Republic of Mining

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.

‘Canada Brand’ Harmed By Misbehaving Mining Companies, Feds Finally Realize – by Bruce Cheadle (Canadian Press/Huffington Post – November , 2014)

November 24, 2014

http://www.huffingtonpost.ca/business/

OTTAWA – It’s taken almost a decade of loud, often unwelcome advocacy, but the federal government appears to finally recognize that Canada’s international brand needs a little spit and polish.

In back-to-back addresses this week to a Mining Association of Canada luncheon, two federal cabinet ministers repeatedly stressed the critical importance of what they called the “Canada brand” — and how it is a key to grabbing new business in the mining sector.

“We as a government and Canadians broadly speaking expect our companies to do business in a way that reflects the highest ethical standards, that reflects the highest environmental standards, the highest level of corporate social responsibility, the highest level of transparency,” International Trade Minister Ed Fast told the gathering at an Ottawa hotel.

Fast recited a host of laudatory statistics: about 1,200 Canadian mining companies operate more than 8,000 properties in over 100 countries, with 35 per cent of global exploration budgets coming from Canada.

“Can we do things better? Of course, there’s always things we can improve,” Fast finally conceded. “But I’m absolutely confident that we have a very, very good story to tell.” Natural Resources Minister Greg Rickford had already warmed up the crowd by cautioning that “there can be no compromise” on environmental stewardship and social responsibility.

Callinex to target high-grade copper- and zinc-rich VMS deposits in Manitoba (MiningWeekly.com – November 21, 2014)

November 24, 2014

http://www.miningweekly.com/page/americas-home

HANNESBURG (miningweekly.com) – TSX-listed CallinexMines has adopted an aggressive new strategy to discover and develop high-grade copper- and zinc-rich volcanogenic massive sulphide (VMS) deposits.

The company has identified its Flin Flon and Pine Bay projects as the focus of future exploration based on potential to host the Flin Flon mining district’s nextVMS deposit. Both projects are located within 20 km by road to Hudbay Minerals’ processing facility in Flin Flon, Manitoba, which is projected to require additional ore in the coming years.

President and CEO Max Porterfield said: “I am eager to lead the renewed exploration focus on VMS deposits within the Flin Flon mining camp. Prior to the 2011 spinout from Callinan Mines, the company has benefited from several VMS discoveries based in its project portfolio, including the Callinan and 777 mines.

“Additionally, existing infrastructure and Manitoba’s favourable permitting environment can be leveraged to significantly reduce capital costs and lead times to production.”

He added that the strategic shift in focus “comes at a time when the zinc market faces a medium-term supply deficit and copper continues to have positive long-term fundamentals”.

Grand Chief pushing power plan for Ring of Fire – by Jeff Labine (Timmins Daily Press – November 21, 2014)

November 24, 2014

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – The Mushkegowuk Council, a large Northeastern Ontario Aboriginal organization, is positioning itself to become a major player in the Ring of Fire development by providing electrical energy to that whole project.

Lawrence Martin, the newly elected Grand Chief of the Mushkegowuk Council, told The Daily Press Friday that plans are being worked on to bring upwards of a thousand megawatts of energy from Quebec to service the Ring of Fire and to service Timmins if a smelter is needed here. He said this can all be done through the corporate jurisdiction of Five Nations Energy Inc., an Aboriginal energy distribution company.

Martin, who will be sworn in as the new grand chief on Tuesday, said the Mushkegowuk Council has been discussing major electrical infrastructure improvements for many months already.

Just a few years ago, Martin was known as the Mayor of Cochrane. He was elected to the post of grand chief that was left vacant by the death of well-known Grand Chief Stan Louttit, who died in June after a struggle with cancer.

Martin was elected in a recent council by-election over six other candidates, also well-known within the Mushkegowuk First Nations communities. They were Peter Wesley, Roderick Sutherland, Theresa Hall, Annie Metat, Peter Nakogee and Edward Nakogee.

Ontario should be No. 1 in mining: Fedeli – by Jeff Labine (Timmins Daily Press – November 21, 2014)

November 24, 2014

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Vic Fedeli wants to make Ontario No. 1 in mining again.

