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Saskatchewan Mining

Saskatchewan is to mining what Crosby is to hockey – by Bruce Johnstone (Saskatoon StarPhoenix – May 19, 2015)

http://www.thestarphoenix.com/index.html

To call Saskatchewan a major player in the global mining industry is a bit like saying Sidney Crosby is a good hockey player. Saskatchewan is a mining superstar.

It’s the world’s leading producer and exporter of potash, accounting for 30 per cent of the global supply of the agricultural nutrient potassium (one of three essential components of fertilizer, along with phosphorous and nitrogen.)

Potash was the top-ranked commodity produced in Canada in 2013, with a reported value of $6.1 billion, ahead of gold ($5.9 billion) and iron ore ($5.3 billion), according to Natural Resources Canada.

In fact, potash is the only mineral in which Canada is a world leader. And virtually all of that Canadian potash (96 per cent) was produced in Saskatchewan. (The remaining four per cent was produced at the Potash Corporation of Saskatchewan mine at Sussex, N.B.)

Saskatchewan is also a world leader in uranium production, with nearly 16 per cent of the world’s supply of the nuclear fuel source, placing Canada second among uranium-producing nations after Kazakhstan.

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Participation of First Nations vital to success – by Tim Gitzel (Saskatoon StarPhoenix – May 7, 2015)

http://www.thestarphoenix.com/index.html

Tim Gitzel is president and CEO of Cameco Corporation.

Development of Canada’s wealth of resources has potential to deliver many generations of prosperity for Canadians.

We have what the world needs. Over the next decade, an estimated $675 billion in resource development projects are planned across Canada. This is a truly incredible opportunity.

We can attract billions in capital investment and become a trusted, reliable supplier of energy, minerals and other materials for the rapidly growing economies of China, India and other developing nations. These projects would deliver high-quality employment and business opportunities for many thousands of Canadians and strong, sustained revenue for governments.

However, without respectful, mutually beneficial partnerships between industry and Canada’s aboriginal people, none of this will happen.

Almost all of the major resource projects on the horizon have a footprint on aboriginal traditional territory. Aboriginal people must be effectively consulted and engaged in the development of natural resources and must share in the prosperity it brings. Otherwise, the incredible opportunity will be lost.

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First Nations businesses growing with Saskatchewan resource boom (Business Vancouver – by Joe Ralko (April 28, 2015)

http://www.biv.com/

Battlefords Agency Tribal Chiefs embark on joint venture that provides services to the energy industry and trains workers for oilpatch jobs

A three-year agreement involving the Battlefords Agency Tribal Chiefs (BATC) and Site Energy Services Ltd. (SES) is the latest example of how the boom in Saskatchewan’s resource sector is helping the growth of First Nations businesses.

First Alliance Energy Services is the name of the new entity expected to generate revenue in the millions of dollars from work in the oilpatch, say BATC and SES officials.

“We felt it was a really good fit for us,” said Ed Standinghorn, director of industry relations with BATC. “In addition to providing a range of services in the oilfield, we also have a training module getting our clients work ready. For example, we help them get their driver’s licences, complete their GED and so on.”

He said the new joint venture is a natural progression of the projects BATC has under its belt. “Work we do is nationally recognized,” Standinghorn said.

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Why coal looms large in India’s future – by Peter Foster (National Post – April 17, 2015)

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

Narendra Modi is the first Indian Prime Minister to visit Canada since Indira Ghandi. For much of the intervening period, relations were sticky because of that unfortunate business of India using Canadian technology to manufacture nuclear weapons. At the same time, India’s growth was held back by poor economic policies and widespread corruption, much of it soaked in socialist cant.

Those lousy policies also go back to Mrs. Ghandi. Mr. Modi is rightly seen as a breath of fresh air, even if he inevitably has to play the hypocritical game of global realpolitik.

The alleged landmark deal of Mr. Modi’s visit is India’s $350 million purchase of Saskatchewan uranium. This both symbolically buries the bomb issue, and enables Mr. Modi to trumpet his country’s commitment to “sustainable development,” even as SD is increasingly exposed for the unworkable non-concept that it is.

The notion first emerged at the 1972 UN conference on the environment in Stockholm. Conceived by British intellectual Barbara Ward, who thought the Industrial Revolution had been a mistake, SD’s conceit was that poor nations had to grow while avoiding free markets and fossil fuels.

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Uranium deal with India signals new era, Modi tells Harper – by Les Whittington (Toronto Star – April 16, 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.

