Archive | Canadian Media Resource Articles

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 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 →

Marilyn 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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Marilyn 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.

Marilyn 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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Marilyn 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.