement this week by Northern Dynasty stating that the Pebble Partnership is planning to spend $107 million to advance the mine in 2012, with the objective of achieving permitting by the end of this year.

The Pebble Mine is one of the largest undeveloped polymetallic mineral deposits left in the world.

According to a project website, 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. Comparing the world’s undeveloped gold deposits, Pebble ranks no. 1, dwarfing even Rio Tinto’s Oyu Tolgoi project in Mongolia, which is ranked fourth at just over 40 million gold ounces.

So far the Pebble Partnership has invested about $500 million into the project, including about $150 million on studies.

The size of the proposed mine and its location near salmon-bearing streams has attracted considerable controversy and opposition from some quarters.

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.

A report released today by the US EPA does not paint a favourable picture of the proposed Pebble Mine in Alaska.

The report, titled “An Assessment of Potential Mining Impacts on Salmon Ecosystems on Bristol Bay, Alaska”, says the Pebble Mine, a huge copper-gold deposit being shepherded through a 50-50 partnership between Anglo American and Northern Dynasty Minerals, would have significant impacts on fish populations and streams surrounding the mine site, located near Bristol Bay.

The study looked at the potential impacts of large-scale mining in the Bristol Bay and two other river watersheds, considering a potential open-pit mine producing 2-6.5 billion tonnes of ore and a 139-km transportation corridor:

Based on this mine scenario, we conclude that, at a minimum, mining at this scale would cause the loss of spawning and rearing habitat for multiple species of anadromous and resident fish. A mine footprint of this scale would likely result in the direct loss of 87.5 to 141.4 km of streams and 10.2 to 17.3 km2 of wetlands.

The report abstract notes that even if mining did not result in any accidents or failures, the mine “would result in significant impacts on fish populations in streams surrounding the mine site.” Accidents or failures could include the release of contaminants or the catastrophic failure of a tailings dam.

The release of the report coincides with an announcement this week by Northern Dynasty stating that the Pebble Partnership is planning to spend $107 million to advance the mine in 2012, with the objective of achieving permitting by the end of this year.

The Pebble Mine is one of the largest undeveloped polymetallic mineral deposits left in the world.

According to a project website, 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. Comparing the world’s undeveloped gold deposits, Pebble ranks no. 1, dwarfing even Rio Tinto’s Oyu Tolgoi project in Mongolia, which is ranked fourth at just over 40 million gold ounces.

So far the Pebble Partnership has invested about $500 million into the project, including about $150 million on studies.

The size of the proposed mine and its location near salmon-bearing streams has attracted considerable controversy and opposition from some quarters.

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.

Chinese authorities have added 10,680 tonnes to the country’s export allowance on the top of the 10,546 tonnes it had already allocated to 11 state-sanctioned miners this year.

It is something of a meaningless exercise because during the first quarter China only exported about 2,770 tonnes of rare-earth oxides – 26.3% of the initial quota according to customs data.

Compared to last year that is a 70% drop in demand. The Australian quotes Du Shuaibing of Baichuan, a Beijing rare earth consultancy: “The global market has adopted a cautious, wait-and-see attitude in rare-earth procurement, resulting in weakness upstream and downstream.”

China mines roughly 95% of the world’s rare earths and is also the globe’s top consumer. It said at the start of the year that it will keep the allocation for the entire year at just over 30,000 tonnes.

The country’s export restriction on rare earths is currently before the World Trade Organization after the EU, Japan and the US complained, but what promised to be a precedent-setting case about trade with China now looks more like a damp squib.

This has not stopped lawmakers in the US from viewing rare earths – employed in critical components of the automotive, high tech, green energy and defence industries – as a national security issue and the industry worthy of special treatment.

Some have even called into question an official report from the Pentagon that showed that even at the height of China’s clampdown US defence contractors never faced a shortage of rare earths.

