Iran’s return to the oil market could send prices diving – by Yadullah Hussain (National Post – September 27, 2013)

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

Iran’s return to the oil market could trigger a “positive supply shock,” sending oil prices plunging by as much as US$20 per barrel, although Saudi Arabia will probably move swiftly to ensure a softer, $10-drop in crude prices.

Increasingly crippling sanctions imposed by Western countries to punish Tehran for pursuing a nuclear program has limited Iran’s ability to export its primary production over the past few years.

But in recent weeks, both Tehran and Washington have replaced their sabre rattling with a softer tone, raising hopes of a diplomatic solution, especially as the Iranian government hopes to resolve the nuclear dispute within three to six months.

U.S. Secretary of State John Kerry was to meet Iranian foreign minister Javad Zarif on Thursday in what is billed as the first direct contact between the U.S. and Iran in six years. Foreign ministers from the U.K., China, France, Germany and Russia also were to join in the discussion.

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Harper ‘won’t take no for an answer’ from U.S. on Keystone XL – by Joanna Slater (Globe and Mail – September 27, 2013)

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.

NEW YORK — Prime Minister Stephen Harper warned that Canada would not take no for an answer from the United States on the Keystone XL pipeline and declared that political calculations were the only obstacle blocking the project.

In pointed remarks to an audience in New York, Mr. Harper asserted that the arguments in favour of the proposed pipeline were “overwhelming” and vowed to continue his campaign to win approval for the project until it succeeds.

“My view is that you don’t take no for an answer,” Mr. Harper said. “We haven’t had that [from the U.S.], but if we were to get that, that won’t be final. This won’t be final until it’s approved and we will keep pushing forward.”

Mr. Harper didn’t spell out what Canada would do if Keystone were rebuffed, but did point to demand for Canadian energy around the world and to proposals for eastern and western pipelines. “If I were an American the last thing I would want to see is Canada selling its oil anywhere else.”

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Oil find boosts Nfld. offshore prospects – by Jeffrey Jones (Globe and Mail – September 27, 2013)

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.

CALGARY — Newfoundland’s government is touting a major offshore discovery as the start of a new chapter in the province’s oil industry, and a reason for international energy companies to consider investments there.

Statoil ASA of Norway said Thursday its discovery in the Flemish Pass Basin, called Bay du Nord, could hold 300 million to 600 million barrels of light oil. The upper end of that range would be Newfoundland’s third-largest discovery. Statoil’s partner in the project is Calgary-based Husky Energy Inc.

Bay du Nord represents the partners’ third oil discovery in that area. The find is in deeper North Atlantic water and farther off the coast from the Jeanne d’Arc Basin, where the Hibernia, Terra Nova and White Rose fields produce, and the $14-billion Hebron field is under development.

“That’s good news for us and it certainly will encourage increased offshore exploratory activity. It’s one of the largest offshore oil fields to be discovered off Canada,” Tom Marshall, Newfoundland’s Natural Resources Minister, said in an interview.

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Derailing passenger train to Ontario north costly blunder – by Christina Blizzard (Toronto Sun – September 27, 2013)

TORONTO — Think of it as Northern Ontario’s very own $1-billion gas plant boondoggle. Except it’s not about moving generating plants.

It’s about the way former premier Dalton McGuinty and his finance minister, Dwight Duncan, shut down Ontario Northland Transportation Commission (ONTC), once a vital link for communities like North Bay, Cochrane and Timmins.

(While the end of the line was Marathon, a bus took passengers on to Timmins.) Abruptly last year, the government shut down the rail link from Toronto, leaving in place only the Polar Bear Express from Cochrane to Moosonee.

The last train rattled out of Union Station last September and since then Nipissing Tory MPP Vic Fedeli has been asking questions about the government’s figures.

Announcing the shutdown, Duncan claimed it would save $265 million. Documents made public along with the gas plant material put the lie to that, Fedeli says. “If they go ahead with the full sale, it will cost the treasury $790 million. That’s a $1-billion gap from saving $265 to costing $790 million,” he told me.

