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Industry, jobs and the environment (Thunder Bay Chronicle-Journal Editorial – May 23, 2013)

Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

It goes without saying, but there has to be a balance between environmental protection and economic interests, particularly in Northern Ontario. The economies of Northern towns and sensitive ecosystems depend on it. However, that balance was called into question this week by Resolute Forest Products, which pulled out of negotiations on the Canadian Boreal Forest Agreement over how much land to set aside for conservation.

While environmentalists accused Resolute of not living up to its promises to protect habitat for caribou, the company said “draconian” demands by environmental groups would have forced the closure of multiple mills and multiple projects in both Ontario and Quebec.

Two of those projects in Northwestern Ontario — the restart of the Ignace sawmill and a new sawmill project in Atikokan — would have been shelved, and a Fort Frances paper mill would have closed, the company said, if it agreed to environmentalists’ terms.

Resolute said it put forward proposals for more protected areas, including an additional 204,000 hectares of forest for conservation in Northern Ontario, but it wasn’t enough for environmentalists. Company spokesman Seth Kursman said that the company “was not about to negotiate people’s livelihoods away.”

“Many communities have already been hit by the forest industry crisis, (so) we could not unilaterally support such measures,” he said.

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Child Miners Speak: Key Findings on Children and Artisanal Mining in Kambove DRC – (World Vision – May 2013)

World Vision is a Christian relief, development and advocacy organisation dedicated to working with children, families and communities to overcome poverty and injustice. http://voices.worldvision.ca/home/

Executive Summary

Child labour is a highly complex problem interlinked with poverty, a lack of social services and alternative employment, education and health impacts, and exploitation. The challenge we have is to understand the specific circumstances and needs of working children and their families, in particular settings. From there, we can develop appropriate and effective solutions that address these circumstances and needs, and sustainably move children out of the worst forms of labour. Simplified calls to eradicate all child labour often ignore the complexity of the problem, the persistence of poverty, and the difficult choices children face.

Child miners in one community in the DRC’s southern Katanga province speak to this reality throughout this report. A key objective for the research was the direct participation by children. They themselves described the circumstances, impacts and drivers of their work as miners, as well as possible solutions to the challenges they face. This was then compared to, and supplemented by, parents, other community members, and mining stakeholders.

By listening carefully, we heard that:

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Children as young as 8 working in Congo copper mines in Democratic Republic of Congo – by Tanya Talaga (Toronto Star – May 24, 2013)

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.

World Vision has documented the voices of children kept out of school to work in a copper and cobalt artisanal mine in the southern Democratic Republic of Congo and has found that “this type of hard labour is robbing children of their childhood.”

Child labour in developing world garment factories is a tragic, known occurrence but a new report on children as young as eight toiling away in African mines sheds light on a forgotten group. World Vision, a Christian relief organization, documented the voices of children kept out of school in order to work in a copper and cobalt artisanal mine in the southern Democratic Republic of Congo.

The key goal of this project, entitled “Child Miners Speak,” was to build trust and talk specifically to children to ask them how they feel about working in the harsh conditions of the mines, said Harry Kits, World Vision’s senior policy adviser for economic justice.

“This type of hard labour is robbing children of their childhood,” Kits said in an interview Thursday.

After speaking with 50 children in Kambove, aged eight to 17, World Vision documented children ill with various infections from working in polluted water or being exposed to mercury or uranium.

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Australia coal firms dig in for years of mine closures, job cuts – by Rebekah Kebede (Reuters U.K. – May 24, 2013)

http://uk.reuters.com/

PERTH, May 24 (Reuters) – Australian coal miners are steeling themselves for years of production cuts, job reductions and asset sales as swelling shipments from international rivals lower hopes of a recovery in prices for coal.

Prices have slumped around 30 percent since their peak two years ago as coal flooded global markets, especially from the United States where cheap gas has cut domestic demand and led to a nearly 50 percent jump in thermal coal exports last year. Even robust Chinese and Indian demand growth is failing to soak up the plentiful supply.

To boost their thinning margins, miners in Australia such as BHP Billiton, Rio Tinto, Glencore Xstrata and Peabody have trimmed output and laid off thousands. Clinging to barely profitable operations, coal producers now face the prospect of further cost-cutting, which they fear could benefit rivals when the market recovers.

“Everyone is waiting to see who blinks first,” said Tom Sartor, an analyst with Morgans Stockbroking in Brisbane. “You don’t want to be the one curtailing production knowing that it’s going to benefit your competitor.” Australia’s coal industry has become a victim of its own success. In its rush to meet growing Chinese demand, producers churned out more and more coal, and miners are now stuck with more than they can sell.

