Republic of Mining

Ontario Mining Association education and outreach initiatives build on past efforts

November 29, 2012

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 Ontario Mining Association was a major participant in an explore mining and forestry career night held earlier this month at Mohawk College in Hamilton, which attracted more than 100 students. Lesley Hymers, OMA Environment and Education Specialist, and Bryan Wilson from Xstrata Nickel in Sudbury carried the message for the mining side. Representatives from the Canadian Institute of Forestry, Resolute Forest Products and the Forest Products Association of Canada were on hand speaking about their component of Canada’s resource sector at the community college.

The event was organized by Richard Borger, an elementary school teacher and part-time professor in the engineering technology program at Mohawk College. He became acquainted with the OMA, while in the role of student, during the third annual Teachers’ Mining Tour earlier this year. Mr. Wilson has been an active and key participant in all three of these teachers’ tours, which have taken place, so far, through facilitating tours of Xstrata Nickel’s Nickel Rim South Mine in Sudbury.

“It is important for us to establish links with educators across the province and to work to strengthen and build upon those links,” said Ms Hymers. “It is also vital that we take advantage of opportunities to make students more aware of the tremendous variety and scope of career options that our industry offers.”

Inmet rejects First Quantum takeover bid – by Peter Koven (National Post – November 29, 2012)

November 29, 2012

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

TORONTO — First Quantum Minerals Ltd. has offered $4.9-billion for Inmet Mining Corp. in a bold attempt to get its hands on Cobre Panama, one of the largest mining development projects underway anywhere in the world.

The move puts Inmet’s immediate future into question, as the company is now in play and senior copper miners are certain to take a closer look at Cobre Panama.

Toronto-based Inmet owns 80% of Cobre Panama, and it is a monster. The project holds 32 billion pounds of copper reserves and nine million ounces of gold reserves (along with huge inferred resources), and has a likely mine life of more than 30 years. It also comes with enormous risk: The current cost estimate is US$6.2-billion, and Panama has no history of large-scale mining.

Construction of Cobre Panama has just started, and analysts suggested that if First Quantum has its own development plan for the mine, it needs to get in quickly. First Quantum is recognized for having a strong technical team.

“I see a fit in the sense that [First Quantum] management has been very experienced in building four grassroots projects on time and within reasonable budgets, and also operating in what I would call politically sensitive areas in Central Africa,” said John Hughes, an analyst at Desjardins Securities.

Oil sands producers could feel squeeze as pipeline capacity tightens – by Claudia Cattaneo (National Post – November 29, 2012)

November 29, 2012

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

Plans are under way to build oil pipelines south, west and east, but even if they are successful they’re not going to alleviate today’s problem: Many of Canada’s oil pipelines are full and it’s only a matter of time before they choke off oil growth.

Already, analysts are warning the next steps will be production shut-ins and the rationalization of oil sands projects so only the less expensive go ahead.

Coping strategies are expected to come into focus as producers announce their investment plans for 2013 over the next few days and weeks, starting with Canadian Oil Sands Ltd. on Thursday. Pipeline capacity has been getting tighter because of surging production from Alberta’s oil sands and from tight oil fields across North America.

Space will be substantially smaller than demand in December, when Enbridge Inc. will “apportion” space on a number of its key pipelines – Line 5, Line 14, Line 6B, Line 6A/62, Line 4/67, Line 4. Kinder Morgan Inc. is apportioning space so that only 30% of producers’ hoped-for volume gets into its regularly oversubscribed TransMountain pipeline in December.

Enbridge looks east: N.B. pipeline now a Gateway alternative – by John Ivison (National Post – November 29, 2012)

November 29, 2012

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

Al Monaco puts a brave face on the prospects of Enbridge’s Northern Gateway pipeline becoming a reality.

“We’re in the middle of the regulatory process, so I don’t want to presume anything. But we’re optimistic and committed to it,” the company’s new chief executive said over breakfast in Ottawa Wednesday.

Yet he remarked on more than one occasion, “it’s not just about Gateway,” as if he’s resigned to the idea Enbridge’s plan to build a pipeline to connect Canada’s supply of heavy crude to demand in Asia is doomed to failure, thanks to the opposition.

Enbridge’s strategy is to diversify Canada’s markets, so it is no longer a price taker — a captive supplier selling heavy crude to the U.S. market at a discount that costs the country $60-million a day.

The average discount in the first three quarters of this year was $27 a barrel, which was a major contributor to Canada’s increased deficit. Mr. Monaco, who was in town to talk to politicians in all parties, was more keen to emphasize Enbridge’s other market access initiatives.

Don’t play it safe, Deloitte tells mining firms – by Bertrand Marotte (Globe and Mail – November 29, 2012)

November 29, 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.

Faced with rising costs, falling commodity prices and other challenges in these volatile times, mining companies should avoid the urge to retreat and play it safe, says a new Deloitte report.

“For the second year in a row, mounting costs tops the list of the key issues affecting the mining industry,” says Glenn Ives, Americas mining leader at Deloitte Canada.

