September 9, 2014 – Republic of Mining

If We Build It, They Will Stay [Ring of Fire and North] – by John Van Nostrand (Walrus Magazine – September 2014)

September 9, 2014

Instead of extracting resources and leaving, we could populate the mid-Canada corridor—and create a bigger, better country

FORTY-SEVEN YEARS AGO, perhaps in the outsized spirit of Expo 67, the retired major general and author Richard Rohmer put forward a bold proposal in Mid-Canada Development Corridor: A Concept. It described a vast landmass stretching from Newfoundland and Labrador across Quebec, Ontario, and the Prairies, to British Columbia and up through Northwest Territories and Yukon, occupying the area between southern settlements and the treeline—a band dominated by boreal forest. His idea was to implement a national strategy to develop and populate it.

Rohmer reasoned that Canada was poised to be a world leader in resource extraction, and that our future was tied to that endeavour. Mid-Canada was rich in minerals, oil, and gas, largely untouched, and had a habitable climate. The key to the plan was new infrastructure, which both the government and private sector would finance.

At the time, there were a few north–south arteries in place, and more were needed; east–west links needed improvement. Some existing settlements could be expanded to serve as urban hubs. The middle of the country could be settled in much the same way the West had been settled three generations earlier, when Canada saw its future in agriculture.

First Nations water problems ‘shameful’ – by Jody Porter (CBC News Thunder Bay – September 09, 2014)

September 9, 2014

http://www.cbc.ca/news/canada/thunder-bay

Thunder Bay chapter of Council of Canadians works toward solutions to long-standing water issues

Canadians should be shocked by the lack of clean drinking water in many First Nations, according to the Thunder Bay chapter of the Council of Canadians.

A CBC investigation recently revealed ten First Nations in northern Ontario have been without clean drinking water for more than a decade.

“We just find this such a shameful situation,” said Janice Horgos, chair of the Council of Canadians Blue Planet committee. “It’s shocking in a country rich with water like Canada.”

Horgos said her committee is “honoured” to have several First Nations members to help “further our understanding of the complex issue.”

“We need to understand what’s happening if we’re going to become a better ally,” she said. Horgos said each First Nation faces different challenges when it comes to providing safe drinking water, but all are confronted with the same problem without it. “How can people even think about economic prosperity if they don’t have safe, clean drinking water?”

The Council of Canadians is also expressing concern about federal legislation, The government calls the Safe Drinking Water for First Nations Act “a vital step towards ensuring First Nations have the same health and safety protections for drinking water as other Canadians.”

Mining CEOs call for global fight against Ebola – by Dorothy Kosich (MiningWeb.com – September 9, 2014)

September 9, 2014

http://www.mineweb.com/

Mining companies are joining forces, urging the global community to help fight Ebola in affected West African countries.

RENO (MINEWEB) – The Ebola outbreak in western African has prompted several mining companies, such as Vale, to suspend production and evacuate their expat staff as the epidemic has killed at least 2,100 people in five African countries.

However, other mining companies, such as Rio Tinto, Freeport-McMoRan, Newmont and Randgold Resources, have worked to battle the epidemic.

Combatting the spread of the virus requires West African governments to work closely with international agencies, health service provides and mining companies, which now have a duty to think above and beyond Ebola, said Rokaje Akinkugbe, head of energy and natural resources coverage at FBN Capital in Lagos, Nigeria.

“…Mining companies have a role to play because there will definitely be a greater pullback on mine sites as the disease impacts the workforce. And for a mining companies, its workforce is essential to long-term survival,” Akinkugbe told Think Advisor.com

Mining operations in Liberia, Guinea, Sierra Leone and Nigeria have provided financial backing and increased sanitation for their employees to help fight the disease. Six mining companies have been involved in the emerging infectious disease risk mitigation project funded by USAID, including Freeport McMoRan, MMG Limited, Mawson West and Tiger Resources.

Goldcorp CEO Jeannes Sees “Peak Gold” in Sector This Year or Next – by Alistair MacDonald (Wall Street Journal – September 8, 2014)

September 9, 2014

http://online.wsj.com/home-page

Mining Company Head Says Market Wrong to Assume Company Poised to Acquire

Miners have reached “peak gold,” in which production of the precious metal has hit its high as easy-to-mine gold deposits become harder to find, said Chuck Jeannes, chief executive of Goldcorp, the world’s largest gold miner by market capitalization.

Mr. Jeannes said in an interview that a falloff in supply will support the gold price, but make mining it even harder and lead to further consolidation in the industry. Still, the Vancouver-based miner played down investors’ expectation that Goldcorp itself is poised to make a takeover bid following the rejection of its most recent attempt to buy a rival miner.

“Whether it is this year or next year, I don’t think we will ever see the gold production reach these levels again,” he said. “There are just not that many new mines being found and developed.”

Gold production has been rising quickly since the late 1970s, hitting 2,270 metric tons last year, according to preliminary figures from the U.S. Geological Survey. The 386 metric tons of gold produced in 1900 is 17% of the gold mined in 2013. Mr. Jeannes said that without a dramatic technological advance gold production is unlikely to increase during his career.

