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The politics of a painkiller – Thunder Bay Chronicle-Journal Editorial (December 14, 2012)

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

Leona Aglukkaq has got politics down pat. The federal Health Minister recently approved generic versions of the highly-addictive opioid painkiller OxyContin for sale in Canada. The patent for OxyContin — which is the market name for time-released oxycodone tablets — expired and, in the interest of private-sector initiative, the government opened the door for other companies to step in with their own, no-name versions.

That’s great for the companies; oxycodone painkillers are huge sellers. It’s also good for people in need of those drugs, as well as health care budgets. The generics are much cheaper than the name brand versions and their painkilling abilities are effective.

The issue, though, is one that affects everyone else. Oxycodone is a fiercely addictive painkiller and the introduction of generic versions will cost society far too much to go ahead.

The problem is, those struggling with an oxy addiction — and there are many — pass their struggle on to others. Drug stores are being held up to the point where many pharmacy owners are refusing to stock generic oxy. Convenience stores, homes and vehicles are robbed and whatever taken is quickly flipped to pay for the next pill.

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More than just costs are a concern at Barrick Gold’s $8.5B Pascua-Lama megamine – by Catherine Solyom (National Post – December 16, 2012)

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

Pascua-Lama, on the border of Chile and Argentina — Standing on a precipice 5,200 metres above sea level, the air is thin and the vistas are long.

Just breathing is difficult at this altitude, with a howling wind disturbing the utter, majestic silence of the snow-capped Andes mountains, threatening to blow you over the edge. You’d think you were alone at the top of the world.

But what happens up here in Pascua-Lama, where Canadian mining giant Barrick Gold is developing the first open-pit gold mine to straddle two countries, will have a huge impact on the people living in the valleys below on both sides of the border — for better or for worse.

After more than a decade of intense debate — often played out in front of the Canadian embassies in Santiago and Buenos Aires — the mine is set to open in 2014, and to produce 850,000 ounces of gold a year, as well as vast amounts of copper and silver.

Up to 10,000 people, many of them from the villages closest to the mine, will be employed during the construction phase and another 1,650 will operate the mine for at least the next 25 years.

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[Ontario] Grits extend energy rebate – by Sebastien Perth (Sudbury Star – December 15, 2012)

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

A provincial program that saves millions in energy costs for large industries in Northern Ontario has been extended for three years.

Northern Development and Mines Minister and Sudbury MPP Rick Bartolucci made the announcement Friday at Xstrata Nickel’s operations in Falconbridge.

The Northern Industrial Electricity Rate program can provide a company with a rebate of two-cents per kilowatt hour up to a maximum of $20 million a year. The program was set to expire in March, but will now be in effect until 2016.

To access Northern Industrial Electricity Rate funding, companies must provide a plan showing how they will reduce their energy consumption.

“They have to develop a plan that has to be in discussion with the Ministry of Northern Development and Mines and the ministry of Environment then they have to make sure that the plan is implemented and we follow to make sure that energy conservation is taking place,” Bartolucci said. “You see the success of the program and the importance of the program and if I am still where I am now (in the future), I’d be advocating for the program because it’s so good.”

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2012 is Northern Ontario’s 100th birthday – by Gordon Dowsley (Toronto Star – December 16, 2012)

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.

Gordon Dowsley, a consultant in international development with specialization in the financial sector, teaches courses at the seniors center in Oshawa on history, geography and art.

Before the year slips away, we should celebrate the centennial of Northern Ontario. Not of its existence of course, for its Canadian Shield rock has been here for a billion years. However, its political boundaries were only established in 1912.

After Confederation, Ontario did not extend much beyond the Great Lakes. But in 1870 the new Canada bought all the land draining into Hudson Bay for £300,000. That launched a battle over which provincial government ruled what.

In 1884, the eastern border of Northern Ontario and Quebec was set, a straight line bisecting Lake Timiskaming. This set off a series of events led by one Charles Farr. He had surveyed land around Hailebury, named after his school in England, and New Liskeard.

This is not shield country but the Great Clay Belt. Cloaked in all the biases of his era, he lobbied Queen’s Park to settle the clay belt and set up a wall of English Protestants in the face of the French Catholics across the lake.

