Commodity Super-Cycle and Decline – Page 60

Japan’s government, people split on nuclear power – by Mark Mackinnon (Globe and Mail – October 14, 2011)

October 17, 2011

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.

TOKYO— As the disaster at the Fukushima Daiichi plant continues to reverberate, two diverging plotlines are developing in Japan: Ordinary citizens are becoming increasingly anxious about nuclear power, even taking to the streets in rare protest, Meanwhile, their government is moving back into its old and comfortable embrace with the nuclear industry.

Former prime minister Naoto Kan, who was in office on March 11 when a tsunami triggered a series of terrifying explosions and meltdowns at Fukushima Daiichi, declared in the aftermath that the country should become nuclear-free. It’s a position that polls suggested had 70 per cent support.

But Mr. Kan was blamed by the public and the media for dithering at the height of the crisis, and was forced to resign in August. His successor, Yoshihiko Noda, quickly declared that he wants to see the country’s nuclear reactors restarted by next summer.

Canada, U.S. feel drag in China slowdown – by Simon Avery (Globe and Mail – October 14, 2011)

October 14, 2011

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.

Commodities, resources take hit as Beijing moves to rein in inflation, develop more sustainable economic model

As China’s leaders apply the brakes to slow the world’s second-largest economy, Canadian and U.S. markets are feeling the jolt.

Copper prices have plunged, as have the values of other commodities reliant on Chinese demand. The recent volatility on global stock markets reflects, in part, concerns about how fast and severe the slowdown in China will be.

North American stocks will be hammered if China’s annual GDP growth should shrink to 5 per cent, says Jurrien Timmer, director of global macro for Fidelity Management & Research Co. and co-manager of the Fidelity Tactical Strategies fund.

While that’s still a robust figure by today’s western standards, it would represent a dramatic decline from the 9.6-per-cent growth that China boasted in the first half of the year.

In standoff with Ivanhoe Mines, Mongolia blinks – Brenda Bouw (Globe and Mail – October 7, 2011)

October 8, 2011

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 — Mongolia is backing off plans to grab a larger stake of the massive Oyu Tolgoi copper-gold project following warnings from its majority owner, Canada’s Ivanhoe Mines Ltd., that such a move would create mistrust among future international investors.

Statements from government officials put an end to weeks of speculation that the country might seek to prematurely boost its stake in the project.

Investor worry spurred a sharp selloff of shares of Ivanhoe Mines, the project’s 66 per cent owner, as well as Rio Tinto PLC, which owns 49 per cent of the Canadian company.

Oyu Tolgoi is key to economic growth in the country, the officials said, warning of the economic consequences of revising the existing deal that gives the country a 34-per-cent stake in the project. It has the option to increase that ownership to 50 per cent in 30 years.

The Mongolian government and Ivanhoe Mines, alongside its project partner Rio, later put out a joint statement confirming their support for the existing deal signed in 2009.

Ivanhoe Mines overreliant on a benevolent Mongolia – by Pierre Fournier (Globe and Mail – October 6, 2011)

October 7, 2011

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.

Investors should consider last week’s events in Mongolia as a warning shot for the long-term geopolitical risks associated with Ivanhoe Mines Ltd.’s massive copper and gold project in Mongolia.

The Mongolian government’s brazen attempt to renegotiate the terms of ownership of the Oyu Tolgoi mine comes less than two years after a formal agreement was reached with Ivanhoe, following six years of tumultuous negotiations. The $6-billion project is only half completed and is not scheduled to start production before the first half of 2013.

At some level, the government’s power play to squeeze a few more nuggets out of Ivanhoe and project partner Rio Tinto is another classic case of resource nationalism. A poor country, rich in resources, and with an election looming next year, is being promised by politicians from both major parties that they can and should expect more from the mining companies. In the short term, the showdown is unlikely to lead to either a full-blown renegotiation of the contract or a significant hit to shareholders. But a few face-saving “concessions” to the Mongolian government cannot be ruled out.

