October 30, 2012 – Republic of Mining

Have Nickel Prices Bottomed? – by Stuart Burns (Metal Miner.com – October 29, 2012)

October 30, 2012

The supply demand outlook for nickel remains highly uncertain — banks and analysts at least agree on that. Many believe nickel demand, having slumped this year, to have bottomed and that the metal could post a modest upswing next year.

HSBC reports that China posted practically no growth (+1.4%) in stainless steel production (by far the largest market for nickel) in 2012, but is expected to pick up in 2013.

Stainless steel production was actually down in Europe and the Americas this year, but a lower nickel price encourages the use of nickel-bearing steels and in particular austenitic grades, a trend that has seen the ratio of austenitic to total stainless grades increase from 72.1 percent to 73.3 percent during this year.

Although smaller in total demand, the increase in nickel use from non-stainless applications has increased the most rapidly, by 8 percent this year.

Taken as a whole and against the backdrop of slowing global GDP growth, even outright recession in some quarters, nickel demand has held up reasonably well responding to the stainless cycle rather than directly to GDP trends.

Quebec Mineral Exploration Association (AEMQ) calls on Quebec to play by the rules – by Marilyn Scales (Canadian Mining Journal – October 30, 2012)

May 4, 2015October 30, 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.

Concern is mounting within the industry as the Quebec government mulls a ban on uranium exploration. This news is creating uncertainty in Quebec’s mining industry, particularly with respect to Strateco Resources’ Matoush project in the Otish Mountains roughly 200 km from Chibougamau and Mistissini.

Strateco has been working at Matoush since 2006, and says it is considered one of the highest grade uranium projects in the world. At Dec. 31, 2011, the deposit had an indicated resource of 453,000 tonnes grading 0.78% U3O8, containing 7.78 million lb of yellowcake. There is also an inferred resource of 2.04 million tonnes grading 0.43% U3O8 and containing 19.22 million lb of U3O8 using a cut-off grade of 0.10%.

Between 2008 and 2012, Strateco conducted rigorous studies into the impact of the Matoush project, which have been independently monitored and verified. Following these studies, the Canadian Nuclear Safety Commission (CNSC) approved an underground exploration program at Matoush earlier this month. The licence is valid until Oct. 31, 2017.

The alarm is being raised by the Quebec Mineral Exploration Association (AEQM).

BMO adviser Donald Coxe to halt long-running newsletter – by Martin Mittelstaedt (Globe and Mail – October 30, 2012)

October 30, 2012

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.

Donald Coxe, one of Canada’s best known stock-market prognosticators, plans to cease publishing his market letter.

For the past 20 years, Mr. Coxe has been issuing massive 10,000- to 12,000-word missives outlining his investing views, laced with a healthy dose of his conservative political philosophy. But at 76, he’s decided to hang up his pen to concentrate on investment advice for the funds he helps manage.

December will mark the last issue of his Basic Points newsletter, which has recently been appearing once every two months.

As an investment writer, Mr. Coxe is best known for his view that the financial world is in the middle of a “commodity super cycle.” That’s a long period during which the prices of energy, food, metals and other raw materials rise – in the current instance, driven by the rapid growth of emerging economies.

Mr. Coxe said producing a market letter while also working as an investment strategy adviser at the Bank of Montreal, which distributes his newsletter, has been a strain.

TransCanada, Chinese firm form pipeline partnership – by Lauren Krugel (Toronto Star – October 30, 2012)

October 30, 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 Canadian Press – CALGARY—TransCanada Corp. has entered a partnership with a Chinese-owned company to build a new $3-billion oilsands pipeline in Northern Alberta, pushing further into a business that has traditionally been dominated by rival pipeline giant Enbridge Inc.

TransCanada and Phoenix Energy Holdings Ltd., a unit of state-owned China National Petroleum Corp., would each own half of the Grand Rapids project, which would carry up to 900,000 barrels of crude per day along with 330,000 barrels per day of diluent, which helps thick oilsands bitumen to flow through pipelines.

The pipeline would run about 500 kilometres between an emerging oilsands area northwest of Fort McMurray, Alta., to the industrial heartland near Edmonton. It’s expected to be in service by early 2017.

“As Alberta crude oil production continues to grow, it’s critical to have the infrastructure in place to move oil to market from emerging developments west of the Athabasca River,” said TransCanada CEO Russ Girling in a release. “This is the first major pipeline project to meet the needs of this fast-growing area.”

CNOOC’s compelling deal – by David A. McLellan (National Post – October 30, 2012)

October 30, 2012

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

David A. McLellan is manager of intellectual property at Petrobank Energy and Resources Ltd. in Calgary.

Don’t abandon the free market for sinophobia

There has been much vigorous debate about CNOOC’s proposed acquisition of Nexen and the lack of clarity around what the federal government defines as “net benefit” when applying the Investment Canada Act. This is unfortunate and has the potential to cost the Canadian economy many quality jobs, royalties, taxes and subsequently to adversely impact economic growth.

Examining the details of the CNOOC-Nexen deal go a long way to reassure us that Canada will ultimately benefit more from this transaction than we otherwise would without it. Similarly, a review of the facts about Nexen and our oil-sands resources should assuage concerns that we are giving away too much in this particular transaction.

