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Day: April 9, 2015

New Plan Nord calls for smaller investment as metal, mineral prices tumble – by Peter Hadekel (Montreal Gazette – April 9, 2015)

http://montrealgazette.com/

From the start, the Quebec government’s Plan Nord strategy to develop the resource-rich northern regions of the province has been more about marketing than anything else.

First conceived by then-premier Jean Charest in 2011, it called for $80 billion in public and private investment over 25 years. But critics pointed out that many of the projects would have gone ahead anyway and that the whole operation was a convenient way for Charest to grab some headlines.

Four years later, the current version of the Liberal government has dusted off the Plan Nord and relaunched it. True to form, the announcement Wednesday was a slick marketing presentation with a lot more style than substance.

While details were scarce, the new plan revealed the government is much less optimistic about the amount of investment expected. Instead of $80 billion, we’re talking $50 billion by 2035, said Premier Philippe Couillard.

Some $20 billion will come from Hydro-Québec in the form of new projects and $2 billion will be spent on public infrastructure like roads and airports.

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Iron ore in fresh crisis as forward prices crumble – by Henning Gloystein and Manolo Serapio Jr. (Reuters India – April 10, 2015)

http://in.reuters.com/

SINGAPORE – (Reuters) – Iron ore is veering to a new crisis as prices for future delivery of the commodity slide 30 percent in the space of a month, and its outlook is now more bearish than oil and more dire than ever for miners struggling to just stay in business.

Prices of the steel-making ingredient for immediate delivery have slumped 60 percent over the past year as demand particularly from China slowed rapidly.

Despite the crumbling cash market, miners had been able to hedge future production at prices well above spot levels. Indeed, a month ago, miners could still sell 2017 output at close to $70 a tonne even as April 2015 prices fell below $60 for the first time in more than five years.

Forward iron ore prices have since tumbled below $47 for deliveries all the way until the end of 2017, depriving nearly all miners of any chance of establishing hedges at or above breakeven levels during that period.

A combination of factors brought about the recent capitulation in forward prices, most notably news that China plans to subsidise its iron ore sector to protect its flagging steel industry. Subsidies would help keep mines open and keep supplies flowing.

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Australia’s Hockey vs Glencore’s Glasenberg – by Kip Keen (Mineweb.com – April 9, 2015)

http://www.mineweb.com/

Treasurer’s tough comments on Glencore-Rio Tinto merger could be read as a stern warning by Australia’s government.

Taken at face value Australia’s treasurer Joe Hockey has declared Rio Tinto untouchable. As widely reported now by media, Hockey is quoted as saying by numerous sources at a recent meeting including mining executives that there was “no way” he’d let Glencore merge with Rio Tinto “on his watch”. Assuming the reports are accurate, the question becomes, is Hockey serious?

If he is, then Australia truly has a curious way of dealing with possible foreign takeovers. Yes, it’s ultimately up to the treasurer (a political position equivalent to finance minister in other parliaments) to decide on big deals like this where the “national interest”, e.g. major tax revenue, is at stake.

But then the decision is usually taken as part of, or at least after, some due diligence. Australia’s Foreign Investment Review Board (FIRB) usually makes unbinding recommendations on such deals to the treasurer. Then the treasurer decides, however he/she and his/her government want.

Now, if Hockey truly means “no way” on another (hypothetical) attempt by Glencore to merge with Rio Tinto, he would effectively be turning the whole process on its head.

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Mexican gold mines beset by robberies, kidnappings – by Rachelle Younglai (Globe and Mail – April 9, 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.

For the third time this year, gold miners in Mexico have come under attack, highlighting the perils of mining in the country.

McEwen Mining Inc. became the latest victim, when armed robbers looted about $8.4-million (U.S.) worth of gold this week from the Canadian miner’s refinery in the Mexican state of Sinaloa.

The Toronto-based company said none of its employees were seriously injured, nor were its facilities damaged, when the approximately 900 kilograms of gold ore was stolen. The ore is expected to contain 7,000 ounces of gold, but it is unclear how the thieves will process the rocks.

The robbery comes about a month after four of Goldcorp Inc.’s Mexican employees went missing after leaving the company’s Los Filos mine. Three of the four have since been found dead, the Canadian company said. A Reuters report said the bodies were found in a mass grave and showed signs of torture. The fourth employee was released with minor injuries.

