2012 – Page 154 – Republic of Mining

LNG hubs to make strange bedfellows – by Claudia Cattaneo (February 8, 2012)

February 8, 2012

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

As plans to build a natural gas liquefaction (LNG) hub on the British Columbia coast move closer to reality this year, the market is buzzing with talk of new partnerships and takeovers involving Western Canadian gas producers, potentially sweeping up big names like Encana Corp.

The trend has the makings of the next big thing and could shake up the natural gas sector in Western Canada, where prices are languishing at disastrous levels and cash-strapped producers are motivated to make deals.

Oil majors like Royal Dutch Shell Group PLC and national oil companies like Malaysia’s Petronas are evaluating as many as five plans to build terminals in the Kitimat area to export LNG to Asian markets and will need to secure supplies to keep them full.

So far, they have secured about 17.8 trillion cubic feet (tcf) of resources in Western Canada, but will need 39 tcf to meet current plans, CIBC World Markets estimates in a recent report.

Mixed messages – by Peter Foster (National Post – February 8, 2012)

February 8, 2012

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

The Keystone killers are waiting to ambush the Northern Gateway

This week, Prime Minister Stephen Harper went to Beijing to deliver a message to the U.S. , while Alberta Energy Minister Ted Morton came to Toronto to speak to B.C. Mr. Morton faced the tougher sell, which he attempted to soften, but further confused, by throwing “national energy strategy” into the pot.

The Chinese are gung-ho for Canadian oil, as are most Americans. However, Ontario’s Premier Dalton McGuinty has installed an expensive policy based on weaning the province off “dirty” oil to save the planet. As for B.C., it is at least as green but more crucial to the market diversification plans of Edmonton and Ottawa because no Alberta oil can reach China — or any non-U.S. market — that doesn’t pass through the province.

Opposition to a new trans-B.C. pipeline, Northern Gateway, is significantly related to the success of environmental NGOs in mounting a global campaign of demonization and disinformation against the oil sands. That campaign forced President Obama to kill/delay the $7-billion Keystone XL line, sponsored by TransCanada Corp., to ship up to 830,000 barrels of oil — mostly from the oil sands — to the Gulf Coast.

Official Welcoming Address to the Mining Indaba Conference 2012 – by Susan Shabangu: Minister of Mineral Resources for the Republic of South Africa (February 7, 2012)

February 7, 2012

This speech is from the Resourceinvestor.com website: www.resourceinvestor.com

CAPE TOWN, South Africa –

Programme Director: Mr Jonathan Moore; Organisers of the Mining Indaba; Honourable Ministers of Mineral Resources from other African countries; Members of the Diplomatic Corps; The investment community; Senior government officials; Delegates; Distinguished Guests; Ladies and gentlemen

Introduction

On behalf of the democratic Government of South Africa, I bid you the warmest of welcomes to our country, and to this region of the Western Cape, in whose capital city we meet today amidst its splendour and beauty.

Even if mining has always been somewhat elusive in this region, may you have a chance to make interesting side trips, for instance, viewing where oceans converge, where wine farms abound, or where a world famous mountain with a flat top towers over a beautiful city.

Investing in African Mining Indaba 2012

It was Mark Twain, travelling the world more than a century ago, who called Table Mountain “a majestic pile” (Following the Equator, Dover Publications, USA, 1989, page 710). He described visiting the old Cape Parliament, “where they quarrelled in two languages and agreed in none.”

Cliffs Becomes Easy Target With Cheapest Mining Value in America: Real M&A – by Charles Mead (Bloomberg.com – February 7, 2012)

February 7, 2012

www.bloomberg.com

For all the acquisitions being struck in the mining industry, no company in North America is a cheaper takeover candidate than Cliffs Natural Resources Inc.

