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Day: March 12, 2013

Don’t take [mining] prosperity for granted, warns Rae – by Karen McKinley (Thunder Bay Chronicle-Journal – March 12, 2013)

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

Northwestern Ontario may be on the brink of an economic boon, but the province can’t take that opportunity for granted, says federal Liberal interim leader Bob Rae.

Rae spoke Monday at a Thunder Bay Chamber of Commerce luncheon. The former NDP premier of Ontario confirmed that he could become a negotiator for First Nations with links to the mining zone, and he would working with federal FedNor Minister Tony Clement.

But Rae said nothing about a new job will be finalized until his term at the Liberal helm winds up with the party’s leadership vote on April 14. Rae focused on the potential for prosperity in the region with the Ring of Fire.

“If we can’t take prosperity for granted and we have to work at it, then we must also mean we must not take this project for granted,” he said in his address at the Airlane Hotel and Conference Centre.

He said as premier of Ontario, he learned many hard lessons, like a province should never take prosperity for granted. Rae recalled that the day after he was elected in 1990, he was told that the province was going to go from a surplus in May to an $8-billion deficit in a very short time. By the next year, it was a $10-billion deficit due to falling revenues.

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Ring ‘once-in-a-lifetime opportunity’ – by Star Staff (Sudbury Star – March 12, 2013)

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

The federal minister responsible for Northern Ontario continues to promote the economic potential of the Ring of Fire. Tony Clement, minister for FedNor, told the Ontario Chamber of Commerce in Toronto the Ring of Fire could create as many as 5,000 new jobs in the region if fully developed.

“The Ring of Fire represents a once-in-a-lifetime opportunity to create jobs, and generate growth and long-term prosper ity for Northern Ontario and the nation,” Clement said in a release.

“As minister for FedNor and as the federal lead minister on this initiative, I welcome the opportunity to work with all levels of government, as well as First Nations and industry stakeholders to prepare and implement the collaborative economic development approaches for the region.”

The Ring of Fire, located about 500 km northeast of Thunder Bay, is potentially the largest mining development ever seen in Northern Ontario, Clement told chamber officials. The region has significant deposits of nickel and copper and represents North America’s single largest deposit of chromite, the main ingredient in stainless steel.

With mineral content worth an estimated $30 billion to $50 billion, the Ring of Fire could create up to 5,000 direct and indirect jobs in Northern Ontario alone.

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Vale’s results better than they appear: Prof – by Carol Mulligan (Sudbury Star – March 12, 2013)

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

Vale SA may have had its worst fourth-quarter in a decade, losing $2.65 billion from October to December last year, but a Sudbury economist says the company still made $5.5 billion in 2012, a healthy profit.

That’s despite the fact Vale earnings fell from $4.67 billion in the fourth quarter of 2011, and that this was the company’s first quarterly loss since the third quarter of 2002.

Jean-Charles Cachon teaches in the faculty of management at Laurentian University and is chair of the Small Business Research Group at the university. Cachon said he found it strange that a company “that’s flush with money would report a loss. So, I wanted to go to the bottom of things, and I did.”

He read Vale’s fourth-quarter report thoroughly and determined its results are not all doom and gloom. When a company’s operations aren’t as profitable as expected, it’s allowed to take impairment charges. Those charges don’t “cost you a penny,” said Cachon, but they allowed Vale to write off about $5.6 billion.

It’s a complicated formula for many to understand, but the bottom line is Vale still made billions in 2012 and was still able to give “a hefty dividend to their shareholders,” said Cachon.

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Gold Fields chief Holland isn’t afraid to get out front – by Geoffrey York (Globe and Mail – March 12, 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.

JOHANNESBURG — When the wave of violent strikes erupted across the country, Nick Holland’s security advisers cautioned him to stay away from his gold mines. He went anyway – and soon found himself facing an army of 5 ,000 angry miners marching across the fields, waving machetes and sticks.

“I always like to be at the front,” says Mr. Holland, chief executive officer of Gold Fields Ltd., the world’s fourth-biggest gold producer. “But it gave me a really scary feeling in the pit of my stomach, that we were about to have something blow up.”

Gold Fields survived the wildcat strikes that left dozens dead at other mines in South Africa last year, but now Mr. Holland faces an even greater challenge: How to save his company from a national mining-industry crisis of rising costs, deteriorating production, high political risk, labour pressures and the threat of new taxes.

It’s a daunting moment for South Africa’s gold industry, the biggest in the world for nearly a century but now in steady decline. At a time when innovation is crucial, Mr. Holland has become a pioneer, orchestrating a bold move to divide Johannesburg-based Gold Fields by spinning off its older South African mines into a new company, leaving its most modern and international mines in the hands of Gold Fields itself.

