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The next pop can? How Ford’s new F-150 trucks are shaking up the aluminum industry – by Kristine Owram (National Post – November 22, 2014)

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

After several years of turmoil, the North American aluminum industry may have found its saviour in Ford Motor Co.’s new F-150 — arguably the biggest thing to happen to the metal since Coke and Pepsi ditched steel cans in 1967.

“When cans transitioned to aluminum it was the beginning of a new era for the industry,” said Gervais Jacques, chief commercial officer at Rio Tinto Alcan, which sells aluminum to General Motors Co., Honda Motor Co. and Tesla Motors Inc. “This is to the same extent.”

Like many other metals, aluminum prices plunged at the start of the financial crisis in 2008. Several aluminum makers were forced to dramatically curtail production in response to a collapse in global demand and an increase in Chinese production that they had dramatically underestimated.

Rio Tinto Group Plc, the global miner that bought Montreal-based Alcan at the height of the market in 2007, has been forced to take US$25-billion worth of writedowns on that acquisition — more than two-thirds of the US$38-billion it paid for the takeover. But aluminum’s troubles may be over, thanks to the aluminum-bodied F-150 and the potential for many other vehicles like it.

One company that sees a massive opportunity arising from the auto industry’s new taste for aluminum is American Specialty Alloys Inc.

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THE LUNCH: For Kinross CEO, it’s ‘situation normal’ in Russia – by Eric Reguly (Globe and Mail – November 22, 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.

LONDON — When you buy a share in Canada’s Kinross Gold Corp., you are not just betting on gold prices; you are betting on the outcome of the great geopolitical standoff between the West and Vladimir Putin’s Russia, which may or many not evolve into a new Cold War.

So far, the bet has gone massively in Mr. Putin’s favour – Kinross shares are so low that they seem to be awarding virtually no value to Kinross’s two big, and profitable, gold mines in Russia’s far east. In 2010, Kinross was a $20 stock. Today, it trades at about $3.20 and has been as low as $2.27. But haven’t all gold companies been slaughtered along with the gold price?

Yes, but Toronto-based Kinross is in a submarine class all of its own and when its executives and shareholders are in a masochistic mood, they call up a few Goldcorp charts. Vancouver’s Goldcorp Inc. is of roughly equal size yet its market value is more than four times higher than Kinross’s ($18.5-billion versus $3.6-billion). Eldorado Gold Corp., whose production is less than a third of Kinross’s, is worth $5-billion. Ouch! Whip us again! Kinross’s problem can be summed up in one wretched word: Russia.

“We’re getting doubly hammered because of the gold price and the situation in Russia,” says Kinross CEO Paul Rollinson, who was in London this week trying to convince investors and brokers that the economic sanctions against Russia were not endangering Kinross’s mines.

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How Canada Can Help Combat the ‘Resource Curse’ – by Lina Holguin (Huffington Post – November 20 , 2014)

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

Lina Holguin is a Policy Director at Oxfam Canada and Oxfam-Quebec.

Recently, Canada’s Parliament introduced the Extractive Sector Transparency Measures Act, which could have a huge impact on people around the world experiencing the “resource curse.”

More than 60 per cent of the world’s poorest people live in countries rich in natural resources — but they rarely share in the wealth. Too often, poor communities have no say in the extraction of resources from their land and receive little information about the scope of these projects, the revenues they generate, their timelines and potential impacts.

The legislation would increase transparency in the oil, gas and mining industry by requiring Canadian companies to disclose the payments they make to governments for the extraction of natural resources. The legislation, part of the omnibus bill introduced last month, is an important first step to helping citizens of resource-rich countries increase accountability and fight corruption.

The finalized legislation needs to align with global transparency standards already in place around the world, including in the European Union and the U.S., which require company by company, country by country, public, project-level disclosure. Publish What You Pay Canada, of which Oxfam is a member, has proposed amendments to the law that would bring it into line with these standards. At the moment, the act has critical gaps that must be filled to make it effective and to deter corruption.

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Ring of Fire is ‘beyond the point of no return,’ mining company says – Bill Curry and Bertrand Marotte (Globe and Mail – November 20, 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 and MONTREAL – The Ring of Fire project is “beyond the point of no return” in spite of renewed government pledges to move ahead, says the CEO of the mining company that owns the rights to most of the resources in the remote Northern Ontario mineral deposit.

Cliffs Natural Resources Inc. CEO Lourenco Goncalves made headlines last month with his declaration that he had “zero hope” that the Ring of Fire would be developed in his lifetime.

In an interview with The Globe and Mail this week, Mr. Goncalves said recent pledges from the federal and Ontario governments to support the project with public infrastructure cash have not changed his assessment of the project’s viability.