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The oil deal that paved China’s path to Nexen – and beyond – by Jacquie McNish and Carrie Tait (Globe and Mail – December 16, 2012)

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 and CALGARY – The foreign investment rush that prompted Ottawa to cordon off Alberta’s oil sands can be traced to a furious pre-dawn game of Pictionary in the Chinese city of Panjin nearly three years ago.

Four Calgary oil executives had travelled to the city, three hours north of Beijing, to promote a vast Alberta oil sands deposit local geologists had never seen and a planned thermal drilling technology they didn’t understand. Growing frustrated, the Canadians grabbed markers and decorated a nearby easel, sketching fat rocks, granules of sand, buried oil reservoirs and complex math formulas. At first, even an attending Chinese translator was bewildered.

Although the game took time, there was magic in those markers. In the middle of the night, shortly before 3 a.m., officials of China’s Great Wall Drilling Co. began nodding their heads. Soon the nondescript office in a squat, stone building shook with laughter as relieved English and Chinese officials bowed and congratulated each other.

“It was a breakthrough,” says Hilary Foulkes, a former executive vice-president of Penn West Petroleum Ltd., who led the presentation for what she believed was a long-shot bid to attract scarce capital to the company’s Peace River oil sands property in Northern Alberta. “We made a connection and there was a camaraderie and trust that was developed.”

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Calls for New Caledonia’s nickel profits to be shared – Radio Australia (October 18, 2012)

http://www.radioaustralia.net.au/international/radio

But the benefits aren’t reaching many New Caledonians; in particular, young indigenous Kanaks, among whom unemployment is 38 per cent.

Presenter: Geraldine Coutts
Speaker: Professor Catherine Ris, University of New Caledonia

RIS: New Caledonia is a quite rich country, especially compared to other countries in the Pacific Islands, but it’s a very unequal country. Income distribution, experience, [there are] big, huge disparities. Even people, even different ethnic groups and also between areas even, if you are living in the south of New Caledonia you are not living in the same conditions than if you are living in the north, or in the islands province.

And one of the reasons for that is the school achievement already defers according to ethnicity. School achievement, if we split the population between Kanaks – that’s the indigenous people of New Caledonia – and non-Kanak people, we see for example that only three per cent of Kanak people graduate from higher education, compared to 23 per cent from non-Kanak people. And this disparity in school achievement also implies of course disparities in access to employment, labour market outcomes and to income distribution.

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CHROME’S COLOURFUL HISTORY – From The International Chromium Development Association (ICDA)

The International Chromium Development Association (ICDA) http://www.icdacr.com/

The Discovery of Chrome

In 1762, J. G. Legmann described an orange-yellow mineral discovered in Siberia’s Ural Mountains, which he called crocoite because it resembled the colour of egg yoke (krokos in Greek). Thirty-five years later, French chemist Nicolas-Louis Vauquelin identified a new metallic element in this mineral. He called it “chromium”, after the Greek khrōma, meaning colour, because of its colourful compounds. Indeed, the yellow deposit obtained by crushing the mineral was already being used as a paint pigment. After further research, Vauquelin found that trace elements of chrome give rubies their characteristic red colour and emeralds, serpentine and chrome mica their distinctive green.

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China’s mining occupation of the Philippines – by Rodel Rodis (Global Nation – December 12, 2012)

http://www.inquirer.net/

While China’s brazen occupation of the Philippines’ Scarborough Shoal, located just 125 nautical miles from Masinloc, Zambales, has captured all the national and international attention, little has been mentioned about China’s occupation of the Philippine mining industry, an entirely different issue from the Filipino Chinese (“Chinoys”) domination of the Philippine economy.

For example, one of China’s vast army of mining companies operating almost under the radar in the Philippines is located near the Scarborough Shoal in the coastal town of Masinloc where China’s Wei-Wei Group has set up a US$100 million nickel processing plant. In nearby Botolan, Zambales, China’s Jiangxi Rare Earth and Rare Metals Tungsten Group Company Limited operates a US$150 million nickel exploration and cobalt processing project.

As the Asia Sentinel reported on November 12, 2012 (“China’s Filipino Gold Rush”), “With an estimated US$1 trillion in untapped mineral resources in the Philippines, according to the Mines and Geosciences Bureau, Chinese mining companies, many of them operating illegally, have been exporting gold, nickel and other precious minerals out through the island country’s porous coastal ports, where there are no customs officials and plenty of bribable officials to turn their eyes the other way.”

