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China, Base Metal Tiger, Sets the Trend for Metals: Stefan Ioannou – Interview by Brian Sylvester (The Gold Report – July 1, 13)

http://www.streetwisereports.com/

Industrial metal prices have struggled to find firm footing. Stefan Ioannou of Haywood Securities tees up near-, medium- and long-term scenarios for three industrial metals—copper, zinc and nickel—and explains why he is most enthusiastic about zinc. In this interview with The Gold Report, Ioannou discusses companies that stand to benefit from the coming supply squeezes and China’s role as both supplier and consumer of all three metals.

The Gold Report: In January, Haywood Securities forecast a copper price above $3.60/pound ($3.60/lb) for the remainder of 2013. Six months later, copper is struggling to remain above $3/lb. What is causing the weakness?

Stefan Ioannou: A lot of it relates to uncertainty regarding the global economic situation. Early in the year, the price hovered around $3.25–3.50/lb and recently nosedived to $3/lb. That happened on the back of Federal Reserve Chairman Ben Bernanke’s hints that quantitative easing in the United States may end in mid-2014, raising concerns that U.S. demand for raw goods will decline. Because copper goes into a lot of raw goods, that supposes less demand. In addition, copper inventories are well over 600,000 tons (600 Kt), which is high on a historic basis.

China is the other big concern. Its manufacturing numbers are weakening. People are worried that China, which really drives a lot of the metal stories, is not growing as fast as expected.

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Analysis: Latest Barrick mine delay fans price tag fears – by Julie Gordon (Reuters U.S. – June 30, 2013)

http://www.reuters.com/

TORONTO – (Reuters) – Barrick Gold Corp (ABX.TO) has slowed spending at its Pascua-Lama project in South America, delaying first output to 2016, but that may not be enough for the its shareholders, who worry that the final price tag may creep beyond what the mine is worth.

While the flagship development, which straddles the border of Chile and Argentina, is one of the richest untapped gold deposits in the world, the string of delays and budget overruns have been a nightmare for world’s top producer and its investors.

“They should walk from Pascua-Lama,” said John Ing, president of boutique investment and research firm Maison Placements, adding that the embattled miner also needs to divest non-core assets, cut exploration spending and slash hefty board salaries if it wants to turn its fortunes around.

Barrick said late on Friday that it would re-sequence construction of the controversial project to target first production by mid-2016, deferring some $1.5 billion to $1.8 billion of planned capital spending in 2013 and 2014. The company has not updated the market on capital costs, last projected to be up to $8.5 billion.

The delay was in-line with a scenario that Credit Suisse analyst Anita Soni outlined earlier this week, as the bank downgraded Barrick to ‘Neutral’ from ‘Outperform’.

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Mining group head sees tough times now, but better prospects ahead – by Josh Kerr (Globe and Mail – July 2, 2013)

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.

TORONTO — Trying to get a read on the mining industry may be like peeking in a crystal ball at this point, but Zoë Yujnovich believes the long-term outlook is still a good one. “Right now it’s a little bit like reading tea leaves to try to figure out exactly what’s happening,” says the new chair of the Mining Association of Canada.

“Certainly in the longer term the industry is still poised to be very successful, and when we look at it in a Canadian context I think we’re going to continue to see the extractive industry being a major contributor to Canadian GDP,” she said.

Ms. Yujnovich’s comments come as she takes the helm of the 78-year-old association, building on an impressive résumé. The first woman to hold the post, she first made waves when put in charge of the Brazilian operations for British-Australian mining giant Rio Tinto Inc. at the age of 34.

Ms. Yujnovich, the chief executive officer of Iron Ore Co. of Canada, which is majority owned by Rio Tinto, will chair the association for two years. Pierre Gratton the current president and CEO of the mining association said he is excited to have her heading up the board and isn’t surprised that Ms. Yujnovich, who he describes as a natural leader, has risen so far so fast in an industry long dominated by men.

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When the U.S. doesn’t need Canadian oil – by Jeffrey Simpson (Globe and Mail – June 29, 2013)

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.

Could it be that a keystone belief and a bedrock of prosperity in Canada might disappear over the next two decades? For a long time, it has been assumed that whatever surplus oil (and natural gas) Canadians could produce would be gladly purchased by the United States. “Pump it and they will come” has been an underpinning reality for Canada’s economy.

