January 5, 2015 – Republic of Mining

Cliffs’ Bloom Lake mine hit with record $7.5-million environmental fine – by Bertrand Marotte (Globe and Mail – December 26, 2014)

January 5, 2015

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.

Cliffs Natural Resources Inc. is feeling more pain from its foray into Canada.

As the Cleveland-based company pulls up stakes at its money-losing Bloom Lake iron ore mine in northeastern Quebec after investing billions in what its chief executive dubbed a “disaster,” the company’s subsidiary has been hit with a record $7.5-million fine for environmental infractions at the site.

Bloom Lake General Partner Ltd. – in which Cliffs has a controlling stake – pleaded guilty on Dec. 18 to 45 offences under the federal Fisheries Act and the Metal Mining Effluent Regulations in the Criminal and Penal Division of the Court of Quebec, according to Environment Canada.

The fine is the largest penalty for environmental infractions in the country’s history, Environment Canada said. Of the $7.5-million, $6.83-million will go to a federal fund that aims to direct money to environmental projects in the location where the incident took place.

Environment Canada said its investigation lasted more than three years. One major infraction involved the breach of a tailings pond dam that allowed more than 200,000 cubic meters of mine tailings and water to be released into fish-bearing waters.

Supply and services sector contributes 41K jobs: study – by Jonathan Migneault (Northern Ontario Business – January 5, 2015)

January 5, 2015

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.

In 2011, Ontario’s mining supply and services sector contributed $3.9 billion to the province’s gross domestic product, and sustained around 68,000 direct and indirect jobs, according to a new study published by the Canadian Association of Mining Equipment and Services for Export (CAMESE).

CAMESE managing director Jon Baird said the study’s findings are historic, because economic contributions from the mining supply and services sector had never been studied to such a degree.

“Nothing was known, or next to nothing was known, about the economic impact of mining supply before this survey,” Baird said. The association partnered with PricewaterhouseCoopers to analyze questionnaires it sent out to 913 supply and service companies across Ontario.

The pan-Ontario mining supply and services sector economic impact study determined 41,000 people in the province are directly employed by mining supply and services companies, while another 27,000 people rely on the sector indirectly, as suppliers or service providers themselves.

Around 78 per cent of the companies that responded to the survey reported doing some business outside of Ontario, while 70 per cent of respondents did business outside of Canada.

2014 in review: Decline and fall in the mining industry – by Rachelle Younglai (Globe and Mail – January 1, 2015)

January 5, 2015

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.

The mining industry hasn’t had much good news in recent years, so further signs of an economic slowdown in China rattled already-skittish producers. With financial-sector reform choking off growth in China’s property sector, which uses vast amounts of raw material, a bloodbath for metal and mineral prices ensued. Companies’ stocks sank to decade lows, and cost cutting became the critical part of every miner’s strategy. Here are 2014’s pivotal moments.

Iron ore glut

Iron ore lost 50 per cent of its value in 2014, falling below $67 (U.S.) a tonne because of weak demand from China and a glut of supply. The world’s biggest producers – Rio Tinto Group, BHP Billiton Ltd., Vale SA and Fortescue Metals Group – responded not by cutting production, but by continuing to increase it, despite the low prices for the steel-making ingredient.

Their strategy has taken a toll on smaller, higher cost producers, such as Cliffs Natural Resources Inc. and Labrador Iron Mines Holdings Ltd. Both have suspended operations at iron ore mines in the Labrador Trough, a 1,600-kilometre-long area that straddles Labrador and Quebec. Two iron ore mines there, Bloom Lake and Wabush, have been shuttered, putting hundreds out of work.

MY SONG FOR THE MINER VIDEO – by Wild Spirit Films ( Junie Boudreau)

January 5, 2015

http://www.wild-spirit-films.ca/ Tribute video dedicated to Canadian miners from Cape Breton, Nova Scotia and across Canada. Music courtesy of Fred White. Pictures courtesy of Cape Breton coal miners and Nova Scotia archives. Video made by filmmaker Junie Boudreau of Wild Spirit Films. This video is dedicated to my grandfather who died of “Black Lung” which is …

Canadian prosperity requires a strong resource industry – by Gwyn Morgan (Globe and Mail – January 5, 2015)

January 5, 2015

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.

