Archive | Canada Mining

Canada’s Mineral Reserves Crisis – by Paul Stothart

Paul Stothart - Mining Association of CanadaPaul Stothart is vice president, economic affairs of the Mining Association of Canada. He is responsible for advancing the industry’s interests regarding federal tax, trade, investment, transport and energy issues.

The mining industry’s fundamental importance to the Canadian economy actually predates Confederation. The fact that the Geological Survey of Canada was founded in 1842, a full quarter century before Confederation, speaks volumes about the role that mining has played throughout Canadian history. To this day, the industry remains the backbone of over 100 communities, including larger communities such as Sudbury, Flin Flon, Thompson, Timmins, and Trail.

The industry’s presence also extends well beyond the mine site to include smelters, refineries, and semi-fabrication operations – defined broadly the industry employs almost 400,000 Canadians. In the larger urban setting, the industry is important to the financial and legal community in Toronto, and features an exploration cluster in Vancouver, and research and headoffice activity in Montreal, among other examples. Beyond this, several thousand supplier firms provide engineering, environmental, transportation, and other expertise to the industry. Internationally, companies funded on the Toronto Stock Exchange have over 4,000 mining projects in play in foreign countries, and Canadian mining firms have some $50 billion in direct investment abroad.

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Canadian Mineral Facts and Figures from the Mining Association of Canada – by Marilyn Scales

Marilyn Scales - Canadian Mining JournalMarilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

The MINING ASSOCIATION OF CANADA (MAC) released its latest “Facts and Figures 2008” publication at the recent Mines Ministers Conference in Saskatoon. In it are details about the production, reserves, exploration, trade and investment, innovation, tax and human resource aspects of our industry. That’s a lot of ground to cover in 65 pages, but MAC is once again the most comprehensive source of such numbers.

Here are a few of them:

VALUE: The contribution that the metals and minerals industry makes to Canada’s economy by value is relatively stable at 3.5% to 4.5%. Meanwhile, the gross domestic product (GDP) grew to $1.2 trillion in 2007. Of that amount, mineral extraction contributed $9.68 billion and mineral manufacturing $32.22 billion.

TOP TEN: Canada’s top ten minerals by value in 2007 were nickel ($9.90 billion), copper ($4.53 billion), potash ($3.14 billion), coal ($3.14 billion), uranium ($2.76 billion), iron ore ($2.51 billion), gold ($2.38 billion), Continue Reading →

Mainstream Media Ignorance About Mining – Especially Waste Disposal – by Marilyn Scales

Marilyn Scales - Canadian Mining JournalMarilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

I’ve let the daily press get under my skin again. Newspapers and the CBC are telling the public that mining companies are going to destroy pristine Canadian lakes by turning them into dump sites for toxic mine waste. Why does the popular press still think that everything coming from a mine operation is “toxic”? Has no one outside the mining industry ever heard of sub-aqueous deposition?

There are 16 projects for which mining companies have applied to use lakes as tailings repositories, claim the environmentalists. The list includes the following 15:

BRITISH COLUMBIA
– NORTHGATE MINERALS – Kemess North (Duncan Lake)
– SHERWOOD COPPER – Kutcho Creek (Andrea Creek)
– ADANAC MOLY – Ruby Creek (Ruby Creek)
– TASEKO MINES – Prosperity (Fish Lake)
– IMPERIAL METALS – Red Chris
– TERRANE METALS – Mount Milligan

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What Has Gone Up Will Come Down – by Marilyn Scales

Marilyn Scales - Canadian Mining JournalMarilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication.

I am no economist, and I don’t have a magic formula to predict the future of commodity prices. Instead I read other people’s prognostications and watch for trends. Sadly, the trend that has is emerging involves a downturn in the cyclical high that miners have enjoyed since 2002.

For what my advice is worth, watch the US dollar get stronger. It would appear the recession caused by the sub-prime mortgage fiasco in that country was short-lived. The relative worth of the American dollar affects global commodity markets.

The price of crude oil has dropped from its US$145/bbl high in mid-July to below US$109 despite Hurricane Gustav’s trek across the Gulf of Mexico. The storm blew through the oil-producing region at a relatively mild strength of Category 2 and 1. Analysts who said only a week ago that Canadian gas prices would skyrocket to C$1.75/litre are now saying they will drop even further than the C$1.25/litre it is in Eastern Ontario today.

