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Barrick must check its hubris to achieve a smooth Newmont merger – by Boyd Erman (Globe and Mail – March 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.

Barrick Gold Corp. says its strategy is no longer about bigger, but about better. A successful merger with Newmont Mining Corp. has got to be about a bit of both.

Barrick is not talking yet, as no deal is done, but job one when a transaction is finalized will be to explain just how a combination with Newmont would square with Barrick’s new strategy.

Toronto-based Barrick has long sought to gain control of Newmont. Talks have gone on and off for more than decade as Barrick grew to become the world’s largest gold producer.

Newmont plus Barrick would create by a huge margin the world’s largest gold miner. There was a time when that would have been sufficient rationale for Barrick, but that is no longer good enough. Shareholders want returns and cash flow from their mines. They want profit from mining companies, not just growth.

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Harper’s vision of Canada as energy superpower thwarted by opposition to pipelines – by Les Whittington (Toronto Star – April 21, 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.

A grassroots movement against B.C.’s Northern Gateway project and a White House decision to delay approval of Keystone XL are the latest blows to Conservatives’ plans to ship more oilsands crude abroad.

OTTAWA—The Harper government, which never foresaw that pipelines would become the battleground in a frenzied struggle over climate change, is contending with a continentwide wave of political opposition that has imperilled plans to sell more Canadian petroleum in foreign markets.

In British Columbia, a few thousand people in the small coastal town of Kitimat have given powerful symbolic momentum to the movement against pipelines designed to carry oilsands-derived crude for export.

In one of the first soundings of voter attitude toward the proposed Northern Gateway pipeline planned for B.C., the citizens of Kitimat turned out to reject the project in a referendum. The result of the unusual April 12 plebiscite, though non-binding, was seen as a serious blow to Enbridge Inc., the company behind the planned $6.5-billion conduit to carry oil from Alberta across the Rockies to an export terminal in Kitimat.

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Rio’s Oyu Tolgoi woes deepen – by Matt Chambers (The Australian – April 22, 2014)

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

MONGOLIA has stepped up criticism of Rio Tinto over continuing delays to expansion of the pair’s $US11.5 billion ($12.3bn) Oyu Tolgoi copper and gold mine, revealing a big divide still stands in the way of the profitable second stage of the giant mine.

In a letter to Rio chief Sam Walsh leaked to the Mongolian press at the weekend, Prime Minister Norov Altankhuyag chided Rio over behind-the-scenes moves to declare it was seeking an end-of-year extension to project financing for the $US5.1bn underground expansion of Oyu Tolgoi.

Lenders’ commitments for a $US3.6bn financing package for the stalled expansion expired last month because Rio and the government could not agree on Mongolia’s take from the project, access to water, and a $US2bn cost blowout on the first-stage ­expansion.

The disagreement threatens to derail the underground expansion of the project, which is where most of the value is set to be ­realised. The March 27 letter from Mr Altankhuyag, who has declared Mongolia is ready to wrap up the funding, shows the government is unhappy with Rio’s public statements on the project.

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[Sudbury] Stantec exec ‘living the dream’- by Laura Stricker (Sudbury Star – April 22, 2014)

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

Local boy Mike Mayhew is responsible for creating and sustaining relationships in the mining industry worldwide. At Stantec, where he works, more than 450 people in 20 countries are employed in the sector. Close to 300 of those are based in Sudbury.

The 42-year-old is a busy guy – never too busy, though, to play the guitar. Leaning against a bookcase the instrument is within easy reach of his office chair. “I’m living the dream here,” Mayhew says, beaming. Earlier this month he was made the sector leader/director for global mining, a new position at Stantec.

“As the sector leader of Canadian operations, I’m responsible for growing and nurturing our relationships in the mining sector and looking for other opportunities to grow and expand our business and tap into all the other services that Stantec offers to our clients,” he explains.

“If they’re looking for mining support and expertise, we have that. If they’re looking for environmental support and expertise, we have that. We have building infrastructure, we have project management, we (can) tap into expertise around the world.

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How to cool the planet – by Lorrie Goldstein (Toronto Sun – April 19, 2014)

 http://www.torontosun.com/home

Nuclear power, natural gas and carbon capture technology hold far more promise than near-useless wind and solar energy

The key finding in the latest report from the United Nations’ Intergovernmental Panel on Climate Change (IPCC) is this: It acknowledges the reality any viable move to a low-carbon dioxide global economy must include nuclear power, replacing coal power with natural gas and carbon capture and storage (CCS).