“One of the key messages in Mr. Olson’s Rise and Decline of Nations is that
societies who don’t understand how their wealth is generated are destined
to lose it.” (Gwyn Morgan – January 5, 2015)

It’s been thirty years since Mancur Olson, the late American Economist, wrote The Rise and Decline of Nations. The premise of his widely acclaimed book is the longer a society enjoys political stability, the more likely it is to develop powerful special interest groups that erode economic prosperity. His words have proven prescient as we witness Europe’s debt-burdened stagnation and degeneration of the U.S. Congress into fractious ideological gridlock.

Canada weathered the 2008 economic crisis better than other countries, emerging as one of the world’s most financially sound and prosperous countries. The cornerstone that distinguishes Canada’s prosperity is our rich resource endowment, which generates some two million jobs, more than half of all merchandise exports and one-third of all capital investment.

Resource companies are planning capital investment of more than $600-billion over the next decade, creating hundreds of thousands more new jobs each year. But a new dynamic has emerged that threatens to stymie these investments.

How $40 oil would impact Canada’s provinces – by Jeff Rubin (Globe and Mail – January 5, 2015)

January 5, 2015

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.

What does Canada’s economy look like with oil prices at $40 a barrel? Certainly it won’t be the energy superpower envisioned by Prime Minister Stephen Harper.

If $40 a barrel still seems a ways off, consider that the benchmark price for oil sands crude is already trading in that price range. What’s more, if production from high-cost sources isn’t withdrawn from an oversupplied market, oil prices may soon be trading even lower.

The first thing Canadians should recognize about the new world order for oil prices is that – contrary to what we’re being told by our federal government – the economy is no longer in dire need of any new pipelines. For that matter, it can live without the new rail terminals being built to move oil as well. Yesterday’s transportation bottlenecks aren’t relevant in today’s marketplace.

At current prices there won’t be any massive expansion of oil sands production because those projects, which would produce some of the world’s most expensive crude, no longer make economic sense.

The recent spate of project cancellations by global oil giants – Total’s Joslyn mine, Shell’s at Pierre River, and Statoil’s Corner oil sands venture – is only the beginning. As oil prices grind lower, we can expect to hear about tens of billions of dollars of proposed spending that will be cancelled or indefinitely postponed.

Slowdown in China Bruises Economy in Latin America – by Eduardo Porter (New York Times – December 16, 2014)

January 5, 2015

http://www.nytimes.com/

SANTIAGO, Chile — Few people are as intensely worried about the slowing Chinese economy as Latin Americans. Not only does China buy nearly 40 percent of Chile’s copper, but its once-insatiable demand helped push copper prices from $1 to $4 a pound.

Meanwhile, Beijing plowed billions into Peruvian mines and fisheries and spent billions more buying soybeans from Argentina and Brazil. And it propped up the Venezuelan government to the tune of $50 billion in loans, to be paid in shipments of oil.

China’s voracious hunger for Latin America’s raw materials fueled the region’s most prosperous decade since the 1970s. It filled government coffers and helped halve the region’s poverty rate.

That era is over. For policy makers gathered here last week for the International Monetary Fund’s conference on challenges to Latin America’s prosperity, there seemed to be no more clear and present danger than China’s slowdown.

“The commodity boom allowed governments and companies to avoid hard choices,” Andrés Velasco, Chile’s finance minister from 2006 to 2010, told me. “For goodness’ sake even Argentina grew by 5 to 6 percent per year for almost a decade.”

Copper is back under $3. As commodity prices continue to swoon, driven in large part by China’s weaker demand, the going will get much tougher.

2014 a gruelling year for B.C. miners – by James Kwantes (Victoria Times Colonist – January 1, 2015)

January 5, 2015

http://www.timescolonist.com/

How bad was 2014 for Vancouver-based mining companies? With coal prices stumbling along at 52-week lows, even the lumps in the stocking were a stinking money-loser.

Take mining heavyweight Teck Resources, which is better-positioned than most coal producers to weather low prices. While its six coal mines were profitable for the three months ended Sept. 30, third-quarter profit dropped largely due to lower metallurgical coal prices. The stock has slumped more than 40 per cent this year to $16 on the Toronto Stock Exchange, pushing its dividend yield up to nearly six per cent.

Gold looked to break even at about $1,200 US an ounce after hitting highs of $1,385 during 2014. As for the prices of other resources produced in B.C. — copper, molybdenum, natural gas — each finished the year lower as economic growth in China continued to slow.

