May 13, 2013 – Republic of Mining

THUNDER BAY MINING READINESS STRATEGY — AN INTEGRATED REGIONAL ECONOMIC DEVELOPMENT PLAN

May 13, 2013

The City of Thunder Bay, together with Fort William First Nation (FWFN) and the Thunder Bay Community Economic Development Commission (CEDC) has initiated a Mining Readiness Strategy to address and strategically plan for growth in Thunder Bay and the Northwestern Ontario Region. The Strategy is a major step forward to help guide all of Northwestern Ontario in capitalizing on the many opportunities that mining development is expected to bring to the Region.

The Strategy can be downloaded at: www.thunderbay.ca/miningreadiness

EXECUTIVE SUMMARY

Introduction and Strategy Context

The Northwestern Ontario region is forecasting significant growth in mineral exploration and mining development. This growth is expected to result in substantial economic and social development for Thunder Bay, its surrounding municipalities and First Nation communities. The discovery and development of major gold deposits, nickel and chromite in Northwestern Ontario’s “Ring of Fire” and other mineral resources are expected to create a variety of business opportunities that positively influence the Region’s economic outlook. This growth will place unique pressures on infrastructure and government services as well as the current, and future, mining labour market.

Gold Bears Pull $20.8 Billion as BlackRock Says Buy: Commodities – by Elizabeth Campbell (Bloomberg News – May 13, 2013)

May 13, 2013

http://www.bloomberg.com/

Hedge funds increased bets on lower gold prices after investors pulled a record $20.8 billion from bullion funds this year while BlackRock Inc. (BLK), the world’s biggest money manager, said it’s still bullish.

Speculators held 67,374 so-called short contracts on May 7, 6.4 percent more than a week earlier, U.S. Commodity Futures Trading Commission data show. The net-long position dropped 10 percent to 49,260 futures and options. Net-bullish wagers across 18 U.S.-traded raw materials climbed 5.8 percent to 582,265, with gains for cocoa, cotton and hogs.

Gold is having its worst start to a year since 1982 after dropping 15 percent and sliding into a bear market in April. Holdings in exchange-traded funds backed by bullion tumbled to the lowest since July 2011 even as central banks print money on an unprecedented scale to boost growth. BlackRock’s President Robert Kapito said May 9 he would still buy the metal, echoing billionaire John Paulson, who’s sticking with a bullish view even after losing 27 percent in his Gold Fund last month.

“People have been told the world is going to end for five years, and it hasn’t, so they’re finally moving on,” said James Paulsen, the Minneapolis-based chief investment strategist at Wells Capital Management, which oversees $325 billion of assets. “So even when crisis flashes now, you don’t get the same upside, and then in good times, you get more downside, and that’s what you’re getting in gold as the Armageddon premium is coming out.”

Could gold’s fall be the start of a broader resources slump? – by Chris Sorensen (MacLean’s Magazine – April 30, 2013)

May 13, 2013

http://www2.macleans.ca/?cid=navlogo

Resource prices have driven the Canadian economy for over a decade. Are the good times coming to an end?

For investors and producers alike, gold’s recent rout was as devastating as it was unexpected. The price plummeted by $200 an ounce over a two-day period last week, suffering its biggest single-day drop in 30 years. Though it eventually stabilized at around $1,400 an ounce, stocks of gold mines—many of them Canadian—continued to be hammered by investors for days afterward, with some reports suggesting that as many as 15 per cent of the world’s gold mining companies are now wallowing in red ink.

There are many theories as to what caused gold to fall so far, so fast. They range from rumours that Cyprus planned to sell off some of its reserves to pay for its bailout, to the easing of fears that central bankers are destroying currencies with their unprecedented stimulus measures. “People thought loose monetary policies lead to rampant inflation,” says Keith Head, a professor at the University of British Columbia’s Sauder School of Business. “But gold prices stayed high, even when the underlying theory was repudiated by actual evidence, and that’s a vulnerable situation to be in.”

The big question now is whether other commodity prices will follow suit. Though gold, which traded as high as $1,888 an ounce in 2011, is unique in many respects—it is valued mostly as a way to store wealth, as opposed to as an industrial input—prices of everything from aluminum to zinc have slumped over the past several years after hitting historic highs, creating fears of a broader crash.

