Republic of Mining

Canadian mining sector cheers TPP signing – by Peter Koven (National Post – October 6, 2015)

October 6, 2015

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

TORONTO – The Canadian mining industry is celebrating Canada’s signing of the Trans-Pacific Partnership (TPP), which brings plenty of positives and no serious negatives.

The deal will gradually eliminate tariffs on Canadian mineral exports in TPP nations, some of which are enormous. At the same time, it does not bring any of the risks to Canada’s mining sector that it does to the dairy or auto sectors. It simply enhances the export opportunities.

“We don’t have some of the issues that other sectors face,” Pierre Gratton, president of the Mining Association of Canada, said in an interview. “For us, it’s really an opportunity to see reduced tariffs and to make us more competitive.”

There are huge variations in mineral import tariffs in TPP countries. On the low end, Australia applies tariffs of up to five per cent on Canadian imports, and Japan applies tariffs up to 7.9 per cent, the mining association said. On the high end, Vietnam’s tariffs are as high as 40 per cent, and Malaysia’s go up to 50 per cent.

GLOBE EDITORIAL: TPP-Less than hoped for, less than feared.(Globe and Mail – October 6, 2015)

October 6, 2015

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.

The Trans-Pacific Partnership (TPP) trade and investment agreement reached by 12 countries on Monday morning looks like a good deal – good, and not quite as big as promised. Both the positives and negatives in the deal appear to be smaller than hoped, or feared.

The broad strokes of the deal are known, though the precise details won’t be out for a few days. The TPP will open closed sectors of the Canadian economy, such as dairy, poultry and eggs – but by less than expected. In pharmaceutical patents, an area of concern to Canadians, the TPP’s changes to the status quo also appear to be smaller than advertised. And while the agreement, which includes Japan and the United States (but not China), is being sold as the biggest trade deal ever, it is not as revolutionary as all that.

Thanks to three decades of trade liberalization, from the Canada-U.S. Free Trade Agreement to NAFTA to the World Trade Organization, Canada’s trade is already largely free. The remaining old-style tariff barriers are few and generally low. The TPP is mostly about taking one more step down that path.

Canada’s auto industry could lose 20,000 jobs because of TPP trade deal, union says – by Kristine Owram (National Post – October 6, 2015)

October 6, 2015

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

The Trans-Pacific Partnership trade deal could have major ramifications for Canada’s already struggling auto industry, resulting in cheaper vehicles for consumers, but a more competitive landscape for Canadian manufacturers.

Unifor, the union that represents Canadian workers at the Detroit Three, said the deal would put an estimated 20,000 auto jobs at risk by eliminating tariffs and significantly reducing content rules for vehicles and auto parts.

Under the TPP agreement, Canada will phase out its existing 6.1 per cent tariff on imported passenger vehicles over the next five years — a move that is expected to lower the cost of Japanese-made vehicles for Canadian consumers.

“Certainly it’s good news for consumers and to us that means it’s good news across the board,” said Michael Hatch, chief economist at the Canadian Automobile Dealers Association.

How Suncor Energy Inc hopes to cement its position as oilsands kingpin by purchasing Canadian Oil Sands Ltd – by Claudia Cattaneo (National Post – October 6, 2015)

October 6, 2015

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

Canada’s oilsands are not high on the list of investor must-haves at a time of depressed oil prices, potentially higher provincial royalties and tougher climate change regulations.

But those are also the reasons oilsands pioneer Suncor Energy Inc. launched a $6.6-billion unsolicited bid Monday for Canadian Oil Sands Ltd. (COS), the largest shareholder in once arch-rival Syncrude Canada Ltd. and lately a challenged, underperforming operator.

In short, Suncor has figured out how to make money in a potentially lower-for-longer downturn (its operating costs are $28 a barrel and heading lower); Syncrude is struggling to adjust (comparable costs are $52.63 a barrel); Suncor believes it can push Syncrude to improve. If oil prices recover, Suncor will have cemented its position as Canada’s oilsands kingpin and will be laughing all the way to the bank.

