Canadian/International Media Resource Articles – Page 38

Quebec’s mining operators need a boost from the province, not a hand reaching into their pockets – by Peter Hadekel (Montreal Gazette – May 7, 2013)

May 8, 2013

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

MONTREAL — Most observers are describing Quebec’s new regime on mining royalties as a retreat from the election promises made last year by the Parti Québécois.

But while the damage isn’t as bad as first feared, the new policy adds up to a missed opportunity. At a time when mining investment is slowing down because of tumbling metal prices and weak interest from the financial community, mining operators need a boost from the Quebec government, not a hand reaching into their pockets.

Industry officials are disappointed that the new policy fails to take stock of the uncertain economic context facing the mining business.

“The cost of doing business is constantly increasing and adding another layer of taxation is certainly not the best policy,” said Michel Rathier, a consultant at KPMG Secor.

During the election campaign, the PQ promised to double the royalties on mining operations, arguing that companies were getting too sweet a deal compared with other jurisdictions around the world.

The party proposed a five-per-cent royalty on the value of production from each mine, whether it made or lost money, and a 30-per-cent “supertax” on profits above eight per cent.

Rio Tinto to press on with iron ore expansion plans – by James Regan and Sonali Paul (Reuters India – May 7, 2013)

May 8, 2013

http://in.reuters.com/

SYDNEY/MELBOURNE, May 7 (Reuters) – Rio Tinto, the world’s No.2 iron ore miner, is set to press on with plans to boost production at its Australian mines by a quarter by 2015, shrugging off pressure to slow spending and conserve cash as the commodity boom cools.

In spite of forecasts of a looming global supply glut, shareholders expect Chief Executive Sam Walsh to tell the firm’s annual general meeting in Sydney on Thursday that it’s full speed ahead with a 70 million tonnes-per-year increase that will take output to 360 million tonnes annually by 2015.

The plan means that a major additional chunk of iron ore production will enter the world market in the next few years and will add to concerns about increased supply that could weigh on a recovery in prices.

“They should continue to expand what is a high margin, high returning project, one of the best returning mining projects in the world, because growth now will mean yield in the future,” said Ben Lyons, who helps manage A$400 million ($409.42 million)at ATI Asset Management, which holds Rio shares.

Rio Tinto’s board is not expected to make a final decision on the expansion plans, estimated to cost up to $5 billion, until later this year.

PQ piles taxes on Quebec miners – by Marilyn Scales (Canadian Mining Journal – May 7, 2013)

May 4, 2015May 8, 2013

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.

As promised in the last provincial election, the Partie Québécoise has slapped new taxes on Quebec’s mining industry. Beginning in 2014 producers will pay either a royalty or a graduated tax on the company’s profit margin whichever is higher.

The royalty is set at 1% of the first $80-million-worth of production, and at 4% on amounts greater than that. It will apply to any mine regardless of profitability.

The graduated tax starts at 16% and rises to a top rate of 28%. This option claws back profits made at a given operation.

The new taxes are less than promised by the PQ during the election. They were scaled back from the $388-million target due to the recent softening of commodity prices. Nonetheless, the measures are expected to add between $73 million and $200 million to the provincial pocketbook each year.

The Quebec Mining Exploration Association (AEMQ) expressed disappointment at the new taxes. “The Quebec mining sector is already suffering from severe a financial crisis, and in the last few years, we have had to deal with significant mining taxes.

Quebec announces plans for northern development, assigns $868m – by Henry Lazenby (MiningWeekly.com – May 7, 2013)

May 8, 2013

http://www.miningweekly.com/

TORONTO (miningweekly.com) – Quebec Premier Pauline Marois and provincial Natural Resources Minister Martine Ouellet, on Tuesday outlined the province’s incumbent political party, Parti Québécois’ economic vision for developing the vast north, committing $868-million over the next five years to develop the region.

Marois, during a visit to the mining town of Chibougamau, said the bulk of the money would be spent on infrastructure, through creating the Nordic Development Fund.

“We want to develop the north responsibly to maximise the benefits for local communities and for all Quebecers,” Marois said.

Marois added government was proposing developing a new framework for funding related to infrastructure projects in the north, which would put forward practical and innovative solutions to ensure the wellbeing and the beneficial development of communities in the area, while simultaneously ensuring the harmonious and respectful development of the environment.

