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The coming oil boom, and resulting environmental battle – by Chrystia Freeland (Globe and Mail – August 10, 2012)

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.

Forget America’s fiscal cliff, Europe’s currency troubles or the emerging-markets slowdown. The most important story in the global economy today may well be some good news that isn’t yet making as many headlines – the coming surge in oil production around the world.

Until very recently, our collective assumption was that oil was running out. That was partly a matter of what seemed like geological common sense. It took millions of years for the Earth to crush plankton into fossil fuels; it is logical to think that it would take millions of years to create more. The rise of the emerging markets, with their energy-hungry billions, was a further reason it seemed obvious that we would have less oil and gas in 2020 than we do today.

Obvious – but wrong. Thanks in part to technologies such as horizontal drilling and hydraulic fracking, we are entering a new age of abundant oil. As the energy expert Leonardo Maugeri contends in a recent report published by the Belfer Center at the John F. Kennedy School of Government at Harvard, “contrary to what most people believe, oil supply capacity is growing worldwide at such an unprecedented level that it might outpace consumption.”

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Tempering U.S. shale potential – by Yadullah Hussain (National Post – August 10, 2012)

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

It’s tough to get a word in edgewise as U.S. producers beat their chest over their shale oil and gas finds and impending energy independence, but one analyst has managed to deflate some of the hype. Bob Brackett, an analyst at New York-based Bernstein Research, says oil wells in Montana, part of the giant Bakken shale basin, are rapidly deteriorating.
 
“Something is rotten in the State of Montana and it smells like moldy shale,” Mr. Brackett wrote in a note to clients. “Montana production of oil is down 38% from its 2006 peak of more than 100,000 barrels per day.”
 
The state, which shares the Bakken with North Dakota and Saskatchewan, produces between 1% and 2% of U.S. output and is home to two of the largest oil fields in the country. More important, Montana is home to Elm Coulee field, the poster child of Bakken potential and was expected to recover more than 200 million barrels.
 
But Montana’s oil boom cycle appears to have flamed out pretty quickly. As a result, Montana’s economy, which outpaced the U.S. economy during the mid-2000s, is expected to post just 0.9% growth this year, according to JPMorgan Chase & Co. estimates.

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Mining gains strong voice on safety at new Prevention Council

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.

Roy Slack, President of Ontario Mining Association member Cementation Canada, has been appointed to Ontario’s newly formed incident Prevention Council.  This 11-member panel has been created to support Chief Prevention Officer George Gritziotis and advise the Minister of Labour Linda Jeffrey.
 
The Prevention Council is charged with the tasks of advising on the prevention of workplace injuries and illnesses, developing a provincial occupational health and safety strategy and proposing changes to funding and delivery of services to achieve accident prevention goals.  The Prevention Council includes four employer representatives, four labour representatives, one non-union labour representative, an occupational health and safety expert and a representative from the Workplace Safety and Insurance Board.   
 
“I think it is important that the North be represented and that mining has a seat at the table and I am pleased to be able to represent our industry,” said Mr. Slack.  “The mining industry in Ontario has a lot to offer with regard to safety but we are still on our journey to zero harm, so we also have work to do.”

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NEWS RELEASE: Ontario Supports Cutting-Edge Mining Research In Sudbury

(L to R) Kevin Manuel, Account Executive, 3M Canada Company; Nicholas Dickson, Team Leader, UVT Product Group, Mining Technologies International; Rick Bartolucci, Minister of Northern Development and Mines and Chair of the NOHFC; Oliver Koski, Business Development Manager, Mining Technologies International and Charles Graham, CAMIRO - Mining Division.

August 9, 2012 10:20 AM

McGuinty Government Strengthening Province’s Mining Sector

Today Rick Bartolucci, Minister of Northern Development and Mines and Chair of the Northern Ontario Heritage Fund Corporation (NOHFC) announced NOHFC funding of $300,000 for CAMIRO’s work to test a flexible thin spray-on lining that helps keep broken rock safely in place in deep underground mining. The new product could become an important tool in ensuring the health and safety of underground workers.

Ontario is investing in innovative new technology that will help strengthen Sudbury’s position as a world mining leader.

Through the Northern Ontario Heritage Fund Corporation (NOHFC), the Canadian Mining Industry Research Organization (CAMIRO) will test a thin spray-on lining that helps keep broken rock safely in place in deep underground mining. The new product could become an important tool in ensuring the health and safety of underground workers.

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Xstrata extends life of Kidd Mine – by Ron Grech (Timmins Daily Press – August 8, 2012)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Xstrata Copper has added another three more years of mine life to its Kidd Operation. The mine was targeted to close by 2017. However, Carole Belanger, communications and community relations co-ordinator for the Kidd Operations, said they are now looking at continuing until 2020.
 