The MPP for Nipissing and Ontario Progressive Conservative leadership candidate paid a visit to the Timmins Chamber of Commerce on Friday during his campaign tour. He laid out his plan to help small businesses if he gets elected as party leader this coming May. He called it an excellent opportunity to discuss the business climate in Ontario.

He said there are many threats to businesses – such as high energy rates and payroll taxes – so he promised that as party leader he would work to lower hydro and have the government stay out of the way while providing support and less red tape.

His first step to reducing those costs was to stop spending as he believes the province spends more than it takes in. He pointed to the recent fall economic statement that showed a $509 million shortfall.

He said he wants Ontario to be first in everything from health care to mining. “This isn’t about ideology. This is about rolling up our sleeves and doing what’s right for all of us,” he said. “You can imagine here in Northern Ontario the mining and forestry sectors that getting permits for a new mine has become almost impossible, it has certainly become impracticable.

The next pop can? How Ford’s new F-150 trucks are shaking up the aluminum industry – by Kristine Owram (National Post – November 22, 2014)

November 24, 2014

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

After several years of turmoil, the North American aluminum industry may have found its saviour in Ford Motor Co.’s new F-150 — arguably the biggest thing to happen to the metal since Coke and Pepsi ditched steel cans in 1967.

“When cans transitioned to aluminum it was the beginning of a new era for the industry,” said Gervais Jacques, chief commercial officer at Rio Tinto Alcan, which sells aluminum to General Motors Co., Honda Motor Co. and Tesla Motors Inc. “This is to the same extent.”

Like many other metals, aluminum prices plunged at the start of the financial crisis in 2008. Several aluminum makers were forced to dramatically curtail production in response to a collapse in global demand and an increase in Chinese production that they had dramatically underestimated.

Rio Tinto Group Plc, the global miner that bought Montreal-based Alcan at the height of the market in 2007, has been forced to take US$25-billion worth of writedowns on that acquisition — more than two-thirds of the US$38-billion it paid for the takeover. But aluminum’s troubles may be over, thanks to the aluminum-bodied F-150 and the potential for many other vehicles like it.

One company that sees a massive opportunity arising from the auto industry’s new taste for aluminum is American Specialty Alloys Inc.

THE LUNCH: For Kinross CEO, it’s ‘situation normal’ in Russia – by Eric Reguly (Globe and Mail – November 22, 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.

LONDON — When you buy a share in Canada’s Kinross Gold Corp., you are not just betting on gold prices; you are betting on the outcome of the great geopolitical standoff between the West and Vladimir Putin’s Russia, which may or many not evolve into a new Cold War.

So far, the bet has gone massively in Mr. Putin’s favour – Kinross shares are so low that they seem to be awarding virtually no value to Kinross’s two big, and profitable, gold mines in Russia’s far east. In 2010, Kinross was a $20 stock. Today, it trades at about $3.20 and has been as low as $2.27. But haven’t all gold companies been slaughtered along with the gold price?

Yes, but Toronto-based Kinross is in a submarine class all of its own and when its executives and shareholders are in a masochistic mood, they call up a few Goldcorp charts. Vancouver’s Goldcorp Inc. is of roughly equal size yet its market value is more than four times higher than Kinross’s ($18.5-billion versus $3.6-billion). Eldorado Gold Corp., whose production is less than a third of Kinross’s, is worth $5-billion. Ouch! Whip us again! Kinross’s problem can be summed up in one wretched word: Russia.

“We’re getting doubly hammered because of the gold price and the situation in Russia,” says Kinross CEO Paul Rollinson, who was in London this week trying to convince investors and brokers that the economic sanctions against Russia were not endangering Kinross’s mines.

Roots run deep in Sudbury’s reclamation efforts – by Lindsay Kelly (Northern Ontario Business – November 21, 2014)

November 24, 2014

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.

Still lots of work to be done, though

Forty years, $28 million and 9.5 million trees after reclamation efforts began, the moonscape that was once Sudbury is taking on a greener hue — but only half the job is done.

A total of 81,000 hectares have been impacted by the city’s industrial activity, which started with the logging industry in the early 1800s, and intensified in the early days of mining when open roasting beds sent high levels of sulphur dioxide into the air, raining down metal particulate across the landscape.

