Black Hills are lined with gold – by Russell Noble (Canadian Mining Journal – December 2013)

Russell Noble is the editor for the Canadian Mining Journal, Canada’s first mining publication.

Historic U.S. gold belt offers new opportunities for Canadian miners

With a name like “Holy Terror,” one can only speculate what the founders of this mine in The Black Hills of South Dakota were thinking when they named it in the late 1890s?

Even to this day, visitors to the Keystone area of the historic mining communities in the famed Black Hills still wonder where the name came from and why was the mine tagged with such a menacing monicker?

Sketchy historical documents and old wives’ tales* spell out some of the myths behind the name but nevertheless, the mine is real and the name lives on as a legally registered claim with the U.S. Bureau of Mines.

The Holy Terror Mine is located in the Keystone Mining District of the Black Hills, about 35 km southwest of Rapid City and is one of no fewer than a dozen high-grade mines that formed a chain along the historical Keystone gold belt. Mining in the Keystone district dates back to 1874, with the most notable deposit being the famous Homestake Mine which produced nearly 40 million ounces of gold, making it the richest, deepest and most successful gold mine in U.S. history.

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Cross-border miners are great neighbours – by Russell Noble (Canadian Mining Journal – December 2013)

Russell Noble is the editor for the Canadian Mining Journal, Canada’s first mining publication.

Canada and U.S. relations is a topic that’s usual pretty boring because rarely does anything of interest come from this long and humdrum relationship. In fact, not since the War of 1812 and the Americans’ failed invasion of our country has there been anything remotely close to either country being a real ‘threat’ to the other.

Sure there’s the proposed Keystone pipeline that is viewed by some Americans as a potential threat to their lands along its route, and then there’s our gasoline that some major retailers have boycotted because of its ‘mis-perceived’ high lead content, but overall, nothing done or produced on either side of the border is seriously worth worrying about.

Unlike too many other parts of the world where neighbours are blowing each other to bits, the relationship between Canada and the United States is friendly with an “open-for-business” attitude. Sure, both countries have their own peculiari¬ties when it comes to people, permits and properties but for the most part, mining is mining on both sides of the border.

Canada and the U.S. contain some of the more prolific mines found anywhere on earth and thanks to both countries practicing open-door policies, mining companies are pretty much free to come and go as they please.

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Tech could change face of mining jobs at Resolution Copper – by Jack Fitzpatrick (Tucson Sentinel – December 12, 2013)

http://www.tucsonsentinel.com/

Cronkite News Service – The small town of Superior has pinned its livelihood to copper, silver and gold mines for more than a century, but never has it had a prospect like this.

The proposed Resolution Copper mine near this struggling town could be the most productive copper mine in North America, promising $61.4 billion in economic activity over its nearly 60-year life and 1,400 mining jobs at the peak of production.

But those jobs are not likely to be the jobs that built Superior and other towns in Arizona’s historic Copper Corridor, where culture and economies are closely tied to the copper-mining industry. The generations of traditional mining experience in Superior may not be of much use as Resolution, like mines around the world, turns to robotics.

“We’ve reached a new world when it comes to mining,” said Thomas Power, an economics professor at the University of Montana who wrote a report for opponents of the mine.

Arizona is part of that new world, with the copper industry becoming markedly less labor-intensive in recent decades.

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Rio Tinto on track to save $3bn in costs – by Alex MacDonald (The Australian – December 12, 2013)

http://www.theaustralian.com.au/business

MINING titan Rio Tinto says it has already exceeded its target of cutting $2 billion in operating costs by the end of the year and said it will prioritise paying down debt next year.

Major resources companies such as Rio Tinto are moving to bolster their balance sheets and profits in the face of subdued prices for many commodities, as a decade-long mining boom cools.

Rio Tinto already announced plans to more than halve its capital expenditure to less than $8 billion by 2015 from last year’s level while its peer BHP Billiton announced plans to cut its capital spend below $15 billion in the future from $21.7 billion in the last financial year.

In an effort to boost profitability, mining companies are also slashing operating costs by reducing headcount, increasing production capacity at its operations, and revising supply contract agreements among other things. Rio Tinto announced in February plans to cut operating costs by $2 billion through such measures by the end of the year.

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Why Scrooge visited Potash Corp. workers early – by Ryan Lijdsman (Winnipeg Free Press – December 11, 2013)

http://www.winnipegfreepress.com/

Ryan Lijdsman is a Canadian-based international business consultant.

EDMONTON — This Christmas, Potash Corp. spread the holiday cheer by raising dividends to its shareholders and gifting 18 per cent of its workforce with layoff notices.

These actions may appear counterintuitive and even bizarre to employees and those who don’t study business, but the reality is they are not out of the ordinary and are becoming more and more common in Canada. A corporate culture of maximizing shareholder value and short-termism has overtaken building “real value” and long-term corporate sustainability.