Resources should rise if Europe’s woes fixed – by Jonathan Ratner (National Post – October 5, 2011)

October 5, 2011

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

Amid the staggering sell-off in commodities, there is a light at the end of the tunnel for investors – assuming we don’t see another global financial crisis.

The pullback in everything from oil and coal to copper and agriculture runs counter to strong Asian demand growth and structurally short supplies for metals, food and fuels.

So investors are left with a simple question: Will the European sovereign debt crisis and the resulting stress on the financial sector trigger a world economic recession as was experienced in 2008?

“The best way of assessing the likely future remains to track current economic momentum,” Credit Suisse said in a note to clients on Tuesday. “To that end, the first two months of panic looks to have had surprisingly little impact on the data from China and the U.S., although the Euro area has weakened noticeably.”

Rails to the Ring of Fire – Stan Sudol (Toronto Star – May 30, 2011)

September 5, 2016October 5, 2011

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.

For the web’s largest database of articles on the Ring of Fire mining camp, please go to: Ontario’s Ring of Fire Mineral Discovery

“The Ring of Fire railroad should be subsidized by
governments as the huge economic impact will benefit
the economy for decades to come, help balance budgets
and alleviate aboriginal poverty in the surrounding
First Nations communities.” (Stan Sudol)

Notwithstanding the recent correction in commodity prices, near-record highs for gold, silver and a host of base metals essential for industry confirm that the commodity “supercycle” is back and with a vengeance.

China, India, Brazil and many other developing economies are continuing their rapid pace of growth. In 2010, China overtook Japan to become the world’s second largest economy and surpassed the United States to become the biggest producer of cars.

In March, Bank of Canada governor Mark Carney remarked: “Commodity markets are in the midst of a supercycle. . . . Rapid urbanization underpins this growth. . . . Even though history teaches that all booms are finite, this one could go on for some time.”

Quebec’s visionary 25-year “Plan Nord” will see billions invested in northern resource development and infrastructure to take advantage of the tsunami in global metal demand and generate much needed revenue for government programs.

In Ontario, the isolated Ring of Fire mining camp in the James Bay lowlands is one of the most exciting and possibly the richest new Canadian mineral discovery in more than a generation. It has been compared with both the Sudbury Basin and the Abitibi Greenstone belt that includes Timmins, Kirkland Lake, Noranda and Val d’Or.

CIBC NEWS RELEASE: Energy infrastructure megaprojects will unlock Canada’s resource wealth and create a million new jobs, says Hon. Jim Prentice, CIBC Vice-Chairman

September 29, 2011

Investments will help Canada ride out current uncertain economic environment

A copy of the CIBC Economics report Energizing Infrastructure is available here.

A copy of Mr. Prentice’s full speech is available here: “Nation-building in the 21st Century: The Case for the Lower Churchill Hydro Development”

HALIFAX, Sept. 28, 2011 /CNW/ – Canada’s era of nation-building through transformational infrastructure investments is far from over as planned megaprojects will unlock resource wealth, secure new markets for Canadian energy and create a million new jobs, the Hon. Jim Prentice, CIBC Senior Executive Vice-President and Vice Chairman, said today.

“No other nation is leading energy projects at our pace and scale,” Mr. Prentice said in a speech to the Atlantic Provinces Economic Council. “And in an economic climate where the world debates how much public money to borrow to create stimulus jobs, Canada stands alone in terms of its potential to chart a different course.”

“The economic potential of these projects, the job creating power of these projects, led for the most part by the private sector, is immense.”

Strategic Minerals: Is China’s Consumption a Threat to United States Security? – by Dr. Kent Hughes Butts, Mr. Brent Bankus, and 2nd Lieutenant Adam Norris (U.S. Army War College – July, 2011)

September 26, 2011September 26, 2011

“China’s resulting role in the mineral trade has increased
Western security community concern over strategic minerals
to its highest point since the end of the Cold War….The
U.S. dependence on overseas sources of strategic minerals
essential to sustain its economy and defense sector is more
pronounced than its dependence upon foreign oil….There is
not, for example, a substitute for … chromium in the
production of stainless steel.”
(U.S. Army War College Issue Paper)

