Republic of Mining

Stephen Poloz for Prime Minister – by Terence Corcoran (National Post – September 22, 2015)

September 22, 2015

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

After months of hyperventilating media reports on Canada’s slide into recession and a looming national economic crisis over falling oil prices, along comes Bank of Canada Governor Stephen Poloz to calm the frothing waters.

The idea that Canada is undergoing a destructive economic mega-shift away from oil and natural resources has been one of the driving metaphors of the current election campaign. To avoid sliding helplessly beyond recession into some dark unknown future, Canada supposedly needs a retooled national policy “vision” from government — new strategies, bold investment initiatives, revamped incentives, grand innovation programs.

No such policy imperatives appeared in Poloz’s speech to the Calgary Economic Club Monday. On the contrary, the central bank governor declared Canada to be a resource-rich economy that will continue to thrive on its natural endowments. “While an abundance of raw materials may complicate the management of companies and the conduct of economic policy, it is far better for a country to have resources than not to have them.” They represent, he said, a “store of value and a source of future riches.”

[Canada] Our resource-rich economy – by Stephen S. Poloz (National Post – September 22, 2015)

September 22, 2015

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

Stephen S. Poloz is Governor of the Bank of Canada. This is an edited excerpt from his speech Monday to the Calgary Economic Club.

Because Canada has been endowed with such a wide variety of resources, we’ve had to learn how to deal with large swings in their prices. I don’t just mean the usual high degree of volatility common among many raw materials. I’m also referring to the long-term swings in prices that are often called “supercycles.” These long-term swings are driven by the fundamental economic laws of supply and demand, as well as the continuous technological progress that can affect both output and consumption.

The pattern is familiar. A large and persistent increase in demand leads to sustained upward pressure on resource prices. The higher prices act as an incentive to boost supply, and companies act by, for example, investing in new capacity and finding methods to increase efficiency.

While high prices can certainly spur research and development, technological progress has been a constant theme in natural resource industries. Because of this progress inflation-adjusted commodity prices have generally been trending lower for 200 years.

Anti-energy campaigns harming countries – by Dr. Patrick Moore (Toronto Sun – September 21, 2015)

September 22, 2015

http://www.torontosun.com/

Co-founder and leader of Greenpeace for 15 years, Dr. Moore is now Chair of Ecology, and Energy with the Frontier Centre for Public Policy.

It is obvious that civilization would not be possible without the mineral and energy resources mined and extracted from the Earth. Yet there is a growing movement to oppose nearly all such activities.

Even though 86% of the world’s energy supply, including 98% of the energy for transporting people and goods, comes from fossil fuels, there are proposals to end their use altogether. The G7 countries, including Canada, recently agreed that “zero emissions” is the desired long-term goal.

It is very difficult to obtain approval for a new mining development, even in the leading mining countries like Australia and Canada. It is virtually impossible in any European country where nearly all their metals are imported, mostly from developing countries.

This trend is based on the perceived negative environmental impacts caused by disturbing the land and water and by emitting CO2 into the atmosphere.

Few will support Naomi Klein’s revolution, thankfully sparing us from national suicide – by Conrad Black (National Post – September 19, 2015)

September 22, 2015

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

The Leap Manifesto unveiled by Naomi Klein and a coalition of somewhat kindred spirits this week in Toronto illustrates the phenomenon of regrouping in which the shattered Old Left, heavily buffeted eco-zealots, imperishable agitators for the native people, and the detritus of organized labour, together with an endearing rag-tail of old do-gooders, posturers and hemophiliac bleeding hearts have stood on each other’s shoulders and proclaimed once more that they are the wave of the future.

The inspiriting tocsin for this bedraggled resurrection, which if any of it actually occurs will be the greatest comeback since Lazarus, seems to have been Naomi Klein’s book last year, This Changes Everything: Capitalism vs. the Climate. Her organizing principle is that ecological necessities have made much of commerce, and especially the carbon-based economy, obsolete and unsustainable.

The bone-crushing defeat of international communism — the metamorphosis of China into a pure-capitalist/command-economy hybrid and of the Russian core of the old Soviet Union into a gangster state run by avaricious and cynical friends of the regime — has forced the traditional Marxists of the West to engage in frenetic networking and consensus-building. They have made their big move toward the environment zealots.