The slump in prices of REEs is as dramatic as the decline in volumes. Some more abundant rare earth elements such as lanthanum have crashed by more than 70%. While heavy and scarcer REEs such as dysprosium have generally held up better, many have also experienced price declines of 50% or more.

The changing marketplace has also led to a brutal beating of Molycorp, which was once the world’s top supplier of REEs and is now restarting mining and processing.

The Colorado company is destined to become the number one producer of the 17 elements outside China, but the rapidly changing economics of the industry has seen its stock decline 20% this week and 74% since May last year.

Read >> Rare earthquake: May last year Molycorp investors were $5.5 billion richer

Read >> Benign neglect: Black Ops II, Obama and Molycorp

Read >> We need to talk about how rare earth prices are imploding

Chinese authorities have added 10,680 tonnes to the country’s export allowance on the top of the 10,546 tonnes it had already allocated to 11 state-sanctioned miners this year.

It is something of a meaningless exercise because during the first quarter China only exported about 2,770 tonnes of rare-earth oxides – 26.3% of the initial quota according to customs data.

Compared to last year that is a 70% drop in demand. The Australian quotes Du Shuaibing of Baichuan, a Beijing rare earth consultancy: “The global market has adopted a cautious, wait-and-see attitude in rare-earth procurement, resulting in weakness upstream and downstream.”

China mines roughly 95% of the world’s rare earths and is also the globe’s top consumer. It said at the start of the year that it will keep the allocation for the entire year at just over 30,000 tonnes.

The country’s export restriction on rare earths is currently before the World Trade Organization after the EU, Japan and the US complained, but what promised to be a precedent-setting case about trade with China now looks more like a damp squib.

This has not stopped lawmakers in the US from viewing rare earths – employed in critical components of the automotive, high tech, green energy and defence industries – as a national security issue and the industry worthy of special treatment.

Some have even called into question an official report from the Pentagon that showed that even at the height of China’s clampdown US defence contractors never faced a shortage of rare earths.

The slump in prices of REEs is as dramatic as the decline in volumes. Some more abundant rare earth elements such as lanthanum have crashed by more than 70%. While heavy and scarcer REEs such as dysprosium have generally held up better, many have also experienced price declines of 50% or more.

The changing marketplace has also led to a brutal beating of Molycorp, which was once the world’s top supplier of REEs and is now restarting mining and processing.

The Colorado company is destined to become the number one producer of the 17 elements outside China, but the rapidly changing economics of the industry has seen its stock decline 20% this week and 74% since May last year.

Read >> Rare earthquake: May last year Molycorp investors were $5.5 billion richer

Read >> Benign neglect: Black Ops II, Obama and Molycorp

Read >> We need to talk about how rare earth prices are imploding

Chinese authorities have added 10,680 tonnes to the country’s export allowance on the top of the 10,546 tonnes it had already allocated to 11 state-sanctioned miners this year.

It is something of a meaningless exercise because during the first quarter China only exported about 2,770 tonnes of rare-earth oxides – 26.3% of the initial quota according to customs data.

Compared to last year that is a 70% drop in demand. The Australian quotes Du Shuaibing of Baichuan, a Beijing rare earth consultancy: “The global market has adopted a cautious, wait-and-see attitude in rare-earth procurement, resulting in weakness upstream and downstream.”

China mines roughly 95% of the world’s rare earths and is also the globe’s top consumer. It said at the start of the year that it will keep the allocation for the entire year at just over 30,000 tonnes.

The country’s export restriction on rare earths is currently before the World Trade Organization after the EU, Japan and the US complained, but what promised to be a precedent-setting case about trade with China now looks more like a damp squib.

This has not stopped lawmakers in the US from viewing rare earths – employed in critical components of the automotive, high tech, green energy and defence industries – as a national security issue and the industry worthy of special treatment.

Some have even called into question an official report from the Pentagon that showed that even at the height of China’s clampdown US defence contractors never faced a shortage of rare earths.

