Republic of Mining

UPDATE 1-UK forces energy, mining firms to show foreign state payments – by Silvia Antonioli and Karolin Schaps (Reuters India – August 22, 2014)

August 22, 2014

http://in.reuters.com/

Aug 22 (Reuters) – Britain announced that energy and mining firms would have to disclose from next year any payments made to governments in countries where they operate as it aims to curb corruption in the natural resources sector.

UK-registered companies will have up to 11 months after the end of their financial year to report payments to Companies House under the new rule, which will take effect from Jan. 1 2015.

“The UK is determined to lead by example, which is why we have introduced reporting requirements on UK-based extractives companies early,” Business Minister Jo Swinson said in a statement.

“Oil, gas and mining can, if well managed, deliver precious economic benefits to the populations of developing countries. Too often, though, the assets from resource-rich countries are not benefiting local people or the local economy.” The announcement on Friday follows a period of consultation with industry and the public on the proposal.

“While these reforms may be a step in the right direction to eradicate corruption, tax evasion and reduce extreme poverty in emerging markets, a disclosure regime is not of itself a cure,” Rachel Speight, a partner at law firm Mayer Brown, wrote in an email to Reuters.

[Canadian PM’s] Northern vision melts – by Peter Foster (National Post – August 22, 2014)

August 22, 2014

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

Trudeau is dead set against Northern Gateway, which makes it rather peculiar for him to be criticizing Harper

Media commentators, political opponents, and even Stephen Harper’s putative hosts gave the Prime Minister’s ninth annual trip to the far north a less than a rousing send off this week.

Michael Byers, the Canada Research Chair in Global Politics and International Law at the University of British Columbia, pointed out that the dispatch of two ice breakers to scope Canadian claims on the North Pole was – in legal terms — a fool’s errand. There was a story alleging that the Harper government had – yet again – “muzzled” its scientists from reporting record low Arctic sea ice coverage two years ago.

Then there’s the lawsuit against the Conservatives by the Nunavut Planning Commission, claiming that the Feds are trying to interfere with Nunavut affairs by, er, not providing enough cash.

The tour kicked off Thursday morning with a photo op in Whitehorse to announce money for cold weather technology. Ho hum. Meanwhile progress on major commitments such as new icebreakers, and Arctic port and research facilities, continues to flag.

As the Post’s Michael den Tandt noted earlier this week, the fact that northern achievement lags far behind aspiration has been starkly highlighted by the new belligerence of Vladimir Putin, who is pouring huge resources into the Russian Arctic.

SNL sees up to $20bn private equity war chest boosting mining M&A – by Angela Kean (Mineweb.com – August 22, 2014)

August 22, 2014

http://www.mineweb.com/

SNL says market experts see mining M&A activity picking up as up to US$20 billion in private capital funds look for investments in the sector.

SNL Metals & Mining is the world’s largest source for integrated comprehensive data, expert analysis and breaking news in real time for the global mining industry. It encompasses worldwide exploration, development and production data to strategic planning and acquisitions information. www.snl.com

PERTH (SNL) – The much-anticipated influx of capital from new mining-focused private funds is taking longer than expected to hit the market, but market experts expect more deals to hit in the second half of 2014 and an increase in activity in early 2015.

Ernst & Young estimates that mining-focused private capital funds have amassed at least US$10 billion, and possibly as high as US$20 billion, to invest in the global metals and mining sector.

The firm’s global mining and metals transactions leader, Lee Downham, said mergers and acquisitions activity is likely to remain subdued for the rest of 2014 despite a strong deal pipeline and a private capital funds war chest yet to be unleashed.

“Dealmaking in the sector continues to be cautious, partly due to the continuing commitment to capital discipline, but also due to a lack of urgency over investment given the lack of competition for assets,” Downham said in a statement.

Lac-Mégantic report skims surface of deep problems – by Greg Gormick (Toronto Star – August 22, 2014)

August 22, 2014

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Greg Gormick is a Toronto transportation writer and policy adviser. His clients have included CN, CP, VIA and numerous elected officials and government transportation agencies.

The report of the Transportation Safety Board of Canada on the Lac-Mégantic disaster blames “systemic problems” for the fourth deadliest accident in nearly two centuries of Canadian railroading. Those problems are more deeply rooted than even the TSB indicates.

As an arm’s-length agency, the TSB isn’t controlled by politicians and doesn’t bow to any master except public safety. But it does not play a public policy role. That’s in the hands of politicians, backed by their advisers and ministry staff.

