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Saskatchewan Mining

Despite challenges, mining on track to invest $50B [in Saskatchewan] – by Bruce Johnstone (Regina Leader-Post – May 29, 2013)

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

Demand for food, energy to increase

Despite the postponement of several multibillion-dollar projects, the head of the Saskatchewan Mining Association is confidently holding to his prediction that the industry will invest $50 billion in the province between 2008 and 2028.

“The outlook for the mining market and sector in 2013 remains strong, if mining companies are strategic in their actions,” Steve Fortney, president of the SMA, told a news conference Monday to launch Mining Week in Saskatchewan. “We need to remain aware of the challenges the industry faces, including increased project and operational costs that are not supported by commodity prices, and a tight labour market.”

Fortney, who is senior director of technical projects for PotashCorp in Saskatoon, was referring to recent announcements by mining companies to delay or cancel major capital projects due to softening commodity prices, a weakening global economy and competition for resources.

Earlier this month, Mosaic announced it was delaying, for up to two years, a couple of expansion projects in Saskatchewan, which would have added another two million tonnes of potash production at a cost of $2 billion.

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[Saskatchewan] Uranium mine industry under scrutiny – by Shinoah Young (Regina Leader-Post – May 28, 2013)

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

Northerners are in dire need for further education and training when it comes to Saskatchewan’s economic “boom.”

A recent report called the Community Vitality Montoring Partnership Process (CVMPP) suggested that “uranium mining companies should target some education efforts and donations to invest in early childhood development” in northern Saskatchewan. The recent CVMPP report was suggested by northern leaders and put together by InterGroup Consultants Ltd., a company based in Winnipeg.

Thursday at the University of Regina, Thomas Sierzycki, mayor of La Ronge, presented the report regarding the socio-economic impacts of uranium mining in Saskatchewan.

Sierzycki said there needs to be more training and education towards the higher, non-entry level positions in order for northerners to fully benefit from the uranium mining industry.

“The number of people who have higher levels of education has increased (and) the number of people who have long-term, full-time employment have increased. Although because the population has grown so quickly, the proportion hasn’t necessarily (matched) with education,” said Erin Jonasson, a research consultant for InterGroup.

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New uranium royalty incentives will encourage development in Saskatchewan – by Tony Playter (Regina Leader Post – May 25, 2013)

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

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In an effort to encourage new investments in uranium mining, the provincial government made changes to its uranium royalty structure earlier this year.

Tim McMillan, Minister Responsible for Energy and Resources, said the new royalty structure now recognizes actual costs incurred in development and mining.

“The old uranium royalty structure, which was put in place in 2001, presented a number of challenges,” said McMillan. “It was based on assumed costs and over the last 13 years we have seen the cost of construction far exceed assumptions that were put in the old model.”

The old royalty system had a very negative effect on mining in Saskatchewan. Over the years, many development and mine projects have been placed on hold because the structure would not recognize certain actual costs.

“We corrected that system, which was no longer reflecting the true costs of building a new mine or bringing new projects forward,” said McMillan.

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International Minerals Innovation Institute – by Robyn Tocker (Regina Leader Post – May 25, 2013)

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

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In Saskatoon, a unique, non-profit institute funded by Saskatchewan’s mining industry and government that brings “market pull” to the design of education and training (E&T) programs and research and development (R&D) projects has been developed. International Minerals Innovation Institute (IMII) “is focused on enhancing mining technology, processing technology, environment and safety management, exploration, social license and policy research, and economics of global commodities,” said Rodney Orr, executive director of IMII.

The goals are simple: to support the attraction and retention of educated and skilled people; facilitate research and development; and provide leadership and capacity-building in the development of programs, technical certificate and undergraduate and post-graduate programs. IMII has already begun their work to meet the mining industry’s needs by entering into an agreement with the University of Saskatchewan to provide $1.68 million over a three-year period for the start-up costs of developing Mining Option classes for engineering students and to explore the delivery of an undergraduate mining engineering degree.

IMII was designed to fill the gap for skill development through industry-driven education and training programs and R&D within [the Saskatchewan] mineral industry. It is a unique approach.

