January 28, 2015 – Republic of Mining

70th anniversary of Paymaster mining disaster – by Len Gillis (Timmins Daily Press – January 28, 2015)

January 28, 2015

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Who knew what Hector Poitras was thinking that cold February morning in 1945, when he stepped onto the cage at the Paymaster No. 5 shaft getting ready to ride down into the mine with his co-workers?

It was a Friday. Maybe he was going to a dance that night, or maybe to see a hockey game at The Mac or the South Porcupine Arena. For whatever reason, Poitras didn’t have his mind completely on the job.

Poitras was a young rookie miner. That’s probably why another miner, an older fellow, gave him a friendly nudge and asked him why he didn’t have his cap lamp with him. Poitras had to get off the cage and head for the lamp room, thus missing his ride underground and possibly facing a bucket load of you-know-what from the shift boss.

That mistake would save his life. The cage had begun its descent into the depths of the mine. Eight men were on the upper deck. Eight were on the lower deck.

The incident itself took only seconds, at about 7:55 that morning. The cage was moving at a normal speed of about 1,200 feet per minute when the rope broke, said the Ministry of Mines report. There was no evidence to the rope being jerked or kinked, said the report.

COLUMN-Crude oil decline cuts both ways for miners – by Clyde Russel (Reuters India – January 28, 2015)

January 28, 2015

http://in.reuters.com/

LAUNCESTON, Australia, Jan 28 (Reuters) – The plunge in oil prices is a double-edged sword for many miners, lowering the cost of production but at the same time cutting the value of the commodities they produce.

At first glance the 57 percent tumble in Brent crude since June last year would seem to be an unambiguous positive for many commodity producers, given their heavy reliance on diesel to operate mines and transport output to ports.

This is especially the case for Australian coal and iron ore mines, which use diesel not only for mining vehicles but to generate electricity as well, given their remote locations.

Diesel-fired train locomotives help miners move their commodities across hundreds of kilometres (miles) and there may even be savings on charter flights used to ferry workers to and from remote mine sites, given the lower cost of aviation fuel.

Research by Morgan Stanley, published on Jan. 25, said that oil and diesel made up between 9 and 12 percent of the total production costs for bulk commodities such as coal, iron ore and bauxite, but only 3 to 5 percent for metals.

Rio’s McIntosh at Roundup 2015: Mining not a ‘sunset industry’ (Northern Miner – January 27, 2015)

January 28, 2015

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

VANCOUVER — There’s likely not an explorer with a bigger technical team or budget than Rio Tinto’s (NYSE: RIO; LON: RIO) Stephen McIntosh, who serves as the mega miner’s global head of exploration and has been with the company for over 28 years.

McIntosh took to the podium at the Association for Mineral Exploration BC’s (AMEBC) annual Roundup conference to address the company’s view on discovery success and the current downturn in the commodity cycle.

Even a company with the financial swagger of Rio — which maintains a market capitalization of roughly US$99.5 billion at the time of writing — hasn’t been immune to the cutbacks in exploration spending.

The company went from investing around US$2 billion in project development and greenfield programs in 2012 to around US$750 million in 2014. McIntosh was quick to underline, however, just how important maintaining a robust project pipeline is to the large-cap miner, and pointed out that “exploration is in this company’s DNA.”

Rio Tinto’s exploration arm employs a team of roughly 450 people, who handle the company’s greenfield and brownfield programs and also deal with business intelligence, big data analysis, and commodity strategies.

Rickford, Gravelle meet on Ring of Fire – by Staff (Northern Ontario Business – January 28, 2015)

January 28, 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.

Progress in the Ring of Fire – or the lack of it – was on the agenda of federal Natural Resources Minister Greg Rickford and provincial Northern Development and Mines Minister Michael Gravelle during a meeting in Ottawa, Jan. 27.

In their first “constructive” meeting of 2015, a joint news release stated the ministers discussed funding arrangements to extend transportation infrastructure into the isolated Far North region to support mining and improve access to remote First Nation communities.

The two sides have been at an impasse on how to work together in the James Bay lowlands where exploration has ground to a halt and the biggest explorer, Cliffs Natural Resources, has abandoned work and seems likely to leave Ontario.

The Wynne government has accused the Harper government of dragging its feet in matching Ontario’s $1 billion infrastructure commitment for development of the mining camp, while Ottawa has chastised Queen’s Park for its lack of a detailed plan from its much-maligned Ring of Fire development corporation.

The news release said discussion focused on the Ottawa’s $53 billion Building Canada Fund, set aside for provincial and municipal infrastructure, including “legacy resource development projects like the Ring of Fire.”