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Saskatchewan finds small solutions to big pipeline problems – by Yadullah Hussain (National Post – May 24, 2013)

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

Stunned by Enbridge Inc.’s Kalamazoo River oil spill in 2010 that disrupted its sole market access in Saskatchewan, Crescent Point Energy Corp. found an unlikely ally: an agriculture company.

Toronto-based Ceres Global Ag. Corp owns a stake in Southern Stewart Railway set up to transport grain from Stoughton, Sask., to Regina, from where it connects to other lines. But floods over the past two years had wrecked its agriculture business, and the province’s burgeoning oil production seemed like a good way to bring its trains back into active duty.

The arrangement took off. Within the space of a year, SSR was shipping nearly 30,000 bpd of oil out of Saskatchewan, helping Crescent Point and others escape the heavy oil discounts plaguing Canadian producers.

“The Kalamazoo river leak was a bit of an eye opener as a lot of our production is in Saskatchewan and we are not blessed with the number of pipeline alternatives they have in Alberta, so we really had one way of getting our crude to the market, and that’s the Enbridge mainline system,” said Trent Stangl, vice-president at Crescent. “The SSR has been a key part of our rail plan for southeast Saskatchewan.”

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Oil sands deals lose traction – by Jeffrey Jones (Globe and Mail – May 24, 2013)

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 — There’s a buyers’ strike in the oil sands. At least a half dozen energy companies have come up dry in efforts to attract the rich bids they envisaged when they put oil sands assets on the auction block in the past year, showing downward pricing pressure on a sector touted as the cornerstone of Canada’s economic growth.

Would-be buyers and joint venture partners are balking at deals amid a combination of wildly volatile Canadian crude prices, rising development costs and weakening returns, a situation that could force the industry to temper heady expectations for long-term oil sands production growth.

Marathon Oil Corp., Murphy Oil Corp. and Athabasca Oil Corp. had sought buyers and partners in the Northern Alberta oil sands, but now have changed their minds – or in Athabasca’s case, have told investors to hang tight after the company failed to clinch deals that had once appeared imminent.

Those companies join ConocoPhillips Co., Koch Industries Inc. and Royal Dutch Shell PLC in being disappointed after putting properties up for sale that may have once attracted bids totalling in the billions of dollars. Those three say they have rethought their plans after offers failed to meet expectations.

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Liberal win in B.C. provides ‘greater clarity’ on pipeline: Kinder Morgan – by Kelly Cryderman (Globe and Mail – May 23, 2013)

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 — The pipeline company behind the proposed Trans Mountain expansion from Alberta to the West Coast says the B.C. Liberals’ electoral victory this month is a “pro-economy, jobs and investment” result, and provides greater clarity as to what conditions the company must meet in order to get shovels in the ground.

Kinder Morgan Canada president Ian Anderson said when he heard the Clark Liberals had won on May 14, “what I felt is we had a greater clarity of what those conditions were and what the interests were that we were facing in British Columbia.”

Speaking to reporters after a panel discussion with Mr. Anderson in Calgary on Thursday, Vern Yu of Enbridge Inc. – the proponent of the proposed Northern Gateway pipeline project – also said he believes the B.C. Liberals under Christy Clark have a more firm idea “of what’s necessary to get the project across the finish line” than their NDP challengers.

Both pipeline companies are keen to take advantage of what is burgeoning demand to ship growing volumes of Alberta bitumen to foreign buyers. But the rush to markets from the West Coast has been impeded by concerns about the environmental consequences of spills or an increased number of supertankers travelling from B.C. ports.

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The tax dilemma in Northern [Ontario] towns (Thunder Bay Chronicle-Journal Editorial – May 22, 2013)

Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

A Northern town trying to shore up its assessment base by attracting new residents would be hard pressed to do so if potential newcomers knew they’d be facing sky-high taxes. Yet that’s the dilemma in Schreiber, where a lack of industry has left some homeowners paying $5,000 or more in residential taxes just so the town can keep the streets plowed and streetlights on.

One of the North’s oldest municipalities, Schreiber was once fairly prosperous, one of many single-industry towns on the Trans-Canada Highway.

But as its businessman mayor Don McArthur explains, for more than a decade the town has been slowly crumbling in the wake of a mine closure and the overall forestry collapse that felled many towns like it between Kenora and White River.
A situation that has left residents paying the price for a backlog of $3 million of unpaid and uncollectable commercial taxes has reached the point of no return, it seems.

If it isn’t addressed soon, says McArthur, the town will spend another 10 years lucky to tread water while its neighbours break free of the recession. In the short term, McArthur wants the province to cover half the cost of clearing the hefty backlog so the municipality can reduce the time required to break free of what the mayor bluntly terms “a financial sinkhole.”