With its occupation of the Scarborough Shoal (what China calls “Huanyin Island”), smuggling precious metals from the Philippines to a China base will be even more convenient especially after it is transformed into a four story fortress, as China did with the Philippines’ Mischief Reef, located just 75 miles from Palawan, which China occupied in 1996.

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Oligarchs, not investors, to get Abramovich Norilsk windfall – by Polina Devitt (Reuters U.K. – December 11, 2012)

http://uk.reuters.com/

MOSCOW – (Reuters) – Roman Abramovich, the Kremlin’s enforcer on a peace deal at Norilsk Nickel, will pay cash straight to the Arctic giant’s two main oligarch owners for a stake in the company, depriving other investors of the windfall from an end a billionaires’ feud.

Norilsk Nickel, which mines the vast mineral deposits of Russia’s far north, was one of the biggest prizes handed to insiders in the post-Soviet carve-up of Russian industry that created a clique of politically powerful tycoons.

For years the world’s largest nickel and palladium producer has suffered from a feud between its two main owners, billionaires Vladimir Potanin and Oleg Deripaska.

Fellow billionaire Abramovich, owner of London’s Chelsea football club, settled the row last week by sweeping in to buy a stake under a deal that appeared to have the blessing of President Vladimir Putin.

A revision, announced on Tuesday by Norilsk and Deripaska’s Hong Kong-listed aluminum producer RUSAL (0486.HK), would see Abramovich buy a slightly smaller stake, but pay for it directly to the two billionaires’ firms, rather than Norilsk.

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Will the real Norilsk owner please stand up? – by Andy Home (Reuters U.S. – December 7, 2012)

http://www.reuters.com/

Dec 7 (Reuters) – The Economist Intelligence Unit (EIU) has just issued a report on doing business in Russia.

“Nothing ventured, nothing gained: Changing international perceptions of Russian business” is based on a survey of 195 senior executives from outside Russia, with particular focus on those who have been or are considering joint venturing with Russian corporates.

“Non-Russian executives have decidedly mixed views of their Russian partners,” the report notes, explaining: “Access to energy and financial resources, and technical know-how, are the big pluses (…) poor language skills, inefficient management and corporate governance are the big minuses.”

Third on the EIU’s recommended list of nine ways for Russian companies to break free of outsiders’ “stereotypes” is to “avoid ‘insider’ practices and back-room deals”. Oh, and one other thing. The study was commissioned by Russian aluminium giant UC RUSAL and is available for download from the company’s website (www.rusal.com).

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Resource nationalism – A growing challenge for miners globally – by John Gravelle (Canadian Mining Journal – December 2012)

The Canadian Mining Journal is Canada’s first mining publication providing information on Canadian mining and exploration trends, technologies, operations, and industry events.

John Gravelle, PwC Mining Leader for the Americas

Mining companies looking to establish mine operations in developed and developing nations must consider the risks associated with the investment. A reoccurring challenge faced by miners is resource nationalism. Resource nationalism is when governments assert greater control, influence or demand a larger share of mining revenues from companies engaged in the extraction and processing of a country’s natural resources.

A common myth is the belief that resource nationalism is restricted to developing countries. This is not always the case. These trends are prevalent in developed nations, including Canada, but the ways to exercise resource nationalism may
differ. For example, while developing nations often apply export duties to mining companies in order to support local
related industries, developed countries tend to increase taxes charged to mining companies as a way to generate additional
government revenue.

An example of resource nationalism in a developed country is Australia’s Mineral Resource Rent Tax (MRRT). The MRRT, which came into effect this year, imposes a substantial additional profit-based tax on upstream iron ore and coal operations that achieve a specified rate of return.

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OMA report gains broader exposure at economic conference

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 recently released Ontario Mining Association economic contribution study “Mining: Dynamic and Dependable for Ontario’s Future” was highlighted at an academic forecasting conference yesterday. The study was a component of the program at the University of Toronto’s Policy and Economic Analysis Program’s (PEAP) bi-annual conference.