Trade, energy, the environment, security, and culture are expected to be among the issues Harper and Modi will discuss during the visit.

OTTAWA—Indian Prime Minister Narendra Modi kicked off his visit to Canada by signing a uranium supply deal with Ottawa he says signals a new era in cooperation between the two nations.

At a joint press conference on Parliament Hill with Prime Minister Stephen Harper, Modi said the agreement that will see hundreds of millions of dollars worth of uranium exported to India from Saskatchewan annually “is a mark (of Canada’s) trust and confidence” in his country.

“And this is going to take forward our relations,” Modi told the media, adding that uranium for India’s civilian nuclear program will help his country address global warming through “clean energy” and thus allows India “to give something to the world.”

Harper, who will accompany Modi to Toronto and Vancouver during the Indian leader’s three-day visit, agreed the uranium sales deal will end the lingering tension arising from India’s use of Canadian equipment to develop a nuclear bomb in the 1970s — which Harper said created “an unnecessarily frosty relationship for far too long.”

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NEWS RELEASE: Sale of Canadian Uranium to India Denounced by International Experts at the World Uranium Symposium

QUEBEC CITY, QUEBEC–(Marketwired – April 15, 2015) – About 200 international experts and delegates of the World Uranium Symposium this morning denounced the sale of Canadian uranium to India, a country that maintains an arsenal of nuclear weapons and has never signed the United Nations’ Nuclear Non-Proliferation Treaty (NPT). By signing such a deal on the eve of the NPT review conference to be held in New York City in two weeks’ time, Canada is undermining and discrediting the key international treaty prohibiting the proliferation of nuclear weapons.

“Canada’s attitude sends a terrible message to the international community regarding the necessity for all countries to respect and to reinforce the Nuclear Non-Proliferation Treaty,” said Arielle Denis, Director of the International Campaign for the Abolition of Nuclear Weapons (ICAN) for Europe, the Middle East and Africa.

“India’s nuclear weapons program is very active, as demonstrated by a series of nuclear test explosions. Moreover tensions between India and Pakistan, a country with its own nuclear arsenal, are running very high. The attitude of Canada is irresponsible and alarming,” according to Shri Prakash, one of several participants from India at the World Uranium Symposium.

“Despite rules specifying no military use of Canadian materials, some uranium from Canada could well end up in Indian bombs,” said Dr. Gordon Edwards of the Canadian Coalition for Nuclear Responsibility. “At the very least, Canadian uranium will free up more Indian uranium for weapons production purposes.”

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Mining Uranium: Saskatchewan Cameco Sets the Standard – by Rick Littlechild (First Nations Drum – April 12, 2015)

http://www.firstnationsdrum.com/

The Athabasca Basin hosts the world’s richest high grade uranium deposits. Saskatchewan produces 30% of the world’s uranium, and one main player in this Canadian mining success story is Cameco. The company was formed in 1988, and for over a quarter century, the company has been safely and reliably producing uranium and nuclear fuel products. Cameco currently has three active mines in northern Saskatchewan: Rabbit Lake, McArthur River and Cigar Lake.

Last year, Cameco successfully commenced production at their new Cigar Lake mine in northern Saskatchewan. This year, their main focus is to safely ramp up production at the mine. They expect to produce 6 to 8 million pounds in 2015, which would make Cigar Lake the third largest mine in the world by production. By 2018, Cameco expect’s to produce 18 million pounds(100% basis) of uranium concentrate annually.

The ore mined at Cigar Lake is transported by truck to the Mclean Lake Mill operated by Areva Resource Canada Inc, where it is processed to Unranium concentrate. Mclean Lake Mill is located approximately 70 kilometres northeast of the mine site. Mining at Cigar Lake began in March 2014 and the first Uranium concentrate was packaged at Mclean Lake in October 2014.

The company has developed strong ties with aboriginal people, with an emphasis on partnerships, Metis Sean Wiilly has spent a career in mining and is very sensitive to Aboriginal relations stated that “ Our goal is to develop and maintain long-term relationships between First Nations and Metis communities near where we operate.

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Cameco’s first deal with India gives it access to the world’s second-fastest-growing consumer of uranium – by Jonathan Ratner (National Post – April 16, 2015)

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

The numbers certainly aren’t mind-blowing on Cameco Corp.’s five-year agreement to provide 7.1 million pounds of uranium to India through 2020.