Investors were mostly in the dark about the government’s plans for Quebec’s north since Marois’s party defeated Jean Charest’s Liberals toward the end of last year. Marois had indicated she wanted to replace Charest’s Plan Nord project with her own vision for the territory but detail had been scarce until today.

Mining exploration sinks to new low – by Jeff Candy (Mineweb.com – May 8, 2013)

May 8, 2013

http://www.mineweb.com/

According to IntierraRMG, mining exploration fell once more in March, extending a 17-month decline in exploration activity.

GRONINGEN (MINEWEB) – The mining industry’s search for new ounces fell to a new low in March, extending a 17-month decline in exploration activity. This is according to IntierraRMG’s latest State of the Market report.

According to the group’s online database, there were drilling reports from a total of only 355 prospects (it adds that this figure includes reports from more than one drilling prospect per project). This, it says is compared to “440 in February, 662 in January and (a restated) 367 in December 2012”.

“Gold-exploration has been particularly weak, with activity reported from just 172 prospects in March, compared with 199 in February, 350 in January and 382 in March 2012. Last month’s gold activity is still better, however, than the nadir of 157 prospects reported in December,” the group writes.

While the number of drills turning at gold prospects fell in absolute terms during the quarter, the search for the yellow metal continues to dominate the overall figures. During the quarter 651 gold projects reported drilling activity, IntierraRMG says, as compared to only 192 copper projects, 154 silver projects, 63 zinc projects and 42 lead projects.

A Quebec mining plan that pleases no one – by Sophie Cousineau (Globe and Mail – May 8, 2013)

May 8, 2013

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.

MONTREAL — Premier Pauline Marois is going to great lengths to put the Parti Québécois’s imprint on the development of Quebec’s North.

Ms. Marois and three of her ministers travelled all the way to Chibougamau on Tuesday to meet the press in the small mining and forestry town that sits north of the 49th parallel, in what used to be Plan Nord territory.

But now it’s out with Plan Nord, Jean Charest’s signature economic project, and in with the “Nord pour tous” – North for everybody – as the PQ’s program is now called.

In a blind taste test, however, you would be hard pressed to tell the two plans apart. The government now says it will invest $868-million in infrastructure and social housing over the next five years, almost exactly what the Liberals had allocated to the roads and parks in the North. The only change is that private developers will have to assume a bigger share of the risk when they are the sole users of roads and railways – a flaw the PQ rightly corrected.

In essence, the Quebec government is barely rebranding a program so tainted in bright Liberal red that Ms. Marois’s eyes would hurt just looking at it. But there are some striking differences between the then and the now.

Australia cuts benchmark interest rate [Mining in Australia] – by Tavia Grant (Globe and Mail – May 8, 2013)

May 8, 2013

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.

An overvalued currency, lower commodity prices and cooling investment in the mining sector. These things are not just happening in Canada, they’re also dealing a blow to Australia, which surprised markets by cutting its key interest rate in an effort to bolster its economy.

The Reserve Bank of Australia cut its benchmark rate to a record low of 2.75 per cent Tuesday, citing rising unemployment, “below trend” economic growth and resource-sector investment that’s poised to cool. And it didn’t mince words about the Australian dollar, which it suggests is too strong. As its natural resource sector slows, the central bank is aiming to give a lift to consumer spending and factories.

Canada’s economy is often compared with Australia’s. Both countries are heavily reliant on commodity exports, have triple-A credit ratings and strong currencies. They have similar levels of wealth, as measured by GDP per capita, and relatively small populations spread over a huge land mass.

But though Australia’s rate cut will be closely watched by Canada’s incoming central bank governor, Stephen Poloz, that doesn’t mean this country’s monetary policy will follow suit.

‘No such thing as ethical oil,’ Al Gore tells Toronto audience – by Ivan Semeniuk (Globe and Mail – May 8, 2013)

May 8, 2013

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.

Declaring that “American democracy has been hacked,” former U.S. vice-president Al Gore told a Toronto audience that his countrymen needed to wake up to the special interests that have a grip on the levers of power in the U.S. Congress and are able to block legislation on a range of policy issues including his signature cause, global climate change.

Mr. Gore added that he felt action on climate change was possible, indeed inevitable, once it was viewed by enough people as a matter of personal values. “When these kind of issues settle into a choice between right and wrong, then the moral clarity that eventually develops makes it possible to move quickly.”

