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Year: 2012

Northern leaders keep up ONTC fight – by Kyle Gennings (Timmins Daily Press – November 21, 2012)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – The fight continues for the ONTC.

Kapuskasing Mayor and Federation of Northern Ontario Municipalities (FONOM) president Al Spacek spent Monday in Toronto meeting with Northern Development and Mines Minister Rick Bartolucci, fighting for a game changer that never came.

“We reiterated our concerns about the lack of information and transparency about the ongoing divestiture process,” he said. “I also communicated to him and his senior staff that we are hearing the same concerns from industry, a lot of time has gone by now and we still don’t have a comfort level with what the process is and where they are at with it.”

This lack of transparency regarding the sale has been a concern from the outset of the issue. Despite numerous pleas from FONOM representatives, Spacek said Bartolucci and his staff, along with the provincial cabinet, have not been forthcoming with information.

“His response continues to be the same, the divestiture is going ahead and did not directly address our concerns about transparency,” said Spacek. “Our reaction with this government has been one of much legislation and policy that has been very detrimental to the North.

“That legislation and policy was developed without the consultation of the people most effected by it, Northerners.”

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Petronas revises bid for Progress Energy Resources – by Vanessa Lu (Toronto Star – November 21, 2012)

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.

Petronas, a Malaysian state-owned business, has revised its offer for Calgary-based Progress Energy Resources in hopes that Ottawa will sign off on the deal this time.

The deadline for approval has been extended to Dec. 30, the second extension since Industry Minister Christian Paradis rejected the initial $6 billion takeover proposal on Oct. 19. At the time, Paradis said he was “not satisfied that the proposed investment is likely to be of net benefit to Canada.”

No details have been released on how the latest bid for Progress, which has extensive shale gas holdings, differs from the earlier proposal.

The federal government is still pondering how it should handle the politically thorny issue of state-owned businesses from countries such as Malaysia, and more notably China, seeking to buy Canadian companies.

Ottawa is also weighing a proposed $15.1 billion takeover of Calgary-based Nexen Inc. by China National Offshore Oil Co. (CNOOC), China’s biggest offshore oil and gas producer. The deadline for approval is Dec. 10.

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The end of the oil world as we know it – by Jeffrey Simpson (Globe and Mail – November 21, 2012)

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.

The International Energy Agency’s report ricocheted around the world last week, and nowhere more so than in Canada.

The United States will become the world’s largest producer of oil by 2020, predicted the IEA, and North America will become a net oil exporter by 2030. So much for foolishness about the end of oil. So much for the comfortable assumption in Canada that the U.S. would always soak up every drop of oil we could export to them.

Hidden in the report, however, are two other implicit assumptions of immense importance for the future. First, for the first time since president Franklin D. Roosevelt made cozy with the Saud dynasty, the United States will not need, let alone be beholden to, oil-producing countries in the Middle East. Second, the international target of holding the increase in global temperatures to two degrees Celsius is a forlorn hope.

It would be simplistic to say that oil alone has driven U.S. interests in the Middle East, but it would also be simplistic to ignore that oil imports from that region have been critical for the U.S. economy. And with economic realities have gone geopolitical interests.

Oil helped to link the interests of sheikdoms and autocracies to the consumers of the United States – and through them to their democratically elected government.

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N. America’s energy renaissance more like a revival – by Peter Tertzakian (Globe and Mail – November 21, 2012)

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.

 Peter Tertzakian is chief energy economist and managing director with Arc Financial Corp. in Calgary and provides analysis on technology and energy-related businesses to fund managers and portfolio companies.

A large part of the oil and gas renaissance is a consequence of reviving old fields with new technology.

Pennsylvania, where the industry had its genesis in the mid-1800s, and mostly forgotten in favor of more prolific finds a century ago, is now repositioning itself to be a dominant supplier of natural gas. Light oil fields throughout Texas, Oklahoma and Alberta — thought to have peaked in the 1970s — are making such a vigorous comeback that North American energy independence is the new phrase du jour. And who would have said a few years ago that North Dakota, a small and stable producer up until 2007, would be the next energy superpower?

So, it’s with interest that we watch big dollars being attracted to one of the oldest North American oil fields, the Sahtu Region of Canada’s Northwest Territories.

Drilling 160 kilometers below the Arctic Circle, near Fort Norman, N.W.T., Theodore Link, a geologist for Imperial Oil, is credited for drilling the first commercial oil well in the region.

