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Canada Mining

Mining Accidents Do, and Will Continue to Happen – by Russell Noble

Russell Noble is the editor of the Canadian Mining Journal, Canada’s first mining publication. This editorial is from the May, 2010 issue.

Accidents but worst of all, deaths have been associated with mining ever since the Stone Age so I’m not surprised when I hear of people getting hurt or even killed by rocks.

Given they are harder than humans in their natural makeup, it’s no wonder that people nearly always come out second when rocks decide to fight back. Even “hard-as-rock” individuals are no match for their namesakes.

Cave-ins, slides, or even chips flying from the blow of a hammer or shrapnel from an unplanned explosion usually results in injuries or worse and as we all know, the latter has made too many headlines lately.

China’s Wangjianling coal mine in Xiangning, Barrick’s Bulyanhulu gold mine in Tanzania and most recently Massey Energy’s disaster in West Virginia are just few examples of what I’m talking about and being realistic about it all, similar occurrences will happen again, and again, and again.

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Deals Underscore Chinese Interest in Canada’s Mineral Riches – by Marilyn Scales

Marilyn 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.

Not so long ago, say 10 years, the Chinese were thought of as a poor, insular nation, mysterious and of a peculiar political stripe. Now we must lay aside those notions and recognize that China is an economic powerhouse. Whatever remains of “communism” in that country is proving to have very capitalistic talents. Hence, the many foreign investments made in the last two years while the rest of the world suffered economic meltdown.

Here are a few of the investments made by Chinese investors outside that country in the past two years:   
 
-Aluminum Corp. of China (Chinalco) attempted to invest US$19.5 billion in Rio Tinto
-China Minmetals made a A$2.6 billion bid for Australian miner Oz MineralsChina Mining United Fund bought into Canadian juniors including

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Key Economic Points About the Canadian Mining Sector – by Paul Stothart

Paul 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. www.mining.ca This column was originally published November, 2009.

Late summer and fall are always busy times for the mining industry on the economic policy front. Typically, the Mining Association of Canada releases its annual “Facts & Figures” report in August and also prepares a formal industry submission in advance of the meeting of federal, provincial and territorial energy and mines ministers held each fall. The federal government’s pre-budget process also starts in late summer, launched with a submission deadline set by the Finance Committee. The key messages reflected in MAC’s ministerial comments, pre-budget views and “Facts & Figures 2009” follow.

The mining industry is important to the economy

The industry, as defined by Natural Resources Canada, contributes $40 billion to Canada’s GDP, employs 350,000 people, pays approximately $13.5 billion in taxes and royalties, contributes 19 per cent of Canadian exports and generates business for 3,140 supplier companies. It creates value in urban, rural and remote regions and its products are fundamental to modern life and to the emergence of clean energy technologies.

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Show Us the Money: Canada’s Federal and Provincial Outlooks to Mining – by Marilyn Scales

Marilyn 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.

“Money” was the word on the industry’s lips last week as the federal, British Columbia and Ontario governments brought outlined their spending plans for the future. A mining-friendly government helps keep our industry healthy, so let’s take a look at what we can look forward to.

First out of the gate on March 2 was the Throne Speech from Ottawa. In it the federal government promised to develop a clearer process for project approval and a commitment to both Northern development and Aboriginal Canadians.

The speech was lauded by Mining Association of Canada (MAC) president Gordon Peeling, who said, “These issues in today’s Speech from the Throne will enhance the contribution that the mining industry can make to all Canadians by improving the investment climate, bringing efficiency and clarity to our regulatory processes and strengthening our skilled workforce.”

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Why We Need to Defend our Canadian Mining Industry against Bill C-300 – by David Clarry

David Clarry is a management consultant focused on project development, project financing and business improvement in the mining, energy, and cleantech sectors.  His career has included 19 years with the prominent Canadian engineering and consulting firm Hatch Ltd., as a Director in the management consulting and environmental practices.  Prior to Hatch David worked for DuPont and General Electric. His expertise includes general business management and project management.