The kidnappings took place in Guerrero, a southern Mexican state where 43 students were seized en route to a protest last year and are presumed murdered.

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Mining the depths of frustration in Halkidiki [Greece] – by Yannis Palaiologos (Ekathimerini.com – April 9, 2015)

http://www.ekathimerini.com/

Eldorado Gold CEO Paul Wright talks to Kathimerini about the Canadian firm’s major investment in Greece and the difficulties it is facing

“I have never encountered anything like it.” Paul Wright, chief executive officer of Hellas Gold’s parent company Eldorado Gold, has difficulty understanding the quagmire in which the firm’s large investment in Halkidiki has found itself.

In an interview with Kathimerini, Wright says that the project in northern Greece bolsters employment, exports and tax revenues for the Greek state during what is a very difficult period. He also points out that the project has survived a number of court challenges. “And yet the government wants to stop it.”

We met at the company’s Athens headquarters. Wright was visiting the country for a third time since the January election in a bid to reach some sort of understanding with the new government. Despite efforts made by the company, as well as Canada’s government, his contacts with Greek government officials have proved difficult.

“It is uncertain what the government’s intentions are. We are receiving mixed signals. There has been interference, negative statements about the investment,” he said. Have there also been some positive signals?

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Shell-BG Group merger a game changer for B.C.’s LNG industry – by Brent Jang (Globe and Mail – April 9, 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 — A global powerhouse in liquefied natural gas has emerged in a blockbuster merger that is expected to reshape British Columbia’s LNG industry.

Royal Dutch Shell PLC’s £47.7-billion ($88-billion) deal to buy BG Group PLC creates a liquefied natural gas giant, and will allow the combined company to choose which energy projects to keep or jettison within B.C.’s fledgling LNG sector. The merger will bolster the Shell-led LNG Canada project in Kitimat while hampering BG’s chances near Prince Rupert, as pressure mounts for players to either drop out or consolidate to cut costs.

There are 19 LNG proposals in B.C., though only three or four projects at most have a realistic chance to survive amid fierce global competition and a looming glut of LNG supplies. “We’re going to see some consolidation amongst the LNG projects. There really isn’t room for all of them,” BMO Nesbitt Burns Inc. energy analyst Randy Ollenberger said in an interview.

Premier Christy Clark describes the LNG industry as a once-in-a-generation opportunity to improve the province’s finances and create tens of thousands of jobs.

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Piping ever more petroleum: The world needs Canada’s oil and gas – by Russ Girling (National Post – April 9, 2015)

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

Canada and the rest of the world will transition to a less carbon-intensive energy future – it’s already happening – social and economic pressures will dictate that.

However, here in Canada and the United States, despite the rhetoric you may hear, we will continue to consume significant quantities of oil to fuel the 280 million vehicles that North Americans need to start every morning.

And as we transition off coal-fired electricity, it will be replaced largely by natural gas, and as a result, demand for natural gas will grow even higher.

And at the same time, global demand for oil and gas will continue to grow, driven by a massive population in developing economies striving to obtain a lifestyle for their families similar to what we enjoy here in Canada. For example, there are 1.3 billion people in China that want to have the same quality of life that you and I have.

The International Energy Agency – a group of 28 countries cooperating to provide the world’s most credible outlook for energy demand for the next 25 years — believes that the demand for energy is going to continue to grow at a rate of 1.1 per cent through 2040.

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Surprises aside, economic power shifts south, east [toward BRICs] – by Gwynne Dyer (Sudbury Star – April 8, 2015)

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

“The only function of economic forecasting is to make astrology look respectable,” said John Kenneth Galbraith, the wisest American economist of his generation.

But you still can’t resist wondering when the Chinese economy will be bigger than the American economy — or the Brazilian economy bigger than the British, or the Turkish bigger than the Italian — as if it were some kind of horse race.

The latest document to tackle these questions is The World in 2050, drawn up by HSBC bank, which ranks the world’s hundred biggest economies as they are now, and as (it thinks) they will be in 2050.

It contains the usual little surprises, like a prediction that per-capita incomes in the Philippines and Indonesia, now roughly the same, will diverge so fast that the average Filipino will have twice the income of the average Indonesian by 2050.