Center for Strategic Leadership,U.S. Army War College

For the web’s largest database of articles on the Ring of Fire mining camp, please go to: Ontario’s Ring of Fire Mineral Discovery

No great nation willingly allows its standard of life and culture to be lowered and no great nation accepts the risk that it will go hungry. — Hjalmer Schacht, German Minister of Economics, 1937

The vitality of a powerful nation depends upon its ability to secure access to the strategic resources necessary to sustain its economy and produce effective weapons for defense. This is especially true for the world’s two largest economies, those of the United States and China, which are similarly import dependent for around half of their petroleum imports and large quantities of their strategic minerals.

Because China’s economy and resource import dependence continue to grow at a high rate it has adopted a geopolitical strategy to secure strategic resources. China’s resulting role in the mineral trade has increased Western security community concern over strategic minerals to its highest point since the end of the Cold War.

The south’s the target in battle for Northern Ontario – by Steve Ladurantaye (Globe and Mail – September 23, 2011)

September 23, 2011

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.

“There is a lack of regard by Mr. McGuinty for the people
and issues of Northern Ontario. I know our quality of life
could be so much better and our economic security could be
so much better with the right policies that reflect our
northern way of life.” (Progressive Conservative candidate
Rod McKay – Kenora–Rainy River riding)

KENORA, ONT.— As the province’s political leaders plowed for votes in Southern Ontario, a more bare-knuckled version of democracy was breaking out in the North.

For the first time in 12 years, someone other than former NDP leader Howard Hampton will be sent to Queen’s Park to represent the sprawling 250,000-square-kilometre riding of Kenora–Rainy River. And the candidates are desperate to persuade voters they’ll find a way to bring jobs to a region that’s struggled to diversify from a forestry-based economy to one driven by both mining and tourism.

In a chalet-like conference room at a Super 8 motel, candidates argued fiercely over the fine details of northern development. But they agreed on one theme – the North and its wealth of natural resources are on the rise, and the south had best not stand in the way.

“There have been great ideas in the past,” said the Green Party’s Jo Jo Holiday, setting the tone in the opening minutes of the debate. “But they are Toronto people who think they know the North and think it goes no further than Sudbury. We are unique and we need to be treated as such.”

Why Northern Ontario is important for both the leaders and the economy – by Steve Ladurantaye (Globe and Mail – September 23, 2011)

September 26, 2011September 23, 2011

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.

For the web’s largest database of articles on the Ring of Fire mining camp, please go to: Ontario’s Ring of Fire Mineral Discovery

KENORA, ONT.— The winding roads of Northern Ontario skirt around many of its most valuable assets – mines, forest plots and mills are largely hidden in the countryside and accessible only by dirt roads and trails.

But as the province struggles to pull itself back from economic ruin, those assets aren’t going to stay hidden for long. Residents considering the wealth of riches that wait to be extracted have a sinking suspicion that they will benefit the least from the region’s resource boom.

They are concerned the good jobs – those involving processing and research – will pass them by as Southern Ontario towns position themselves to take advantage of the North’s lack of infrastructure and comparatively low number of skilled trades people.

Once they would have been resigned to their fate – but that’s changing. As the province’s top politicians descend on Thunder Bay for a debate on Friday, all eyes are on the region and its possibilities. It’s a scene also playing out in resource-rich but job-poor communities across the country, particularly in the Northwest Territories and Alberta.

Ottawa urged to encourage private-sector projects in remote communities – by Richard Blackwell (Globe and Mail – September 19, 2011)

September 20, 2011

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.

Private sector investment will be crucial if Canada’s remote communities are to grow and prosper, but the federal government must set the stage by cutting red tape and improving education and infrastructure in smaller centres, a new study suggests.

The report, to be released Monday by the Canadian Chamber of Commerce, says a long-term strategy for remote community development is needed, but there are many things the government can do to encourage investment.

The conclusions stem from a series of cross-country round tables conducted with business leaders over the past year, and an online survey, conducted by the chamber in collaboration with General Electric Canada.