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CRA says Saskatchewan uranium giant Cameco has avoided paying hundreds of millions in Canadian taxes by offshoring profits in Switzerland – by John Greenwood (National Post – September 26, 2013)

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

The Canada Revenue Agency says Saskatchewan-based Cameco Corp. hasn’t been paying its taxes and it wants the money. Now Saskatchewan premier Brad Wall has joined the fray, calling for Cameco, the world’s largest publicly traded uranium producer, to pay up.

Speaking to reporters this week, Mr. Wall said part of the tax revenue that Ottawa collects ends up going back to the provinces, so when the CRA says it’s not getting what it believes it should, “that’s a concern to [Saskatchewan] as well, and it should be. It doesn’t matter who the company is, or the individual. We should pay taxes that are due.”

At issue is Cameco’s alleged practice of shifting profits to a Switzerland subsidiary where taxes are lower. And while the Cameco case has been going on for several years and though the CRA won the most recent round, the ruling is being appealed and observers say it is unclear who will come out on top.

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Natural gas may be cheap and clean, but Quebec still holds a grudge – by Sophie Cousineau (Globe and Mail – September 25, 2013)

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.

Sophie Brochu was all smiles when she sat down to testify at Quebec’s roving commission on the province’s energy stakes, but in a flash, sparks started flying between the president and CEO of Gaz Métro and the commission’s co-chair Normand Mousseau.

She had been told by the commission’s staff she had 15 minutes to make her case. But he curtly retorted she had 10. Should she spill over and leave no time for questions, Mr. Mousseau implied, that would cast the province’s biggest gas distributor in a bad light. It was just a skirmish, really, and yet the incident was telling. In the land of hydroelectricity, natural gas is not cordially welcomed.

Through the public consultation now under way, the Quebec government is redrawing its energy policy with an eye to reducing its carbon footprint and to decreasing its reliance on imported oil. The Parti Québécois upped the ante on the Liberals with an ambitious promise to reduce greenhouse gas emissions by 25 per cent by 2020. To keep its word, the PQ government is championing projects that strike the imagination of voters. Electrifying the province’s transportation means is all the buzz. So is pumping oil out of Quebec soil even if both of those grand schemes will take at least a decade to materialize.

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Iron ore giant Vale has a secret but it is not telling – by Cecilia Jamasmie ( – September 25, 2013)

Brazilian miner Vale (NYSE: VALE), the world’s biggest iron ore firm, is considering more non-core asset sales by the end of the year, but it is also working on a deal that could shock the market, said Chief Executive Murilo Ferreira yesterday.

After a speech at the Brazilian Mining Congress, the executive told reporters Vale was evaluating whether to sell its 22% stake in aluminum producer Norsk Hydro ASA (STO:NHYO), as well as its 40% stake in Brazilian bauxite miner Mineracao Rio do Norte SA. The company is also evaluating what to do with its remaining oil and gas assets.

“We also have a surprise that I won’t mention so you remain curious,” Ferreira told reporters Tuesday, after a speech at the Brazilian Mining Congress, according to Bloomberg.

Iron ore prices to hold

The miner is quite bullish about global iron prices, as it sees demand from China, the world’s top iron ore consumer, likely to moderate next year. The executive director for ferrous and strategy, Jose Carlos Martins, said Wednesday the firm was expecting prices to be in range of $120-$130 a tonne in the fourth quarter.

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China’s potash deal with Russia threatens Canadian profits – by Carrie Tait (Globe and Mail – September 25, 2013)

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.

CALGARY — China has bought a chunk of one of the world’s largest potash producers, giving the Asian country more control over what price it should pay for the fertilizer – a move that could drag down prices for the mineral and eat into profits for Canada’s potash companies.

China Investment Corp., Beijing’s sovereign wealth fund, agreed to acquired a 12.5-per-cent stake in Russia’s OAO Uralkali. The deal – a debt-for-equity exchange between CIC and a company owned by three Russian oligarchs – comes after Uralkali said it intends to break from Belarus Potash Co., the cartel it had with state-owned Belaruskali.