Everyone jumped on the bandwagon as the gold price topped US$1,000/oz in mid-March. Exploration, development and takeover activity reached a fever pitch. But the high cannot be sustained. With the exception of a brief rise to US$977/oz six weeks ago, the gold price continues to slide, closing just short of US$800/oz on Sept. 2. I would hazard a guess that no other metal price reflects such an inverse correlation to the value of the U.S. dollar.

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Honourable Prime Minister of Canada Stephen Harper – Geo-mapping for Northern Energy and Minerals Program Speech – 26 August 2008, Ottawa, Ontario

Honourable Prime Minister of Canada - Stephen Harper

Good morning, ladies and gentlemen.  First of all, thank you Gary Lunn for your introduction, and thank you for all the work you’ve done as our Minister of Natural Resources to make today’s important announcement possible.  Greetings to Daniel Caron, Jeffrey Murray and to everyone here who has joined us at the Library and Archives Canada, which is acting as our gracious host this morning.

Ladies and gentlemen, later today I will begin another tour of Canada’s North.  I’ve done this at least once each year since becoming Prime Minister.  I look forward to going north because I see some of Canada’s most spectacular landscapes and I meet some of Canada’s most hardy and dynamic people.  As Prime Minister, I have visited all of the territorial capitals, met polar bears in Churchill, tried dog sledding in Yellowknife.  I’ve looked over the breathtaking Nahanni Falls, visited the future site of a year-round military training base at Resolute Bay, concluded a land claims agreement at Kuujuuaq and stood at the future deep water port of Nanasivik. 

I’ve even dipped my toe into the Arctic Ocean at Alert, the northernmost human settlement on Earth.  Each time I do this, it’s really a great experience, and I come back to Ottawa inspired by the vastness, the beauty and the potential of our North.  And each time I return more determined than ever to draw the gaze of all Canadians northward. 

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Canada Will Rule the North – by Marilyn Scales

Marilyn Scales - Canadian Mining JournalMarilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication.

In a bid to encourage economic development and defend Canadian sovereignty throughout the North, the federal government announced a new program of geo-mapping for Canada’s Arctic.

Prime Minister Stephen Harper made the announcement on Aug. 26, 2008, noting, “As I’ve said before, ‘use it or lose it’ is the first principle of sovereignty in the Arctic. To develop the North we must know the North. To protect the North, we must control the North. And to accomplish all our goals for the North, we must be in the North.”

Sovereignty in the North may not be a concept that miners frequently consider. Yet it is essential if Canadians are going to benefit from the potential natural resources. I include fresh water along with the metallic, diamondiferous and hydrocarbon deposits of the region. The United States is offering to claim sovereignty over the Arctic landscape, but that is not in our interests.

We must as Canadians make it very clear that the North—its people and its wealth—belong to us. The new federal initiatives will help ensure that reality. Promoting the mineral industry’s interests is a great way to do that.

The geo-mapping program will combine field research and advanced scientific analysis to provide Canadians with a fuller assessment on the extent of mineral and energy resources in the Canadian North. This information will help generate additional investment and economic development in Canada’s northern communities.

The geo-mapping announcement is the latest example of the government’s commitment to protecting Canada’s North. In the past week, Minister of Defence Peter MacKay has participated in Operation NANOOK, a major Canadian Forces Arctic defence exercise, and Minister of the Environment John Baird has announced three new National Wildlife areas on or around Baffin Island. Also, Secretary of State for Small Business Diane Ablonczy announced a major expansion of broadband services throughout the North.

Alaska Votes for Gold, Not Fishing – by Marilyn Scales

Marilyn Scales - Canadian Mining JournalMarilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication.

This week the voters of Alaska were asked to decide whether or not they favour prohibitive clean water regulations for new mines in that state. Ballot Measure 4 was aimed specifically at stopping Vancouver’s NORTHERN DYNASTY MINERALS (50%) and South Africa’s ANGLO AMERICAN from completing the Pebble gold mine.

The potential of the Pebble deposit is huge. The property is believed to contain 91.6 billion lb of copper, 84.6 million oz of gold and 5.5 billion lb of molybdenum in the inferred resource category. What concerns opponents is that the deposit is located near the headwaters of Bristol Bay, one of the world’s greatest salmon runs. The sport and commercial fisheries would be crippled if the salmon habitat were damaged.