The biggest North American iron-ore producer yesterday sold for 6.4 times its cash from operations, after deducting capital expenses, according to data compiled by Bloomberg. That was less than every other metals or mining company in the U.S. or Canada exceeding $5 billion in market value, and a 70 percent discount to the median. Cleveland-based Cliffs, which analysts say will generate record sales in 2012, was also the least expensive relative to its estimated net income this year and next.

Mining takeovers accelerated to a four-year high in 2011 as companies sought to replace deposits and industrial growth in China and the developing world fueled demand for raw materials. With Glencore International Plc and Xstrata Plc (XTA) agreeing to merge to create a $90 billion global mining company, Cliffs may attract interest from BHP Billiton Ltd. (BHP) or Rio Tinto Group, Lutetia Capital said. An acquirer could pay a 30 percent premium and still get Cliffs for less than any comparable publicly traded mining company versus its free cash flow, the data show.

Xstrata-Glencore deal a possible game changer – by David Ebner (Globe and Mail – February 7, 2012)

February 7, 2012

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— The merger of Glencore International PLC and Xstrata PLC has the potential to spark a new wave of deals in the mining industry, particularly among copper producers, some analysts say.

The two companies are expected to announce an $88-billion (U.S.) deal Tuesday that will unite one of the world’s biggest traders of commodities with one of the largest miners of base metals. The new company will be a massive player in resources such as zinc, thermal coal, nickel and copper.

And even though their union has been anticipated for months, even years, the reality of a merged Xstrata-Glencore might be enough to jar others to action.

“There’s a big difference between almost pregnant and pregnant,” said Michael Locker of consulting firm Locker Associates in New York.

The natural resources deficit: the implications for German politics – by Anna Kwiatkowska-Drożdż (Centre for Eastern Studies – February 8, 2011)

February 7, 2012

http://www.osw.waw.pl/en

The Centre for Eastern Studies (OSW) is a Polish think tank dealing with analyses of the political, economic and social situation in the neighbour countries, Central and Eastern Europe, the Balkans, Southern Caucasus, Central Asia and Germany. (Warsaw, Poland)

Falling amounts of natural resources and the ‘peak oil’ question, i.e. the point in time when the maximum rate of extraction of easily-accessible oil reserves is reached, have been among the key issues in public debate in Germany on all levels: expert, business and – most crucially – the government level. The alarming assessments of German analysts anticipate a rapid shrinkage of oil reserves and a sharp rise in oil prices, which in the longer term will affect the economic and political systems of importer countries.

Concerns about the consequences of the projected resource deficit, especially among representatives of German industry, are also fuelled by the stance of those countries which export raw materials. China, which meets 97% of global demand for minerals crucial for the production of new technologies, cut its exports by 40% in summer 2010 (compared to 2009), arguing that it had to protect its reserves from overexploitation.

Private ownership helps First Nation fix housing problems – by Shawn Bell (Wawatay News – February 6, 2012)

February 7, 2012

This article came from Wawatay News: http://www.wawataynews.ca/

Chief Franklin Paibomgai of Whitefish River First Nation is happy to talk housing. Despite the prevalence of housing woes all across northern Ontario First Nations, the days of housing concerns in Whitefish River – just north of Manitoulin Island – are a thing of the past.

Paibomgai laughs when asked about the last time housing has come up at a band meeting. Housing has not been on the agenda for years, he says. It used to be a constant thing – someone wanting a new home, or needing renovations on a current house. But now, thanks to a dramatic shift in how the community looks at housing, there are subdivisions going up and a community-owned construction company doing the work.

In 2003 Whitefish River’s housing situation was similar to many First Nations across northern Ontario. Existing houses were in poor condition. There was a long list of people wanting new homes. And the housing money provided by the federal government was barely enough to complete upkeep on existing houses, never mind build anything new.

