Commodity Super-Cycle and Decline – Page 61

Bullish miners on a spree of buying and digging – by Brenda Bouw (Globe and Mail – September 16, 2011)

September 16, 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.

MINING REPORTER VANCOUVER – Miners are forging ahead with aggressive spending plans despite sinking stock values and retreating commodity prices, in a bet that metals demand will remain solid even as the global economy softens.

Mining giants such as Alcoa Inc., Rio Tinto PLC and Xstrata PLC advanced major new projects this week, adding to the billions of dollars earmarked by miners around the world for expansion through acquisitions, new mine construction and increased exploration.

The spending spree, made possible by years of strong commodity prices that fattened profits, is largely focused on expanding production to meet the needs of commodity-hungry countries such as China, India and Brazil.

In fact, miners are moving forward so fast they are setting records in both exploration and acquisitions.

Asian economy strengthens Vale’s bottomline – by Carol Mulligan (Sudbury Star – September 15, 2011)

September 15, 2011

The Sudbury Star is the City of Greater Sudbury’s daily newspaper. cmulligan@thesudburystar.com

Despite economic troubles in Europe and the United States, Vale Canada Ltd.’s chief executive officer isn’t worried about the company’s financial future. Troubles in the U.S. and abroad aren’t directly affecting the Brazil-based nickel producer, said Tito Martins in Sudbury on Wednesday.

The economy of Asia — and its demand for Vale’s product — is “still very strong,” Martins said after an event at which he presented the Sudbury Food Bank with a cheque for $500,000.

“In general, the market is doing very well and we don’t believe that we will see a major drop in the economy as we saw in 2008,” Martins told reporters. “We may see some difficulties in specific markets, but, in general, we are very optimistic about the future.”

Martins said his company is hiring people in Sudbury and in Newfoundland and Labrador, and that is a good sign.

“If I could produce more, I would love to produce more, actually,” he said.

NEWS RELEASE: Resource nationalism tops miners’ risk list for 2011: Ernst & Young

September 14, 2011

Mining and metals companies contend with supply constraints, volatility

(Vancouver, 13 September 2011) Resource nationalism tops the mining and metals risks list while supply capacity issues like skills shortage, capital allocation and infrastructure access continue to dominate the business agenda, according to Ernst & Young’s annual report Business risks facing mining and metals 2011–2012 .

“This year we’re seeing resource nationalism take the form of greater controls on foreign investment, mandated beneficiation, use-it-or-lose-it demands and authorized government participation,” says Tom Whelan, Leader of Ernst & Young’s national mining and metals practice. “What originally began as a way for mineral-rich countries to repair and replace lost revenue from the downturn has become a way for governments to manage the effects of a two-speed economy.”

In the past 12–18 months, approximately 25 countries have increased or announced intentions to increase their government take through taxes or royalties. South Africa’s new royalty regime, Ghana’s plans to double royalties and the Australian government’s proposed minerals resource rent tax are just a few examples of upcoming legislation that could impact investor decisions.

Chasing Rare Earths, Foreign Companies Expand in China – by Keith Bradsher (New York Times – August 25, 2011)

September 11, 2011

The New York Times has the third highest weekday circulation in the United States (after USA Today and the Wall Street Journal) and is one of the country’s most influential newspapers.

CHANGSHU, China — China has long used access to its giant customer base and cheap labor as bargaining chips to persuade foreign companies to open factories within its borders.

Now, corporate executives say, it is using its near monopoly on certain minerals — in particular, scarce metals vital to products like hybrid cars, cellphones and energy-efficient light bulbs — to make it difficult for foreign manufacturers of high-tech materials to build or expand factories anywhere except China. Companies that continue making their products outside the country must contend with tighter supplies and much higher prices for the materials because of steep taxes and other export controls imposed by China over the last two years.

Companies like Showa Denko and Santoku of Japan and Intematix of the United States are adding factory capacity in China this year instead of elsewhere because they need access to the scarce metals, known as rare earths.

Global Uncertainties Are A Sure Bet – Ned Goodman (Canadian Mining Journal – September, 2011)

September 9, 2011

The Canadian Mining Journal is Canada’s first mining publication.