The deal is only estimated to be worth $350 million and it’s small when you consider that the Saskatchewan-based miner sells about 33 million pounds of uranium annually.

But it’s not the size of the deal that prompted investors to push the stock up 7.56 per cent on Wednesday. What excites them and Tim Gitzel, Cameco’s chief executive, is the opportunity that has now opened up.

“This was more than a uranium buy-sell agreement,” Gitzel said in a telephone interview. “It was really a marking of a new relationship between Canada and India via Cameco. The pounds here aren’t enormous, it’s really the importance of being able now to deal with the Indians and bid into their market.”

Canada banned uranium exports to India in the 1970s after the country used Canadian technology to build nuclear weapons. But the countries put what Prime Minister Stephen Harper called an “unnecessarily frosty relationship” behind them on Wednesday, building on a nuclear cooperation agreement established in 2013.

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Cameco signs major uranium supply deal with India (Business Network News – April 15, 2015)

http://www.bnn.ca/

BNN.ca staff

Canada’s largest uranium producer has signed a sales agreement with India. Cameco will provide the Department of Atomic Energy of India with 7.1 million pounds of uranium concentrate under a long-term contract through 2020.

“This contract opens the door to a dynamic and expanding uranium market,” Cameco president and CEO Tom Gitzel said in a statement. “Much of the long-term growth we see coming in our industry will happen in India and this emerging market is key to our strategy.”

The agreement, worth $350-million to Cameco, was announced by Prime Minister Stephen Harper during Indian Prime Minister Narendra Modi’s visit to Canada Wednesday. Cameco shares (CCO.TO 5.69%) surged almost five percent Wednesday to $19.80 on the TSX after the news was announced.

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Looming India Uranium Deal Huge for Saskatchewan, Premier Says – by Josh Wingrove (Bloomberg News – April 10, 2015)

http://www.bloomberg.com/

Cameco Corp., Canada’s biggest uranium producer, would reap a revenue windfall once a sales agreement is finalized with India, while boosting employment in its home province, Saskatchewan’s premier said.

A deal would be “huge,” yielding hundreds of millions in revenue and supporting jobs in the mining sector, Saskatchewan Premier Brad Wall said in an interview with Bloomberg News on Friday. He was asked to comment on a possible agreement by Saskatchewan-based Cameco to provide uranium for nuclear power.

“It’ll mean tax revenue, it’ll mean job retention, it’ll mean new jobs, if in fact there is an agreement here with India,” Wall said by telephone. “Depending on all the specifics, you’re going to be talking about hundreds of millions of dollars worth of sales over some period of time.”

A long-term deal by Cameco to sell uranium to India could be announced as soon as next week when Indian Prime Minister Narendra Modi visits Canada, said a person familiar with negotiations, who asked not to be identified because the agreement isn’t yet final. The Globe and Mail had reported the possibility of a deal earlier Friday. Modi is scheduled to make a three-day trip to Canada from April 14-16, with stops in Toronto, Ottawa and Vancouver.

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Brad Wall’s good potash play – by Jack M. Mintz (National Post – March 24, 2015)

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

Premier Brad Wall of Saskatchewan is now under fire for his 2015 Budget that promises a potash tax review as well as a curb on some investment incentives for the potash industry. Some are calling his bold move a “Stelmach” moment, comparing the ever-popular Saskatchewan Party’s premier to Premier Ed’s royalty review for the Alberta’s oil and gas industry in 2007-8.

‎Saskatchewan’s royalty review is far from being a comparable situation to Alberta’s. Brad Wall inherited a clumsy complicated potash royalty system devised by the NDP in 2001-2 while the Alberta royalty system was relatively well designed before Stelmach started stirring the pot.

If anything, the Stelmach government was making the system worse with proposals that increased rather than reduced distortions. Moreover, Stelmach’s play was a revenue grab while Wall has finally taken a step to clean up a messy system with the promise not to raise revenues under the review. If there is any criticism to be laid, it’s that Wall should have acted sooner.

Wall now has a unique opportunity to not only reform potash taxation but also to ensure a politically stable tax system that has the right balance between competitiveness and public revenues. The major flaws in the current Saskatchewan system are threefold.

First, the system is unfair with differential treatment of potash companies depending on whether they existed before or after 2001-2. Companies after 2002 are taxed on their volumes differently than companies operating before this time.