It is at that level where blame must be placed. The Lac-Mégantic tragedy can be traced to decades of policy and investment failures resulting from unbridled faith in deregulation and competition as the guiding rules of rail legislation and funding. The biggest culprit is the 1985 transportation act, which the Mulroney government billed as “legislative change which will free Canada’s transportation system from the burden of excessive economic regulation.”

That it did. But it went further by eliminating most of the public interest tests contained in the previous acts, which applied both commercial and public policy requirements to all federally regulated transportation. The 1985 act was based on the profitability test for the regulation of our system, particularly rail.

Ontario’s Wynne, Quebec’s Couillard forge central Canadian alliance – by Jane Taber (Globe and Mail – August 22, 2014)

August 22, 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.

Ontario and Quebec are forging a central Canadian alliance to co-operate on issues, including potentially expanding electricity trade, hoping their combined clout will bring back prosperity to both provinces.

Ontario’s Kathleen Wynne and Quebec’s Philippe Couillard announced the new regional partnership in Quebec City on Thursday. It is the first time the rookie Liberal premiers – both leading so-called have-not provinces – have met in person. According to one senior Ontario official, there is “a lot of personal like-mindedness and great rapport between the two.”

A bullish Mr. Couillard said the new central Canadian alliance signals the two provinces are “back as a very important block of influence in the country.”

“I think by acting together we will be more efficient,” he said. “When we have common concerns like infrastructure, like climate change, like energy strategy, it’s good that we voice those concerns together … Western provinces do the same, Maritime provinces do the same. It was time that Quebec and Ontario, again, do that.”

As have-not provinces, Ontario and Quebec rely on millions of dollars of federal equalization payments as they struggle in the federation economically.

Ex-MP Stockwell Day joins company planning to build B.C. bitumen refinery – by Lauren Krugel (Globe and Mail – August 22, 2014)

August 22, 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.

CALGARY — Stockwell Day has joined the leadership team of a Vancouver company that’s planning to build a $10-billion oil sands refinery on the West Coast.

The former politician, who has held high-profile cabinet posts in the federal and Alberta governments, has been hired as a special adviser at Pacific Future Energy Corp. and will sit on its board of directors. He’ll also head an arm’s-length advisory council that’s expected to be formed over the next few months.

“I’ve been very gratified that I’ve been involved in a number of projects since leaving politics, but this has to be right up there in terms of something that’s exciting for me,” Day said in an interview from Vancouver.

He said the proposed refinery, which bills itself as the world’s greenest, could be a “legacy project for Canada.”

Oil sands producers have been keen to access lucrative Asian markets, but stiff opposition to proposals such as Enbridge Inc.’s Northern Gateway pipeline has put a damper on those ambitions. One of the biggest environmental concerns has been the prospect of bitumen-laden tankers navigating coastal waters.

Ex BHP chairman says cycles move and he’s a happy shareholder – by Simon Evans (Sydney Morning Herald – August 21, 2014)

August 22, 2014

http://www.smh.com.au/

Former BHP chairman Jerry Ellis, who led the miner during one of its darkest periods in the late 1990s before it pursued a merger with South Africa’s Billiton, says the company is performing well and maintains the 2001 merger was a good move.

Mr Ellis says BHP needed its cash flows strengthened at the time, but the situation had now changed and the “cycle has moved on”.

He was chairman of BHP from 1997 to 1999 after joinng the board in 1991. He was also a former boss of the BHP ¬Minerals division and an active promoter of a decision by BHP to pay $3.2 billion for Magma Copper in the United States in 1996.

It ultimately proved to be a disastrous purchase when copper prices slumped dramatically and heavy writedowns were needed. Many analysts blame that acquisition for weakening the company to a point where it needed to pursue a merger.

“I’m a shareholder and very pleased with the way the company is travelling,’’ he said on Wednesday. BHP Billiton on Tuesday officially confirmed a $14 billion demerger plan where it is spinning off many of the assets Billiton brought to the table in the 2001 merger.

“I think [former chairman]Don Argus summed it up very well. At the time BHP needed the cash flow from the Billiton assets,’’ Mr Ellis said.

Mine Tales: Mining railroads overcame obstacles – by William Ascarza (Arizona Daily Star – August 3, 2014)

August 22, 2014

http://tucson.com/

William Ascarza is an archivist, historian and author. Email him at mining@tucson.com

Created in 1910, the Tucson-Nogales Railroad supplemented a line established 20 years prior between Nogales and Guaymas.

At an elevation of 4,613 feet, Dragoon Railroad station — the highest point on the Southern Pacific line between Los Angeles and El Paso — also served as the junction of the Johnson, Dragoon and Northern Railroad.