Iron ore market risks ‘disaster’ – by DOW JONES NEWSWIRES WITH A STAFF REPORTER (The Australian – September 8, 2014)

September 9, 2014

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

Mining companies will aggressively pursue increased output in the face of continuing weakness in the iron ore price, though with forecast demand not expected to keep pace with production, one analyst is warnings of a potential “disaster”.

Rio Tinto and BHP Billiton in Australia, and Vale in South America — the world’s top three iron ore miners — are ramping up production in a bet that their enormous efficiencies of scale will allow them to profit, even though prices are now less than half what they were four years ago. The companies are also betting that the lower prices could force higher-cost competitors out of the market, giving them more pricing power in the long run.

The iron ore price has been in a slump for most of the year, with its latest fall on Friday seeing a new five-year low at $US83.60 a tonne.

Already Cliffs Natural Resources has hired bankers to sell its mines in Australia because it has difficulty competing with the major players. “The big three are in control, and there’s not much you can do about it,” Lourenco Goncalves, chief executive of the Cleveland-based company, said in an interview.

The developments are being closely watched by steelmakers in China, South Korea and Japan, the world’s top three importers of iron ore, the key ingredient in making steel. Should the big players, which account for more than 60 per cent of all seaborne trade of the mineral, tighten their control of the market, they could exert greater pressure during price negotiations.

Zinc Deficiency Gives Investors a Jolt – by Tatyana Shumsky (Wall Street Journal – September 8, 2014)

September 9, 2014

http://online.wsj.com/home-page

Prices for the Metal Have Soared to 3-Year Highs

The world is running low on zinc, sending some investors scurrying to buy mining-company shares and forcing the U.S. Mint to redouble cost-cutting efforts in search of a cheaper penny.

Prices for the metal have soared to three-year highs. Investors are betting prices will continue to climb as some of the world’s largest zinc mines run dry just as demand is ramping up.

Zinc is used in everything from steel coatings to car tires to sunscreen, and the metal has few substitutes. The U.S. Mint reduced manufacturing costs to offset higher prices for zinc, which makes up 97.5% of every penny. However, steelmakers, which buy about half the world’s zinc, are in a tougher bind. Zinc is one of several rust-resistant metals vital to the steelmaking process where costs have soared this year.

Zinc production is expected to fall short of demand this year for the first time since 2007, according to Goldman Sachs. Several large, aging mines are scheduled to close next year, and miners need higher prices to justify the cost of finding and developing new sources of metal. Miners may not produce enough zinc to meet the needs of steel companies and coin makers until 2018, analysts say. Meantime, a rebound in the U.S. property market and soaring global auto sales are creating new demand for galvanized steel.

Commentary: Ring of Fire sale! – by Bill Galagher (Northern Miner – September 8, 2014)

September 9, 2014

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

For anybody wondering what’s going to happen now to Cliffs Natural Resources’ chromite discovery in Ontario’s Ring of Fire region, all they have to do is read Casablanca Capital’s dissident letter to shareholders in the run-up to Cliffs’ July 29 annual general meeting.

Casablanca’s takeover strategy was to run an alternative slate of six directors on the “hedgefund platform” that Cliffs, under new management, would wield the broom over its multi-billion dollar expansion frenzy that it had just pulled off in iron and chromite.

Here is the excerpt imploring Cliffs shareholders to vote the Casablanca slate in, as the incumbent directors had to go: “The Directors are focused on their own interests at the expense of shareholders, cannot be entrusted to lead Cliffs and do not deserve a single vote after having destroyed $9 billion of value.”

Shareholders overwhelmingly agreed at the AGM and thus the slicing-and-dicing commenced. Here’s a key excerpt from analysts (Market Realist) that spelled the end of Cliffs/Casablanca’s infatuation with the Ring of Fire:

“In our view, spinning off international assets might not be possible because most of the international assets are losing money. So ‘fire sale’ might be one option, but even for that it might be difficult to find a buyer at this stage of the market environment…

Land deal with Ontario’s Ojibway still in contention after 164 years – by Tanya Talaga (Toronto Star – September 9, 2014)

September 9, 2014

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.

Robinson Huron Treaty was signed in 1850, covering land from Parry Sound to Sault Ste. Marie and north to Lake Superior

First Nations signatories of one of Canada’s founding treaties are set to start a landmark court action Tuesday against the federal and provincial governments on what they say is a failure to live up to terms of a deal made more than 150 years ago.

Nearly two dozen First Nations fall under the Robinson Huron Treaty of 1850, a vast territory encompassing 92,463 square kilometres in the middle of Ontario stretching from Sudbury to the shores of Lakes Superior and Huron and points north.

In exchange for use of those lands by the crown, indigenous people were told they would be paid $2 a year with regular increases as profits from the land grew, said Mike Restoule, chairperson of the Robinson Huron Treaty Trust Fund.

But there has been only one annuity increase of $2 in 1874 and nothing since, even though the area contains vast mining, forestry and land resources that corporations and the government have profited from for decades, said Restoule.

Currently, the 24,000 to 30,000 descendants of the Ojibway Indians covered under the treaty receive $4 a year each.