Canadian Media Resource Articles – Page 601

Commodity crash reflects global economic slump – by Brent Jang (Globe and Mail – February 24, 2015)

February 24, 2015

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.

VANCOUVER — Global commodity prices have tumbled to levels below the depths of the Great Recession, underscoring the widespread difficulties facing the global economy.

While crude oil’s price collapse has been in the spotlight, a wide range of other commodities are suffering as well, including natural gas, coal, iron ore, copper, grain and pulp and paper.

The commodity crash is the result of too little demand for raw goods now in plentiful supply after producers ramped up capacity in recent years in anticipation of steady global growth.

But trouble spots are everywhere. Commodity markets have declined during worldwide turbulence as the pace of growth in China continues to slow, Russia grapples with an imploding economy and ruble and Greece struggles through an economic crisis that Europe must solve. Oil’s big drop has hurt many energy-producing countries, including Canada, where low prices are hammering Alberta and reducing growth for Canada as a whole.

B.C. mines minister aims for right audience with next trip to Alaska – by Tamsyn Burgmann (Canadian Press/Vancouver Sun – February 22, 2015)

February 23, 2015

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

VANCOUVER – British Columbia’s mines minister is making plans to visit Alaska’s indigenous fishing community after admitting his first trip to the state following the Mount Polley disaster addressed “probably the wrong audience.”

Bill Bennett spoke at a major mining industry conference last fall, but met with none of the tribal groups in the southeast region presumed most threatened by upstream mining across the border in B.C.

In retrospect, Bennett said people living off the sea in the transboundary region have every right to be concerned about mines in his province, but that he wants to stem the rising anxiety by sharing more information.

“They do not have the kind of information and understanding of how we do things here in British Columbia that they need to have, and that’s probably our fault,” he told The Canadian Press. “I think that we can relieve some of these fears.”

Bennett has asked a binational economic think-tank to consider organizing a symposium to bring both sides together in one of the southeastern Alaska towns at the heart of its multibillion-dollar fishing industry.

Bennett said he hopes the Pacific NorthWest Economic Region will convene a forum in a few months to share best practices and raise awareness about B.C.’s “rigorous” permitting process.

Growing demand for cheap minerals, energy opening up high-yielding investment opportunities – by Henry Lazenby (MiningWeekly.com – February 23, 2015)

February 23, 2015

http://www.miningweekly.com/page/americas-home

NTO (miningweekly.com) – In a world where the economic outlook is uncertain and opinions diverge at best, the overarching trend of divergent lifestyles around the world is providing fuel for a new generation of critical-thinking miners have undergone a paradigm shift in approaching the business in a much cleverer, even holistic, way.

It is currently hard to pinpoint whether economies are at inflationary or deflationary inflection points, stabilising or destabilising, and a host of investors have all but written off the mining and exploration and production industries for not providing financial returns in a low-price environment.

While North Americans experience some of the highest-quality lifestyles in the world, this was not the case in places such as China, Indonesia and elsewhere in the developing world, New York-based House Mountain Partners founder and co-author of The Disruptive Discoveries Journal, Chris Berry recently told resource investors in Vancouver. But, they were gaining, and they were gaining fast.

According to him, the burgeoning global middle class and the inevitable economic growth it brought could not be supported without reliable access to cheap commodities and cheap energy, which was opening up a brave new world for shareholders trying to find high-yield investment opportunities, when bond yields globally were at historic lows or, in many cases, negative.

Barrick rides the DeLorean – by Kip Keen (Mineweb.com – February 23, 2015)

February 23, 2015

http://www.mineweb.com/

Barrick’s quest for greater relevancy.

Under the heading “Taking Barrick ‘Back to the Future’” Barrick Gold touted a plan to transform itself into a leaner, meaner cash machine with management and operational changes along with debt reductions in its forth quarter overview. Most who were around in the 1980s will get the movie reference at play. Back to the Future was a trilogy of movies that features Marty McFly, played by Michael J. Fox, who rides a time machine built into a DeLorean DMC-12 car, famously featuring gull-wing doors, to make his and his family’s present better than the past.

The nut of the first and subsequent movies is that things have not turned out as they should have, or as McFly would have them turn out. The first movie is about McFly and Doc Brown, played by Christopher Lloyd, going back to the 1950s by accident, and then their subsequent attempts to get back to the future (i.e. the 1980s) harnessing the power of lightning to run the DeLorean which, depleted of fuel, needs lots of energy to time travel. In the process, McFly rights – or rewrites – history for his family.

He helps his Dad, in a moment of confrontation, upstage Biff and save Lorraine from the then teenage bully’s advances. Soon thereafter McFly returns to the future – or the present 1980s. And what he finds is nicer than what he previously knew. His dad is no longer a loser and his mum is happy. Biff is a deadbeat.