“If you look at the way reliability and operating costs are going, it’s a very successful business, even at these low oil prices,” Suncor President and CEO Steve Williams said in an interview. “We would be giving the (Syncrude) operator much more support … so we can accelerate the reliability improvement.”

Politics: Ring fires up Nickel Belt debate – by Mary Katherine Keown (Sudbury Star – October 6, 2015)

October 6, 2015

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

The long-stalled chromite project in Northwestern Ontario proved to be a fierce topic of debate on Monday.

Claude Gravelle, the incumbent NDP MP for Nickel Belt, squared off against Aino Laamanen, Stuart McCall and Marc Serre over a number of business-oriented topics at a debate organized by the Greater Sudbury Chamber of Commerce.

“The Ring of Fire has been stalled for the last little while. … It is very important to have a strong MP with a business background and the expertise to work with communities, stakeholders and First Nations,” Serre, the Liberal candidate, began. “The Ring of Fire will create more jobs.”

Gravelle, who has served as the Nickel Belt MP since 2008, relied on his experience in Ottawa, noting he has visited the Ring of Fire twice and laid the groundwork for movement on the project.

Media Release: Federal and Provincial Greens Plan Cooperation on Nuclear Waste, Ring of Fire, Electricity Costs

October 5, 2015

Cooperation between Canada and Ontario that emphasizes northern issues is the pledge that Green MP Bruce Hyer and GPO leader Mike Schreiner made today.

(10/05/2015) Thunder Bay, ON – Hyer and Schreiner are working together on a cross jurisdictional plan to responsibly develop the Ring of Fire, protect Lake Superior from radioactive nuclear waste, and lower electricity prices in northwestern Ontario.

“Thunder Bay needs an independent voice that will speak for northerners,” says Schreiner. “Bruce Hyer has demonstrated repeatedly that he can work with other parties and the province to get things done for Thunder Bay Superior North.”

Hyer will work with all levels of government, including First Nations, to develop a comprehensive land use plan for north of 50; support value-added local processing with affordable renewable electricity from Manitoba for all northern communities; ensure that all aboriginal and non-aboriginal communities benefit from mining developments; and support federal funding for road corridors and rail access to the Ring of Fire.

“Lower electricity prices, federal infrastructure support, environmental protections, and shared benefits to all communities are essential to making the Ring of Fire work for northerners,” says Hyer. “I’m committed to using the Green Party’s leverage in a minority Parliament to influence federal policies.”

Commodities crisis spurs calls for African reform – by Maggie Fick and John Aglionby (Financial Times – October 5, 2015)

October 5, 2015

http://www.ft.com/

London – African nations need to respond to the commodity price crash by overhauling the continent’s regulatory burden and bolstering its energy infrastructure, prominent executives and officials have told a Financial Times summit.

Participants at the London conference were virtually unanimous that reforms delayed when oil and metal prices were rising can be put off no further now that demand from China has slowed and the commodities supercycle is on a downturn.

“It is a call to both regulators and business to ensure they maintain foreign direct investment and encourage local entrepreneurs,” said Wale Tinubu, chief executive of Nigerian oil and gas company Oando, arguing that it was now urgent to diversify countries’ economies across the resource-rich continent.

A chief focus of his and other participants’ attentions was the energy sector, where pricing regulations have often deterred investment. Efforts to industrialise countries’ economies have often been hobbled by inadequate energy supply. Spain produces more electricity than all of sub-Saharan Africa.

Glencore surges as speculation swirls around takeover, Viterra sale – by Eric Reguly (Globe and Mail – October 5, 2015)

October 5, 2015

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.

ROME — Glencore rallied strongly on Monday as CEO Ivan Glasenberg of the world’s biggest commodities trader pleaded for the closure of copper mines in a glutted market, and analysts suggested the company’s shares were oversold last week, when they plunged 30 per cent in one day.

In midafternoon trading in London, the shares were up 18 per cent. In overnight Hong Kong trading, Glencore surged more than 70 per cent on speculation that it is open to takeover offers and is close to selling its Canadian agriculture business.

