Canadian Media Resource Articles – Page 608

Robert Friedland’s mining showdown in South Africa – by Geoffrey York (Globe and Mail – January 10, 2015)

January 12, 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.

MOKOPANE, SOUTH AFRICA — The two men took the cash from an envelope, counted it carefully and spread it on the table in front of Raesetsa Makgabo in her village home. It was exactly 5,250 South African rand (about $450 U.S.).

She says she remembers vividly what the men said next: They told her to take the money and allow the Canadian mining company to begin drilling on her maize fields – or lose her monthly pension.

Illiterate and unable to read the document in front of her, but fearful of losing the $120 monthly pension that was her main income, the 82-year-old villager took the pen and marked the agreement with a humble X beside her name. The two men, including an official from Ivanhoe Mines Ltd., signed the document dated May 10, 2011. Then the drilling began.

Ivanhoe’s $1.7-billion project, forecast to become the world’s biggest new platinum mine, is crucial to the fate of the Vancouver-based company – and to thousands of impoverished villagers near the site.

Ivanhoe says its Platreef mine will provide 10,000 direct and indirect jobs, along with a minority ownership stake for 150,000 residents and employees under South Africa’s black-empowerment rules.

An ‘emerging market’ at home: Canada’s banks making a big push into aboriginal communities – by Barbara Shecter (National Post – January 10, 2015)

January 12, 2015

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

A few years ago, Chief Darcy Bear and the Whitecap Dakota First Nation in Saskatchewan made a practical decision to cut ties with the handful of financial institutions that were backing their infrastructure loans in favour of a single player: Bank of Montreal.

It was a simple choice, Chief Bear explained during an interview in Toronto this week. Along with its domestic peers, BMO has made a concerted push into aboriginal banking. But the bank went further. While the band had in the past been forced to depend on relatively short-term debt, making it harder to make the case for bigger infrastructure projects with extended lifespans — roads, schools, bridges — BMO was offering longer, more favourable terms. The kind of 20- or 25-year deals common in off-reserve municipal projects, instead of forcing the band into five or 10-year arrangements.

“The relationship has been a good one,” said Chief Bear, smiling as he recounted the story of first meeting Stephen Fay, BMO’s head of Aboriginal Banking five years ago, after patiently waiting around until the very end of a conference in Vancouver conference to make the meeting happen.

Like any banker, Mr. Fay also seems pleased when he recounts the story of having won out over rival financial services institutions by “pushing the envelope” on infrastructure loans for aboriginal communities. But he says he’s “waiting for the other shoe” to drop in the relentless grabs for market share that are characteristic in his competitive industry.

Bre-X lawyer’s fight in the spotlight – by Rachel Mendleson (Toronto Star – January 9, 2015)

January 9, 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.

Battle continues in court for man who got client acquitted after mining scandal.

The legal community is closely watching the latest round in Bre-X lawyer Joe Groia’s battle to defend himself against a controversial charge of “incivility,” which is raising fundamental questions of judicial independence and freedom of speech.

In Ontario Divisional Court on Thursday, Groia’s lawyer framed the case as an opportunity to preserve the right of all lawyers to vigorously defend their clients without fear of reprisal from an “overzealous” professional regulator.

“No lawyer wants to be the next Joe Groia,” lawyer Earl Cherniak told the panel of three judges. “Groia (has) defended his prosecution, not only for his own sake, but also in the public interest in the profession.”

The judicial review follows nearly five years of legal wrangling over charges of professional misconduct by the Law Society of Upper Canada, which took issue with Groia’s behaviour in the early stages of the insider-trading trial of former Bre-X geologist John Felderhof.

A mining company, Bre-X Minerals announced a promising find of gold in Indonesia in 1995, sending its stock price soaring. But the samples were found to be fraudulent — the largest mining fraud in Canadian history, driving the company into bankruptcy.

Proposed Murray River mine to rely primarily on foreign workers – by Wendy Stueck (Globe and Mail – January 9, 2015)

January 9, 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 — If the proposed Murray River coal project goes ahead, more than half of its employees would be temporary foreign workers in 2018 – potentially the first year of operation – and it would take nearly a decade for all the hourly jobs at the project to be filled by Canadians.

HD Mining has previously discussed its plan to shift from a work force that is mostly foreign to one that is mostly domestic, saying in 2013 the mine would have a “full Canadian work force” after 10 years of production.

But documents recently filed as part of an environmental-assessment process provide more detail about that transition, and an updated estimate of the cost to build the mine of $554.9-million, compared with a previous estimate of $300-million.

