Republic of Mining

The natives’ tools – by Lawrence Solomon (National Post – October 2, 2015)

October 2, 2015

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

In a predictable display of stakeholder democracy and sustainable development, native leaders, environmentalists, governments and industry all participated in a historic breakthrough this week – an agreement to build a pipeline carrying tar sands oil from Alberta through the Rockies and the British Columbia interior to the Pacific Ocean, from where tankers will deliver the oil to China and beyond. In this $15-billion pipeline play, the parties to the agreement committed to the creation of an energy corridor that would also transport natural gas to an LNG terminal on the coast.

All the stakeholders played their prescribed part in this megaproject. The natives and the corporate leaders spent years in hard-bargaining, eliminating roadblocks through patient negotiations that obtained buy-ins from the many native bands along the route. The government provided the financial concessions needed to secure the development and jobs it invariably touts. And the environmentalists played the role of fools.

This 1.1 million-barrel-a-day oil pipeline and LNG complex – proposed by native-run Eagle Spirit Energy – could morph into an even bigger industrial development. The company is also contemplating multi-billion investments in an upgrader or refinery, in a power transmission line and in marine terminal port development to leverage the opportunities in its energy corridor.

Newfoundland seeking oil companies for booming offshore industry – by Shawn McCarthy (Globe and Mail – October 2, 2015)

October 2, 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 government of Newfoundland and Labrador says there is as much as 30 billion barrels of oil equivalent that is expected to be found in an unexplored area of its deep-water offshore, as the province looks for billion-dollar drilling commitments from international oil companies to expand its production.

In an telephone interview from St. John’s, Ed Martin, chief executive officer of provincially owned Nalcor Energy, said the province’s Flemish Pass area ranks as one of the top undeveloped areas in the world, particularly as companies such as Royal Dutch Shell PLC turn away from risky ventures in the Arctic.

The province’s premier, Paul Davis, released an assessment by French geophysical firm, Beicip-Franlab, that estimates that an 11-parcel block currently being auctioned in the Flemish Pass has the potential to contain 12 billion barrels of crude and 113 trillion cubic feet of natural gas. Beicip-Franlab based that estimate on seismic and satellite data collected by Nalcor and private sector partners that conducted a four-year, $240-million exploration program.

Death Toll in Xinjiang Coal Mine Attack Climbs to 50 (Radio Free Asia – September 30, 2015)

October 2, 2015

http://www.rfa.org/english/

The death toll in a knife attack orchestrated by alleged “separatists” at a coal mine in northwestern China’s troubled Xinjiang Uyghur Autonomous Region has climbed to at least 50 people—including five police officers—with as many as 50 injured, according to local security officials who say nine suspects are on the run.

The attack occurred on Sept. 18, when a group of knife-wielding suspects set upon security guards at the gate of the Sogan Colliery in Aksu (in Chinese, Akesu) prefecture’s Bay (Baicheng) county, before targeting the mine owner’s residence and a dormitory for workers.

When police officers arrived at the mine in Terek township to control the situation, the attackers rammed their vehicles using trucks loaded down with coal, sources said.

Three sources, including a ruling Communist Party cadre from a local township government, told RFA’s Uyghur Service in recent days that at least 50 people were killed and as many as 50 injured in the attack—with most casualties suffered by the mine’s largely majority Han Chinese workers.

The Thucydides Trap: Are the U.S. and China Headed for War? – by Graham Allison (The Atlantic – September 24, 2015)

October 2, 2015

http://www.theatlantic.com/

In 12 of 16 past cases in which a rising power has confronted a ruling power, the result has been bloodshed.

When Barack Obama meets this week with Xi Jinping during the Chinese president’s first state visit to America, one item probably won’t be on their agenda: the possibility that the United States and China could find themselves at war in the next decade. In policy circles, this appears as unlikely as it would be unwise.

And yet 100 years on, World War I offers a sobering reminder of man’s capacity for folly. When we say that war is “inconceivable,” is this a statement about what is possible in the world—or only about what our limited minds can conceive? In 1914, few could imagine slaughter on a scale that demanded a new category: world war.