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Canada’s crude export pipelines clogged – by Nathan Vanderklippe (Globe and Mail – November 21, 2012)

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.

CALGARY — The surge in Canadian oil production must now face a new reality: The biggest mover of crude says the pipes out of the country are full.

In recent years, estimates by analysts and energy consultants predicted that Canada stood to run out of room on export pipelines some time between 2014 and 2018. And it has become clear that the pipes are filling, amid rising oil output from both the oil sands and fast-growing U.S. oil fields.

But Enbridge Inc. has now formally declared the pipes full, meaning that date has arrived far sooner than expected.

“All of the crude oil export pipelines are pretty much full, running at maximum capacity,” Vern Yu, a vice-president of business development and market development for Enbridge told a Petroleum Technology Alliance Canada conference in Calgary Tuesday. “And we’re not likely to see any meaningful capacity added to these networks until the end of next year.”

For the energy industry, the likelihood of choked market access for months to come stands to cut off billions in profits as oil shipments back up behind stuffed pipelines. A growing glut of product waiting for export is pressuring prices for Canadian crude.

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The SAMSSA brings strength and prosperity – by Karen Kornelsen (Mining and Exploration Magazine – July 20, 2012)

http://www.miningandexploration.ca/

The SAMSSA’s No. 1 goal is to promote the expertise of its mining supply and service members

The Sudbury Area Mining Supply and Service Association(SAMSSA) represents the interests of the greatest concentration of expertise in mining supply products and services from within what is considered to be the most recognized centre of excellence worldwide.

The SAMSSA’s executive director, Dick DeStefano, is one of the founders of the association, which currently represents 120 members, including organizations in North Bay and Timmins as well as Sudbury.

The SAMSSA started in 2003 when DeStefano recognized there were more than 350 mining supply and service companies situated in Sudbury, yet they had never formed an organization or chamber to join together to create an international brand.

“Historically, this was not a pattern for independent business people in any regional area,” said DeStefano. “It was very competitive and companies did not want to reveal their networks or intelligence.”

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Cliffs Natural Resources idles iron-ore production on weak demand – by Henry Lazenby (MiningWeekly.com – November 19, 2012)

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – New York- and Paris-listed Cliffs Natural Resources on Monday said it would idle mine expansion in Quebec and a portion of production at two US operations as a result of weak iron-ore prices.

The company, which is the largest producer of iron-ore pellets in the US, said it would idle iron-ore production at its Bloom Lake mine Phase 2 expansion, in Quebec, and at two of its US iron-ore operations, Northshore Mining, in Minnesota, and at the Empire mine, in Michigan.

Cliffs said it was adjusting its 2013 operating plans for its North American iron-ore businesses to align with expected sales volumes. These production decreases were driven by increased iron-ore pricing volatility and lower North American steelmaking utilisation rates.

“Disciplined capital allocation is core to our operating strategy and reducing higher cost production will enhance our financial flexibility in both the short and longer term. Despite today’s announcement, we are still committed to our investments in Canada and believe Bloom Lake will deliver significant long-term value over time,” Cliffs chairperson and CEO Joseph Carrabba said.

At the Bloom Lake mine, Cliffs had suspended certain components of the second phase of expansion, including the completion of the concentrator and load-out facility. As a result, construction related to these activities was halted and third-party contractors were demobilised immediately.

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Chamber and Unions unite to push for Duluth Complex base/precious metals mines – by Lawrence Williams (Mineweb.com – November 20, 2012)

http://www.mineweb.com/

Mining on the environmentally sensitive Duluth Metallurgical complex in Minnesota is gleaning strong local support from a union/Chamber of Commerce alliance.

LONDON – In what must be a welcome development for prospective miners, PolyMet and Duluth Metals, Minnesota’s Chamber of Commerce and local mining unions will be mounting a combined campaign to try to ensure that mining of what has to be one of the world’s most significant mineral deposits, is given the go-ahead by state and federal bodies.

According to a report in the Duluth News Tribune, The Minnesota Chamber of Commerce, the state’s largest business group, and the Minnesota Building and Construction Trades Council have formed “Jobs for Minnesotans” to promote development of the state’s first-ever massive base and precious metals mining operations on the Duluth Metallurgical Complex which hosts one of the world’s largest potential polymetallic orebodies and which could see large scale mining for the next century, with its associated employment and tax benefits for the state and federal economies.

