ALBERTA: Rachel Notley’s victory shows the system does work – by Margaret Wente (Globe and Mail – May 12, 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.

Back in 1990, in a fit of pique, I cast my vote in Ontario for Bob Rae and the NDP. I never expected him to win. I was just mad at the other guys. Imagine my surprise when I woke up the next morning and discovered he was premier. The entire province was aghast. I thought it would be a train wreck, and it was.

Will Rachel Notley be a train wreck? I don’t think so. Unlike Mr. Rae, she doesn’t feel like the leader of a left-wing horde of crazies who got in by mistake. She feels like a gust of fresh air blowing the cobwebs out of all those stale backrooms where old boys lurked.

When Albertans woke up the day after the election, a lot of them were smiling. Ms. Notley is by all accounts level-headed, smart and down-to-earth, like her dad. Even though most of them didn’t vote for her, she’s riding an upswell of goodwill.

Mr. Rae’s crew were red-diaper socialists who really did think that capitalism and big business were the root of all evil. They despised the private sector so much that the poor saps who happened to work on Bay Street couldn’t even get an audience with the government. Ms. Notley has set a different tone. She has been courteous to the oil and gas people, some of whom have practically gone into cardiac arrest.

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Germany Divided Over Future of Coal – by Rachel Knaebel (Equal Times.org – May 11, 2015)

http://www.equaltimes.org/

On 25 April, 6000 people formed a human chain stretching over seven kilometres in the Rhineland mining area in western Germany to protest against the role of coal in the country.

At the same time, in Berlin, 15,000 people were taking part in a demonstration called by the mining sector union IG BCE.

They were protesting against the proposal of the German Minister for Economic Affairs, Sigmar Gabriel, to introduce an extra tax on the country’s oldest coal power plants.

The objective: to reduce Germany’s greenhouse gas emissions. Berlin has committed to reducing CO2 emissions by 40 per cent by 2020, compared with 1990 levels. To achieve this, Germany’s coal power plants need to do their bit, according to the ministry.

Environmental associations agree, and they see the proposal as a first step towards a coal phase-out, following on from the nuclear phase-out to be completed by 2022.

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Transparency act could muddy things with FNs, assoc. warns – by Jonathan Migneault (Sudbury Northern Life – May 11, 2015)

http://www.northernlife.ca/

Aimed at corruption, Mining Assoc. prez says act could be used against First Nations

A new transparency act for the mining industry may go too far when it comes to First Nations, says the Mining Association of Canada.

The Extractive Sector Transparency Measures Act (ESTMA), which received royal assent in December 2014, and is expected to come into effect in June, requires mining companies to publicly disclose payments greater than $100,000 they make to foreign and domestic governments.

“It’s an anti-corruption measure,” said Pierre Gratton, the president and CEO of the Mining Association of Canada. “By having companies disclose what they pay, then citizens of those countries can ask questions about what their governments might be doing with that money.”

The act’s purpose, as it appears in the document itself, is to “implement Canada’s international commitments to participate in the fight against corruption through the implementation of measures applicable to the extractive sector, including measures that enhance transparency and measures that impose reporting obligations with respect to payments made by entities.”

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Mining companies to face more transparency – by Rita Celli (CBC News Business – May 11, 2015)

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

For Rita Celli’s Ontario Today program on mining, click here: http://podcast.cbc.ca/mp3/podcasts/ontariotoday_20150511_48892.mp3

When federal law requires reporting of all payments to government, it will shine light on royalties

Canadian-owned oil, gas and mining companies must begin reporting next year all payments of more than $100,000 for government services, including port fees and royalties, beginning a new era of transparency in the mining sector.

The federal government’s new Extractive Measures Transparency Act will give Canada similar legislation to what exists in the U.K. and the U.S. “There is opacity,” says Pierre Gratton, president and CEO of the Mining Association of Canada.

Details are still being finalized, but the legislation is designed largely as a way to cut down on corruption in Third World countries. The industry likes the new disclosure rules because it puts all companies on the same playing field, Gratton says.

“Our view was that more disclosure is better. We’re going in with eyes wide open,” says Gratton, acknowledging that the revelation of new financial details will likely spark a different kind of debate in Canada, about whether mining companies pay enough taxes.

