Canadian Media Resource Articles – Page 555

Why the call for bigger and better carbon taxes is about to escalate – by Terence Corcoran (National Post – December 1, 2014)

December 2, 2014

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

When the first OPEC oil crisis struck in 1973, sending the price of crude as high as US$140 a barrel in today’s dollars, policymakers around the world — including Canada — scrambled for ways to bring the price back down. Today, the opposite is true. As the 2014 OPEC crisis pushed oil down to US$65 Monday, the major policy objective in many circles is to find a way to bring the price back up.

Consumers may like the idea of low energy prices and the inevitable boost to global economic growth, opening the door on a world of increasing prosperity and wealth distribution. But a large number of governments, climate activists and corporate interests have a vested interest in keeping oil prices high. Will they succeed?

As the world price of oil fell over the past few days, there has been no shortage of handwringing over the negative consequences.

The U.S. shale oil industry was said to be doomed. Oil-rich nations dependent on massive dollar flows would be unable to meet their budget and debt payments. Capital investment in developing countries with oil potential would dry up. Big oil companies would suffer as share prices plunged.

And there would certainly have been no cheering Monday in Lima, Peru, where international climate negotiators were gearing up for the 20th annual United Nations’ Climate Change Conference. Low oil prices equal increased demand for oil that will drive up carbon emissions.

When emissions disappear, so do jobs – by Donna Laframboise (National Post – December 2, 2014)

December 2, 2014

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

This is the dirty little secret lurking behind every new emissions deal: when emissions
disappear, so do jobs, economic opportunities, and human well-being.

The manufacturing jobs found in factories and the auto industry need affordable power –
not the intermittent, stupendously-priced, boutique power generated by wind turbines.
Coal mining feeds families. Oil wells put food on the table.

We used to view the dignity that accompanies a paying job as an important social good.
We used to care that unemployment, substance abuse, and family breakdown are closely
connected.

These days, we’ve convinced ourselves that driving CO2-emitting factories into bankruptcy
is smart. That throwing people out of work makes sense. That plunging families into crisis
is the path to glory. (Donna Laframboise)

Following Barack Obama’s recent visit to China, the White House issued a joint U.S.-China climate announcement that says “China intends to achieve the peaking of C02 emissions around 2030.” But that isn’t news.

Brazil’s Vale mulling IPO for part of base metals business – sources – by Nicole Mordant and Euan Rocha (Reuters U.S. – December 1, 2014)

December 2, 2014

http://www.reuters.com/

VANCOUVER/TORONTO – Dec 1 (Reuters) – Brazil’s Vale SA is considering listing part of its global base metals business, two sources with knowledge of the matter said on Monday, as the miner looks to fund capital projects amid a collapse in iron ore prices.

The sources, who asked not to be named as they have not been authorized to discuss the matter publicly, said the world’s top iron ore producer is likely to retain a majority interest in the new entity if it proceeds with the plan.

Vale could outline the plan to list a new entity in Toronto and London as early as Tuesday at an investor day event being held in New York, said one of the sources.

The event at the New York Stock Exchange will be webcast. The second source said there had been significant discussion inside Vale about listing the base metals assets, which have fared better than its iron ore business due to steadier prices.

A Vale spokeswoman in Brazil could not be reached for comment after hours.

Vale’s iron ore business contributed 62 percent of the company’s gross revenue in the third quarter. Outside of iron ore, Vale’s global asset portfolio includes nickel assets in Canada, Indonesia and New Caledonia, coal mines in Australia and Mozambique as well as copper projects in Canada, Brazil and Zambia.

Wabush woes: Labrador mining town reels from a China slowdown – by Rachelle Younglai (Globe and Mail – November 29, 2014)

December 1, 2014

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.

WABUSH, LABRADOR — Ron Barron has spent 30 years working in the Wabush mine, one of three generations of Barrons who have toiled in the open pits in what western Labrador bills as the iron ore capital of Canada.

The family’s roots run deep here. Mr. Barron’s father was one of Wabush‘s first settlers, who not only got a job in the mine when it opened in the 1960s but also helped organize a union. Five of Mr. Barron’s brothers have worked in the same pits along with his son and nephew.

But now Mr. Barron’s life has been upended along with the rest of city. The Wabush mine, once the cornerstone of this community, is shutting down along with another iron ore mine called Bloom Lake in neighbouring Quebec. More than 1,000 miners will be out of work, not to mention a slew of other job losses from businesses that service the industry. It’s a crippling blow in an area with a population of about 9,000.