The slump in prices of REEs is as dramatic as the decline in volumes. Some more abundant rare earth elements such as lanthanum have crashed by more than 70%. While heavy and scarcer REEs such as dysprosium have generally held up better, many have also experienced price declines of 50% or more.

The changing marketplace has also led to a brutal beating of Molycorp, which was once the world’s top supplier of REEs and is now restarting mining and processing.

The Colorado company is destined to become the number one producer of the 17 elements outside China, but the rapidly changing economics of the industry has seen its stock decline 20% this week and 74% since May last year.

Read >> Rare earthquake: May last year Molycorp investors were $5.5 billion richer

Read >> Benign neglect: Black Ops II, Obama and Molycorp

Read >> We need to talk about how rare earth prices are imploding

Founder and controlling shareholder Laurence Graff, the undisputed king of uber-expensive diamonds, will earn a tidy $290 million windfall when he restructures his Mayfair-based company and will massively boost his paper wealth when Graff Diamonds lists in Hong Kong.

Graff Diamonds is kicking off a roadshow on Monday and will market the shares at $3.20 to $4.70 to raise $1 billion. It should afford the high end jewelry producer and retailer a market value of $3 billion to $4 billion.

Graff has about 20 stores worldwide, owns the majority of the cutter and polisher South African Diamond Corporation and also has a stake in Gem Diamonds, which operates the Letšeng mine in Lesotho.

Letseng produces some of the world’s largest diamonds including the 603-carat Lesotho Promise which Graff made into a necklace of 26 stones that is valued at more than $60 million.

FT.com (sub required) reports Graff is reliant on a small number of buyers – its top client last year bought a single item worth $100 million when total annual revenue was $756 million – and has to carry a massive inventory:

Graff specialises in sourcing some of the biggest and most expensive stones in the world and identifying the people who are willing to buy them. It has an inventory worth almost $900m at cost, of which 50 per cent are individual stones or items of jewellery containing stones of 10 carats or more.

The company only revalues individual pieces at their point of sale and analysts at Credit Suisse have estimated that the inventory could ultimately be worth $2.5bn-$3bn, which would approach the market capitalisation of Graff itself.

Besides jewelry Graff he owns a wine estate and hotel near Cape Town South Africa, a valuable modern and contemporary art collection and the obligatory super-yacht.

CNBC profiled Graff, who grew up in the working class neighbourhood of East London and dropped out of school at age 14 to become a jeweler’s apprentice, in June last year:

Graff, now in his eighth decade, is circumspect about the future. His son François, 47, works for him in London. But two years ago, a potentially smooth family transition seemed at risk. Mr. Graff and his wife of 47 years, Anne Marie, were set to divorce after Mr. Graff fathered a child with a woman who had worked for him. The London tabloids screamed that it would be the largest divorce settlement in British history.

At the last minute, the couple reconciled. And Mr. Graff is open in recognizing his daughter.

Graff not only deals in rough stones. The accompanying image (courtesy of Christie’s auction house)  is of the Wittelsbach diamond which was bought by Graff in 2008 for $24.3 million.

The 35.56-ct. Wittelsbach diamond was once owned by King Philip IV of Spain, who purchased it for his daughter, Margarita Teresa (in the background) for her engagement to Leopold I of Austria in 1664. It was mined in India and owned by the same private collector since 1964.

In a controversial move, Graff recut the diamond to remove imperfections, prompting criticism that he had essentially painted over a Rembrandt. The Wittelsbach Graff sold last year for an undisclosed amount.

The Graff family fortune is put at roughly $2.6 billion according to Forbes, which places Laurence Graff outside the top 40 of the 2012 mining billionaires list.

After the IPO he is likely to join two other diamond billionaires in the top ranks.

Number 21, Nicky Oppenheimer of De Beers is in charge of a family fortune estimated at $6.8 billion while Beny Steinmetz’s diamond businesses supply him with a net worth of $5.9 billion.   Controversial Angola-focused diamond miner Lev Leviev sits at #61 on the list .

