China joins nations seeking treasure in warming Arctic – by Elisabeth Rosenthal (New York Times/NBC News – September 19, 2012)

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Bid to join Arctic Council is so ‘it won’t be shut out from decisions on minerals and shipping,’ expert says

NUUK, Greenland — With Arctic ice melting at record pace, the world’s superpowers are increasingly jockeying for political influence and economic position in outposts like this one, previously regarded as barren wastelands.

At stake are the Arctic’s abundant supplies of oil, gas and minerals that are, thanks to climate change, becoming newly accessible along with increasingly navigable polar shipping shortcuts. This year, China has become a far more aggressive player in this frigid field, experts say, provoking alarm among Western powers.

While the United States, Russia and several nations of the European Union have Arctic territory, China has none, and as a result, has been deploying its wealth and diplomatic clout to secure toeholds in the region.

“The Arctic has risen rapidly on China’s foreign policy agenda in the past two years,” said Linda Jakobson, East Asia program director at the Lowy Institute for International Policy in Sydney, Australia. So, she said, the Chinese are exploring “how they could get involved.”

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Iron ore price plummet brings trouble to Labrador Trough – by Peter Koven (National Post – October 1, 2012)

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

Short of the oil sands, there is no Canadian resource getting more foreign attention than the Labrador Trough.

The red-tinged ground that permeates the Quebec-Labrador border region hints at the massive iron ore riches that lie below, and the construction activity around Schefferville (along with much larger booms in nearby Wabush and Labrador City) points to the huge investments to come.

A small army of mining companies are moving ahead with iron-ore projects that could pour tens of billions of dollars into the region. Since most of these firms are juniors and could never finance these projects on their own, they have secured Asia’s largest steelmakers as backers. Iron-ore giants Rio Tinto Ltd., Cliffs Natural Resources Inc. and ArcelorMittal are also in the midst of production expansions.

The Trough only churns out about 40 million tonnes of iron ore a year right now — a pittance in a global market bigger than one billion tonnes. Both the Asian steelmakers and Canadian investors are counting on those numbers to rise substantially in the years to come.

Which is why they were so stunned at what just happened. With virtually no warning, the iron ore price fell off a cliff in August, plummeting about 30%. It was below US$85 a tonne by early September, compared with almost US$200 a tonne in 2010.

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Pro-Alberta, pro-Canada – National Post Editorial (October 1, 2012)

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

In July, we praised Ontario premier Dalton McGuinty for showing a more positive attitude about the oil sands, and the province of Alberta in general (“What’s Good for Alberta,”July 21). Mr. McGuinty had dined with Alberta premier Alison Redford in Toronto, seeking to smooth over any problems in their relationship that may have been created by the Ontario premier’s earlier ill-considered criticisms of the oil sands.

It was February when Mr. McGuinty sought to pin some of the blame for Ontario’s current economic difficulties on the high Canadian dollar, partially due to Alberta’s booming petroleum sector. Of course, a high Canadian dollar provides as many benefits to Canadian businesses as problems, and Mr. McGuinty’s leadership has undoubtedly done more harm to Ontario’s economy and future competitiveness than any oil pumped from Alberta.

We were therefore pleased when, after his meeting with Ms. Redford, Mr. McGuinty spoke of the need for the provinces to work together as members of the same team. And we said so. We ought to have waited. We hadn’t seen anything yet.

On Thursday, Ontario finance minister Dwight Duncan travelled to Calgary to launch a full-on charm offensive.

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NDP’s Mulcair throws support behind West-to-East oil pipeline – by Bill Curry and Shawn McCarthy (Globe and Mail – September 29, 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

OTTAWA – he politics of pipeline expansion in Canada are shifting again, as the federal NDP – which strongly opposes plans for a Northern Gateway pipeline to the Pacific coast – is now pledging its full support for a pipeline that would see Alberta oil pumped to Eastern Canada.