Precious Holdings [Rare Earth Metals] – by Austin Ramzy (Time Magazine – Feb. 18, 2013)

May 13, 2013

http://science.time.com/

From smart phones to weaponry, cutting-edge technologies depend on access to elements called rare earths. What happened when China tried too hard to control them

In the dystopia imagined in the video game Call of Duty: Black Ops II, the year 2025 is defined by a rampaging cult, a zombie apocalypse–and a war between the U.S. and China for control of the world’s supply of rare earths, materials crucial to the production of everything from mobile phones to weapons. Early in the game, a character waves around a smart phone, lecturing on the importance of rare earths. “Who controls all of it?” he asks ominously. “China.”

It’s only a video game, but not long ago that scenario–minus the zombies–seemed uncomfortably close to reality. China, the world’s dominant producer of rare-earth elements, announced in 2010 that it was drastically cutting its exports, triggering a global panic. Rare earths are a fundamental ingredient across much of the $1 trillion high-tech manufacturing industry. Consumer companies feared shortages of the rare-earth elements that go into computer screens and lightbulbs; U.S. weapons manufacturers worried that a supply shock would imperil production of Abrams tanks and Tomahawk cruise missiles.

“The scope of this crisis is enormous, and only a concerted national effort will lead us out of this mess,” warned U.S. Representative Donald Manzullo, an Illinois Republican. Paul Krugman, a Nobel Prize–winning Princeton economist and New York Times columnist, wrote that China had achieved “a monopoly position exceeding the wildest dreams of Middle Eastern oil-fueled tyrants.”

NEWS RELEASE: National Mining Week, May 13–19, 2013

May 13, 2013

National Mining Week celebrates the important role that mining plays in the lives of Canadians. It is hard to imagine a life without minerals and metals – we use them and rely on them every day.

This year’s theme, Our Mineral Resource Advantage: Working for Canadians, highlights the essential role that Natural Resources Canada (NRCan) plays in helping raise awareness of the important contributions mining makes to Canadian communities and the national economy. NRCan is the Government of Canada’s voice on mining and a world-class centre of knowledge and technologies (e.g., the Green Mining Initiative) in mining environment and processing.

Our mining industry has been a cornerstone of Canada’s economy for generations, shaping our national identity with benefits in all regions. Over the next 30 years, the world will need to extract more resources to meet the demands of the growing middle classes in emerging economies. Canada will continue to be a reliable global supplier of these resources, as it has in the past.

The numbers tell the story. Canada produces more than 60 minerals and metals and is one of the world’s leading exporters. We are the world’s number-one producer of potash. We rank in the top five in aluminum, cadmium, cobalt, diamonds, nickel, platinum group metals, sulphur, titanium concentrates, tungsten, and uranium.

This is a good time to celebrate Canada’s international leadership in mining. Did you know that:

The commodities supercycle is far from dead – by Nitesh Shah (Financial Times Adviser – May 13, 2013)

May 13, 2013

http://www.ftadviser.com/

The commodities supercycle, that started in the late 1990s, is far from over.

The main fundamental drivers of the commodities supercycle are still in force and recent commodity price weaknesses are more related to business-cycle fluctuations and short-term commodity-specific supply increases than a change in structural fundamentals.

Resource-intensive economic growth in emerging markets, led by urbanisation and industrialisation, has been the main force behind the rise in commodity demand and prices in the past 10 years.

This process is expected to continue for the next 10 to 20 years. The rise in commodity demand in the past 10 years has occurred most strongly in China and India. Both remain in the early stages of industrialisation and urbanisation. With per capita GDP in these countries projected to triple by 2030, absolute demand for the commodity inputs necessary to produce the investment and consumption goods they will demand in this period is expected to be significant.

The size of the middle class in emerging markets is expected to rise at a rapid pace in the next decade, and with it so will their consumption of commodity-intensive goods. Offices, middle-class housing, automobiles, roads, trains, airports and related infrastructure, refrigerators, washing machines, computing devices and meat for example are all highly commodity intensive to produce.

UPDATE 2-Rio Tinto expects Mongolia nod for copper exports soon – by James Regan (Reuters U.S. – May 9, 2013)

May 13, 2013

http://www.reuters.com/

SYDNEY, May 9 (Reuters) – Rio Tinto could be two weeks away from gaining Mongolian approval to ship copper from its Oyu Tolgoi mine, helping offset a slide in revenue from its U.S. copper business as it faces pressure to slash costs and sell non-core assets.

