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Canadian Media Resource Articles

Mexico’s oil policy change challenges Canadian energy sector – by Jeffrey Jones (Globe and Mail – August 13, 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 — A rush of foreign investment in Mexican oil production in the wake of that country’s energy reforms threatens to fuel competition against Canada in the race to supply the U.S. Gulf Coast market with crude.

Mexico’s government is seeking to break a 75-year state monopoly on energy and lure private investors into the oil, gas and electricity industries to boost flagging output and lower energy costs for manufacturers.

The plan from President Enrique Pena Nieto, unveiled Monday, will be sent to the Congress for approval this week. It includes plans to change articles of the Constitution that prohibit private ownership of Mexican oil and introduce profit-sharing contracts.

If enacted, the reforms would mark the largest private sector opportunity in decades for Mexico’s oil and gas industry, which was nationalized in 1938 and is controlled by state monopoly Pemex. The national oil sector has been a source of Mexican pride since then, so approval of the reforms is still uncertain.

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Canada must continue to exercise its sovereignty in the North (Calgary Herald Editorial – August 12, 2013)

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

Prime Minister Stephen Harper, who made the Arctic a priority soon after coming to power in 2006, apparently needs to educate others in the federal government about how important the North is to the country’s well-being.

National Defence advisers have revealed there’s too much infighting going on in the civil service and that departments are failing to embrace the Tories’ so-called Northern Strategy. Their internal report, which was published last year but just now obtained by Postmedia News, is worrisome.

It is essential that Canada demonstrates its sovereignty in the sparsely populated region, which is rich in natural resources and is expected to become increasingly important for shipping in future years.

“The federal government culture can often be described by its hierarchical leanings and stove pipes which limit the exchange of information and often produce a reluctance to co-operate, lest traditional boundaries be violated or perceived authority be ceded unnecessarily,” says the report by the Defence Science Advisory Board.

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ArcelorMittal remains committed to Nunavut iron ore mine – by Robert Gibbens (Montreal Gazette – August 12, 2013)

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

MONTREAL — ArcelorMittal, the world’s largest steelmaker, said Monday it is fully committed to developing a $4 billion open-pit mine with an annual capacity of 18-20 million tonnes of high-grade iron ore on northern Baffin Island in Nunavut.

Steve Wood, ArcelorMittal’s vice-president, Iron Ore Americas, reaffirmed ArcelorMittal’s future plans for long-term development of the Mary River deposits, after addressing the 23rd World Mining Congress at the Palais des Congrès in Montreal. His comments follow skepticism from some industry sources who questioned whether ArcelorMittal was still committed to such a large capacity, following the collapse in global iron ore prices last year, along with a severe slowdown in steel demand.

ArcelorMittal’s commitment to the Baffin Island development comes at a time when executives like Rio Tinto Alcan CEO Jacynthe Côté are talking about the increased risks facing the mining industry, which is struggling with the vagaries of the economic cycle, rising operating, compliance and social costs, and locations that are more remote and challenging.

The blow to iron ore prices last year led ArcelorMittal to reduce its interest in Baffinland Iron Mines Inc. — owner of the almost inexhaustible Mary River deposits — from 75 per cent to 50 per cent.

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Canada’s new science minister wants green mining growth (QMI Agency – August 12th, 2013)

http://www.sunnewsnetwork.ca/home.html

OTTAWA – Newly appointed Minister of State for Science and Technology Greg Rickford gave a speech at the World Mining Congress Monday in which he referred to the industry as a “cornerstone of the Canadian economy” and iterated the need for continued growth.

He described how the feds have streamlined the regulatory process, eliminated redundant bureaucratic requirements and made project reviews more market sensitive.

But unlike other, similar speeches given by his Conservative comrades, Rickford’s emphasized environmental stewardship and the need for the mining industry to “(obtain) a social licence to operate.”

If the social licence can be defined as a trust among parties that all are benefiting satisfactorily and feel their priorities and concerns are taken into account, then the renewal of such a thing between the federal government, mining companies and the local communities they affect – namely First Nations – could prove invaluable. Because when it comes to the resource extraction industry in particular, public confidence in “the system” is abysmal, said Rob Roach, vice president of research at the Canada West Foundation.

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Gold producers squeezed by rising costs and sliding prices – by Tim Kiladze (Globe and Mail – August 12, 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.

Midway through his master’s degree in geology in the 1980s, Brian Christie trekked to the Red Lake gold mine in Northwestern Ontario as part of a research project. About 930 metres deep, more than one and a half times the CN Tower’s height, the remote mining project was a treat for a geology student eager to make his mark in the industry.

At the time, Red Lake was near the top of the list of the world’s most important gold mines in terms of grade and volume. Even today, after decades of production, some areas of the mine produce 57 grams of the gold per tonne – many multiples ahead of the industry average.

