May 16, 2012 – Republic of Mining

From Queen’s Park – We need to make the right decisions on the Ring of Fire – by Sarah Campbell, Kenora-Rainy River MPP (NetNewsledger.com – May 13, 2012)

May 16, 2012

QUEEN’S PARK – LEADER’S LEDGER – Last week Cliffs Natural Resources announced its plans to locate a chromite smelter, which will be used to process raw ore from the Ring of Fire, in Sudbury.

While many are disappointed that the smelter, and 450 potential jobs, will be located in Sudbury, Cliffs Natural Resources is a privately owned company and the decision, with its estimated $1.8 billion price tag, is theirs to make.

That said, I have concerns with the way this process was handled by the provincial government, not only in its failure to involve regional leaders but also in the fact that there appears to be many side deals that have been made but not announced.

The fact is, the government needs to be the party facilitating a cooperative approach, to ensure the potential of the Ring of Fire project is maximized. By leaving community leaders out of the first stage of planning, and making decisions without them, they risk making the wrong decisions.

While the only firm commitment that has been announced is the location of the smelter, the fact that this decision was made in the backroom leaves us to guess as to what other promises have been made.

Will the Ring of Fire lead to a new Northwestern Ontario territory? – by James Murray (Netnewsledger.com – May 16, 2012)

May 16, 2012

http://netnewsledger.com/

THUNDER BAY – Editorial – Will the Ring of Fire lead to a new Northwestern Ontario territory? In the Ontario Legislature on Tuesday the issue of mining and the Ring of Fire was discussed. Sarah Campbell went so far as to state in the legislature, “This government must start representing our needs and interests today; otherwise, its not just Cliffs that will receive an eviction notice from the northwest, it will be the government of Ontario”.

This is the first time in recent memory that the subject of Northwestern Ontario as a separate political entity from the rest of Ontario has been raised.

It demonstrates the degree of frustration and the depth of growing anger over how the McGuinty government is treating the region.

Campbell stated in a members statement read in Queen’s Park, “While Cliffs made a business decision to process northwestern Ontario resources in northeastern Ontario, which is its right, this government has no excuse for failing in its duty to involve northerners in the process. While the government is silent on many details, it is clear that this government has made commitments without involving municipal leaders or First Nations.

“It would appear that Ontario is already in breach of their legal duties toward Neskantaga” – by Netnewledger News(Netnewsledger.com – May 15, 2012)

May 16, 2012

http://netnewsledger.com/

THUNDER BAY – The legal team for the Neskantaga First Nation have communicated to the McGuinty Government through Minister of Northern Development and Mines, Rick Bartolucci over what the First Nation is saying is a lack of consultation.

“The Neskantaga, along with the other Matawa First Nations, is in litigation in respect to the Cliffs’ project, and the need for a full Joint Panel Review. Neskantaga has indicated to your Ministry and your officials a desire to negotiate a proper regional environmental assessment process that would harmonize Federal, provincial and First Nation reviews”.

“Further, your Ministry and the project proponent, Cliffs Natural Resources Inc. have been well aware that the proposed project and its related infrastructure will have significant adverse impacts on the Neskantaga lands, culture and aboriginal interests. Despite this knowledge, Ontario has proceeded with discussions with the proponent and other First Nations to the exclusion of Neskantaga. We are now advised that your Ministry has announced that Ontario intends to proceed with this project, and to provide funding to the proponent for infrastructure without having fulfilled the duty of consultation and many other First Nations directly affected”

Discord over NW Ont. [Ring of Fire] mine was avoidable, lawyer says – CBC News (CBC Radio Thunder Bay – May 16, 2012)

May 16, 2012

http://www.cbc.ca/thunderbay/

An American company planning to invest $3.3 billion on a Northern Ontario mine and processing plant has waded into the latest front in a countrywide battle over environmental issues and aboriginal rights, a mining consultant says.

Lawyer and mining industry strategist Bill Gallagher said Ontario should have foreseen the confrontation brewing over land use in the province’s mineral-rich Ring of Fire region in the James Bay Lowlands.

The province announced last week that it reached an agreement in principle with Cleveland-based Cliffs Natural Resources to build a chromite mine in the area about 500 kilometres northeast of Thunder Bay, a road there and a processing facility near Sudbury.

But lawyers for the Neskantaga First Nation say the province may have broken the law by signing deals with Cliffs before consulting First Nations. In a letter written last week, solicitor Gregory McDade exhorts the province to “take no further steps to support this project until full discussion has been held with northern First Nations.”

Neskantaga Chief Peter Moonias added that without thorough consultation on environmental and other issues, Cliffs would have to “kill me first” before accessing its mine site.

OMA member Cliffs plans to invest $3.3 billion in Ring of Fire

May 16, 2012

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

Ontario Association Member Cliffs Natural Resources has announced intentions to invest $3.3 billion to develop a chromite mine in the Ring of Fire area, a transportation corridor and a processing plant in Northern Ontario. This could lead to more than 1,200 direct jobs over the anticipated 30 year life of the mine.