The initiative was brought by a Washington, D.C.-based lobbying group. Alaska allows legislature to be initiated by voters as well as the state legislature. While Measure 4 did not mention Pebble by name, the target was obvious. Passing it would have effectively delayed or stopped other mine developments, for example, the Donlin Creek gold project belonging to BARRICK GOLD and NOVAGOLD RESOURCES. TECK COMINCO’s planned expansion of its Red Dog zinc mine might have been delayed.

In case the reader has not quite guessed yet, the measure was defeated on Aug. 26. The outcome was not as close as predicted. Almost 57% of voters were opposed and only 34% in favour. That is a result we applaud because we know the mining industry is mindful of local flora and fauna and does all it can to mitigate potential harmful effects. The Hope Brook gold mine that operated from 1987 to 1997 on the southwest coast of Newfoundland was located in a salmon habitat. The fish survived nicely, in fact mine workers were forbidden from fishing or even bringing fishing gear to the site.

Canada does not allow its voters to initiate legislation, and perhaps that is a good thing. Imagine heavily populated Toronto swaying a vote against expansion at XSTRATA COPPER’s Kidd mine or against development of DE BEERS CANADA’s Victor diamond mine. Suppose the residents of Canada’s southern cities said “no” to AGNICO-EAGLE’s Meadowbank gold mine in Nunavut. On the other hand, if voters in Indonesia had stepped in to stop exploration at the Busang project, the entire BRE-X fiasco might have been prevented.

Danger Lurks Despite Modern Technology – by Marilyn Scales

Marilyn Scales - Canadian Mining JournalMarilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication.

The mining industry has made great strides toward establishing workplaces that are safe and healthy for employees. We almost take for granted our computer-assisted, automated and equipment-enabled jobs. For many in the mining and exploration sectors, helicopters are the only transportation that can reach remote locations. For some a trip on a “chopper” is as routine as tying on their boots.

But sometimes technology lets us down. The technology that allows modern helicopter to fly so that drill crews can reach remote sites failed last week, and people died.

One crash happened near Alice Arm about 150 km north of Prince Rupert, B.C. Four passengers lost their lives. Dead are the pilot David Jeffrey Reid of Sidney, B.C., two employees of Bodnar Drilling, Walter Bodnar and his nephew Nicholas Bodnar (both of Rose du Lac, Manitoba). Also killed was a prospector, Frank Moehling of Calgary. They were headed to the Homestake Ridge property belonging to Bravo Ventures.

The Hughes MB500 helicopter that went down on Aug. 6 belonged to Prism Helicopters of Pitt Meadows, B.C. It was chartered by Vancouver’s Bravo Venture Group that is testing its Homestake Ridge copper-gold property.

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More Mines, Lower Commodity Prices on Horizon – by Marilyn Scales

Marilyn Scales - Canadian Mining JournalMarilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication.

We have all heard that “timing is everything”, and that truism applies as much to mine development as to anything. It seems that there is a growing number of new mines planned in Canada just as analysts warn of major corrections in commodities prices.

Softer prices are a result of a strengthening U.S. dollar, according to analysts. Oil prices have dropped to a three-month low, if one considers $119/bbl to be low. Perhaps it is compared to $140/bbl. The much-anticipated $1,000/oz threshold for gold was topped only three days in March 2008. The price of the yellow metal has been bouncing up and down since then from $850 to $990, averaging $900 so far in August. Copper has fallen from its high of over $4.00/lb in June this year back to approximately $3.50, and the pundits predict further losses. The zinc price is continuing to slide from its late 2006 high of slightly over $2.00/lb to under $1.00. Nickel reached a high of $24.00/lb in the first half of 2007, but it, too, is giving up ground, finishing June 2008 in the $8.00 neighbourhood. Analysts are beginning to say that even potash prices have peaked. And so it goes.

All of us mining industry watchers know this is a cyclical sector. Five years of rising prices have spurred exploration efforts around the world and across Canada. Many would-be miners want to cash in on the boom. The question becomes how many of them can do that before prices soften to the point that projects are once again shelved?