But analysts dismissed the Hong Kong trading as essentially meaningless since Glencore shares have very little liquidity in that market and are prone to wild swings. Monday’s rise in both markets was so sharp and fast that the Swiss company was forced to put out a statement denying that any deal was imminent. It said “the board confirms that is not aware for any reason for these price and volume movements.”

Speaking on a panel in London at the Financial Times Africa Summit, Mr. Glasenberg made no comment on the extreme volatility in recent weeks in Glencore’s share price.

RPT-COLUMN-A role reversal for the ugly sisters, lead and zinc – by Andy Home (Reuters U.S. – October 2, 2015)

October 5, 2015

http://www.reuters.com/

Oct 2 (Reuters) – The commodities “supercycle”, it is now generally accepted, is over.

Slowdown in China, the lynchpin of the whole concept, is turning out to be a lot harder than anyone expected with industrial metal prices sliding across the board. But for some of them the “supercycle” was arguably over many years ago.

Consider the example of lead and zinc, often called sister metals because they tend to be found in the same deposits and are as often as not mined in tandem.

Zinc’s “supercycle” price peak of $4,580 per tonne, basis three-month metal on the London Metal Exchange (LME), came in November 2006 while lead’s peak of $3,890 followed a year later in October 2007.

Neither made it back to those lofty heights in the Chinese infrastructure-fuelled boom that followed the Global Financial Crisis of 2008-2009. And since then the two sisters have done little more than trudge sideways in well-worn ranges until joining in this year’s broader sell-off.

Defendant testifies in environmental crimes trial over platinum mine – by Lisa Demer (Alaska Dispatch News – October 2, 2015)

October 5, 2015

http://www.adn.com/

A mine operator on trial over pollution at a Southwestern Alaska platinum mine told a federal jury Friday in Anchorage he knew of muddy wastewater that turned the Salmon River dirty brown. But though he was the on-site boss and designed the mine operation, James Slade testified he never alerted regulators of the problems because, he said, that wasn’t within his authority.

Instead, even when the turbidity of the discharges was hundreds of times greater than allowed under Platinum Creek Mine’s general permit in 2011, Slade emailed company executives the mine would “continue to produce 24/7 until the wheels fall off.” That acknowledgement by Slade provided a punch at the end of cross examination by assistant U.S. Attorney Kevin Feldis.

Slade, a mining consultant from Calgary, Alberta who became chief operating officer for XS Platinum Inc., is accused of six felony charges including conspiracy, various violations of the federal Clean Water Act, and submission of a false report. His testimony in U.S. District Court took up most of Friday, the 10th day of a trial during which prosecutors have called more than 25 witnesses and presented hundreds of exhibits. Slade, who began working for the mine owners in 2010 and stayed through 2011, was the sole defense witness.

He said he was thrilled when he was recruited to work on resurrecting the old platinum mine in one of Alaska’s historic mining areas.

RPT-UPDATE 2-Potash Corp withdraws $8.9 bln takeover bid for German peer K+S – by Greg Roumeliotis and Arno Schuetze (Reuters U.S. – October 5, 2015)

October 5, 2015

http://www.reuters.com/

NEW YORK/FRANKFURT, Oct 5 (Reuters) – Potash Corp of Saskatchewan said on Monday it had withdrawn its 7.9 billion euro ($8.9 bln) offer for German potash producer K+S , citing a decline in global commodity and equity markets and a lack of engagement by K+S management.

K+S shares dropped 24 percent after Potash announced its decision in a statement, wiping almost 1.5 billion euros off the company’s market value.

An acquisition of K+S would have given Potash Corp an opportunity to realize savings from selling potash within North America from its own Western Canada mines and from K+S’s Legacy mine, which is under construction in the region.

However, senior K+S executives dismissed the Canadian company’s 41-euro-per-share cash bid — which represented a 59 percent premium to the volume-weighted average of K+S’s share price during the prior 12 months — as too low and refused to negotiate.

Since Potash Corp made its offer to K+S privately at the end of May, shares of K+S peers have dropped by around 40 percent amid concerns over weakening demand from China, the world’s largest consumer of potash.

