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Month: November 2012

Nickel’s bounce to be hit by heavy 2013 surplus – by Eric Onstad (Reuters U.S. – November 30, 2012)

http://www.reuters.com/

LONDON, Nov 30 (Reuters) – Nickel prices may see a short-term lift over the next several months due to a seasonal rise in demand for stainless steel, but next year’s outlook is burdened by another market surplus.

Nickel, a component in stainless steel, has already seen benchmark prices on the London Metal Exchange shake off a weak performance this year, running ahead of other metals in recent weeks.

This may persist into early next year, but prices will soon be overwhelmed by output from major new mines gearing up and a surge in Chinese pig iron output fuelled by cheap Asian ore.

“There could be a little bit of seasonal pick up, but I struggle to see how nickel prices can improve significantly next year,” said Nic Brown, head of commodities research at Natixis in London.

“You are going to get substantial amounts of cheap nickel ore coming from both Indonesia and the Philippines, as things currently stand, on top of the additional supply from some of these big nickel projects around the world.”

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Let’s hear from some 2012 So You Think You Know Mining winners

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.

Now that the Ontario Mining Association has launched season five of its high school video competition So You Think You Know Mining, perhaps it is a good time to hear from some of the winners from season four. These students who received their awards in June 2012 at the SYTYKM awards ceremony at the Royal Ontario Museum in Toronto are a talented and creative group of young people who are moving forward with their education and their careers. They have benefited from participation in this OMA film making initiative. Let’s see what some of them have to say about SYTYKM.

Hananeel Robertson from Don Mills C.I. in Toronto won the Best Writing Award for “OMG! Ontario Mining Girls.” “When the project was introduced to my class, the word mining just threw me off completely but when I started doing research, I was blown away. Not only did I learn from making my video but from watching others,” she said. “The whole contest opened my eyes to realizing that the necessities in our everyday lives would not be available to us without mining.”

“Winning means the world to me and it has definitely been one of the best experiences of my life,” said Hananeel. She is using her award money to help cover tuition at the University of Ottawa, where she is majoring in Communications. “I am not quite sure what exactly I want my career to be but I am leaning towards the media or public relations,” she said. “Who knows? Maybe I’ll end up in the mining industry.”

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Canadian judge skeptical about hearing $19-billion Ecuador lawsuit case – by Colin Perkel (Canadian Press – November 30, 2012)

http://o.canada.com/

TORONTO – An attempt by Ecuadorian villagers to have a Canadian court enforce a $19-billion judgment awarded in their country against multinational oil giant Chevron Corp. got off to a rocky start Thursday, with an Ontario judge openly skeptical about the proposition.

Ontario Superior Court Justice David Brown made no bones about his feelings as a lawyer for Chevron attempted to argue the villagers had no cause against subsidiary, Chevron Canada.

For one thing, Brown noted, an Ontario court should not even think about weighing in unless there had been a final judgment in the South American country and no one had persuaded him there was one.

“This is basic stuff, folks,” he said. “Why should an Ontario court stick its nose into a lawsuit where there is no final judgment?” Chevron Corp. lawyer Alan Mark, who had a rough time getting to his substantive submissions, conceded there was an appeal pending in Ecuador’s constitutional court.

That prompted Brown to retort, “I need to have evidence. I need to have argument. You can’t keep me in the dark on this.”

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Expect First Nations to press on resource rights – by Doug Cuthand (Saskatoon StarPheonix – November 30, 2012)

http://www.thestarphoenix.com/index.html

Resource Rulers, a new book by Bill Gallagher, outlines the recent history of First Nations, the resource industry and government relations, and confirms what I suspected.

The First Nations are on a winning streak, and we’re kicking butt in the courts. There are close to 170 positive court cases so far, related to resources and jurisdiction since the inception of the Constitution Act of Canada.

In 1982, when the pa-triation of the Constitution from Britain and the discussions to develop the Charter of Rights and Freedoms were underway, First Nations fought to have aboriginal and treaty rights enshrined in the Constitution and given legal weight. The result was Section 35, which states: “Existing aboriginal and treaty rights of the aboriginal peoples of Canada are hereby recognized and affirmed.”

At the time we complained that Sec. 35 was not defined and only gave us the right to go to court. Then prime minister Pierre Trudeau announced that three first ministers’ conferences would be held to define those rights. The three conferences were held, but unfortunately the meetings got nowhere.

The premiers had the chance to define rights or initiate a process at the conferences, but instead left it for the courts to decide. In the intervening years First Nations have gone to the courts repeatedly and we have amassed an impressive winning streak.

