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Canada Mining

Expect First Nations to press on resource rights – by Doug Cuthand (Saskatoon StarPheonix – November 30, 2012)

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

Resource Rulers, a new book by Bill Gallagher, outlines the recent history of First Nations, the resource industry and government relations, and confirms what I suspected.

The First Nations are on a winning streak, and we’re kicking butt in the courts. There are close to 170 positive court cases so far, related to resources and jurisdiction since the inception of the Constitution Act of Canada.

In 1982, when the pa-triation of the Constitution from Britain and the discussions to develop the Charter of Rights and Freedoms were underway, First Nations fought to have aboriginal and treaty rights enshrined in the Constitution and given legal weight. The result was Section 35, which states: “Existing aboriginal and treaty rights of the aboriginal peoples of Canada are hereby recognized and affirmed.”

At the time we complained that Sec. 35 was not defined and only gave us the right to go to court. Then prime minister Pierre Trudeau announced that three first ministers’ conferences would be held to define those rights. The three conferences were held, but unfortunately the meetings got nowhere.

The premiers had the chance to define rights or initiate a process at the conferences, but instead left it for the courts to decide. In the intervening years First Nations have gone to the courts repeatedly and we have amassed an impressive winning streak.

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Investors bid up Inmet as copper mine battle looms – by Pav Jordan (Globe and Mail – November 30, 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.

Investors are betting on a battle for Inmet Mining Corp. to control the coveted Cobre Panama project in Central America, one of the world’s largest undeveloped copper plays.

Inmet shares have catapulted 23 per cent in the two tradings sessions since the company disclosed it received and promptly rejected two takeover offers in the past month from First Quantum Minerals Ltd., one of Canada’s largest copper miners.

Inmet also said it adopted a shareholder rights plan, known as a poison pill, but said that was not meant to prevent takeovers so much as give it time to consider options in the event of a hostile bid.

“I think they are effectively saying we’re probably for sale at the right price,” said Terry Thib, a portfolio manager with Norrep Funds in Toronto that holds Inmet shares. “From my perspective, I’m kind of thinking something north of $80 might get it done; shareholders might be happy with that.”

First Quantum’s latest cash-and-stock bid valued Inmet at $4.9-billion, or $70 a share. Its shares traded up nearly 6 per cent on Thursday to $65.50. Before the bids were made public, Inmet was trading at $52.80.

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NEWS RELEASE: Canada’s mining companies can take steps now to improve their prospects in the longer term: Deloitte Report

 To view the report, please visit: http://www.deloitte.com/assets/Dcom-Canada/Local%20Assets/Documents/EandR/Mining/ca_en_energy_Tracking_the_trends_2013_112812.pdf

Toronto, Ontario – 29 November 2012 — Canadian mining companies should be investing now to ensure they can fulfill future global demand for commodities even as they face a series of immediate challenges affecting the global mining sector, according to a new report from Deloitte that was released today. The report, Tracking the trends 2013, provides commentary and analysis of the top 10 issues most likely to impact the mining sector in 2013 and provides a range of responses that companies can adopt to prepare for shifting industry dynamics.

According to the Deloitte report, now in its fifth year of distribution, miners need to set a solid strategic direction and hold the course amidst shifting industry realities in order to prosper when global demand for commodities rebounds in the longer term. Beyond finding ways to control costs and improve their demand forecasts, Canada’s mining companies should be preparing for increased mergers and acquisitions activity in 2013, strengthening their relationships with local governments in order to minimize the impact of growing resource nationalism in various countries and finding innovative ways to cope with a looming skills shortage. They also need to expand their use of information technology and data analytics to enhance safety, improve operations and reduce costs.

“For the second year in a row, mounting costs tops the list of the key issues affecting the mining industry” said Glenn Ives, Americas Mining Leader, Deloitte Canada. “This is expected to worsen in the short term as commodity prices continue to dip, workers demand higher wages and regulatory costs rise. But rather than halting production in the face of shareholder demands for more immediate returns, miners should be making investments today to meet the expected long-term demand for commodities.”

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Miners need to keep investing and be ready when market picks: report – by Craig Wong (The Canadian Press/Vancouver Sun – November 29, 2012)

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

TORONTO – Mining companies facing an uncertain economic outlook and rising costs need to keep investing in their development projects to ensure they are ready to go when the market picks up again, a new report suggests.