B.C. mining conference urges social engagement with First Nations – by Mark Hume (Globe and Mail – January 27, 2015)

January 28, 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.

VANCOUVER — Mining executives may sometimes feel they face insurmountable problems in British Columbia, where the courts have reaffirmed aboriginal title over land and where environmental regulations seem myriad.

But participants at a major mining conference in Vancouver were told Tuesday that if the industry can come up with a new way of incorporating social and environmental issues into its planning, the province could emerge as a global leader.

“This community has everything in the world going for it – just don’t screw it up,” said Rick Rule, chairman of Sprott US Holdings and an expert on international resource investment.

The development landscape in B.C. has become more complicated since the Supreme Court of Canada confirmed last year that aboriginal title exists and that both government and industry have an obligation to consult First Nations over proposed projects.

But Mr. Rule and other speakers on a panel about aboriginal engagement said the ruling has clarified the legal ground rules and it is now up to industry and First Nation leaders to rise to the challenge of finding ways to move ahead.

NEWS RELEASE: War for talent in mining just heating up, says EY

January 28, 2015

Click here for report: http://www.ey.com/Publication/vwLUAssets/EY-productivity-in-labour-mining-and-metals/$FILE/EY-productivity-in-labour-mining-and-metals.pdf

With a focus on productivity, companies must not neglect talent management

VANCOUVER, Jan. 28, 2015 /CNW/ – The end of the mining boom does not mean victory in the war for talent, according to a new EY report. Instead, EY says it’s merely a ceasefire – and companies must maintain a focus on talent to minimize risks presented by more enduring trends.

“The war for talent just got a lot more complex,” says Bruce Sprague, EY’s Canadian Mining & Metals Leader. “During the boom years, many mining companies hired talent at any cost. Now, as cost cutting exercises mean there are fewer jobs to fill, the best people are able cherry pick the top roles in a global marketplace, and in other sectors as well. Now more than ever, mining companies must not lose their focus on talent management.”

EY’s report, It is only a ceasefire – the war for talent will continue, notes things like an aging workforce, globalization and disruptive technology are all affecting the future supply of talent. Amid these trends, without a strong focus on talent management, companies are faced with two significant risks:

Loss of wise, senior and experienced people from the sector
Significant talent shortage in the next upturn

Metals supercycle remains intact, says Bay Street analyst Ray Goldie – by Peter Kennedy (Stockhouse.com – January 28, 2015)

January 28, 2015

http://www.stockhouse.com/

One of Canada’s most seasoned commodities analysts says the long term outlook is bright for key base metals, including nickel, copper and zinc.

Raymond Goldie, Vice-President, Commodity Economics with Salman Partners was in Vancouver Tuesday to talk about the “super cycle,” a term that was often used in the early part of this century when metal prices kept going up in a seemingly relentless fashion.

“We have been in a super cycle since 2004,’’ Goldie told the CFA Society of Vancouver during a lunchtime speech.

But even though the price of key metals has weakened in the past two years, it doesn’t mean the current supercycle is over. Rather it is caught in a “mid-cycle trough,” he said. “The rebound lies ahead.”

The veteran Bay Street analyst, who was widely known for his coverage of iconic Canadian mining companies like Falconbridge and Inco Ltd. before they were swallowed up in the globalization process, said the near term outlook is brightest for nickel.

He said supply is constrained by an Indonesian ban on exports of raw ore, which is affecting China’s ability to produce nickel pig iron, a low grade ferronickel invented in China as a cheap alternative to pure nickel for the production of stainless steel.

Report on Mount Polley mining disaster set for release – by Justine Hunter (Globe and Mail – January 28, 2015)

January 28, 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.

VICTORIA — A report to be released on Friday will pinpoint the cause of the Mount Polley dam failure and is expected to lead to new safety standards for the entire Canadian mining industry.

But blame and consequences for any misconduct won’t be part of the story this week. Almost six months after the ecological disaster, responsibility for the collapse of the tailings pond that released millions of cubic metres of waste material into Quesnel Lake and other waterways in central British Columbia is still under investigation.

The provincial government is set to release the results of a geotechnical inquiry by an independent panel – this will be the engineers’ explanation of what went wrong.

The report’s findings could pave the way for the partial reopening of the copper and gold mine 55 kilometres northeast of Williams Lake. Two other investigations have yet to be published that would determine if any fines or prosecution are warranted – one by the Chief Inspector of Mines and the second by the Conservation Officer Service, a law-enforcement body that would send any recommendations for charges to provincial Crown Counsel.