“This is expected to worsen in the short term as commodity prices continue to dip, workers demand higher wages and regulatory costs rise. But rather than halting production in the face of shareholder demands for more immediate returns, miners should be making investments today to meet the expected long-term demand for commodities.”

The report, Tracking the Trends 2013, lists the top 10 challenges for the mining sector in 2013:

1. Higher costs

Inmet Mining snubs $4.9-billion takeover bid by First Quantum – by Pav Jordan and Tim Kiladze (Globe and Mail – November 29, 2012)

November 29, 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.

First Quantum Minerals Ltd. offered $4.9-billion to acquire Inmet Mining Corp., a bold declaration from one of Canada’s largest copper miners that the commodities supercycle has room to run.

Inmet rejected the bid, describing it as “highly conditional” and not in shareholders’ interests, but analysts said First Quantum could return with a higher offer for one of the world’s largest copper projects in development.

Toronto-based Inmet is developing the $6.2-billion (U.S.) Cobre Panama project that will produce some 300,000 tonnes of copper a year for 30 years, putting it on a scale with major mines in Chile and Peru, the world’s largest producers of the metal.

Inmet revealed that it was the second offer from First Quantum in a month, underscoring global miners’ convictions that copper demand will remain strong into the future, despite slowing growth in China and other major markets. Copper has been one of the most in-demand commodities of the past decade, driven by breakneck development in China as it built power grids and entire cities in its urbanization drive.

Fight to keep power plant far from over – by Bryan Meadows (Thunder Bay Chronicle-Journal – November 29, 2012)

November 29, 2012

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

Thunder Bay’s Liberal MPPs continue their fight to keep the Thunder Bay Generating Station in the energy mix in Northwestern Ontario. Thunder Bay-Atikokan MPP Bill Mauro said Wednesday that he believes the plant conversion from coal-fired to natural gas can still happen.

“I think it can be salvaged,” he said. That’s despite an Ontario Power Generation decision to cancel a Union Gas contract, at a cost of more than $5 million, that would have tied the power station to the utility’s pipeline system.

Mauro said “if the conversion goes forward, those costs will not be lost, just included as part of the project. “It’s my belief that this will happen. The money will become part of the project. “I feel this is a cost-effective project, for our future it makes a tonne of sense,” he said.

“The cost of conversion is minimal compare to the value of the asset (of the Thunder Bay Generating Station).” Thunder Bay-Superior North MPP Michael Gravelle agreed, noting that Energy Minister Chris Bentley has made it clear that the suspension of the conversion plan is a pause in the process.

Ontario’s Power Trip — The gas bungle: $800M? – by Jan Carr(National Post – November 29, 2012)

November 29, 2012

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

Jan Carr is a director on several electricity-sector boards and former chief executive of the Ontario Power Authority.

Cancellation costs could have paid for five recent hospital projects

Decisions to relocate two Ontario electricity generating stations from the Toronto suburbs of Mississauga and Oakville to locations further afield in Sarnia and Lennox were driven by partisan political attempts to win at the polls. The relocations have a cost, however.

The exact costs are unknown, mainly because the provincial government has released only limited amounts of information, despite the highly publicized production of 56,000 pages of documents. The documents cover a period of time prior to the end of 2011, while the deals to relocate the plants were finalized in 2012. With the Ontario legislature prorogued, there are no legal channels to force publication of the final numbers.

The government has announced a $40-million “cost to taxpayers” for relocating the TransCanada Energy (TCE) plant from Oakville to Lennox and a “total cost” of $180-million for relocating the Eastern Power (EP) Mississauga plant to Sarnia. The credibility of these figures was first undermined by the discovery of an additional $10-million paid to EP related to a 1998 dispute over a different power plant contract. The long settlement delay indicates that the unannounced $10-million was negotiated as part of the current plant relocation agreement, bringing the total Mississauga cost to $190-million.

Canadian Royalties aims to start shipments from Nunavik Nickel in 2013 – by Jane George (Nunatsiaq News – November 28, 2012)

November 28, 2012

http://www.nunatsiaqonline.ca/

More than 650 people already working on site

A Chinese-owned mine in Nunavik will soon see huge ice-class vessels sailing through Hudson Strait to bring nickel, copper, platinum and palladium to European markets.

After sinking $735 million into infrastructure, Jien Canada Mining Ltd., the owner of Nunavik’s second soon-to-be operating mine, plans to ramp up production in early 2013 and hire more Nunavik workers.

The mine company, which expects to reach full production by 2014, will produce nickel, copper, palladium and platinum for at least 13 years. Located 20 miles from Xstrata Nickel’s Raglan nickel mine, the Nunavik Nickel mine sits in “one of the most inhospitable places in the world,” said its president, John Caldbick in a recent interview.

But the cold, rocky plateau is rich in minerals, and early in 2013 the mine will start processing ore. More than 650 people are now on site, living in its 428-person main camp and other temporary camps. Some workers are excavating ore from the Expo open pit mine, while others complete essential parts of the mine’s infrastructure.