David’s projects have spanned North and South America, Asia, Australia, Europe, the former Soviet Union, and Africa. He brings particular strength in building project teams that integrate technical, environmental, management and financial perspectives.  He has led projects for mining and metals companies, equipment manufacturers, utilities, governments, and financial institutions. 

Why you need to read this?

Bill C-300, the “Corporate Accountability of Mining, Oil and Gas Corporations in Developing Countries Act”, was introduced as a Private Member’s bill in February 2009 (initially solely to prompt the government to respond to the CSR Roundtable process).  While the objective of improving CSR performance is laudable, this bill, written with no consultation with the mining industry,  in fact will likely work counter to that objective.  There are fundamental flaws in the bill, and its main proponents seem more interested in attacking Canadian mining companies than in improving CSR performance. 

In the words of the petition being circulated by the sponsor of the bill “the alleged abuses of human rights and the degradation of the environment by Canadian mining companies is a violation of the principles of fundamental justice …”.  This bill ignores the leadership of the Canadian mining industry in CSR.

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The Oil Sands and Climate Change — Some Important Considerations – Paul Stothart

Paul 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. www.mining.ca This column was originally published October, 2009.

The development of the western oil sands constitutes one of the world’s most significant economic stories of recent decades. Technological advances and increases in crude oil prices from $20 per barrel in the 1990s to $140 in mid-2008 together reinforced the oil sands’ economic viability and, through hundreds of billions of dollars of investment, sustained its production growth from test-well quantities to volumes exceeding one million barrels per day.

As with any source of energy, the process of extracting oil from oil sands raises a range of environmental issues. Its rapid development has served to position this sector as target number one among some environmental groups. In this respect, it is important that NGOs and public policy stakeholders not ignore some key realities.

Economic contribution

Oil sands development has increased wealth and economic activity in western Canada during the past decade, creating 200,000 jobs, including many in central Canada that helped to offset job losses in the manufacturing sector. It is also estimated that each direct job translates to nine additional jobs among suppliers and indirect beneficiaries.

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Canada’s Mining Ministers Urged to Support Mineral Industry Growth – by Marilyn Scales

Marilyn 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.

ST. JOHN’S — The 66th Mines Ministers Conference was urged once again to take active measures in support of the Canada’s mineral industry. The plea came from the Canadian Mineral Industry Federation (CMIF), a group of 17 mining-related associations headed by the Mining Association of Canada (MAC) and the Prospectors and Developers Association of Canada (PDAC).

First, the ministers were reminded of mining’s economic importance to Canada. It contributed $40 billion to the country’s gross domestic product (GDP) and provided 351,000 jobs in 2008. There are an estimated 3,140 suppliers to the industry. The mining industry paid $11.5 billion in taxes and royalties to all levels of government. 

There are challenges ahead for the industry, and the CMIF brief addressed them.

1. Enhance commitment to the core mandate of natural resource ministers

 Many organizations, government departments and NGOs have adopted an aggressive anti-mining focus. It is critically important that Canada’s natural resource ministers maintain and enhance their dedication to economic development. In this sense, advocacy for infrastructure projects, for more open access to minerals, for northern development, and for tax incentives to encourage increased investment, among other objectives, remains fundamental.

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Gold Resources and McEwen’s Junior Index – by Marilyn Scales

Marilyn 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.

It is difficult to overstate the importance of gold. It has been prized as decoration as long as humankind has been around. It makes a solid foundation for world banking. It has been fought over. It is the stuff of which legends are made. And gold is undeniably beautiful.

Most of the general public and the mineral industry snap to attention when gold is in the news. Reports of new gold finds are especially welcome. But they may be fewer and farther apart if the findings of Halifax’s Metals Economics Group (MEG) are accurate. (www.MetalsEconomics.com) 

MEG examined the costs of finding and acquiring gold reserves and found that overall the industry is not discovering new deposits fast enough to meet future production demand.

