Analysis: As Canada’s junior miners flounder, long-term damage looms – by Allison Martell and Euan Rocha (Reuters Canada – July 25, 2013)

TORONTO (Reuters) – Hundreds of small mineral exploration companies may have their stock delisted by Canada’s TSX Venture Exchange in the coming months, choking off a development pipeline that has long supplied major miners with new projects.

As commodity prices boomed in the last decade, a flood of new issuers swelled the ranks of the Venture, TMX Group Inc’s exchange for small-capitalization companies, burnishing Canada’s reputation as the center of global mining finance.

But the money has dried up over the past two years, thanks to a slump in metal prices and a spike in costs. Hardest hit are the Venture-listed, exploration-stage companies that depend on equity financing to develop their properties to the point where they can build a mine or sell the asset to a major.

“There’s a crisis that’s looming,” said Joe Groia, a securities lawyer and former head of enforcement at Canada’s top securities regulator, the Ontario Securities Commission. “If we continue to not address it, what we’re going to end up with is literally hundreds of companies where boards are either going to walk away or hundreds of companies that are going to run out of money.”

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TransCanada touts major backing as premiers to discuss west-east pipeline – by Shawn McCarthy and Adrian Morrow (Globe and Mail – July 25, 2013)

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.

OTTAWA AND NIAGARA-ON-THE-LAKE, ONT. — TransCanada Corp. says it has garnered significant support for its quest to ship Western crude to refineries in the East, as premiers seek consensus on a politically charged cross-country pipeline.

The Calgary-based company told The Globe and Mail it has received major backing from producers who want to ship crude on its Energy East pipeline, and will make an announcement in the coming weeks.

Canada’s premiers will discuss the proposed pipeline – which has been championed by Alberta and New Brunswick – at the Council of the Federation this week in Niagara-on-the-Lake, Ont.

The discussions take place as Quebec Premier Pauline Marois grapples with the fallout from the catastrophic train derailment in Lac-Mégantic, which has raised questions about the safety of transporting oil. Alberta Premier Alison Redford and New Brunswick’s David Alward will highlight the proposal as a nation-building project as the premiers gather for the annual meeting.

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Ferrochrome: An Industry Moving Beyond South Africa – by Stuart Burns (Metal Miner – March 11, 2013)

Part One

When you think of ferrochrome, you traditionally think of South Africa. Indeed, power supply problems in South Africa have been a major source of volatility for FeCr prices over the last few years, as the state power utility Eskom has struggled to provide enough electricity for industrial and residential users.

Ten years ago, over half the world’s FeCr came from South Africa, but since then Kazakhstan, India and China have all risen in prominence, with China moving into top spot last year, as this graph from HSBC shows.

South Africa continues to face power problems; currently Eskom is engaged in a power buy-back agreement with FeCr producers resulting in the probable loss of about 100,000 tons of production, according to an HSBC metals & mining survey, as Xstrata–Merafe closes at least five of its 20 furnaces.

Even if this cutback is reversed in the second half of 2013, South Africa’s expensive winter tariffs will then kick in, further impacting utilizations rates.

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Kathleen Wynne ‘involved all along’ in gas-plant cancellations, opposition says – by Sue-Ann Levy (Toronto Sun – July 25, 2013)

A little more than six weeks ago at the committee hearing evidence into the gas plant scandal, Premier Kathleen Wynne denied — under oath — all involvement in the decision to cancel the plants or to delete key e-mails related to a move that could cost taxpayers as much as $1-billion.

“Those were decisions that were made by other people in other conversations and I wasn’t part of those conversations, I wasn’t in those rooms,” the premier said at the time.

At the time I was highly skeptical that she sat on the sidelines blissfully unaware of this evolving scandal considering she was co-chair of the 2011 Liberal election campaign.

But when a letter surfaced Wednesday — in response to a request from the gas plant committee to dig deeper for the supposedly deleted gas plant e-mails — it pointed to far more involvement by Ontario’s unelected premier than she’d care to admit.