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Investors bid up Inmet as copper mine battle looms – by Pav Jordan (Globe and Mail – November 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.

Investors are betting on a battle for Inmet Mining Corp. to control the coveted Cobre Panama project in Central America, one of the world’s largest undeveloped copper plays.

Inmet shares have catapulted 23 per cent in the two tradings sessions since the company disclosed it received and promptly rejected two takeover offers in the past month from First Quantum Minerals Ltd., one of Canada’s largest copper miners.

Inmet also said it adopted a shareholder rights plan, known as a poison pill, but said that was not meant to prevent takeovers so much as give it time to consider options in the event of a hostile bid.

“I think they are effectively saying we’re probably for sale at the right price,” said Terry Thib, a portfolio manager with Norrep Funds in Toronto that holds Inmet shares. “From my perspective, I’m kind of thinking something north of $80 might get it done; shareholders might be happy with that.”

First Quantum’s latest cash-and-stock bid valued Inmet at $4.9-billion, or $70 a share. Its shares traded up nearly 6 per cent on Thursday to $65.50. Before the bids were made public, Inmet was trading at $52.80.

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Chinese investment OK but not workers, B.C. unions say in fight against foreign employees at coal mine – by Brian Hutchinson (National Post – November 30, 2012)

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

VANCOUVER — Tumbler Ridge is a coal mining town, tucked away in northeastern B.C. All of its largest employers are in the same business: Extracting high quality coal from the ground and shipping most of it to Asia, where demand is insatiable.

The first Chinese investors arrived in Tumbler Ridge almost 10 years ago and began purchasing coal-bearing properties. They even bought a small lodge. And now the first wave of Chinese coal miners have landed, to the chagrin of some. Chinese money is welcome in Tumbler Ridge, it seems. But Chinese muscle is another story.

HD Mining International Ltd. is a private partnership, established last year by Chinese-owned entities, including the Chinese government. In April, the partnership obtained permission from Ottawa to hire on a temporary basis 201 foreign workers, for the development of a potential underground mine just south of Tumbler Ridge.

The Murray River coal project could eventually create up to 600 permanent jobs, and over a lifespan of 30 or more years yield up to three billion tonnes of coal. That’s just for starters, says the town’s mayor, Darwin Wren. “For every job underground, there would be another one above ground,” he says.

The Chinese insist they need their own workers to continue with the coal deposit’s “advanced exploration stage,” which precedes actual mine production.

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Canadian development aid takes on corporate [mining sector] colouring – by Todd Gordon (Toronto Star – November 29, 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.

Todd Gordon is the author of Imperialist Canada (Arbeiter Ring Publishing, 2010). He teaches at Laurier University in Brantford, Ont., and can be reached at tsgordon@wlu.ca.

On Friday Nov. 23, the minister for international cooperation in Stephen Harper’s Conservative government (and former Toronto police chief), Julian Fantino, announced that Canada’s international aid program would be tied much more closely to the private sector. When he says “private sector,” he really means the natural resources industry, particularly mining. A primary goal of the Canadian International Development Agency’s (CIDA) work, Fantino proudly proclaimed, is “to make countries and people, trade and investment ready.”

The announcement, sadly, was not a surprise; it really was a reflection of the trends toward aggressively advancing the interests of Canadian multinationals in the Global South that have been taking shape within CIDA over the last couple of decades, and which have been a part of other government ministries for much longer. But it does offer a blunt reminder of what drives Canadian aid and foreign policy, if one was really needed at this point.

The initial step toward Fantino’s declaration was CIDA’s announcement a year ago that it was initiating aid partnerships with mining companies, offering financial support — roughly $27 million over five years — to the Corporate Social Responsibility (CSR) initiatives of five companies with operations in Africa and Latin America.

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U.S. greens shut down Canadian oil – by Vivian Krause (National Post – November 29, 2012)

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

For U.S. foundations, this is about fossil fuels

Vivian Krause is a Vancouver researcher and writer. On Twitter she’s @FairQuestions.

Heads up, Canada! Our one and only big energy customer, the United States, isn’t going to need Canadian oil any more. That’s the implication of the International Energy Agency’s latest predictions. The U.S. will be the world’s largest oil producer by 2020 and the largest oil exporter by 2030. Some say this could happen a lot sooner.