Provinces making bad bets with resource-based budgets – by Brian Lee Crowley (Globe and Mail – January 9, 2015)

January 28, 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.

You can’t say you weren’t warned. That’s a message that should be posted on billboards opposite the premier’s office in Edmonton, St. John’s and various other provincial capitals where falling energy prices have devastated government budgets.

Those of us who care about such things have been repeating for years the wisdom best summed up by former Alberta treasurer Jim Dinning: “Non-renewable natural resource revenues are non-reliable revenues.”

When your provincial budget is the attic in a house of cards, the first breath of contrary wind brings the whole structure tumbling down. I remember when a 10-cent difference in the price of natural gas meant a swing of $142-million in Alberta’s revenues. The price of that commodity has of course gyrated all over the place in the past 20 years, but mostly in a direction that has caused apoplexy at budget time.

The volatility of natural resource revenues is far less interesting than what might be done about them. On the other hand, if you can’t get policy makers to grasp the fragility of their budgets, you will never get them to take the hard decisions necessary to put things on a sounder footing.

Leaders hope to inspire new [economic] visions for Sudbury – by Jim Moodie (Sudbury Star – January 28, 2015)

January 28, 2015

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

Four community leaders came together Tuesday at a chamber of commerce event to share their thoughts on what makes Sudbury an attractive place to live and what will enhance its culture and economy going forward.

Sean Murray, head of pediatrics at Health Sciences North, said his dream is to create a freestanding medical facility for children in Sudbury.

“I really want to inspire the City of Greater Sudbury, and our rural communities as well, to try to improve health care for children, who unfortunately often get left in the mix of everything else that goes on,” he said.

Murray said he had performed a procedure earlier in the day on a boy who has chronic medical issues, including autism spectrum disorder, and was suffering from headaches. “I had to stick a needle into his back to take spinal fluid out and measure how much pressure was in his brain,” he said.

But since the boy has particular sensitivities to needles and crowds of people, the procedure had to be done in OR. “It really highlighted for me the importance of having something that is child-friendly,” he said. “We need to minimize those types of traumas that kids go through.”

Mining financier Sheldon Inwentash departs Pinetree Capital in big shakeup – by Peter Koven (National Pot – January 28, 2015)

January 28, 2015

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

TORONTO – It is the end of an era at Pinetree Capital Ltd.

The investment and merchant bank, which was a world leader in financing junior resource firms, announced this week that controversial chairman and chief executive Sheldon Inwentash is resigning after more than 22 years at the helm of the company. His departure is tied to a proposed deal with creditors that gives them security over the firm’s assets, but keeps Toronto-based Pinetree afloat after it defaulted on a debt covenant. The stock, which peaked at more than $15 in 2007, is now worth 7.5¢.

It is a disappointing outcome for Mr. Inwentash. He was on top of the world during the commodity bull market, making an enormous personal fortune as his firm helped hundreds of start-up mining companies get off the ground. His name also adorns the University of Toronto’s faculty of social work, to which he and his wife donated $15-million.

When micro-cap junior miners went looking for capital on Bay Street, Mr. Inwentash was, along with Ned Goodman and Eric Sprott, one of the first people they would think to call. Pinetree held investments in more than 400 public and private resource companies at its peak, with a big focus on precious metals. The firm’s investments had a fair value of almost $800-million by the end of 2010.

Mr. Inwentash came under scrutiny for his high compensation during those heady days.

Mining Deals Seen Bouncing From Lowest in Decade Last Year – by Firat Kayakiran (Bloomberg News – January 27, 2015)

January 28, 2015

http://www.bloomberg.com/

(Bloomberg) — Mining mergers and acquisitions are set to bounce after declining to the lowest in a decade last year as companies shied away from large deals and private-equity funds were slow to complete transactions, Ernst & Young LLP said.

The value of mining mergers and acquisitions fell 49 percent to $44.6 billion, the lowest since 2004, E&Y said in a report today. The number of deals declined 23 percent to 544. That excludes Glencore Plc’s takeover of Xstrata Plc in 2013.

“We expect an uptick in 2015; we expect to see more deals from private capital,” Lee Downham, global mining transaction chief at E&Y in London, said in a phone interview. “But I don’t think there will be $10 billion plus or $20 billion plus type of deals happening. It will still be a gradual entry into the market.”

Former bankers and executives including Mick Davis, a past Xstrata chief executive officer, Barrick Gold Corp.’s ex-CEO Aaron Regent and former JPMorgan Chase & Co. banker Lloyd Pengilly have set up companies and funds to bid for assets put up for sale by the world’s biggest mining companies.