In that letter, deputy minister of government services Kevin Costante confirms to the Standing Committee on Justice Policy that — poof! — as if by magic some 3,226 backup tapes have been suddenly been found for 13 Liberal politicians and staffers that could contain “potentially responsive” e-mails related to the cancellation of the two gas plants in Oakville and Mississauga, a.k.a Project Vapour Lock.

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No quick fix as Anglo’s new boss prepares to woo investors – by Clara Ferreira-Marques (Reuters U.K. – July 24, 2013)

LONDON, July 24 (Reuters) – Anglo American’s new boss will lay out his stall on Friday after four months in the job and while investors are not counting on a quick fix, they are betting his plans will include cost cuts, more disciplined spending and potential asset sales.

Anglo, the smallest of the major diversified miners, has underperformed its peers, most recently battling labour unrest in South Africa, where it generates half its earnings, and multi-billion dollar cost overruns in Brazil.

Investors piling into BHP Billiton, Rio Tinto and Anglo in 2006 would have made more than one and a half times their money at BHP and seen returns of 65 percent at Rio. But they would have lost money at Anglo – a negative total return of around 16 percent, according to Reuters data.

Anglo posted its first loss in a decade in 2012, a year of hefty writedowns and CEO departures across the industry. According to Citi, last year Anglo’s return on equity, a measure of profitability, hit its lowest level since the 1930s.

So while the market may not be preparing for what some analysts called a “big bang” menu of asset splits or a radical and frequently debated platinum spin-off – all are demanding change from boss Mark Cutifani, an Australian former miner and engineer who joined from bullion producer AngloGold.

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Financial, human toll of ‘horrific’ Big Gossan accident costs FCX dearly – by Dorothy Kosich ( – July 24, 2013)

28 fatalities, the loss of millions of pounds of copper and thousands of ounces of gold, as well as creating a new oil & gas subsidiary, slammed FCX’s 2Q.

RENO (MINEWEB) – The tunnel collapse in a Freeport-McMoRan Copper & Gold training facility in Indonesia “was an incredibly horrific convergence of events that came together because of the geology of the rock and the influence of water and air on our ground support facilities, and unfortunately just happened as we were having this training meeting,” CEO Richard Adkerson told analysts during a conference call Tuesday.

On May 14th, the accident occurred at PT Freeport Indonesia, which resulted in 28 fatalities and 10 injured when the rock structure above an underground ceiling for a training facility collapsed in an unprecedented and unexpected event. While the accident occurred outside of mining operations, mining and processing activities at the Grasberg complex were temporarily suspended as Indonesian government authorities also conducted inspections.

“In the quarter, we lost roughly 125 million pounds of copper and 125,000 ounces of gold,” said Adkerson. “The full year impact will be greater than that. We estimate 230 million pounds of copper and 250,000 ounces of gold.”

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Ring of Fire talks between First Nations, province to start soon – by Alisha Hiyate (Mining Markets Magazine – July 23, 2013)

Bob Rae on his new gig as chief negotiator for the Matawa Tribal Council

Talks between First Nations and the Ontario government regarding development in the remote Ring of Fire area are set to start soon, now that both sides have appointed lead negotiators.

In May, the Matawa Tribal Council, which is made up of nine First Nations communities that would be most affected by potential development in the Ring of Fire, announced that lawyer and politician Bob Rae will be their chief negotiator. Rae was the leader of the federal Liberal party until mid-April, and premier of Ontario from 1990-1995. He will step down as MP for Toronto-Centre at the end of July, freeing him to work on the negotiations full time.

Earlier this month, the province named its own chief negotiator — retired Supreme Court Justice Frank Iacobucci.

While commodities prices have seen a big pullback since 2011, it might actually be a good time for such negotiations — the scope of which is yet to be defined, but will likely include investments in education and health, as well as infrastructure, and will clearly take time to conclude.

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Japan has vision for California-style ‘platinum valley’ in SA – by Helmo Preuss (Business Day Live – July 23, 2013)

JAPAN plans to encourage a “platinum valley” in South Africa similar to the US’s Silicon Valley, minister in the Japanese embassy in Pretoria Ken Okinawa told BDlive in an exclusive interview last week.