Recently, the U.S. Energy Information Agency produced an estimate that the U.S. has almost 60 billion barrels of “technically recoverable” shale oil. Now, “technically recoverable” does not mean that all this supply will be used. Nor does it mean, however, that supplies the agency knows about today will not increase, perhaps substantially, as new deposits are discovered or innovative technologies for discovery and extraction are found. All that can be said is that 60 billion barrels of “technically recoverable” oil is a godsend for the United States.

These barrels, or a portion thereof, could be a game-changer in a country with 7.4 million barrels of daily net imports of oil. U.S. dependence on imported oil has declined since peaking in 2005. The recession of 2008 and its aftermath knocked down consumption. So did improved energy efficiency measures, switching to natural gas, more renewable energy and consumers watching their pennies.

Forthcoming tighter mileage requirements for cars will drive down demand for oil, as will requirements for heavy-duty vehicles that President Barack Obama promised in his recent climate change speech.

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Kitimat vision of LNG boom clouded with uncertainty – by Claudia Cattaneo (National Post – June 29, 2013)

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

Kitamaat Village, B.C. – On the north side of Douglas Channel, a quick boat ride from the Haisla Nation’s town site, an old log dumpsite covered by forest is awaiting transformation as the first liquefied natural gas (LNG) export site on Canada’s West Coast.

While surveying the band-owned oceanfront location from a fishing boat, chief counselor Ellis Ross pondered the massive work ahead.

“We are not prepared for all the tanker traffic,” said the 48-year-old Aboriginal leader, donning a dark business suit and wingtip dress shoes, markers of his new role in the energy world, while checking a fishing net for crabs.

“We don’t even have docks for tugs and barges. We’ll need to sit down with governments and proponents, look at the impacts and come up with a framework.” Two years from now, as long as market conditions and financing terms remain supportive, the Haisla’s partly owned BCLNG project will be loading for the first time British Columbia natural gas into tankers headed for Asia from a floating platform moored next to land-based facilities.

The project is one of three planned for the coast near Kitimat, and one of nine announced for Northern British Columbia so far. The LNG opportunity emerged out of the blue three years ago after the tsunami and nuclear disaster in Japan triggered a rush by Asian countries to secure natural gas from Western Canada as a backup fuel.

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NEWS RELEASE: Ontario Appoints Lead Negotiator for Ring of Fire

Ontario and Chiefs of the Matawa Tribal Council Negotiators to Develop a Negotiation Framework

NEWS – July 2, 2013

Ontario has appointed former Supreme Court of Canada Justice Frank Iacobucci as lead negotiator on behalf of Ontario in discussions with Chiefs of the Matawa Tribal Council on resource developments in the Ring of Fire, a project that will create jobs and grow Ontario’s regional economies.

Former Justice Iacobucci looks forward to community-based discussions on regional considerations with the Chiefs of the Matawa Tribal Council and their lead negotiator, Bob Rae. Mr. Iacobucci hopes to be invited to visit the Matawa First Nations communities closest to the proposed resource developments in the Ring of Fire prior to engaging in more formal negotiations. He hopes to address the following priorities:

• Environmental protection and monitoring
• Regional infrastructure planning and development
• Resource revenue sharing
• Social and economic supports

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Is the global boom in commodity prices finally over? – by Linda Yueh (BBC News – July 2, 2013)

http://www.bbc.co.uk/

Like Graham Greene’s The End of the Affair, it is hard to believe it is over and let go. But, it has been an extraordinary run, a decade of what has been called the commodity super-cycle.

It started, and perhaps will end, with China. The global integration of an economy that has grown at double digits since China joined the World Trade Organization (WTO) in December 2001 perhaps marked the start. Will China also now mark the end?

Until the last decade, the real price – so, taking off inflation – of commodities had fallen for 150 years. It was the reason why developing countries wished to diversify out of natural resources and into manufacturing.

Because agriculture prices fall over time, countries like Brazil, where more than 90% of exports were coffee during the immediate post-war period, would experience worsening incomes. This is why.