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SIMSA – promoting Saskatchewan solutions to the global resource industry – by Tony Playter (Regina Leader Post – May 25, 2013)

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

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The Saskatchewan Industrial and Mining Supply Association (SIMSA) is a new organization representing Saskatchewan based companies that provide goods and services to mining, oil and gas, and industrial projects.

With Saskatchewan’s strong resource base and growing economy, SIMSA – which was officially launched at the 2013 Saskatchewan Mining Supply Chain Forum – will play an important role in providing world-class opportunities and solutions to members of the industry. SIMSA assists its members by promoting the capabilities and capacity of its members who represent Saskatchewan industrial manufacturers and service suppliers.

“Our mandate is to represent the interests and concerns of our members who are Saskatchewan industrial equipment and service suppliers,” said Tom Foster, chairman of SIMSA’s board of directors. “We look to promote our members and create lasting partnerships within the industry and other associations.”

SIMSA will also promote its members and their services to global companies working in Saskatchewan as well as globally. The organization will also provide one voice when reviewing new policies and regulations that may affect their members.

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Saskatchewan mining companies contribute to their communities – by Carol Rogers And Barb Flynn (Regina Leader-Post – May 25, 2013)

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

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Saskatchewan’s mining corporations are drilling into more than just the earth. Many are becoming involved in and giving back to their communities. They are doing this in a variety of ways including by introducing educational programs, providing employment opportunities, ensuring employee safety both on and after leaving the job, and addressing child hunger as a way of promoting a healthy education and lifestyle. Here is a look at some of the ways that companies are investing in local communities.

AREVA

AREVA Resources Canada is entering an exciting phase of growth in 2013. Not only is AREVA restarting the mill at McClean Lake this summer, they are also upgrading and expanding it so they can process all the ore from the nearby Cigar Lake mine.

The key to their success? Hiring a significant number of employees to ensure they are ready for this growth and development. In 2012, AREVA launched a major recruitment campaign focused on gaining employees from northern Saskatchewan.

Because it is a competitive market with many projects underway in the province, AREVA understands that they need an innovative approach to attract and retain talent.

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Minister responsible for Energy and Resources – by Tony Playter (Regina Leader-Post – May 25, 2013)

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

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Q & A with Tim McMillan

According to the Saskatchewan Mining Association website, Saskatchewan has more than 25 operating mines that produce minerals such as potash, uranium, coal and gold as well as mineral resources including diamonds, copper and zinc.

To ensure continued success in the mining sector and the province’s overall economic growth, the Ministry of the Economy has taken several steps to encourage investment and development in Saskatchewan. Tim McMillan, Minister responsible for Energy and Resources, discussed the future of mining in Saskatchewan.

Q: Since 2007, how has the provincial government encouraged investment in Saskatchewan’s mining sector?

I believe it is important to tell the Saskatchewan story in an accurate and positive light. For too long, Saskatchewan politicians talked about what we couldn’t do, what we didn’t have and how we would never grow or prosper like some of our neighbours.

The change in paradigm has been a very important part of our success. We have been very open and made some key structural changes that have created a stable royalty system that will drive long-term investments and benefits for our province.

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Saskatchewan Mining Association predicts mining sector growth – by Robyn Tocker (Regina Leader-Post – May 25, 2013)

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

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Saskatchewan’s mining industry employs over 30,500 people who work in over 20 different mining operations across Saskatchewan. The province supplies a variety of minerals in Canada and internationally. It is best known for being the world’s leading producer of potash, producing roughly one third of the world’s supply. “Saskatchewan is also the world’s second-leading producer of uranium, supplying roughly 17 per cent,” said Pam Schwann, the executive director of the Saskatchewan Mining Association (SMA).

Saskatchewan’s mining industry also produces minerals such as lignite coal, which supplies over 50 per cent of the province’s baseload power. Gold, salt, sodium sulphate, bentonite and other clays are also mined.

“One of the key advantages Saskatchewan has over other jurisdictions [in producing these minerals] is its geologic framework,” Schwann said. Both the potash-bearing Prairie Evaporite Formation and the uranium-bearing Athabasca Basin host world class deposits in terms of tonnage and grade.