According to an executive summary, the number of temporary foreign workers at the project, for which preparatory work began in 2014, would peak in 2018 at 494 – 382 hourly and 112 management employees – out of a total of 764, or nearly 65 per cent. By 2027, plans call for zero hourly foreign workers and 20 managers out of a total of 764. Those levels are projected to stay the same for the rest of the mine’s life.

The environmental assessment is taking place nearly two years after HD Mining sent more than a dozen Chinese miners home in January, 2013, over uncertainty related to a high-profile court battle.

Big Hydro’s big days are behind it – by Konrad Yakabuski (Globe and Mail – January 5, 2015)

January 9, 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.

To paraphrase what another politician said about another energy megaproject, British Columbia’s plan to build a new $8.8-billion hydro project on the Peace River is hardly a no-brainer.

Depending on your assumptions about future electricity demand, environmental regulations and market trends, you could make a credible case for the 1,100-megawatt Site C power project that Premier Christy Clark has just green-lighted. But Ms. Clark’s refusal to submit her plan to a review by the B.C. Utilities Commission suggests she’s not especially confident of winning the argument.

This raises a broader credibility problem facing all of Canada’s provincially owned electric utilities. They are run by political appointees who answer to politicians who live to cut ribbons. The utilities are fiercely jealous of their prerogatives as near-monopoly suppliers of electricity and fight incursions by the private sector. When they make the business case for a new publicly financed hydro megaproject, it’s hardly an objective exercise.

So, from Newfoundland to B.C., hydro megaprojects are back in fashion. From Muskrat Falls to Site C – with Quebec’s La Romaine and Manitoba’s Keeyask and Conawapa in between – governments are again betting billions on Big Hydro. But they are confusing economic development with sound energy policy.

Barrick Gold Corp comes under fire, cut to underperform in extensive analyst report – by Peter Koven (National Post – January 9, 2015)

January 9, 2015

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

Barrick Gold Corp. has received plenty of criticism from the investment community over the past few years, much of it deserved. But few have been as thorough and pointed as Macquarie Capital Markets analyst Ron Stewart.

Over the course of a 17-page report released Wednesday, he argued the battered stock should still be avoided, even though it has already dropped more than 70% over the past three years, and pointed to a lot of faults at Barrick: lack of growth, excess debt, poor strategic clarity, operating risk and a head office that appears to be in turmoil.

Nearly every sell-side analyst calls Toronto-based Barrick a buy or a hold. But Mr. Stewart downgraded it to underperform with a target of $11 a share, noting the company has “limited options” to repair its balance sheet and needs more time to regain investor confidence.

“Miners are known for their ability to dig holes; big miners dig big ones,” he said in the report. “Barrick, the biggest gold miner on the planet, however has dug itself into a huge financial hole that is going to be difficult to get out of any time soon unless metal prices improve.”

Of course, he noted the company’s two biggest errors of the last few years: the botched construction of the Pascua-Lama project in South America and the $7.3-billion purchase of the Lumwana mine, which is set to be shuttered because of a massive royalty hike in Zambia.

Harper-Wynne meeting a ‘good discussion,’ but not end of their cold war [Ring of Fire conflict] – by John Ivison (National Post – January 9, 2015)

January 9, 2015

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

The late unpleasantness between Kathleen Wynne and Stephen Harper may appear to have been resolved by their meeting last Monday in Toronto.

But, behind the scenes, all is not well and hostilities may be resumed when the Ontario Premier travels to Ottawa to speak on the state of the federation at a Canada 2020 conference on Jan. 20.

The suspicion at Queen’s Park is that the Prime Minister met Ms. Wynne simply to buy some peace and shut down a source of relentless criticism. The Premier had previously bemoaned the fact that Mr. Harper had refused to meet with her in 2014.

In her media availability following the pre-hockey game summit, she called the meeting a “positive step forward” and refrained from the kind of megaphone diplomacy that has characterized their relationship to this point.

But it is understood that the Premier expects to see some concrete results emerging from the conversation and that if those don’t materialize, she will go back on the offensive. The catalyst for a new cold war is likely to be the Ring of Fire in Northern Ontario.

Ms. Wynne said that she and Mr. Harper had a “good discussion” over the mineral deposit project and the provincial request for $1-billion in federal funding to match the provincial government’s planned investment.

Sask. potash royalty structure ‘alarmingly inefficient:’ report (Canadian Press/CTV News – January 7, 2015)

January 8, 2015

http://regina.ctvnews.ca/

A new report says Saskatchewan’s potash royalty structure needs to be overhauled because it is too complex and “alarmingly inefficient.”