Predictably the IPCC — being in thrall to radical environmentalists who hate all of these ideas — goes on to praise expensive, unreliable and inefficient wind and solar power which, at their current level of development, cannot power modern, industrialized economies like Canada’s.

Nor can they power developing economies like China’s, the world’s biggest greenhouse gas emitter, which is building hundreds of coal-fired electricity plants. The key passages of the latest 33-page IPCC report are on page 23 and 24, where it addresses the need for non-emitting and low-emitting conventional energy technologies to reduce rising global greenhouse gas (GHG) emissions.

“Nuclear energy is a mature low-GHG emission source of baseload power” the IPCC acknowledges, “but its share of global electricity generation has been declining (since 1993).

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Ottawa to force energy companies to report payments made to native bands – by Shawn McCarthy (Globe and Mail – April 21, 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.

OTTAWA — The federal government is proposing measures that would require mining and oil companies to report all payments made to native band councils and their corporations as part of Ottawa’s push for greater transparency among aboriginal governments.

Officials from Natural Resources Canada are consulting with industry, non-governmental organizations and aboriginal communities over plans to require mandatory reporting of all payments made by resource companies to foreign and domestic governments. Unlike similar regulations in the United States and Europe, the federal rules would include aboriginal governments and their corporations.

The demand for mandatory resource-revenue reporting comes amid a concerted effort by the Conservative government to increase financial disclosure from aboriginal communities to combat concerns over mismanagement and corruption. In a high-profile case last week, the Nishnawbe-Aski Police Service charged the former co-manager of the remote Attawapiskat Reserve in Northern Ontario – who is also the common-law spouse of chief Theresa Spence – with two counts of fraud and theft after the band council conducted its own investigation.

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From wasteland to parkland: Mining greens up – by Daina Lawrence (Globe and Mail – April 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.

Today, the aerial view of the historic Coniaurum gold mine, owned by Goldcorp Inc. since 2002, more closely resembles a putting green on a golf course than an old mine site. But it didn’t always look like this.

For decades it was a wasteland of discarded rock – leftovers from its previous life as an active mine since 1913, until a storm in 1961 caused a breach in the tailings dams and shut down operations for good.

Past practices did not call for any closure or clean up of these sites, so for more than 30 years the Timmins, Ont.-based mine site sat almost untouched. But through a mergers and acquisition deal, Goldcorp Inc. inherited the historic mine (along with almost 20 others) and in 2005 the company began its multimillion-dollar reclamation project. It took three years and between $10-million and $12-million to complete, but the current property now grows plant life and even acts as home to a colony of beehives that aid in Coniaurum’s revegetation.

“The goal, with this property in particular, is to bring us back as close as possible to the original vegetation that would have been there before mining,” says Marc Lauzier, manager of Goldcorp’s Timmins property. “We have to do what’s right and do a complete mining cycle, which ends when you can return the land to its original state,” he adds.

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Indonesian ban on unprocessed ore exports may help Vale – (CBC News Sudbury – April 17, 2014)

http://www.cbc.ca/sudbury/

A new commodities report projects a boost in the price of nickel over the next three years — and that will have an impact on mining companies in Sudbury.

The projected price hike is connected to what’s happening overseas in Indonesia, where that country recently put a ban on exports of unprocessed ore—an effort to encourage foreign investment in domestic refining activity.

The country produces about 28 per cent of the world’s nickel, so its withdrawal from the global market marks a significant drop in supply. Recent nickel prices have reflected this new reality, as it reached a six-month high this week at $8.11/lb.

“I have revised upward my price forecast for 2015 to $9 a pound,” said Patricia Mohr, a commodities specialist with Scotiabank.  “We started this year at prices just a little above $6, so it does represent quite an improvement.”

Miner Vale has operations in Indonesia, but spokesperson Cory McPhee said the company won’t be affected by the ban. “We’re a company that actually produces a refined nickel product in Indonesia,” he said.

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Canada’s potash policy threatens food security – by Kai Xue (Ottawa Citizen – April 18, 2014)

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

Kai Xue is a corporate lawyer in Beijing. These views are his own.