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NWT celebrates ‘day of dreams’ with deal for province-like powers by Josh Wingrove (Globe and Mail – March 12, 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.

Ottawa and the Northwest Territories have reached a deal to hand the territory province-like power over its land, a move aimed at empowering local leaders to unlock more of their resource riches.

More than a decade in the making, the agreement celebrated by Prime Minister Stephen Harper and NWT Premier Bob McLeod in Yellowknife on Monday will hand the territory an additional $130-million a year and give it greater independence in approving resource projects.

The hope of both parties to the historic agreement is that it will spur development and reshape the economy of Canada’s North at a time when its output of oil and diamonds has declined, while low commodity prices have stalled other projects.

“This is a big day for the Northwest Territories. It is a day of hopes, a day of dreams and a day of transformation,” Mr. McLeod said.

The deal is the latest move by Mr. Harper’s government to reduce Ottawa’s role in provincial and territorial affairs.

“Our government believes that opportunities and challenges here would be better handled by the people who understand them best. That is to say, you who live here in the Northwest Territories,” Mr. Harper said.

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Vale Shelves Potash Venture in Argentina to Preserve Cash – by Juan Pablo Spinetto (Bloomberg.com – March 11, 2012)

http://www.bloomberg.com/

Vale SA (VALE3), the third most valuable miner, mothballed a $5.9 billion potash venture in Argentina as the Brazilian company drops projects and writes down assets.

The Rio de Janeiro-based company’s decision was communicated to Argentina’s government today, according to an e- mailed statement. Vale’s shares rallied in Sao Paulo.

Work at Rio Colorado, billed to make Argentina the third- largest exporter of the crop nutrient, was suspended in January so Vale could reassess the project in light of inflation, exchange rate fluctuations and demands from provinces, Chief Executive Officer Murilo Ferreira said Feb. 28. Vale sought tax breaks and partners to make the venture more profitable.

“Major miners are continuing to shed assets, especially those that have greatly surpassed their cost expectations, and slash budgets,” said Robert Verderese, a trader at Knight Capital Group Inc. in New York. “I would expect more to come from Vale.”

Vale erased a loss to rise after the announcement 1.4 percent to 35.22 reais at the close of trading. The stock was the most traded by value on the Brazilian Bovespa index today at 84 percent of its three-month daily average volume.

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Want to build something? Ask the angry mob first – by Chris Selley (National Post – March 12, 2013)

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

A panel discussion at the Manning Networking Conference in Ottawa on Saturday considered the various pipeline routes that more Albertan bitumen might travel to market: west to the British Columbia coast and thence to China, south to the United States, or east to Saint John, N.B., and thence the world. The first two are already political hot potatoes in Ottawa and Washington, respectively, and the latter would be a hot potato in Quebec City, and no doubt on the streets of Montreal, if the idea ever gathered steam.

On the matter of these political obstacles, political strategist Rick Anderson ruefully asked an interesting question: “If somebody came forward today with a proposal to build a national railroad across the country, would it survive the processes that we now have in place? Would we get that done?” Or would it bog down in red tape, native blockades and street protests and eventually die on the vine?

Canada today wouldn’t exist as it does without the railroad, of course, but within the scope of the thought experiment the answer is clearly “no.” A Toronto example hammers home the point: For much of my lifetime, a rail link between Pearson Airport and downtown has been both a screaming priority and the stated desire of just about everyone.

This has never been a herculean undertaking. There is, and has been for nearly 40 years, a commuter rail station less than a kilometre away from the end of Pearson’s runway 23.

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Aung San Suu Kyi support for copper mine outrages Burmese activists (Associated Press in Rangoon/The Guardian – March 12, 2013)

http://www.guardian.co.uk/

Report commissioned after police crackdown on protesters says near-$1bn joint venture mine with Chinese firm should continue

Opponents of a copper mine worth nearly $1bn in north-western Burma have expressed outrage over a government-ordered report that said the project should continue and that refrained from demanding punishment for police involved in a violent crackdown on protesters.

The opposition leader, Aung San Suu Kyi, chaired the investigation commission behind the report, which was released late on Monday night. It could pose a problem for Aung San Suu Kyi by identifying her with the government’s pro-growth policies against the interests of the grassroots people’s movements.

President Thein Sein appointed the commission after police cracked down on protesters at the Letpadaung mine on 29 November, leaving scores in hospital with serious burns.

Thwe Thwe Win, a protest leader, said on Tuesday that demonstrations would resume. “I am very dissatisfied and it is unacceptable,” she said. “There is no clause that will punish anyone who had ordered the violent crackdown. Action should be taken against the person who gave the order.”