Ned Goodman is President and CEO of Dundee Corporation, an asset management company dedicated to private wealth management, real estate and resources.

“We remain solidly long-term bullish on our
scenario that demand for most commodities,
including food, will remain in excess of
the world’s ability to supply.”(Ned Goodman –
President and CEO Dundee Corporation)

It was some months ago that I was asked by Russ Noble if I would write a few words for an op-ed article in Canadian Mining Journal. There were several subjects that came to mind, just about all would have been too lengthy and not bear the kind of information required for this specialized and excellent magazine.

Sitting back, I thought I would write about development, global economic movements, freedom and the overall investment climate.

Amartya Sen, a winner of the Nobel Prize in Economics, wrote a book in 1999 called “Development as Freedom”. He concluded the book with a quote from William Cowper: “Freedom had a thousand charms to show, That slaves, however contented, never know.”

Sen wrote too that, “Development is indeed a momentous engagement with freedom’s possibility”. In his book, Sen presented and defended a particular approach to the development of the global human population. He recommended as a process the expansion of substantive freedoms that would be available to people all over the world. He presents the perspective of freedom in both an evaluative analysis of assessing change and in a predictive analysis of “seeing freedom as a causally effective factor in the generation of rapid change.”

Price of copper suggests world economy on right track – by Brenda Bouw (Globe and Mail – September 6, 2011)

September 6, 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.

If copper is worth its mettle in predicting the financial future, it appears the global economy isn’t headed off a cliff after all.

Despite a growing number of indicators that global growth is slowing, the steady price of the red metal, dubbed “Dr. Copper” for its ability to diagnose economic activity, is signalling the economy may not be as sick as it seems.

In fact, copper, a metal used in everything from power and construction to cars and cellphones, looks relatively healthy right now considering the recent commodities sell off.

Copper averaged $4.20 (U.S.) per pound in August, according to Bloomberg, not far from a record $4.60 set six months ago, and dipped only briefly below $4 during the recent market turmoil. On Monday, it closed at $4.06, still considered resilient and at a level that remains highly profitable for most mining companies.

Yet the global economic picture isn’t improving.

Vale now active in Southern, Central and West Africa – by Keith Campbell (Mining Weekly – September 2, 2011)

September 5, 2011

Mining Weekly is South Africa’s premier source of weekly news on mining developments in Africa’s most important industry. In order to advance Mining Weekly’s objective of positioning itself as a leading global provider of mining news, a full-time correspondent is based in Toronto, Canada and another in Perth, Australia.

JOHANNESBURG (miningweekly.com) – In June, Brazilian diversified mining major Vale, the world’s second-biggest mining company by market capitalisation, reaffirmed that it is set to make major investments in Africa by 2016.

“Our current investment proposal in Africa is to expend more than $12-billion over the next five years, subject to board approval,” Vale Zambia exploration manager Ian Hart told the recent first Zambian International Mining and Energy Conference and Exhibition, in Lusaka.

The peak year in this programme will be 2012, which should see the company invest $3.3-billion in the continent. As of April this year, Vale’s investment in the continent totalled $2.5-billion, reported the Financial Times.

Canada en route to much stronger trade ties with China, envoy says – by Andy Hoffman (Globe and Mail – August 30, 2011)

August 30, 2011

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous impact and influence on Canada’s political and business elite as well as the rest of the country’s print, radio and television media.

…China hopes Canada will permit Chinese companies
to increase the amount of investment in Canadian
resource companies producing minerals, lumber, oil
and gas and other commodities needed to fuel
China’s fast-growing economy.

According to a recent survey by the Asia Pacific
Foundation of Canada, the vast majority of Canadians
continue to oppose Chinese state-owned enterprises
buying major Canadian companies or resource assets.

China’s ambassador to Canada says the Harper government’s about-face regarding his country has strengthened bilateral relations and should foster a major increase in trade and investment.

Ambassador Zhang Junsai says relations between Canada and China are rapidly improving now that Ottawa has recognized the need to diversify its economic and trading focus beyond the United States and Europe. The diplomat also cited Canada’s return of a high-profile Chinese fugitive as a key milestone that will fortify the bond between the two countries.