The mine has been able to achieve this by making better use of the “sub-economic” mineralized rock, which it has a vast amount of.
 
Belanger said the good news was shared with staff very recently. In the meantime, there has been a hike in activity at the Xstrata metallurgical site despite the fact the smelter there has been shut down since May 2010. Belanger said the company has invested $40 million in a two-phase reclamation project, which is currently underway at the site.
 
The first phase, which began February 2011 and has since been completed, saw the demolition and removal of 36 buildings or structures that were connected with the smelter operation.

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Province looking for First Nation input on Ring of Fire infrastructure – by Shawn Bell (Wawatay News – August 9, 2012)

 Northern Ontario’s First Nations Voice: http://wawataynews.ca/

The coordinator of Ontario’s Ring of Fire Secretariat insists the province is committed to working with First Nations on establishing how the north will develop alongside the massive mining projects proposed for the Ring of Fire.
 
In an interview with Wawatay News, Christine Kaszycki emphasized that the provincial government is thinking of long-term infrastructure needs as it analyzes how best to develop the Ring of Fire. Kaszycki said discussions between the province and First Nations on regional infrastructure planning will begin sometime in the next few months.
 
“There are a number of initiatives Ontario has put on the table, including regional infrastructure planning and regional environmental monitoring, where the discussions need to include groups of communities,” Kaszycki said.
 
She said that in her view infrastructure needs includes roads as well as transmission lines to connect communities to southern electricity grids. Kasycki’s pledge to involve First Nations in determining infrastructure needs for the region comes as conflict over the process of developing the Ring of Fire continues to grow.

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From Resource Curse to Blessing – by Joseph E. Stiglitz (Project Syndicate Website – August 2012)

http://www.project-syndicate.org/

Joseph E. Stiglitz, a Nobel laureate in economics, has pioneered pathbreaking theories in the fields of economic information, taxation, development, trade, and technical change.

KAMPALA – New discoveries of natural resources in several African countries – including Ghana, Uganda, Tanzania, and Mozambique – raise an important question: Will these windfalls be a blessing that brings prosperity and hope, or a political and economic curse, as has been the case in so many countries?

On average, resource-rich countries have done even more poorly than countries without resources. They have grown more slowly, and with greater inequality – just the opposite of what one would expect. After all, taxing natural resources at high rates will not cause them to disappear, which means that countries whose major source of revenue is natural resources can use them to finance education, health care, development, and redistribution.

A large literature in economics and political science has developed to explain this “resource curse,”and civil-society groups (such as Revenue Watch and the Extractive Industries Transparency Initiative) have been established to try to counter it. Three of the curse’s economic ingredients are well known:

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Sobering 12 months for Top 10 global mining companies – by Lawrence Williams (Mineweb.com – August 8, 2012)

www.mineweb.com

While the stock prices of the world’s top mining co.s are well below their 52 week highs it does still leave them in a strong position with respect to M&A opportunities.

LONDON (Mineweb) –  While few mining company stocks have ever got back to their peaks prior to the mega-crash of Q3 2008, there had been a decent recovery, but as the global recession has bitten and commodity prices have, for the most part, been hit hard, the biggest global mining companies have seen their stock prices, and market capitalisations fall. 

While most are now off their recent low points, they have still suffered badly being on average around 30% below their 52 week highs.  Even so, the overall market situation, coupled with their strong balance sheets and cash generation abilities, does give them some great opportunities to build at the expense of those further down in the pecking order.
 
Compared with a year ago the order among the top companies has changed only a little – notably top potash miner PotashCorp moving above top gold miner, Barrick Gold, and copper and gold miner Freeport McMoRan when ranked by market capitalisation and a bit of a shakeout at the bottom.  However the differentials between some of the bigger ones have narrowed – in particular between Rio Tinto and Vale.  Rio got marked down heavily when it made its ill-timed (market wise) takeover of Alcan now nearly 5 years ago.  It has made a recovery from this  and could be poised to move back into the global No. 2 position in the years ahead.

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Kinross Gold hunts for ways to cut expenses – by Peter Koven (National Post – August 8, 2012)

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

TORONTO – Kinross Gold Corp. is looking at a plan to downsize initial production from its troubled Tasiast mine in Mauritania, as it tries to mitigate the impact of major cost pressures on the operation.
 
New chief executive Paul Rollinson also said the company is implementing a new company-wide cost-reduction initiative as its capital and operating costs continue to escalate. The announcements came in the company’s lower-than-expected second quarter earnings report, released Wednesday, a week after former chief executive Tye Burt was fired.
 