The report looked closely at major gold producers, those with an output of 450,000 oz or more in 2008. They overcame “… rising costs, equipment and labour shortages, electrical outages, wars, permitting hurdles, typhoons, political opposition, and other obstacles,” the report noted to replace reserves at twice the rate they are mining them. Most of these gains were made through acquisitions or upgrading existing resources due to the high gold price, not through grassroots discoveries.

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New PwC Survey Paints Gloomy Picture of Mining – by Marilyn Scales

Marilyn 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 latest news from PricewaterhouseCoopers (PwC) is very gloomy. The survey, titled Mine: When the going gets tough, is full of bad news.
 
Unfortunately, PwC reports a market capitalization of the world’s top 40 mining companies has dropped by 65%. The cutoff for inclusion in the top 40 was a capitalization of $2.3 billion in 2008 rather than $9.0 billion as was the case in 2007. The firm blames the fall of commodity prices and the impact of the global economic crisis on investor confidence for the decline.

Gold companies were least affected. Their market capitalization decreased by only 20%, thanks to the perception that gold is a safe haven during economic turmoil. There are now 14 gold companies in PwC’s top 40, and together they comprise 26% of the total market capitalization. 

Investor returns were lower last year, too. In 2008, only three of the top 40 companies reported positive total shareholder returns. The four companies reporting the greatest decline dropped 75% or more. The picture is even gloomier when compared to the 2007 numbers. Fourteen of the previous year’s top 40 had returns of more than 100% and four reported a whopping 400%.

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The Chinese are coming! The Chinese are coming! – by Marilyn Scales

Marilyn 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.

Readers are advised to get out their chopsticks and start practising because the Chinese are coming to Canada. In two separate deals since the beginning of this year, Jilin Jien Nickel Industry has shelled out cash to gain a toehold in potential new nickel producers.

In April, Jien agreed to advance $30 million to Edmonton’s Liberty Mines. Liberty has suspended work at its Redstone nickel mine, but it is hoping to reopen the McWatters nickel-copper mine and make a development decision on the Hart nickel-copper-PGE project. These projects are all near Timmins, ON, and all have measured and/or indicated resources.

For its investment, Jien has received 51% of the issued and outstanding Liberty common shares. The Chinese partner also holds close to 187 million convertible and redeemable preferred shares. If all the preferred shares are converted, Jien will hold 76.8% of Liberty. Jien will also appoint four of the seven Liberty directors.

Separately, Jien has become a joint venture partner with Vancouver’s Goldbrook Ventures on Goldbrook’s Raglan Belt property in northern Quebec.

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Australia Prepares to Overtake Canadian Uranium Production – by Marilyn Scales

Marilyn 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.

Australia will quadruple uranium production pushing itself ahead of Canada as the world’s largest producer. Australian state premier Mike Rann made this boast to a group of Indian journalists at the Citi Australia and new Zealand Investment conference earlier this month, according to a report in The Hindu of March 8, 2009.

The single project that would rocket Australian uranium production ahead of Canadian is the expansion of BHP Billiton’s Olympic Dam mine. The company is looking at the feasibility of expanding output from 4,300 t/y to 19,000 t/y. That would create a single mine that could produce 35% of the world’s current uranium needs.

The newspaper account did not specify whether all those tonnes per year were elemental uranium or uranium oxide. A quick peek at the BHP Billiton website confirmed that the annual output is tonnes of U3O8.

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Money Flowing Again for Best Mining Projects – by Marilyn Scales

Marilyn 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.

There is light at the end of the ramp. There have been several financings in the hundreds-of-million-dollar range since the beginning of the year, and that leaves me hoping the worst is over for the mining community.

In early February, Osisko Mining of Montreal closed a bought deal worth C$350 million. That money is earmarked for completion of the Malartic gold project in Quebec.