In a speech to the Canadian Club of Toronto at the Royal York Hotel, NDP Leader Thomas Mulcair gave his clearest sign of support yet for the notion of a west-to-east pipeline that would allow western producers to receive higher prices for their crude and refiners in Eastern Canada to replace imported supplies of oil with North American product.

The comments also highlight how politics is shifting the debate over pipelines for western oil, as even Conservative supporters including former federal minister Jim Prentice have criticized Ottawa’s approach to pipelines that would carry Alberta bitumen through British Columbia for export to the Pacific Rim market.

While political momentum is building against the Northern Gateway pipeline, provincial and federal political leaders of various stripes are lining up in favour of a focus on the east. The federal Conservatives, New Democrats and Liberals are all in favour of having western crude refined and exported in the east.

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[Ring of Fire’s] Black Thor deposit delayed – by Carol Mulligan (Sudbury Star – October 1, 2012)

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

Cliffs Natural Resources has moved the production start date for its Black Thor chromite deposit in the Ring of Fire back a year to 2016, because discussions about the location of Cliffs’ ferrochrome processing plant took longer than expected.

Cliffs spokeswoman Patricia Persico said “that’s fine” because the talks were about “necessary and important topics” such as the building of an all-weather road to the site, 540 kilometres north of Thunder Bay, as well as electricity prices.

Those discussions are continuing, said Perscico. The company has said all along its timelines to develop the project are estimates, she said. Cliffs is promoting a north-south road in its talks with the government of Ontario, said Persico. What that will mean in terms of shared capital is still being discussed.

Cliffs announced in early May it had selected a brown-field site north of Capreol, at the old Moose Mountain Mine, as its choice of location for the ferrochrome smelter.

That announcement moved development of Black Thor into the feasibility stage, “which allows us to really get deeper ” into the project’s scope and move the environmental assessment project forward, said Persico.

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Xstrata board backs Glencore’s $33bn takeover offer – by Firat Kayakiran (Mineweb.com – October 1, 2012)

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Xstrata’s board members have backed Glencore’s revised offer after gaining assurances over the combined company’s board and decoupling approval of incentive payments from a vote on the offer.

LONDON (BLOOMBERG) – Xstrata Plc (XTA)’s board recommended shareholders back a $33 billion sweetened takeover offer by Glencore International Plc (GLEN) after gaining assurances on board composition and delinking votes on the bid and bonus payments.

Shareholders will be asked to consider two resolutions: one to approve the takeover along with 144 million pounds ($232 million) of retention bonuses and a second that excludes the pay question, Xstrata said in a statement today. This means the deal can proceed even if the incentive payments are rejected.

The recommendation brings Glencore’s billionaire Chief Executive Officer Ivan Glasenberg one step closer to his goal of creating the world’s fourth-largest mining company. The combination, five years in the making, would couple Glencore’s global trading operations with Xstrata’s coal, copper, and zinc production, establishing a resources group with about 130,000 employees in more than 40 countries.

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Africa’s investment boom offers valuable lessons – by Geoffrey York (Globe and Mail – September 29, 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.

GOULGOULTOUN, BURKINA FASO – Within sight of the biggest gold mine in Burkina Faso, hundreds of children are slipping silently into starvation.

They live in flimsy wattle or mud huts in a scrub wasteland. They help their parents scrounge for flecks of gold in the sand. And every month, hundreds are so malnourished that they need emergency food at the village clinic – just a short walk from the perimeter of the massive high-tech gold mine, owned by a Canadian company.

I’ve seen the same contrasts and inequities across Africa: poverty and hunger in the shadow of gleaming new mines and plantations; luxury hotel towers rising near crowded slums; villagers gaining jobs from multinational projects while others lose their land; local entrepreneurs capitalizing on the economic growth even as most of the profits go to foreign shareholders.

Today’s investment boom is Africa’s biggest opportunity in decades, but will it seize the moment or squander it? Some African countries are getting it right and there are lessons to be drawn from their successes.