“Last month I said it would not happen in the next 50 years. This month I will say it’s not going to happen in 49 years and 11 months,” he said. “We are beyond the point of no return.”

The Cleveland-based company bought three chromite deposits in 2010 for $350-million and has spent about $200-million on development. Since large chromite deposits were first discovered in 2008, estimates have pegged the mineral potential of the region at $60-billion.

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Cliffs Natural Resources retreats from Canadian ‘disaster’ – by Nicolas Van Praet (Globe and Mail – November 21, 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.

MONTREAL — The chief executive officer of mining giant Cliffs Natural Resources Inc. is taking aim at his predecessors for their decision to pump billions of dollars into Canada, saying every single investment it made here in recent years was a “disaster” that failed to produce any profit.

“I’m walking away from Canada big time – Canada for Cliffs has not been a good thing,” Lourenco Goncalves, the company’s chairman and CEO, said in an interview Thursday. “All these investments that the company made in Canada after the Wabush mine were a disaster.”

“I’m not the type of guy that’s too much of a Monday morning quarterback,” he said. “But these [decisions] are very clear. Misguided decisions all the way.”

Cleveland-based Cliffs, the biggest U.S. iron ore producer, has spent $6-billion (U.S.) in all on its Bloom Lake iron ore mine in northeastern Quebec over the past three years and “never made a penny” on the investment, Mr. Goncalves said. The company on Wednesday announced that it is “pursuing exit options” for its Eastern Canadian iron ore operations, evaluating its maximum exposure to close the Bloom Lake site at $700-million. The company will also close its mine in Wabush, Nfld., which had been in operation for more than 40 years.

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There are many good reasons for takeover interest in Nevsun — and one really big downside – by Peter Koven (National Post – November 21, 2014)

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

Canadian miner Nevsun Resouces Ltd. has emerged as a potential takeover target, but any bidder is going to have to overcome a major deterrent: Eritrea.

The Vancouver-based miner revealed Thursday it recently received inquiries from “various parties” about a potential transaction. The announcement came after Bloomberg News reported that a Qatar-backed private equity fund called QKR Corp. is eyeing a US$1-billion bid for the company. Nevsun shares jumped 11%, giving the firm a market value of $942-million.

There are good reasons for the interest. Nevsun’s Bisha mine is extremely rich, with high-grade copper output that will transition into high-grade zinc output in a couple of years, when many analysts are forecasting shortages in the zinc market. The company has promising exploration ground in the area that could yield more mines. It also has close to US$400-million of cash, which means a takeover would largely pay for itself.

But the downside is that Bisha is in Eritrea, which is ruled by one of the world’s most repressive governments. The country is facing international sanctions, and Western governments may not look kindly at any company looking to do business there.

The Eritrean government has caused major problems for Nevsun.

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By erecting new hurdles for Energy East, Quebec is caving to pipeline opponents – by Claudia Cattaneo(National Post – November 21, 2014)

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

As if TransCanada Corp.’s 30,000-page application to the National Energy Board for its proposed Energy East pipeline wasn’t good enough, the Quebec government has laid out seven conditions of its own before allowing the $12-billion project.

In a Nov. 18 letter (in French) to TransCanada president and CEO Russ Girling, Quebec Environment Minister David Heurtel said the conditions include passing an environmental assessment that examines its impact on greenhouse gas emissions, echoing President Barack Obama’s warning that he won’t approve Keystone XL if it exacerbates greenhouse gas emissions.

“If the company doesn’t respond to the conditions, the project cannot go ahead,” Mr. Heurtel said.

Quebec approval of Energy East, which would take 1.1 million barrels per day of Alberta crude oil to refineries in Quebec and New Brunswick and to ports in both provinces for export, is also contingent on the project providing a thorough emergency plan with a compensation fund in case of a spill; consultations with communities on the potential social impacts; use of the highest technical standards to assure public safety and protection of the environment; satisfying issues dealing with First Nations; generating economic benefits for all of Quebec, especially in job creation in areas where the pipeline will be located.

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RPT-Quebec’s ambitious Plan Nord mineral project goes south – by Allison Lampert and Nicole Mordant (Reuters India – November 21, 2014)

http://in.reuters.com/

Nov 20 (Reuters) – A plan by the Canadian province of Quebec to spend billions to develop the mineral riches of its northern region has been dealt a crippling blow by the pending closure of a major mine as iron ore prices sink and China’s interest wanes.

The Plan Nord project hopes to attract C$80 billion ($71 billion) of investment to the vast northern region, of which the iron ore-rich Labrador Trough is a major component. The French-speaking province is trying to sell the plan globally and is hoping miners will flock to northern Quebec after the government invests in the infrastructure necessary to open it up.