NEWS RELEASE: Canada’s mineral treasures sparkle in new Vale Earth Gallery at Canadian Museum of Nature

November 29, 2012November 28, 2012

(L-R) Vale Canada representatives Cory McPhee, VP, Corporate Affairs; Audrey Leduc, Corporate Affairs Officer; and John Mullally, Director, Corporate Affairs in front of display with rock sample from Sudbury’s Vale mine. (Photo by: Jamie Kronick, Canadian Museum of Nature)

www.vale.com

Ottawa, November 28, 2012─Canada’s mineral treasures and the geological forces that shape the country are featured in a renewed and expanded gallery opening November 30 at the Canadian Museum of Nature.

The Vale Earth Gallery presents a fascinating journey through geological time that relates how the Earth formed, how powerful forces have changed and shaped our planet, and how geology and mineralogy connect with everyday life. The new attraction is the result of two years of planning and three months of renovations to a smaller phase of the Vale Earth Gallery that had opened in 2010.

“This new gallery returns the museum’s best geological and mineral specimens to permanent display in an expanded setting that includes new content and engaging interactives,” says Meg Beckel, President and CEO of the Canadian Museum of Nature. “We are extremely grateful for Vale’s support that has allowed us to complete this project that will inspire and connect visitors with our collections and the mineralogy research of our scientists.”

Instructive panels, interactive games and simulations explore the complexities of geology and the three main types of rock that make up the planet—sedimentary, magmatic and metamorphic.

After Conflict Minerals Comes The Death Metal: Tin. And It’s Apple’s Fault Again.- by Tim Worstall (Forbes Magazine – November 24, 2012)

November 28, 2012

http://www.forbes.com/

Given that the well meaning types have now solved the problem of conflict minerals through the Dodd Frank act and the requirements for companies to report their use there’s obviously a new frontier needed for the well meaning to conquer. And of course the conflict minerals problem has been solved as M-23′s move into Goma shows. Now that people can’t make money out of mining in the area no one at all is fighting for control over the area are they?

The Guardian tells us all about this new frontier being staked out. It’s tin mining in Indonesia now. Much of what they actually say they get right. There is indeed a belt of alluvial tin ore ranging from Burma down to Indonesia. In the poorer countries there it is indeed mined by very primitive methods. Miners are badly paid while they do so and yes, some of them die while they do it. The poor pay and primitive methods are because the places are poor: they’re actually the exact same statement.

Just as a little background, and without too much technical guff. The only ore of tin that we care about is cassiterite. Sometimes we find vast mountains of it as in Peru. Sometimes small mountains of it as in the Erzgebirge/Krusny Hory on the German Czech border (disclosure, I’m currently waiting, rather nervously, to find out whether my application for a mining license there is going to be granted. I’m not looking for tin but for the closely related, in an ore sense, tungsten but tin will be a by-product and it’s the main product of the mine right next door.).

NEWS RELEASE: Canadian mining and metals deal value down 43% as focus on business fundamentals rises: Ernst & Young Macroeconomic issues put damper on M&A, but confidence on the rise

November 28, 2012

For the full report, click here: ey.com/ca

(Vancouver, November 28, 2012) Global mining and metals deal value and volume are down globally, with Canadian numbers falling 43% and 16% year over year in the first nine months of 2012, according to Ernst & Young’s seventh twice-yearly Global Capital Confidence Barometer.

“Our survey results reveal that only 38% of companies, down from 53% in April, are focused on growth in the next 12 months, while 27% are refocusing on business fundamentals, including cost reduction and operational efficiency,” says Bruce Sprague, Ernst & Young’s Canadian mining and metals leader.

Cost inflation, slowing economic growth, heightened geopolitical risk and volatile prices have sparked this shift in mining and metals companies’ mindsets.

“Executives are trading in their ‘growth for growth’s sake’ mentality and refocusing on capital optimization,” says Sprague. “Nearly a third of our survey respondents cited cost reduction and operational efficiencies as key priorities in the next year.”

But confidence in doing deals is improving, with 28% of respondents expecting to pursue an acquisition in the next 12 months. That’s up from 18% in April.

Big miners keep on drilling as juniors freeze up – by Pav Jordan (Globe and Mail – November 28, 2012)

November 28, 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 — Big mining companies may be pulling back on major new spending plans, but they haven’t let up on exploration budgets, according to Major Drilling Group International Inc., which has a bird’s-eye view on the mining world as the second-largest resource driller.

Chief executive officer Francis McGuire says the same cannot be said for junior miners, which have been stripped of access to financing amid tumultuous global markets, forcing them to virtually freeze drilling activities.

“The junior market is very dead,” Mr. McGuire said in an interview on Tuesday, adding that most drilling proposals for the 2013 calendar year are coming from senior miners, intermediaries and some very well-funded juniors.

Drilling companies closely shadow price cycles for resource commodities, so it’s no surprise their fortunes have slipped in recent months amid a slowdown in demand for key industrial metals, such as copper and zinc, especially from China.

Moncton, N.B.-based Major Drilling said this week that profit fell 30 per cent in the fiscal second quarter, which ended Oct. 31, and pointed at falling demand from junior miners.