“Cliffs is pleased to be moving forward the proposed development of a mine in the Ring of Fire and a processing facility near Sudbury,” said Bill Boor, Senior Vice President Global Ferroalloys for Cliffs Natural Resources, based in Cleveland. “These milestones bring us closer to opening the mine and starting production to meet the global demand for stainless steel.”

“Ontario is blessed with an abundance of natural resources at a time in history when the world is developing faster than ever and demanding these resources,” said Rick Bartolucci, Minister of Northern Development and Mines and MPP for Sudbury. “We are taking advantage of this incredible opportunity in the Ring of Fire to further open up Northern Ontario by bringing thousands of jobs, new infrastructure and economic opportunities to cities, towns and First Nations communities.”

The Ring of Fire is a mineral rich and somewhat isolated area of Northern Ontario located about 540 kilometres northeast of Thunder Bay.

Is the resource boom over? A resounding No! – by Lawrence Williams (Mineweb.com – May 16, 2012)

May 16, 2012

www.mineweb.com

Speaking at the New York Hard Assets Investment Conference this week, respected analyst Adrian Day gave the reasons for his belief that the recent resource boom is still far from over.

NEW YORK (MINEWEB) – Not surprisingly – given metal price performance at the time – the audience at the New York Hard Assets Investment Conference was a little depressed. With gold heading down to the low $1500s – the lowest for several months and, of course, junior mining stocks, which is the sector most of the audience would be there to hear about, having been particularly hard hit.

What the audience really wanted advice on was addressed in one of the earlier keynote presentations by Adrian Day. Is the resource boom over? was the title of his talk and he prefaced it with an immediate No! In particular he made some very salient points about global copper production and the copper market itself. He pointed out that the shortest full copper price cycle in recent history was 17 years, while the current copper cycle only started in 2001 – so if this is the end of the current resource boom this would be the shortest such cycle in over 200 years by a very long margin – which he did not see as likely.

Also he made the very apposite point that most of the world’s copper production comes from old mines where production is declining – either for technical or falling grade reasons – while it takes at least a 10 year lead time – mostly a lot longer to bring a significant new copper mine on stream so it is relatively straightforward assessing he future production scenario given that almost certainly there will not be a new major copper mine opened in the next 25 years which is not already known about.

NEWS RELEASE: KGHM INTERNATIONAL ANNOUNCES Q1 2012 RESULTS & CHANGES TO MANAGEMENT TEAM

May 16, 2012

Vancouver, Canada, May 15, 2012 – KGHM International Ltd., formerly Quadra FNX Mining Ltd. (the “Company” or “KGHM International”), today announced that it will hold a conference call to discuss its financial results for the first quarter of 2012 on Thursday, May 17, 2012 at 9 a.m. PT, 12:00 noon ET, 6:00 p.m. CEST. The financial statements and the MD&A will be available at www.kghminternational.com as of May 15, 2012.

The North American toll free number for this conference call is 1-866-226-1793 and the international number is 1-416-340-2218. The Company requests that participants dial into the call at least 10 minutes prior to the scheduled start time. A PowerPoint slide presentation will be posted on the web site, by end of day on Wednesday, May 16, 2012.

The playback version of the conference call will be available until May 24, 2012 at 1-905-694-9451 or North American toll free 1-800-408-3053 and using the pass code: 7115552.

The Company today also announced that effective June 1, 2012, Derek White, currently the Executive Vice President, Corporate Development, will become the President of KGHM International Ltd.

The cost of moving Alaska’s Pebble mining project forward – by Marilyn Scales (Canadian Mining Journal – May 15, 2012)

May 4, 2015May 16, 2012

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

I know an engineer who says anything is possible if you throw enough money at it. The costs associated with the development of the Pebble copper-gold-molybdenum project in Alaska come to mind when thinking in this vein.

The Pebble Partnership, a joint venture of Vancouver’s Northern Dynasty Minerals and Anglo American plc of London, UK, is shepherding the US$5-billion project toward production. The deposit is estimated to contain 80.6 billion lb of copper, 107.4 million oz of gold, and 5.6 billion lb of molybdenum.

Pebble is a deposit worth going after even if it takes and investment of $400 million and more to conduct work programs, research and comparative studies so far. Move than $100 million has been spent on environmental and socio-economic studies, resulting in a 27,000-page environmental baseline document.

This year’s budget is $107 million to be spent on engineering studies to complete a project description.

Methane hydrate technology fuels a new energy regime – by Neil Reynolds (Globe and Mail – May 16, 2012)

May 16, 2012

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

In a joint announcement two weeks ago, the United States and Japan (along with ConocoPhillips, the U.S.-based multinational oil company) announced the world’s first successful field trial (in Alaska) of a technology that uses carbon dioxide to free natural gas from methane hydrates – the globally abundant hunks of porous ice that trap huge amounts of natural gas in deposits, onshore and offshore, around the world. It’s a neat feat. You use CO2, which isn’t wanted, to produce natural gas, which is. But it’s more than neat – much more.