The report by audit and consulting firm Deloitte to be released Thursday suggests while miners need to focus on controlling costs that may have risen during the recent boom, they also need to hold the course on their strategic plan for the long term.

Jurgen Beier, national mining leader at Deloitte Canada, said as prices for many key commodities slip, the focus is increasingly on reducing costs that may have been masked in boom times. “The key thing with cost is that when you’re not worried about the revenue line, basically there is less focus on the cost line,” he said.

“Over time, inefficiencies creep into running any business and many of these inefficiencies are based on merger and acquisition transactions where the companies haven’t been completely integrated.”

But Beier noted that cutting costs needs to be balanced with ensuring a miner’s future and that means continuing to develop new projects so they are ready to go in the next boom.

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Inmet rejects First Quantum takeover bid – by Peter Koven (National Post – November 29, 2012)

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

TORONTO — First Quantum Minerals Ltd. has offered $4.9-billion for Inmet Mining Corp. in a bold attempt to get its hands on Cobre Panama, one of the largest mining development projects underway anywhere in the world.

The move puts Inmet’s immediate future into question, as the company is now in play and senior copper miners are certain to take a closer look at Cobre Panama.

Toronto-based Inmet owns 80% of Cobre Panama, and it is a monster. The project holds 32 billion pounds of copper reserves and nine million ounces of gold reserves (along with huge inferred resources), and has a likely mine life of more than 30 years. It also comes with enormous risk: The current cost estimate is US$6.2-billion, and Panama has no history of large-scale mining.

Construction of Cobre Panama has just started, and analysts suggested that if First Quantum has its own development plan for the mine, it needs to get in quickly. First Quantum is recognized for having a strong technical team.

“I see a fit in the sense that [First Quantum] management has been very experienced in building four grassroots projects on time and within reasonable budgets, and also operating in what I would call politically sensitive areas in Central Africa,” said John Hughes, an analyst at Desjardins Securities.

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Don’t play it safe, Deloitte tells mining firms – by Bertrand Marotte (Globe and Mail – November 29, 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.

Faced with rising costs, falling commodity prices and other challenges in these volatile times, mining companies should avoid the urge to retreat and play it safe, says a new Deloitte report.

“For the second year in a row, mounting costs tops the list of the key issues affecting the mining industry,” says Glenn Ives, Americas mining leader at Deloitte Canada.

“This is expected to worsen in the short term as commodity prices continue to dip, workers demand higher wages and regulatory costs rise. But rather than halting production in the face of shareholder demands for more immediate returns, miners should be making investments today to meet the expected long-term demand for commodities.”

The report, Tracking the Trends 2013, lists the top 10 challenges for the mining sector in 2013:

1. Higher costs

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Inmet Mining snubs $4.9-billion takeover bid by First Quantum – by Pav Jordan and Tim Kiladze (Globe and Mail – November 29, 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.

First Quantum Minerals Ltd. offered $4.9-billion to acquire Inmet Mining Corp., a bold declaration from one of Canada’s largest copper miners that the commodities supercycle has room to run.

Inmet rejected the bid, describing it as “highly conditional” and not in shareholders’ interests, but analysts said First Quantum could return with a higher offer for one of the world’s largest copper projects in development.

Toronto-based Inmet is developing the $6.2-billion (U.S.) Cobre Panama project that will produce some 300,000 tonnes of copper a year for 30 years, putting it on a scale with major mines in Chile and Peru, the world’s largest producers of the metal.

Inmet revealed that it was the second offer from First Quantum in a month, underscoring global miners’ convictions that copper demand will remain strong into the future, despite slowing growth in China and other major markets. Copper has been one of the most in-demand commodities of the past decade, driven by breakneck development in China as it built power grids and entire cities in its urbanization drive.

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NEWS RELEASE: Canada’s mineral treasures sparkle in new Vale Earth Gallery at Canadian Museum of Nature

(L-R) Vale Canada representatives Cory McPhee, VP, Corporate Affairs; Audrey Leduc, Corporate Affairs Officer; and John Mullally, Director, Corporate Affairs in front of display with rock sample from Sudbury’s Vale mine. (Photo by: Jamie Kronick, Canadian Museum of Nature)

www.vale.com

Ottawa, November 28, 2012─Canada’s mineral treasures and the geological forces that shape the country are featured in a renewed and expanded gallery opening November 30 at the Canadian Museum of Nature.