But Plan Nord took a big hit on Wednesday, when Cliffs Natural Resources said it is closing its Bloom Lake iron ore mine after struggling to secure funds to expand the mine and make it viable. Chinese steelmaker Wuhan Iron & Steel owns a minority stake in Bloom Lake.

Bloom Lake, one of three producing iron ore mines in Quebec, would have become a major customer for a railway line being considered under Plan Nord.

“Without Bloom Lake there’s no Plan Nord,” Cliffs Chief Executive Lourenco Goncalves told Reuters. “Without the mine, there’s pretty much nothing for Plan Nord to transport from point A to point B.”

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Australia positioned as an Indo-Pacific power with new China, India trade deals – by Matthew Fisher (National Post – November 21, 2014)

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

CANBERRA — Australia is on the kind of diplomatic tear Canada can only dream of. Brisbane got lots of global attention by hosting the Group of 20 leaders summit in Brisbane last weekend because so many participants lined up behind Canada’s Stephen Harper to disparage Russian President Vladimir Putin for the Kremlin’s malignant actions in Ukraine.

Less than 24 hours later in Canberra, the Australian capital, Chinese President Xi Jinping and Australian Prime Minister Tony Abbott signed China’s biggest trade deal ever. Mr. Abbott followed that triumph by announcing a strategic security alliance with Indian Prime Minister Narendra Modi and, perhaps rashly, promised another trade deal could be expected by the end of 2015.

As Australia’s daily Financial Review crowed, “Simultaneous visits by Xi and Modi mark us as no longer an appendix to Asia, but as a core Indo-Pacific power.”

The optics must have looked good to the 2.6 billion people back home in China and India, too. The two leaders were accorded rapturous welcomes when they addressed Australia’s parliament on consecutive days.

Mr. Xi talked about how it was best to achieve peace through trade. Mr. Modi spoke of the bonds that Indians and Australians share. Both countries are democracies, he said, and their citizens love cricket.

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Teck to control contaminants from mining operations in B.C.’s Elk Valley (Canadian Press/Huffington Post – November 19, 2014)

http://www.huffingtonpost.ca/british-columbia/

VICTORIA – A plan to address decades of coal-mining contaminants leeched into the Elk Valley watershed has been approved by the B.C. government.

The water treatment plan by Teck Resources Ltd. would control selenium and nitrate that have been dumped into nearby rivers and streams as the mining giant expanded operations over the years.

The company will construct water diversions and treatment facilities at several of its mine sites, including at Line Creek, Fording River and Elkview Operations, the government said. Environment Minister Mary Polak said Tuesday that the measures will improve water quality.

“This plan represents the next step in the long-term plan to ensure a healthy watershed in the Elk Valley,” she said in a statement. “Many different groups have come together to find solutions.”

In April 2013, the government ordered Teck Resources to stabilize and reverse water-quality concentrations. It cited the presence of several chemicals, including selenium, cadmium, nitrate, sulphate and the formation of calcite in the water.

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Rock-bottom prices forcing Cliffs to pull up stakes in Canada – by Bertrand Marotte and Nicolas Van Praet (Globe and Mail – November 20, 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.

MONTREAL — Cliffs Natural Resources Inc.’s Canadian adventure is winding down. The Ohio-based mining giant is preparing to shut down its money-losing Bloom Lake iron ore mine in northeastern Quebec amid rock-bottom prices for the mineral and high operating costs. It has already closed a Labrador iron ore property at Wabush and said it is looking to sell its chromite deposits in northern Ontario’s Ring of Fire.

Cliffs has spent hundreds of millions of dollars developing the high-potential Ring of Fire deposit and the existing Lake Bloom operations, but has run into a series of roadblocks, including a five-year low for iron ore prices, slumping Chinese demand and major delays in getting agreements with Ontario and First Nations over essential infrastructure for the Ring of Fire.

A shutdown of Bloom Lake would be a major blow to the local economy and to the provincial government’s multibillion-dollar Plan Nord economic development strategy pinned on natural resources extraction north of the 49th parallel.

Likewise, the Ontario government had made the Ring of Fire the centrepiece of its ambitious development plans for the mineral-rich region about 500 kilometres northeast of Thunder Bay in the James Bay Lowlands. And Cliffs had been the leading mining player in that plan.

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What Uralkali’s mine shutdown may mean for the potash market – by Jonathan Ratner (National Post – November 20, 2014)

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

A major supply outage at one of Uralkali’s potash mines in Russia raises the prospect of a much tighter global market for the commodity and could serve as a much-needed catalyst for Canadian fertilizer stocks.

