January 18, 2013 – Republic of Mining

Tom Albanese out at Rio Tinto as Alcan bet goes awry – by Pav Jordan and Jacquie McNish (Globe and Mail – January 18, 2013)

January 21, 2013January 18, 2013

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.

It was a wrong bet on China that crushed Tom Albanese’s dream for Alcan Inc. When the chief of Rio Tinto PLC took out the Montreal-based aluminum maker in Canada’s largest-ever takeover deal in 2007, aluminum prices were at 35-year highs, and he believed they could go quite a bit higher.

The decision proved costly. Mr. Albanese resigned Thursday, along with another senior executive, as Rio Tinto announced a $14-billion (U.S.) writedown attributed mostly to its aluminum assets. The charges included some $3-billion in impairments on coal assets acquired in Mozambique in 2011 and about $500-million in smaller asset writedowns.

For the aluminum business, it was the second writedown in as many years, bringing the total impairments on Rio Tinto’s Alcan acquisition to $20-billion, or more than half the $38-billion price tag.

The huge hit is arguably the deepest wound yet on a global mining industry facing the harshest headwinds in decades, from huge cost runups to a murky outlook on demand and a scarcity of new resources. It’s an environment that has been so difficult to navigate that many of the the world’s largest mining companies, among them Canada’s Barrick Gold Corp. and Kinross Gold Corp., have changed their top executives.

Rio Tinto chief Albanese’s downfall a cautionary tale of bad acquisitions – by Peter Koven (National Post – January 18, 2013)

January 18, 2013

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

When Tom Albanese made the rounds in 2007 to promote his US$38-billion takeover of Alcan Inc., the chief executive of Rio Tinto Ltd. always told a good story.

He talked about the phenomenal growth rates of emerging markets, and his belief that China would transition from a being a net exporter of aluminum into an importer as its domestic production could not keep up with demand. As that happened, he was confident aluminum would outperform other commodities.

Despite his best efforts, Mr. Albanese was never able to convince the many skeptics among his shareholder base. They worried that Alcan was a classic example of the debt-fueled, top-of-the-market acquisition that always comes back to haunt the CEO who makes it. Of course, they were right.

Mr. Albanese lost his job on Thursday as London-based Rio announced up to US$11-billion of writedowns on its aluminum business and a US$3-billion writedown on recently acquired coal assets in Mozambique.

Rio Tinto has now taken a mind-boggling US$30-billion (give or take) of Alcan-related writedowns, which is more than three-quarters of the total acquisition value. The deal is, if nothing else, a cautionary tale for executives to avoid getting carried away during a bull market.

BHP Billiton JV partner sues over sale of Canadian diamond mine – by Henry Lazenby (MiningWeekly.com – January 17, 2013)

January 18, 2013

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – A joint venture (JV) partner is suing BHP Billiton over its plan to sell its stake in the Ekati diamond mine and surrounding exploration properties, in Canada, to miner and luxury goods manufacturer Harry Winston Diamond.

C Fipke Holdings (Fipco) has started an action in the Ontario Superior Court of Justice against BHP Billiton Canada and certain of its affiliates, Harry Winston and its subsidiary Harry Winston Diamond Mines, as well as against Dr Stewart Blusson (Blusson) and Archon Minerals, alleging that the offers made by BHP Billiton to Fipco do not comply with Fipco’s pre-emptive rights under the JV agreements for the Ekati mine.

Harry Winston in November 2012 said it had agreed to buy from BHP Billiton an 80% interest in the Core Zone JV and a 58.8% interest in the Buffer Zone JV for about $500-million.

Under the purchase agreement, BHP Billiton offered its interests in the JVs to Fipco, Blusson and Archon, the minority JV parties. Fipco, which holds a 10% interest in each of the Core Zone and Buffer Zone JVs, also alleges in its statement of claim that, among other things, Harry Winston’s debt financing arrangements for the acquisition have interfered with Fipco’s ability to arrange its own financing.

Friedland does it again with huge DRC copper project – Lawrence Williams (Mineweb.com – January 18, 2013)

January 18, 2013

http://www.mineweb.com/

Robert Friedland’s Ivanplats has just released new resource data on its Kamoa project in the DRC, placing it firmly among the world’s largest known undeveloped copper deposits.

LONDON (MINEWEB) – Canadian mining entrepreneur extraordinaire, Robert Friedland, appears to have done it again. Not merely content with his companies finding the Voisey’s Bay nickel mega-deposit in Canada and the giant Oyu Tolgoi copper/gold project in Mongolia, his recently floated Ivanplats company has unearthed what it claims is Africa’s and the world’s largest undeveloped high-grade copper discovery. The deposit is at Kamoa in the Democratic Republic of Congo (DRC), the location for most of Africa’s major high grade copper deposits.

According to the latest release from Ivanplats, Kamoa’s Indicated Mineral Resource has expanded to 739 million tonnes grading 2.67% copper, an increase of 115% since the company’s IPO in October last year. The new resource estimate has stemmed from a new, independent review of drilling results by AMEC E&C Services of Reno, Nevada.

The release goes on to note that the new estimate increases Kamoa’s Indicated Mineral Resources to a total of 739 million tonnes of material grading 2.67% copper, containing 43.5 billion pounds (19.7 million tonnes) of copper – more than doubling the previous September 2011 estimate of 348 million tonnes, containing 20.2 billion pounds of copper. Both estimates used a 1% copper cut-off grade and a minimum vertical mining thickness of three metres.

