Republic of Mining

Leadership race: Ring of Fire ignites PC debate – by Carol Mulligan (Sudbury Star – November 25, 2014)

November 25, 2014

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

It was the last question at the first Ontario Progressive Conservative leadership debate, submitted online by a man from Huntsville. But it fired up candidates and an audience of about 150 people, most party faithful, at College Boreal on Monday night.

Whitby-Oshawa MPP Christine Elliott, Nipissing MPP Vic Fedeli, Nepean-Carleton MPP Lisa MacLeod and Barrie MP Patrick Brown were asked what their plans were to spur development of the Ring of Fire.

“We’ve heard a lot of talk and promises from the Liberals,” wrote the Huntsville resident, “but no real plan to move forward.” All four candidates couldn’t have agreed more with that statement.

Fedeli summed up the frustration of northerners with the lack of development of the chromite deposits 500 kilometres northeast of Thunder Bay at the first of six debates before a new party leader is named May 9.

A former two-term mayor of North Bay, Fedeli said he remembered the Liberals’ Northern Development and Mines minister visiting his town to talk about this “great, vast find.”

Canada’s unheard aboriginal narrative – by Lawrence Martin (Globe and Mail – November 25, 2014)

November 25, 2014

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.

Canada’s rank racism toward aboriginal peoples was institutionalized within the fundamentals of European philosophy and culture, says maverick thinker John Ralston Saul. Europeans insisted their principles were universal. “Of course they were universal. After all, they said they were.”

With their technological and cultural sophistication came a conviction of racial superiority. They were so superior, the writer adds, that they proceeded to massacre one another, as the aboriginals quizzically looked on, in one world war and then a second. A hundred million died in less than half a century.

More wars followed, along with more racist attitudes toward the destined losers. In more recent times, a more sympathetic attitude has been adopted toward indigenous peoples, but it still smacks of soft racism, according to Mr. Saul.

What’s missing, he robustly contends in his new book, The Comeback, is the realization that aboriginal peoples have been making a remarkable recovery and are now on the verge of taking a prominent place in this country.

BHP rethinks Olympic Dam – by Matt Chambers (The Australian – November 25, 2014)

November 25, 2014

http://www.theaustralian.com.au/

BHP Billiton has outlined new plans to turn the Olympic Dam mine in South Australia into the world’s second-biggest copper mine and potentially the world’s biggest uranium mine, in a big-ticket expansion that could see extra production at the start of next decade.

The plans, which BHP hopes to start exploring in earnest this year, are a big pullback from a $US30 billion open pit expansion of the giant copper-uranium-gold deposit shelved in 2012.

But they are the strongest indication since then that BHP is still serious about a big expansion of the massive Olympic Dam deposit that has been talked about since BHP acquired the mine in its 2005 takeover of WMC Resources. If the expansion goes ahead, it represents an extra $US3bn ($3.5bn) of potential annual revenue for BHP at current copper prices.

In presentations to analysts and media in Sydney yesterday, BHP chief financial officer Peter Bevean revealed the mining giant was targeting an underground mine expansion that would start producing in 2021-22 and ramp up to copper production of more than 450,000 tonnes a year by 2024.

This is more than double the 184,000 tonnes of copper Olympic Dam produced in 2013-14, but is well down on the 750,000 tonnes a year previously flagged under boomtime plans for the world’s biggest open-pit mine.

Flooded Mine Bolsters BHP’s Plan for Potash, CEO Says – by David Stringer (Bloomberg News – November 24, 2014)

November 25, 2014

http://www.bloomberg.com/

The flooding of a mine owned by the world’s biggest potash producer is confirmation for BHP Billiton Ltd. (BHP)’s Chief Executive Officer Andrew Mackenzie of the wisdom of his company’s planned move into the industry.

“These sorts of factors, combined with continued economic growth and demand for potash all conspire, if you like, to bring toward us the time when a new mine is required,” Mackenzie said in an interview in Sydney. “We have the lowest cost mine that would be useful to bring into the market at that stage.”

According to Mackenzie, no major new mines have begun production since the 1970s and the halt of operations at Uralkali’s Solikamsk-2 mine, which accounts for 3 percent of world supply, is a sign of the vulnerability of supply — just as the need to feed a booming global population spurs demand.

BHP is looking to build its Jansen project in Canada’s Saskatchewan province sometime in the next decade, though Mackenzie is cautious about giving an exact timeline. Spending of $3.8 billion has been approved so far on Jansen, including mine and service shafts, and Citigroup Inc. (C) forecasts the whole project may cost $16 billion.