When war ended four years later, Europe lay in ruins: the kaiser gone, the Austro-Hungarian Empire dissolved, the Russian tsar overthrown by the Bolsheviks, France bled for a generation, and England shorn of its youth and treasure. A millennium in which Europe had been the political center of the world came to a crashing halt.

The defining question about global order for this generation is whether China and the United States can escape Thucydides’s Trap.

Glencore’s Wild Ride Has Investors Asking: Can It Happen Again? – by Matthew Campbell, Dinesh Nair and Jesse Riseborough (Bloomberg News – October 2, 2015)

October 2, 2015

http://www.bloomberg.com/

From London to New York to Hong Kong, the frantic question kept coming: could this be another Lehman?

But nowhere did it cause more alarm than inside Glencore Plc — the Swiss commodities giant that had suddenly found itself at the epicenter of a global panic on Monday.

What began that morning in London, with a sudden plunge in Glencore’s share price, cascaded across oceans and time zones and left the company’s billionaire chief executive, Ivan Glasenberg, scrambling to calm anxious shareholders, creditors and trading partners.

Days later, even as Glencore regained most of the $6 billion of shareholder wealth erased in a few hours, many investors wondered if Glasenberg can hold the markets at bay.

Few market players, including people close to Glencore, are able to pinpoint why a blue-chip member of the FTSE-100 Index — even one that had been under pressure from sliding commodities prices — lost almost a third of its value in a blink. And that, investors worry, suggests this could all happen again.

Holding keys to Ring of Fire development – by Alan S. Hale (Timmins Daily Press – October 2, 2015)

October 2, 2015

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Aboriginal communities and their role in the future of the Ring of Fire was the focus of a presentation to business leaders in Timmins Thursday.

Glen Nolan, a former chief of the Missanabie Cree First Nation and vice-president of aboriginal affairs for Noront Resources, was the guest speaker of a luncheon hosted by the Timmins Chamber of Commerce.

Noront is a significant player in the Ring of Fire. The company owns 65% of the mining claims within that James Bay lowland region.

With the First Nations in the area holding a great deal of power over the future of the project, Nolan said it is vital that companies like Noront go about handling their relationship with these communities properly.

“It’s not as simple as going into these territories and expecting the communities to open their doors. There has been many years of promises made by governments and by resource companies that have not been fulfilled,” said said Nolan to the chamber members.

AUDIO: New Democrats hone in on Ring of Fire election promises (CBC News Thunder Bay – September 29, 2015)

October 1, 2015

http://www.cbc.ca/news/canada/thunder-bay/

What the New Democrats have to say about Ring of Fire development, and counterpoints from the other parties

The federal NDP says if it forms the next federal government it will commit $1 billion to infrastructure in the Ring of Fire. It’s one of the key promises in the NDP’s Northern Ontario platform, which was announced Monday.

Thunder Bay Rainy River NDP candidate John Rafferty said his party’s plan to match Ontario’s $1 billion commitment to the Ring of Fire sends an important message.

“There’s a commitment to make this happen and that optimism will help move this program forward.” The Conservative Candidate for Thunder Bay – Superior North, Richard Harvey, said his party will commit funding when Ontario has a plan in place to develop the project.

“Simply transferring money to the province to spend on — something — when they don’t have a plan doesn’t make sense,” Harvey said.

The riding’s Green Party candidate Bruce Hyer said he wants to wait until there’s a plan in place — one that benefits northern Ontario communities, as well as First Nations.

Uganda: Mineral Conference to Focus On Value Addition – by Justus Lyatuu (All Africa.com – September 30, 2015)

October 1, 2015

http://allafrica.com/

Officials of mining firms, both local and international, will converge in Kampala for the fourth Mineral Wealth Conference on October 1 and 2, looking for opportunities in an industry that is sometimes touted to be bigger than the oil and gas sector.

Richard Kaijuka, the vice chairman of the Uganda Chamber of Mines and Petroleum (UCMP), the body organising the conference, said the annual MWC was fast becoming East Africa’s flagship mining convention as it played a significant role in highlighting the huge untapped potential of Uganda’s, and the region’s, fledgling mining industries.

