October 12, 2012 – Republic of Mining

The way the nation lives: Canada bets its buck on commodities – by James Munson (iPolitics – October 2012)

October 12, 2012October 12, 2012

Open publication – Free publishing – More commodities

iPolitics is independent, non-partisan and committed to providing timely, relevant, insightful content to those whose professional or personal interests require that they stay on top of political developments in Ottawa and the provinces.

RepublicOfMining graciously thanks iPolitics deputy editor Ian Shelton and writer James Munson for allowing this very insightful and timely content to be posted on this Blog – Stan Sudol

Commodity Supercycles

Speaking on the phone from Haifa, Israel last month, Natural Resources Minister Joe Oliver didn’t hide his government’s bout of commodities fever.

“As I’ve mentioned before, Canada is undertaking many major mega projects,” said Oliver, who was in Israel to secure energy partnerships with the Jewish state. “Over the next 10 years, we could see 500 projects with half a trillion dollars at stake.”

“No other country in the world is undertaking energy and mining projects at this scale or at this pace, creating a truly once in a generation opportunity for investors,” he said.

He was echoing his boss, Prime Minister Stephen Harper, who used the Summit of the Americas in Cartagena, Columbia in April to expound at resource development’s “vast power to change the way a nation lives.”

“Our natural resource sector is of vital importance in ensuring solid job creation and economic growth in Canada,” he said a month after putting forth a budget that deregulated much of Ottawa’s oversight over resource projects, a move that will heighten energy and mining’s already important stature in the Canadian economic pantheon.

Vale’s major challenges go beyond iron ore – by Jeb Blount (Mineweb.com – October 12, 2012)

October 12, 2012

www.mineweb.com

Costs are soaring, new mines are running behind schedule and growth in China, Vale’s largest market, is slowing.

RIO DE JANEIRO (REUTERS) – Roger Agnelli, who was forced out as chief executive of Brazil’s Vale in May 2011, may have been lucky to leave the world’s second-largest mining company when he did.

Since Murilo Ferreira replaced him as CEO, a series of setbacks have raised questions about Vale’s ability to increase sales and profit and maintain its place as the world’s top producer of iron ore, the main ingredient in steel.

Costs are soaring, new mines are behind schedule and growth in China, Vale’s largest market, is slowing. The price of iron ore, responsible for nearly three-quarters of the Rio de Janeiro-based company’s sales, recently sank to three-year lows.

Making matters worse, Brazilian laws and government interference threaten to hobble Vale, the country’s biggest exporter. Vale shipped $42 billion of raw materials in 2011, 16 percent of exports from the world’s sixth-largest economy.

“What the government is doing to Vale won’t kill the proverbial golden goose, but it could make the goose sick,” said Mauricio Canedo, an economist specializing in industrial policy and commodities at the Getulio Vargas Foundation (FGV), a Rio de Janeiro economic research institute. “Vale’s future looks less promising now than it has for some time.”

After Fukushima: Canada’s nuclear ambitions – by Yadullah Hussain (National Post – October 12, 2012)

October 12, 2012

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

Canada has emerged as one of the few bright spots in the latest International Atomic Energy Agency report, which cast a looming, Fukushima-shaped shadow on the wider industry.

The country’s nuclear-energy sector raised capacity by 35 megawatts last year and increased its contribution to total electricity to 15.3% from 14.8% in 2010, says the IAEA report, published late last month.

These improvements may seem incremental but they come at a time of great hardship for the global industry. An earthquake, followed by a tsunami, in 2011 left the Fukushima Daiichi Nuclear Power Plant in Japan — and the global industry — in a perilous state.

Nuclear power plants have always wrestled with a public relations problem, but the twin Japanese blows shook the industry. Japan, the second-largest producer of nuclear energy in the world and seen as a model for many energy-poor states, retired 12 nuclear power plants in the immediate aftermath of the disaster.

“The Fukushima Daiichi accident resulted in a slowing of the expansion of nuclear power but did not reverse it,” says the IAEA in its latest report. Still, the agency’s post-accident projections of global nuclear power capacity in 2030 were 7–8% lower than its previous estimates.

Goldcorp fined $350,000 [for fatal mining accident] – by Ron Grech (Timmins Daily Press – October 12, 2012)

October 12, 2012

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Goldcorp Canada has been fined $350,000 in connection with a fatal accident that occurred underground at the Hoyle Pond gold mine in March 2011.

The company pleaded guilty in a Timmins court Thursday to a Ministry of Labour charge of failing to provide sufficient information, instruction and supervision to protect the safety of its workers.

The charge stems from an incident in which David Yuskow Sr., a 57-year-old electrician who worked at the mine, was crushed by a scoop tram at the 1,390-foot level.

Wes Wilson, special prosecutor for the Ministry of Labour, said the mine had a procedure for alerting scoop tram operators about “pedestrians” working nearby but, at the time, it was not enforced in the area where the accident occurred.

“The procedure required the placement of signs and amber lights to alert equipment operators to the presence and proximity of workers,” Wilson explained. “Signs and lights were readily available to the workers at the time of the incident.”