However, it was Vancouver’s mineral exploration companies — which rely on fresh capital infusions to continue their quest for buried treasure — that felt the most pain.

The S&P/TSX Venture Composite index — a bellwether of sorts for the junior exploration sector — finished the year at 690, comparable to levels at the height of the 2008 financial crisis. Several junior mining companies even gave up on mineral exploration and switched over to the burgeoning medical marijuana industry, while others closed their doors or hunkered down in cash-conservation mode.

Bad year for Cliffs gives way to uncertain future – by John Myers (Duluth News Tribune – December 28, 2014)

January 5, 2015

http://www.duluthnewstribune.com/

A bad year is nearly in the rear-view mirror for Cliffs Natural Resources, but the view through the windshield doesn’t look great, either.

The Cleveland-based mining company with a huge presence on Minnesota’s Iron Range has seen its stock value evaporate in 2014, the price for its iron ore halved and Wall Street confidence in its ability to thrive reach rock bottom. How bad was 2014?

In the past 12 months:

Cliffs’ stock has fallen from $27 per share to about $6, and some analysts say it may go lower. That’s for a stock that hit $100 per share in 2011 and $75 as recently as 2012.
Cliffs’ management team was ousted in late July when the company became the victim of a hostile takeover by the New York hedge fund Casablanca Capital. Casablanca, which called Cliffs’ old guard an “incompetent and entrenched” board that had “destroyed shareholder value” by expanding too fast and ringing up debt at the expense of profit, said it would downsize the company and sell off many or all of its foreign holdings.
Cliffs permanently shuttered its Wabush iron ore mine and shipping facilities in Newfoundland and Labrador early in the year. Then in November it announced it was seeking “exit options” to shut down its Bloom Lake operations in Quebec if a buyer didn’t come forward. So far, no buyer has emerged, and the operations appear doomed, at least in the short run. Ironically, closing the plant will cost Cliffs millions more.

Mining of the future – by Lindsay Kelly (Northern Ontario Business – December 28, 2014)

January 5, 2015

http://www.northernlife.ca/

Real-time communications to allow deep mining

It may sound like something straight from science fiction, but for miners of the future, suits and helmets that monitor their vital signs, regulate their body temperature and communicate to above-ground operators isn’t so far from reality.

Sudbury company Jannatec Technologies is working to develop fully connected, wearable gear that would do all these things to help miners go deeper underground.

“We’re very good at mining, but our communications and how we move ore and how we move things is still back 30, 40 years, so we have to catch up, and we need higher speed data under there,” Jannatec president Wayne Ablitt said. “We have to give the same working tools underground that are above ground, and that’s our goal.”

Jannatec is one of the partners in the Ultra-Deep Mining Network — established by Sudbury’s Centre for Excellence in Mining Innovation (CEMI) — focused on four areas of innovation: rock-stress risk reduction, energy reduction, material transport and productivity, and human health. The network defines ultra-deep mining as mining taking place up to 2.5 kilometres underground.

Last January, the network received $15 million from the Business Led Network Centres of Excellence; an additional $31 million has come from cash and in-kind contributions.

Canada’s mining sector braces for another challenging year – by Ross Marowits (CBC News/Canadian Press – December 28, 2014)

January 5, 2015

http://www.cbc.ca/news/business

Industry will benefit from weakened Canadian dollar

Canada’s mining sector is bracing for another challenging year in 2015 as slower growth in China is expected to continue to dampen selling prices for many metals.

Iron ore suffered the biggest drop in the past year, losing nearly half its value to reach the lowest price in more than five years. Some expect the price could fall further — perhaps to US$60 per tonne — on increased supply from Australia and Brazil by giants like Rio Tinto and BHP Billiton, outpaces demand.

Coal, silver, potash, copper and lead prices also weakened in the past year. Not all metals and minerals suffered. Nickel was the big winner, with prices rising 17 per cent following Indonesia’s ban on exports. Other gainers were uranium, aluminum, zinc and diamonds.

Although mining is in a multi-year global slump, prices are significantly higher than they were a decade ago, said Pierre Gratton, president of the Mining Association of Canada.

“It’s a cyclical industry and we have to weather this,” he said in an interview. Gratton said mining companies are very focused on reducing costs and will benefit from both the weakened Canadian dollar and dramatically lower energy prices.