At the same time that the U.S. is fast becoming an energy exporter, American charitable foundations are restricting Canadian fossil fuel development with conservation initiatives that put huge areas of land off-limits to natural resources development. Whether it is their intention or not, large conservation areas are de facto trade barriers that would restrict Canada’s marine access to global energy markets — on all three coasts — and maintain the U.S. monopoly on Canadian exports, keeping Canada over a barrel and on the sidelines of the global energy market.

The downside of the U.S. monopoly on Canadian exports is huge. Joe Oliver, Minister of Natural Resources told the B.C. Business Council in a speech Tuesday that the Canadian economy loses out on $18-billion annually – $50-million every day – because Canadian oil is sold into the U.S. market below market value.

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Nexen bidder CNOOC has a troubling record – by Tim Armstrong (Toronto Star – November 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.

Tim Armstrong is a lawyer whose assignments in the Ontario government included deputy minister of industry and trade and agent general for the Asia-Pacific region, headquartered in Tokyo, 1986-1990, with regional responsibilities for Japan, Korea and China.

If there was ever doubt, it now is clear that the takeover by the Chinese National Overseas Oil Corp. (CNOOC) of Nexen will be determined by the federal government with no public or parliamentary input. Ottawa remains unresponsive, in spite of the countless relevant questions that have been publicly raised.

The Investment Canada Act preserves confidentiality for any aspect of an acquisition application that contains privileged financial, commercial, scientific or technical information. But there are a host of unanswered factual issues that have nothing to do with any of these privileged categories.

It’s difficult to ignore the paradox that our federal governments have moved for some years to privatize virtually all market-oriented enterprises previously under federal ownership, and that we are now open to permitting foreign state-owned enterprises to acquire full control of companies like Nexen.

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BRICS mining: the lay of the land – by Chris Lo (Mining Technology.com – January 5, 2012)

http://www.mining-technology.com/

The so-called BRICS nations (Brazil, Russia, India, China and South Africa) are the world’s emerging powerhouses, in more ways than one. As well as exerting an ever-growing influence on the global political stage, these burgeoning economies are building up an industrial base that is closing the gap with the developed western world – or, in some cases, even surpassing it.

No sector illustrates this process better than mining. Competition from low-cost, large-scale mining projects in the BRICS nations has simply been too much for many European and US operations, which are struggling with higher overhead costs and more complex regulatory regimes. As a consequence, countries such as Brazil and China have become hotbeds for international investment.

BRICS countries look outward

BRICS mining investment, however, isn’t just a one-way street – increasingly, these countries are looking to tap into overseas resources in addition to their own domestic deposits. Indian companies including Adani Mining and Lanco Infratech have been assertively investing in Australian coal mining projects, while Brazilian iron ore giant Vale’s funding of iron ore projects in China proves that there are lucrative opportunities in inter-BRICS investment.

In Africa, BRICS countries, particularly China, are becoming more prevalent as investors in new mining projects, both for profit and to provide materials for massive infrastructure and construction projects.

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NEWS RELEASE: Canada’s mining companies can take steps now to improve their prospects in the longer term: Deloitte Report

 To view the report, please visit: http://www.deloitte.com/assets/Dcom-Canada/Local%20Assets/Documents/EandR/Mining/ca_en_energy_Tracking_the_trends_2013_112812.pdf

Toronto, Ontario – 29 November 2012 — Canadian mining companies should be investing now to ensure they can fulfill future global demand for commodities even as they face a series of immediate challenges affecting the global mining sector, according to a new report from Deloitte that was released today. The report, Tracking the trends 2013, provides commentary and analysis of the top 10 issues most likely to impact the mining sector in 2013 and provides a range of responses that companies can adopt to prepare for shifting industry dynamics.

According to the Deloitte report, now in its fifth year of distribution, miners need to set a solid strategic direction and hold the course amidst shifting industry realities in order to prosper when global demand for commodities rebounds in the longer term. Beyond finding ways to control costs and improve their demand forecasts, Canada’s mining companies should be preparing for increased mergers and acquisitions activity in 2013, strengthening their relationships with local governments in order to minimize the impact of growing resource nationalism in various countries and finding innovative ways to cope with a looming skills shortage. They also need to expand their use of information technology and data analytics to enhance safety, improve operations and reduce costs.

“For the second year in a row, mounting costs tops the list of the key issues affecting the mining industry” said Glenn Ives, Americas Mining Leader, Deloitte Canada. “This is expected to worsen in the short term as commodity prices continue to dip, workers demand higher wages and regulatory costs rise. But rather than halting production in the face of shareholder demands for more immediate returns, miners should be making investments today to meet the expected long-term demand for commodities.”