Analysis – Copper market may get a 2003-style supply shock from Glencore closures – by Josephine Mason (Reuters U.K. – September 22, 2015)

September 22, 2015

http://uk.reuters.com/

NEW YORK – As copper miners start to slash spending and shutter mines because of the plunge in the price of the metal, experts who analyse the market in the base metal are suddenly getting a little more cheery.

They are seeing the potential for a re-run of 2003 when Chile’s Codelco [COBRE.UL], the world’s top copper producer stockpiled 200,000 tonnes of the metal that is used in everything from pipes to autos, providing the market with a supply shock that soon drove copper prices back up.

This time around hopes are pinned on the announcement earlier this month from Glencore (GLEN.L) of a sweeping strategy to shore up cash and cut spending, including plans to shutter two major, high-cost copper mines in Zambia and the Democratic Republic of Congo over the next 18 months. That will cut company output by 400,000 tonnes and remove some 2 percent of global supply from the market.

For Glencore CEO Ivan Glasenberg, the plan helped placate shareholders worried about $30 billion (£19 billion) of debt as prices of its main products from copper to coal sank to six-year lows amid worries about China’s waning appetite for such commodities.

Times tough for miners all over – by Reuters/Star Staff (Sudbury Star – September 22, 2015)

September 22, 2015

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

Europe’s No. 2 copper producer Poland’s KGHM said on Monday it would put its McCreedy West copper mine in Sudbury on care and maintenance, the latest victim of sinking prices as worries about demand from China fuel the biggest market rout in years.

Copper prices plunged to six-year lows below $5,000 a tonne last month. They have since recovered to just under $5,300 a tonne, but that’s still about 18 per cent below the 2015 peak.

Also feeding the downward spiral were expectations of a small surplus this year and a larger one in 2016.

Major miners have up until recently mostly refrained from cutting production, but prices have now fallen to levels where some operations are no longer economically viable.

Mining giants Glencore and Freeport have waved the white flag and announced plans to suspend some of their copper production.

Potash Pessimism Clouds Prospects for BHP’s Jansen Project – by David Stringer (Bloomberg News – September 21, 2015)

September 22, 2015

http://www.bloomberg.com/

BHP Billiton Ltd.’s prospects of building potash into the fifth pillar of its portfolio of big-ticket businesses is looking a long way off. That’s the view of Macquarie Group Ltd., which has a “very pessimistic view” of the market.

The world’s biggest miner’s Jansen project in Canada, which has already consumed about $3.8 billion in capital, is unlikely to be developed unless prices rise, according to Macquarie. The bank has cut its long-term price forecast by 16 percent to $280 a metric ton.

“Our base-case scenario for BHP assumes the indefinite deferral of Jansen’s development,” Macquarie analysts wrote in a note to clients dated Sept. 21. The company will probably favor development of less capital intensive petroleum and copper projects, they said.

Mosaic Co., the largest U.S. producer of potash fertilizer, said Monday it plans to reduce output as low crop prices continue to erode farmer demand for agricultural products.

CANADA’S WATERLESS COMMUNITIES (Vice.com – September 2015)

September 22, 2015

http://www.vice.com/en_ca

This is a “must watch” series by Vice News, a current affairs media company that produces news documentaries that are not thoroughly covered by mainstream global news gathering organizations. The issue of non-potable drinking water in many of Canada’s First Nations communities is a national scandal that continues to be largely ignored by the very influential Toronto media. – Stan Sudol (RepublicOfMining.com)

CANADA’S WATERLESS COMMUNITIES, PART 2 (Vice.com – September 15, 2015)

Shoal Lake 40 has been cut off from the mainland for over 100 years. The First Nation community is fighting for an access road to the west so that it can build a water treatment plant. The community has been on a boil water advisory for 17 years. But so far, the federal government has failed to commit its portion of the funding. In Part 2 of this feature, Hilary Beaumont sees the community’s reaction to the latest government announcement.

Click here: http://en.daily.vice.com/videos/canadas-waterless-communities-part-2

CANADA’S WATERLESS COMMUNITIES, PART 3 (Vice.com – September 16, 2015)

The residents of Shoal Lake 40 rely on an aging barge to get food and water from the mainland. In the winter, they drive across the ice. But in the spring and fall, the crossing becomes treacherous. In today’s feature, Hilary Beaumont talks to a resident whose mother died while trying to cross the lake.

