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Sask. potash royalty structure ‘alarmingly inefficient:’ report (Canadian Press/CTV News – January 7, 2015)

http://regina.ctvnews.ca/

A new report says Saskatchewan’s potash royalty structure needs to be overhauled because it is too complex and “alarmingly inefficient.”

Jack Mintz, a professor at the University of Calgary, says the royalty program is the most complicated in the world. “Hardly anyone understands the Saskatchewan system,” said Mintz, who is the director of the university’s School of Public Policy.

His report released Wednesday says that while Saskatchewan produces almost one-third of the world’s potash, its tax on the resource isn’t competitive on an international level. “What you really want is something that’s stable,” said Mintz, who added that there are wide fluctuations in the current approach.

The royalties collected by governments from resource companies help fill provincial coffers. Saskatchewan’s system includes a production-based levy, revenue-based levies, profit-based taxes and other taxes on capital investment.

“Saskatchewan is competitive as long as there is a lot of investment that is undertaken by firms,” Mintz said. “But it’s not very competitive — in fact it actually has the highest effective tax rate on investments compared to any other country that we look at — when companies aren’t investing as much as the 2002 period.”

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2015 Black Swans – or another BRIC in the wall – by Lawrence Williams (Mineweb.com – January 8, 2015)

http://www.mineweb.com/

A New Year newsletter offers some fascinating interpretations of current geopolitical issues and a positive view on gold as the best currency at such a time of uncertainty.

China set to play leading role in setting up and financing financial entities which will be strong rivals to the IMF and the World Bank.

As Mineweb’s principal commentator on precious metals matters I tend to be in receipt of various emails virtually everyday or so from precious metals and geopolitical analysts and commentators – some of whom provide some really good and interesting new material, while others provide views and thoughts which, quite frankly, are not worth taking the time to scan them.

Some of these analysts are somewhat trapped in a groove saying the same things over and over again. Eventually they may well turn out to be right – what goes around comes around – but sometimes this can take an awful long time eventuating. And of course, there are a number out there trying to promote their own premium services, which is fair enough as people need to make a living, but the problem here is that too many of them preach entirely to their own vested interests.

While there is often much that is good in what they have to say it is sometimes difficult to separate the wheat from the chaff.

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History of Mining: The evolution of shaft sinking systems in the western world and the improvement in sinking rates (Part 3 of 7) – by C. Graham and V. Evans (CIM Magazine – November 2007)

http://www.cim.org/en/

Shaft sinking from 1800 to 1900: Cousin Jacks

During the latter part of the reign of the Tudors in England (1485–1603), Saxon technicians were brought to England to teach Cornishmen to sink shafts and mine Cornwall’s extensive tin and copper deposits. This worked so effectively that by the early 19th century Cornwall possessed some of the best contemporary European mining technology.

Beginning about 1840 and repeating in 1865, Cornish mining prosperity slumped disastrously for a number of technical and economic reasons. The discovery of rich overseas copper deposits coupled with a degree of mismanagement in the Cornish mines worsened the situation, throwing Cornish shaft sinkers and miners out of work. At the same time, the 1800s saw a great deal of British capital investment in overseas mining ventures.

These British-owned mining operations recruited their skilled labour from Cornwall and by the mid-1820s, Cornish miners, or “Cousin Jacks” as they were called, were to be found all across Latin America sinking shafts and developing mines. Cornish miners were also brought in to develop and mine lead deposits in the United States, as well as in Norway and Spain.

Copper was discovered in Australia in 1848 and more Cornish miners emigrated to that area to develop the mines there. Additional mineral strikes across the Americas and Australia followed, which attracted Cornish miners. By 1850, there were an estimated 7,000 Cornish miners and dependents in the upper Mississippi region.