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Commodity investors race to adapt on fear of supercycle end – by Barani Krishnan (Reuters U.S. – July 1, 2013)

http://www.reuters.com/

NEW YORK – (Reuters) – Investors who have plowed some $400 billion into raw materials markets over the past 10 years are accelerating efforts to change their strategies, if not their allocations, on the growing belief the commodities “supercycle” has come to an end.

While pension funds and other institutional investors have been quick to bail on gold as bullion fell deeper into bear market territory in the second quarter, they have yet to abandon other markets like oil and metals en masse, asset allocation experts and analysts say.

Instead, more and more funds are changing tack, abandoning the passive, buy-and-hold strategies that held sway in the previous decade to embrace a more active approach to picking winners and losers within the commodities sphere.

While the shift toward ‘active’ investing has been growing for several years, the pressure to adapt is mounting. The 19-commodity Thomson Reuters-Jefferies CRB index .TRJCRB fell 7 percent in the second quarter and 25 percent from a second-quarter 2011 peak, entering bear market territory.

Among individual commodities, the second quarter was gold’s worst on record due to fear the U.S. Federal Reserve will curb stimulus money crucial to bullion prices.

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Economy must return to sustainable footing after end of the mining boom – Brisbane Courier-Mail Editorial (June 29, 2013)

http://www.couriermail.com.au/

PRIME Minister Kevin Rudd yesterday stepped up his rhetoric in relation to China and what he has now definitively called the end of the boom.

The halcyon days of ever rising commodity prices and demand for the things we dig out of the ground are finished; now comes the long, hard recalibration of an economy back to a broader, more sustainable footing was the line Mr Rudd prosecuted.

There may be an element of political overreach in the sense that while the peak of the boom appears to have well and truly crested, in historical terms the demand and price we receive for our commodity exports remains relatively healthy.

Coming off once in a generation highs to more sustainable levels does not constitute a crash after all, but it does give you the opportunity to paint yourself as the only party with clear policy to boost manufacturing, innovation and agriculture within a lower Aussie dollar paradigm.

Mr Rudd, possibly Australia’s most renowned Sinophile, should be heeded though, for events in China in recent weeks give cause for some alarm in a country as dependent on their economic well-being as Australia is.

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Coal companies adjust to new realities as gas insulates Queensland from worst of global downturn – by John McCarthy (Brisbane Courier-Mail – June 29, 2013)

http://www.couriermail.com.au/

ABOUT 7000 jobs have been lost from the state’s coal sector in the past 15 months as the boom ends and companies shut mines and scale back production, according to the industry.

In the past week about 1000 jobs disappeared as some of the world’s biggest miners, Vale, Glencore and Peabody, adjusted to the new realities of the market in which the cost of producing coal is ”line ball” with prices.

Thousands more jobs have disappeared from service companies or contractors. Unions said the central Queensland towns of Tieri and Glenden would be devastated by the loss of about 450 jobs this week at the Oaky and Newlands mines, but have rejected any suggestion that big pay increases had been a factor.

The cost of abandoned coal and infrastructure projects is now about $10 billion in lost investment and the numbers of jobs that won’t be created would be in the thousands.

A handful of massive coal projects are also now extremely doubtful, particularly in the Galilee Basin, not just because of poor prices but also because of a lack of investment funds.

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Excerpt: From Meteorite Impact to Constellation City: A Historical Geography of Greater Sudbury – by Oiva W. Saarinen

To order a copy of “From Meteorite Impact to Constellation City”, please click here: http://www.wlupress.wlu.ca/Catalog/saarinen-meteorite.shtml

Sudbury: A Union Town? (Part 5 of 5)

Post-Merger Events

In the years following 1967, both unions went their separate ways, each respectful of the other. In 1969, Inco tested the mettle of the Steelworkers, resulting in a 128-day strike. Unlike previous strikes, this one was quiet and orderly. With no nickel stockpile at hand, the Steelworkers outlasted Inco. The strike ended on November 15, 1969, with the union winning major gains in wages and, for the first time, a cost of living allowance (COLA). The union made progress on issues such as the “contracting out” of jobs, training and apprenticeship opportunities, and an evaluation of all job classifications at Inco. The last act resulted in major monetary gains for numerous positions. Falconbridge workers went on strike around the same time and reached a similar settlement, albeit without a contracting out provision.