“Oh my god, everybody loses. All the organizations, the schools, everything loses. Everything will suffer because of it,” said Mr. Barron, who will be officially out of a job by mid-December. “We have had shutdowns and layoffs before, but this is different. The mine is closing.”

The reason for the closings is simple: The price of iron ore, a key ingredient in steel, has been in freefall, falling 60 per cent in three years. Where the resource once traded as high as $190 (U.S.) a tonne in 2011, it is now below $70.

The progressive war on science – by Margaret Wente (Globe and Mail – November 29, 2014)

December 1, 2014

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.

An epidemic of whooping cough has broken out in California. Not long ago, this ancient scourge had been banished by modern medicine. But now it’s back, thanks to people who believe modern medicine is dangerous.

These folks are not ignorant backwoods hicks. Many of them have advanced degrees. They live in some of the nicest neighbourhoods on Earth – places like Marin County, Napa and Malibu. But they believe that vaccines cause autism or worse. Immunization rates in some of the more fashionable California schools resemble those in the more backward parts of Africa. At the Valley Waldorf City School in Lake Balboa, for example, 88 per cent of students don’t have the standard vaccinations.

Nearly 9,000 people in California have come down with whooping cough this year, and a handful have died. Repeated pleas from public health officials have gone unheeded. “Children are the victims of our ignorance,” vaccination expert Paul Offit wrote in The Wall Street Journal. “An ignorance that, ironically, is cloaked in education, wealth and privilege.”

Yet it’s conservatives – religious, less educated, less wealthy and certainly less liberal – who are generally condemned for dogmatically refusing to embrace science. After all, they’re the knuckle-draggers who believe that evolution is just a story and that global warming is a crock.

On pipelines, politicians are just listening to the people – by Gary Mason (Globe and Mail – November 28, 2014)

December 1, 2014

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.

If you listen closely, you can hear the sound of desperation in the voice of Alberta Premier Jim Prentice when he talks about the Energy East pipeline. One doesn’t have to concentrate quite as hard to detect the same anxiety in the words of Saskatchewan Premier Brad Wall.

Both were taken aback when Ontario and Quebec announced seven conditions for granting approval to the pipeline. One of those includes an assessment of the project’s upstream greenhouse gas emissions – which would appear to take into account the source of the crude moving through the pipeline. In Alberta’s case, that would be the oil sands, a high GHG emitter.

The conditions are similar to ones the B.C. government set out for pipeline projects, including a requirement to consult with First Nations. And we all know how that’s been going for pipeline companies trying to reach tidewater on the West Coast.

Despite conditional approval from the National Energy Board, most believe the Northern Gateway pipeline will never get built because of opposition to it. The courts have given First Nations new powers to fight developments that encroach on their land. Outside of aboriginal communities, public opinion regarding pipelines is at best divided – although there seems to be a growing societal angst about climate change that is palpable.

Kinder Morgan, which also wants to add a pipeline to the West Coast, is encountering that sentiment now.

Canada’s unfinished business with First Nations is an economic failure – by Diane Francis (National Post – November 29, 2014)

December 1, 2014

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

“The great themes of Canada are as follows: Keeping the Americans out, keeping the French in, and trying to get the Natives to somehow disappear.” – Will Ferguson, humorist and 2012 Giller Prize winner

Ferguson’s acerbic quote also summarizes the great unfinished business of Canada which is to reconcile the rights and create a role for the country’s 614 First Nations and their 700,000 members. The failure to have done this after centuries not only impedes national economic development, but is at the root of much of the misery and squalor on and off reserves.

The United States did not make deals, but conquered its Native Americans and, under international law, has only been required to compensate them. But here, Britain signed sovereign deals with aboriginals, catapulting them under international law to the rights and privileges of nation-states. Thus they call themselves First Nations. Australia has a similar history, but, unlike here, Canberra has fully addressed the issues.

Canada must now do the same. A recent, landmark Supreme Court of Canada ruling has fully, and radically, defined “aboriginal rights.” Justices unanimously decided that lands in the British Columbia interior, the size of Greater Vancouver, belonged to the Tsilhqot’in Nation, a band with 400 members. They now own and must manage the lands in perpetuity, rights they can relinquish only if they sign ownership over to a government.

Oil drop sends Ottawa into damage control – by Shawn McCarthy and Eric Reguly (Globe and Mail – November 28, 2014)

November 28, 2014

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 – OPEC has thrown the global oil markets into turmoil with its decision not to cut its production targets in the face of a supply glut, a move that will have dire consequences for Canadian producers but offers some welcome relief at the gas pump for consumers.

