This column was originally published in Northern Life on Jun. 21, 2007

The McGuinty Liberal’s policies of the past four years are severely hampering Northern Ontario’s two main industries – forestry and mining.

In the spring, Premier Dalton McGuinty ignored a delegation of five northern mayors, whom collectively represented two-thirds of the region’s population, and were presenting a policy document – Northern Lights: Strategic Investments in Ontario’s Greatest Asset – that detailed constructive solutions for the region’s many problems.

After 130 years of being a resource colony for the south, has the time finally come to create our own province?

Yes, I see the eyes rolling and the heads shaking, but northern separation does have merit.

And if it was possible to carve out Nunavut from the former Northwest Territories with a tiny population of about 30,000 – roughly twice that of Kenora – then a separate province in the north is economically feasible.

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Last week, I had the pleasure of being invited onto TVO’s flagship current affairs program, The Agenda, hosted by Steve Paikin. www.tvo.org The topic for the first half-hour segment was about northern Ontario forming a separate province.

As the station’s website states, “TVO is Ontario’s public educational media organization and a trusted source of interactive educational content that informs, inspires, and stimulates curiosity and thought. TVO’s vision is to empower people to be engaged citizens of Ontario through educational media.” The Agenda has been described as a program that “presents in-depth analysis and intelligent debate on issues of concern in the rapidly changing world around us.”

The participants on the five-member panel were:

From Thunder Bay:

• Rebecca Johnson, City Councilor
• Livio Di Matteo, Lakehead University Economics Professor

From Sudbury:

• Rejean Grenier, Editor of Le Voyageur

Toronto TVO Studio:

• John Beaucage, Union of Ontario Indians Grand Chief
• Stan Sudol, Communications Consultant, Northern Life Columnist

To view the entire program click below:

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BHP Billiton chairman Don Argus stated last summer that Canada’s commanding role in global mining had been reduced to “branch office” status. This criticism reflects the fact that Canada`s major mining companies like Falconbridge, Inco and Alcan have fallen under foreign control.

Vancouver-based Teck, however, withstood this wave of industry consolidation and stands today as the last, diversified Canadian mining giant.

So I am both wary of and troubled by the intense negative media speculation over the immediate future of Teck. Due to the emotional “herd” mentality of current stock market investors, if you repeat something often enough it seems to become a fact even though it’s not.

Much of this negative coverage focuses on the company’s ability to handle the US$9.8 billion debt it incurred to fund its acquisition of the assets of Fording Canadian Coal Trust. There is concern over the $5.8 billion in bridge financing that is due at the end of October, 2009. The remaining US$4 billion is term debt and repayable over three years.

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The Canadian Mining Journal is Canada’s first mining publication.

This article was originally published – August/2005

Everything you wanted to know about laterites but were afraid to ask

The last few years of the 20th Century were not very kind to the nickel industry. In October and December of 1998 the LME price for nickel dipped to US$1.76 a pound, the lowest level ever, if you factor in inflation. The imploding Russian economy was dumping nickel on western markets, the Asian currency crisis was annihilating economic growth and metal demand, and new lower-cost mine production was threatening to come on stream.

Of great concern to Canadian nickel giants Inco Ltd. and Falconbridge Ltd., the second and third largest producers after Russian MMC Norilsk, was an upstart Australian company called Anaconda Nickel Ltd.

Andrew “Twiggy” Forrest, Anaconda’s chairman, was well known in Australian mining circles for his legendary salesmanship and determination. One could almost imagine him pounding the table like Nikita Khrushchev and boasting that “he would bury the West with low-cost laterite nickel.”

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Premier McGuinty should consolidate the province’s scattered post-secondary mineral education programs at Laurentian University and establish a world-class centre of excellence – a Harvard of the Mining Sector.

In one visionary initiative, the Premier could give Sudbury an economic boost, help resolve mining skilled labour shortages, spend university funding more efficiently and be in sync with the recently published provincial report “Ontario in the Creative Age” by Richard Florida and Roger Martin of the Rotman School of Management.

Notwithstanding the current commodity slump, there is a demographic time bomb ticking in the mineral sector as the baby boomers get ready to retire. It is believed that 60% of geo scientists – the people who find new mineral deposits – in Canada will be 65 or older by 2015.

In early 2008, the Mining Industry Human Resources Council (MIHR) projected that mining industry yearly labour requirements face three scenarios: high-growth (9,200), no-growth (6,200), and industry contraction (4,600), until 2016.  These were only based on retirements.

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(L to R) Ontario Deputy Minister of Northern Development and Mines, Kevin Costante; Timmins Mayor, Tom Laughren; Ontario Minister of Northern Development and Mines, Honourable Michael Gravelle; Ontario Mining Association President, Chris Hodgson; Ontario Prospector Association Executive Director, Garry Clark

What a difference a year makes at the Prospectors and Developers Association of Canada (PDAC) annual convention, the largest on the planet. The PDAC is where the world’s mining analysts, investors, prospectors, exploration managers, government representatives and anyone else connected to this industry come to meet, do business, attend lectures and of course party. There is also a large Investor’s Exchange that the general public can attend to find out about the newest exploration plays or interrogate company presidents about their stock performance.