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Canada Reduced to “Branch Office” Status – by Marilyn Scales

Marilyn Scales - Canadian Mining JournalMarilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication.

Has Canada been reduced to the level of a mere “branch office” in the global mining industry? That’s what Don Argus, chairman of BHP BILLITON, called this country at a recent business gathering in Brisbane, Australia. He was talking about two years of mergers when a large chunk of our base metals industry passed into English, Swiss and Brazilian hands. Argus is concerned lest the Australian mining industry meet the same fate.

For decades Canadians have been leaders in the highly technical business of finding and mining deposits in some of the harshest conditions imaginable. They still are. The fact that our industry attracted the attention of foreign suitors speaks to that. To be called a “branch office” is an insult.

But, truth be told, Canadians have lost control of a large part of a very important industrial sector. Part of the blame belongs to the federal government for allowing the takeovers to happen. Part of the blame belongs to investors who failed to see opportunities in the Canadian resource sector.

A measure of how far Canada has fallen can be seen in this fact: Canada has lost more mining head offices than any other country since 2003. Numbers compiled by PRICEWATERHOUSECOOPERS show that 12 of the world’s top 40 mining companies called Canada home four years ago. Since then, seven of the 12 have been taken over.

If the trend continues, what will be left for Canadians? Will all the profits from our natural resources (minerals, fuels, water) leave the country? Will research opportunities move offshore? Will Canadian jobs be the first to go when the mineral industry reaches its next cyclical downturn? Will Canada be poorer for losing its domestic mineral industry?

The answer to the last question is “yes”. I doubt there will be much argument there. The arguments will start when someone thinks he can reverse the trend.

Canada’s Minister of Natural Resources – The Honourable Gary Lunn – Toronto PDAC Speech

Honourable Gary Lunn - Canadian Minister of Natural Resources - Toronto PDAC -Government PhotoGood morning, everyone. Thank you, Pat [Pat Dillon, President of the Prospectors and Developers Association of Canada] for that kind introduction. It’s a great privilege to speak to the largest gathering of mining prospectors and developers in the world.

I want to thank Pat and PDAC for the invitation and also extend a special greeting to those of you who are here in Canada from all over the world for the first time.

Canada is one of the world’s leading mining countries, and our government continues to work with you to ensure we stay at the forefront.

It was a great week last week for both the mining and exploration industry. We tabled our federal budget – there were several investments that will benefit the Canadian minerals and metals sector, both directly and indirectly, and I’ll touch on those in a few minutes.

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Canada’s Minister of Natural Resources – Gary Lunn – An Introduction

The Honourable Gary Lunn - Canada’s Minister of Natural ResourcesThe Honourable Gary Lunn was appointed Minister of Natural Resources by Prime Minister Stephen Harper on February 6, 2006. Since 1997, he has been the Member of Parliament for the beautiful Saanich –Gulf Islands in British Columbia.

The Natural Resources portfolio is well suited to Minister Lunn because his early working days were spent in the mining and forestry industries in British Columbia and northern Canada. This experience has allowed him to understand first-hand the importance of Canada’s natural resources to our present and future prosperity.

Minister Lunn speaks frequently about the need to streamline the regulatory approval process for energy and mining projects in Canada, and has made this a personal priority.

In the February 26, 2008 budget, the government committed to the establishment of a new framework for Aboriginal economic development by the end of 2008, dedicating $70 million over the next two years for Aboriginal economic development measures to support the framework. In announcing this framework, the Budget makes special mention of the role that the mining and resource sectors serve in creating economic opportunities for Aboriginal Canadians.

The Federal Budget committed $34 million over the next two years to Natural Resources Canada for geological mapping, primarily focused in Canada’s North, and for logistical support for mapping activities provided by the Polar Continental Shelf Project.

The Budget also announced a commitment to renew the Mineral Exploration Tax Credit (super flow-through share program) for a further year until March 31, 2009. The temporary 15-percent Mineral Exploration Tax Credit is an incentive available to individuals who invest in flow-through shares that are used to finance grassroots mining exploration. Extension of the credit will support continued exploration for new mineral reserves in the North and other regions of Canada.

A journeyman carpenter, Minister Lunn has designed and built numerous homes, including his family’s current home in Sidney, British Columbia. He and his wife Alexis have two children, David and Victoria.