Led by Saudi Arabia, the 12-member cartel ended a fractious meeting in Vienna on Thursday with a stand-pat strategy, pledging only to stick to its existing 30-million barrels-a-day target. However, increased production from non-OPEC countries, particularly Russia and the United States, means global oil supplies will be significantly higher than consumers will need in the coming months.

As a result, global crude prices – and oil company shares – plunged on Thursday.

The price of the benchmark North American crude, West Texas Intermediate, fell $4.46 (U.S.) – or 6 per cent – to $69.05 a barrel, while the leading international benchmark, North Seat Brent, lost $5 and fell to a four-year low of $72.26. Six months ago, the North American price hit $107 while Brent peaked at $115.

On the Toronto Stock Exchange, the index of energy stocks was off 7.4 per cent Thursday, as major oil stocks suffered sharp declines, while the Canadian dollar fell 0.7 cents to 88.22 cents (U.S.).

Why the collapse in oil prices is such a huge win for China – by Nathan Vanderklippe (Globe and Mail – November 28, 2014)

November 28, 2014

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.

BEIJING — The slowdown in China’s economy is so significant that oil prices, already in a free fall that has cut their value by a third since the summer, stand to remain weak for years to come, a prominent Chinese economist is warning.

Oil prices fell to four-year lows Thursday after OPEC member states opted not to trim output, a decision that sent the international Brent price of oil plunging more than $5 (U.S.) a barrel. The decision was widely viewed as a strategic move by the cartel to clip the wings of fast-rising U.S. output from booming regions like the Bakken and the Eagle Ford.

But Andy Xie, the often-contrarian former top Asia-Pacific economist for Morgan Stanley, warned that the massive investment overhang in China, valued at more than $6-trillion, will dramatically affect its energy demand growth, and will, as a result, rein in oil prices for a long time to come.

“China’s energy demand, the only source of growth for a decade, has fallen sharply,” he said in an interview. “There are several conspiracy theories out there. None can affect demand supply balance, which determines prices.”

How markets finally beat OPEC’s oil-price chokehold – by Terence Corcoran (National Post – November 28, 2014)

November 28, 2014

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

Nobody can truly say what the real long-term price of oil should be — but it would not be out of line to look at the outcome of Thursday’s OPEC blowout and conclude that the world is getting closer to the right number.

Supply, demand, competition and innovation are performing the usual service to consumers and driving prices down. That the market is performing its proper function should be no surprise, although it has taken longer than many expected for the mighty OPEC cartel to run up against the hard realities of economics.

As the North American price of crude oil dipped below US$70 a barrel Thursday, with analysts calling for US$60 or lower soon, the world’s leading source of energy appears to be heading back to where it came from. At US$60, the real price of oil (adjusted for inflation) would be close to the level it reached during the first OPEC oil crisis in the 1970s.

There may be lots more to come. As the late, great market economist Julian Simon wrote 20 years ago, the long-term data on energy prices in a market economy “show an unambiguous trend toward lower costs and greater availability.” Increasing demand spurs high prices, high prices trigger corporate innovation, prices fall.

Oil is also political, where competition also rules.

Ten things junior miners can do to survive the downturn – by David Poynton (Mining Markets Magazine – November 25, 2014)

November 28, 2014

http://www.miningmarkets.ca/

“The market turn for junior miners is just around the corner.” Really? The problem is, that corner just kept moving ahead and three years into the downturn, we all still seem to be in very tough times. With gold now under US$1,200 an oz. and our seniors making drastic cost cuts, what is next? Where are those better days?

Our industry in general — and the junior mining sector specifically — has undergone a fundamental and permanent change. Regular routine financings where all you debated about was a penny here or there, or commission, are long gone. Reasonable M&A deals and fair pricing are difficult to find — if at all — those with money can demand very steep terms. I’m not sure the “good old days” will ever return.

So let’s face it head on. Companies need to accept the new reality in order to adapt and survive. It is time to face some harsh truths — cash is king and it is time to scrimp and save every dollar. Time for some tough decisions and reviews.

Three years into this downturn, investors might be surprised at how many companies have only done the window-dressing and, hoping that elusive turnaround will save them, not even attempted to cut to the bone.

Often, management and boards are unable or uncomfortable dealing with the tough questions — they are often as not human issues: who keeps a job and who doesn’t?

Will the Swiss go for gold? – by Peter Schiff (National Post – November 27, 2014)

November 27, 2014

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

Peter Schiff is the CEO and Chief Global Strategist of Euro Pacific Capital.