Since its inception in 1973, VETAC (the Vegetation Enhancement Technical Advisory Committee) has brought together volunteers from science, industry, academia, government and Sudbury’s citizenry to return the land to its original state, said Dr. Peter Becket, a reclamation, restoration and wetland ecologist with Laurentian University who’s dedicated his life’s work to the task. But it hasn’t been easy.

“The estimate is that we have about 7,000 hectares to do,” said Beckett, who gave the keynote address during the Nov. 20 gathering of the Sudbury chapter of the Canadian Institute of Mining, Metallurgy and Petroleum (CIM).

Mozambique continues to attract coal miners, despite low market prices – by Keith Campbell (MiningWeekly.com – November 21, 2014)

November 24, 2014

http://www.miningweekly.com/page/home

Two more companies have been granted coal mining concessions in the Tete province of Mozambique, despite the fall in global coal prices which have put the already operating mines in the province under pressure. The new concessions were granted to the Eurasian Natural Resources Corporation (better known as ENRC, largely based in Kazakhstan, but with head office in London) and to United Arab Emirates (UAE) group ETA Star.

At the concession award function, Mozambique Mineral Resources Minister Esperança Bias acknowledged that the country’s coal sector was going through a difficult time. However, she expressed confidence that the current trend of declining prices was only temporary and would change in the near future, the newspaper O País reported. “Investors continue to believe that Mozambique is a good investment destination,” she affirmed. “We want to encourage the whole mining sector, particularly the investors, to continue to believe that it is a good destination.”

Meanwhile, she noted that the sector will be involved in seeking solutions to increase the value of the coal that is not exported. Developing the domestic use of coal would create a balance between the home and export markets. She urged that the investors undertake their mining operations in a sustainable way which would ensure “a just return for the investor and a just return for the State which offers the resource for exploitation”.

The representatives of the two groups – José Dai of ENRC and Mubarak Hussein of ETA Star – both expressed the view that the efforts of their companies in developing Tete coal resources were praiseworthy given the difficulties posed by the low international coal prices.

Federal government right to question province for plan, Ring of Fire stakeholder says [KWG Resources] – by Jamie Smith (tbnewswatch.com – November 21, 2014)

November 21, 2014

http://www.tbnewswatch.com/

THUNDER BAY — A major Ring of Fire player says the federal government is right in asking the province to show their plans for the massive mining project.

Federal Natural Resources Minister Greg Rickford (Con., Kenora) said recently that the province hasn’t spent any money despite making a $1 billion commitment to the project.

KWG exploration and development vice-president Moe Lavigne said the commitment is putting the cart before the horse and mining companies don’t have a social license in the area without an actual plan to bring infrastructure to the North.

“It’s great to make that commitment for a billion dollars but you need a place to spend it,” he said. “You need a plan and that doesn’t exist.”

The plan is supposed to be developed through the province’s development corporation but so far no one from the province has contacted KWG or any First Nations to be a part of the organization. “There’s absolutely no update there. We haven’t had any contact with anybody in the development corporation,” he added.

Meanwhile, a former Ring of Fire stakeholder continues to declare its skepticism that the region will ever become a profitable venture for private interests.

Lies we wish were true [Ring of Fire transportation] – by David Robinson (Northern Ontario Business – November 2014)

November 21, 2014

Dave Robinson is an economist with the Institute for Northern Ontario Research and Development at Laurentian University.drobinson@laurentian.ca

Here is a fantasy about Northern development and the Ring of Fire. Everyone in the story really exists. Not a single event in the story has happened — yet.

In late 2014, the chief of the Moose Cree First Nation, Norm Hardisty, wrote to Stephen McGlennan, CEO of Hybrid Air Vehicles in Britain, asking if their Airlander 50 would be a suitable vehicle for CreeWest, a First Nations-owned air carrier. Hardisty didn’t have a clear plan in mind, but he knew that if First Nations controlled an essential transportation system they would be big winners in the development of Ontario’s North. McGlennan phoned Hardisty back saying he would fly a half-dozen people to the hangar in London where the radical airship is being built.

According to the International Business Review, McGlennan’s super blimp has a top speed of 160 kilometres per hour, can carry 50 tons of equipment, and can operate in the most extreme weather. If there is no runway, it can deliver 20 tons to any clearing bigger than a football field. In comparison, a CH-47 Chinook helicopter can only lift a maximum of 10 tons. And helicopters are fuel hogs. The Airlander has much better fuel efficiency than any conventional aircraft.