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Potash Corp profit to take $100-million hit this year after Saskatchewan tax-rule changes – by Peter Koven (National Post – March 20, 2015)

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

Saskatchewan is preparing to review its byzantine potash royalty regime, and Premier Brad Wall thinks it is long overdue.

“Without the incentives that are overlaid on top of the royalty structure for brownfield and greenfield investment, we have the highest potash taxes on earth,” he said in an interview. “Higher than Russia.”

But in this week’s budget, Mr. Wall introduced one interim tax change that has already drawn a furious response from the world’s biggest fertilizer company.

Saskatchewan is stretching out the timing in which miners make deductions for expansions and maintenance spending. That has a significant impact on Potash Corp. of Saskatchewan Inc., which is wrapping up a $6-billion expansion program in the province. Potash Corp. expects budget proposals will cut its pre-tax earnings by $75-million to $100-million this year.

“Changing the rules midstream impacts the ability of our shareholders to earn a fair return on their capital and undermines Saskatchewan’s relative competitiveness,” chief executive Jochen Tilk said in an uncharacteristically harsh statement.

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It takes chutzpah for Potash to protest new tax regime – by Sean Silcoff (Globe and Mail – March 20, 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.

Saskatchewan is blessed with the world’s largest bounty of potash – and cursed with the worst tax system for capitalizing on its bounty of the naturally-occurring fertilizer. It is a regime so complex that nobody – miners, investors or governments – has a clue how to forecast the tax outlay from year to year. Even University of Calgary tax expert Jack Mintz, who has written extensively about it, calls the regime “the most complicated thing I’ve seen in my whole career.”

Finally, after much prodding, the government of Brad Wall is promising to do something. In the provincial budget tabled this week, the Premier promised “a broad review of the entire potash tax regime.” Change can’t come soon enough. Potash Corp. of Saskatchewan, the industry’s largest miner, isn’t happy, but it has a lot of nerve to complain.

Saskatchewan’s potash tax system, according to a recent paper co-written by Dr Mintz, is convoluted, inefficient and uncompetitive. There are three levels of levies, creating a “tax jungle” that leaves producers subject to marginal effective tax and royalty rates last year ranging from 0.3 per cent to 22.6 per cent. It’s a wild and ridiculous range, especially considering the rate in other potash-producing countries amounts to one number, usually in the mid-teens or low 20s.

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REFILE-UPDATE 2-Saskatchewan sees slim 2015-16 surplus, hikes potash taxes – by Rod Nickel (Reuters India – March 19, 2015)

http://in.reuters.com/

(Reuters) – The Western Canadian province of Saskatchewan expects to post a slim budget surplus in the 2015-16 fiscal year, helped by changes in how it taxes potash mining companies, the government said on Wednesday.

Premier Brad Wall’s right-leaning Saskatchewan Party government raised spending 1.2 percent to C$14.17 billion ($11.10 billion) for the year starting April 1, leaving a forecast C$107 million surplus in Canada’s biggest wheat-producing province.

Saskatchewan has remained in the black for two decades, even as most provinces ran deficits when their economies slowed in recent years. In the year ahead, however, the province expects to receive C$661 million less revenue from the crude oil industry than budgeted last year due to plunging prices.

Saskatchewan estimates the price of West Texas Intermediate oil to average $57.15 per barrel in 2015-16, while oil production slips nearly 5 percent to 178.7 million barrels.

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Budget upsets potash producers – by Bruce Johnstone (Regina Leader-Post – March 19, 2015)

http://www.thestarphoenix.com/index.html

Sask. to gain, industry to lose

A change in the province’s potash royalty regime in the 2015-16 budget will net the Sask. Party government $150 million this year, Finance Minister Ken Krawetz announced Wednesday. The government also promised to revamp the province’s complex potash royalty scheme in consultation with the industry over the next year or two.

But the province’s biggest potash producer indicated the royalty change will negatively affect earnings and amounts to “changing the rules midstream.’ The budget said changes will be made to the Potash Production Tax “to defer the timing of capital deductions in order to prove an immediate and temporary increase in revenue from potash companies. The total amount of deductions producers received from their capital spending will now be utilized over a longer period of time.

“This is an interim step that will be followed by a review of the entire potash royalty and taxation regime.’ Krawetz told reporters that the government has held “ongoing consultations with the potash industry’ about the impact of the changes.

“After these smaller changes that we’ve been working on for a number of months, there will be a broader review over the next year or two. We want to ensure that the people of Saskatchewan who own the resource are rewarded at an appreciative rate,’ Krawetz said.

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