Kinross’s clash with contractors over West African gold mines – by Geoffrey York and Eric Reguly (Globe and Mail – October 5, 2015)

October 5, 2015

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.

JOHANNESBURG and ROME — Kinross Gold Corp., facing an investigation in the United States over alleged corruption at its West African mines, has portrayed itself as the victim of “noise” by contractors who fail to win bids at its massive gold mine in the Sahara Desert in Mauritania.

In an interview last month, before the U.S. investigation was disclosed, Kinross executives in West Africa insisted their contracting procedures are transparent and fair. They denied local claims that the company faced pressure by the Mauritanian government to hire politically connected contractors, but they acknowledged the losing bidders have sometimes alleged wrongdoing in the contracting process.

“They go to some politicians and then you hear noise about it,” said Mike Sylvestre, regional vice-president for Kinross operations in West Africa. “There does seem to be a lot of noise.”

Kinross said on Friday it had received subpoenas from the U.S. Securities and Exchange Commission and the U.S. Justice Department, seeking information about alleged “improper payments made to government officials and certain internal control deficiencies” at its gold operations in Mauritania and Ghana.

For many miners, there’s no avoiding the gold ‘production cliff’ now – by Peter Koven (National Post – October 3, 2015)

October 5, 2015

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

When Steve Parsons and his colleagues published their first report on the gold “production cliff” in early 2013, they thought the thesis was obvious, even though almost no one was talking about it.

“It’s not a matter of if or even when the production cliff will happen,” the National Bank analyst said in an interview this week. “It’s really a matter of how companies respond.”

Gold miners hardly ever spoke up on this issue over the last several years. It may be that they didn’t agree with the conclusion, or perhaps they just didn’t want to think too hard about the implications. But there’s no avoiding it now.

Parsons’ thesis, in short, is that global gold production is set to fall in a big way. He calls it the “production cliff” while Goldcorp Inc. and others call it “peak gold,” but it amounts to the same thing.

The cliff appears to be imminent. According to numerous professional estimates, gold output will top out in 2015 or 2016 and then go into decline for several years at least.

Canada reaches sweeping Trans-Pacific trade deal – by Barrie McKenna (Globe and Mail – October 5, 2015)

October 5, 2015

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.

Ottawa — Canada is joining a massive Pacific Rim free trade zone, but has sacrificed some long-held protections for the country’s dairy, poultry and auto industries to gain entry.

Negotiators for the 12 members of the Trans-Pacific Partnership struck a tentative deal in Atlanta early Monday morning that will eliminate most tariffs in a region spanning roughly 40 per cent of the global economy.

But that will come at a hefty price for some sectors, and for taxpayers.

Ottawa said Monday it will spend $4.3-billion over 15 years to compensate dairy, chicken and egg farmers, who are ceding what Canadian officials called “limited access” to their now highly protected markets under the TPP deal. The subsidies will “keep producers whole,” according to a government press release.

The deal, originally slated to be announced Friday, was delayed numerous times over the weekend as countries haggled over last-minute details on autos, patent protection for drugs and agricultural products.

Nickel crisis rocks French islands in Pacific – by Claudine Wery (AFP/Yahoo.com – October 4, 2015)

October 5, 2015

https://en-maktoob.news.yahoo.com/

Plunging nickel prices and the market woes of world mining giants have shaken the French territory of New Caledonia, a tropical archipelago in the Pacific that is hostage to the metal’s fortunes.

Though best known for its stunning lagoon, pristine beaches and diverse wildlife, New Caledonia’s economy actually relies heavily on nickel, discovered here in the 19th century.

The price of nickel — essential to the manufacture of stainless steel — has plunged 35 percent so far this year to a six-and-a-half year low of less than $10,000 (9,000 euros) a tonne.

A slowdown in economic growth in China, the world’s biggest consumer of nickel, and stockpiles of the metal amounting to more than 450,000 tonnes, have depressed the market.

“We were already in a deteriorating situation when the crisis hit because every sector was in a slowdown. I think we are not far from zero economic growth,” Catherine Wehbe, director of the employers’ federation Medef in New Caledonia, told AFP.