Click here: http://en.daily.vice.com/videos/canadas-waterless-communities-part-3

NEWS RELEASE: Morgan Stanley Pressured to Drop Coal Financing

September 22, 2015

Rainforest Action Network Announces Campaign as Next Major Bank Targeted Since Bank of America Coal Milestone

San Francisco – Today, Rainforest Action Network (RAN)announced that Morgan Stanley is the next major investment bank being targeted with a public campaign to demand that the bank commit to stop financing coal mining and coal-fired power.

“Morgan Stanley has longstanding financing relationships withsome of the worst offenders from the global coal mining industry, including Peabody Energy, the world’s largest private sector coal mining company,” said Ben Collins, Senior Research and Policy Campaigner at RAN. “Last year alone, the bank financed $477 million for coal mining.”

Morgan Stanley continues to finance top producers of mountaintop removal coal, even as eleven of its competitors have committed to cut financing for the practice. The bank also financed $1.2 billion in 2014 for the largest operators of coal-fired power plants in the world such as RWE, Europe’s largest single emitter of carbon dioxide.

For fifteen years, RAN has been holding the U.S. banking sector accountable for its environmental and human rights impacts, most recently campaigning against Bank of America’s coal financing.

Aluminum Makers Call for `Green’ Trademark to Sell at a Premium – by Yuliya Fedorinova (Bloomberg News – September 21, 2015)

September 21, 2015

http://www.bloomberg.com/

The biggest aluminum producers are discussing the introduction of a “green” trademark for the lightweight metal that could be sold at a premium and encourage carbon footprint reductions among rivals, United Co. Rusal’s deputy chief executive officer said.

“Since many of consumers, such as the car industry, are working on becoming more nature-friendly, the issue of clean aluminum output becomes important,” Oleg Mukhamedshin said in an interview last week. As an example, “even if a car with an aluminum body enables lower CO2 emissions, more pollution could have been caused by the company producing that metal, which damages the idea of clean vehicles.”

Automakers including Ford Motor Co. are turning to aluminum as they seek to reduce vehicle weights to meet stringent fuel-efficiency requirements. In 2014, Rexam Plc approved a program to cut its cans’ carbon footprint by 25 percent through 2020, the packaging company said in a 2015 report. Energy comprises most of the aluminum industry’s costs, and carbon dioxide generated by fossil fuels such as coal makes up almost 60 percent of global greenhouse-gas emissions, according to the U.S.

Environmental Protection Agency.

Pope Francis And Coal Country Catholics – by Dan Boyce (Inside Energy – September 20, 2015)

September 21, 2015

http://insideenergy.org/

Pope Francis is visiting the U.S, this week. On Thursday he will make a historic address to Congress.

Some conservative Catholics say Pope Francis is meddling in American politics with his recent encyclical on the environment, the biggest papal statement ever on the subject and one which included a call for action on climate change. Meanwhile, for the faithful in western coal country, he is raising moral questions.

Donna Zofcin’s husband was injured in a coal mining accident in Kentucky. He was paralyzed for a time, then doctors helped him walk again. He died a few years later, in 1992. Still, the walls of her humble Cheyenne, Wyoming home are an homage to coal, with framed watercolor prints of mining equipment. Living now in the country’s biggest coal state, that theme still runs through her life. So too, does her Catholic faith.

“Oh, we’re very devout,” Zofcin said of her and her family, “and we go to church every Sunday.”

Back in June, Wyoming’s State Bishop, Paul Etienne, delivered a special homily at Zofcin’s church in Cheyenne. The homily focused on the Pope’s headline grabbing encyclical. A challenging and bold teaching, Etienne said, which lines out humanity’s responsibility to be good stewards of the earth.

Miners turn to alternative finance to cut debt as downturn grinds on – by Nicole Mordant (Reuters U.S. – September 21, 2015)

September 21, 2015

http://www.reuters.com/

DENVER – A niche form of mining industry finance is emerging as the new go-to funding for miners bowed by debt, another sign of the sector’s distress as it plods through the fourth year of a commodities’ downturn.