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History of Mining: The evolution of shaft sinking systems in the western world and the improvement in sinking rates (Part 2 of 7) – by C. Graham and V. Evans (CIM Magazine – September/October 2007)

http://www.cim.org/en/

Shaft Sinking from 1600 to 1800 – The Industrial Revolution

It was during this period of time that the first mining schools were opened in North America and the first technical societies for mining were formed. The first School of Mines in the United States was opened in 1864 at Columbia University in New York. In Canada, McGill University opened a mining engineering program in 1871. This was followed by the University of Toronto in 1892, and Queen’s University in 1893.

Also helping to spread the expertise involved in shaft sinking were the mining technical institutes. In Canada, the first of these to be formed was “The Gold Miners Club of Nova Scotia” in 1887. This organization was reorganized the following year as “The Gold Miners Association of Nova Scotia.” A number of other provinces also set up provincial mining associations in the 1890s. In 1898 the Canadian Mining Institute was formed.

One of the early improvements to shaft sinking techniques during this period was the introduction of horse whims for the removal of material from the shaft bottom. This development occurred in the late 17th and early 18th centuries. A well-designed horse whim could remove material from the shaft bottom many times faster than windlasses operated by manpower.

The second improvement to take place during this period was the replacement of fire setting with drilling and blasting. It took three centuries after gunpowder became known in Europe before some resourceful miner, probably in the late 1500s, thought to stuff some into the cracks in rocks, ignite it, and let chemistry do the work.

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History of Mining: The evolution of shaft sinking systems in the western world and the improvement in sinking rates (Part 1 of 7) – by C. Graham and V. Evans (CIM Magazine – August 2007)

http://www.cim.org/en/

Shaft sinking prior to 1600 (ancient times)

The sinking of mine shafts has been going on for thousands of years. The Egyptians mined gold as long as 4,000 years ago, and it is thought that the Persians, Greeks, and Romans learned their shaft sinking techniques from the Egyptians.

Shaft sinking in the Egyptian period and early Roman period was carried out by prisoners of war and criminals, and conditions were terrible. Towards the end of the Roman period, prisoners of war became less available and working conditions improved dramatically.

With the fall of the Roman Empire in the 5th century, shaft sinking and mining activity decreased substantially due to the instability in Western Europe. The social chaos and general economic instability persisted until the 11th century.

From 1100 – 1500 AD the status of the miner was much changed from Roman times. The trade of mining, which included shaft sinking, became a respected profession. Agricola, in his book De Re Metallica published in 1556, gives a number of references to shaft sinking. Advance rates at the end of this period were probably in the range of one to two metres per month.

The period from antiquity to 1600 AD covers a huge time period and many changes in civilization; however, from the early mining by the Egyptians, through Roman times, the Dark Ages, and then the Medieval period, very little changed as far as the techniques utilized for sinking shafts.

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China’s Big Year Ahead – by Jim O’Neill (Bloomberg News – January 7, 2015)

http://www.bloombergview.com/

Halfway through a decade in which China set out to rebalance its economy, it is poised to drastically enlarge its role in the world. Let me explain why.

Back at the start of the decade, I made certain assumptions about how the so-called BRIC economies — Brazil, Russia, India and China — would perform in the 10 years ahead. Five years on, China is the only one of the four to have either met or possibly slightly surpassed my expectations.

Assuming that China’s soon-to-be-published fourth-quarter gross domestic product number will come in at or close to 7.3 percent, as many experts assume, then from 2011 to 2014, China will have averaged real GDP growth of just less than 8 percent. I had assumed it would be 7.5 percent for the full decade (as did Chinese leaders back in 2011), and China could achieve this if its economy continues to grow by 7 percent for the next five years.

If so, it will have become a $10 trillion economy in current nominal U.S. dollars, well more than half the size of the U.S. (probably even bigger, adjusting for purchasing power), twice the size of Japan, bigger than Germany, France and Italy put together and not far off one and half times the size of the other three BRIC economies put together.

Brazil and Russia, for their part, have significantly disappointed my expectations. Indeed, their economic performance supports skeptics of their long-term potential, who attributed earlier growth primarily to high commodity prices. India also disappointed, but its growth rate accelerated in 2014.