My Take on Snow Lake – by Marc Jackson (Thompson Citizen – December 24, 2014)

January 5, 2015

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

Former Snow Lakers abound at mining convention

Walking the exhibition floor at the annual Manitoba Mining and Mineral Convention is just like old home week for a Snow Laker. A wide variety of people who have either lived here, or had extended visits, were around every corner, or in some cases working a booth on the convention centre’s massive exhibition floor.

This was indeed the case for several gents clustered on one of the central avenues of the floor looking to drum up interest in their “prospective” properties.

Dan Ziehlke, representing his company Strider Resources Ltd., was welcoming, conversational, and partaking in something he called “the miner’s breakfast” (a bag of popcorn from the kettle maker set up on the convention floor) when we happened upon him. Dan firmly believes – and he can back it up with the geology, prospecting and geochemical work – that he has another Nor-Acme type deposit on the east side of Wekusko.

Jim Parres was set up immediately to the left of Ziehlke and promoting his Jiminex Properties: Misehkow River near Pickle Lake; Northern Eagle near Hemlo; and the Parres and Parres Two near Osborne Lake.

Roger Warren, Giant Mine Bomber, Has Day Parole Extended (Canadian Press/Huffington Post – December 24, 2014)

January 5, 2015

http://www.huffingtonpost.ca/

A man who murdered nine people by bombing a Yellowknife mine 22 years ago continues to make “positive contributions to society” since being released from prison, a federal parole board has ruled in extending Roger Warren’s day parole.

The Parole Board of Canada granted the 71-year-old an additional six months parole on Nov. 21, stating board members found that by all accounts he is doing well and respecting conditions the board imposed.

“While mindful that the victims of your crime remain deeply affected by your actions,” reads recently obtained documents, “with no evidence that your risk is increasing and given the positive work you have done throughout your incarceration and community supervision, the Board finds that your risk to reoffend is not undue…”

Warren was sentenced to life in prison for second degree murder in January 1995 in the killing of nine replacement workers during an acrimonious strike at the Giant Mine.

He was found guilty of rigging a trip wire that detonated a massive dynamite explosion deep underground when it was snagged by a passing ore car holding the victims.

Canadian miners brace for ‘knife fight’ after year of dumping assets at fire-sale prices – by Peter Koven (National Post – December 30, 2014)

January 5, 2015

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

The mining business has a long history of companies grossly overpaying for assets. But no one will accuse George Dethlefsen of that crime.

Mr. Dethlefsen’s firm, Corsa Coal Corp., was approached this year about buying coal assets in Pennsylvania from Russian steel giant OAO Severstal, which was bailing out of the United States.

Severstal had bought these operations for $900 million in 2008, when steelmaking coal prices were hitting all-time highs. Mr. Dethlefsen would not pay anything close to that in today’s awful coal market, but he didn’t have to. Corsa bought the operations for a grand total of US$60 million, or less than 8% of what Severstal paid.

“It’s a tough market. We have our work cut out for us with this business and it’s not going to be easy,” said Mr. Dethlefsen, Corsa’s chief executive. “But we’d rather start by paying US$60 million than US$500 million.”

Indeed. It used to be that when mining companies put assets up for auction, they wouldn’t actually sell them unless they got a very full price. That could be because their commodity price assumptions were too optimistic, or they were just too attached to them and convinced they could extract more value. Dozens of interesting projects were put up for auction in recent years and never changed hands because sellers demanded too much money.

What Really Needs to Happen to Make the Ring of Fire a Reality – by Chief Cornelius Wabasse (Huffington Post – December 24, 2014)

January 5, 2015

http://www.huffingtonpost.ca/politics/

Cornelius Wabasse is the Chief of Webequie First Nation.

We have heard a lot in the news recently about whether resource development in the Ring of Fire in Ontario will ever become a reality. Newspapers are filled with discussion about why progress has not been faster, of companies abandoning development projects, and of concerns that Ring of Fire development may never be achieved.

These discussions focus on the wrong questions.

If Ring of Fire development is to be successful, the question should not be whether the development is happening fast enough. It should be whether the process is taking place based on a foundation of recognition and respect for Webequie First Nation and the other Indigenous nations who call this land home.

Despite all the words written and spoken about the Ring of Fire, Webequie and our Indigenous neighbours remain invisible to most of the boosters, pundits and speculators. We are the unnamed “First Nations” or “Aboriginal people.” It is time people learned more about who we are and our vision for our lands and future.

We have always lived here. We are not going anywhere. We have our own laws separate from Canadian laws.