July 19, 2013 – Republic of Mining

Jumping into the Ring of Fire – by David McLaren (QMI Agency/Sarnia Observer – July 19, 2013)

July 19, 2013

http://www.theobserver.ca/

Well-connected ex-politician Bob Rae must work with head and heart for First Nations as pressure mounts to develop Northern Ontario’s Ring of Fire

I’m looking at a map of northern Ontario where there’s a pretty patchwork of colours in the shape of a crescent moon: deep sea-blue for Freewest Resources, orange for KWG, bright sun-yellow for Probe, grass green for Fancamp, sky-blue for the Freewest/Spider/KWG partnership.

They are some of the thousands of claims staked by mining companies in the Ring of Fire — 5,120 square kilometres in the watersheds of Hudson and James bays and chock full of chromite, nickel, copper and zinc worth well over $100 billion. That’s a sizable chunk of boreal forest, itself a carbon sink in the order of the Amazon rain forest.

Imagine you’re on the shore of McFaulds Lake. You’re looking at trees and rock and muskeg — swampland, millions of acres of it. Turn around and you’ll see KWG’s base camp and maybe a drill or two pulling up core samples of chromite. Well, why not? you ask. There’s nothing else there.

Not so. It’s home for everything and everyone from black flies to black bears to First Nations peoples — Cree and Anishinaabek — whose ways of life will be forever altered if and when all those pretty coloured claims become mines.

Vale holds open houses on EIS for potash mine – by Regina Leader Post (July 19, 2013)

July 19, 2013

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

Vale Potash Canada held open house information meetings to discuss the environmental impact statement (EIS) for its proposed Kronau potash mine in Kronau, about 30 km southeast of Regina, on Wednesday and nearby White City on Thursday.

While the Brazilian mining giant’s proposed potash solution mine project was put on hold last August, there’s still considerable interest in the $3-billion project and its potential environmental impact on the area, according to a spokesperson for Vale Potash Canada.

“What we’re trying to get across to people is that if the Kronau project proceeds … the commitments attached to the EIS still apply,” said Lara Ludwig, community relations lead for Vale Potash Canada. About 170 people attended the Kronau session, which was similar to the crowd at the first public information meetings on the Kronau project in 2011, Ludwig said.

“A lot of people had questions about how the internal option analysis is going and what the status (of the project) is. From our perspective, … it was a good opportunity to reconnect and answer any questions.”

Last August, the giant mining company decided to temporarily suspend further work on the 2.9-million tonne per year project due to the tough global economy, although work on the EIS and finding a secure water source for the mine continued.

True Gold taps new sources to raise capital – by Peter Koven (National Post – July 19, 2013)

July 19, 2013

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

Mark O’Dea has to be the envy of every of nearly every junior mining CEO in the country. As the executive chairman of True Gold Mining Inc., Mr. O’Dea has signed off on deals to raise $33.5-million of fresh capital since the start of May. That equates to more than half of True’s $60-million market value.

It is an enormous amount of money for a junior gold miner to raise at this point in time. Juniors are suffering through some of the worst market conditions seen in decades, as risk capital has fled the sector and equity financing opportunities have dried up due to lack of demand. The recent drop in gold prices only made matters worse.

Mr. O’Dea, a well-known mining entrepreneur, said he recognized the equity markets were a non-starter for raising capital. That caused him to take a different approach and look for strategic investors. His success demonstrates that money is available for quality junior companies, but they have to work a little harder for it than they used to.

“We’ve really tried to target a different style of niche investor, and different pools of capital from the traditional resource sector funds which have been really beat up,” the 45-year-old said in an interview.

Gold Prices Will Rebound – by Frank Yu and Warren Song (Epoch Times – July 19, 2013)

July 19, 2013

http://www.theepochtimes.com/

The price of gold has declined more than 20 percent so far in 2013. At below $1,300 per ounce, a fair amount of discussion has been happening around the value of gold.

Since gold does not generate any income and it is relatively expensive to store, its valuation has historically been difficult to assess. Recently, with the U.S. dollar rising and interest rates edging up, hot money began to move out of gold exchange-traded funds (ETFs) and into other channels—notably, U.S. equities. Now let’s attempt to assess the value of gold.

Gold has always had its own unique value. Because central banks can print money in large quantities to stimulate the economy, gold, which has a finite supply, will always have followers who view it as a way to preserve monetary value. This is especially true in many less-developed countries where the majority of the population does not have freedom or access to move money and invest in the U.S. stock market.

Historically, families in many parts of the world pass part of their fortunes to the next generation in some form of jewelry and gold. In most developing countries, corruption is a major issue and an especially large portion of the wealth is concentrated in the hands of a small number of people.

Exclusive: Chile indigenous group likely to appeal Barrick ruling -lawyer – by Alexandra Ulmer (Reuters India – July 19, 2013)

July 19, 2013

http://in.reuters.com/

SANTIAGO – (Reuters) – A Chilean indigenous group will likely ask the Supreme Court to review a lower court decision on Barrick Gold Corp’s Pascua-Lama gold mine, because the ruling does not go far enough to protect the environment, a lawyer representing the group told Reuters on Thursday.