Glencore, the world’s third-biggest miner, is in talks to raise more than $1 billion in so-called “streaming” deals, coming on the heels of transactions by No.1 gold producer Barrick Gold and diversified miner Teck Resources .

More such deals are expected as shareholders, ratings agencies and lenders pressure miners to slash debt amid a gloomy commodity price outlook and as other debt-cutting tools such as asset sales, dividend cuts and share issues are not enough.

Until now so-called “streaming” finance – upfront funds for miners in exchange for a portion of a mine’s future output – has most commonly been used by mid-sized miners with limited access to capital to fund mine builds.

That the world’s biggest miners are now prepared to do deals that see them giving up a portion of their future production, earnings and cashflow to cut debt is a reflection of their limited options.

Barrick says strong interest in U.S. gold asset sale – by Nicole Mordant (Reuters U.S. – September 20, 2015)

September 21, 2015

http://www.reuters.com/

There has been strong interest in a package of six U.S. gold assets that Barrick Gold Corp (ABX.TO) wants to sell, a senior Barrick executive said on Sunday, adding that he expects a deal to close before year end.

The interest has been largely from North American-based miners, Barrick President Kelvin Dushnisky said.

Denver-based Newmont Mining Corp (NEM.N) and Toronto-based Kinross Gold Corp (K.TO) are likely buyers of the assets, an investment banking source said, speaking on condition of anonymity. Kinross declined to comment and Newmonth could not immediately be reached for comment.

As part of its plan to cut at least $3 billion in debt this year, Barrick, the world’s biggest gold producer, last month said it would sell six of its U.S. gold mines and projects: Bald Mountain, Round Mountain, Spring Valley, Ruby Hill, Hilltop and Golden Sunlight assets.

“We just started it (the sale) but already the level of interest is extremely high,” Dushnisky told Reuters in an interview at the Denver Gold Forum, an annual gold industry conference.

Guinean Boom in Top-Quality Bauxite Set to Boost Economy – by Franz Wild and Ougna Camara (Bloomberg News – September 21, 2015)

September 21, 2015

http://www.bloomberg.com/

Red bauxite powder mined by Guinea’s biggest producer — flowing past a mangrove swamp on a conveyor belt and plunging through a giant funnel into the Rio Tamara ship — has been the country’s steadiest source of income since it was first mined four decades ago.

The company churning out the ore — owned by Rio Tinto Plc, Alcoa Inc., Dadco Alumina & Chemicals Ltd. and the government — will also lead a new wave of investment that may spur the West African nation’s economy and more than double bauxite output, which is refined and then smelted into aluminum.

Compagnie des Bauxites de Guinee’s $1 billion plan will almost double its annual production to 28.5 million metric tons within five years, Chief Executive Officer Namory Conde said. Four other developments could see a further 20 million tons added to Guinea’s annual exports.

“There’s going to be a lot more bauxite coming out of Guinea,” Conde said at CBG’s headquarters in the town of Kamsar, where the ship was being loaded. “Our quality is much better than around the world.

Peru: Pope Gets Pushback on Environment – by Justin Catanoso (Pulitzer Center.org – September 20, 2015)

September 21, 2015

http://www.pulitzercenter.org/

LA OROYA, Peru – In Pope Francis’ teaching doctrine on climate change and environmental sustainability, released in June to worldwide attention, he intertwines two threads that often dangle separately: nature and the world’s poor.

“A true ecological approach always becomes a social approach,” Francis writes in his papal encyclical. “It must integrate questions of justice in debates on the environment, so as to hear both the cry of the earth and the cry of the poor.”

There are few places on Earth where the cry of both is louder than in this city of 33,000 more than 2 miles high in the central Andes. La Oroya, Peru, is recognized as one of the world’s most polluted places. A smoke-belching smelting plant for copper, zinc and lead, operating from 1922 to 2009, made it so. Chernobyl makes those same lists.

Every child in town has excessive levels of lead in his or her blood, according to health officials. The soil is contaminated with sulfur dioxide. Portions of the Montaro River, which flows past the smelting plant, has been dead for years. Seven decades of acid rain chemically transformed the mountains surrounding the plant so that they look like molten wax, not solid rock.