Power plan just months away – by Kris Ketonen (Thunder Bay Chronicle-Journal – January 18, 2013)

January 18, 2013

The Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

The province will have a plan in place on how to meet Northern Ontario’s growing energy needs within a few months, Ontario’s energy minister assured Thursday.

The question of how, exactly, to provide the necessary power to the region as it prepares for a mining boom was the topic of discussion at a meeting Thursday between Energy Minister Chris Bentley and representatives of the Ontario Power Authority (OPA) and the City of Thunder Bay.

The gathering didn’t produce anything concrete, save for an assurance that there will be more meetings on the matter.
Bentley said that was the point.

“I was determined that we not come in with a conclusion,” he said after the meeting at the Airlane hotel. “We didn’t come in with a report from the OPA, because I said we need to hear, in detail, from the energy task force and from the experts in the region.

“We’re not leaving with a conclusion, because they’ve got more work to do — both sides have got more discussions to have, so that we make sure we fully identify not only what the opportunities are, what the load energy requirements are, but the timing of those requirements, so we can get the infrastructure right.

Brad Wall urges Obama to ‘swiftly’ approve Keystone pipeline – by Josh Wingrove (Globe and Mail – January 18, 2013)

January 18, 2013

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.

Edmonton — Saskatchewan Premier Brad Wall is urging President Barack Obama to “swiftly” approve the Keystone XL pipeline project, issuing a letter signed by 10 state governors – but not Alberta’s premier.

Mr. Wall calls the energy relationship between Canada and the U.S. “vital to the future of both our countries.” He urges Mr. Obama, who will be formally inaugurated for his second term this weekend, to approve the proposed pipeline to create jobs while recognizing the governors’ and premiers’ commitment to “responsible stewardship” of the environment.

“Mr. President, we consider the Keystone XL pipeline fundamentally important to the future economic prosperity of both the United States and Canada,” Mr. Wall wrote. “We strongly urge you to issue a Presidential Permit and act swiftly to approve the Keystone XL pipeline.”

There are notable omissions among the letter’s signees, however. Those include Alberta Premier Alison Redford, a long-time advocate for the pipeline, and Nebraska Governor Dave Heineman, whose state has raised some of the most acute environmental concerns about the pipeline project.

The project would carry oil from Alberta, into Saskatchewan, through six U.S. states and down to the Gulf Coast. The signees on Mr. Wall’s letter include the governors from four of the six states Keystone XL would cross: South Dakota, Kansas, Oklahoma and Texas.

Wake-up call for boreal alarmism – by Peter Foster (National Post – January 18, 2013)

January 18, 2013

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

Greenpeace’s latest stunt shows it has no interest in responsible development

This week, Greenpeace issued a report, Boreal Alarm: A Wake-up Call for Action in Canada’s Endangered Forests. The radical NGO thus continues its leading role as a fount of boreal alarmism. However, there are encouraging signs that a previously too-pliable forest industry may at last be waking up to the idea that appeasing such organizations is a slippery slope.

Three years ago, when the Canadian Boreal Forest Agreement — which ostensibly sanitized a 29-million-hectare swath of Canadian forest from development — was signed, I suggested in this space that it was a dark day for Canada. The agreement, between members of the Forest Products Association of Canada and a group of nine environmental NGOs including Greenpeace and ForestEthics, came after a campaign of hysterical misinformation and “Do Not Buy” campaigns. The U.S.-based Pew Foundation had not merely “brokered” the deal, it had also supported the NGO campaign, a flagrant case of being both player and referee.

The deal confirmed that intimidation worked, and set a terrible precedent of corporate appeasement. It created the impression that environmental laws were non-existent or severely lacking, and that without their feet being held to the proverbial fire, forest companies would devastate Canada’s natural heritage willy-nilly. In fact, neither the boreal forest nor the caribou — the campaign’s “charismatic megafauna” — were, or are, under any realistic threat.

All logged land is reforested, vast areas are off limits from development, and the great majority of the boreal is economically inaccessible in any case.

Why proposed federal legislation concerns First Nations – (Wawatay News – January 16, 2013)

January 18, 2013

http://wawataynews.ca/

Prepared by Lorraine Land, Liora Zimmerman and Andrea Bradley Dec. 20, 2012 of Olthuis Kleer Townshend – LLP

Bill C-38 Budget Omnibus Bill #1

This 450-page bill changed more than 70 federal acts without proper Parliamentary debate. This bill dramatically changes Canada’s federal environmental legislation, removing many protections for water, fish, and the environment. The changes were made without consulting First Nations.

Bill C-45 Budget Omnibus Bill #2

This second bill also exceeds 450 pages, and changed 44 federal laws, again without proper Parliamentary debate. This bill removes many fish habitat protections and fails to recognize Aboriginal commercial fisheries.

Changes to the Navigable Waters Protection Act reduce the number of lakes and rivers where navigation and federal environmental assessment is required from 32,000 to just 97 lakes, and from 2.25 million to just 62 rivers. This means 99 per cent of Canada’s waterways lost their protection for navigation and federal enviro assessment purposes.

These changes were made without consulting First Nations.