Companies controlled by Beijing have invested billions of dollars as part of an overall strategy to secure energy supplies as well as basic manufacturing and building materials. In Canada, Chinese oil and gas companies, along with CIC, are significant energy players. CIC’s deal with Uralkali fits the recent Chinese model: Invest in resources in order to secure supply and exert some control over prices.

China is the world’s most populous country and largest potash consumer, and its stake in Uralkali could hurt Canada’s fertilizer producers because they could further lose pricing power.

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Peter Munk responds to his critics – by Peter Munk (Globe and Mail – September 25, 2013)

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.

In an article published in this newspaper on Sept. 18, 2013, David Parkinson was unfairly critical of me and the governance practices at Barrick Gold Corp. Mr. Parkinson went so far as to suggest that I was treating Barrick as if it were my “personal piggy bank.” You have extended to me the opportunity to rebut his criticisms, for which I am thankful.

I founded Barrick more than 30 years ago. In the period since, Barrick has become one of the most successful companies in Canada, and one of the world’s largest and most profitable gold mining companies. Barrick now has operations on five continents and more than 25,000 employees. In the most recent fiscal year, Barrick had record revenues of more than $14.5-billion. In the last three years alone, despite some major non-cash write-offs, Barrick had operating cash flows of more than $16-billion; and EBITDA (earnings before interest, taxes, depreciation and amortization) of more than $23-billion. Measured by these key metrics, this ranks Barrick as one of the top performing companies on the Toronto Stock Exchange over the period.

Contrary to Mr. Parkinson’s assertions, the board of directors of Barrick takes its governance obligations very seriously. Moreover, the compensation arrangements referred to in his article were approved both by Barrick’s compensation committee, comprised entirely of independent directors; and subsequently and unanimously by the independent directors of the board as a whole.

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B.C. Mining Protest: Company Pulling Out From Mt. Klappen – by The Canadian Press (Huffington Post – September 24, 2013)

VANCOUVER – A Canadian mining company is moving to diffuse a growing dispute with First Nations over a proposed open pit coal mine in northern B.C., by pulling out of the mine site for several months.

However, Fortune Minerals (TSX:FT) said it is not leaving Mount Klappan for good, and that the company remains committed to the mine in an area considered sacred by First Nations.

“While all of Fortune’s activities at the project site are focused on gathering necessary information that will be used in a B.C. environmental assessment process, … the company has faced disruptive and damaging protests,” the firm said in a statement.

On Sunday, about 40 members of the Tahltan First Nation, including elders, moved into the Fortune’s camp site at Mount Klappan and asked the workers to leave.

Tahltan members had earlier issued what they called an “eviction notice, requiring the company to halt its exploration activities and leave the area,” said a news release issued by the Tahltan Central Council on Tuesday.

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Japan Inc. shows it means business in Canada – by Claudia Cattaneo (National Post – September 25, 2013)

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

A major topic loomed large during Tuesday’s first official visit to Canada by Japanese Prime Minister Shinzo Abe: building a long-term energy relationship for the benefit of both.

It’s well known that energy-poor Japan has been eyeing Western Canada’s abundant natural gas deposits as a new energy source, particularly since the Fukushima disaster in 2011 shut down its nuclear industry, and that Canada is equally motivated to sell energy to Japan as a way to diversify its energy markets away from the United States.

The big hurdle to what could be a union made in heaven is price: Japan is struggling to pay the premium prices for imported liquefied natural gas (LNG) that are prevailing in Asia, partly due to its own increased demand since Fukushima, and is bargaining hard for a new energy deal with Canada that it can afford.

While contracts are ultimately the domain of the market, Abe told reporters in Ottawa the two countries agreed to co-operate more closely on natural gas and praised Canada as a stable source that can provide natural gas at competitive prices. Showing it means business, Japan Inc. has moved en masse to Canada over the past two years to sweeten the relationship through investment.

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[Saskatchewan Premier] Wall silent on Cameco tax move – by Murray Mandryk (Regina Leader-Post – September 24, 2013)

It’s been six years since Brad Wall was elected Saskatchewan premier, but it was three years ago at this time when he cemented himself as a populist politician.