Let’s start with the facts. Approximately 70% of Nexen’s current production is outside Canada, with the U.K. North Sea being the most prolific region in its property portfolio. According to Oilweek, Nexen’s 2011 actual Canadian production averaged a modest 60,000 barrels of oil equivalents per day (boepd) and this number does not rank it among the 20 largest producers in Canada.

With a 65% interest in the Long Lake project and 7.25% interest in Syncrude, Nexen accounts for perhaps 3% of current oil sands production. In terms of reserves, at 1,544 million boe of proved and probable, Nexen’s Canadian reserves represent less than 1% of Canada’s total. Further, more than half of Nexen’s shares are held outside Canada.

India thirsts for Canadian energy – by Matthew Fisher (National Post – October 30, 2012)

October 30, 2012

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

Prime Minister Stephen Harper can expect a warm, even rapturous welcome when he arrives Sunday in India on what is to be an unusually long six-day trip to the subcontinent to drum up business for Canada. Coming with the prime minister are several cabinet ministers and a large group of senior businessmen.

As in so many other areas of foreign trade, Canada was astonishingly late to twig to the opportunities presented by India’s $2-trillion-a-year economy. Canada’s Achilles heel has often been that its governments and business people “thought small.” But Canada was also badly hurt in India because “it was preachy, which made India prickly,” according to Nandan Unnikrishnan, vice-president of the New Delhi-based Observer Research Foundation.

Successive Canadian governments ignored India for decades, except to scold it over its nuclear policies and the human rights of those whom India considered terrorists. Canada’s policy greatly irritated India and achieved nothing except to make a few Canadians feel morally superior while costing the Canadian economy dearly.

The cant over moral issues has almost totally disappeared since Harper’s government won its first majority in May 2011 and made improving Canada’s economy through trade its main international focus. This pragmatic, common-sensical approach to diplomacy and trade was long overdue and has found an eager ear in India.

Cynthia Carroll’s Anglo American legacy – by Geoff Candy (Mineweb.com – October 29, 2012)

October 30, 2012

http://www.mineweb.com/

The numbers only really tell one side of the story.

GRONINGEN (MINEWEB) – When Cynthia Carroll, a coal geologist by training and, formerly, of Canada’s Alcan, took the reins at Anglo American in March 2007, then Chairman Mark Moody-Stuart cited her “clear leadership and communication skills, her highly relevant hands-on operational experience and her record of working with governments and other key stakeholders,” as important attributes.

This is the legacy Carroll leaves behind her by the numbers: In its 2006 financial year, Anglo American’s produced $5.5 billion in underlying earnings, a 46% increase over 2005. Operating profit jumped 54% to 9.8 billion and net debt fell 33% to 3.3 billion. The group also recorded the deaths of 44 employees and contractors. In 2011, the group reported a group operating profit of $11.1 billion and underlying earnings of $6.1 billion. It spent $5.8 billion in capex and reduced net debt to $1.4 billion down from $7.4 billion in 2010. The group also reported 17 deaths.

In between those numbers, however, lies a much broader story. Firstly, as my colleague Dorothy Kosich wrote a year after Carroll’s appointment was announced, “Carroll shattered the glass ceiling of international mining as the first female CEO to head a mega-mining company, specifically with deep South African roots. In an industry, which barely allowed women to work underground a couple of decades ago, Carroll’s appointment is a substantive indicator of change in mindset among international miners…Carroll also hails from Canada’s Alcan, where as president of the Primary Metals Group, she had to convince a sceptical public that smelting aluminium could actually evolve into a sustainable, environmentally clean activity.

NEWS RELEASE: McGuinty prorogation enables subpoena of Premier & other Ministers in $275 million seat-saver scandal

October 30, 2012

Senior-most Liberals Will Be Forced to Face Questioning On Flamborough Quarry

TORONTO, Oct. 29, 2012 /CNW/ – Ontario Premier Dalton McGuinty and other senior Cabinet Ministers will be subpoenaed and compelled to testify in the judicial review of the Liberal government’s decision to kill the proposed Flamborough Quarry. The judicial review will help determine whether the government acted improperly in cancelling a quarry in the riding of Liberal MPP Ted McMeekin in advance of the 2011 provincial election. St Marys Cement has also filed a NAFTA claim based on the regulatory failure in this case, and is seeking damages of not less than $275 million.

In May, St Marys Cement served a Notice of Application to review the decision by the McGuinty Liberals to issue a Minister’s Zoning Order and a Declaration of Provincial Interest to stop the proposed Flamborough Quarry. The provincial government brought forward a motion to have the application dismissed, a motion that has now been dismissed by the Ontario Divisional Court. The government has appealed this ruling.

Due to a common law principle that protects sitting members from being subpoenaed while the house is in session or on break for holiday, the decision by Dalton McGuinty to prorogue the Legislature presents the first opportunity for the Premier, in addition to Ministers Jim Bradley and Rick Bartolucci, to be forced to testify. The legal process will now be initiated with the full intention of hearing from key decision-makers around this decision to save the seat of a Liberal MPP.