Saskatchewan also has an advantage because of a positive policy environment. Schwann explained the annual Fraser Institute Survey identified that Saskatchewan ranked 13th out of 96 global jurisdictions in terms of offering overall policy attractiveness for investment. Saskatchewan’s postsecondary institutes, including the Apprenticeship and Trade Certification Commission, also lend a hand.

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Saskatchewan finds small solutions to big pipeline problems – by Yadullah Hussain (National Post – May 24, 2013)

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

Stunned by Enbridge Inc.’s Kalamazoo River oil spill in 2010 that disrupted its sole market access in Saskatchewan, Crescent Point Energy Corp. found an unlikely ally: an agriculture company.

Toronto-based Ceres Global Ag. Corp owns a stake in Southern Stewart Railway set up to transport grain from Stoughton, Sask., to Regina, from where it connects to other lines. But floods over the past two years had wrecked its agriculture business, and the province’s burgeoning oil production seemed like a good way to bring its trains back into active duty.

The arrangement took off. Within the space of a year, SSR was shipping nearly 30,000 bpd of oil out of Saskatchewan, helping Crescent Point and others escape the heavy oil discounts plaguing Canadian producers.

“The Kalamazoo river leak was a bit of an eye opener as a lot of our production is in Saskatchewan and we are not blessed with the number of pipeline alternatives they have in Alberta, so we really had one way of getting our crude to the market, and that’s the Enbridge mainline system,” said Trent Stangl, vice-president at Crescent. “The SSR has been a key part of our rail plan for southeast Saskatchewan.”

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Potash, uranium to remain leaders of pack, forum hears – by Scott Larson (Saskatoon StarPhoenix – May 1, 2013)

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

The mining industry in Saskatchewan, led by potash and uranium, will continue to be a strong sector, says Gary Delaney, chief geologist with the province.

“We are very optimistic about potash and uranium,” said Delaney while speaking to an audience at the third annual Saskatchewan Mining Forum.

“Our mineral sector is well positioned for growth. The roots are strong and we are seeing vigorous exploration. There is more opportunities, there is more potential, and we hope going forward that will be realized and our sector will continue to grow.”

There are 10 producing potash mines in the province and at least nine potential greenfield projects have been identified. Pam Schwann, executive director with the Saskatchewan Mining Association, agreed those two sectors will lead the way. “I don’t see any big changes there.”

She said world population growth, increased industrialization, energy and food needs mean potash and uranium will continue to be high in demand.

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Cameco’s $800-million tax battle – by David Milstead (Globe and Mail – May 2, 2013)

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.

Did you know one of the largest sellers of uranium in Switzerland is Saskatoon-based Cameco Corp.? The Canada Revenue Agency has been aware for some time. And now Cameco shareholders are getting more details about the potential problems it may cause the company – as in more than $800-million in back taxes.

It wasn’t supposed to work out this way, of course. In 1999, Cameco set up a subsidiary, Cameco Europe Ltd., in low-tax Zug, Switzerland. Cameco then signed a 17-year deal to take the uranium it produces in Canada, sell it to Cameco Europe, and have Cameco Europe make the final sale to the end customers all across the world.

Why inject a middleman into the transaction? Well, Cameco is selling the uranium to Cameco Europe at the low prices reflective of 1999, when the deal was signed. Cameco is recording little to any profit in Canada; instead, all the profits appear in Zug, where the tax rate is lower.

This has been a boon to Cameco’s bottom line. The uranium producer estimates it has avoided declaring $4.9-billion in Canadian income, saving it $1.4-billion in taxes, over the last 10 years.

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Potash Corp. sees rising demand in North America, overseas markets – by Pav Jordan (Globe and Mail)

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 clouds are parting over the global potash market, the world’s largest producer of the crop nutrient says.

After four consecutive quarters of falling profit, Potash Corp. of Saskatchewan said Thursday it’s seeing higher sales to China, Latin America and India as customers are lured back by low prices after a buyers’ strike last year.