[MAC’s Pierre Gratton says] embrace foreign investment – by Carol Mulligan (Sudbury Star – August 26, 2011)

August 26, 2011

The Sudbury Star, the City of Greater Sudbury’s daily newspaper. cmulligan@thesudburystar.com

“We have already succeeded as Canadians on the global
mining stage. We are every-where…Canada’s voice is
loud, the Canadian industry is loud, our expertise is
used everywhere, our government legislation is copied
everywhere. We have nothing to fear about our place
in the world.” (Pierre Gratton, President and CEO,
Mining Association of Canada)

It can be a difficult message to deliver, but someone has to do it, says the head of an organization that calls itself the voice of the mining industry in Canada.

Foreign investment in mining companies is a good thing and should not be feared, says Pierre Gratton.

In Sudbury, for instance, the billions in investments that Vale is looking to make in its Sudbury operations might not have been made by the former Inco Ltd.

Gratton, president and chief executive officer of the Mining Association of Canada, urged an audience of 200 people Thursday to “avoid protectionism.”

Sudbury ready to cash in [on mining investments] – by Carol Mulligan

September 13, 2018August 26, 2011

The Sudbury Star, the City of Greater Sudbury’s daily newspaper. cmulligan@thesudburystar.com

“If we do the right things, mining can literally help
dig Ontario out of its debt.” (Chris Hodgson, President
and CEO Ontario Mining Association)

Sudbury is well-positioned to benefit from that mining
boom because it has the largest integrated mining complex
in the world and one of the largest nickel-copper
sulphide bodies. (Pierre Gratton, President and CEO,
Mining Association of Canada)

Sudbury stands to benefit from investments in mining operations to the tune of about $5.2 billion in the next five years. That’s a healthy percentage of the $136.4 billion in capital expected to be invested in mining projects throughout Canada from 2012 to 2017.

All of those billions will go into mining projects already in existence, says the president and chief executive officer of the Mining Association of Canada.

That doesn’t include private and public money that may be invested in projects to develop, mine, smelt and transport chromite from the Ring of Fire in northwestern Ontario.

Pierre Gratton was one of two guests who spoke to the Greater Sudbury Chamber of Commerce on Thursday about how the city can benefit from the current up cycle in the metals industry.

China will continue to be a mineral price driver as its econo my continues to grow at double-digit rates. That demand is long-term, with expectations its growth will still be in the 6% to 9% range from 2020-2025.

Governments got $8.4B from miners in 2010 – by Peter Koven (National Post – August 4, 2011)

August 4, 2011

The National Post is Canada’s second largest national paper. Peter Koven is their mining reporter.

After a stunning drop-off in 2009, Canadian governments are once again swimming in mining-related revenues. And those revenues are expected to grow even more in the months and years ahead.

A study by the Mining Association of Canada (MAC), to be released Thursday, shows federal and provincial governments pocketed a whopping $8.4-billion from the mining sector in 2010, or $5.5-billion if oil sands is excluded. It is a dramatic 65% increase from 2009, though still below the record years of 2007 and 2008, when the total haul was more than $10-billion each year.

Those records could fall very soon, according to MAC president Pierre Gratton. His organization estimates that “well over $110-billion” could be invested in new and existing projects across the country over the next five years to expand production. If that happens, thousands of jobs will be created and the government revenue haul from mining will get much bigger.

NEWS RELEASE (Ernst & Young): Value of mining M&A continues to climb

July 28, 2011

http://www.ey.com/CA/en/Industries/Mining—Metals

First half deal value doubles year-on-year

London 25 July 2011 – The thirst for natural resources from rapidly developing economies continues to drive M&A in the mining sector, but the pace of growth in deal-making is being tempered by uncertainty around global macroeconomic issues and resource nationalism concerns around the world.

Total deal value for January—June 2011 doubled compared to January—June 2010, up from US$47.9b to US$96.3b.

There were slightly fewer deals in the same period, with 573 for the H1 2010 compared to 511 to 30 June this year, reinforcing the view that while larger deals are being executed there is still a level of uncertainty around doing M&A given the current macro-economic backdrop.