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COLUMN-China stimulus, jobs worry may boost some commodity exports – by Clyde Russell (Reuters India – May 11, 2015)

http://in.reuters.com/

LAUNCESTON, Australia, May 11 (Reuters) – China’s efforts to re-energise its economy through interest rate cuts are probably not enough to give much of a boost to commodity import demand, but oddly enough may act to boost some commodity exports.

The People’s Bank of China cut interest rates for the third time in six months on May 10 in the wake of weaker-than-expected trade and inflation numbers.

Analysts are divided on whether the rate cut will have much of an impact, with a seeming consensus that at best it will act to halt the slowing of economic growth, rather than increasing the pace.

For natural resource producers, already pressured by prices close to multi-year lows for several major commodities such as iron ore and coal, even a stabilisation of economic growth around Beijing’s 7 percent annual target would be good news.

However, for China’s commodity demand to rise in any meaningful way, it’s likely that fiscal stimulus in the form of increased spending on infrastructure and social housing will have to be put in place.

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Fortescue founder asks Australians to fight Rio, BHP iron ore plans – by James Regan (Reuters U.S. – May 11, 2015)

http://www.reuters.com/

SYDNEY – May 11 Fortescue Metals Group Chairman Andrew “Twiggy” Forrest on Monday called on Australians to urge the government to stop expansion plans by iron ore miners Rio Tinto and BHP Billiton, saying they were jeopardizing the economy.

The plea by the billionaire philanthropist and founder of the world’s fourth-biggest iron ore miner was condemned by the national mining lobby, the Minerals Council of Australia, for threatening to set the country on an “interventionist path.”

Forrest has accused Rio and BHP of over-producing to drive out competitors from the $60 billion-a-year Chinese import market despite Fortescue quadrupling its own production in the last seven years.

“These big companies say they must flood the market next year and the year after and the year after even though it will crash the price further,” Forrest said in an editorial in Sydney’s Daily Telegraph. “Every time they say this the price falls again.”

Iron ore prices .IO62-CNI=SI are trading off their lows at $60.50, but still 55-percent under last year’s peak. For every $1 price fall, the Australian economy lost A$800 million ($632 million) in foreign income, according to Forrest.

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Mining for more: How much is mining really worth to Ontario? – by Rita Celli (CBC News Business – May 11, 2015)

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

For Rita Celli’s Ontario Today program on mining, click here: http://podcast.cbc.ca/mp3/podcasts/ontariotoday_20150511_48892.mp3

Are low royalty rates making the province a tax haven for mining or building a viable industry

Ontario has collected about 1.5 per cent in royalties on the billions of dollars worth of ore extracted in the province over the past decade, but critics say that’s not enough for the loss of non-renewable resources, a CBC News investigation supported by Michener-Deacon shows.

“One and a half per cent! That’s like 10 times less than a tip at a restaurant. Can’t we require that they tip us 15 per cent for using and extracting our resources?” says Ugo Lapointe of Mining Watch Canada.

In Ontario, companies pay a mining profits tax on precious and base metals. When the company makes money, it’s supposed to pay this so-called royalty.

Critics say precious and base metals are Crown assets and that the province should get the best deal possible as compensation for the loss of non-renewable natural resources. But the mining industry and government officials argue that mining is a uniquely expensive enterprise and that focusing on royalties distorts the big picture.

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Vale to divide and conquer by lifting high-grade iron ore output – by James Wilson (Financial Times – May 10, 2015)

http://www.ft.com/intl/companies/mining

Vale is keen to build up its supply of higher-quality iron ore in a move that could increase pressure on some rival producers in the global market for the steelmaking commodity.

The Brazilian miner is one of a quartet of companies that dominate the global market in iron ore, where prices have plummeted over the past year as a glut of supply — mainly from Australian producers — has encountered weakening Chinese demand.

Vale’s recent indications that it would be prepared to hold back some supply have helped to arrest the slide in the iron ore price, while underpinning a rally in the company’s shares in the past month.

In an interview Luciano Siani, chief financial officer, did not rule out Vale cutting its growth plans for next year. The miner expects to produce 340m tonnes of iron ore this year and has previously estimated that 2016 output will be 376m tonnes.

However, Mr Siani said Vale would be likely to “push to the fullest” its production of the highest grade of iron ore, which commands a premium price from steelmakers. By contrast Vale would be more likely to “manage” its more “standard” iron ore supplies, he said.