The Vale Earth Gallery presents a fascinating journey through geological time that relates how the Earth formed, how powerful forces have changed and shaped our planet, and how geology and mineralogy connect with everyday life. The new attraction is the result of two years of planning and three months of renovations to a smaller phase of the Vale Earth Gallery that had opened in 2010.

“This new gallery returns the museum’s best geological and mineral specimens to permanent display in an expanded setting that includes new content and engaging interactives,” says Meg Beckel, President and CEO of the Canadian Museum of Nature. “We are extremely grateful for Vale’s support that has allowed us to complete this project that will inspire and connect visitors with our collections and the mineralogy research of our scientists.”

Instructive panels, interactive games and simulations explore the complexities of geology and the three main types of rock that make up the planet—sedimentary, magmatic and metamorphic.

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NEWS RELEASE: Canadian mining and metals deal value down 43% as focus on business fundamentals rises: Ernst & Young Macroeconomic issues put damper on M&A, but confidence on the rise

For the full report, click here: ey.com/ca

(Vancouver, November 28, 2012) Global mining and metals deal value and volume are down globally, with Canadian numbers falling 43% and 16% year over year in the first nine months of 2012, according to Ernst & Young’s seventh twice-yearly Global Capital Confidence Barometer.

“Our survey results reveal that only 38% of companies, down from 53% in April, are focused on growth in the next 12 months, while 27% are refocusing on business fundamentals, including cost reduction and operational efficiency,” says Bruce Sprague, Ernst & Young’s Canadian mining and metals leader.

Cost inflation, slowing economic growth, heightened geopolitical risk and volatile prices have sparked this shift in mining and metals companies’ mindsets.

“Executives are trading in their ‘growth for growth’s sake’ mentality and refocusing on capital optimization,” says Sprague. “Nearly a third of our survey respondents cited cost reduction and operational efficiencies as key priorities in the next year.”

But confidence in doing deals is improving, with 28% of respondents expecting to pursue an acquisition in the next 12 months. That’s up from 18% in April.

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Big miners keep on drilling as juniors freeze up – by Pav Jordan (Globe and Mail – November 28, 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.

TORONTO — Big mining companies may be pulling back on major new spending plans, but they haven’t let up on exploration budgets, according to Major Drilling Group International Inc., which has a bird’s-eye view on the mining world as the second-largest resource driller.

Chief executive officer Francis McGuire says the same cannot be said for junior miners, which have been stripped of access to financing amid tumultuous global markets, forcing them to virtually freeze drilling activities.

“The junior market is very dead,” Mr. McGuire said in an interview on Tuesday, adding that most drilling proposals for the 2013 calendar year are coming from senior miners, intermediaries and some very well-funded juniors.

Drilling companies closely shadow price cycles for resource commodities, so it’s no surprise their fortunes have slipped in recent months amid a slowdown in demand for key industrial metals, such as copper and zinc, especially from China.

Moncton, N.B.-based Major Drilling said this week that profit fell 30 per cent in the fiscal second quarter, which ended Oct. 31, and pointed at falling demand from junior miners.

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Africans should reap the benefits of their resource bonanza – by Paul Collier (Globe and Mail – November 26, 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.

Paul Collier is a professor of economics and public policy at Oxford University. This article is based on the Hagey Lecture, delivered at the University of Waterloo on Nov. 22.

Canada is about to take pole position in a race that will determine the well-being of a billion people. The poorest countries on Earth, many in Africa, are in the throes of massive new resource bonanzas. In the past, such bonanzas have been the path to plunder rather than prosperity. The default option is that this dismal history gets repeated: Corruption and violence remain powerful drivers. But across Africa, many brave people are saying “never again.”

In this momentous struggle, on which the future of a billion poor people hangs, Canadians must now decide where they stand. Although this is a struggle that must be won in Africa, Africans alone do not have the power to win it.

Guinea is a brutal current example of the limitations of what decent African governments can do. For decades, the country was mired in dictatorships, culminating in a military coup so grim that the African Union refused to recognize the regime.

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Lawsuit against mining firm [Hudbay Minerals] brings Guatemalans to Toronto – CBC News (November 27, 2012)

http://www.cbc.ca/news/

Hudbay Minerals denies involvement in alleged shootings and gang rape

Five Guatemalans are in Toronto to sue a Canadian mining firm over allegations the security staff of one of its subsidiaries brought violence and death to their village.