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Investissement Québec in talks to reopen Cliffs Natural Resources mine in Bloom Lake – by Frederic Tomesco and Liezel Hill (Bloomberg News/Montreal Gazette – January 8, 2015)

http://montrealgazette.com/

Quebec is talking to U.S. miner Cliffs Natural Resources Inc. about restarting the Bloom Lake iron-ore mine in the northeast of the province.

It’s too early to provide more details on the discussions or speculate on potential outcomes, Quebec Energy and Natural Resources Minister Pierre Arcand said in an interview yesterday.

Investissement Québec, an investment arm of the provincial government, is talking to the Cleveland-based company “about the next step,” he said. “We’ll look for the best way to relaunch this facility.”

Cliffs announced Jan. 2 it had ended production at Bloom Lake, less than two months after the company said it was considering the closing of the project. Cliffs acquired the mine in 2011 via its C$4.2 billion ($3.6 billion) takeover of Consolidated Thompson Iron Mines Ltd.

Cliffs is exiting higher-cost operations to focus on its domestic business after iron-ore prices slumped to a five-year low amid weakening demand for the steelmaking ingredient in China, the biggest consumer. A Cliffs spokeswoman didn’t immediately respond to requests for comment.

Quebec Finance Minister Carlos Leitao said in June that his government would revive the so-called Plan Nord, a strategy to tap mining and energy resources north of the 49th parallel that the previous administration halted in 2012.

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Oil collapse threatens Ottawa’s balance plans: ‘There’ll be a big hit right up front’ – by Gordon Isfeld (National Post – January 8, 2015)

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

OTTAWA — With oil prices tumbling and no solid bottom in sight, economists are shaving their forecasts for Canadian growth and predicting interest rates will stay lower for longer.

While weak energy costs will likely keep inflation in check, the drop in crude to more than five-year lows could also throw the federal government’s budget-balancing plans out the window as revenues shrink.

Combined with the collapse in oil — one of the country’s major exports — the already-weak Canadian dollar is being held down by near-record-low lending levels that are now not expected to begin rising until late this year or early 2016.

“Depending on where the bottom is on oil prices and how long they stay there, it will definitely be a negative on the economy,” said Pedro Antunes, deputy chief economist at the Conference Board of Canada.

“The reality is we’re going to suck out of the economy billions and billions in terms of profits, in terms of revenues,” he said. “There’ll be a big hit right up front.”

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Ontario’s magical economy isn’t working – by Catherine Swift (National Post – January 8, 2015)

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

Socialism in its various guises has never worked to the benefit of average, middle-class people. Take the Government of Kathleen Wynne as a real-time case in point. A number of recent developments in the province have focused the mind on how the current Ontario government’s policies are hurting, not helping, average Ontarians.

The Wynne government professes to be the savior of the lower- and middle-class. All factual evidence suggests otherwise. As last month’s report by Ontario’s Auditor General (AG), Bonnie Lysyk, pointed out in stark terms, all efforts of Ontarians to contain their rapidly increasing hydro bills by doing their laundry in the middle of the night are for naught. Anyone who was paying attention to their hydro bill would have already known this.

A recent bill showed that my household’s hydro consumption was precisely the same as the comparable period last year, with maximum “off-peak” usage, yet the bill increased by 8% – four times the rate of inflation. Informed analysts know that the main driver of hydro costs in Ontario is the “Green Energy” policy imposed by the government, an approach that is being abandoned elsewhere around the world as evidence showed it had negligible environmental benefit. The exodus of manufacturers from Ontario is in part driven by uncompetitively high hydro costs.

Another recent policy proposal that will do nothing but harm average Ontarians is the Ontario Retirement Pension Plan (ORPP). As designed, this plan will hurt lower income families the most.

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Miners face challenge tapping copper opportunities – by James Wilson (Financial Times – January 6, 2015)

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

The giant Chilean Escondida mine produces more copper than anywhere on earth. Some 1.2m tonnes emerge from the BHP Billiton-run facility each year. For the largest miners, Escondida also serves as a key measure for world copper output.