The appeal will probably also seek a re-evaluation of the suspended $8.5 billion project and ask that Barrick present a new environmental impact assessment study, a potentially lengthy and costly process, the lawyer, Lorenzo Soto, added.

The Copiapo Court of Appeals on Monday ordered a freeze on construction of the project, which straddles the Chile-Argentine border high in the Andes, until the company builds infrastructure to prevent water pollution.

“It’s very likely we appeal the decision,” Soto said. “What we’re interested in is that the project be re-evaluated. What is optimal, in our opinion, is for the project to present a new environmental impact assessment.”

Soto said the decision on whether to appeal would be made on Friday. The Diaguita indigenous group has until Monday to file with the court, he added.

Carbon tax floated as an option for covering flood cost – by Gillian Steward (Toronto Star – July 17, 2013)

July 19, 2013

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.

Former Calgary councillor thinks the unthinkable in the heart of oil country. The devastating flash floods that swamped much of southern Alberta — including Calgary’s downtown core — have suddenly made the projected effects of climate change quite tangible.

Climate change is no longer just a concept or a gaggle of statistics. It means soggy, smelly houses, apartment and office towers without working elevators, and shuttered restaurants.

The costs are also quite tangible. Calgary Mayor Naheed Nenshi estimates that restoring city infrastructure and facilities will cost between $250 million and $500 million. Estimates of the total damage in Calgary run between $3 billion and $5 billion. Premier Alison Redford has pledged $1 billion for immediate aid, cleanup and reconstruction throughout the province.

But where is this money going to come from? And if extreme weather events are to become more frequent, how are we going to pay for the damage from future disasters? This is the second major flood in Calgary in seven years. Bob Hawkesworth has an answer that seems obvious, especially in Alberta.

North American oil prices surge toward global levels – by Shawn McCarthy (Globe and Mail – July 19, 2013)

July 19, 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 — The Cushing logjam has broken, and with its opening, North American oil has lost the bargain-basement status it has sustained for the past two years.

Since early 2011, oil producers in the United States and Canada have suffered from large discounts in the market – the trendsetting West Texas intermediate (WTI) was priced well below international benchmark North Sea Brent, while a larger-than-normal gap opened up between WTI and Canadian heavy crude.

The boom in U.S. tight oil production, on top of growing oil sands volumes from Alberta, created a glut at Cushing, Okla., a terminus that served as a traditional pricing-point for WTI but had virtually no pipeline access to the massive refinery capacity at the Gulf Coast. As a result, companies invested heavily in new transportation – pipelines, rail cars, barges, even trucks – to move landlocked North American crude to coastal markets where it would fetch international prices.

Now, that investment in transportation is providing a big payoff. Along with the stronger economic news in the United States, the increased ability to get western oil to markets on the U.S. Gulf Coast and East Coast is credited for driving North American crude higher, even as Brent prices lag.

TransCanada ramps up effort to sway U.S. on Keystone XL project – by Jeffrey Jones (Globe and Mail – July 19, 2013)

July 19, 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.

CALGARY – TransCanada Corp. is seeking to bolster its case with U.S. President Barack Obama for the long-delayed Keystone XL oil pipeline, firing off a laundry list of reasons the company says the contentious project will have minimal influence on rising North American greenhouse gas emissions.

TransCanada sent data from various studies on Canadian oil sands, carbon intensity and power used by pipelines to the U.S. State Department in response to Mr. Obama’s recent remarks that elevated climate impact to the top of the list of criteria for approving or rejecting the project.

The Calgary-based company remains intent on winning approval for the $5.3-billion (U.S.) pipeline in the face of opposition from environmental groups, though chief executive officer Russ Girling warned on Thursday that the slow pace of the regulatory process would make it hard to achieve the current start-up target of late 2015.

That would represent another in a string of delays since TransCanada first applied to build the export conduit to Texas refineries from Alberta nearly five years ago.

St. Lawrence oil and gas well proposal has Farley Mowat ‘hopping mad’ – by Gloria Galloway (Globe and Mail – July 15, 2013)

July 19, 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 — There is no denying the amount of fight still left in Farley Mowat. Just let him get going on the “evil forces” who are sacrificing the environment in their lust for oil.

The writer, conservationist and conversationalist, who completed what he declared to be his final book nearly three years ago at the age of 89, is irate. A proposal to put an offshore oil and gas well in the Gulf of St. Lawrence will not go away, and Mr. Mowat is aghast at the depths of human folly.

Back in 1984, he wrote a book called Sea of Slaughter that detailed a litany of environmental wrongs in the gulf and on the Atlantic seaboard. The looming development, known as the Old Harry Prospect, holds the potential to unleash more of the same, Mr. Mowat said this week in a telephone interview from Cape Breton, where he and his wife, Claire, spend their summers.