The Devastating Costs of the Amazon Gold Rush – by Donovan Webster (Smithsonian Magazine – February, 2012)

February 7, 2012

This article is from: http://www.smithsonianmag.com/?ref=home

Spurred by rising global demand for the metal, miners are destroying invaluable rainforest in Peru’s Amazon basin

It’s a few hours before dawn in the Peruvian rainforest, and five bare light bulbs hang from a wire above a 40-foot-deep pit. Gold miners, operating illegally, have worked in this chasm since 11 a.m. yesterday. Standing waist-deep in muddy water, they chew coca leaves to stave off exhaustion and hunger.

In the pit a minivan-size gasoline engine, set on a wooden cargo pallet, powers a pump, which siphons water from a nearby river. A man holding a flexible ribbed-plastic hose aims the water jet at the walls, tearing away chunks of earth and enlarging the pit every minute until it’s now about the size of six football fields laid side by side. The engine also drives an industrial vacuum pump. Another hose suctions the gold-fleck-laced soil torn loose by the water cannon.

At first light, workers hefting huge Stihl chain saws roar into action, cutting down trees that may be 1,200 years old. Red macaws and brilliant-feathered toucans take off, heading deeper into the rainforest. The chain saw crews also set fires, making way for more pits.

Australia-China relationship a lesson for Ottawa [about resources] – by Matthew Fisher (National Post – February 7, 2012)

February 7, 2012

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

Canadians are about to discover that Prime Minister Stephen Harper has caught China fever. The Prime Minister arrives Tuesday in Beijing to shout that Canada is open for business.

Australia caught China fever some years ago and because of it the Land Down Under has been creating a staggering amount of wealth out of one of the greatest resource booms of all time.

To little fanfare elsewhere, Australia’s trade to China has tripled over the past five years to more than $60-billion a year.

When imports are included, trade between the countries is $80-billion a year, compared with a relatively piddling $30-billion a year of trade between Canada and China.

Glencore-Xstrata deal meets shareholder opposition – by Sarah Young and Eric Onstad (Reuters – February 7, 2012)

February 7, 2012

This article came from: www.reuters.com

LONDON (Reuters) – Two top 10 shareholders in miner Xstrata said on Tuesday they would vote against a takeover by commodities trader Glencore, threatening the industry’s biggest deal to create a powerhouse spanning mining, agriculture and trading.

Standard Life Investments, the fourth largest investor in Xstrata, and Schroders head of UK equities said the deal to buy the remaining 66 percent of Xstrata for $41 billion undervalued their shares.

The two own 3.6 percent of Xstrata, according to Thomson Reuters data. Their statements may persuade others to follow suit and block Glencore’s ambition to create a company to rival mining heavyweights such as BHP Billiton and Rio Tinto.

“I’m in complete agreement with Standard Life and we intend to do exactly the same. This is a fabulous deal for Glencore, it’s probably a great deal for the Xstrata management, but it’s a poor deal for Xstrata’s majority shareholders,” Shroders’ Richard Buxton told Reuters.

Xstrata agrees $41bn Glencore takeover deal – by Sarah Young and Eric Onstad (Mineweb.com – February 7, 2012)

February 7, 2012

This article came from: www.mineweb.com

In the biggest merger in the mining sector since Rio and Alcan, Glencore and Xstrata will form a company worth $90bn, Mick Davis will be CEO.

LONDON (Reuters) – Commodities trader Glencore agreed on Tuesday to buy the remaining 66 percent of miner Xstrata for $41 billion in a record deal to create a powerhouse spanning mining, agriculture and trading.

In what has been billed as a merger of equals, Glencore, the world’s largest diversified commodities trading house, and Xstrata will form a company worth $90 billion to rival other mining heavyweights such as BHP Billiton and Rio Tinto.

The new group, which will have mining assets from New Caledonia to the Democratic Republic of Congo, are expected to use their combined clout to look at other deals, including potentially a takeover of Anglo American, analysts say.

“M&A is a space that you’d expect the combined group to be in,” Xstrata chief executive Mick Davis, who will be CEO of the enlarged Glencore, told Reuters.