“We do know we have to wait for the market to come towards us, but once those shafts are complete, we are only three to four years — at most — from first potash,” Mackenzie said yesterday in the interview.

Renewables are not enough – by Margaret Wente (Globe and Mail – November 25, 2014)

November 25, 2014

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.

All over Ontario, giant wind turbines are sprouting up across the rural landscape and ruining people’s lives. Ordinary people are trying to fight them off in court, but they don’t have a chance. The multinational wind industry has a lot more money than they do. The law is on Big Wind’s side. So is Premier Kathleen Wynne’s Liberal government, which has pledged to triple the number of wind and solar generators and stick taxpayers with the bill.

But the fundamental problem with Big Wind is much bigger than its cost and unreliability. The problem is that today’s renewable energy technologies won’t save us from the effects of climate change – and we’re wasting our time by trying.

That’s the conclusion Google has reached. Google has invested many years and significant resources in tackling the world’s climate and energy problems. Its biggest initiative was called RE<C (Renewable Energy Cheaper Than Coal), a massive effort to find renewable energy sources that could compete in cost with coal.

Last week, Ross Koningstein and David Fork, two of the engineers at the heart of the RE<C project, published an article describing what they learned, and why Google threw in the towel. “We had shared the attitude of many stalwart environmentalists,” they wrote.

How to Avoid a $1-Billion Boondoggle – by Bill Gallagher (Onotassiniik Magazine – Winter 2014)

November 25, 2014

http://issuu.com/wawatay/docs/ono_winter_2014_layout/

‘Boondoggle’: any unnecessary and wasteful project
‘Billion’: a thousand million (Webster’s Dictionary)

A billion dollars is an attention-getting number. That’s no doubt why the Wynne Liberals touted that number as a campaign pledge in the run-up to their recent election win. This $1-billion dollar carrot arose after the party politically ‘rediscovered’ the Ring of Fire as a slumbering engine of economic growth for the province.

Buried in the election budget was the glossed-over detail that the Queen’s Park $1-billion was contingent on Ottawa making a matching billion. The feds quickly set this sleight-of-hand straight; whereupon the Wynne Liberals confirmed on the hustings that they were good for their $1-billion dollar pledge no matter what.

On the industry side of the ledger, as Cliffs Natural Resources slowly realized that it was taking a fiscal cold shower on its rushed expansion into Canada; it took its own billion dollar write down on its Bloom Lake iron project in Quebec. (‘Write-down’ is an accounting term used to describe a reduction of the book value of an asset due to economic or fundamental changes in an asset.) Cliffs will likely take another major write down on account of its botched Ring of Fire investment.

Three of Canada’s premiers have a golden opportunity to serve the national interest – by Kelly McParland (National Post – November 24, 2014)

November 25, 2014

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

The leaders of three of Canada’s biggest provinces have a golden opportunity to contribute to the growth and prosperity of the country, throwing their weight behind a project of national interest while helping create jobs and support their own economies. To do so, however, may require two of them to demonstrate leadership in the face of short-term populist agendas with strong — if ill-informed — emotional pull.

Last week premiers Kathleen Wynne of Ontario and Philippe Couillard of Quebec agreed to follow a coordinated strategy in dealing with the Energy East project, the $12-billion pipeline that would move Alberta crude to the East Coast. Responding to popular concern about the impact of the pipeline on a range of interests, they issued a list of conditions to be met, including consultations with First Nations; due consideration of greenhouse gas emissions, adoption of the highest standards of safety and protection of the natural gas supply for consumers.

None of the conditions is unreasonable – what company is going to object to a demand for high safety standards? What’s worrying is the sense that Canada’s two biggest provinces may be positioning themselves for a repetition of the aggressive opposition adopted by British Columbia’s government in regard to several pipeline projects that would cross B.C. to Pacific ports.

Seeking to bolster her party’s low standing in polls before the most recent election, B.C. Premier Christy Clark took a combative approach to the $6.5 billion Northern Gateway project running from Alberta to Kitimat.

While Australian Miners Declare End of Massive Expansion of Iron Ore, Gina Rinehart Bucks Trend & Starts Export From New Mine – by Vittorio Hernandez (International Business Times – November 24, 2014)

November 25, 2014

http://au.ibtimes.com/

Gina Rinehart is the richest person in Australia and would likely remain that way for a long time. One reason behind her wealth, aside from inheriting Hancock Prospecting established by her father, Lang Hancock, is her bucking business trends.

Like her dad who dared invest in mining in areas that were considered outback, Rinehart will begin to export in September 2015 from her $8.6 billion iron ore mine despite prices of the commodity hitting a five-year low and bleak forecast for the next few months due to global oversupply and weak Chinese demand.