Last month, Canada’s aid program left Malawi. Canada had announced: “all funding for country-to-country (bilateral) programs in Malawi will end and all existing project and contract work will be completed” with the exception of a maternity health program.

Canada’s decision to depart is especially disappointing. It had been a commendable development partner to Malawi. However, after clearing out, Canada will still lamentably remain in Malawi in a negative form. Canada’s presence is still felt through the effect of its legal cartel in the export of potash, a key fertilizer.

Through this lever of control, Canada inflates the price of potash while Malawi imports 20,000 tonnes of it annually.

This fertilizer is an ingredient of world food security and was until July 2013 controlled by a duopoly of cartels: Uralkali-Belaruskali, a Belarusian-Russian partnership, and Canpotex, the Canadian cartel formed by three potash companies mining in Saskatchewan.

The status quo was shaken in July by the collapse of the Uralkali-Belaruskali cartel, and a sharp drop of about a quarter of the price for potash followed, illustrating the price fixing power of the cartels.

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BHP Needs Rebound, Not Spinoffs, Amid Metal Slump: Real M&A – by Angus Whitley and Elisabeth Behrmann (Bloomberg News – April 17, 2014)

http://www.businessweek.com/

A spinoff of BHP Billiton Ltd.’s (BHP) least-loved assets may do little for shareholders of the world’s largest mining company.  BHP, which is wringing out costs after a decade-long mining boom ended, said this month it’s studying “structural options” to help narrow its focus to four commodities including iron ore. With mines aging and new oil and gas fields becoming harder to find, BHP’s return on invested capital has sunk to the lowest since 2003, according to data compiled by Bloomberg.

Separating the nickel, manganese and aluminum assets from BHP probably wouldn’t boost profit at either the new or old entity, said Sanford C. Bernstein Ltd. Profit margins for the unfavored business have evaporated at the bottom of the commodity cycle and CLSA Asia-Pacific Markets said a spun-off company may be valued at $7.5 billion, just 4 percent of Melbourne-based BHP’s market value.

“There’s a long history of the larger companies succumbing to the cyclical pressures,” John Robertson, director at EIM Capital Managers Pty in Melbourne, said by phone. “If you’re going to float off a large chunk of assets that currently have a low return on capital, unless somebody’s got a magic wand, it’s really not going to do much.”

In 2011, as China devoured everything from iron ore to copper to feed economic expansion, BHP’s return on invested capital was 35 percent, Bloomberg data show. The figure slumped to 10 percent two years later because of slower Chinese growth and costs that were still aligned with a resources boom.

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Ludlow massacre spurred New Deal labor reforms – (Associated Press/Washington Post – April 18, 2014)

http://www.washingtonpost.com/

DENVER — A century ago this Sunday, 11 children and two women died in a fire that followed a shootout between the Colorado National Guard and striking coal miners at a tent camp in southern Colorado.

What became known as the Ludlow Massacre quickly evolved into a national rallying cry for labor unions and eventually helped lead to New Deal labor reforms. But over the years, the tragedy has been largely forgotten, even among many in Colorado.

To mark the centennial, a Greek Orthodox Easter service will be held Sunday on the prairie where the women and children died on April 20, 1914. They had hidden in a dugout beneath the tent colony when the fire roared through the camp. The miners came from many countries; mining rules were posted in 27 languages. But most had joined fellow Greek strikers in celebrating Orthodox Easter the day before.

The United Mine Workers of America plans a May memorial at the site about three hours south of Denver with descendants of labor activist Mother Jones, who was jailed twice for refusing to stay away from the strike zone. The deaths at Ludlow came during a strike launched in September 1913 by miners whose living conditions were largely controlled by Colorado Fuel & Iron, owned by John D. Rockefeller Jr.

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Proxy adviser backs Augusta poison pill as hostile bid looms – by Bertrand Marotte (Globe and Mail – April 17, 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.

Augusta Resource Corp. says a leading independent proxy advisory firm is recommending that shareholders vote for the continuation of the company’s defence plan in the face of the hostile takeover offer by HudBay Minerals Inc.

Vancouver-based Augusta said on Thursday that San Francisco-based Glass, Lewis & Co. backs the mining company’s stance that the shareholder rights plan should continue. HudBay, which is after Augusta’s rich copper-molybdenum project near Tucson, Ariz., is seeking a decision from Canadian securities regulators that would get rid of Augusta’s so-called poison pill.