The five, from the village of El Estor, are preparing for pre-trial questioning by lawyers for Hudbay Minerals Inc. in connection with three civil suits filed against the Toronto firm. They concern the alleged killing of community leader Adolfo Ich in 2009, a shooting that left another man paralyzed in 2009 and the gang rape of 11 women in 2007.

At San Lorenzo Church in north Toronto last week, Rosa Elbira choked back tears as she recounted the day in 2007 when she says she was repeatedly raped by nine men including police, soldiers and security officers for a mining company.

Beside her, holding her hand in support, sat German Chub Choc, 23, who’s paralyzed from the waist down, a bullet still lodged near his spine. He admitted to moments despair since the day in 2009 when he says he was shot by the head of the same mining company’s security detail.

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Drop dogmatism on Chinese investments – by Daniel Schwanen (National Post – November 27, 2012)

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

 Daniel Schwanen is associate vice-president, international and trade policy, C.D. Howe Institute.

Canada has recourse should China flout local laws and regulations

By many standards, the proposed acquisitions of Nexen Inc. by China’s state-controlled CNOOC Ltd., and of Progress Energy Resources Corp. by Petronas, owned by the Malaysian government, are a natural fit for Canada. To take advantage of its natural resources, Canada needs foreign investment. State-owned firms are big players in the global energy sector and Canada has recently rediscovered Asia as a priority economic and diplomatic area.

Yet concerns persist about these proposed acquisitions, focusing on the impact of the investments on national security, the fairness of investments by subsidized state-owned firms and their ability to run efficient businesses, and the lack of reciprocal opportunities for Canadian firms. For many, the current guidelines on how Canada might apply its “net benefit” test for approving large domestic investments by foreign state-owned enterprises, which Canada issued in late 2007, are just not up to the task.

While the concerns are understandable, they do not justify rejecting out of hand acquisitions of Canadian businesses by foreign state-owned enterprises.

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Speaking notes for the Honourable Julian Fantino Minister of International Cooperation for the Economic Club of Canada ‘Reducing Poverty – Building Tomorrow’s Markets’

November 23, 2012, Toronto, Ontario

Good morning.

It has now been a few months since Prime Minister Harper asked me to be the Minister of International Cooperation, and I am enjoying the job immensely. It is a great honour and a privilege.

As you can imagine, it has been a busy time for me and a fascinating experience seeing international development work first-hand, as Canada continues to respond to situations around the world.

In my brief experience, it is clear that Canada is respected on the world stage for the work the Canadian International Development Agency does. You may know that my previous professional life was in law enforcement, spending the latter part of my career as an executive within various police departments.

However, as the Ontario Commissioner of Emergency Management and more recently, as Associate Minister of National Defence, I have had the opportunity to see CIDA’s work with my own eyes.

On a trip to Afghanistan as Associate Minister of Defence, I saw young Afghan girls heading to school, wearing their backpacks. And it reminded me of my own grandchildren. I was impressed then, and I remain so, knowing that these girls were going to school because of the assistance Canada provided.

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NEWS RELEASE: UBC, SFU to further global sustainable mining practices through $25M Institute

Media Release | Nov. 23, 2012

The University of British Columbia and Simon Fraser University will lead an international coalition to help developing countries benefit from their natural resources in environmentally and socially responsible ways.

The establishment of the Canadian International Institute for Extractive Industries and Development (CIIEID), funded by a $25-million grant from the Canadian International Development Agency (CIDA), was announced last October with an aim to sharing Canadian expertise in extractive industries. The selection of UBC and SFU to operate the Institute was announced today by the Honourable Julian Fantino, Minister of International Cooperation.

In 2008 alone, exports of oil and minerals from Africa, Asia, and Central America were valued at $1-trillion. Canadian companies, many headquartered in Vancouver, B.C., dominate the world’s mineral exploration and Canada relies heavily on its resource industries.

UBC’s research and education in the extractive sector spans nearly a century, with a strong emphasis over the past decade placed on sustainable development and corporate social responsibility through its Norman B. Keevil Institute of Mining Engineering. SFU’s Beedie School of Business offers Canada’s longest-standing Executive MBA program for sustainable mining, and houses the Responsible Minerals Sector Initiative, fostering global dialogue for the extractive sector.

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