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NEWS RELEASE: Cliffs Natural Resources Inc. Announce Plans to Idle Wabush Pointe Noire Pellet Plant

March 11, 2013

CLEVELAND, March 11, 2013 /PRNewswire/ — Cliffs Natural Resources Inc. (NYSE: CLF) (Paris: CLF) announced today that it expects to idle its Wabush Pointe Noire pellet plant within the city of Sept-Iles in Quebec by the end of the second quarter of 2013. The Company indicated that its decision to idle its iron ore pellet operation is due to high production costs and lower pellet premium pricing which is expected to persist in certain markets during the year.

“Due to the dynamics in the marketplace, we are taking measures to adjust our iron ore pellet production at our Wabush operation while continuing to meet our customer commitments,” said Joseph A. Carrabba, Cliffs’ chairman, president and chief executive officer. “Unfortunately this decision will impact approximately 165 employees. We understand this is a hardship for our employees and their families. During this transition, we will be working with them including exploring other opportunities at Cliffs.”

The Company’s current product mix in its Eastern Canadian Iron Ore business segment is comprised of iron ore pellets and concentrate. Cliffs expects to idle production at its Pointe Noire iron ore pellet plant and transition to producing an iron ore concentrate only product from its Wabush Scully mine in the Province of Newfoundland and Labrador by the end of the second quarter in 2013.

“We are taking a long-term view of our investments in Canada. These measures address current market conditions and we look forward to advancing our work at Bloom Lake which is key to Cliffs’ future,” added Mr. Carrabba.

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[Wisconsin] Gov. Scott Walker signs iron ore mining bill – by Noah Goetzel (The Badger Herald – March 12, 2013)

http://badgerherald.com/

Gov. Scott Walker signed a controversial iron ore mining bill which streamlines the permit process into law Monday, more than a year after the legislation was first introduced.

The bill, supported solely by Republican legislators, will allow Gogebic Taconite LLC to create the largest open-pit iron ore mining operation in the world, according to a statement from the Wisconsin John Muir Chapter of the Sierra Club.

Walker said in a statement he was grateful to legislators statewide for moving forward a bill that will be deadline-oriented and environmentally friendly. He signed the legislation into law in Rhinelander and later in Milwaukee.

“Wisconsin’s seal and the state flag both depict mining in our great state,” Walker said. “In light of our mining tradition, I’m thrilled to sign legislation into law protecting environmental safeguards, while providing certainty to the mine permitting process.”

The governor added he is optimistic his endorsement of the bill will create thousands of private sector jobs in the future.

However, Sen. Bob Jauch, D-Poplar, criticized Walker in a statement for signing the bill at Oldenburg Group Company and P&H Mining Engineering manufacturing plants because both locations are more than 100 miles away from the proposed mining site.

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Cold feet on Ontario’s green energy mania – by Tom Adams (National Post – March 12, 2013)

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

Ontario has quietly slowed its green juggernaut

As Ontario’s new premier, Kathleen Wynne, zigzags on the province’s electricity future — at once aligning herself with former premier Dalton McGuinty’s green stance and calling for stronger conservation efforts but also promising to backtrack on developer-friendly rules that cut municipalities out of power plant siting decisions — a shift has quietly been underway in the Liberal government’s energy objectives. Since their last electoral victory in 2011, the Liberals have started throttling back their green-at-any-cost energy vision.

Leading up to the 2011 election, McGuinty’s team published its “Long Term Energy Plan.” That plan embodied a radical shift away from a widespread consensus that had prevailed for over a hundred years that the purpose of Ontario’s power system was to serve consumers.

McGuinty’s new purpose for the power system was to deliver a green-at-any-cost social and economic transformation. The plan anticipated steeply escalating electricity rates. The worst increases — compound annual growth of 7.9% for household consumers — were projected over the period 2011 through 2015.

McGuinty’s last energy minister, Chris Bentley, vigorously promoted the government’s green electricity plan. Last April, for example, he gave a speech at a conference in Toronto for wind and solar power developers.

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Canada’s energy superpower dreams – by Terence Corcoran (National Post – March 8, 2013)

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

 The dreams are ­coming fast and furious, as are obstacles and risks

Every nation needs dreams and dreamers. For some reason Canada is suddenly awash in grand projects and industrial schemes, the product of a new national dream created some seven years ago by Prime Minister Stephen Harper.

In a 2006 speech, Mr. Harper floated the idea that Canada should aspire to become a global energy superpower. We are witnessing, he said, “Canada’s emergence as a global energy powerhouse — the emerging ‘energy superpower’ our government intends to build.” Based on the oil sands, the project involves “Brobdingnagian technology and an army of skilled workers. In short, it is an enterprise of epic proportions, akin to the building of the pyramids or China’s Great Wall. Only bigger.”