In a public interview with The Globe and Mail’s editor-in-chief, John Stackhouse, Mr. Gore also spoke of his wish that U.S. president Barack Obama would cancel the Keystone XL pipeline intended to transport heavy crude from the Alberta oil sands to U.S. refineries. In part because oil-sands crude requires more energy to extract than conventional sources, and so produces more greenhouse gases per barrel, he suggested that the full social and environmental cost of developing the oil sands made it a more expensive proposition than a faster move by the U.S. to renewable sources.

Resources Minister takes bitumen battle to Europe – by Shawn McCarthy (Globe and Mail – May 8, 2013)

May 8, 2013

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 — Environmentalists are warning the European Union’s proposed fuel-quality directive could curtail imports of oil-sands-derived diesel from the U.S. Gulf Coast and drive down the price of Canadian crude.

It’s a warning that Natural Resources Minister Joe Oliver is clearly taking seriously as he visits European capitals to argue that the proposed fuel standard unfairly discriminates against Canada and underestimates emissions of crude now imported into Europe from countries such as Nigeria and Russia.

The standard assesses penalties for high-carbon fuels. Mr. Oliver wants the EU to revamp the existing proposal to reduce the difference in how it would treat oil sands producers versus other sources of oil.

While Ottawa’s objections were once based on fear of a negative precedent that could migrate to this side of the Atlantic, it is now clear the proposal could have tangible impacts on the North American crude market. Canadian producers and U.S. refiners increasingly see Europe as an attractive export destination – both for crude from Canada if a west-to-east pipeline gets built, and for petroleum products made from Alberta bitumen refined in the U.S. Gulf Coast.

McGuinty’s testimony shows him at his best and worst – by Adam Radwanski (Globe and Mail – May 8, 2013)

May 8, 2013

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.

Premier Dad was in vintage form.

Testifying about the expensive cancellation of gas-fired power plants, Dalton McGuinty offered his old chestnut about it never being too late to make the right decision. He spoke of government officials as “people with all their noble strengths and human frailties.” He cited advice that his mother gave him on his wedding day. Recalling his prorogation of the Ontario Legislature as a necessary “time out” that would allow everyone to “cool down,” he stopped just short of reaching across the table and patting opposition MPPs on the head.

It was an assured performance before the legislature’s justice committee, and a reminder of the political skills that allowed Mr. McGuinty to spend nearly a decade in his province’s top job. It was also a reminder of why he finally wore out his welcome.

Looking less jittery than Kathleen Wynne a week earlier, Mr. McGuinty did his best to absolve his successor of responsibility by reiterating she hadn’t been in the loop on the cancellations. For that, and for avoiding making much other news about the controversy, his fellow Liberals were surely grateful.

Where he was less successful was in defaulting to a familiar father-knows-best defence of his policy choices – one that rang hollow because the cancellations stand as the best evidence of him allowing his own interests to overtake his concern for those of the public.

Rio Tinto to press on with iron ore expansion plans – by James Regan and Sonali Paul (Reuters India – May 7, 2013)

May 7, 2013

http://in.reuters.com/

SYDNEY/MELBOURNE, May 7 (Reuters) – Rio Tinto, the world’s No.2 iron ore miner, is set to press on with plans to boost production at its Australian mines by a quarter by 2015, shrugging off pressure to slow spending and conserve cash as the commodity boom cools.

Rio Tinto’s board is not expected to make a final decision on the expansion plans, estimated to cost up to $5 billion, until later this year.

Quebec tax hike targets miners as slump hits industry – by RHÉAL SÉGUIN, SOPHIE COUSINEAU (Globe and Mail – ay 7, 2013)

May 7, 2013

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.

QUEBEC, MONTREAL – The Quebec government is boosting its take from a mining sector already beset by a global downturn, introducing minimum royalty payments and other tax increases aimed at generating up to $200-million a year.

Those increases are less than what the Parti Québécois promised during last’s year’s election campaign – an acknowledgment, the government said, that the drop in commodity prices meant it had to scale down its plans for increasing revenue from the sector.

The new taxes are in addition to existing federal and Quebec general corporate taxes.