The railroad supplanted the freight wagon and stagecoach as did its method of power generation. Steam, electric and diesel locomotives were employed in Arizona history for mining, passenger transport and irrigation projects for agriculture.

Standard, narrow and baby railroad gauges used at the mines in Arizona were based upon the width of the track: standard gauge (56ƒ inches), narrow gauge (less than 56ƒ inches) and baby gauge (20 inches). Standard-gauge railroads in Arizona became dominant in the early 20th century, though many narrow gauge railroads continued to service the mines.

Challenges facing railroads included rockslides, floods, Indian raids and steep gradients. In 1910, the Arizona Eastern Railroad connected the eight miles between Winkelman and Christmas.

Mine Tales: Railroads spurred mining’s growth in Arizona – by William Ascarza (Arizona Daily Star – July 27, 2014)

August 22, 2014

http://tucson.com/

William Ascarza is an archivist, historian and author. Email him at mining@tucson.com

Railroad transportation proved indispensable to the development of the mining industry in Arizona, connecting it to lucrative markets in California and the Eastern states.

The arrival of the “iron horse” established towns and injected capital to advance mining interests through delivery of equipment and supplies while providing ease of ore transport to distant markets for refinement and profit.

Early talk of involving rail transportation in Arizona dates to shortly after the end of the Mexican-American War, when Congress financed surveys with the intention of establishing transcontinental railroad lines through what was then part of New Mexico Territory. Euphoric Manifest Destiny aspirations of the late 1850s included a railroad connecting mining operations around Tubac to Guaymas, Mexico.

This connection was deemed essential by William Wrightson, superintendent of the Santa Rita Mining Co.

Attempts to annex Sonora, Mexico, including a final expedition led by Henry Crabb in 1857, resulted in failure, as was the proposed rail line at the time. The Civil War, coupled with lack of financing, hindered rail in Arizona for the next two decades.

Opinion: Extensive safeguards already in place for B.C. mining industry – by Angela Waterman (Vancouver Sun – August 20, 2014)

August 21, 2014

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

Best practices: Tailings dam breach was an extremely rare occurrence

Angela Waterman is Vice-president of Environment and Technical Affairs at The Mining Association of British Columbia.

The breach of the tailings dam at the Mount Polley Mine is an unfortunate event that is of great concern to the Mining Association of British Columbia (MABC) and all our member companies, just as it is to people across Canada.

After this incident, the public, the government and the mining industry all share the same objective: to find the root cause of what happened and determine if there are changes required or actions to be taken based.

The B.C. mining industry is committed to producing the materials the world needs in a way that is safe and responsible for both people and the environment. MABC, its members, and mining associations and companies across Canada are closely following the ongoing investigation.

Tailings dams across Canada are operated under stringent regulations and are subject to frequent and rigorous inspections, and this kind of incident is extremely rare. There has not been a comparable event in Canada in over 20 years. Globally, the general statistics related to likelihood of dam failure is between one in a million and one in 100,000 per dam year.

First Nations poised to emerge as leaders in Ring of Fire development – by Suzanne Leclair (Mining Markets – August 21, 2014)

August 21, 2014

http://www.miningmarkets.ca/

Suzanne Leclair LL.B is the founder of Connect Counsel, a Canadian professional multi-disciplinary business advisory firm dedicated to developing major aboriginal and non-aboriginal partnerships in energy and natural resource related infrastructure projects. She is an infrastructure advisor to Mushkegowuk Council.

In July, on the day after the Ontario Court handed a victory to Cliffs Natural Resources (NYSE: CLF) against KWG Resources (TSXV: KWG) regarding a potential road into the Ring of Fire, Cliffs’ legal representative flew to Marten Falls, an aboriginal community in the Ring of Fire region to explain the implications of the decision to the chiefs at their annual general meeting.

After his presentation, Cliffs’ representative fielded his first question from one of the chiefs: “How can two mining companies fight in a Toronto court over land that is simply not theirs?” With that simple question, the chief underscored the challenges as to who can lead the development of a transportation corridor into the isolated but mineral-rich region.

Also last month, another potential challenge arose with the Supreme Court of Canada’s Tsilhqot’in Nation decision. It’s the first time that aboriginal title has been granted in Canada, and it could have implications for resource development in Ontario. So, what’s changed with respect to the Ring of Fire since Canada’s highest court handed down a major victory for aboriginal communities in the form of the Tsilhqot’in ruling?

End of Australia’s mining boom threatens Pilbara Cities plan – by Jamie Smyth (Financial Times – August 20, 2014)

August 21, 2014

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

Port Hedland, Australia – In a dusty industrial estate next to the world’s biggest iron ore port in Western Australia’s remote Pilbara region, business has never been so bad.