Needless to say, the mood was somewhat somber as everyone is trying to cope with commodity prices and metal demand that over the past six months have fallen off the proverbial cliff. The rapidness of the crash, along side with the unprecedented turmoil in credit and capital markets that has dried up funding for most exploration and development work has sent a legitimate fear throughout the entire junior mining sector.

A PricewaterhouseCoopers survey found that the market capitalization of the top 100 TSX-V junior mining companies plummeted from $20.2 billion on June 30, 2007 to $4.1 billion by November 2008. Investors are shunning higher risk exploration companies like the plague.

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This article was originally published in the Sudbury Star on March 9 , 2002

Maybe it’s time for Northern Ontario to think about going it alone

In my 45 years of living in Ontario, I have never seen such a tremendous rift between its southern and northern halves. The corporate, media and political elites of Toronto have grown so out of touch with the economic hardships and challenges of the North that for the second time in my life I have come to the conclusion that it would be in the best interests of Northern Ontario to secede from the south and form its own province.

When I was a teenager in the mid 1970s, I was sympathetic to the Northern Ontario Heritage Party. Ed Deibel, a North Bay businessman, unsuccessfully tried to separate from the south in order to establish social, economic and cultural justice for the distinct people of Northern Ontario.

Perhaps the time is right to revisit Ed Deibel’s worthy dream. A separate Northern Ontario would encompass approximately 85 per cent of the province’s land mass, using the French and Mattawa Rivers as the traditional boundary between north and south. With a population of roughly 838,812, according to the 2001 census, Canada’s eleventh province would be larger than New Brunswick, P.E.I. and Newfoundland, and would be eligible for more money in federal equalization payments as a “have not province” than it currently receives from Queen’s Park.

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This column was originally published in Northern Life, Greater Sudbury’s community newspaper on October 25, 2006

It was the best of times, it was the worst of times, if I may borrow from Charles Dickens.

On Aug. 24, 2006 , the spot nickel price hit its all time high ever, at $15.76 (US) per pound. Last Friday it was just a tad under that record at $15.65.

Inco’s third quarter net earnings of $701 million—the Ontario operations contributed $US356 million to that figure—were the highest ever quarterly profits in the company’s 104-year history. The 2005 third quarter net earnings were $64-million.

And to add the cherry on the cake, the company officially opened its $115-million Fluid Bed Roaster Dioxide Emission Reduction plant in Copper Cliff that will further reduce SO2 pollution from the Sudbury operations by 34 percent to just 175 kilotonnes a year. This is about a 90 percent reduction from the 2,000 kilotonnes a year the company used to emit in 1970.

However, the drama and trauma of the past year’s “nickel wars” have finally come to an end in a way we didn’t expect.

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This column was originally published in Northern Life, Greater Sudbury’s community newspaper on August 16, 2006

Combined assets of CVRD and Inco would create the third-largest mining company in the world

Like most other analysts and columnists who have been following this nickel soap opera, we were all collectively given a sucker punch out of nowhere by the Brazilians!

Last Friday, Brazilian iron ore king, Companhia Vale do Rio Doce (CVRD) made an all-cash offer to buy Inco Limited at the price of CDN$ 86.00 per share. The offers of both Teck-Cominco and Phelps Dodge are a mix of cash and share. The hedge fund boys and girls dance with delight with all cash offers as these always trump any cash/share combination and give maximum short term gain.

In addition, Atticus Capital, a large American hedge fund that owns about eight percent of Phelps Dodge does not support the merger with Inco and will recommend shareholders to vote against this deal. If there are no regulatory hurdles, this does appear – notice my hedging – to be a knock-out punch.

Roger Agnelli, chief operating officer of CVRD said in a statement, “This is an exciting opportunity for CVRD. The operations of the two companies are complementary and the combination will enhance our capabilities to benefit from the fast changing global landscape in the metals and mining industry.”

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This column was originally published in Northern Life, Greater Sudbury’s community newspaper on February 23, 2007

The metallic “Achilles heel” for any military and navel production has always been nickel

Sudbury was definitely going to be “nuked” by the Russians. At least that was our conclusion back in 1976 when I worked at CVRD Inco’s Clarabell Mill for a year.

During one graveyard shift, a group of us were talking about Cold War politics and atomic bombs. We all agreed that if there ever was a nuclear war between the Americans and Russians then there must have been one Soviet “nuke” with our community’s name stenciled on it. We all laughed a little nervously, but there was also some pride in knowing Sudbury was important enough to get blown-up in the first round of missiles.

Access to strategic materials has always affected the destinies of nations. The Romans conquered Britain in AD 43 to control valuable tin deposits in Cornwall. Combining tin with copper produces bronze, a more valuable and militarily important alloy. Ancient Chinese metallurgical expertise with iron and steel allowed the Middle Kingdom to become a dominate military and economic force during the prosperous Han dynasty.

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