Stan Sudol Columns/Media References and Appearances – Page 16

PDAC 2009 Convention – the Mining Bust of a Generation? – by Stan Sudol

May 15, 2010March 9, 2009

What a difference a year makes at the Prospectors and Developers Association of Canada (PDAC) annual convention, the largest on the planet. The PDAC is where the world’s mining analysts, investors, prospectors, exploration managers, government representatives and anyone else connected to this industry come to meet, do business, attend lectures and of course party. There is also a large Investor’s Exchange that the general public can attend to find out about the newest exploration plays or interrogate company presidents about their stock performance.

Needless to say, the mood was somewhat somber as everyone is trying to cope with commodity prices and metal demand that over the past six months have fallen off the proverbial cliff. The rapidness of the crash, along side with the unprecedented turmoil in credit and capital markets that has dried up funding for most exploration and development work has sent a legitimate fear throughout the entire junior mining sector.

A PricewaterhouseCoopers survey found that the market capitalization of the top 100 TSX-V junior mining companies plummeted from $20.2 billion on June 30, 2007 to $4.1 billion by November 2008. Investors are shunning higher risk exploration companies like the plague.

Northern Ontario Separation – by Stan Sudol

April 28, 2009February 16, 2009

This article was originally published in the Sudbury Star on March 9 , 2002

Maybe it’s time for Northern Ontario to think about going it alone

In my 45 years of living in Ontario, I have never seen such a tremendous rift between its southern and northern halves. The corporate, media and political elites of Toronto have grown so out of touch with the economic hardships and challenges of the North that for the second time in my life I have come to the conclusion that it would be in the best interests of Northern Ontario to secede from the south and form its own province.

When I was a teenager in the mid 1970s, I was sympathetic to the Northern Ontario Heritage Party. Ed Deibel, a North Bay businessman, unsuccessfully tried to separate from the south in order to establish social, economic and cultural justice for the distinct people of Northern Ontario.

Perhaps the time is right to revisit Ed Deibel’s worthy dream. A separate Northern Ontario would encompass approximately 85 per cent of the province’s land mass, using the French and Mattawa Rivers as the traditional boundary between north and south. With a population of roughly 838,812, according to the 2001 census, Canada’s eleventh province would be larger than New Brunswick, P.E.I. and Newfoundland, and would be eligible for more money in federal equalization payments as a “have not province” than it currently receives from Queen’s Park.

Goodby Inco, ‘Bem-Vindos’ to Sudbury Brazillian CVRD – by Stan Sudol

February 16, 2009

This column was originally published in Northern Life, Greater Sudbury’s community newspaper on October 25, 2006

It was the best of times, it was the worst of times, if I may borrow from Charles Dickens.

On Aug. 24, 2006 , the spot nickel price hit its all time high ever, at $15.76 (US) per pound. Last Friday it was just a tad under that record at $15.65.

Inco’s third quarter net earnings of $701 million—the Ontario operations contributed $US356 million to that figure—were the highest ever quarterly profits in the company’s 104-year history. The 2005 third quarter net earnings were $64-million.

And to add the cherry on the cake, the company officially opened its $115-million Fluid Bed Roaster Dioxide Emission Reduction plant in Copper Cliff that will further reduce SO2 pollution from the Sudbury operations by 34 percent to just 175 kilotonnes a year. This is about a 90 percent reduction from the 2,000 kilotonnes a year the company used to emit in 1970.

However, the drama and trauma of the past year’s “nickel wars” have finally come to an end in a way we didn’t expect.

The Brazilians are Coming, the Brazilians are Coming – by Stan Sudol

February 16, 2009

This column was originally published in Northern Life, Greater Sudbury’s community newspaper on August 16, 2006

Combined assets of CVRD and Inco would create the third-largest mining company in the world

Like most other analysts and columnists who have been following this nickel soap opera, we were all collectively given a sucker punch out of nowhere by the Brazilians!

Last Friday, Brazilian iron ore king, Companhia Vale do Rio Doce (CVRD) made an all-cash offer to buy Inco Limited at the price of CDN$ 86.00 per share. The offers of both Teck-Cominco and Phelps Dodge are a mix of cash and share. The hedge fund boys and girls dance with delight with all cash offers as these always trump any cash/share combination and give maximum short term gain.

In addition, Atticus Capital, a large American hedge fund that owns about eight percent of Phelps Dodge does not support the merger with Inco and will recommend shareholders to vote against this deal. If there are no regulatory hurdles, this does appear – notice my hedging – to be a knock-out punch.