The Duluth Complex hosts an enormous resource of relatively low grade polymetallic mineralisation, which in combination represents perhaps the world’s largest ever discovery of an orebody containing copper, nickel, cobalt, pgms and gold – and Polymet and the Duluth Metals 60:40 jv with Antofagasta – the Twin Metals project – are the two most advanced projects on the Complex at the moment. However the area where these enormous deposits is hosted lies in an environmentally sensitive locality between the Boundary Waters recreational area and brownfields mining and processing sites left over from the still significant Minnesota taconite iron ore mines and process plants.

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NEWS RELEASE: Minister Oliver: Responsible Resource Development Contributes to Jobs for Aboriginal Peoples Across Canada

TORONTO, ONTARIO — (Marketwire) — 11/19/12 — The Honourable Joe Oliver, Canada’s Minister of Natural Resources, today highlighted the importance of Responsible Resource Development to jobs for Aboriginal peoples and Canada’s economy. The Minister discussed how the Federal Government’s plans will contribute to further increasing Aboriginal people’s participation in the mining and exploration sector.

“The Harper Government is fully committed to supporting Canadian jobs, economic growth and long-term prosperity,” said Minister Oliver. “Our plans support the 31,000 Aboriginal peoples employed in our natural resources sector and will result in opportunities for thousands more.”

The Mining Association of Canada estimates that 7.5 percent of Canadians employed in mining are Aboriginal – making mining Canada’s largest private employer of Aboriginal peoples.

“This government is demonstrating leadership that is resulting in new economic opportunities for Aboriginal communities across Canada,” said Minister Oliver. “Our commitment to creating new markets and keeping taxes low is contributing to an estimated 600 projects over the next 10 years that will increase Aboriginal jobs and economic benefits.”

The mining sector expects to hire approximately 100,000 additional workers over the next decade to coincide with new natural resources projects. Responsible Resource Development strengthens support specifically for Aboriginal peoples by:

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Mining veteran [Pierre Gratton] insists record demand for commodities not over – just paused – by Pav Jordan (Globe and Mail – November 19, 2012)

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.

Pierre Gratton gets irritated when hear others tell him the global commodities supercycle has ended. That’s not especially surprising: After all, as president of the Mining Association of Canada (MAC), it’s part of Mr. Gratton’s job to be bullish about metals.

But the industry veteran also believes the doomsayers lack historical perspective. Yes, he admits, commodities are facing a downturn – but it’s a lot less black-and-white than simple supply and demand.

“Having been in this business now for 13 years, there is a very significant difference between the mood in this downturn and the kind of attitude and the kind of mood that I used to see in 2000 and 2001,” Mr. Gratton said in an interview.

“It’s just a whole different kind of feeling. Back then, times were tough and there was no sense it was going to get better, whereas now, times are tough, but we know it’s going to get better, so it’s a different mentality.”

Global commodity prices staggered in recent months, battered by fears that a strong global economic recovery could be more elusive than initially thought.

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Glenstrata deal costs chairman Bond his job – by Clara Ferreira-Marques and Emma Farge (Reuters Canada – November 20, 2012)

http://ca.reuters.com/

LONDON/ZUG, Switzerland (Reuters) – Shareholders in Xstrata (XTA.L: Quote) prompted the resignation of the miner’s chairman on Tuesday as they voted through a $31 billion takeover by trader Glencore (GLEN.L: Quote) but twice snubbed a controversial pay plan to retain key managers.

Xstrata Chairman John Bond, formerly chairman of HSBC (HSBA.L: Quote) and Vodafone (VOD.L: Quote), would have been chairman of the new Glencore Xstrata.

Bond had been under fire for months over a 140 million pound ($223 million) “golden handcuffs” package for managers the Xstrata board said were key to operations, and over what some investors felt was an insufficient fight for better terms from Glencore, Xstrata’s top shareholder.

It took an unprecedented, activist stance from the Gulf state of Qatar, an unexpected kingmaker and second-largest shareholder in Xstrata, to force Glencore to improve the offer – just hours before a September shareholder vote, later cancelled.

At the shareholder meeting in the lakeside Swiss town of Zug activist investor Knight Vinke, also a top 25 Xstrata shareholder, accused the board of “governance failings” and said it had no confidence in its independence and robustness.

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Cliffs considers Vermilion river for smelter’s water supply – by CBC Radio Sudbury (November 19, 2012)

http://www.cbc.ca/sudbury/

Other industrial development planned for Vermilion as well

Cliffs Natural Resources says it’s evaluating a number of water sources, including the Vermilion River, for its proposed ferrochrome smelter in Capreol in Sudbury — and that has the local stewardship committee concerned. Vermilion River Stewardship chair Linda Heron said the river can’t take any more development.