The theory of maximizing shareholder value was originally developed in the 1970s by free-market economists at the University of Chicago. Its raison d’être was to protect shareholders from a “managerialist” philosophy that taught corporations should be professionally managed to serve not just shareholders, but also employees, customers, and the broader society. It taught the purpose of the corporation was to serve shareholders and the best way to maximize the total value of the company was to maximize share price. An increase in share price was viewed as proof of greater economic efficiency, a view that is currently held in most publicly-traded companies.

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COLUMN-Might China spoil Indonesia’s tin party? – by Andy Home (Reuters U.K. – December 11, 2013)

http://uk.finance.yahoo.com/

(Andy Home is a Reuters columnist. The opinions expressed are his own)

LONDON, Dec 11 (Reuters) – Tin has been the best relative performer of the London Metal Exchange (LME) base metals pack so far this year. And it’s a fair bet that analysts are going to pick it again as a likely out-performer next year when the annual polls are compiled.

Against a backdrop of improving metals demand, relative price performance is increasingly a reflection of each metal’s supply dynamics. Which is why tin’s bull credentials are unarguably the strongest of the lot.

THE BULL CASE

This is a market still characterised by structural supply shortfall, unlike, say copper, where heavy investment in new mine capacity is finally closing the gap with demand.

There has been no such investment splurge in tin. Nor is there likely to be any time soon.  The bull case was recently spelt out by Peter Kettle, markets manager for tin industry association ITRI.

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Africa’s local banks offer mining lifeline where others fear to tread – by Stephen Eisenhammer (Reuters India – December 12, 2013)

http://in.reuters.com/

LONDON, Dec 12 (Reuters) – African banks are playing an increasingly significant role in the continent’s new generation of mines, providing cash for projects considered too risky or expensive for rattled markets and cautious international lenders.

Central and West Africa is home to some of the world’s largest untapped deposits of gold, iron ore and other minerals, but the promising mine projects often require billions of dollars to be spent on bridges, roads, railways and ports.

That level of investment, combined with the perceived risks of corruption and political uncertainty in Africa, is proving too much for under-pressure equity and debt markets and twitchy overseas banks undergoing enforced belt-tightening since the financial crisis.

A solution, however, appears to be on the mining companies’ own doorsteps, with recent deals suggesting that local banks could provide a lifeline for the region’s junior miners.

In West Africa, banks such as Togo-based Ecobank and Ivory Coast’s Banque Atlantique are moving in on mining projects, emboldened by the expert local knowledge gained from their extensive branch networks.

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Editorial: The two lions of Southern Africa – by Northern Miner (December 11, 2013)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. 

The mining community in Canada probably has more connections to South Africa than any other group in the country, and so the death of Nelson Mandela on Dec. 5 provided many miners here with time to reflect on the man’s leadership, as well as the tortuous history and unsettled future of South Africa, with a natural focus on the fate of the country’s tremendous mineral endowment.

For readers of a certain age, two of the biggest lifetime geopolitical surprises have been the rapid fall of the Soviet Union and the transition of South Africa from an apartheid state to a relatively well-functioning democratic free market — without having passed through a payback-fuelled civil war in between. As has been discussed at length around the world, the latter is largely due to Mandela’s moderate policies and conciliatory leadership once he assumed the South African presidency in 1994.

In order to maintain social peace and keep foreign investment flowing, once they were voted into power, Mandela and the African National Congress did not nationalize South Africa’s mines, and that decision had a profound effect on the careers and life choices of so many in the mining community, both inside and outside South Africa.

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Miners warned about Indonesia, Brazil, India and South Africa investments – by Cecilia Jamasmie (Mining.com – December 12, 2013)

http://www.mining.com/

A significant increase in conflict, terrorism and regime instability in the Middle East and North Africa, along with deepened global political violence and resource nationalism, are the main risks mining investors will face in 2014, according to a report published Thursday by UK-based risk consultancy Maplecroft.

In its sixth annual Political Risk Atlas (PRA) the analysts tell investors to pay special attention to possible populist moves in Indonesia, Brazil, India and South Africa as national elections in these countries will likely boost resource nationalist rhetoric and policies.

According to Maplecroft close to 10% of the countries studied have shown a significant increase in their risks levels, with foreign investors facing more political violence, resource nationalism and expropriations.

In the last year alone, says the report, the risk of resource nationalism has increased 15% as a consequence of governments attempts to offset the risk of societal unrest through tax increases, tougher regulations or outright expropriation.

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The Rise of the Resource Curse – by William Pesek (Bloomberg News – December 12, 2013)

 http://www.bloomberg.com/

In many ways Mongolia is an outlier — an exotic tourist destination filled with windswept deserts, nomads and yurts. It might also be a vision of the world’s future.

With a tiny $10 billion economy and less than 3 million people, Mongolia is fantastically resource-rich. And with borders touching China, Russia and Central Asia, the landlocked nation seems to have won a geographic lottery ticket. It doesn’t need to go far to find enthusiastic customers for its immense endowment of copper, gold and other minerals.