A poison pill — or shareholders’ defence — allows non-HudBay shareholders to buy additional shares at a discount, making it prohibitively expensive for HudBay to acquire the rest of Augusta it does not already own. Toronto-based HudBay owns about 16 per cent of Augusta. Augusta shareholders are to vote on the poison pill on May 2.

“Our intention is to put the power of this important decision in the hands of Augusta shareholders by giving them the opportunity to vote on the rights plan on May 2, three days before the expiry of HudBay’s bid,” said Augusta president and chief executive officer Gil Clausen.

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Union raids the subject of author Mick Lowe’s 5th book – by Heidi Ulrichsen (Sudbury Northern Life – April 16, 2014)

 

http://www.northernlife.ca/

Mick Lowe said his disability was actually a benefit when it came to writing his soon-to-be published novel, “The Raids.” The book is set in 1963, during a particularly violent time in Sudbury’s history — the Steelworkers’ raids on the then-powerful Mine Mill union.

“The Raids,” (Baraka Books, $20), is due to be officially released May 15. The book will be available at Chapters and online at Amazon. An official launch and book signing will be held starting at 2 p.m. May 25 at the Steelworkers Hall.

Lowe, 67, who has penned four other books, said because he’s in a wheelchair and lives at Pioneer Manor after a 2008 stroke paralysed the left side of his body, he wasn’t able to do the meticulous research he put into his other works.

While he had a working knowledge of the union raids through his previous work as a journalist, Lowe said he was forced to use his imagination because of his physical limitations. At one point, he was writing about a Mine Mill meeting, and his first inclination was to go to the library and look up the minutes of the actual meeting.

“But I can’t do that because I’m disabled,” said Lowe, a former Northern Life managing editor and columnist.

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Osisko Mining CEO Sean Roosen lashes out at Canada’s ‘predatory’ takeover process – by Nicolas Van Praet and Peter Koven (National Post – April 17, 2014)

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

MONTREAL/TORONTO – Sean Roosen never wanted to sell Osisko Mining Corp. The chief executive of Quebec’s biggest home-grown miner has said repeatedly that Goldcorp Inc. ambushed him with a hostile offer before he even got the chance to prove what kind of money his main production asset, the Malartic gold mine, could make for investors.

So now that he’s done his duty in perhaps extracting the most he can for Osisko with a friendly $3.9-billion tag-team offer from Yamana Gold Inc. and Agnico-Eagle Mines Ltd., he’s lashing out at the Canadian system that led to this outcome in the first place.

“You’ve got a regulatory regime here that is set for predatory behaviour,” Mr. Roosen said in an interview Wednesday. He said rules requiring TSX-listed bidders to win approval from their own shareholders for an acquisition being paid for with a new share issue equal to more than 25% of the current float favours larger companies. “All the bigger companies basically have free range to rape and pillage.”

The mining executive certainly isn’t the first person to criticize Canada’s bidder-friendly takeover rules. A veritable hoard of high-profile people have pointed out the shortcomings of the regulatory regime, which makes it nearly certain that a company will get sold once it is put into play. But few have said it in terms quite so stark.

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Osisko Mining deal leaves Vancouver’s Goldcorp out in the cold (updated) – by Craig Wong (Vancouver Sun – April 16, 2014)

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

Friendly deal valued at $3.9 billion will see the gold miner acquired by Yamana Gold and Agnico Eagle Mines Ltd. Osisko Mining Corp. (TSX:OSK) announced a new friendly deal Wednesday valued at $3.9 billion that will see the gold miner acquired by Yamana Gold and Agnico Eagle Mines Ltd.

The offer for the company and its Canadian Malartic mine in Quebec tops a rival hostile bid by Goldcorp (TSX:G) that was valued at $3.6 billion or $7.65 per share.

The deal will also see Osisko shareholders receive shares in a new company that will receive a royalty on the production from Canadian Malartic and the company’s existing exploration properties as well as hold $155 million cash and the company’s Guerrero exploration project in Mexico.

Osisko president and chief executive Sean Roosen noted the first hostile offer by Goldcorp valued his company at about $2.6 billion in January. “I think that we’ve delivered a significant amount of value to shareholders,” he told a conference call with investors.

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