Methane hydrates constitute the world’s No. 1 reservoir of fossil fuel. Ubiquitous along vast stretches of Earth’s continental shelves, they hold enough natural gas to fuel the world for a thousand years – and beyond. Who says so? Using the most conservative of assumptions, the U.S. Geological and Geophysical Service says so.

The U.S. now produces 21 trillion cubic feet (tcf) of natural gas a year. But it possesses 330,000 tcf of natural gas in its methane hydrate resource – theoretically enough to supply the country for 3,000 years (give or take). Using less conservative numbers (for example, a methane hydrate resource of 670,000 tcf), the U.S. is good to go for 6,000 years (give or take).

Is Canada grappling with Dutch Disease? – by Barrie McKenna (Globe and Mail – May 16, 2012)

May 16, 2012

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Conventional wisdom says that Canada is fighting a crippling bout of Dutch Disease. Canada’s petro-infused currency, which has risen 55 per cent against the U.S. dollar in the past decade, continues to linger around parity with the greenback. That is clobbering exports, making Canadian auto plants uncompetitive and hammering the manufacturing heartland of Ontario and Quebec – or so the thinking goes.

But the conventional wisdom is wrong, according to three researchers who will publish a study Wednesday that largely debunks the Dutch Disease theory, which has become a frequent talking point amid rising tensions between the oil-rich West and battered factories of the East.

Several key manufacturing industries often linked to the phenomenon show no symptoms at all of currency damage, including autos, food, aerospace and heavy industry, according to the report, Dutch Disease or Failure to Compete?, being released Wednesday.

Don’t blame the Dutch – by Ryan W. Lijdsman (National Post – May 16, 2012)

May 16, 2012

The National Post is Canada’s second largest national paper.

Most Canadians are probably more familiar with Dutch elm disease than the similarly named “Dutch disease,” so when NDP leader Thomas Mulcair diagnosed Canada’s economy as suffering from the ailment it made headlines. According to Mr. Mulcair, “In six years since the Conservatives have arrived, we’ve lost 500,000 good-paying manufacturing jobs” because of a high petro-dollar. But is his diagnosis correct?

Dutch disease describes an ailment that the Netherlands contracted in the 1960s, when its broad economy faltered as it became a major exporter of natural gas. The currency became overvalued and the economy suffered from deindustrialization directly linked to the loss of exports and an increase in cheaper imports. Since then, the phenomenon has been discovered in other petroleumbased economies, such as Venezuela and several West African nations.

A superficial comparison of the Canadian economy and Dutch-diseased economies does show similarities, but not a more substantive look focusing on Dutch disease’s two major components: a high currency caused by an increase in natural resource exports and a directly linked decline in manufacturing.

NEWS RELEASE: Impact of “Dutch disease” on manufacturers smaller than feared

May 16, 2012May 16, 2012

Founded in 1972, Institute for Research on Public Policy seeks to improve public policy in Canada by generating research, providing insight and sparking debate on current and emerging policy issues facing Canadians and their governments.

Click here for: Dutch Disease or Failure to Compete?

For immediate distribution – May 16, 2012

Montreal – Although the resource boom has been widely blamed for the woes in the manufacturing sector and cited as a textbook example of the so-called “Dutch disease,” this diagnosis requires a second opinion, according to a new study published by the Institute for Research on Public Policy.

In Dutch Disease or Failure to Compete? A Diagnosis of Canada’s Manufacturing Woes, authors Mohammad Shakeri, Richard Gray and Jeremy Leonard find that while a booming energy sector in Canada has indeed contributed to the strong Canadian dollar, only one-quarter of total manufacturing output has been adversely affected by the dollar’s increased strength.

The authors examine the linkages between energy prices, the exchange rate and manufacturing output in Canada for 80 different manufacturing industries.

Group wants North to share [Ring of Fire] benefits – by Star Staff (Sudbury Star – May 16, 2012)

May 16, 2012

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

All of Northern Ontario must benefit from plans to build a chromite mine and smelter says a group representing the North’s municipal leaders.

“We are pleased that a decision has been made concerning one of the jewels of the North,” Alan Spacek, president of the Federation of Northern Ontario Municipalities, said in a release Tuesday.

“In a deal as big as this, the ‘devil is in the details.’ We want all communities to benefit from this mammoth find — First Nations, adjacent communities and communities right across the North.”

Last week, Cliffs Natural Resources said pending further studies, it would spend $3 billion to build a chromite mine in the Ring of Fire region of northwestern Ontario and ship the ore to be processed at a smelter in Capreol. Chromite is used to harden stainless steel, a key building component.