Roger Agnelli, chief operating officer of CVRD said in a statement, “This is an exciting opportunity for CVRD. The operations of the two companies are complementary and the combination will enhance our capabilities to benefit from the fast changing global landscape in the metals and mining industry.”

Nickel Closest Thing to a True ‘War Metal’ – by Stan Sudol

May 15, 2010February 13, 2009

This column was originally published in Northern Life, Greater Sudbury’s community newspaper on February 23, 2007

The metallic “Achilles heel” for any military and navel production has always been nickel

Sudbury was definitely going to be “nuked” by the Russians. At least that was our conclusion back in 1976 when I worked at CVRD Inco’s Clarabell Mill for a year.

During one graveyard shift, a group of us were talking about Cold War politics and atomic bombs. We all agreed that if there ever was a nuclear war between the Americans and Russians then there must have been one Soviet “nuke” with our community’s name stenciled on it. We all laughed a little nervously, but there was also some pride in knowing Sudbury was important enough to get blown-up in the first round of missiles.

Access to strategic materials has always affected the destinies of nations. The Romans conquered Britain in AD 43 to control valuable tin deposits in Cornwall. Combining tin with copper produces bronze, a more valuable and militarily important alloy. Ancient Chinese metallurgical expertise with iron and steel allowed the Middle Kingdom to become a dominate military and economic force during the prosperous Han dynasty.

Xstrata Layoffs in Sudbury: Short-term Financial Gain and Long-term Hiring Pain – by Stan Sudol

May 15, 2010February 11, 2009

Global commodity prices have fallen off the cliff. ThyssenKrupp AG, Germany’s largest steelmaker, recently stated that not since the end of the Second World War has the demand for steel fallen so rapidly. Steel is the fundamental building block of all infrastructure and manufacturing activities.

These are extraordinary economic times, so we all knew this was coming.

Yet no one was prepared to see Xstrata Nickel chop its Sudbury workforce in half – 686 layoffs and 210 early retirements. Like most in the community, I am shocked and very, very angry. This kneejerk reaction from Zug, Switzerland has two serious repercussions that will affect the Canadian mining sector for a long time. The first is this: should Canada have allowed foreign companies to take over such a strategic resource as the Sudbury Basin with such weak controls on jobs and investment and, second, how will these severe employment cutbacks impact impending labour shortages in the mining sector?

To be fair, regardless of who owns the two nickel miners, the fundamental issue is that you cannot continue operating if it costs $6 to mine a pound of nickel and you can only sell it for $5.

2009 Canadian Mining Hall of Fame – A Rough Year But There is Hope – by Stan Sudol

January 22, 2009January 21, 2009

There was a somewhat subdued feeling by many in the mining sector at the 21st annual Canadian Mining Hall of Fame dinner, last Thursday, at the Fairmont Royal York Hotel in Toronto.

As Master of Ceremonies, David Harquail, President and CEO of Franco-Nevada said, “…base metals are in the tank, good projects can’t get financing and Hy’s steakhouse is now serving crying towels with those martinis!”

However, the four inductees for 2009 – two entrepreneurial engineers, Grenville Thomas, Bernard Michel, a geologist, Roman Shklanka, and a mineralogist professor, Donald Gorman, – seemed to symbolize the industry’s amazing ability to create enormous wealth and employment as well as the importance of training the next generation of skilled technicians that have made this country a mining superpower.

Mr. Harquail added, “…if there’s one thing a miner knows, it’s a commodity cycle. And when times are bad, opportunity knocks. Many of those at our head table tonight got here by not only surviving many downturns but by capitalizing on them.”

That head table included individuals such as Ian Pearce, CEO Xstrata Nickel, Jim Gowans, President and CEO De Beers Canada, Terry Bowles, President and CEO Iron Ore Company of Canada, and Jack McOuat, Director of the Canadian Mining Hall of Fame, just to name a few.

CANADIAN PERSPECTIVE: Republic Of Mining Chronicles Canadian Mining History -by Stan Sudol*

May 16, 2010January 12, 2009

This column was posted today on the Canadian Mining Journal digital update.

The Web has forever changed the way we search for information. In today’s digitized world, most journalists, policy analysts, political leaders and the general public – especially students – turn to the Internet as their first source for facts.

Two major drawbacks to Internet searches seem to be the lack of content that is over a decade old because no one has bothered to post it or information that is deeply embedded in corporate websites. Blog postings, on the other hand, generally show up on Google searches much more readily.

In the final week of December, the annual Mining Person of the Year Award given by The Northern Miner is eagerly awaited by the industry. Since the first award was given in 1977, I was very surprised that I could not find much information about previous winners when I searched the Internet.