“Uganda enjoys a wealth of minerals ranging from gold, copper, iron ore, vermiculite, tin, tantalite, tungsten, nickel, platinum and phosphate; however, fully exploiting these minerals remains a work in progress as extensive exploration has not been done. So under such conferences we need to engage different stakeholders and the private sector,” he said.

Uganda is also said to hold deposits of rare earth elements, whose value alone is said to be bigger than Uganda’s entire oil industry.

The blood diamond trade is tearing the Central African Republic apart – by Jake Flanagin (Quartz Africa – September 30, 2015)

October 1, 2015

http://qz.com/

The Central African Republic (CAR)—one of the poorest countries in the world—has been embroiled in intense religious conflict since Dec. 2012. Fighting between the predominantly Muslim rebels (known as the Séléka) and Christian/animist anti-balaka militia broke out when the former accused Christian president François Bozizé of violating peace agreements laid down in 2007 and 2011.

The Séléka supplanted Bozizé with their own president, Michel Djotodia, from Mar. 2013 to Jan. 2014; though he has since been replaced by two acting presidents—currently, former mayor of Bangui, Catherine Samba-Panza.

Conflict has continued into 2015, marred by reports of massacres committed by the anti-balakas against Muslims (which constitute roughly 15% of the national population).

In the midst of one of the bloodiest conflicts the region has seen in recent years, with the death toll of more than 5,000, according to Amnesty International, Western companies have quietly carried out business as usual. Such is the hypnotic draw of Central Africa’s diamond industry.

Prior to the Séléka’s gaining the presidency, diamonds represented about half of the CAR’s total exports, and 20% of its budget receipts.

Glencore Slides as Recovery Fades After Three-Day Roller Coaster – by Thomas Biesheuvel and Jesse Riseborough (Bloomberg News – October 1,2015)

October 1, 2015

http://www.bloomberg.com/

Glencore Plc’s rebound ran out of puff after a two and a half day ascent that briefly recouped the $6 billion in market value it lost Monday.

The shares slid 3.1 percent to 88.72 pence by 2 p.m. in London after earlier gaining as much as 8.2 percent. Trading was halted for five minutes because of increased volatility.

Investors in the stock could probably do with the breather. Glencore has endured a roller-coaster week with unprecedented volatility for a company that went public in 2011 at 530 pence a share.

The mining and trading firm sank 29 percent on Monday to 68.62 pence on concern over its debt load and ability to withstand sinking commodity prices. It spent most of the rest of the week recovering those losses as investors spied a bargain.

Glencore sought to reassure investors on Tuesday, saying it had “absolutely no solvency issues” and its funding was secure. It also aimed to raise more than $1 billion selling future gold and silver output, according to two people familiar with the situation.

Glencore tells investors debt is being cut, trading robust – by DMITRY ZHDANNIKOV, SARAH MCFARLANE AND OLIVIA KUMWENDA-MTAMBO (Reuters U.S. – October 1, 2015)

October 1, 2015

http://www.reuters.com/

LONDON – Glencore has told investors it is on track to cut debt and has shown new data about its secretive trading unit in a fresh attempt to dispel market worries over its finances which have knocked 70 percent off its share price this year.

Its stock gained as much as 6 percent on Thursday after credit analysts from Barclays said a meeting they had organized with members of Glencore’s management on Wednesday, including the co-head of corporate finance Carlos Perezagua and the head of strategy Paul Smith, managed to address many concerns of investors and bondholders.

But it then tumbled back into negative territory, extending the week’s losses after suffering a 30 percent plunge on Monday. At 1238 GMT it traded down 3.76 percent on the day.

“It was an encouraging meeting (on Wednesday) as we believe it helped to clear up many misconceptions and confusion we believe is currently in the market around commodity trading,” credit analysts from Barclays said in a note on Thursday.

Gold sinks to worst quarterly performance in a year, but signs of optimism emerge – by Peter Koven (National Post – October 1, 2015)

October 1, 2015

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

The third quarter was another ugly one in the gold market. But at least it offered investors a little bit of encouragement.