To meet global demand over the next decade, the industry “will have to add the equivalent of a new Escondida every 15 months”, says Jean-Sebastien Jacques, head of copper at Rio Tinto, which owns a minority stake in the mine. First Quantum, a mid-tier copper miner, says that if China, India and Brazil were to reach EU levels of copper use by 2020, it would imply nine new Escondidas.

Such predictions explain why big UK miners are talking up their growth potential in copper, even though worries over Chinese demand have driven the price of the metal to its lowest since 2010.

Both Rio and BHP believe the copper market is oversupplied now but will tighten from 2018, with growing deficits. “The copper story remains very strong,” says Mike Henry, BHP’s president for marketing.

Some of the UK’s pure-play copper miners are investing heavily in growth. Antofagasta expects to lift annual output from its Chilean mines from 700,000 tonnes last year to 900,000 tonnes by 2018. Kaz Minerals is building two mines in Kazakhstan.

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Minnesota couple who canoed from Boundary Waters to nation’s capital ponder next adventures – by Steve Karnowski (The Associated Press/Winnipeg Free Press – January 5, 2015)

 http://www.winnipegfreepress.com/

MINNEAPOLIS – Two experienced adventurers who paddled, portaged and sailed 2,000 miles from northern Minnesota to Washington, D.C., say they plan to keep up the fight in the new year to protect the Boundary Waters Canoe Area Wilderness from copper-nickel mining.

Amy and Dave Freeman set out Aug. 24 from Ely. They canoed 180 miles through the BWCA, then portaged to Lake Superior. They strapped their canoe to a sailboat for the next 600 miles to Lake Huron, then switched back to the canoe for the final 1,300 miles, travelling mostly by rivers and canals across parts of Canada and the eastern states. They reached the Potomac waterfront in Washington on Dec. 2 — 101 days after they set out.

The Freemans wanted to call attention to the threat they say copper-nickel mining poses to the Boundary Waters and to mark the 50th anniversary of the federal Wilderness Act, which protects pristine areas such as the BWCA. Their next plan is a bike ride across Minnesota in 2015 hauling another canoe to press their message.

But it won’t be the same signature-covered “petition canoe” they paddled to Washington. They gave that to the U.S. Forest Service, the agency that oversees the BWCA. Dave Freeman said the bike tour, which is being organized by the Ely-based group Save The Boundary Waters, will last about six weeks and a large group of people will participate for a week or two at a time.

“I think it’s going to be a lot of fun. We’re going to try and hit as many of the college campuses in Minnesota as possible,” he said.

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Paul Marcotte acknowledged for mining contributions – by Lindsay Kelly (Northern Ontario Business – January 7, 2015)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.

Starting out as a 20-year-old female in the mining supply and service industry, Alicia Woods would sometimes be met with skepticism by those who doubted her knowledge and questioned her place in the industry. That all disappeared when people learned her dad was Paul Marcotte.

“It was because of the credibility of the Marcotte name, and the respect that the industry had for my father, that made it easy for me to enter such a non-traditional role in the world of heavy underground equipment,” Woods said.

Marcotte, a founder of Marcotte Mining Machinery Services, was recognized posthumously by the Sudbury Mining Supply and Service Association (SAMSSA) with an induction into the Hall of Fame Dec. 4, along with Doug Smith, the founder of Manitoulin Transport.

Marcotte was born in Quebec, but grew up in Sudbury, and entered the industry with his father at Jarvis Clark before the family — dad Raymond and brothers Paul, Raymond, Pierre and John — forged out on its own with Marcotte Mining in 1979.

As business grew, the company went from repairing and rebuilding equipment manufactured by others to becoming a successful original equipment manufacturer (OEM), with the company offering new design and manufacturing options, Woods said.