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Waterloo Region reaps dividends by being conduit to Baffin Island – by Greg Mercer (Waterloo Region Record – May 9, 2015)

http://www.therecord.com/waterlooregion/

BRESLAU — The sun is just starting to peek above the horizon as a handful of men in work boots suck on their last cigarettes outside the airport terminal, getting ready for the long commute.

In a few minutes, they’ll join dozens of others boarding the Boeing 737 for the five-and-a-half hour charter flight to Mary River, Baffin Island — where a small army of pipe fitters, machinists, cooks, engineers and other tradespeople are helping build and supply one of the world’s largest and most ambitious iron ore mining projects.

For hundreds of workers passing through the Region of Waterloo International Airport three times a week, Waterloo Region is a southern hub for the buried riches of the Far North. And that connection is pumping millions into the local economy.

The Mary River Project, run by an Oakville-based company called Baffinland, aims to move its first shipment of iron ore — the main raw material used to make steel — this summer.

The ore deposits in that part of Baffin Island, first discovered by a prospector in 1962, are so rich and pure they’re the stuff of legend. Pilots used to report the minerals would scramble their compasses as they flew over.

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Old deals in risky countries continue to haunt junior resource sector – by Peter Koven (National Post – May 9, 2015)

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

Given recent headlines, it is hard to imagine that Khan Resources Inc. was ever in an enviable position. But in early 2010, it really was.

The tiny Toronto-based exploration company, which owned a uranium deposit in Mongolia, was the target of a bidding war between massive, state-owned entities from China and Russia that were chasing foreign uranium reserves. It was exactly the sort of scenario that shareholders dreamed of when Khan went public in 2006. The company appeared to have overcome nationalization concerns in Mongolia and set up a decent outcome for shareholders.

“I don’t know if they’ll be fighting over us. But it has the makings of one trying to outbid the other,” then-chief executive Martin Quick predicted. Of course, that isn’t what happened. Instead of engaging in a market-driven takeover battle, the Russians appeared to apply political pressure behind the scenes, forcing Khan off the uranium project without paying its investors a dime.

The case ended up in international arbitration, with Khan actually winning a US$100-million award. Mongolia, an extremely poor country, signaled it would challenge the decision.

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Newmont Mining Corporation History (1921- 1993)

For a large selection of corporate histories click: International Directory of Company Histories

Newmont Mining Corporation, primarily through two subsidiaries, is engaged in the exploration, mining, and processing of gold. The bulk of Newmont’s revenue is generated by Newmont Gold Company (NGC), of which parent Newmont controls a 90.1 percent interest. Operating in Nevada along a 38-mile stretch of the Carlin Trend, NGC is North America’s leading producer of gold. NGC controls a 58-square-mile area of mineral rights in the Carlin region, while Newmont owns rights to a surrounding additional 420 square miles. In 1991, NGC accounted for about $573 million of Newmont’s $623 million total sales, mining 132 million tons of gold ore and selling 1.58 million ounces of gold.

Newmont’s other main subsidiary is the wholly owned Newmont Exploration Limited (NEL) whose role is to discover new gold deposits in NGC’s areas of interest and to determine the minable ore reserves in these deposits by drilling. In exchange for a 10 percent royalty, NGC has rights to any gold discovered by NEL in the 2,300-square-mile area around its Carlin property. Newmont’s cost to produce an ounce of gold in 1991–$203–was a more efficient rate than 75 percent of the Western world’s gold production.

Newmont was founded in 1921 as Newmont Corporation by Colonel William Boyce Thompson as a type of holding company for his varied financial interests. Thompson was born in 1869 in Alder Gulch, Montana, and grew up in Butte. An overweight, cigar-smoking man with a penchant for gambling (a telling hobby for someone in his line of work), Thompson eventually landed at the Columbia School of Mines, after which he made some money in the coal business.

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Kinross Gold Corporation History (1993 – 2001)

For a large selection of corporate histories click: International Directory of Company Histories

In just five years Kinross Gold Corporation went from a newly formed company to North America’s fifth largest gold producer. With revenues of $318 million in 1999, the young company considers itself the fastest growing gold producer in the world and its 1998 merger with Amax Gold helped put it there.