“The rents got so high in the town that when the boom ended, businesses began to die off everywhere,” says Jo Woodward, owner of Jems, a ramshackle building with an eviction notice stuck to its padlocked gate that was recently Port Hedland’s only legal brothel. “Nothing is selling here now.”

The demise of Jems, and of many other Pilbara businesses that have closed their doors following the end of the country’s mining investment boom, suggests Australia may struggle to realise one of its flagship projects.

Port Hedland and neighbouring Karratha grew rapidly during a decade-long boom as workers flooded into the Pilbara to construct the iron ore mines, railways and ports needed to feed Chinese demand for steel.

Mushkegowuk Council Sets Ring of Fire Business Case – by NNL Staff (August 20, 2014)

August 21, 2014

http://www.netnewsledger.com/

Mushkegowuk MUSHKEGOWUK HOMELANDS – The Mushkegowuk Council has announced they will coordinate the development of their business case in support of a Ring of Fire rail, sea port, fibre-optic, and energy transportation corridor through an Aboriginal-led-alliance. “We now have the experience, people, credibility and knowledge to take an active role in leading the development of infrastructure corridors. We have learned from our mistakes and we have the confidence from our successes” said Deputy Grand Chief Leo Friday.

Deputy Grand Chief Leo Friday, on behalf of Mushkegowuk Council, announced to the Matawa Council of Chiefs at their annual general meeting on July 31st, 2014 that Mushkegowuk is fully supportive of Matawa’s interests in the Ring of Fire.

Mushkegowuk Seeks Matawa Agreement

In the spirit of our joint declaration between Matawa and Mushkegowuk Chiefs, Mushkegowuk Council offered the Matawa Council of Chiefs to jointly develop sustainable infrastructure opportunities to unlock the economic potential of the Ring of Fire while safeguard ing the historic rivers of the Matawa and Mushkegowuk homelands.

For example; Mushkegowuk’s Moose Cree First Nation and Taykwa Tagamou Nation have negotiated equity partnerships in power generation stations.

Nuclear watchdog requests safety checks after B.C. mine breach – by Dene Moore (CTV News/Canadian Press – August 19, 2014)

August 21, 2014

http://www.ctvnews.ca/

VANCOUVER — A toxic spill from a British Columbia mine has prompted the country’s nuclear watchdog to request a series of checks at uranium facilities. The Canadian Nuclear Safety Commission will discuss the failure of the tailings pond at the Mount Polley gold and copper mine during a meeting Wednesday.

In the interim, the commission has asked the uranium mining and milling operations it oversees to ensure that all necessary inspections and monitoring are in compliance with licence conditions.

“The recent tailings dam breach that occurred at the Mount Polley mine in British Columbia on Aug. 4, 2014, has raised awareness of issues associated with tailings impoundments,” said a letter sent to Areva Resources, Cameco Corp. , Rio Algom, Willet Green Miller, P.J. Brugger and Associates, EWL Management Ltd. and Denison Mines Inc.

“This is a reminder that vigilance must be maintained by ensuring that tailings dams continue to be properly designed, constructed, operated, maintained and monitored to prevent such occurrences.”

The companies were asked to confirm that mitigation measures are in place in the event of a tailings breach. They’re also asked to confirm the safety of tailings facilities and report any identified gaps to the commission by Sept. 15.

Glencore to Buy Back $1 Billion of Stock as Profit Gains – by Jesse Riseborough (Bloomberg News – August 20, 2014)

August 21, 2014

http://www.bloomberg.com/

Glencore Plc (GLEN)’s billionaire Chief Executive Officer Ivan Glasenberg underscored his belief in the longevity of the global commodities boom by beating his biggest rivals in handing out surplus cash to investors.

Glencore, the third-largest miner by market value, today announced a $1 billion share buyback after first-half profit gained 8 percent on higher production. Investors in BHP Billiton Ltd. (BHP) sent the stock down the most in more than three years in London yesterday after the world’s biggest mining company chose to retain cash because of weaker commodity prices.

Global mining investors have been demanding greater returns following a period marked by failed acquisitions and spending on mine expansions that flooded metals markets. After a decade of explosive price gains fueled by Chinese demand, often defined as the commodities supercycle, mining companies are contending with slower growth by spurning mergers and cutting costs.

“The supercycle ain’t over, China is still buying, demand for commodities hasn’t tapered off, it’s even higher than it’s ever been,” Glasenberg said today in an interview. “The demand is pretty good. We’ll grow. We may do acquisitions where you’re not creating more supply in the market.”