Canada doesn’t know how to protect its [resource] interests [from China] – by Terry Glavin (Ottawa Citizen – February 4 2012)

February 6, 2012

This column is from the: http://www.ottawacitizen.com/index.html

“We are sitting ducks.”

That’s the way Anthony Campbell, the former head of the Intelligence Assessment Secretariat of the Privy Council Office, put it to me the other day. We were talking about Beijing’s designs on Canada’s energy resources, Beijing’s adroit cunning in enfeebling Canadian foreign policy, and how Canadians have been rendered unable to cope with the drama as it unfolds.

The Chinese Year of the Dragon began inauspiciously with Prime Minister Stephen Harper and Industry Minister Joe Oliver riffing on a clever talking-points stratagem dreamed up by neophyte Conservative war-room hangabouts. It featured American billionaire socialists infiltrating into Canada to ambuscade the construction of Canada’s last-hope economic lifeline, to China.

Most Canadians had probably never even heard of the Enbridge project, which is a plan to build a huge bitumen tube from Alberta’s oilsands to saltwater on the northern British Columbia coast. Still, whatever Ottawa was shouting about, it seemed to contain enough resemblance to a kernel of truth. So it worked for a while.

The World from Berlin: Germany Playing Catch-Up in Scramble for Resources – by David Gordon Smith and Christopher Cottrell (Spiegel Online International – October 14, 2011)

February 6, 2012

This article is from Germany’s Speigel Online International: http://www.spiegel.de/international/

Chancellor Angela Merkel has signed a commodities deal with Mongolia during her visit to the Central Asian country. The agreement is intended to secure access to much-needed raw materials for German industry. But commentators point out that it will take more than just a piece of paper to win the scramble for rare earths.

At first glance, German Chancellor Angela Merkel’s decision to visit Mongolia precisely at a time when Europe’s debt crisis is hotter than ever might seem peculiar. But cool-headed economic interests were behind the trip: The Central Asian country has raw materials that Germany’s industry desperately needs.

On Thursday, the governments of the two countries signed a commodity partnership agreement. The deal promises, among other things, that no limits will be imposed on the quantity of raw materials that Mongolia supplies to Germany. Mongolia, for its part, wants to benefit from the deal by making sure that the raw materials are processed in the country.

12 companies join German commodity alliance – by Michael Hogan (Reuters – January 30, 2012)

February 6, 2012

This article is from: http://af.reuters.com/

* German companies plan cooperation on commodity sourcing

* Will consider investment in commodity projects

* Aim to secure commodity supply for German industry

HAMBURG, Jan 30 (Reuters) – Twelve German companies have joined the new German alliance aimed at securing raw materials supplies in the face of growing competition for key commodities, the Federation of German industry BDI said on Monday.

In October 2010, Germany’s government approved a new commodities strategy aimed at helping German industry secure supplies in the face of intense competition from China and other newly-industrialised countries which will include partnerships with supplier countries and greater cooperation between German commodity consumers.

A series of major German companies have been involved in talks about a project lad by German industrial association BDI to invest in foreign commodity projects and 12 have now agreed to join, the BDI said.

Sudbury College officially opens doors of Xstrata Nickel energy centre

February 6, 2012

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

With the support of a $2 million contribution from Ontario Mining Association member Xstrata Nickel, Cambrian College in Sudbury has officially opened the doors of its new energy research facility. The Xstrata Nickel Sustainable Energy Centre is home to cutting-edge applied research and education programs for sustainable energy.

Cambrian’s three-year Energy Systems Technology, Environmental Monitoring and Impact Assessment programs will be run out of this 16,000 square foot plus $5-million building. The centre will also house research facilities to be used by students, entrepreneurs and the general public.

“With this new centre, we are expanding our capacity for applied research and making room for growth,” said Sylvia Barnard, President of Cambrian College. “We are focused on applied research because it gives students in various programs real-life experience working with prototypes and entrepreneurs.”