The shutdown of the Solikamsk-2 potash mine after Uralkali detected an increased flow of brine, which can weaken a mine’s structure, bodes particularly well for producers such as Potash Corp. of Saskatchewan Inc. to increase their sales since the Russian mine has annual capacity of approximately 2.3 million tonnes.

Raymond James analyst Steve Hansen said early indications are that the shutdown will be an extended one or possibly worse, and it comes during a period of international contract negotiations, which could influence both Chinese and Indian contract pricing to the upside.

He raised his 2015 international pricing benchmarks by US$10 per tonne to reflect the additional bargaining leverage that potash marketer Canpotex, whose members include Agrium Inc., Mosaic Co. and Potash Corp., should get from this development.

“With both Uralkali and Belaruskali running close to flat out of late, we believe that much of the volume shortfall stemming from this supply outage will accrue disproportionately to the western-based producers (i.e., Canpotex) who possess ample slack capacity,” he told clients.

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Cliffs’ massive closure costs at Bloom Lake stun analysts – by Peter Koven (National Post – November 20, 2014)

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

Three weeks ago, Lourenco Goncalves warned that shutting down the Bloom Lake mine in Quebec would not be a simple task. “Going away from [Bloom Lake] is not deleting it on a computer. It’s a pretty complicated process,” the chief executive of Cliffs Natural Resources Inc. told the Financial Post.

He wasn’t kidding. Cliffs announced on Wednesday that it plans to exit Bloom Lake. And if it can’t find a buyer, it expects to be on the hook for astounding closure costs of US$650-million to US$700-million during the next five years. The stock plunged US$2.04 or 20% to US$8.17 in New York on the news.

The Cleveland-based miner did not respond to requests for comment. But analysts said a key problem for Cliffs is the penalty costs involved in breaking a “take or pay” rail contract between Bloom Lake and the Quebec North Shore and Labrador Railway Company. If the mine shuts, there is no choice but to terminate that contract.

Citigroup analyst Brian Yu was forecasting US$360-million of care and maintenance and transport penalty costs over three years to close Bloom Lake, noting the company’s estimate is “obviously much larger.”

Cliffs said in a filing this month that if Bloom Lake were to close, “various commitments including rail minimums, royalties, and other ongoing costs could be incurred.”

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Red Chris mine failure would eclipse Mount Polley damage: report – by By Cara McKenna (CBC News British Columbia – November 19, 2014)

http://www.cbc.ca/news/canada/british-columbia

Porous soil at site of proposed tailings pond dam called a ‘major design issue’

The Canadian Press – The results of a third-party review into the design of a northwestern B.C. gold and copper mine says it has the potential to cause significantly more environmental damage than the recent collapse of the Mount Polley tailings pond.

Engineering firm Klohn Crippen Berger made 22 recommendations for the owner of the mine, Imperial Metals, to improve the tailings dam of the Red Chris mine, 500 kilometres north of Terrace.

The review found the design of the dam is feasible, but that there are issues that must be addressed. The three-phased review looks at the tailings pond design, water quality predictions and geohazards at the mine site.

It identifies a “major design issue” for the soil on which the dams would be built, noting the porous soil could cause damaging water leaks if the planned installation of a fine-grained tailings blanket isn’t enough to limit seepage.

It also suggests that designers carefully monitor the water balance for their tailings reservoir and complete a risk assessment around the effects of another nearby landslide.

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Quebec-Ontario power-sharing shows energy synergy – by Martin Regg Cohn (Toronto Star – November 20, 2014)

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.

Quebec has put separatism on the backburner. Is Ontario ready to reciprocate — by renouncing its own costly history of electricity separatism?

For decades, Ontario built political moats around its nuclear reactors — and raised the drawbridges to prevent the flow of cheaper hydroelectric power from our neighbouring province. But as Central Canada faces up to an era of economic upheaval and energy uncertainty, against a backdrop of newfound political stability, the calculus is changing.

We’ll get a hint of the economic and political benefits of energy co-operation Friday, when Quebec Premier Philippe Couillard and a dozen of his senior ministers sit down with Ontario’s cabinet. The meetings of ministers will produce a meeting of minds:

After months of negotiations kicked off by Wynne and Couillard, the two provinces are set to sign a historic power-sharing agreement — electrical, not political. The goal is to backstop each other’s base load electricity during peak periods, going beyond the traditional stop-gap approach of buying and selling power on short-term deals at peak periods.

This new approach will lead to ongoing power swaps without any money changing hands: Quebec’s peak load occurs during the winter heating season, when electrical baseboard heating puts a strain on its abundant reservoirs of hydroelectricity.

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