Quebec To Decide On Canada’s Largest Open-Pit Mine Within Town Limits – by Catherine Lévesque (Huffington Post – February 19, 2015)

February 20, 2015

http://www.huffingtonpost.ca/business/

SEPT-ÎLES, Que. – The Quebec government is expected to make a decision any day now on the development of Canada’s largest open-pit mine near an inhabited area.

Environment Minister David Heurtel is trying to balance a difficult economic situation in Quebec’s North Shore with serious environmental concerns. If it is approved, the Arnaud mining project will extract apatite, phosphate minerals used for fertilizers, roughly six kilometers as the crow flies from downtown Sept-Îles.

The Bureau d’audiences publiques sur l’environnement (BAPE), an independent agency that reports to the Ministry, said in a report last year that the project was “unacceptable” in its present form. The risk of water contamination and landslides are simply too high, said BAPE, an advisory body that has no decision-making power.

Sept-Îles is located in Quebec’s northeastern territories, approximately 600 kilometers from Quebec City. Its economy is heavily dependent on mining by large, multinational companies, but it has taken a severe blow with recent layoffs at Cliffs Natural Resources.

According to its supporters, the Arnaud mine would create jobs and diversify the local economy. But opponents say having an open-pit mine within city limits is too risky. Sept-Îles currently has just one source of drinking water and no alternatives in case of contamination.

Barrick goes back to mining roots with focus on gold – by Rachelle Younglai (Globe and Mail – February 20, 2015)

February 20, 2015

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.

Barrick Gold Corp. founder Peter Munk had a vision for his company. Barrick’s new chairman John Thornton has another one.

Less than a year on the job as chairman, Mr. Thornton appears to have killed Mr. Munk’s dream of turning Barrick into a giant diversified mining company, and plans to forge a deep business relationship with China are no longer on the table.

Instead, Mr. Thornton wants the world’s biggest gold producer to return to its roots when it was a nimble operator with an entrepreneurial spirit, a streamlined corporate structure and a pristine balance sheet that earned a top credit rating.

Barrick, like the rest of the gold industry, was forced to clamp down on expenses when bullion began plummeting in 2011. Under Mr. Munk and previous management, Barrick had started becoming leaner by selling and suspending expensive operations and shrinking production.

But Mr. Thornton suggested Barrick had lost its way over the past decade and is pushing the company back to its “original DNA.” Gone are the layers of managers between Barrick’s executives and the 19 mines that it operates. Barrick’s Toronto headquarters is now a skeleton crew of 150, compared with 500 in its heyday.

Comment: Mines minister must not ignore his own experts – by Calvin Sandborn , Mark Haddock and Jamie Arbeau (Victoria Times Colonist – February 20, 2015)

February 20, 2015

http://www.timescolonist.com/

“The panel firmly rejects the notion that business as usual can continue.” — Mount Polley Expert Review Panel

In all the fuss about the execution of search warrants in the Mount Polley Mine disaster case, we shouldn’t lose sight of the main issue — how do we prevent the next disaster?

Indeed, Mines Minister Bill Bennett commissioned the Mount Polley expert panel “to ensure this never happens again.” So why is the minister dodging commitment to the panel’s most important recommendation? Why has he failed to endorse that vital recommendation — and shuffled it off to bureaucrats for extended “review”?

Here’s the issue: The panel noted that more tailings lakes and ponds will inevitably fail — and recommended that the province move to eliminate such water impoundments across the province, in both new and closed mines. Criticizing construction of tailings ponds as “century-old technology,” they called for dry disposal of tailings.

The panel pointed out a central problem: For tailings lakes to work, everything has to go right, all the time and forever. But human error inevitably intervenes. For example, the panel exposed the incompetent ad hoc management of the Mount Polley tailings lake.

Bad times for Canada’s big gold miners – by Lisa Wright (Toronto Star – February 20, 2015)

February 20, 2015

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.

Barrick, Goldcorp take massive Q4 writedowns amid weak gold prices.

Barrick Gold Corp. chairman John Thornton’s message to Bay Street came through loud and clear: he wants to take the world’s largest gold producer back to its roots as a smaller company with fewer mines and micro-managers — and hopefully return it to profitability.

To that end, the Toronto mining giant is slashing staff at headquarters by nearly half and selling two Asia-Pacific mines. It will be “laser focused” on reducing its debt by $3 billion this year amid rocky times in the mining industry and a weak gold price, he told analysts on a conference call Thursday.