Rinehart told media that over 2 million metric tons of iron ore are stockpiled at Roy Hill where project construction is 67 percent complete. She said that since Roy Hill is a fast-schedule, major and really complicated projects, its being ahead of schedule is fantastic.

Glencore-Rio Merger Will Happen, Hannam Tells Hedge Funds – by Matthew Campbell, Dinesh Nair and Jesse Riseborough (Bloomberg News – November 24, 2014)

November 25, 2014

http://www.bloomberg.com/

Hedge funds including GLG Partners, DE Shaw & Co, and Pentwater Capital Management were told this month by a prominent London mining banker to prepare for an all-but-inevitable takeover of Rio Tinto Group by Glencore Plc (GLEN), according to people familiar with the meeting.

Former JPMorgan Chase & Co. dealmaker Ian Hannam, who now runs a boutique advisory firm, convened representatives of more than 20 investors at Corrigan’s Mayfair restaurant in the British capital in mid-November to share his views on the potential deal, the people said, asking not to be identified discussing a private matter. The meeting was intended in part to help position Hannam’s firm, Hannam & Partners, to win a role in the transaction, the people said.

“If not today, this deal will happen sometime in the near future,” Hannam said in his presentation, according to a copy seen by Bloomberg. “Glencore is M&A savvy and times deals well. The combination will create a super-major with a diversified portfolio of world-class mining assets.”

Neil Passmore, chief executive officer of Hannam & Partners, said the firm is not working for Glencore or Rio Tinto (RIO), nor is it in discussions to do so. Spokesmen for Rio Tinto and Glencore declined to comment, as did representatives for Pentwater and DE Shaw. GLG couldn’t be immediately reached.

German plea to Sweden over threat to coal mines – by Pilita Clark, David Crouch and Jeevan Vasagar (Financial Times – November 24, 2014)

November 24, 2014

http://www.ft.com/home/us

London, Gothenburg and Berlin – Germany has made a dramatic appeal to Sweden to help it out of an energy dilemma that threatens Europe’s biggest economy as it shifts away from nuclear power and fossil fuels to renewable energy.

Sigmar Gabriel, Germany’s vice-chancellor, warned Sweden’s new prime minister Stefan Löfven last month that there would be “serious consequences” for electricity supplies and jobs if Sweden’s state-owned utility Vattenfall ditched plans to expand two coal mines in the northeast of Germany.

The intervention is a clear sign of the challenges Germany faces as it grapples with an ambitious switch to renewable energy – the so-called Energiewende.

Under the policy, Germany aims to derive 80 per cent of its electricity from clean sources by 2050. As part of that, it is closing down all of its nuclear power stations by 2022.

But it is making up the energy shortfall caused by the nuclear phase-out by generating power from coal – the dirtiest fossil fuel. Last year, German electricity production from lignite or brown coal, a particularly polluting form of the fuel, reached its highest level since 1990.

COLUMN-BHP, Rio were right on iron ore demand, wrong on supply – by Clyde Russell (Reuters U.K. – November 24, 2014)

November 24, 2014

http://uk.reuters.com/

LAUNCESTON, Australia, Nov 24 (Reuters) – What was lacking at BHP Billiton’s annual meeting was an admission that what has effectively happened with iron ore is that the company’sshareholders are subsidising the profits of Chinese steel mills.

Instead, what Chairman Jac Nasser told the media after the AGM on Nov. 20 was iron ore prices were “not inconsistent with the expectations we had built into our long-term investment”. Both Nasser and Chief Executive Andrew Mackenzie were keen to emphasize the productivity successes at the iron ore business, saying it remains one of BHP’s main profit drivers.

That may well be true, but the message from the executives at last week’s AGM doesn’t quite tally with what BHP was saying in 2011, when it was approving the massive expansion of its iron ore operations in Western Australia.

It was around this time that BHP, its Anglo-Australian rival Rio Tinto, newcomer Fortescue Metals Group and top iron ore miner Brazil’s Vale were all making decisions to radically boost output of the steel-making ingredient.

This unprecedented capacity expansion was based on the two-pronged view that China, which buys about two-thirds of seaborne iron ore, would continue its rapid growth for decades to come, and that low-cost producers would be able to force higher-cost miners from the market.

Ridley delays expansion of terminal in B.C. – by Brent Jang (Globe and Mail – November 24, 2014)

November 24, 2014

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.

PRINCE RUPERT, B.C. – A federally owned coal-shipping operation in northern British Columbia is placing its expansion on hold for up to five years, getting only halfway toward its goal to double the terminal’s capacity.