After contacting The Northern Miner about my concerns, publisher Doug Donnelly graciously allowed the RepublicOfMining.com to post all the previous Mining Person of the Year winners.

I have created a separate file in my blog’s index site located on the left hand side of the screen called “Northern Miner – Mining Person of the Year Award,” for easy access. Or just Google “Mining Person/Man of the Year” and the address will pop up at the top of the page.

Sudbury – The Republic of Nickel (Part 4 of 4) – Stan Sudol

May 15, 2010December 7, 2008

The summer of 1969 was the beginning of the end of Sudbury’s commanding control of global nickel production. The labour disruptions that summer and fall would impact the industry for the next few decades. The Inco miners went on strike on July 10, 1969 with the Falconbridge workers joining them in the third week of August. They did not settle with until mid-November. The industrial economies of Britain and the U.S., both of which imported almost all of their nickel from Canada suffered greatly.

The London Times headlines screamed “The Nickel Crisis” and “Whitehall and CBI May Soon Declare Nickel Emergency.” It was the most severe materials shortages both countries had experienced since World War Two. In the U.S. nickel stockpiles had to guarded by armed police to prevent theft. U.S. military production remained unaffected due to the government strategic stockpile.

It was the last time the “Sudbury nickel lion” roared. By bringing U.S. and British industry to their knees the Sudbury workers ensured that billions would be spent over the next few years to finally break their monopoly on this strategic metal.

Sudbury – The Republic of Nickel (Part 3 of 4) – Stan Sudol

May 15, 2010December 7, 2008

The decade ended with King George VI and Queen Elizabeth visited the community in June 1939. It was the first time a reigning British monarch had ever visited Canada, let alone Sudbury. Precedence was broken by allowing the Queen, the first women ever to go underground at the Frood Mine. Traditionally miners thought women would bring bad luck if they were allowed underground. There were a few miners who probably thought the beginning of the Second World War was a result of her visit.

Second World War

Shortly after the second world war started, nickel was one of the first metals to require government allocation. Non-essential use of this strategic material was banned which included most of International Nickel’s civilian markets.

Labour shortages were a constant struggle requiring the company to hire women in its surface operations for the first time in history. Over 1,400 women were hired in production and maintenance jobs for the duration of the war at the Sudbury operations and the Port Colborne refinery.

The labour shortages also finally allowed a permanent union to be established. Inco’s nickel operations were well known to have an extensive system of anti-union spies who ensured any person discussing organization activities would be quickly fired.

Sudbury – The Republic of Nickel (Part 2 of 4) – Stan Sudol

May 15, 2010December 7, 2008

Thomas A. Edison the famous inventor came to Sudbury in 1901 searching for nickel. He was unsuccessful as he didn’t drill deep enough. Years later Falconbridge would develop a mine on this very claim.

The strategic military importance of nickel attracted major American corporations. In 1902 J.P. Morgan of U.S. Steel helped establish the International Nickel Company by combining the Orford Copper Company’s New Jersey refinery with the Canadian Copper Company’s Sudbury mines. Samuel Ritchie was ousted be his partners back in 1891 giving Robert M. Thompson control. Ambrose Monell, who came from U.S. Steel was the first president.

In 1905, Sudbury nickel production surpassed that of New Caladonia for the first time and would continue it stranglehold on the world’s largest supplies of nickel until the late 1970s.

The growing importance of Sudbury and all of northern Ontario was formally recognized by the provincial government of Premier James Whitney (1905-1914) by appointing Sudbury businessman and former mayor Frank Cochrane as the province’s first northern cabinet minister. He served as the as the provincial minister of lands, forests and mines from 1905 to 1911. At the turn of the last century northern Ontario’s vast resources were supplying about 25 per cent of Queen’s Park revenues.

Sudbury – The Republic of Nickel (Part 1 of 4) – Stan Sudol

May 15, 2010December 7, 2008

Since the beginning of mankind, access to important mineral deposits for economic or military applications have changed the destinies of entire civilizations.

The rich gold mines of Thrace gave Alexander the Great the enormous wealth to bankrole a powerfull army and establish one of the greatest empires the world had ever seen. Ancient Chinese metalurgical expertise with iron and steel allowed the Middle Kingdom to become a powerful military and economic force during the prosperous Han dynasty.

For much of the twentieth century, the nickel mines of Sudbury were not only the principle source of this strategic metal, but also had a disproportionate impact on the industrial and military history of the world.