But what’s happening at the top of the list is of interest to everybody. That’s where the great powers all live, with the so-called BRICs — Brazil, Russia, India, China — nipping at their heels. Or rather, some of the BRICs are nipping at their heels, and some are not.

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Doubling Down with Bloomberg Philanthropies to Replace Coal with Clean Energy – by Mary Anne Hitt (Huffington Post – April 8, 2015)

http://www.huffingtonpost.com/green/

Today, I had the honor of standing with Michael Bloomberg and dozens of Sierra Club volunteers, staff, and supporters in Washington, DC, to announce a new round of investment by Bloomberg Philanthropies in the work of the Beyond Coal Campaign. With this new support of $30 million over three years, we plan to double down on our past success and secure replacement of half the nation’s coal plants with clean energy by 2017.

It’s been four years since I first stood with Michael Bloomberg, Sierra Club executive director Michael Brune, and our staff and volunteers in front of the polluting GenOn coal plant in Alexandria, Virginia, to announce the launch of our game-changing partnership with Bloomberg Philanthropies. The goal of that first round of funding: replace one-third of the nation’s coal plants with clean energy by the end of 2015.

That initial investment by Bloomberg Philanthropies has delivered some incredible results, and we’re on our way to meeting that goal. The Alexandria coal plant is one of 187 coal plants that have either retired or announced they will retire since 2010, thanks to the work of Sierra Club and over 100 partner organizations, helping to secure clean air and clean water for millions of Americans by supporting the amazing work of activists nationwide. Even better, we’re on track to replace that coal with clean, renewable energy like wind, solar, and energy efficiency.

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Bloomberg Philanthropies brings ‘Beyond Coal’ investment total to $80 million – by Sarah Tincher (The State Journal – April 8, 2015)

http://www.statejournal.com/ [West Virginia Business Newspaper]

Bloomberg Philanthropies announced it will invest an additional $30 million in the Sierra Club, following a previous $50 million commitment, to secure the replacement of half the nation’s coal fleet by 2017 with clean energy. Sierra Club said it expects the investment in the Beyond Coal campaign to put the United States in a stronger position to drive more ambitious climate action at the 2015 United Nations climate change conference in Paris.

“The single biggest reduction in carbon pollution in the U.S. has come by retiring and repurposing coal-fired power plants — and that’s the direct result of our Beyond Coal campaign,” said Michael R. Bloomberg. “Thanks to the community leaders who have spearheaded this work, the U.S. led every industrialized nation in reducing carbon emissions last year.”

National Mining Association President and CEO Hal Quinn, however, released a statement calling the donation and coalition a “campaign to shut down affordable sources of electricity generation.”

“Policies favored by the Sierra Club have already destroyed large portions of the nation’s most reliable sources of electricity generation, leaving consumers more dependent on fewer and costlier sources of electricity and a less reliable supply, leaving tens of thousands of Americans without jobs and low-income families plus those on fixed incomes with still higher bills to pay,” Quinn stated. “There is no reason to celebrate raising costs for society’s most vulnerable.

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PC blunder over Highway 407 looms over Liberals on Hydro – by Martin Regg Cohn (Toronto Star – March 30, 2015)

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.

Unless we learn the lessons of the 407 fiasco, we are condemned to be fleeced again — this time on Hydro One.

If you build it, they will come. And pay the toll. When Highway 407 opened in 1997, drivers not only came, they kept coming back — transforming the toll road into a short-lived success story.

Two years later, the storyline changed: The PC government of the day took an abrupt detour by brokering a 99-year lease of the highway for a fraction of its true value. If you lease it — and undervalue it — they will profit. At our expense.

The 407 deal is now considered a financial blunder on a par with Newfoundland’s lease of Churchill Falls to Quebec, and China’s surrender of Hong Kong to Britain, for equally ill-fated 99-year leases.

As today’s Liberal government ponders selling off part of Hydro One’s transmission lines, after more than a century of public ownership, the 407 debacle looms over the debate. Unless we learn the lessons of that fiasco, we are condemned to be fleeced once again.

If the toll highway hadn’t been handed off for a pittance in 1999, it could have been paid off by now. Imagine driving free on the 407, instead of being hit up for steadily increasing tolls that have flowed to the consortium’s overseas owners for years.

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