Ridley Terminals Inc., a Crown corporation put up for sale by Ottawa nearly two years ago, has been ramping up its capacity in anticipation of increased coal exports to energy-hungry customers in Asia. Some industry observers estimate Ottawa might have been able to fetch $1-billion had the government sold the operation in early 2013.

But as coal prices spiralled downward over the past couple of years, producers vastly scaled back or cancelled exports. Interest among prospective buyers of Ridley has waned and the terminal’s market value declined. In less than two years, Ridley has gone from scrambling to keep up with surging demand to now having excess capacity – plenty of new equipment but dwindling supplies of coal that arrive in railcars at the Port of Prince Rupert.

During a tour last week, no ships waited to be loaded at the Ridley berth, and some conveyors used to help stockpile coal were halted. Ridley, which loaded its first coal ship in 1984, leases land from the Prince Rupert Port Authority.

Why are Canada’s resource boards behind the curve? – by Janet McFarland (Globe and Mail – November 24, 2014)

November 24, 2014

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.

When it comes to putting women on company boards, Canada has two solitudes: the resource sector and everyone else.

Despite years of high-profile pressure to bolster the representation of women on boards – including new diversity disclosure rules from regulators taking effect Dec. 31 – Canada’s resource companies remain far behind the curve. Women fill just 7.8 per cent of seats on the boards of energy companies in Canada and 11 per cent in mining and forestry firms.

In most other sectors – including financial services, utilities, telecommunications, health care and consumer staples – women now account for between 20 per cent and 25 per cent of corporate directors, a proportion that has been growing rapidly as companies respond to calls from regulators, shareholders and advocacy groups for greater diversity in senior roles.

Calgary-based corporate director Stella Thompson, a retired Petro-Canada executive, says the slow pace of improvement on board diversity in the energy sector is becoming an embarrassment for women in Alberta’s oil patch.

“There are lots of capable women to help with boards,” she says. “You don’t necessarily have to be the CEO of an oil company – you need a few of those, but you don’t need all of them.”

RINGS of DEVELOPMENT: Maximizing Ring of Fire benefits requires simultaneous planning at local First Nation, tribal council and NAN levels – by John van Nostrand (Onotassiniik Magazine – Winter 2014)

November 24, 2014

http://issuu.com/wawatay/docs/ono_winter_2014_layout/1

http://www.replan.ca/

John van Nostrand is the Principal at rePlan Inc., a company that provides social assessment, advisory and management services to natural resource companies and financial institutions around the world.

Mines are like the proverbial pebble in the pond – they have profound circles of influence. Their impacts range from the economic to the environmental to the social. They affect national, regional and local economies, entire watersheds and ecosystems, and the towns, farmlands and hunting grounds that communities around them occupy.

The Ring of Fire is one of the largest pebbles ever to be dropped in the pond we call Ontario. It will create an economy estimated at more than $50 billion. It will have a broad impact on over 60 per cent of the province, and a direct impact on an area four times larger than the Timmins/Sudbury Mining Region in northeastern Ontario.

Development of that region began more than 100 years ago when major ore, nickel and silver deposits were exposed around Sudbury and Cobalt during the building of the railway to the Clay Belt. But with the Ring of Fire, there is a very real opportunity to prepare and plan – ahead of development – in order to maximize the benefits for not only for the mining companies and our provincial coffers, but also the 49 communities of Nishnawbe Aski Nation (NAN) and other Aboriginal and non-Aboriginal populations that currently live in the region.

Research shows comet as cause of Sudbury crater – by Jim Moodie (Sudbury Star – November 24, 2014)

November 24, 2014

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

A city known for its rock and snow may well have been formed, nearly two billion years ago, by a giant ball of rock and snow.

New research by Laurentian PhD candidate Joe Petrus suggests the Sudbury basin was the work of a comet, which blasted through the atmosphere at a speed of about 50 km/second and struck with such force that debris rained down as far away as Thunder Bay and Minnesota.

Scientists have understood since the 1960s that the area owes its shape and geology to the impact of a celestial object, but exactly what type of object — asteroid or comet — has remained an open question.

It was a puzzle that Petrus, who earlier studied physics, couldn’t resist probing. “‘Why hasn’t somebody done this?’ ” he recalls thinking. “It seemed a glaring question, especially since Sudbury is one of the most important impact craters on Earth.”

The doctoral student also felt the timing was right. While there had been some earlier speculation about a comet being the cause of Sudbury’s crater, more sophisticated technology was now available to test the theory.

Petrus’s study, undertaken with the support of PhD supervisor Balz Kamber, formerly affiliated with Laurentian University, and geologist Doreen Ames relied largely on chemical analysis of rocks in the impact zone.