A landslide at the firm’s Bingham Canyon copper mine in Utah in April, which could result in over $700 million in lost sales revenue based on Reuters calculations, was unlikely to force a rethink on assets sales, Chief Executive Sam Walsh told shareholders at the annual meeting in Sydney on Thursday.

There has been speculation that moves by Rio Tinto to sell its Northparkes copper mine in Australia could be delayed until full production resumed at Bingham Canyon.

“We are not expecting that that (the landslide) will have a difference” on divestment decisions, said Walsh, adding the firm would also not be draw into a “fire sale” of businesses.

Rio Tinto hired Macquarie Bank to sell its majority stake in Northparkes, a source familiar with the matter told Reuters. . Rio Tinto and Macquarie declined comment. Japan’s Sumitomo Corp. own 20 percent of the mine.

China may not overtake America this century after all – by Ambrose Evans-Pritchard (The Telegraph – May 8, 2013)

May 13, 2013

http://www.telegraph.co.uk/

Doubts are growing about whether China can pass the US to become the world’s biggest economy this century amid warnings that the country’s 30-year miracle is nearing exhaustion.

The world’s tallest tower should have been built by now. Officials said last year that the great edifice with 220 floors would be erected in three months flat in China’s inland city of Changsha by March, snatching the crown from Dubai’s Burj Khalifa.

The deadline has come and gone, yet the wasteland sits untouched. It now looks as if the fin d’époque project – using prefab blocs – may never be approved. Even China knows its limits.

Prime minister Li Keqiang has asked the State Council to clamp down on the excesses of the regions. Not before time. A top regulator says local government finances are “out of control”.

Mr Li aims to cut China’s economic growth to a safe speed limit of 7pc next year and rein in rampant investment – still a world record 49pc of GDP – before it traps the country in a boom-bust dynamic of frightening scale.

Vested interests are conspiring to stop him, launching a counter-attack from their power-base in the $6 trillion state industries. Even so, uber-growth is surely over.

Wynne is listening [to northern Ontario issues]: Matichuk – by Laura Stricker (Sudbury Star – May 11, 2013)

May 13, 2013

http://www.thesudburystar.com/

After two back-to-back meetings with other Northern municipalities and policy makers, Mayor Marianne Matichuk walked away feeling cautiously optimistic.

“I was very impressed that the premier came, (and) quite a few ministers, and they were really listening to our concerns in the North. So that’s a really good sign. And people were very pleased,” she said Friday.

Matichuk was speaking after attending the Federation of Northern Ontario Municipalities (FONOM) conference this past week in Parry Sound. Prior to that, on May 3, Matichuk was in North Bay for a meeting with the mayors from North Bay, Sault Ste. Marie, Thunder Bay and Timmins.

The three-day FONOM”con-f erence featured talks with provincial and federal ministers, as well as outside experts. Premier Kathleen Wynne was also there.

“Kathleen Wynne was very open about wanting to work with people in the North. She wanted to hear our concerns. She also committed to working with not just municipalities. She’s stated specifically that she wanted to work with the federal government to resolve problems, because she feels that we all need to work together,” said Matichuk.

Birchtree Mine dodges a bullet: Vale says ‘care and maintenance’ no longer scheduled for August – by John Barker (Thompson Citizen – May 9, 2013)

May 13, 2013

The Thompson Citizen, which was established in June 1960, covers the City of Thompson and Nickel Belt Region of Northern Manitoba. The city has a population of about 13,500 residents while the regional population is more than 40,000. editor@thompsoncitizen.net

Reprieve comes less than four months before mine faced being mothballed

Birchtree Mine, which opened in 1968, is “no longer scheduled to be placed on care and maintenance in August,” Lovro Paulic, vice-president for Vale’s Manitoba Operations, told employees in an internal Manitoba Operations update circulated Monday. The company had announced last Oct. 18 care and maintenance was being considered for Birchtree Mine in 10 months time, leaving Thompson in a state of suspended animation of sorts over the last seven months. The mine was previously on care and maintenance from 1977 to 1989. The current life of mine plan anticipates closure of Birchtree Mine at some point in the next 10 years.