The main part of the PEAP conferences involves model construction and explanation for predicting future growth and growth rates in the Canadian economy and where that growth will be derived. Members of PEAP are predominantly economists involved in forecasting, planning and marketing for both private sector and public sector organizations.

In attendance yesterday were representatives from the financial services sector and other industries, the ministry of finance, economists from other industry associations and academia. PEAP works closely with government finance officials, banks and Statistics Canada in developing its projections. Domestic factors as well as global economic trends, which affect the Canadian economy, are examined by this group of specialists. Of particular interest were current social and economic trends in China, Europe and the United States.

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Outgoing Norilsk Nickel CEO to get $100m severance deal – by Reuters (Mineweb.com – December 14, 2012)

http://www.mineweb.com/

Sources close to the company say Vladimir Strzhalkovsky will receive a one-off payment of $50 million and two further payments of $25 million each after six months and one year.

MOSCOW (REUTERS) – The departing chief executive of Norilsk Nickel, the Russian mining giant undergoing an ownership shakeup, will receive a $100 million severance deal, two sources close to the company’s shareholders said on Friday.

Vladimir Strzhalkovsky is leaving the world’s largest miner of nickel and palladium to make way for shareholder Vladimir Potanin, who this week struck a deal through which Chelsea soccer club owner Roman Abramovich will become a shareholder.

The sources confirmed a report in the Vedomosti daily that said Strzhalkovsky – who as CEO launched a series of share buybacks and sided with Potanin in a bitter shareholder dispute – would receive a one-off payment of $50 million from Norilsk.

He will receive two further payments of $25 million each after six months and one year.

In this week’s revised deal, Abramovich will buy a stake of 5.86 percent in Norilsk from Potanin and RUSAL, the aluminium company in which Oleg Deripaska is the main shareholder, for $1.5 billion.

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Nothing beats homemade ore – by Russell Noble (Canadian Mining Journal – December 2012)

The Canadian Mining Journal is Canada’s first mining publication providing information on Canadian mining and exploration trends, technologies, operations, and industry events.

Working abroad may sound exciting and almost exotic, but as many of you know, it can be a total nightmare filled with hostility, sickness, and worst of all, false promises and cost overruns.

Nevertheless, Canadian companies continue to look offshore for their futures and fortunes but more often than not, they come home with their hopes shattered and few answers for their investors as to why things didn’t turn out as planned.

There’s no question that venturing offshore has a mystique about it that drives miners to new frontiers, but I just
wish many of those adventurers would give Canada a second look before investing their time and, moreover, their stakeholders’ money in foreign projects.

I know that some of the properties being explored or developed offshore hold outstanding prospects for Canadians in terms
of minerals, but on the downside, what about where they’re located and even worse, what about the odds of coming home with
a buck or two?

Even some major companies with seemingly unlimited financial and topnotch managerial resources are looking pretty sheepish lately as they admit to the fact that a million dollars worth of gold is going to cost a million-and-one dollars to produce.

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Harper is right on SOE takeovers – by Jack M. Mintz (National Post – December 14, 2012)

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

Jack M. Mintz is the Palmer Chair in Public Policy, University of Calgary.

Most criticisms of Ottawa’s SOE position are mystifying

This past week I attended the Globes business conference in Israel, only to miss the great brouhaha over the Harper government’s decision to approve the takeovers of Nexen by China’s CNOOC Ltd. and of Progress Energy by Malaysia’s Petronas. Prime Minister Stephen Harper also announced at the same time tougher guidelines for state-owned-enterprise (SOE) takeovers of Canadian companies on a going-forward basis.

Reading the National Post on my iPad, however, you would think that the Harper decision was a great travesty. The editorial page criticized the decision as undermining free markets, a rather surprising view since SOEs are far from being “free” of foreign-government intervention.

Another criticism was that the two takeover approvals were inconsistent with the new policy restrictions on state-owned enterprises. This is a fair point, but we have to remember that Canada is not a banana republic. When the rules of the game are changed, usually transactions that have been put in place, even if not yet consummated, are typically grandfathered. We do this all the time in tax policy, sometimes involving billions of dollars in transactions that get grandfathered or provided transitional relief. Although the “net benefit” test under the old regime is far from clear, the two takeovers would have likely passed anyway.

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