“I was so appalled by what I discovered when I wrote this book, I could hardly believe that human beings could be so thoughtless, so destructive, so devilish, just plain devilish, all in pursuit of money,” he said of Sea of Slaughter. “It took me five years to write the damn thing, and I have never been able to fully reread it since, I get so upset about it.”

UPDATE 2-Atlas Copco to shed more jobs as mining slump deepens – Niklas Pollard and Helena Soderpalm (Reuters U.K. – July 18, 2013)

July 19, 2013

http://uk.reuters.com/

STOCKHOLM, July 18 (Reuters) – Engineering group Atlas Copco announced more job losses on Thursday as spending cuts across the mining industry hit demand for its trademark drill rigs and loaders and raised worries the sector’s downturn may have further to run.

Robust activity in services and industrial equipment stemmed a fall in group profit and orders but the company forecast that demand for mining gear would slip further in the near term.

Mining is suffering a hangover from years of booming expansion and has slashed capital spending as softer prices for commodities such as coal, copper and gold have raise doubts about future investment returns.

The likes of BHP Billiton and Rio Tinto have cut billions of dollars from outlays. For Atlas Copco and its cross-town rival Sandvik, which together supply more than half the global market for underground mining gear, this has brought a sharp drop-off in equipment orders though a thriving services business has cushioned the blows.

Unlike Sandvik, which is due to report on Friday, Atlas’s single biggest mining exposure – around one third – is to gold whose price has slid more than 20 percent since year-end.

COLUMN-BHP, Rio gamble on iron ore, but they’ve stacked the deck – by Clyde Russell (Reuters U.S. – July 18, 2013)

July 19, 2013

http://www.reuters.com/

Clyde Russell is a Reuters market analyst. The views expressed are his own.

LAUNCESTON, Australia, July 18 (Reuters) – Ramping up output in the face of an expected easing in demand growth may seem like an odd tactic for a miner, but it’s exactly what Rio Tinto and BHP Billiton are doing in iron ore.

The world’s second- and third-ranked producers both said this week that their expansion plans are on track, notwithstanding the expected slowdown in China, which buys about two-thirds of global seaborne iron ore supply.

But there is method in the seeming madness of increasing production when the demand outlook is less than rosy. Both Rio and BHP are effectively betting that their low-cost operations in Australia will be able to dominate the market, squeezing out both Chinese domestic production and higher-cost mines elsewhere in Australia and around the globe.

They are also betting that the fears of a slowdown in Chinese demand growth are being overstated, and that import volumes will remain healthy. While these may look like risky assumptions for the two Anglo-Australian mining giants, they stand a good chance of being correct.

ONTC divestment could be costly for communities – by Lenny Carpenter (Wawatay News – July 18, 2013)

July 19, 2013

http://wawataynews.ca/

The Ontario government’s plans to sell off services of the Ontario Northland Transportation Commission (ONTC) could lead to higher costs for members of the James Bay communities, according to Mushkegowuk Deputy Grand Chief Leo Friday.

Last year, the province announced it would be divesting the government-owned transportation commission after citing stagnant ridership and increasing costs to its bus and train services that operate mostly in northeastern Ontario.

One of those services in the Polar Bear Express train, which runs between Moosonee and Cochrane and serves as a vital link between the James Bay coast and the rest of Ontario.

Since 2003, the province increased funding by 274 per cent to subsidize the Polar Bear Express, a subsidy that averages to about $400 per passenger. If the province continues with its divestment plan to sell the train services to a private corporation, Friday believes the people of James Bay will face the most financial impact.

“The minute the other company operates that train, they will jack up the rates and it’s not going to run every day – maybe once or twice a week because of the cutbacks,” Friday said.

Detroit Slides From Industrial Might to Bankruptcy – by Steven Church, Dawn McCarty & Margaret Cronin Fisk (Bloomberg News – July 19, 2013)

July 19, 2013

http://www.bloomberg.com/

Detroit, the cradle of the automobile assembly line and a symbol of industrial might, filed the biggest U.S. municipal bankruptcy after decades of decline left it too poor to pay billions of dollars owed bondholders, retired cops and current city workers.

“I know many will see this as a low point in the city’s history,” Michigan Governor Rick Snyder, a Republican, said in a letter yesterday authorizing the filing in U.S. Bankruptcy Court in Detroit. “Without this decision, the city’s condition would only worsen.”

Michigan’s largest city joins Jefferson County, Alabama, and the California cities of San Bernardino and Stockton in bankruptcy. The filing shattered the presumption of many bondholders that local governments, eager to continue borrowing at reasonable rates, would do whatever it took, including raise taxes, to come up with the money to meet bond obligations. Kevyn Orr, the city’s emergency manager, said the debt is $18 billion.

While under court protection, Detroit can stop paying some debts, is temporarily immune from most lawsuits and may be able to ask a judge to cancel contracts, including union agreements. Under Chapter 9 of the U.S. Bankruptcy Code, the first step is likely to be a court fight over whether the city was entitled to bankruptcy protection, a challenge that would ask if the city was truly insolvent and it had no alternative to filing.