Vale, which is trying to find $100 million in cost savings at its Manitoba Operations in Thompson to help bring its cost per metric tonne for finished nickel to under US$10,000, says they have achieved 90 per cent of that goal over the last eight months – a cost savings of $90 million with $10 million still to go. The reprieve for Birchtree Mine is “as a direct result of our collective efforts” to achieve that cost savings, Paulic wrote to employees.

Vale is also looking to “secure a strategic investor” to more quickly develop its 1-D Lower ore body, a project first announced almost eight years ago on Aug. 19, 2005, and studied for close to a decade before that to determine if it could be mined profitably.

Mine Sales in Bear Market Brings Private Equity on Prowl – by Brett Foley & Elisabeth Behrmann (Bloomberg News – May 9, 2013)

May 13, 2013

http://www.bloomberg.com/

“I haven’t seen anything like it in more than 20 years,” said Tim Schroeders, who helps manage about $1 billion in equities, including BHP and Rio Tinto (RIO) Group, at Pengana Capital Ltd. in Melbourne. “Mining companies have done pretty well buying assets at the bottom of the cycle and turning some over near the top, but this is completely the other way around.”

BHP, the world’s biggest mining company, and London-based Rio Tinto are leading the global asset disposal and may sell businesses or stakes in mines for as much as $35 billion, according to Deutsche Bank AG. Private-equity firms are finding that tempting, raising almost $9 billion in 16 months for mine investment, more than the previous four years combined, according to data compiled by Bloomberg.

Aaron Regent, who was fired last year as chief executive officer of Barrick Gold Corp. (ABX), the biggest producer of the metal, started a company to invest in mining assets, according to two people familiar with the matter. KKR & Co. (KKR), the firm run by Henry Kravis and George Roberts, is considering a bid for Rio’s stake in an Australian copper and gold mine, two people with knowledge of the matter said last month.

Steve Okun, a spokesman for KKR in Hong Kong, said the firm doesn’t comment on market speculation.

Innu not idle as Plan Nord advances – by Aaron Lakoff (Briar Patch Magazine – May 1, 2013)

May 13, 2013

http://briarpatchmagazine.com/

Resistance to repackaged neoliberalism grows in Quebec’s North

One year after the student strikes and Maple Spring that erupted in Quebec in 2012, the ongoing wave of social protests is having to recalibrate itself to meet a new set of challenges.

Former Liberal premier Jean Charest incited popular outrage with a proposed university tuition hike and broader austerity measures, but with last September’s election of Parti Québécois (PQ) leader Pauline Marois, many are finding that the neoliberal policies of the Charest government are only taking on slightly subtler forms.

In late February, Marois held a two-day summit on post-secondary education and announced that her government would continue to increase tuition costs, much to the chagrin of the student movement.

Also continuing is the northern Quebec development project known as Plan Nord under the previous provincial government and recently rebranded Le Nord Pour Tous under Marois. According to its official website, Plan Nord is a 25-year project estimated to bring in $80 billion in investments and create 20,000 jobs in mining, forestry, and dam projects.

Bob Rae will serve all interests [in Ring of Fire] (Thunder Bay Editorial – May 13, 2013)

May 13, 2013

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

CONFIRMATION that Bob Rae will negotiate for First Nations in the Ring of Fire mining belt should please all parties involved. Ensuring First Nations have an influential place at the table is essential to their full and fair inclusion in the biggest potential economic development in recent Ontario history. But it is not just the Matawa First Nations who should welcome the longtime MP and former Liberal leader to the table.

Governments have been flailing away on this file for years, trying to come to some sort of agreement on how to negotiate the ways in which First Nations are to be involved in development. Not what to negotiate, mind you, but how.

Government comes at this with a formal model that differs greatly from how aboriginal people talk to other people. Matawa has known and trusted Rae since he visited individual First Nations as Ontario NDP leader. He has held various responsibilities for First Nations activities at Queen’s Park and in Ottawa and he is clearly one of the few senior Canadian political figures who enjoy the confidence of First Nations.

Industry, too, should welcome Rae to the mining development talks since they have been caught between First Nations and government on most occasions when exploration is undertaken.

“ . . . There are many different public interests that need to be served in this regard and that’s certainly something I want to make sure happens,” Rae said back in March when he was first identified as Matawa’s choice.