Five mineral value-chains prioritised in South Africa’s draft beneficiation plan – by Terence Creamer (MiningWeekly.com – November 21, 2014)

November 21, 2014

http://www.miningweekly.com/page/home

The Mineral Beneficiation Action Plan (MBAP), which is currently in draft form, should be finalised by the end of March 2015, the Department of Trade and Industry (DTI) has confirmed. The department is leading the drafting process, which also involves the National Treasury, the Economic Development Department, the Department of Mineral Resources (DMR) and the Department of Science and Technology.

The Economic Sectors, Employment and Infrastructure Development Cluster announced this week that the MBAP would seek to advance “local value-addition across five mineral value-chains, namely, iron-ore and steel, platinum-group metals, polymers, titanium and mining inputs”.

In response to questions posed by Engineering News Online, DTI deputy DG Garth Strachan reported that the main objective of the MBAP was to break down the objectives of the ‘Beneficiation Strategy’ into incremental and achievable targets.

It would also seek to identify specific policies and projects to enable South Africa to leverage its “comparative resource advantage to build a dynamic industrial economy”.

Some elements of the plan would be incorporated into the mineral beneficiation section of the 2015/16 version of the rolling Industrial Policy Action Plan (Ipap), which is overseen by the DTI. But the other departments would also play a role in implementation, with the Ipap mainly focusing on the project components.

How Canada Can Help Combat the ‘Resource Curse’ – by Lina Holguin (Huffington Post – November 20 , 2014)

November 21, 2014

http://www.huffingtonpost.ca/business/

Lina Holguin is a Policy Director at Oxfam Canada and Oxfam-Quebec.

Recently, Canada’s Parliament introduced the Extractive Sector Transparency Measures Act, which could have a huge impact on people around the world experiencing the “resource curse.”

More than 60 per cent of the world’s poorest people live in countries rich in natural resources — but they rarely share in the wealth. Too often, poor communities have no say in the extraction of resources from their land and receive little information about the scope of these projects, the revenues they generate, their timelines and potential impacts.

The legislation would increase transparency in the oil, gas and mining industry by requiring Canadian companies to disclose the payments they make to governments for the extraction of natural resources. The legislation, part of the omnibus bill introduced last month, is an important first step to helping citizens of resource-rich countries increase accountability and fight corruption.

The finalized legislation needs to align with global transparency standards already in place around the world, including in the European Union and the U.S., which require company by company, country by country, public, project-level disclosure. Publish What You Pay Canada, of which Oxfam is a member, has proposed amendments to the law that would bring it into line with these standards. At the moment, the act has critical gaps that must be filled to make it effective and to deter corruption.

Go where it is darkest: When company, country, currency and commodity risk collide! – by Aswath Damodaran (Musings on Markets – November 20, 2014)

November 21, 2014

http://aswathdamodaran.blogspot.ca/

Aswath Damodaran is a Professor of Finance at the Stern School of Business at NYU.

You learn valuation (and find out how much you don’t know) by valuing businesses and companies, not by talking, reading or ruminating about doing valuation. That said, it is natural to want to value companies with profit-making histories and a well-established business models in mature markets. You will have an easier time building valuation models and you will arrive at more precise estimates of value, but not only will you learn little about valuation in the process, it is also unlikely that you will find immense bargains, because the same qualities that made this company easy to value for you also make it easier to value for others, and more importantly, easier to price.

I believe that your biggest payoff is in valuing companies where there is uncertainty about the future, because that is where people are most likely to abandon valuation first principles and go with the herd. So, if you are a long-term investor interested in finding bargains, my advice to you is to go where it is darkest, where micro and macro uncertainty swirl around every input and where every estimate seems like a stab in the dark. I will not claim that this is easy or comes naturally to anyone, but I have a few coping mechanisms that work for me, which I describe in this paper.

While I enjoy valuing companies with uncertain futures, there are cases where my serenity about valuation is disturbed by the coming together of multiple uncertainties, piling on and feeding of each other to create a maelstrom. In this post, I want to focus on two companies, one Brazilian (Vale) and one Russian (Lukoil), where bad corporate governance, a spike in country risk, currency weakness and plunging commodity prices have conspired to devastating effect on their stock prices.