Jack Mintz, a professor at the University of Calgary, says the royalty program is the most complicated in the world. “Hardly anyone understands the Saskatchewan system,” said Mintz, who is the director of the university’s School of Public Policy.

His report released Wednesday says that while Saskatchewan produces almost one-third of the world’s potash, its tax on the resource isn’t competitive on an international level. “What you really want is something that’s stable,” said Mintz, who added that there are wide fluctuations in the current approach.

The royalties collected by governments from resource companies help fill provincial coffers. Saskatchewan’s system includes a production-based levy, revenue-based levies, profit-based taxes and other taxes on capital investment.

“Saskatchewan is competitive as long as there is a lot of investment that is undertaken by firms,” Mintz said. “But it’s not very competitive — in fact it actually has the highest effective tax rate on investments compared to any other country that we look at — when companies aren’t investing as much as the 2002 period.”

Investissement Québec in talks to reopen Cliffs Natural Resources mine in Bloom Lake – by Frederic Tomesco and Liezel Hill (Bloomberg News/Montreal Gazette – January 8, 2015)

January 8, 2015

http://montrealgazette.com/

Quebec is talking to U.S. miner Cliffs Natural Resources Inc. about restarting the Bloom Lake iron-ore mine in the northeast of the province.

It’s too early to provide more details on the discussions or speculate on potential outcomes, Quebec Energy and Natural Resources Minister Pierre Arcand said in an interview yesterday.

Investissement Québec, an investment arm of the provincial government, is talking to the Cleveland-based company “about the next step,” he said. “We’ll look for the best way to relaunch this facility.”

Cliffs announced Jan. 2 it had ended production at Bloom Lake, less than two months after the company said it was considering the closing of the project. Cliffs acquired the mine in 2011 via its C$4.2 billion ($3.6 billion) takeover of Consolidated Thompson Iron Mines Ltd.

Cliffs is exiting higher-cost operations to focus on its domestic business after iron-ore prices slumped to a five-year low amid weakening demand for the steelmaking ingredient in China, the biggest consumer. A Cliffs spokeswoman didn’t immediately respond to requests for comment.

Quebec Finance Minister Carlos Leitao said in June that his government would revive the so-called Plan Nord, a strategy to tap mining and energy resources north of the 49th parallel that the previous administration halted in 2012.

Oil collapse threatens Ottawa’s balance plans: ‘There’ll be a big hit right up front’ – by Gordon Isfeld (National Post – January 8, 2015)

January 8, 2015

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

OTTAWA — With oil prices tumbling and no solid bottom in sight, economists are shaving their forecasts for Canadian growth and predicting interest rates will stay lower for longer.

While weak energy costs will likely keep inflation in check, the drop in crude to more than five-year lows could also throw the federal government’s budget-balancing plans out the window as revenues shrink.

Combined with the collapse in oil — one of the country’s major exports — the already-weak Canadian dollar is being held down by near-record-low lending levels that are now not expected to begin rising until late this year or early 2016.

“Depending on where the bottom is on oil prices and how long they stay there, it will definitely be a negative on the economy,” said Pedro Antunes, deputy chief economist at the Conference Board of Canada.

“The reality is we’re going to suck out of the economy billions and billions in terms of profits, in terms of revenues,” he said. “There’ll be a big hit right up front.”

Ontario’s magical economy isn’t working – by Catherine Swift (National Post – January 8, 2015)

January 8, 2015

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

Socialism in its various guises has never worked to the benefit of average, middle-class people. Take the Government of Kathleen Wynne as a real-time case in point. A number of recent developments in the province have focused the mind on how the current Ontario government’s policies are hurting, not helping, average Ontarians.

The Wynne government professes to be the savior of the lower- and middle-class. All factual evidence suggests otherwise. As last month’s report by Ontario’s Auditor General (AG), Bonnie Lysyk, pointed out in stark terms, all efforts of Ontarians to contain their rapidly increasing hydro bills by doing their laundry in the middle of the night are for naught. Anyone who was paying attention to their hydro bill would have already known this.

A recent bill showed that my household’s hydro consumption was precisely the same as the comparable period last year, with maximum “off-peak” usage, yet the bill increased by 8% – four times the rate of inflation. Informed analysts know that the main driver of hydro costs in Ontario is the “Green Energy” policy imposed by the government, an approach that is being abandoned elsewhere around the world as evidence showed it had negligible environmental benefit. The exodus of manufacturers from Ontario is in part driven by uncompetitively high hydro costs.