“For years the water levels have been going lower and lower, so we question what we can afford to lose additionally out of the river,” she said.

There are already five proposals for hydro-electric dams that could end up on the Vermilion River, in addition to the Cliffs project. Xeneca has four proposed Hydro electric dams on the Vermilion River, and Water Power Group plans to put a hydroelectric dam in Capreol.

Operating within watershed

Jason Aagenes, director of Environmental Affairs with Cliffs, said an environmental assessment will determine the effect of operating within the Vermilion River watershed, especially during extended low-flow river conditions.

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An Industry Struggles to Keep Its Luster – by John Tagliabue (New York Times – November 6, 2012)

http://www.nytimes.com/

ANTWERP, Belgium — Step off the train here and you cannot miss the signs on the stores: Diamond World, Diamond Gallery, Diamond Creations or simply, Diamonds. Of late, there are the banners and posters reading simply, “Antwerp Loves Diamonds.”
Though this Belgian port has had a love affair with diamonds for centuries, of late it seems to be losing some of its passion. For years now, much of the lucrative but labor-intensive business of cutting and polishing stones has been drifting to low-wage centers in the developing world, like Mumbai, Dubai and Shanghai.

More ominously, in recent years, diamond traders have been accused of a range of violations, including tax fraud, money laundering and cheating on customs payments when buying and selling stones.

Local business leaders recognize the threat. This year, they embarked on what local newspapers described as a “charm offensive.” In a 160-page program, titled Project 2020, the World Diamond Center, a trade-promotion group, outlined plans to draw business back to Antwerp by simplifying and accelerating trading via online systems. That, the industry hopes, will win back some of the polishing business lost to Asian countries with new technology, like fully automated diamond polishers, and generally burnish the image of the diamond business in the public’s jaded eye.

“This is our strength,” said Ari Epstein, 36, a lawyer who is chief executive of the World Diamond Center and the son of a diamond trader, whose father emigrated from a village in Romania in the 1960s. “We have the critical mass so that every diamond finds a buyer and seller.”

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‘Pause’ ONTC divestment: Murray – by Dave Dale (North Bay Nugget – November 19, 2012)

http://www.nugget.ca/

NORTH BAY – Big city Liberal politician Glen Murray said Northern Ontario is the key to the province’s future and should be run by a regional authority.

And Murray, who is seeking to replace out-going Premier Dalton McGuinty as the Grit party leader, said they should “pause” the divestment of the Ontario Northland Transportation Commission until regional priorities are set.

“I’d put the pause button on ONTC decisions,” he said while in North Bay, Sunday. “We should not be making these one off decisions.”

Murray is stumping for Liberal Party membership support and visited Thunder Bay, Sault Ste. Marie and Sudbury pitching his campaign platform. Tax cuts for the middle class and small business, no-money-down university or college and Northern Ontario autonomy.

“The north needs it’s own voice,” he said, noting it’s a resource-rich region with residents, business owners and community leaders with a stake in its success.

Murray said the shape of the authority could be decided by referendum — whether a general northern government or separate regional government n the northeast and northwest.

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Oilsands will be a definining showdown in battle between forms of capitalism – by Jim Prentice (National Post – November 20, 2012)

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

Jim Prentice, the former Calgary MP who who served in the Harper cabinet as minister of industry and later as minister of environment and is now an executive at CIBC, addressed a conference in London on foreign investment in the oilsands, and the proposed $15 billion purchase of Nexen Inc. by China’s state-owned China National Offshore Oil Corp. The text follows.

The theme of our conference is, of course, Energy Strategies for Turbulent Times. These are indeed turbulent times and no one is unaffected, even Canada. In that context, I have been asked to speak today on the subject of foreign investment in Canada – in particular as it pertains to oil and gas. This topic is demanding, controversial, relevant to investors and, of late, the source of vigorous public and media debate in Canada.

This controversy has been building for years and it achieved a force in recent months that can fairly said to be “turbulence”. This is because of two proposed investments in Canadian energy companies by two State Owned Enterprises – Petronas from Malaysia, and CNOOC from China.

This is a pivotal time for the Canadian government. It must consider its policy on foreign investment in light of the growing and evolving role of SOEs in Canada’s oil and gas industry and across its economy, and in the face of changing geopolitical realities.

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