The number of mining & metals sector IPOs globally was up 30% from 56 in H1 2010 to 73 in H1 2011. Total proceeds from IPOs were up 107% from US$6.3b to US$13.0b, although this is dominated by the US$10 billion Glencore listing.

Africa’s Emerging Partners [China, Brazil and India]: Friend or foe? by Nicholas Norbrook and Marshall Van Valen (The Africa Report – June 2011)

July 25, 2011

The Africa Report: An insight into Africa, an outlook on the world.

Land grabs and exploited workers dominate the headlines, but Africa’s relationship with emerging partners is more complex and will boost the continent – if states negotiate wisely.

Fact or fiction? African mineworkers toil for peanuts, under the watchful eye of the gun-toting Chinese overseers. Guinea’s green savannah is etched ragged with intensive palm-oil plantations. Madagascan communities are pushed off their land as South Korean land merchants order the island’s ancestral earth to be ploughed up for export crops. Asian banks rush to sign up African governments for new loans they can ill afford, in exchange for poorly constructed buildings.

Indian gem merchants bribe politicians to gain access to huge diamond reserves, with profits spirited out of the country via anonymous Mauritian front companies. Taxes avoided, workers exploited, environments despoiled, resources bled, countries indebted. The dream deferred.

 The bogeymen raised by the advance of Africa’s emerging partners are projections of post-colonial guilt. After decades of achieving little for Africa, the West has been shaken by the arrival of powerful emerging economies on the continent. Self-appointed Africa saviour Sir Bob Geldof says: “China is engaged in an entirely mercantilist expedition in Africa. They are driving huge amounts of growth. But at what cost?” Chinese officials deny the charge. “For China to sustain its development, we need to have a stable supply of energy and minerals. I don’t think that is something bad, or something evil,” says Liu Guijin, China’s special representative for Sudan. Geldof is currently raising $1bn to launch a private equity fund aimed at Africa.  A new report from the OECD and the African Development Bank (AfDB) is more measured. 

CBC NEWS: In Depth – Rare earth metals (July 7, 2011)

July 20, 2011

http://www.cbc.ca/news/

A look at 17 chemical elements vital for gadgets of today, green technologies of tomorrow

What are they?

Rare earth elements, or REEs, are a group of 16 metals (or 17 if scandium is included) that share particular chemical and physical properties that make them indispensable to the manufacture of countless electronics, appliances, green technologies, weapons and medical devices. They are valued for their properties of luminescence, thermal and electrical conductivity, magnetism and ability to act as catalysts and polishing compounds.

They are considered vital not just for the many gadgets of today, such as cellphones, computers, stereos, flat-screen TVs and MRI machines but, perhaps more importantly, for the green technologies that many expect will define our future. They are a key component of manufacturers’ efforts to produce more efficient, less-polluting versions of their products, such as cars and light bulbs, and of the global fight to reduce greenhouse gas emissions.

One of the areas where REEs have made the greatest contribution is in the miniaturization of magnets used in the motors and generators that power electronics, electric cars and wind turbines. REE alloys reduce the weight of such magnets by up to 90 per cent and allow them to function at high temperatures.

The [global] race for rare metals – by Geoffrey York and Brenda Bouw (Globe and Mail – July 16, 2011)

July 16, 2011

VANRHYNSDORP, SOUTH AFRICA, VANCOUVER – Filled with radioactive waste, its buildings gutted and crumbling after 48 years of disuse, the abandoned Steenkampskraal mine would seem to hold little value to anyone.

Until recently, the decaying apartheid-era mine in a remote patch of South African desert was mainly of interest to scientists studying the effects of high radiation on the thousands of bats that hibernate in the empty mine shaft.

But soon the bats will be evicted, the radioactive waste will be buried and the shaft refurbished. The Canadian owners of this mine are scrambling to tap the mine’s rare-earth minerals – possibly the hottest commodity on the planet these days, with immense strategic and technological significance, and pivotal to a global geopolitical rivalry.

As prices soar, there is a frantic global rush to develop new sources of rare earths. These obscure minerals – 17 different elements with futuristic names such as neodymium, samarium, yttrium and lanthanum – are crucial for everything from guided missiles and hybrid cars to flat-screen televisions, iPods and BlackBerry phones.