Another recent policy proposal that will do nothing but harm average Ontarians is the Ontario Retirement Pension Plan (ORPP). As designed, this plan will hurt lower income families the most.

Will 2015 finally be the year of the national securities regulator? – by Gordon Isfeld (National Post – January 5, 2015)

January 7, 2015

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

OTTAWA — It might have seemed like a straightforward proposition at the time: tying the strands of securities regulators across this country into one federal body with a unified set of rules.

But Canada — now a respected member of the Group of 20 industrialized nations — has for decades fallen short of that goal, leaving it out of step with global peers who long ago established national oversight of their respective capital markets.

Despite piling on study after study — some dating back nearly 60 years — along with numerous false starts, Ottawa is still less than halfway to its goal of creating some form of federal watchdog here.

It could be said that the most recent attempt, with the Conservative government pushing in 2013 to create the yet-to-be-launched Cooperative Capital Markets Regulatory System, the concept has finally reached the critical mass of signatories necessary to legitimize its existence and move forward.

Even now, of the country’s 13 provinces and territories, only five — Ontario and British Columbia in 2013, and Saskatchewan, New Brunswick and Prince Edwards Island in 2014 — are officially on board, while eight remain outside the framework. And of those, at least three — Quebec, Alberta and Manitoba — have vowed not to join.

Oil price plunge is Canadian business story of year – by Lauren Krugel (Toronto Star – December 31, 2014)

January 7, 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.

CALGARY — From Alberta oilfields to Bay Street boardrooms to the gas station on the corner, the precipitous drop in crude prices is expected to have far-reaching impacts across the country heading into 2015, making it The Canadian Press Business News Story of the Year.

The abrupt turnaround in oil markets was chosen by half of the 50 editors and news directors across the country who participated in the annual survey.

In explaining their pick, many respondents noted the story’s ripple effects beyond the oilpatch. Richard Dettman, business editor at News 1130 in Vancouver, said the halving in crude prices over a six-month span created a “gusher of stories” — the hit to federal and provincial government coffers, the plunging loonie and the benefit to consumers, to name a few.

Lynn Moore, assistant city editor, business at the Montreal Gazette, highlighted several ways in which oil’s decline will reverberate across Canada.

“A sustained period of low oil prices will throw a big wrench into the works of the Canadian economy and collective psyche.

The end of Canada’s oil superpower pipe dreams – by Terence Corcoran (National Post – January 7, 2015)

January 7, 2015

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

The Washington dust has not yet settled around Canada’s Keystone XL pipeline, but the fuzzy images visible Tuesday through the political storm do not look promising. Nothing in the current play of politics and oil prices would lead to the conclusion that Keystone will ever get approved.

But it’s worse than that for Canada. As the world oil market swirls, not just Keystone is at stake. The greater risk is that the great national global energy superpower dream is going down the drain, washed away by a confluence of forces over which Canada has no control.

On Tuesday, the White House said President Barack Obama would veto the latest Republican effort to push a Senate Keystone bill through Congress. It was an easy decision for the President to announce, since it appears the Senate failed to come up with the necessary 67 votes to override Mr. Obama’s veto.

When even a Republican-dominated Senate can’t muster enough support to force the President’s hand, it’s a sure sign that environmentalists and other activist opponents of Keystone still dominate the pipeline decision-making process.

While Canada’s dreams of exporting more oil sands production to the United States face a grim political environment, the economic environment looks even shakier.

Can the once-mighty TSX Venture Exchange be saved? – by Peter Koven (National Post – December 27, 2014)

January 7, 2015

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

Canada’s junior stock market is in crisis. Hundreds and hundreds of companies can’t raise money, do anything productive to create shareholder value, or get anyone to trade their stocks. But the biggest problem may be that most people just don’t seem to care.

Tell a Canadian market participant that the S&P/TSX Venture composite index hit an all-time low in December and you will likely be met with astonishment.

The once-mighty junior exchange, a place where issuers have raised more than $80 billion in capital during the past 13 years, has fallen so far off the investment community’s radar that most investors seem to have no idea it is plumbing such depths.

The raw numbers are grim. The index is down a whopping 73% since March 2011, and 80% from its all-time high in 2007. The total market value of the exchange’s nearly 2,000 companies is less than $30 billion.

By comparison, the market cap of companies on the Canadian Venture Exchange was more than $100 billion in 2001 before it was acquired by TMX Group Inc. and became the TSX Venture Exchange.