Among its flagship operations are the aptly named Fort Knox in Alaska, Hoyle Pond in northern Ontario, and the Kubaka property in eastern Russia. Kinross also mines properties in Chile, Zimbabwe, and in the United States’ richest gold vein, Nevada. Though gold is its raison d’être, Kinross also mines significant quantities of silver.

Birth of Kinross: 1992-93

Gold derived its name from the Latin aurum and its luster, malleability, and anticorrosive qualities have made it a prized possession since the earliest civilizations. More than 170 years after the establishment of the gold standard in 1821, several Canadian companies began discussions to unite and create a new company. Two of these companies were publicly held and controlled gold mining interests; the third was the equally-owned offspring of one of the gold industry’s titans, Placer Dome, Inc., and Dundee Bancorp.

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Peru Sends 2,000 Police as Copper Project Protests Spread – by John Quigley (Bloomberg News – April 8, 2015)

http://www.bloomberg.com/

Peru sent police reinforcements to the Islay province as protests against Southern Copper Corp.’s Tia Maria mine project spread to more towns.

About 2,000 officers are being transferred to the coastal province in southern Peru as street protests against the project entered a 47th day, Interior Minister Jose Perez told reporters.

Southern Copper’s plans to build the $1.4 billion mine in the mountains above Islay’s Tambo Valley, about 780 kilometers (485 miles) south of Lima, are opposed by local farmers concerned that water and air pollution will damage their crops. One person died and four police officers were injured in clashes this week as the unrest spread to the seaside town of Mollendo.

President Ollanta Humala weighed options for declaring a state of emergency in Islay at a meeting Thursday. “We don’t rule out any decision that needs to be taken,” Perez said. “We’re prepared for this decision. More police are arriving at this moment.”

Police used a loader to clear boulders and rocks strewn across the highway between the port town of Matarani and Mollendo, where demonstrators set fire to buses Thursday, according to Canal N. Images broadcast by the Lima-based television station showed protesters blockading a highway Friday as tires burned along the side of the road.

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The Betrayal of Brazil – by Michael Smith, Sabrina Valle and Blake Schmidt(Bloomberg News – May 8, 2015)

http://www.bloomberg.com/

As a massive corruption scandal unfolds, Brazilians are facing some stark truths: The powerful and connected are still dividing the country’s riches among themselves. The past decade’s economic miracle was in large part a mirage. And the future is again on hold.

In mid-2013, Brazilian federal police investigator Erika Mialik Marena noticed something strange.

Alberto Youssef, suspected of running an illicit black-market bank for the rich, had paid 250,000 reais (about $125,000 at the time) for a Land Rover. The black Evoque SUV ended up as a gift for Paulo Roberto Costa, formerly a division manager at Brazil’s national oil company, Petrobras. “We were investigating a money-laundering case, and Petrobras wasn’t our target at all,” says Marena. “Paulo was just another client of his. So we started to ask, ‘Why is he getting an expensive car from a money launderer? Who is that guy?’”

Marena had spent the previous decade building cases against money launderers, and Youssef had been a perennial target. He’d been arrested at least nine times for using private jets, armored cars, clandestine pickups by bagmen, and a web of front companies to move illicit cash. But Youssef had been spared serious jail time by testifying repeatedly against other doleiros, Brazilian slang for specialists in laundering unreported cash.

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Opinion: Mining industry continues as integral part of B.C. fabric – by Karina Brino (Vancouver Sun – May 7, 2015)

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

Karina Briño is president and CEO of the Mining Association of British Columbia.

Mining Week is a time when British Columbians have the opportunity to celebrate an industry that has greatly contributed to the prosperity of this province since before it joined Confederation in 1871.

Mining operations provide payments to government that help fund health care, social programs and education, and create thousands of jobs across the province. British Columbia is a global centre for mining and is home to some of the most innovative, sustainable mining companies in the world. Thanks to its diverse geology, the province is rich in high quality mineral resources, in every corner of the province.

Despite all these advantages, 2014 was a challenging year for the B.C. mining industry. Largely due to falling commodity prices, several operating mines were placed in care and maintenance, resulting in workforce reductions, primarily in the North Eastern corner of the province. These external pressures are continuing in 2015.

Notwithstanding these challenges, there are a significant number of projects in the approval process which provide an opportunity for growth of the mining industry, further strengthening the provincial economy.

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