Gold dropped 4.8 per cent overall in Q3, closing at US$1,115 an ounce on Wednesday after bottoming out at US$1,080 in July. It was the metal’s worst quarterly performance in a year. But Q3 was really a tale of two halves in the gold market: before and after China devalued its currency on Aug. 11.

Before that date, sentiment on gold was at its weakest point in years. With a strong U.S. dollar, low inflation and expectations of monetary tightening by the U.S. Federal Reserve, investors had little motivation to own gold or other precious metals.

But after Aug. 11, it was one of the only commodities to draw any excitement whatsoever.

China’s devaluation caused panic, as investors feared that its economy was in far worse shape than previously assumed. That triggered a broad equity market sell-off around the globe. Commodities also fell sharply, as demand for them is linked so closely to China’s economic growth.

Election 2015: Liberals, Greens and NDP Q&A on mining in Canada – by John Cumming (Northern Miner – September 30, 2015)

October 1, 2015

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

With Canadians looking ahead to a federal election on Oct. 19, The Northern Miner submitted mining-related questions to the leaders of the four major political parties running across Canada. The following are the answers from the Liberal Party of Canada leader Justin Trudeau, Green Party of Canada leader Elizabeth May, New Democratic Party of Canada leader Tom Mulcair, and their respective parties (The Conservative Party of Canada did not respond):

The Northern Miner: In recent years the federal government has moved to streamline environmental permitting for miners by trying to avoid duplication of provincial efforts. Do you support this approach? Does the federal government have a unique role to play in avoiding catastrophic tailings dam failures such as the one we saw at Mount Polley in B.C. in 2014?

Justin Trudeau/Liberal Party: The Harper government has eroded the credibility of Canada’s environmental reviews by narrowing their application, limiting public participation and slashing the capacity of the federal government to protect the environment. They have ended over 50 years of environmental oversight in Canada by repealing the Canadian Environmental Assessment Act so that the federal government can sidestep environmental reviews of potentially harmful projects.

Wynne’s losing performance: How Ontario’s growth-killing policies are sinking the economy – by Philip Cross (National Post – October 1, 2015)

October 1, 2015

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

Ontarians are clearly having buyer’s remorse after re-electing its Liberal government last year, with two-thirds now believing that Ontario is headed in the wrong direction. An exasperated Kathleen Wynne recently asked “What is it that especially disqualifies me for the job I’m doing?” as Premier of Ontario. Well, since she asked, let’s list the problems the Liberal government has created.

Start with persistent slow economic growth. Since 2002, real GDP growth in Ontario has been consistently below the national average, with a total shortfall of over 10 percentage points. Two-thirds of this gap occurred outside of recession years. Meanwhile, Ontario’s unemployment rate rose above the national average in 2007 for the first time on record and has stayed there.

Ontario has lost its traditional above-average income status in Canada. In the decades after World War II, real disposable income per capita in Ontario was 20 per cent above the national average; in the 1990s under the Harris government, it was still 10 per cent above average. In 2012 and 2013, incomes in Ontario fell below the national average for the first time ever.

Ontario now qualifies for equalization payments, confirming its shift from “have” to “have-not” status within Confederation.

Coal threatens Poland’s image as European role-model – by Marcin Goettig (Reuters U.S. – October 1, 2015)

October 1, 2015

http://www.reuters.com/

WARSAW, Oct 1 (Reuters) – Coal mining has taken centre stage in the campaign for this month’s parliamentary election in Poland, an outsize political role that threatens the country’s hard-won economic growth and reputation in Europe.

Once a pillar of the communist-era economy, coal mines escaped the “shock therapy” that helped turn Poland into one of the European Union’s most resilient economies and a role-model for the rest of the bloc in investors’ eyes.

Successive governments have shrunk the sector, but kept it in state hands, conscious of public support for the miners, whose predecessors lost lives opposing martial law in 1981 and helped overthrow communism.

The mines have lost more than $850 million since the start of 2014 as coal prices slipped to decade lows, and efforts to prop them up have brought Poland into conflict with the European Union on both competition and environmental grounds.

The bloc wants to cut carbon dioxide emissions by at least 80 percent by 2050, and the highly polluting Polish hard coal sector will come under further scrutiny with the approach of talks on a global climate deal in late November.