The energy pyramid schemes are now coming fast and furious, with industrialists, bankers and others talking up pipelines, ports and industrial installations from coast to coast. Also coming just as fast, however, are signals, obstacles and indicators that suggest the grand megaprojects and pipeline proposals run grave risks of becoming pipe dreams.

As the Financial Post’s Claudia Cattaneo notes, the death of Hugo Chavez could trigger a return to more normalized U.S./Venezuela relations and a return of large flows of Venezuelan oil into the United States, oil that could displace Canadian production. (See also the accompanying article by Ryan W. Lijdsman.)

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Life after Chavez: America’s oil gains could be Canada’s loss – by Yadullah Hussain (National Post – March 6, 2013)

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

 
Oil is critical to Venezuela’s earnings, so there could be the potential for a change in approach to foreign investment in the sector
Brent crude prices didn’t move much as traders absorbed the death of Hugo Chavez who ruled the world’s sixth largest OPEC producer, but it may mask a long-term shift that could impact North American energy trading patterns.

“Over the longer term, changes in policy towards the energy sector might eventually allow Venezuela’s oil production to return to the much higher levels seen in the late 1990s,” said Tom Pugh, commodities economist at Capital Economics. “However, any such recovery would take many years.”

Venezuela is home to the world’s largest proven oil reserves of around 296.5 billion barrels, but its production has steadily fallen under Mr. Chavez who diverted Venezuela’s oil revenues to his pet projects and weakened the state-owned Petróleos de Venezuela, which is responsible for developing the country’s enormous riches.

Evan as 40% of Venezuelan oil exports headed towards the United States, Mr. Chavez’ despised Washington’s policies and was actively pursuing a policy to shift exports to China, the Caribbean, Central America and other Asian markets.

“U.S. imports of Venezuelan petroleum products peaked in 1997, at 379,000 bbl/d, and have since fallen to as low as 23,000 bbl/d in October 2012,” the U.S. Department of Energy said in a January note.

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Will Chavez’s death spoil oil sands’ party? – by Claudia Cattaneo (National Post – March 6, 2013)

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

Barely five years ago, when Canadian pipelines could do no wrong and Canada was the darling of the United States’ oil industry, a joke making the rounds at Enbridge Inc.’s expanding Houston base was that Hugo Chavez had been named Employee Of The Year.

“He’s done a lot to help us,” Stephen Letwin, who was in charge of Calgary-based Enbridge’s U.S. operation, said at the time.

Indeed, it was thanks to Venezuela’s nationalization policies under Chavez that companies such as Enbridge were expanding aggressively to bring more Canadian oil to refineries in the U.S. Gulf, while oil majors that were pushed out of the South American country were redeploying their money and heavy oil expertise to Canada’s oil sands.

For Exxon Mobil Corp., Royal Dutch Shell PLC, Statoil ASA, Total SA, BP PLC, Canada was a good backup: it offered similarly large deposits, access to the U.S. market, as well as stable fiscal and political regimes.

But much like Venezuela’s loss was Canada’s gain when Hugo Chavez was alive, his death on Tuesday could take some lustre away from oil sands if it leads to a more pragmatic approach to oil development in Venezuela, as some expect.

In addition, if oil production in Venezuela stabilizes, and U.S. production from tight oil continues to increase, the U.S. could feel less pressured to get in bed with Canada over the long term for its energy security as it prepares to decide whether to permit the Keystone XL pipeline from Alberta to Texas.

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‘Rubik’s cube’ of development outcomes to be solved mutually – Clement – by Henry Lazenby (MiningWeekly.com – March 12, 2013)

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

TORONTO (miningweekly.com) – The Minister of the Canadian government’s economic development organisation for Northern Ontario (FedNor) Tony Clement was on Monday promoting the federal government’s commitment to bring together all role-players from the private and public sectors, including the First Nations, to map the way forward for developing the Ring of Fire.

Clement underscored the economic development potential of the Ring of Fire and reaffirmed the Harper government’s commitment to mining development in the region and within the country.

“It’s kind of like a ‘Rubik’s cube’ of public policy development and the sequencing of events. No one said it was simple. No one said that you could easily tie up all aspects in a nice neat bow.

“All aspects will be reiterative and in five or ten years from now there will be similar issues that we would have dealt with already, that will lead to economic development,” Clement said.

Clement was in recent weeks placed in charge of coordinating the federal government’s efforts to develop regulatory and public policies with regard to developing the minerals-rich north of Ontario.

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