McGuinty government bankrupting Wawa – by Christina Blizzard (Toronto Sun – October 12, 2012)

October 12, 2012

http://www.torontosun.com/home

TORONTO – Wawa’s goose is cooked. The small town on Lake Superior is teetering on the brink of bankruptcy, pushed to the edge by a provincial government that ignores and misunderstands the needs of rural and northern Ontario.

A series of decisions by the province has forced the town to cut services and even consider layoffs to police and other essential public sector workers.

Wawa’s main industries are forestry and mining. And before you city slickers roll your eyes and say it’s not your problem, consider this: Bay Street was built on forestry and mining. The TMX is the largest mining exchange in the world by number of listings.

The town’s woes started during the Mike Harris years. In 2000, the Harris government took power dam tax revenue from the municipal tax base and gave it to the provincial tax base.

This hit Wawa hard. It has seven dams with 16 generating stations within its municipal boundaries. That power dam taxation made up half its assessment – almost 45% of its tax income.

Ottawa extends Nexen review by 30 days – by John Spears (Toronto Star – October 12, 2012)

October 12, 2012

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

The federal government will take more time to review the proposed takeover of Nexen Inc. by CNOOC, China’s state-owned oil company.

Industry observers say the 30-day extension announced Thursday reflects the conflicting currents the Harper government is facing as it mulls the decision under the Investment Canada Act.

“A determination will be made based on the six clear factors that are laid out in detail in Section 20 of the act and the guidelines on investment by state-owned enterprises,” Paradis said in a statement.

“The required time will be taken to conduct a thorough and careful review of this proposed investment.” CNOOC, or the China National Offshore Oil Company, has offered $15.1 billion for Nexen.

Nexen’s headquarters are in Alberta. It has assets in western Canada, including in the oil sands, but also has extensive holdings in the Gulf of Mexico, the North Sea and off west Africa.

Will Ottawa take CNOOC at its word over Nexen deal? – by Jameson Berkow and Claudia Cattaneo (National Post – October 11, 2012)

October 12, 2012

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

CALGARY — CNOOC Ltd. executives crafted their $15.1-billion takeover bid for Nexen Inc. to pass Canada’s net benefit test for foreign acquisitions.

Yet no matter what they offered, the guidelines remain vaguely defined and open to broad interpretation. It makes the deal subject to any number of biases and political motivations.

Ottawa, which said Thursday it will extend its review by another 30 days to mid-November, will test China’s largest foreign offer to date against a short list of hurdles to determine whether it is as good for Canada as it is for China.

And CNOOC may not even have to satisfy all of them. “You don’t have to demonstrate a net benefit in each one of them,” said Doug New, Toronto-based partner with Fasken Martineau LLP who previously served with the Canadian Foreign Investment Review Agency.

“A neutral finding in four of them, and pluses in two of them could get you approval,” he said. “There are even some transactions where one of the factors would be a negative, but the benefits in the other factors could outweigh it.

West feels chill of low prices for natural gas – by Brent Jang (Globe and Mail – October 12, 2012)

October 12, 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.

VANCOUVER — Canada’s western energy powerhouses are feeling the chill from sluggish natural gas markets. Sales activity at British Columbia’s auction for exploration rights nearly ground to a halt in September, while Alberta and Saskatchewan are being pinched as energy companies scale back their budgets for targeting new natural gas prospects.

The sagging fortunes in natural gas are hitting government coffers already strained by budget deficits. Last month, the B.C. government’s deficit forecast for the 2012-13 fiscal year widened to $1.14-billion from $968-million, largely due to dampened prospects in the natural gas sector. B.C. Premier Christy Clark’s Liberal government will be hard-pressed to present a balanced budget for the 2013-14 fiscal year, as mandated by law.

In late August, Alberta forecast that its deficit could range from $2.3-billion to $3-billion in the 2012-13 fiscal year, or roughly three times higher than originally predicted, largely due to disappointing revenue from oil and bitumen royalties, and also less money raised at land sales.

Saskatchewan is still holding out hope that it will be able to balance its books in 2012-13, despite taking a hit from weaker energy markets and raking in less from auctions.

‘Inaccurate report,’ says Cliffs rep – by Star Staff (Sudbury Star – October 12, 2012)

October 12, 2012

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

A CBC News report claiming that Cliffs Natural Resources ‘is not locked into its decision’ to build a smelter near Capreol is just plain wrong, the company says.

“That is an inaccurate report out of CBC,” Patricia Persico, a Cliffs spokesperson, said in a release. “If you read the article, it is referencing 2011 discussions.

“At that time, Cliffs was exploring various locations in Ontario and Quebec. We made the announcement in May 2012 that our decision for the ferrochrome processing facility will be in Sudbury. “I hope this clears up the confusion and inaccurate report issued today.”

The CBC report did not say whether its reporter talked to Cliffs, a Cleveland-based mining company. Cliffs, meanwhile, has remained visible in Sudbury, holding open houses as part of its environmental review process. It is planning another open house Oct. 26, and Bill Boor, the senior VP of Cliffs Global Ferroalloys, is speaking to the Greater Sudbury Chamber of Commerce on Nov. 6.

The smelter, which will process chromite ore shipped from the Ring of Fire area of northwestern Ontario, will create 300-400 jobs. Hundreds more jobs will be created by the mine.