According to the Quebec government, at least 10 mining companies didn’t pay any taxes to the province in 2011. The proposed changes, to take effect in 2014, take aim at those firms, requiring that any mining operation pay the higher of two fees: either a royalty on production (with a 1-per-cent tax on the first $80-million on the value of the mineral output, increasing to 4 per cent after that point) or a graduated tax based on a firm’s profit margin (starting at 16 per cent and rising to a top rate of 28 per cent).

Quebec Finance Minister Nicolas Marceau estimated that, depending on mining activity and profits, the new regime will increase government revenues between $73-million and $200-million a year in 2015. Mr. Marceau said that over the next 12 years, the province could increase cumulative revenues up to $1.8-billion.

Quebec proposes up to 22.9% tax on mining profits, 1% minimum ore tax – by Dorothy Kosich (May 7, 2013)

May 7, 2013

http://www.mineweb.com/

The Province of Quebec has eased up a bit on its original proposal for mining taxes (such as a 30% super-profits tax), but still intends to take a decent-sized chunk out of the sector’s profits.

RENO (MINEWEB) – The Government of Quebec Monday unveiled the province’s new mining tax regime, aimed at requiring all mining operations to pay a minimum mining tax in addition to existing federal and provincial general corporate taxes.

Beginning Jan. 1, 2014, mining companies would be required to pay the greater of a fixed mining tax or a tax on profit. A minimum annual fixed tax rate would be 1% for operations producing less than Cdn$80 million in ore, and 4% for those that have produced higher valued ore at the mine shaft head.

The profit tax would set a minimum rate of 16% for mines with a profit margin of 35% or less and would increase up to 22.9%, depending on mines with a profit margin of more than 50%. The current highest royalty rate is 16%.

While Parti Quebecois originally promised to raise an average C$388 million annually over five years in mining taxes, the 25% decrease in metal prices since 2011 forced the government to reconsider its strategy, said Quebec Finance Minister Nicolas Marceau. The new mining plan would increase royalties’ revenue by 15% to a total of $370 million annually.

B.C. election outcome crucial for Alberta – by Gillian Steward (Toronto Star – May 7, 2013)

May 7, 2013

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.

Campaign looks like a referendum on oil marketing strategies vital to the Alberta economy.

CALGARY—Never has more been at stake for Alberta in a B.C. provincial election than now. Viewed from Calgary, the campaign looks like a referendum on the oil marketing strategies that both the Alberta and federal governments — and the energy industry — have been banking on for years.

So this time it really matters for Alberta which party — the Liberals or the NDP — emerges victorious.

Alberta is landlocked; it needs access to B.C.’s ports and coastline if the oil it produces is to get to markets other than the U.S.

But while various pipelines transporting oil and other fuels from Alberta have criss-crossed B.C. for more than 60 years, proposals for new or expanded pipelines have become potent symbols for Liberal Leader (and current premier) Christy Clark and NDP Leader Adrian Dix as they lay out their visions for the future of the province.

Both leaders have said no to Enbridge’s proposed Northern Gateway Pipeline that would reach from northern Alberta across the wilds of northern B.C. to Kitimat so diluted bitumen from the oilsands can be funneled onto tankers and shipped to China and other emerging markets.

As B.C. election looms, both NDP and Liberals take hard line on oil pipelines – by Claudia Cattaneo (National Post – May 7, 2013)

May 7, 2013

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

The environment, and particularly opposition to oil sands pipelines and tanker traffic, has become a big theme in the B.C. election, forcing both the NDP and the Liberals to take a hard line against what seem to have become politically toxic projects.

With a week to go before British Columbians go to the polls, Liberal Christy Clark has distanced herself from proposed oil sands pipelines, after front-runner Adrian Dix, leader of the NDP, said two weeks ago he is opposed to both Enbridge Inc.’s Northern Gateway and Kinder Morgan’s TransMountain expansion. With the Green Party also opposed to both, only the shrinking provincial Conservative Party remains supportive.

It’s not an encouraging scenario for pipeline proponents, the province of Alberta or the federal government, which has made oil-market diversification to Asia a key plank of its national agenda.

What’s interesting is that the green factor is influencing the campaign at a time voters are mostly worried about the weak provincial economy, and despite past political failure (remember the federal Liberal Green Shift?) to push environmental issues to the political front lines.

“I think the green issue has become for a lot of people a ballot box issue,” said Michael Prince, a professor of social policy at the University of Victoria. “It’s one of the ones that they are going to have in their mind the day they go into vote.” Why?