Yet the enthusiasm for projects such as that once drew Mr. Christie to research Red Lake has been undercut by a 10-month slide in gold prices and at least $23-billion worth of writedowns by Canadian gold miners over the past year and a half.

Today, Red Lake’s high-grade gold is found as far down as 2,350 metres, about four times the CN Tower’s height, which shows the difficulty gold miners face in trying to boost their stock valuations even if prices for the precious metal rebound.

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The (Russian) Arctic is open for business – by Michael Byers (Globe and Mail – August 12, 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 the 1990 thriller The Hunt for Red October, the rogue captain of a Soviet submarine evades the U.S. and Soviet navies by threading his way through a narrow – but precisely charted – mid-ocean trench.

In real life, the Soviet navy’s charting efforts extended to the heart of the Canadian Arctic. Soviet-era charts, available today, show more depth soundings in the Northwest Passage than Canada’s most recent charts do.

The Cold War is over, but Russia still takes the Arctic seriously. Russian nuclear-powered submarines still sail under the sea ice, where Canada’s diesel-powered submarines cannot venture.

Russia is intent on transforming its Arctic coastline into a commercially viable alternative to the Suez Canal. In 2011, President Vladimir Putin said: “I want to stress the importance of the Northern Sea Route as an international transport artery that will rival traditional trade lanes in service fees, security and quality.”

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Opening new mines here [B.C.] is our responsibility to the world – by Daryl Anderson (Vancouver Sun – August 11, 2013)

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

Environmentally sound projects within Canada save poorly regulated countries from unsafe developments

I grew up in B.C. and have been involved in conservation for my whole working life including conducting inspections and investigations at mine sites for Environment Canada.

Recently I had the opportunity to address the Canadian Environmental Assessment Agency panel hearings into the proposed New Prosperity mine in the Cariboo. You might be surprised to read that I am in favour of the New Prosperity proposal. The reasons I decided to speak in favour are many.

North America consumes a huge percentage of the world’s metal and mineral resources, yet we only extract about a third of those resources within our borders, relying on the rest of the world to satisfy our ever-increasing demands. As an example, the average lifespan of a new smartphone in North America is only 21 months from production to disposal. Even those among us who live a relatively simple lifestyle still utilize and benefit from the infrastructure we have developed to support our health care, education, transportation, communication and many other systems.

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Mining companies can be forces for good – by Craig and Marc Kielburger (Ottawa Citizen – August 11, 2013)

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

The sparkling rock on your finger — there’s a good chance it came from a mine in Botswana, which supplies 22 per cent of the world’s diamonds. Kgosi Kegapetswe is the chief of Letlhakane, a village in north-central Botswana that borders a huge mine that since 1969 was owned by an international diamond company.

For years, he felt like a stranger on his own land. Access to the land was restricted, according to the chief, who told us that when he visited the off-limits property to discuss an issue like grazing rights for his community’s livestock, he waited like a supplicant at the property line. When armed guards admitted him, he was marched to the meeting place and then marched back off again. He said there wasn’t enough consultation with his community. He didn’t even know the company sold the property in 2009 until the new owners showed up.

But when Canadian mining company Lucara Diamond took possession, everything changed. We have read literally hundreds of news stories about global mining operations abusing the environment and human rights. Canada is home to an estimated 75 per cent of the world’s international mining companies, and every time these companies trample rights or the environment, respect for our country takes another hit.

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Cosying up with mining industry – by Catherine Solyom (Montreal Gazette – August 10, 2013)

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

Matchmaking session gives miners, NGOs chance to team up for projects, but not everyone is happy about the process

MONTREAL – Somewhere inside the vast Palais des Congrès, a strange sort of “speed dating” session will be held this weekend to match some unlikely bedfellows.

These are not lonely hearts looking for love, however, but mining companies hoping to hook up with bleeding hearts — the social and environmental groups working to improve living conditions near Canadian mines abroad.

Held on the margin of the World Mining Congress, which will see some 1,500 delegates gathered to discuss everything from rock mechanics to mine closings, the controversial matchmaking session has attracted a lot of interest from both companies and non-governmental organizations hoping to “connect and build relationships,” said Jean Vavrek, the executive director of the Canadian Institute of Mining, Metallurgy and Petroleum, which is sponsoring the event.

The idea, said Vavrek, is to bring these two solitudes together to increase the positive impact of a given mining project, whether in Latin America or West Africa.

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How Enbridge’s Northern Gateway pipeline lost its way – by Nathan Vanderklippe (Globe and Mail – August 10, 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.

Not far from Kitimat, B.C., on the rugged western shore of Douglas Channel, a plot of land is set to serve as the terminus of Enbridge Inc.’s $6.5-billion Northern Gateway project.