Then Kinross Gold of Toronto completed a US$415-million public equity offering. The money will be used to pay down debt incurred with recent acquisitions.

Uranium producer Cameco of Saskatoon completed a bought deal that raised C$460 million. The money will strengthen the company treasury as Cameco looks for opportunities in today’s economic environment.

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Hidden Opportunity in Mining Sector Hard Times – by Marilyn Scales

Marilyn 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.

Unless you are recently returned from a remote, primitive tropical island, you are inundated daily by doom and gloom reports, not only for the mining industry but for a broad range of banking, retail, real estate, automobile and more sectors.

“Dismal” is what the latest PricewaterhouseCoopers study calls last year for juniors.

The numbers tell a “sobering tale”, Ernst & Young said of the toll the global credit crisis is taking on the market capitalization of TSX-listed companies.

The Fraser Institute called the outlook “gloomy”, expecting at least 30% of exploration companies to fail.

“The mining industry, generally, is gripped by panic and the vast majority of firms are in lock-down mode,” says Jon Wylie, managing director of Proudfoot Consulting in Canada. “They have reacted to sharply lower commodity prices by scaling back and closing older, higher-cost mines.”

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The Honourable Lisa Raitt – Canada’s Minister of Natural Resources – 2009 PDAC Speech

Toronto, Ontario
March 2, 2009

Check Against Delivery

Introducation

Thank you for that introduction.

I am pleased to be here, and extend a warm welcome to everyone – especially those of you visiting Canada for the first time.

The Prospectors and Developers Association of Canada (PDAC) is one of the premier mining associations in this country. It hosts the largest conference on mining exploration and development in the world.

I’m grateful for the opportunity to comment not only on the challenges your industry currently faces but also on the action that our Government is taking with industry and with mining communities to weather the current economic recession.

This collaborative approach will see us emerge from the current downturn to take advantage of the rebound.

Major Assets

As you know, mining is a mainstay of the Canadian economy and is vital to some 150 rural northern and Aboriginal communities across the country.

The industry directly employed over 363,000 people in 2007, and contributed $42 billion to Canada’s GDP from mining to downstream processing.

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Donald Coxe Speech for the 2009 Prospectors and Developers Association of Canada (PDAC) Convention

With 35 years of institutional investing and money management experience in the United States and Canada, Donald Coxe has a unique background in North American and global capital markets. www.donaldcoxe.com

Due to illness, Mr. Coxe could not give this keynote address at the PDAC convention. PDAC and Mr. Coxe have graciously allowed Republic of Mining.com to post the speech. www.pdac.ca

“WHEN YOU COME TO A FORK IN THE ROAD—TAKE IT”
Don Coxe,
Chairman, Coxe Advisors LLC.

Hello Toronto—I truly wish I were with you. This is a desire that goes back a long way.

Nearly 6 decades ago, when I started reading The Northern Miner, I concluded that the Prospectors and Developers Association convention must be the neatest convention in the world, and the biggest thrill would be to be giving the keynote address to that convention. I could never aspire, then, to that happening. I had to live a long time, and then I proceeded to get sick.

In that sense, it’s an abbreviation of what has happened to us all, which is that, as of a year ago, it seemed that we’d got what we wanted. It was all coming true—and all of a sudden, a financial collapse hit Wall Street. As you know, for the last 6 years, I’ve been telling people that “We are living through the greatest simultaneous efflorescence of personal economic liberty in human history.”

By that, I mean people who for the first time, (after having led lives of privation and poverty) are moving into dwellings with indoor plumbing, electricity, basic appliances, and acquiring access to private motorized transportation. The people who have those things have more personal economic freedom than 99% of the people whom have ever lived.

What’s happened in this decade is simply that a whole section of the world began to catch up to where we in the industrial world had long been, thereby transforming the outlook for the mining industry.

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