“What we want to do is encourage South Africa to establish a kind of platinum valley here similar to Silicon Valley in California. This facility would aim to find new uses for platinum, while also addressing issues such as job creation and beneficiation,” he said.

To promote this, a senior Japanese expert in fuel cells would shortly come to South Africa, he said.

Government-led projects have supported the commercialisation of fuel cells for many years in Asia, Europe and North America, and this has led to cost reduction, technological advancements and customer acceptance.

Yoshinori Tanaka of the national policy unit in Japan said in 2012 that the need for platinum group metals was likely to increase as more fuel cells that used platinum as a catalyst were installed in cars and homes.

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Mark Cutifani to set out his vision for Anglo American – by James Wilson and Andrew England (Financial Post – July 22, 2013)

Metals prices are under pressure. Costs remain sky-high. And disgruntled shareholders want more money back. Yet still there is a consolation for most mining chief executives: their problems are not as bad as Mark Cutifani’s.

At Anglo American, the diversified miner he has led since April, Mr Cutifani does not merely have to pep up the company’s financial performance. In South Africa, where Anglo’s roots date back nearly 100 years, he has to show political savvy to negotiate a sometimes violent environment of labour unrest and government anger. In Brazil, Anglo’s flagship iron ore project is wildly over schedule and budget.

This week Mr Cutifani, one of a cohort of recently anointed chief executives at the world’s largest mining groups, has promised his first public explanation of how he intends to improve Anglo, which underperformed its peers during the mining boom. Since 2008 Anglo’s total shareholder return has halved compared with a fall of 24 per cent for Rio Tinto and a 44 per cent increase for BHP Billiton.

“The company has not been delivering on shareholder expectations,” he acknowledges. “We need a much more commercial, value-focused mindset.” Rivals including BHP and Rio have promoted insiders to their top jobs, arguably giving them a head start in addressing a markedly more pessimistic environment for the sector.

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Guatemalans can sue HudBay in Canada, judge rules (CBC News Business – July 23, 2013)

Miner faces lawsuits over alleged rapes and violence at Guatemalan mine unit

An Ontario court has cleared the way for a group of Guatemalans to sue mining company HudBay Minerals Inc. in Canadian courts over alleged shootings and gang rapes at a mining project. The ruling, handed down Monday, means that the claims of 13 Mayan Guatemalans can proceed to trial in Canadian courts, according to a lawyer for the plaintiffs.

The Guatemalans are attempting to sue over gang rapes by security personnel and military personnel at the Fenix project nickel mine near El Estor, Guatemala in 2007 and 2009. The indigenous group have also alleged a shooting at the same mine paralyzed one victim, while a local community leader who voiced opposition to the mine was beaten and killed.

Lawyers for the plaintiffs called it a “wake-up call” for Canadian miners, saying the Toronto-based company could potentially be held legally responsible at home for actions by its subsidiary in Guatemala.

“As a result of this ruling, Canadian mining corporations can no longer hide behind their legal corporate structure to abdicate responsibility for human rights abuses that take place at foreign mines under their control at various locations throughout the world,” said Murray Klippenstein, lawyer for the 13 indigenous Mayans, in a press statement.

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B.C. aboriginals entering mining industry in large numbers, report says – by Brian Morton (Vancouver Sun – July 23, 2013)

B.C. aboriginals are entering the mining profession in growing numbers and a growing number of them are women, according to a report released Tuesday.

The PwC report conducted for the B.C. Aboriginal Mine Training Association also found that the dollars invested in training an aboriginal job candidate for a mining career resulted in a nearly 300-per-cent increase in annual wages for the employee, from an average of $13,754 to $52,959.

“So, for about a $15,000 investment in our employed candidates, they are contributing about $108,000 to the provincial GDP,” said association chief executive Laurie Sterritt on Tuesday. “That’s pretty impressive. There’s also a 280-per-cent increase in their salary levels, on average. “In addition to the obvious financial benefits, it provides them with confidence, empowerment, hope and possibilities, which changes lives.”

The report found that an investment of $14,808 trains one candidate and generates approximately $106,804 on average for the provincial economy through higher wages and increased spending. As well, each employed graduate generates about $20,000 in government revenue.