“We believe we are in a recovery year this year,” Bill Doyle, the ever-optimistic chief executive officer of Potash Corp. and the industry’s most vocal champion, said on a conference call with analysts on Thursday. “The impact was evident in our first-quarter earnings.”

Global potash demand slumped hard last year as key consumers in India and China delayed signing new contracts with producers for months, resisting high prices for the nutrient used to strengthen plant stalks against drought and disease. The impasse ended in December when Canpotex Ltd., the joint venture of Potash Corp., Agrium Inc. and Mosaic Co. that sells potash outside of North America, agreed to significantly lower-priced long-term contracts.

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Resource boom fuels Saskatchewan’s soaring economy – by Greg Quinn, Bloomberg News/Regina Leader Post – April 22, 2013)

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

Kylan Dales gave up a banking career to work out of a mobile office and plow his pickup truck through snow in Saskatchewan’s oilfields.

The 30-year-old’s starting salary as a field operator for PetroBakken Energy Ltd. matched what he made as a retail marketing consultant at Servus Credit Union. Dales’s career shift reflects a “rotation” of demand that Bank of Canada Governor Mark Carney says the economy needs – toward business investment and exports and away from consumer spending.

While most of the country faces sagging growth and slowing labour markets, Saskatchewan is benefiting from corporate investment aimed at tapping global demand for natural resources.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market capitalization, has expanded capacity. Cameco Corp., and Canada’s biggest uranium producer, is building its Cigar Lake mine atop the world’s largest undeveloped high-grade uranium deposit.

“There is more going on in this province now than I have ever seen,” said Gavin Semple, 67, chairman of Regina farm-equipment maker Brandt Industries Ltd. “Whether it’s population growth, investment, almost any criteria that you want to use to measure, this is a high point,” said Semple.

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Jansen project seeking green light from BHP board – by Pav Jordan (Globe and Mail – April 15, 2013)

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.

Saskatchewan’s giant Jansen potash project seems just a signature away from final approval, but don’t hold your breath on a decision from the board of BHP Billiton Ltd.

The world’s largest miner is working on the production and service shafts, which are the longest lead items of potash-mine development. The $14-billion project still needs a green light on design engineering after deciding to double initial output on Jansen.

“We are finalizing this design engineering as part of the Jansen project feasibility study, which will be presented to the BHP Billiton board,” said company spokesman Ruban Yogarajah. “While this occurs, we will finish building the camp and continue shaft excavation and site preparation.”

Once built, Jansen is expected to be the world’s largest potash mine, dwarfing even those of BHP’s nearest rival, Potash Corp. of Saskatchewan Inc., which has mines nearby.

The mine, set in flat prairie lands about 150 kilometres southeast of Saskatoon, is a bet by BHP Billiton that potash, a crop nutrient, will become the world’s most important mined commodity as global food demand rises with new demand from emerging economies, where increasing affluence is changing eating habits.

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The poetry of Potash Corp.’s attempted takeover by the Dead Sea – Editorial (Globe and Mail – April 12, 2013)

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 certain poetic justice in the difficulties that Potash Corp. of Saskatchewan Inc. is having as it tries to acquire a controlling interest in Israel Chemicals Ltd., although the government of Israel should not stand in its way, yielding to economic nationalism.

In 2010, the management of Potash Corp. was quite willing to let Canadian economic nationalism work against its proposed takeover by BHP Billiton Ltd., an Australian-British mining corporation; in the end, the federal government took the position that BHP’s purchase would not be of net benefit to Canada.

Yair Lapid, the new Israeli Finance Minister, has gone so far as to say that a takeover by Potash would be “an un-Zionist act.” Such an opinion as applied to a Canadian company presents a striking contrast with the Canadian government’s emphatic support for Israel, expressed in Prime Minister Benjamin Netanyahu’s invitation to John Baird, the Minister of Foreign Affairs, to help revive the Middle East process; Mr. Baird has described himself as a “true believer.”

Israel Chemicals, which mines the Dead Sea at Sdom (named after the Biblical Sodom), is the sixth-largest potash producer in the world, in a highly concentrated industry.

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