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Miners need to keep investing and be ready when market picks: report – by Craig Wong (The Canadian Press/Vancouver Sun – November 29, 2012)

http://www.vancouversun.com/index.html

TORONTO – Mining companies facing an uncertain economic outlook and rising costs need to keep investing in their development projects to ensure they are ready to go when the market picks up again, a new report suggests.

The report by audit and consulting firm Deloitte to be released Thursday suggests while miners need to focus on controlling costs that may have risen during the recent boom, they also need to hold the course on their strategic plan for the long term.

Jurgen Beier, national mining leader at Deloitte Canada, said as prices for many key commodities slip, the focus is increasingly on reducing costs that may have been masked in boom times. “The key thing with cost is that when you’re not worried about the revenue line, basically there is less focus on the cost line,” he said.

“Over time, inefficiencies creep into running any business and many of these inefficiencies are based on merger and acquisition transactions where the companies haven’t been completely integrated.”

But Beier noted that cutting costs needs to be balanced with ensuring a miner’s future and that means continuing to develop new projects so they are ready to go in the next boom.

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Wisconsin governor expects $1.2b iron ore project to return to Iron Range – by Dorothy Kosich (Mineweb.com – November 29, 2012)

http://www.mineweb.com/

In the last session of the Wisconsin Legislature, an iron mining reform bill failed by one vote. However, another pro-mining measure is expected to be introduced in January.

RENO (MINEWEB) – Wisconsin Gov. Scott Walker said Wednesday that he is confident that Gogebic Taconite will resurrect an iron ore mining project south of Lake Superior.

In comments made to the Associated Press after a speech to the Wisconsin Manufacturers & Commerce, Walker said Florida-based Gogebic Taconite is still interested in mining in Wisconsin.

A special committee of Wisconsin’s State Senate is scheduled to meet today and get a briefing from Tim Sullivan, the former CEO of mining heavy equipment manufacturer Bucyrus. He is chairman of the Wisconsin Mining Association.

The committee will hear testimony from local government representatives and regional economic development officials on the issue of state-local distribution of tax revenue raised by future mining operations.

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Ontario Mining Association education and outreach initiatives build on past efforts

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.

The Ontario Mining Association was a major participant in an explore mining and forestry career night held earlier this month at Mohawk College in Hamilton, which attracted more than 100 students. Lesley Hymers, OMA Environment and Education Specialist, and Bryan Wilson from Xstrata Nickel in Sudbury carried the message for the mining side. Representatives from the Canadian Institute of Forestry, Resolute Forest Products and the Forest Products Association of Canada were on hand speaking about their component of Canada’s resource sector at the community college.

The event was organized by Richard Borger, an elementary school teacher and part-time professor in the engineering technology program at Mohawk College. He became acquainted with the OMA, while in the role of student, during the third annual Teachers’ Mining Tour earlier this year. Mr. Wilson has been an active and key participant in all three of these teachers’ tours, which have taken place, so far, through facilitating tours of Xstrata Nickel’s Nickel Rim South Mine in Sudbury.

“It is important for us to establish links with educators across the province and to work to strengthen and build upon those links,” said Ms Hymers. “It is also vital that we take advantage of opportunities to make students more aware of the tremendous variety and scope of career options that our industry offers.”

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Inmet rejects First Quantum takeover bid – by Peter Koven (National Post – November 29, 2012)

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

TORONTO — First Quantum Minerals Ltd. has offered $4.9-billion for Inmet Mining Corp. in a bold attempt to get its hands on Cobre Panama, one of the largest mining development projects underway anywhere in the world.

The move puts Inmet’s immediate future into question, as the company is now in play and senior copper miners are certain to take a closer look at Cobre Panama.

Toronto-based Inmet owns 80% of Cobre Panama, and it is a monster. The project holds 32 billion pounds of copper reserves and nine million ounces of gold reserves (along with huge inferred resources), and has a likely mine life of more than 30 years. It also comes with enormous risk: The current cost estimate is US$6.2-billion, and Panama has no history of large-scale mining.

Construction of Cobre Panama has just started, and analysts suggested that if First Quantum has its own development plan for the mine, it needs to get in quickly. First Quantum is recognized for having a strong technical team.

“I see a fit in the sense that [First Quantum] management has been very experienced in building four grassroots projects on time and within reasonable budgets, and also operating in what I would call politically sensitive areas in Central Africa,” said John Hughes, an analyst at Desjardins Securities.

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