It wasn’t a banner day for either of Canada’s two largest bullion miners, as Vancouver-based Goldcorp Inc. reported a loss of $2.4 billion (U.S.) in its latest quarter as it wrote down the value of its Cerro Negro mine in Argentina. Barrick also reported a massive $2.85 billion fourth-quarter loss due to an after-tax impairment charge on its soon-to-be closed Lumwana copper mine in Zambia and the Cerro Casale project in Chile.

Gold miners are struggling as the gold price has lost 35 per cent of its value since its peak of $1,900 (U.S.) an ounce in 2011 and as the industry suffers through a brutal downturn following a 13-year market rally.

Rio Tinto Alcan open to expanding Canadian smelters once market rebounds: CEO – by Ross Marowits (Canadian Press/Vancouver Sun – February 18, 2015)

February 19, 2015

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

MONTREAL – Rio Tinto Alcan plans to expand its smelting capacity in Canada once the fragile aluminum market gains strength, the mining giant’s CEO said Wednesday.

Alfredo Barrios says aluminum prices, which have retreated since rising last year, are not encouraging investment at the moment because of excess smelting capacity.

But strong long-term fundamentals, including demand expected to grow through 2025 in part from the automotive sector, should eventually encourage new investments.

“If the market starts improving and the returns start remunerating the investments then there are a number of projects that we have across the world, even in Quebec, to potentially grow,” Barrios, who took the helm last June, told reporters. He pointed specifically to a new Alouette smelter and expansion of its AP60 pilot project in Quebec.

“When the moment is right, Quebec is a clear place where we will be investing in smelting. That is where our core smelting business is.” However, the 48-year-old former oil executive wouldn’t say how long it could take before these new projects could be built.

Goldcorp takes US$2.3-billion writedown on ‘cornerstone’ Argentine project – by Alexandra Posadzk (Canadian Business – February 19, 2015)

February 19, 2015

http://www.canadianbusiness.com/

Goldcorp Inc. reported a US$2.4-billion net loss in its latest quarter as it took a big writedown charge on its Cerro Negro project, but the company’s chief executive says he still has high hopes for the Argentine mine.

“This is an accounting charge and does not reflect losses of gold ounces in the ground or our expectations for this asset,” Charles Jeannes told investors during a conference call Thursday.

“Quite the contrary, we continue to believe Cerro Negro will be a cornerstone operation for Goldcorp for a long time to come.”

The news came after the gold miner announced a loss of $2.94 per diluted share in the fourth quarter compared with a loss of US$1.1 billion or $1.34 per diluted share in the last three months of 2013.

The loss includes the US$2.3-billion hit that Goldcorp took in relation to a drop in the value of the Cerro Negro project, which began commercial production last month.

On an adjusted basis, Goldcorp says it earned US$55 million or seven cents per share, down from nine cents per share in the fourth quarter of 2013. Analysts had estimated an adjusted profit of 12 cents per share for the quarter, according to Thomson Reuters.

Barrick Gold Investors Get Answers as Thornton Outlines Strategy – by Liezel Hill (Bloomberg News – February 19, 2015)

February 19, 2015

http://www.bloomberg.com/

(Bloomberg) — Barrick Gold Corp. investors waiting to hear Chairman John Thornton’s plans for the world’s biggest gold producer finally have some answers.

Barrick will stay focused on gold and has no plans to diversify into other metals, Thornton said Thursday in his first appearance on a quarterly earnings call.

The chairman, who replaced Barrick’s founder Peter Munk in April, said he’s trying to go “back to the future,” returning the Toronto-based company to the nimble, entrepreneurial roots that first made it successful.

The last few years have been tumultuous for Barrick, with the departure of two chief executive officers, a sliding gold price and a tumbling share price. With shareholders looking for reassurance, at least two of them — ASA Gold & Precious Metals Ltd. and USAA Precious Metals & Minerals Fund — have complained that Thornton’s plans for the future weren’t clear.

“After having listened to the call, I do feel better about Barrick and its corporate strategy,” Diana Racanelli, a Toronto-based resources fund manager at Manulife Asset Management, said Thursday. “These have all been key issues that needed to be addressed.”

Barrick Gold posts another big quarterly loss (Canadian Press/CTV News – February 19, 2015)

February 19, 2015

http://www.ctvnews.ca/

TORONTO — Barrick Gold Corp. (TSX:ABX), citing massive impairment charges on mine projects in Africa and Chile, has reported another multibillion-dollar net loss in its most recent quarter.

Canada’s second-largest gold miner by market capitalization says it net loss in the three months ended Dec. 31 was US$2.85 billion or US$2.45 per share, compared with a net loss of US$2.83 billion or US$2.61 per share in the same 2013 period when it had fewer shares.

Revenue was US$2.51 billion, down from US$2.94 billion as the company sold fewer ounces of gold — 1.57 million versus 1.83 million — at an average realized price of US$1,204 per ounce compared with $1,272 in the 2013 quarter.