It is from this spot, if the pipeline can be built, that Alberta crude will pour on to supertankers, opening Canada’s energy industry to Pacific markets and providing a key western outlet for surging output from the vast oil sands. It’s an unremarkable tree-covered shoreline, but for Gateway it’s critically important.

And in the fall of 2011, Enbridge nearly lost it, after the Haisla First Nation staged a bold attempt to seize control of the land in question – one of the most striking examples of the rancour that has swelled around the project. Now Northern Gateway is mired in deep uncertainty. Local qualms have blossomed into broad opposition, raising questions about its viability.

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Glencore, Vale should join forces, analyst says (CBC News Sudbury – August 9, 2013)

http://www.cbc.ca/sudbury/

For an indepth radio report, click here: http://www.cbc.ca/video/news/audioplayer.html?clipid=2400108515

Merging the two mining giants will help reduce redundancies, particulary in Sudbury operations

In a search for cost cutting measures, one mining analyst says a merger between Vale and Glencore should be an option that’s considered. Brazilian mining company Vale released its second quarter results Thursday, which showed an 84 per cent drop in profits.

Base metal prices are also down across the board. Terence Ortslan, managing director with TSO and Associates, an independent mining, metals and fertilizer research firm, said combining operations could help reduce redundancies.

“I think the question is, is it going to be out of necessity, or is it going to be creative in doing things? I think the assets have to be put in a pool to see who can do better and how it’s going to be streamlined in terms of a critical path.”

Glencore recently took over Xstrata — a firm that took over Sudbury’s Falconbridge Ltd. in 2006. Sudbury residents have, for decades, heard and talked about mergers between Falconbridge and Inco Ltd., the company now known as Vale.

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Mount Milligan mine on verge of production – by Derrick Penner (Vancouver Sun – August 8, 2013)

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

Copper-gold project north of Prince George will be first new mine in B.C. in more than a decade

Crews at Thompson Creek Metals’ Mount Milligan project have started crushing rocks and are mere days away from turning on the milling machinery that will grind down the ore and start extracting copper and gold from the first new mine to open in British Columbia in more than a decade.

That development will turn the $1.57-billion construction project into an operating mine with the goal of commencing commercial production of ore sometime in the fall, churning out an estimate 40,369 tonnes (89 million pounds) of copper concentrate and 262,000 ounces of gold per year.

However, the mine’s opening coincides with an uncertain time for the mining sector with falling metals prices and companies such as Teck Resources scaling back capital projects.

“It’s a bit of a mixed environment” for copper miners, according to Patricia Mohr, vice-president of industry and commodity research for Scotia Economics.

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Rio Tinto Alcan to close Shawinigan, Que., smelter – (Canadian Press/CBC News Montreal – August 7, 2013)

http://www.cbc.ca/montreal/

425 workers affected by shutdown

Rio Tinto Alcan says weak metal prices have forced the aluminum producer to close its 72-year-old smelter in Shawinigan, Que., about a year ahead of schedule in November, affecting most of its 425 workers.

“With the current difficult market conditions and when we look at the short-term forecasts, the situation became financially unsustainable for Shawinigan, and this despite all the efforts the employees made to help over the past years,” said Étienne Jacques, chief operating officer of Rio Tinto Alcan Primary Metal in an interview.

He said employees couldn’t have done anything to avert the decision because the market finally caught up with the plant’s old Soderberg technology.

“They have done almost everything that was imaginable to do, they have done it,” said Jacques. The announcement was made Wednesday, ahead of environmental regulations that would have forced the facility to close at the end of next year.

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Potash earthquake – (Northern Miner Editorial – Aug 12 – 18, 2013)

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

Like a sudden Saskatchewan thunderstorm, the potash market surprised everyone yet again with its capacity for drama and destruction, as everyone learned just how important the Russian-Belarusian potash cartel had been all this time in supporting the potash market to the benefit of Western producers and juniors alike.

As detailed in these pages, the major North American potash producers and their investors were side-swiped by news in late July that Russia’s Uralkali was leaving the BPC potash cartel it had created with Belarusalkali as a Slavic twin to the long-standing North American cartel Canpotex run by Potashcorp, Agrium and Mosaic.

Uralkali is already the world’s largest and lowest-cost potash producer, and is now vowing to ramp up production and accept lower prices in order to capture new Asian markets.  In retrospect, the fact that two Russian billionaires unloaded their substantial shareholdings in Uralkali in the weeks leading up to the announcement was a sign something was afoot. (Though, for some reason, we’re not expecting any insider trading investigations to get underway in Moscow any time soon.)

North American juniors in the potash space have always had a tough time, given that potash projects are so vast in cost and scope that developing them on their own is never a realistic option.

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