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Alberta’s new oil czar ushers in era of ‘constructive engagement’ – by Claudia Cattaneo (National Post – September 29, 2012)

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

It is tempting for the oil czar of a major producing jurisdiction to tower over his government colleagues and dominate the industry he oversees.

But Ken Hughes, Alberta’s energy minister, is no Ali Naimi, the market-moving oil minister of Saudi Arabia, nor is he Rafael Ramirez, the Hugo Chavez loyalist who doubles as Venezuela’s energy minister and CEO of the national oil company. Nor does he aspire to be.

Appointed four months ago by Alberta Premier Alison Redford to manage a resource endowment rivaling that of his Saudi and Venezuelan counterparts, Mr. Hughes is an amicable former entrepreneur focused on ensuring Alberta’s energy house is in good working order and the conditions competitive.

Meanwhile, others are sweating the big issues – environmental opposition to new oil sands export pipelines to the U.S. and Asia, tension with British Columbia over the division of energy benefits, Chinese takeovers in the oil sands.

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CNOOC-Nexen deal not worth taking a foreign-investment stand on – by Terence Corcoran (National Post – September 29, 2012)

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

As national and international debate over the CNOOC-Nexen deal heats up it becomes more and more obvious that Ottawa should just wave a wand of approval over the $15-billion takeover.

China, which owns CNOOC Ltd., is a growing global threat, politically and economically, but that’s no reason for Ottawa to rush into a new interventionist foreign-investment stance over what is essentially a marginal transaction for a company — Nexen Inc. — that is of no strategic importance. Canada may need a policy on the role of foreign state-owned enterprises, but now is not the time to create one.

There can be no doubt that between now and maybe forever, China is going to be the cause of global economic and political disruption. Totalitarian regimes are inherently unstable and unpredictable.

It is inevitable, for example, that this Communist version of state capitalism — previously known to the world as fascism — will come tumbling down and take a lot of earnest Western fellow travellers with it.

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Canada should be open for business, but not at any cost – by Diane Francis (National Post – September 29, 2012)

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

Canadians should be upset and insulted that China’s biggest grab for control of a major resource company anywhere in the world is the $15-billion Nexen deal. Clearly, China is testing whether this Boy Scout of a nation will roll over.

This is just one of many reasons why Canada must reject this takeover. Another is a warning by CSIS against foreign buyouts of strategic assets, and another is that polls show public opposition to the deal.

One compromise that’s been suggested is that the Nexen deal goes ahead but no more. That’s crazy. Canadians have no obligation to feed China’s appetite for resources just because it invited itself to dinner.

In addition, Canada has no obligation to Nexen shareholders, directors and management because they knew, or should have known, foreign transactions are always at the pleasure of Canadian governments. There should be no compromise and a turndown need not be difficult, won’t burn any bridges and can be done elegantly in this way:

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Time to prove Canada open for business – by Perrin Beatty (National Post – September 29, 2012)

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

Perrin Beatty is chief executive of the Canadian Chamber of Commerce.

‘We’ don’t own Nexen. Its shareholders do

When the Chinese National Overseas Oil Company (CNOOC) offered $15.1-billion to purchase Nexen Ltd., it seemed to be a highly positive event. The specific offer is very attractive — a 61% premium over the company’s stock price. The transaction will also grow the Canadian operation by 40% as additional North American assets are consolidated under the Calgary office.

Commitments to retain the Nexen brand, its operations and staff, as well as to list its shares on the TSX, are all welcome. (Of course, once listed, CNOOC will be bound by the market-transparency rules that govern the exchange. It will also be the single-largest listed entity on the TSX.)

Best of all, the deal signals success for Canada’s campaign to improve our commercial ties with China. This week, the government tabled the long-awaited Canada/China investment treaty, a critical step in establishing reliable commercial relations between the two countries.

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