In defence of Winnipeg – by Ken S. Coates (National Post – January 28, 2015)

January 28, 2015

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

With its current edition, Maclean’s magazine has sparked a national debate about the nature and extent of Canadian racism. Through the simple device of calling Winnipeg the “most racist” city in Canada, it has shone a light on one of the greatest “wicked problems” (a complex problem for which there is no simple solution) in Canadian public life. But it moves us no closer to a resolution.

Racism is clearly part of the picture. But attaching it to the situation facing First Nations suggests that the solution lies in tackling the racists and changing their attitudes. That’s putting the cart before the horse.

Picking on Winnipeg also blames the city for demographic and social accidents beyond its control. The challenges facing indigenous peoples are particularly acute in cities with large aboriginal populations, both in percentage and absolute terms. In these cities — Winnipeg, Regina, Saskatoon, Edmonton and Calgary — the size of the First Nations population makes the issue a collective challenge and responsibility.

There are serious issues in the Manitoban capital. The migration of First Nations people from northern Manitoba, which has one of the lowest per-capita incomes in the country and many communities in serious crisis, exacerbates the existing problems in the city. For northern First Nations people, Winnipeg is an “arrival city,” a place that at least holds the promise of a better life and an escape from hardship. There is thus little reason for Canadians in other cities to look down their noses at those on the frontlines trying to deal with the legacy of Canada’s failed aboriginal policies.

NEWS RELEASE: Cliffs Natural Resources Inc. Announces Decision on Bloom Lake Mine

January 28, 2015

Commences Formal Canadian Restructuring Proceedings

CLEVELAND, Jan. 27, 2015 /PRNewswire/ — Cliffs Natural Resources Inc. (NYSE: CLF) announced today that Bloom Lake General Partner Limited and certain of its affiliates, including Cliffs Quebec Iron Mining ULC (collectively, “Bloom Lake Group”) commenced restructuring proceedings in Montreal, Quebec, under the Companies’ Creditors Arrangement Act (Canada) (“CCAA”). The Bloom Lake Group had recently suspended operations and for several months has been exploring options to sell certain of its Canadian assets, among other initiatives.

The decision to seek protection under the CCAA was based on a thorough legal and financial analysis of the options available to the Bloom Lake Group. The Bloom Lake Group is no longer generating any revenues and is not able to meet its obligations as they come due. The Initial CCAA Order will address the Bloom Lake Group’s immediate liquidity issues and permit the Bloom Lake Group to preserve and protect its assets for the benefit of all stakeholders while restructuring and sale options are explored.

As part of the CCAA process, the Court has appointed FTI Consulting Canada Inc. as the Monitor. The Monitor’s role in the CCAA process is to monitor the activities of the Bloom Lake Group and provide assistance to the Bloom Lake Group and its stakeholders in respect of the CCAA process.

Lourenco Goncalves , Chairman of the Board, President and Chief Executive Officer of Cliffs Natural Resources Inc. said, “For several months, we have been seeking equity investors and exploring sale options for Bloom Lake including working collaboratively with Investissement Québec. We support the decision by the directors of the Bloom Lake Group to conduct a restructuring process under the supervision of the Court.”

RoF access route land squabble headed to Court of Appeal – by Henry Lazenby (MiningWeekly.com – January 28, 2015)

January 28, 2015

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – Prospective Ring of Fire (RoF) miners KWG Resources and Cliffs Natural Resources have been given the green light to take their quarrel over the right of way over an isthmus, narrow strip of land, connecting the remote Northern Ontario mining camp with the outside world to the Court of Appeal for Ontario.

KWG reported on Tuesday that its subsidiary Canada Chrome Corporation (CCC) had received an order of the Court of Appeal granting leave to appeal the decision of the Divisional Court of the Ontario Superior Court of Justice released July 30 last year, which ruled that CCC’s consent should be waived in an application for an easement to build a road over its mining claims.

KWG, through CCC, controls the key transportation route on land, which it acquired through claim staking in 2009. KWG had proposed a rail route connecting to the Canadian National transcontinental rail line at the Exton rail siding to transport ore to consumers, competing with its US-based joint venture partner Cliffs, which had proposed an all-weather road south connecting to the same rail line west of Exton.

Cliffs’ plan was to transport chromite concentrate by rail to Capreol, in the Sudbury area, where it planned to build a ferrochrome production facility.

KWG explained that CCC was now expected to file its notice of appeal by January 30, after which it would have a further 30-day opportunity to perfect its appeal.