Click here for profiles of the world of mining’s 40 richest people >>

In an interview with Louis James, John Hathaway discusses the US’s economic outlook and why he’s delighted by the current bearish sentiment toward gold.

in either the instantly available MP3 files

Louis James: Ladies and gentleman, thanks for tuning in. We’re at the Casey Research Recovery Reality Check Summit. We’re talking with John Hathaway, one of the more successful fund investors – institutional investors – in our precious metals field near and dear to my heart. John, can you give us a quick version of what you talked about here, for those who didn’t make it to the conference?

John Hathaway: Sure, yes. I think we’re at the end of a correction that resulted from the peak last summer. It was overcooked, kind of hyperventilated hysteria over the debt-ceiling talks, the rating downgrade of the US sovereign debt, and I think basically the stocks and the metal had been working off that boiled down to what we now have is a simmer. I think we are at a position where there’s not a lot of downside, and I would not be surprised by revisiting the previous highs of $1,900 and maybe even new highs over $2,000 this year.

What will do that is basically – so much of the narrative has been quantitative easing. When Bernanke announced on the 29th of February that they were done with quantitative easing (and if you believe that I’ve got a bridge to sell you, but for the time being let’s assume that there won’t be any), I was very impressed that gold did not go to a new low. It printed somewhere below $1,600 at the end of the year, made a couple-of-day swoon, but it didn’t go to a new low. And then when the Fed minutes came out it also did not go to a new low, it kind of reiterated what Bernanke said. So the narrative may be changing. I’m not ruling out quantitative easing as a possibility, but there are things out there that gold might be looking at that the CNBC mentality hasn’t figured out.

Remember that gold rose for many years before we even heard of quantitative easing; it was in a steady uptrend. So what could those things be? What would take gold – what would be the new headlines that might take gold to higher highs? To me, the biggest thing is that the Federal Reserve has purchased something like 61% of all new Treasury debt in the last year; and if they aren’t going to continue that, then what’s going to happen to rates?

Louis: Right.

John: The Chinese – who had been big supporters because they were rigging their currency – have not been generating foreign exchange to anything like the extent they were, so their participation rate in Treasury auctions has gone way down. If you look up the TIC numbers, foreign buying of Treasuries has dropped precipitously, so you have the two biggest pillars of support for keeping rates low in question here, and let’s see what happens on June 30th. If you don’t have a political buyer, either the Chinese and foreign buyers who are manipulating currency, and the Fed because they said they aren’t going to do it, what are rates going to do?

If you are going to get a risk-free return inflation-adjusted today that’s not politically motivated, it’s got to be somewhere around 4-5% on the short end of the curve. Every hundred basis points adds a huge amount to the budget deficit, so to me we’re in a real trap here, where it’s going to be a game of chicken as to whether the Fed can really live up to what Bernanke said on the 29th.

Louis: Isn’t that really the bottom line? They can’t allow that interest rate to rise with the debt outstanding –

John: It seems very difficult. The recovery, the alleged recovery that we had, is very… I’ll grant that things are better than they were a year ago or two years ago, but you’d have to call it feeble at best and maybe not sustainable. That’s one thing that I think could affect the gold market.

The second thing, and I think it’s very important too, is that inflation is rising. Even though the economy is soft, the number I look at – and I know we’re going to have John Williams speak at lunch, and we know he has a very good take on it – is the MIT Inflation Index, because that’s real-time pricing of billions of products. You can get to that website just by googling “MIT Inflation Project”; and that does not include services. Most of the services I take are inflating at more than 5%; they are closer to 10%. But goods that could be measured in real time are rising at 5%, so that’s also going to be a factor. That means if rates stay where they are, the Feds are just going to be that much more behind the curve.