That also means that Mongolia sits on the precipice of the so-called resources curse, in which citizens in countries such as Nigeria and Indonesia have not prospered from the treasure sitting under their land and seas. As politicians and cronies make millions, there’s little incentive to create other industries to employ the masses.

Mongolia’s challenge will soon be the world’s. That’s the upshot of a new report from Richard Dobbs and his team at McKinsey, in which they predict a $17 trillion investment bonanza by 2030 to keep up with demand for oil, gas and other materials. That’s an amount greater than the annual output of the U.S. economy and more than four times Germany’s. It’s not just the kind of money that changes people or even nations. It’s the kind that changes the world — and probably not for the better.

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B.C. First Nations eye LNG equity stakes – by Shawn McCarthy (Globe and Mail – December 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.

GATINEAU, QUE. — First Nations leaders in British Columbia are seeking multibillion-dollar loan guarantees from the federal government to enable them to take ownership stakes in various liquefied natural gas projects being planned in the province, and have also travelled to China and Japan looking for backers.

The bid to raise financing comes as the Assembly of First Nations launches an effort to forge an aboriginal national energy strategy, which would be based on treaty rights, sustainable development and the need for impoverished communities to benefit from the massive resource development that Canada expects over the next decade.

“What is absolutely clear is that unless First Nations are included as full partners in development, the prospects for projects proceeding are negligible,” said Dave Porter, chief executive of British Columbia First Nations Energy and Mining Council.

He said aboriginal communities will resort to the courts if Ottawa presses ahead over their objections with pipeline projects such as Enbridge Inc.’s Northern Gateway.

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How long does Ontario need to turn around OPG? – by Konrad Yakabuski (Globe and Mail – December 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.

How long should it take to turn the Titanic around? Is five years a reasonable amount of time to allow for the transformation of a bloated and poorly run government-owned utility into a disciplined, high-performing one? Surely 10 years should be enough?

A decade ago, Ontario’s newly appointed energy minister promised to fix the mess at Ontario Power Generation. Dwight Duncan vowed to end to the years of “indecision and ideology” that had hamstrung electricity policy under the Progressive Conservatives and New Democrats. Job One was ending the excesses at OPG.

Mr. Duncan hired a bank chairman and two former federal cabinet ministers to examine the utility that managed a motley stable of publicly owned energy assets, including the Adam Beck hydroelectric station at Niagara Falls that once made Ontario an energy leader and the problem-plagued fleet of nuclear reactors, which had become the bane of Mr. Duncan’s predecessors and saddled power consumers with the utility’s atomic-sized debt.

The group led by former Liberal minister John Manley, former Tory minister Jake Epp and Bank of Nova Scotia chairman Peter Godsoe, sized up their task:

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Corporate excess tops radioactive waste at OPG – by Martin Regg Cohn (Toronto Star – December 12, 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.

Why did OPG bosses overpay themselves while overcharging electricity ratepayers and impoverishing OPG’s sole shareholder — us?

Sweetheart hirings, obscene pensions, bloated bonuses, skyrocketing salaries: You don’t need to be a rocket scientist — or an auditor — to know the numbers don’t add up at OPG.

Surely a nuclear engineer could do the math? Like Tom Mitchell, the handsomely paid CEO of Ontario Power Generation?
Mitchell’s a smart guy who doesn’t count with his fingers, but it’s hard to wag your finger at overpaid staff when you’re pocketing $1.7 million in a good year.

But where was OPG’s board of directors, who are supposed to oversee work flow, supervise cash flow and superimpose core values? You don’t have to be a right-thinking, God-fearing apostle to know something smelled rotten in the boardroom.

Surely an old Tory, proud of his Mennonite heritage, could see through the lack of thrift? Like Jake Epp, the chairman of the board at OPG?

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A CSR Curse in Transylvania – by By Joseph Kirschke (Engineering and Mining Journal – December 9, 2013)

http://www.e-mj.com/

Joseph Kirschke is the News Editor-Mining.

In May of this year, a handful of anti-mining activists descended on the annual shareholders’ meeting of Allianz in Munich, Germany. Their mission: to convince one of the world’s top accident insurers to reconsider its relationship with Gabriel Resources Ltd., a Canadian miner, which, since 1999, has spent $550 million developing one of Europe’s biggest gold deposits in Romania’s storied Carpathian Mountains.

Risk assessment procedures had begun two months earlier, but the protestors prevailed. “After what I learned today,” said CEO Michael Diekmann, “Allianz will do no business with Gabriel Resources and will not insure the proposed project.”

The mobilization was one of many accentuating the Toronto-listed junior’s latest defeat after Bucharest parliamentarians rejected a draft bill for its open-cast, $7.5 billion Rosia Montana project on November 11. Despite years of opposition across the country and around the world, however, Gabriel and its CEO Jonathan Henry remain undeterred. “Our goal remains to bring the project through to reality that will significantly benefit the people of Romania,” he said.

In a fast-changing world of Corporate Social Responsibility (CSR), Gabriel’s plans for an estimated 314 tons of gold and 1,500 tons of silver in Transylvania have foundered distinctively.

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