The report concluded that remote communities can make a huge contribution to Canada’s overall wealth, mainly because they form the gateway to key resources. Private companies can unlock that wealth, it says, but only if they are encouraged by supportive government policies that can help draw in business investment.

NEWS RELEASE: Remote. Resource Rich. And Ready. GE Canada releases findings of its “Shaping Economic Growth in Canada’s Remote Communities” Initiative

September 20, 2011

GE is a global infrastructure, ﬁnance and media company taking on the world’s toughest challenges.

For GE’s full report, click here: Towards a Remote Communities Investment Strategy for Canada

FOR IMMEDIATE RELEASE

September 19, 2011

St. John’s, Newfoundland – Elyse Allan, President and Chief Executive Officer of GE Canada, today released the findings of its “Shaping Economic Growth in Canada’s Remote Communities” initiative, launched in January 2011.

Responses from over 500 business stakeholders who participated in 11 cross-country roundtables and an online survey point to the fact that Canada is at a “tipping point” with respect to the development of its resources, largely located in remote communities, and how they will shape the Canadian economy. The report found that 93 percent of respondents believe that remote communities will play an important role in the future of Canada’s economy.

“Canada’s remote communities can pack a powerful economic punch. There is great optimism.
Business investment combined with progressive public policy will unleash significant opportunities for remote communities and for Canada as a nation.” said Elyse Allan.

GE’s initiative formed the basis of the Canadian Chamber of Commerce report: The Business Case for Investing in Canada’s Remote Communities, released earlier today.

NEWS RELEASE: The business case for investing in Canada’s remote communities

September 19, 2011

The Canadian Chamber of Commerce is Canada’s largest and most influential business association.

For the full report, click here: The Business Case for Investing in Canada’s Remote Communities

ST. JOHN’S, Sept. 19, 2011 /CNW/ – Perrin Beatty, President and Chief Executive Officer, The Canadian Chamber of Commerce, and Elyse Allan, President and Chief Executive Officer, GE Canada, and Chair of the Canadian Chamber of Commerce, released this morning a report entitled :The Business Case for Investing in Canada’s Remote Communities at the Canadian Chamber of Commerce’s Annual General Meeting in St-john’s, Newfoundland and Labrador.

As Canada seeks to strengthen its position as a competitive nation in an increasingly global economy, GE Canada, in partnership with the Canadian Chamber of Commerce, undertook the initiative to place a business lens on the economic opportunities, challenges, best practices and business investment intentions in remote communities. During the first half of 2011, GE Canada sought the perspectives of businesspeople through roundtables in communities across Canada and an on online survey. At the same time, the Canadian Chamber of Commerce consulted with several of its members and other stakeholders.

“Canadians have to start looking at our remote communities differently”, stated Perrin Beatty, President and Chief Executive Officer of the Canadian Chamber of Commerce. “Our collective economic wellbeing and our international competitiveness could well depend upon the public policies adopted today that leverage the economic possibilities of many of these communities and their potential to contribute to our nation’s wealth”.

Investing in Remote [Canadian] Regions: Building the Business Case – by Livio Di Matteo (September 19, 2011)

September 19, 2011

Livio Di Matteo is Professor of Economics at Lakehead University in Thunder Bay, Ontario. Visit his new Economics Blog “Northern Economist” at http://ldimatte.shawwebspace.ca/

Out of the Canadian Chamber of Commerce comes a new report titled” The Business Case for Investing in Canada’s Remote Communities,” which argues that Canadians need to start looking at remote communities somewhat differently.

Despite the perception (and often the reality) that remote communities are dependent on government assistance for their survival, the new reality is that as the demand for resources rises and the international community flocks to Canadian resources in remote areas, these remote communities are wealth generators that will enhance the living standards of all Canadians. Moreover, the aboriginal population is concentrated in these areas and resource development is an important tool to improve their economic welfare.

There are of course challenges. As the report notes:

“There is no doubt that many remote communities-which are often difficult to reach, have challenging geographies, harsh climates, limited infrastructure and sparse populations – face significant challenges to their long-term social and economic sustainability.”