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NEWS RELEASE: New court victory for the Innu against Rio Tinto (IOC): Quebec Court of Appeal authorizes $900M lawsuit

New court victory for the Innu against Rio Tinto (IOC): Quebec Court of Appeal authorizes $900M lawsuit

UASHAT MAK MANI-UTENAM, QC, Jan. 7, 2015 /CNW Telbec/ – The Innu First Nations of Uashat Mak Mani-Utenam and Matimekush-Lac John, whose traditional territory (Nitassinan) covers a large part of North-eastern Quebec and Labrador, celebrated on January 6, 2015 a new legal victory in their 900 million dollar lawsuit targeting the Iron Ore Company of Canada (majority owned as well as operated by the mining giant Rio Tinto).

Rio Tinto (IOC) was seeking to have the case dismissed before trial by arguing that the Innu should have sued the government rather than the company. On September 19, 2014, the Rio Tinto (IOC) motion to dismiss the lawsuit was rejected at first instance by the Quebec Superior Court and the Court of Appeal has now refused to hear an appeal of the judgment by Rio Tinto (IOC).

“Rio Tinto and its subsidiary IOC continue to try to ignore us, just as they always have. IOC’s president even refuses to meet with us personally. But after this judgement, Rio Tinto (IOC) will no longer be able to hide. The highest Court in Quebec has made clear that Rio Tinto’s subsidiary IOC will have to answer in Court for its violations of our constitutionally protected rights, which violations date back to the 1950s”, declared the Chief of Uashat Mak Mani-Utenam, Mike McKenzie.

Despite their 900 million dollar lawsuit and the injunction they are seeking to put an end to the “IOC megaproject”, the Innu have tried time and again to achieve an honourable outcome with Rio Tinto by way of negotiation.

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Will 2015 finally be the year of the national securities regulator? – by Gordon Isfeld (National Post – January 5, 2015)

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

OTTAWA — It might have seemed like a straightforward proposition at the time: tying the strands of securities regulators across this country into one federal body with a unified set of rules.

But Canada — now a respected member of the Group of 20 industrialized nations — has for decades fallen short of that goal, leaving it out of step with global peers who long ago established national oversight of their respective capital markets.

Despite piling on study after study — some dating back nearly 60 years — along with numerous false starts, Ottawa is still less than halfway to its goal of creating some form of federal watchdog here.

It could be said that the most recent attempt, with the Conservative government pushing in 2013 to create the yet-to-be-launched Cooperative Capital Markets Regulatory System, the concept has finally reached the critical mass of signatories necessary to legitimize its existence and move forward.

Even now, of the country’s 13 provinces and territories, only five — Ontario and British Columbia in 2013, and Saskatchewan, New Brunswick and Prince Edwards Island in 2014 — are officially on board, while eight remain outside the framework. And of those, at least three — Quebec, Alberta and Manitoba — have vowed not to join.

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A female face on aboriginal recruitment [Goldcorp Eléonore gold mine] – by Daniel Bland (Winnipeg Free Press – January 7, 2015)

http://www.winnipegfreepress.com/

When Yvette Mattawashish was eight, she remembers playing in the ditches along the roads of her native Mistissini, a James Bay Cree reserve 900 kilometres northeast of Ottawa. “I used to crawl in the tunnels they’d dig to put in the big water pipes and culverts,” she says laughing now at the memory. “I’d curl right up inside them.”

Today, at 22, Yvette is one of only three James Bay Cree women trained and employed as an underground development miner. And while the path she took to get there is typical in many ways to that of other young aboriginal women in the remote north, it is also extraordinary.

According to a report by the Conference Board of Canada, the annual gross domestic product of mining in Canada’s north, which was $4.4 billion in 2011, is expected to reach $8.5 billion in 2020. A lack of infrastructure in roads and energy is frequently mentioned as the major obstacle to development in the remote north.

Given the demographics of most First Nation communities — a very young population most of whom have not completed high school — effective strategies to engage aboriginal leadership and train local aboriginals to do jobs mines will require may prove to be every bit as important as building a road to access a mine or a deep water port to ship ore. Particularly crucial are efforts to target aboriginal women like Yvette.

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