A proposed takeover of Potash-Corp by multinational South African-Australian mining giant BHP Billiton left Wall on the horns of dilemma: Should he subscribe to his philosophically conservative roots and simply allow the market/shareholders to sort this matter? Or should he act in the best interests of a province whose priority would be PotashCorp’s market share and, thus, royalties?

Compounding matters were BHP Billiton’s eagerness to excuse itself from the marketing cartel Canpotex, which controls offshore potash sales, versus the fact that BHP Billiton was in the early stages of developing what may be the province’s biggest potash mine and one of the first new mines to be built in 40 years.

By setting aside his philosophy and choosing to put the interests of Saskatchewan taxpayers first, Wall established himself as a populist leader voters could look to, to do the right thing … even if that meant sometimes going against his natural inclinations.

However, Wall’s future political and governance success will largely depend on his ability to demonstrate that this wasn’t just a one-off and – when the situation requires – that he is capable of taking on the corporate giants on behalf of the Saskatchewan citizenry.

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Boom towns could tax resources: municipalities – by Jeff Lee (Vancouver Sun/Canadian Press – September 19, 2013)

While the federal and B.C. governments are pushing hard to open up Canada’s liquefied natural gas reserves for export to Asia, local municipalities are raising concerns about the impacts the dramatically rapid developments will have on them.

Whether it is the pressure on local policing, health care and community resources that pop-up boom towns will have on neighbouring cities to the impact on infrastructure such as roads and sewers, municipalities in the northern half of B.C. are tepidly raising a caution flag at this week’s Union of B.C. Municipalities Convention.

“We’re not saying we don’t want the economic investments. We do,” said Oliver Ray, executive director of the North Central Local Government Association. “But with investment in LNG will come some heavy pressures on our municipalities, and we’re worried about the impact that can have on us.”

A third of the association’s 30 resolutions to the UBCM deal with concerns over the impacts caused by rapid resource development. The association represents all local governments in the northern half of B.C., including more than 400,000 residents.

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Mining labour shortage coming in next 10 years – by CBC News Sudbury (September 23, 2013)

Mining Industry Human Resource Council, Canadian Institute of Mining looking at options

Canada is poised for a big labour shortfall in the mining field — and Sudbury is not immune. According to the Mining Industry Human Resource Council, there could be a need for 150 to 200 thousand workers by 2023.

The head of the MIHR said the organization is coming up with strategies to make up for the gap. “Based on our forecasting, Sudbury will need about 20,000 new workers between now and the next 10 years,” Ryan Montpellier said.

“So really, we’ll need about 2,000 new people per year for the mining industry — due to some growth, but primarily due to replacement demand, or people leaving towards retirement.”

A recent industry report estimated that 25 per cent of current workers in Canadian mining will be eligible to retire by 2023. Meanwhile, the Canadian Institute of Mining is working on a new campaign to address the threat of a labour shortage in the global mining industry.

The executive director of the CIM said Canada could be short 100,000 workers in the next decade. “Right now, the industry doesn’t have a good enough handle on the global requirements,” Jean Vavrek said.

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Barrick Gold’s brave (and scary) new world – by David Milstead (Globe and Mail – September 21, 2013)

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.

The buzzword at Barrick Gold Corp. is governance, as the miner responds to unhappy shareholders by adding new members to its board and revising its pay practices for key executives.

The changes that may make the biggest difference to its survival, however, are occurring at the Toronto-based company’s mines. During the past few months, Barrick has cut its head count and deferred capital spending. It has also slashed its dividend as the price of gold has slumped.

As the most debt-heavy miner in the industry, Barrick has the most to lose as gold prices decline. It also has the most to gain as gold prices rise, which may explain why the shares are now near $20, up about 40 per cent from their weakest points earlier this year, as gold has bounced off its recent lows.

Investors who choose Barrick as a means of playing a gold rebound, however, could be in for a long, painful slog if the metal’s price languishes.

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