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Energy has risks. We learn to manage them – by Kenneth Taylor (Globe and Mail – July 24, 2013)

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.

Kenneth Taylor retired in 2012 after a 35-year career as an environmental-social planner in the natural gas pipeline industry. He lives in Calgary.

The recent tragic events in Lac-Mégantic, Que., have brought a well-deserved sharper focus to the public discourse on the risks of transporting and handling the fuels that power our everyday world. After several years in which pipeline transport of oil has been the fashionable target for those who are inclined to protest elements of our modern world, railways have now moved into the crosshairs. This gives us an opportunity to reconsider how our society assesses and manages the relative risks of transporting and handling energy.

Each form of the energy we rely on has inherent characteristics that result in risks we must manage for our everyday safety. After long periods of usage, society learns what these risks are and, considering the consequences, develops strict codes of safe use. For example, electricity has its dangers, but in its household power or battery forms, it works beside nearly every one of us virtually 24 hours a day.

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Newfoundland, Quebec heading for a showdown over Muskrat Falls power plant – by Steven Chase (Globe and Mail – July 24, 2013)

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.

Newfoundland and Labrador Premier Kathy Dunderdale will find herself face to face with Quebec counterpart Pauline Marois on Wednesday as the Atlantic Canadian leader pushes for greater control in a bitter, decades-old feud over the sale of electricity generated by hydro power in Labrador.

On the eve of an annual premiers meeting in Niagara-on-the-Lake, Ont., Ms. Dunderdale went public with a sharp attack on the Quebec government’s power utility, accusing it of making a “desperate move” to thwart Newfoundland and Labrador’s power business plans.

The Atlantic province, which believes it got a raw deal in a long-term supply agreement with Quebec, says it expects to gain a greater say over power deliveries to its neighbour in 2016 when the energy contract is automatically renewed for 25 years.

Newfoundland and Labrador, which owns two-thirds of the existing Churchill Falls generating station through a Crown corporation, says it believes that as of the renewal date, it will be able to revise its delivery schedule for Quebec-bound electricity so that it can operate the facility in tandem with the $7.7-billion Muskrat Falls hydro power development planned for downstream.

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Ottawa gives railways new guidelines for hazardous goods in wake of Lac-Mégantic tragedy – by Shawn McCarthy and Jacquie McNish (Globe and Mail – July 24, 2013)

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.

OTTAWA AND TORONTO — The federal government has issued new safety guidelines for railways carrying hazardous goods after being urged to do so by the Transportation Safety Board in the wake of the fatal derailment in Lac-Mégantic, Que.

Transport Canada announced an “emergency directive” Tuesday that requires rail operators to ensure all trains loaded with hazardous goods are run by at least two qualified people. It also said no such trains can be left unattended on main tracks and tightened rules covering the use of handbrakes and other equipment that would prevent an unattended train from moving.

The rules come as the Conservative majority on a House of Commons committee rejected an NDP effort to begin studying rail safety in Canada, with the government side arguing that the committee should wait for more information on what caused the accident and that a parliamentary study now would draw critical resources away from the investigation.

The government acted just four days after a call for new regulations by the Transportation Safety Board, which is investigating the deadly accident.

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Compromises necessary in review of [B.C.] Prosperity mine – by Barbara Yaffe (Vancouver Sun – July 22, 2013)

Environmental interests must balance with job creation potential

VANCOVUER — As a Hollywood movie it would be titled Dead Mine Walking, according to a B.C. aboriginal group fighting a gold and copper development near Williams Lake.

In reality, the proposed New Prosperity Mine in the Cariboo-Chilcotin region is experiencing a “Take Two” moment, undergoing its second federal environmental review. An earlier Prosperity mine proposal, put forward by Vancouver-based Taseko Mines, was rejected back in 2010 by a similar federal panel.

The company has since overhauled its plans, pledging to preserve nearby Fish Lake, which it previously planned to use as a tailings pond repository. Taseko notes it is spending $300 million to mitigate impacts on wildlife and habitat in the area.

The company hopes such measures will help it win the nod from the review panel, which consists of an environmental assessment specialist from Calgary, a community consultation expert from Sidney, and a Victoria geologist.

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