The signing of the 1969 contract set a positive tone for the next three years because of Inco’s desire to project a revamped company image. The setting was advantageous for the Steelworkers as well, and its membership rose to a peak of 18 224 in July of 1971. Over the next six months, however, the situation changed as Inco announced cutbacks, layoffs, and the closing of the Coniston smelter. Despite this gloomy setting, the union signed a contract that introduced a new clause allowing workers to retain their seniority throughout any of Inco’s operations. Formerly, workers who moved from one department to another lost their seniority. For the first time in mining history, a Joint Occupational Health and Safety Committee (JOHC) was negotiated. During the 1970s, the Steelworkers promoted the concept of mining as a trade, and in cooperation with company officials and Local 598 at Falconbridge, created a “common core” training program for basic underground hard rock mining.

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The Shield – Riches Beyond Our Rocks (Sudbury History Video) – by Ontario Visual Heritage Project


For part one, go to the TV Ontario website: http://ww3.tvo.org/video/162962/shield-riches-beyond-our-rocks-part-1

For part two, go to the TV Ontario website: http://ww3.tvo.org/video/162677/shield-riches-beyond-our-rocks-part-2

The Ontario Visual Heritage Project presents films that teach, preserve and promote the history of Ontario. http://www.visualheritage.ca./index.html

News Release: Feature Length Documentary on Greater Sudbury History Available NOW!

SUDBURY, Ontario – Dec. 18, 2008 – After the launch of the City of Greater Sudbury installment of the Ontario Visual Heritage Project in July, the DVD of the production is now available through local museums and libraries. Entitled, ‘Riches Beyond Our Rocks; Stories
from Greater Sudbury,’ the DVD features a two-hour documentary film, which explores the intriguing history of the City of Greater Sudbury and its people through interviews with local historians, archival films and photographs, and re-enactments of historical events. The DVD is packed with additional interviews and stories.

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He has one tough city to sell [Sudbury image] – by Stan Sudol (Globe and Mail – July 15, 1998)

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.

Paul Brokenshire’s message to visitors: look beyond the image

Poor old Sudbury. Nowhere else in the country has been as much maligned. Polluting smokestacks, acid rain, nickel mines, labour unrest and a scarred landscape resembling the backside of the moon, are all indelible images branded into the Canadian psyche, whenever anyone mentions Sudbury. A public relations nightmare.

And yet the city with the bad rep has a convention and visitor’s department, whose mandate is to attract conventions sporting events, trade shows and special events.

According to Paul Brokenshire, its manager: “Absolutely, one of my major hurdles is overcoming the negative views that the national media routinely portray about Sudbury. My job has always been an uphill battle with this city’s negative image.”

He concludes that over the past 20 years, he has heard all the jokes and putdowns; but he soldiers on, while he and the city politicians politely laugh all the way to the bank. The convention and sporting events industry brought in about $38-million for the local community in 1996.

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Sudbury Dumped on the Slag Heap of History – Stan Sudol (Originally Published in the Sudbury Star – February 6 , 2004)

Nickel Tailings #34, Sudbury, Ontario – by Edward Burtynsky

Stan Sudol – “Sudbury Dumped on the Slag Heap of History” was an article I wrote back in February 6, 2004 about Sudbury’s failure at promoting this community in the critically important Toronto media market. It was recently sent out by Dick DeStefano, Director of the Sudbury Area Mining Supply and Service Association, to his extensive email list with a telling question as to whether much has changed on this issue over the past decade.

I have known Dick for many years and have considered him a great friend ever since his tremendous help with a policy document I wrote – Claiming Our Stake! Building a Sustainable Community – for the former Sudbury Mayor David Courtemanche in 2006, which outlined the community’s concerns about the impending loss of Sudbury’s two iconic Canadian miners to foreign ownership.

We have often discussed Sudbury’s negative image in the national media and how is affects the investment decisions of major corporations as well as the perceptions of provincial and federal politicians. Unfortunately,  the article is still very relevant today and most local politicians still fail to grasp the importance of promoting its many unique strengths and mining intelligence – as repeatedly highlighted by DeStefano – in a very competitive Canadian and international market for capital and investment.

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