So those are two things; and the third thing is that there’s $1.5 trillion of liquidity in the system that should the recovery – and I’m not a macro forecaster, but let’s say the recovery does sustain itself – you’ve got $1.5 trillion of free reserves that could just turn into money supply. Then you really would have a potentially hyperinflationary scenario, and the Fed would be completely powerless to do anything about it. So I think that’s bullish for gold – gold is not backward looking, it basically looks forward. I can go on and on. You’ve got the European unresolved sovereign debt crisis in Europe.

Louis: Let me jump in with a question about this, then. You’ve stood out really from the crowd in that most people agree on the general prognosis for gold. Most people are sort of near-term bearish, you know, the ones –

John: It makes me so happy.

Louis: Laughs But, you know, once a bear sentiment sets in, it seems to almost have its own momentum.

John: Yes.

Louis: You’re the only who’s saying “I think we’re near the bottom.” Most people are saying, “Sell in May and go away” –

John: Yes, I heard a couple of things from this session that just made me want to jump up and buy –

Louis: I understand the contrarian reason for that, but can you tell our audience a couple of reasons why you think we might be near the bottom or why you’re ready to buy now and not waiting to see how this summer turns out?

John: Sure. Well, first of all, I’m not a trader. I mean, I’m long, and last summer I thought, “Gee, this is really a little spooky, we’re not at a sustainable level,” but there wasn’t a whole lot I could do about it. And here we are and we have some cash, we have some inflows, so we are able to put money to work. And what is it that makes me think we’re there? Sentiment numbers are extremely negative, historically, when they’ve gotten to these levels. By the way, I put out a quarterly newsletter now that has a lot of this data, which can be found on our website.

Louis: Go ahead and give us the website.

John: It’s the Tocqueville Asset Management website, and it should be fairly easy to find. So sentiment is at levels that have been associated with big rallies. Traders’ commitments, net longs, net spec longs are way, way down there. I look at that a lot just as a way to see where the market is positioned. The guys who can create some volatility are not there, and so if gold starts moving, they won’t want to miss it, and so they’ll come in. And then, we’ve looked at some technical stuff. I’m not a technician but most of what I see from a technical perspective is extremely constructive. So I put those things together.

Sentiment is rock bottom. COMEX traders’ commitments are very, very constructive, and technical things that we look at are very constructive. So I would say all of those things, plus hearing these guys say that they are not going to step in – that’s more anecdotal, but that to me is just very, very positive. So I – frankly I don’t stake my reputation the way that Dennis Gartman does on making trading calls, but just as an experienced observer of this market for some number of years now, I think we’re ready to make a move higher.

Louis: Okay, well, thank you very much. Word to the wise.

John: Thank you.

South African thermal coal producer Continental Coal is seeking to augment its coal assets with a property in Colombia.

The ASX and AIM-listed company (ASX:CCC; AIM:COOL) said yesterday it has entered into a JV agreement to acquire a 50% interest in an existing coking coal operation in the South American country.

“The acquisition of this well established and high quality hard coking coal mining operation will complement the Company’s existing thermal coal mining, development and exploration projects in South Africa. The acquisition will further diversify its production base geographically into another of the world’s leading coal producing and export nations from a product base into the hard coking coal market,” Continental Coal said in a statement.

The JV involves five mining concessions covering 1,500 hectares and includes an existing underground mine that has been producing for the last 24 years. Continental Coal said the minelife is over 50 years, though the mine currently does not have JORC-compliant reserves or resources. It would produce at a rate of 500,000 tpa according to a 2010 technical report.

The acquisition would cost approximately US$15 million, and Continental Coal said it has finalized a convertible note facility with US-based Bergen Global Opportunity Fund LP for up to A$5 million.

Link to the full news release

URS Corp.’s Oil & Gas division will build pipeline for a Steam Assisted Gravity Drainage oil sands project in the Wood Buffalo Region near Fort McMurray, Alberta.