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Hudak promises to ‘fire up’ North’s economy – by Carol Mulligan (May 23, 2013)

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

Progressive Conservative Leader Tim Hudak slammed what he called the identical twins of bigger government, higher taxes and deeper debt – the Liberal and New Democratic Party coalition – during a swing through Sudbury on Thursday.

Hudak repeatedly swiped at the NDP for propping up what he called the corrupt government of Premier Kathleen Wynne, charging it wasted millions of dollars when it cancelled two Toronto-area gas plants before October’s provincial election to save two Liberal MPPs’ seats.

NDP Leader Andrea Horwath announced this week she would back Wynne’s spring budget, averting a June election. “This is clearly about the NDP and the Liberal MPPs putting their own seats and their own pay cheques ahead of Northern Ontario families,” Hudak said during a whistle stop at Anmar Mechanical and Electrical Contractors in Lively.

Hudak visited the Mumford Road plant to lend his support to Sudbury PC candidate Paula Peroni who this week went public with her 15-month battle with breast cancer.

The Tory leader has been pitching northern voters in recent weeks saying Northern Ontario residents are being harder hit than the rest of the province by the loss of jobs and increasing debt in Ontario.

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Sweden’s LKAB Doubles Spending to Find ‘Elephant’ Iron Mine – by Niklas Magnusson (Bloomberg News – May 22, 2013)

http://www.bloomberg.com/

LKAB is doubling spending on exploration in Sweden’s Arctic as the state-owned company targets finding a deposit to match its Kiirunavaara mine, the world’s largest contiguous body of iron ore.

LKAB will boost its exploration spending to 200 million kronor ($30 million) annually from 100 million kronor and is hiring more geologists to guide it to potential deposits, Chief Executive Officer Lars-Eric Aaro said in a May 20 interview.

“There’s a saying in mining, especially when you’re looking for big volume bodies, that if you’re looking for elephants you have to go to elephant land — and our part of the world is elephant land,” he said. “We now have the equipment to look at rocks deeper down but what’s under there is so far totally unknown. But, the geology is there and there could be a new Kiirunavaara mine — it will just be deeper underground.”

Sweden sits on 60 percent of Europe’s known iron ore and 2 percent of the global total. Prime Minister Fredrik Reinfeldt has said that the resource ore is equivalent to what oil has meant for Norway since it was discovered in the 1960s.
LKAB, which is moving parts of the towns of Kiruna and Malmberget to ensure it can continue production in those two locations, had sales of 27 billion kronor and a profit of 8.8 billion kronor last year.

LKAB paid a dividend of 5 billion kronor to the Swedish state for 2012, equivalent to 0.6 percent of the government’s forecast income in 2013, as well as taxes of 3.77 billion kronor. Those contributions to Sweden’s budget are likely to increase as LKAB opens new mines and expands.

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Conflict Minerals Law Is Heavy Burden On Business, House Republicans Argue – by Christina Wilkie (Huffington Post – May 22, 2013)


 

http://www.huffingtonpost.com/politics/

WASHINGTON — Republicans at a House subcommittee hearing this week objected to a 2010 law that targets conflict minerals from Central Africa, saying it places too many regulations on U.S. businesses and hasn’t accomplished enough since it went into effect.

“Some of us may pat ourselves on the back and say, ‘Well, we’re making sure we’re not using their minerals,’ but we’re only hurting the people of the Congo,” said Rep. Marlin Stutzman (R-Ind.), who called the law “a massive paperwork burden on U.S. companies.”

Profits from mining of lucrative minerals in the Democratic Republic of the Congo (DRC) have helped fund a brutal conflict between rebel militias and government troops that has claimed more than 5 million lives since 1998. For those who live in the conflict areas of eastern Congo, the threat of rape and mutilation is constant; both are used as weapons of war. In the isolated mining camps of the region, men and boys often work in debt bondage or outright slavery. Above ground, women and girls are even more vulnerable to the violence, and desperation forces many of them into the commercial sex trade.

The conflict minerals law originated with then-Sen. Sam Brownback, now the Republican governor of Kansas, who argued in 2008 that “with 1,500 people dying a day [in the Congo’s civil war], there is no room for turning a blind eye on this matter.” Bolstered by the support of United Nations experts and human rights groups, Brownback’s plan became law two years later, as Section 1502 of the Dodd-Frank financial reform legislation.

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The Commodity Supercycle Decelerates – by Ari Charney (Investing Daily – May 22, 2013)

http://www.investingdaily.com/

This week offered a flurry of news signifying the end of Australia’s resource boom. Of course, that doesn’t mean the mining space won’t rebound in the years ahead. Commodities are famously volatile, and the steep correction that inevitably results from overinvestment and a glut of production will itself eventually correct.