For most of my career in international investing, I had always placed a great deal of faith in Switzerland’s financial markets. In recent years, however, as the Swiss government has sought to hitch its wagon to the flailing euro currency and kowtow increasingly to U.S.-based financial requirements, this faith has been shaken.

But November 30th a referendum in Switzerland, on whether its central bank will be required to hold at least 20% of its reserves in gold, will offer ordinary Swiss citizens a rare opportunity to reclaim their country’s strong economic heritage. It’s a vote that few outside Switzerland are following, but the outcome could make an enormous impact on the global economy.

Traditionally, the Swiss franc had always attracted international investors looking for a long-term store of value. That’s because the Swiss government had always kept sacred the idea of conservative central banking and fiscal balance. When the idea of the European common currency was first proposed, the Swiss were wise to stay out.

They did not want to exchange the franc for an unknown and untried pan-national currency. The creators of the euro had suggested that it would become the heir to the strong Deutsche mark. Instead, it has become the step-child of the troubled Italian lira and the Greek drachma. In retrospect, the Swiss were wise to take no part in the experiment.

Dirty tricks on both sides of the pipeline debate — and environmentalists have led the way – by Claudia Cattaneo (National Post – November 27, 2014)

November 27, 2014

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

TransCanada Corp. is cutting its ties with Edelman, the United States-based public relations firm that recommended using aggressive tactics to win public support for its proposed Energy East pipeline project.

Good on TransCanada for choosing to have a “respectful conversation” instead. The $12-billion project to transport Alberta oil to Canada’s East Coast stands on its own merit without having to manipulate public opinion.

The U.S. firm had recommended using third parties to attack the pipeline’s opponents, by creating “an echo chamber of aligned voices.”

Greenpeace, which publicized the leaked documents last week, said they involved “secret public relations and a ‘grassroots advocacy’ strategy by TransCanada to put pressure on politicians and critics of their Energy East pipeline proposal – tactics similar to those employed by the oil industry in the U.S. to attack environmental advocates.” It accused TransCanada of “dirty tricks.”

On Thursday, TransCanada said it never took Edelman’s recommendations and is ending its association with the firm at the end of December because the controversy has become a distraction, particularly in Quebec.

Iron ore prices – Where’s the bottom? (Northern Miner Editorial – Novmeber 26, 2014)

November 27, 2014

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

As the daylight hours shorten and winter chill takes hold of the iron ore mines and surrounding communities in the Labrador Trough, it’s as good a symbol as any of the deep freeze that is engulfing the global iron ore market, as spot prices continue to head south.

Back in October, Cliffs Natural Resources said it would permanently close its Wabush iron ore mine on the Labrador side of the Trough, after having laid off some 500 workers in February when it first idled the mine.

And now Cliffs says it has failed in its attempts to find investment partners for the US$1.2-billion expansion of its Bloom Lake iron ore mine on the Quebec side of the Trough — an expansion that the struggling major said was needed to make the Bloom Lake mine financially viable.

While Cliffs had been optimistic about finding such financial partners as recently as a month ago, layoff notices have been sent to some 400 workers at Bloom Lake ahead of the closure of the entire Bloom Lake complex, which will take affect in mid-December. Around 80 workers will be kept for care and maintenance.

Cliffs now states bluntly that it is pursuing its “exit options” for all its Eastern Canadian iron ore assets. Perhaps the biggest surprise in the announcement is the high price tag that Cliffs has put on closing shop and leaving Eastern Canada: up to US$700 million in the next five years.

Prem Watsa embraces his roots with launch of Fairfax India – by Jacqueline Nelson (Globe and Mail – November 27, 2014)

November 27, 2014

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.

Fairfax Financial Holdings Ltd. founder Prem Watsa has always seen major growth potential in his birthplace of India, and now he is putting money behind that vision with a new investment holding company that has already raised $500-million (U.S.).

Toronto-based Fairfax said Wednesday that it will sponsor and promote Fairfax India Holdings Corp., which will operate as a public company that invests in businesses focused on India’s marketplace.

Fairfax India will be funded in part by a $300-million investment by Fairfax, in exchange for 30 million voting shares, according to an initial public offering prospectus filed Wednesday. Hyderabad-born Mr. Watsa will serve as chair of the new company.

“We’ve been in India for at least 15 years, but we’ve found that the amount of money we could invest given regulatory constraints is limited.

The opportunity in India is greater than our ability to invest alone so we decided to create a separate company to allow other investors to participate,” Mr. Watsa said when reached by phone in Toronto. The company will be listed on the Toronto Stock Exchange.