As with all good things, this story begins with a bang. Actually, it was one cosmic explosion and two smaller earth-bound blasts. The first happened about 1.8 billion years ago when a massive ten kilometer wide meteor, wider than Mount Everest, and traveling at about 75 km per second, collided with the earth at a site roughly 400 km north of present day Toronto. The impact, equal to the force of about 10 billion atomic bombs, melted the crust and concentrated the nickel-copper mineralization already at the site.

Sudbury Dumped on the Slag Heap of History – Stan Sudol

May 15, 2012November 3, 2008

This article was originally published in the Sudbury Star – Friday, February 6 , 2004

Sudbury should work extra hard to control its image

Ed Burtynsky is a very successful art photographer who, unfortunately for Sudbury, has become somewhat of a celebrity within the tiny Toronto media establishment. Why should the city be concerned? Mr. Burtynsky’s principal subject matter happens to be industrial environments and many of his photos were taken in the Sudbury region. In fact one particularly photo titled, Nickel Tailings #34, Sudbury, Ontario is not only on the cover of his new book, but is also being highlighted by the Art Gallery of Ontario (AGO) in their media promotions of his show.

If you read last Saturday’s Globe and Mail, you would have seen a “full-page” advertisement for Mr. Burtynsky’s AGO show using a striking photo of a river of slag with denuded trees in the distance. The Globe and Mail is Canada’s most influential newspaper, read by the country’s corporate and political elite – the type of people who make decisions on where factories should be built and where significant government investments should be made.

In the February issue of Toronto Life, journalist Gerald Hannon writes a lengthy profile on Ed Burtynsky’s work and eloquently describes that slag-dump photo as, “One image in particular has become almost iconic. Nickel Tailings #34, Sudbury, Ontario gives us a black and blistered landscape, a fragile line of trees huddling disconsolately in the background, the foreground dominated by a stream so crimson it is as if the earth has bled.”

In a recent review in the Toronto Star, the country’s largest circulation paper, art critic Peter Goddard describes another Burtynksy photo titled #13, Inco Abandoned Mine Shaft, Crean Hill Mine, Sudbury, Ontario as “… that left a pool of lime-green water so toxic and yet so clear – and lovely to look at – that the vertical striations in the rock are reflected in the surface of the deadly pool.”

Taking a Beating

Sudbury’s public relations image is certainly taking a beating. In fact, many in my business might suggest that the past twenty-five years of trying to change the city’s image from a polluted, industrially ravaged moonscape into a transformed, regreened landscape has been dealt a mortal blow!

Claiming Our Stake! Building a Sustainable Community (Part 3 of 3) – Stan Sudol

November 3, 2015October 3, 2008

IV: COMPANY & GOVERMENT INVESTMENTS IN LOCAL BUSINESSES

Maximizing the Potential of our Local Cluster

More money is spent within a 500-kilometer radius of Sudbury on underground hardrock mining supplies than anywhere else in Canada, the U.S, or Chile. In 2005, lnco spent $374 million on local supplies and services and $228 million on capital spending, Within the Sudbury area there are more than 300 companies that form the basis for the Greater Sudbury mining supply and services (MS&S) cluster. These companies range from dozens of small specialty shops that have created niche markets for themselves, to firms specializing in project engineering and management, equipment design and manufacture, software development and other research.

Employing over 8,000 people, they have the potential to create a significant number of new jobs over the next 10 years, expand exports and develop as a technical leader for the mining industry. A recent Institute for Norfhern Ontario Research and Development (INORD) survey conducted for FedNor at Laurentian University indicates that innovation is extremely high among the cluster of MS&S companies in Northeastern Ontario. The study revealed that 83 out of 90 of the firms surveyed indicated they were upgrading products and services and 72 out of 93 had introduced a new product or service in the preceding three years.

Claiming Our Stake! Building a Sustainable Community (Part 2 of 3) – Stan Sudol

November 3, 2015October 2, 2008

INVESTMENT REQUIREMENTS

I: COMPANY INVESTMENTS IN LOCAL OPERATIONS

Local Operations Managed by Two Major Mining Companies

lnco is planning capital expenditures of about $2 billion in the Sudbury Basin over the next five years to expand current production and build new mines. The company is embarking on the largest period of growth in Sudbury in more than 30 years. This is a conservative estimate and depending on the financial clout of the new owner, may be increased substantially, lnco has plans for new mine developments that include the Kelly Lake and Totten deposits, milling upgrades, smelter improvements, including investments in sulphur emission reductions and expansions at the nickel refinery. The company intends to maintain the stability of their workforce, with longer-term growth potential.

Falconbridge’s half billion-dollar Nickel Rim South project, currently under construction, may become the richest individual mine in Canadian history.