But in the near term, the sector is definitely contracting. Even the uber-wealthy are hurting. Pundits have delighted as porcine plutocrats Nathan Tinkler and Gina Rinehart watched their fortunes drop precipitously over the past year. Tinkler is now merely a former billionaire, while Rinehart’s wealth declined by a staggering AUD7 billion, to AUD22 billion, over the past 12 months.

Their plight might be more entertaining if Australia’s economy weren’t so dependent on the mining industry. The Bureau of Resources and Energy Economics (BREE) recently detailed a significant increase in projects being deferred or cancelled, as well as a decline in investment for exploration. Altogether, roughly AUD150 billion in projects have been delayed or cancelled over the past year.

However, there are still AUD268 billion in projects at the committed stage, which is near record-high levels. Of course, the BREE notes that 11 percent of that figure is due to cost increases. Even so, the agency projects that committed investment will fall by just AUD8 billion next year, a number that supports the Reserve Bank of Australia’s forecast that resource investment would peak this year, but that the peak would be sustained over a number of months.

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OMA NEWS RELEASE: Is labour market gap shortfall or opportunity for employment boom?

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

The most recent report by the Mining Industry Human Resource Council (MiHR) shows that Canada’s mining sector faces a human resource challenge to attract 145,000 new workers over the next decade. “Canadian Mining Industry Employment, Hiring Requirements and Available Talent 10-year Outlook” presents, in detail, views on the economic future of the industry, its workforce requirements — and shortfalls — and suggested actions to reduce the impending labour gap.

The study bases industry employment levels on three different economic forecasts. A baseline case shows the sector with cumulative hiring requirements out to 2023 to be 145,870. The expansionary case shows labour requirements of almost 200,000 workers over the same period while a contractionary case still shows cumulative hiring requirements of 116,850 for the next decade.

The MiHR report puts employment forecasts for 66 core mining occupations under the microscope. Difficulties are foreseen due to pending high retirement rates related to the industry’s demographics as well as recognition that mining must compete with other sectors to attract and retain valuable employees. It also recognizes the remote locations of many mining operations can be a barrier.

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Sudbury Laurentian’s Ned Goodman School of Mines – by Bruce Jago, Excutive Director (May 15, 2013)

 

Bruce Jago, Excutive Director of Laurentian’s Ned Goodman School of Mines

(L to R) Bruce Jago, Excutive Director of Laurentian’s Ned Goodman School of Mines; Ned Goodman, President and CEO of Dundee Corporation; Peter Munk, Chairman and Founder of Barrick Gold Corp.

http://www.laurentian.ca/content/goodman-school-of-mines

This speech was given by Bruce Jago, during the Goodman School of Mines Cocktail Reception at the King Edward Hotel, Toronto, Ontario on May 15, 2013

Thank you Dominic for your very kind introduction and thank you all for attending this celebration.

I would like extend particular thanks to Ned Goodman and Family for their generous investment in the educational future of Laurentian University under-graduate and graduate students but also in the future wealth and health of mining communities world-wide.

In addition, although I have only known Peter Crossgrove a very short time, I would like to express to him my sincere gratitude for introducing Ned Goodman to Laurentian’s President Dominic Giroux and for extending the invitation to this event to his many friends.

Many of you here today have some sort of tie to the mining industry but many of you do not. For those that do not have that tie, you should be aware that the mining industry is going through some transformative changes. We are still going discover and mine new deposits and put them bed once they are exhausted, that is still true, but the real change is going to be about changing how the next generation of mine industry workers are educated.

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Vale’s vale of tears in Mozambique (MSN Money Canada – May 22, 2013)

http://ca.msn.com/?rd=1&ucc=CA&dcc=CA&opt=0

Labor disruptions, flooding and infrastructure problems will mean a substantial reduction in coal exports.

Vale has announced a 30% reduction in its 2013 target for coal exports out of its Moatize mine in Mozambique. The target has been reduced from 4.9 million tonnes planned earlier to 3.4 million tonnes. The revision follows incidents of labor disruptions and heavy flooding, which rendered its railway line temporarily unusable. Infrastructural limitations in Mozambique continue to pose a challenge to Vale, hampering its ability to get the coal produced from pit to port.

The reduction in export volumes, combined with falling coking coal prices in the international market, will impact revenues negatively. However, since the coal division constitutes just 2% to 2.5% of the company’s total gross operating revenues, the overall impact is expected to be muted. On the other hand, the news exposes the fragility of Vale’s Mozambican business and the significant challenges it faces to diversify away from its iron ore business.

Infrastructure bottlenecks are the topmost concern of coal miners operating in Mozambique. Both the government and the private sector have been executing various projects to expand and build new railway lines and ports, but infrastructure will take time to reach satisfactory levels. In 2012, Vale had to cut down its initial export targets by half due to infrastructure issues.

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