The quarterly loss reflected the impact of US$2.8 billion in after-tax impairment charges primarily related to the Lumwana mine in Zambia (US$930 million) and the Cerro Casale project in Chile (US$778 million), the company said in an earnings report issued Wednesday after markets closed.

Fourth-quarter adjusted net earnings were US174 million or 15 U.S. cents per share, compared with US$406 million or 37 cents in the 2013 quarter. For the full year, Barrick recorded a net loss of US$2.91 billion or $2.50 per share, reflecting the impact of $3.4 billion in after-tax impairment charges. The full-year net loss in 2013 was US$10.37 billion or US$10.14 per share.

B.C. schools increase mining education despite industry downturn – by Derrick Penner (Vancouver Sun – February 17, 2015)

February 18, 2015

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

While recent mining news has been dominated by mine closures, layoffs and a retrenchment of prospecting and exploration, UBC’ is launching a new executive MBA program

VANCOUVER — It might seem counterintuitive to launch new education programs focused on mining while the industry is in the middle of a downturn, but B.C.-based institutions are taking a longer-term view than the current business cycle.

While recent mining news has been dominated by mine closures, layoffs and a retrenchment of prospecting and exploration, UBC’s Sauder School of Business is launching a new executive MBA program for mining professionals. At BCIT in Burnaby, the coming fall will see it offer a new bachelor of engineering program in mining.

It is an age-old story now of preparing for the rising tide of retiring baby-boomers, so current layoffs and unemployment aside, the mining industry — B.C.’s in particular — is staring at a disproportionally high segment of its workforce in the 54-to-64 demographic.

“I’m not sure if the timing is good or bad,” said Brian Bemmels, associate dean of the Sauder School. “There are pros and cons to doing this at this time.” It was Vancouver-headquartered mining firms, though, that don’t see the next generation of their industry’s leaders being developed, who prodded the Sauder School into developing the program, Bemmels added.

Barrick Gold Chairman’s Shakeup Keeps Investors Guessing – by Liezel Hill (Bloomberg News – February 17, 2015)

February 18, 2015

http://www.bloomberg.com/

(Bloomberg) — On an icy late-January evening in Toronto, more than 30 Barrick Gold Corp. mine managers and country heads gathered in the basement of a pub to hear their executive chairman’s vision for the world’s largest gold producer.

In town for year-end meetings, the group listened intently as John Thornton outlined a plan to give them the authority they needed to run their units like their own businesses, according to a person present. Barrick’s Toronto headquarters would shrink in size and reach.

To outsiders these are eye-opening words, coming from a leader known within Barrick for a detail-oriented style which has placed him at the center of decision-making at different levels of the company.

While his comments suggest he’s trying to return Barrick to its nimble roots, questions remain within the investment community about what that may mean over the long run. Will Thornton, an ex-Goldman Sachs Group Inc. banker, keep Barrick focused on gold, or diversify further into other metals such as copper, as he has hinted in the past?

“I have no idea what’s going on,” said David Christensen, chief executive officer of ASA Gold & Precious Metals Ltd, a San Mateo, California-based investor that holds Barrick shares. “I feel like I’m looking into a black hole.”

Commentary: Tough markets demand a rethink of rail in Labrador Trough – by Glen Ireland and Mark Apli (Northern Miner – February 13, 2015)

February 17, 2015

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

During its successful 2014 election campaign, Quebec’s Liberal Party vowed to revive Plan Nord — a cherished blueprint for opening up the province’s vast northern mineral wealth for development. Brainchild of former Liberal Premier Jean Charest, the plan was shelved for two years after his defeat to the Parti Québécois in 2012.

The mining industry has recently given its strong support for Premier Philippe Couillard’s refreshed Plan Nord, which includes an ambitious, greenfield 400+ km multi-user railway corridor and port connecting stranded mineral deposits in the legendary Labrador Trough to Sept-Îles on the coast. Energy and Natural Resources Minister Pierre Arcand, Plan Nord’s helmsman, announced in October 2014 a major technical study of the project by Montreal-based Canarail, whose fees will be paid by Quebec taxpayers and supportive junior miners.

While “Plan Nord redux” now appears to be back on track, some awkward but important questions are being asked: Can an infrastructure mega-project in the Labrador Trough be justified at current, heavily-depressed iron ore prices? And, is a new railway corridor really the only viable logistics solution for planned iron ore mines?

Soon after Premier Couillard’s government took office, a flood of iron ore from newly-expanded mines in Australia’s Pilbara, combined with perceived weakness in core demand markets, drove prices from US$130 per tonne to US$70 per tonne — a five year low.