Toronto-based Kinross said it will study an option to build a mill at Tasiast that would process 30,000 tonnes of material, compared to a prior plan of 60,000. The result would be much lower gold production in the early years of mining (before the mill is expanded), but it could also mean lower costs.

The case for a smaller mill “is based on the impact of industry-wide pressures on capital costs, and a better understanding of the Tasiast orebody and associated mine plan,” Kinross said in a statement.

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Mining Companies Feel Heat in the Ring of Fire – by by Tim Groves (The Dominion – August 8, 2012)

http://www.dominionpaper.ca/

Assembly of First Nations backs evictions from northern Ontario

TORONTO—In late July, hundreds of First Nations chiefs from across the country backed a moratorium on mining and development in an area of Northern Ontario known as the “Ring of Fire.” They also called for the eviction of companies operating in the mineral rich area, which has been described as “Ontario’s oil sands”.

The province has called the Ring of Fire “one of the most promising mineral development opportunities in Ontario in almost a century.” The area contains the largest chromite deposits in North America, as well as gold, nickel, copper, platinum and palladium. Opening the area to development has become a major focus for the Dalton McGuinty government.
 
The moratorium demand and eviction notices were voted on by the hundreds of First Nations chiefs gathered in Toronto for the Assembly of First Nations’ (AFN) Annual General Assembly. The AFN is the largest First Nations advocacy organization in the Canada.

“It is solidarity,” said Sonny Gagnon the Chief of Aroland First Nation, whose community would be impacted by the development. “We need the support. If and when we need to go on the land to enforce the evictions notice…we will have 633 First Nations that will be behind us.”

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Why not extend aboriginal rights to aboriginal peoples? – by Cecil Chabot (Toronto Star – August 9, 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.

Cecil Chabot is a PhD candidate at the University of Ottawa and a member of the International Centre for Northern Governance and Development at the University of Saskatchewan.

Northern Ontario First Nations are preparing 30-day eviction notices for mining companies operating in a mineral-rich zone known the Ring of Fire. Will their action win support among the 64 per cent of Canadians who think “aboriginal peoples receive too much support from Canadian taxpayers”?

According to Ipsos Reid president Darrell Bricker, that negative sentiment is a sign of Canadians’ frustration with the “ongoing inability to get started in modern society that exists within the aboriginal communities.”

When Kashechewan and Attawapiskat make the news, other Canadians get a glimpse of the young and expanding aboriginal populations who live on the front line of that frustration. But few of us have sustained contact with these communities. As a result, “Canadians seem as oblivious to the plight of aboriginal people as they are to their own vulnerability should aboriginal anger boil over into insurrection,” says defence expert Douglas Bland. His 2010 novel Uprising is about just such an insurrection.

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First Nation demands to be consulted on chromite project – by Ian Ross (Northern Ontario Business – August 2012)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. Ian Ross is the editor of Northern Ontario Business ianross@nob.on.ca.

The road to the Ring of Fire has hit an enormous speed bump. What looked on paper to be a straight-forward road easement application by Cliffs Natural Resources to an Ontario mining tribunal to cross the claims of KWG Resources, has hit a snag that could slow development in the James Bay region.
 
Neskantaga First Nation, a remote community southwest of the Ring of Fire chromite camp, has given the Ontario Lands and Mining Commissioner something to think about in applying for legal standing at a July 5 hearing.
 
The First Nation wants to be a participant to challenge the Cliffs road application and make the larger case that they have treaty and Constitutional rights to be consulted and included in resource development.   The commission adjourned after two days to consider whether Neskantaga has status to be a participant in the proceedings.
 
“You can’t continue until it’s decided who has status at the hearing,” said KWG vice-president Bruce Hodgman. He doesn’t expect a fast resolution anytime soon and expects this preliminary issue could go on for “months” before the commission even starts the formal hearing.

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Cash-rich mining companies prefer buying to building as metal prices decline – by Gordon Hamilton (Vancouver Sun – August 7, 2012)

The Vancouver Sun, a broadsheet daily paper first published in 1912, has the largest circulation in the province of British Columbia.

Rising development costs and softening metal prices are changing the way mining companies view mergers and acquisitions, according to a report released Tuesday by consultants Ernst & Young.
 
Look for less building and more buying, said Richard Crosson, partner in Ernst & Young’s Transaction Advisory Services practice.
Traditional sources of capital such as equity markets are drying up, Crosson said in an interview, leading to less exploration and more mining mega-mergers.
 
Further, resource nationalism is on the rise, with governments seeking a greater share of the mineral wealth, Crosson said. As a result, companies that have grown wealthy during the strong commodities cycle, are being more selective about where they invest. Mergers and acquisitions are more desirable than new developments, he said.
 
“Predicting markets in the uncertain environment we are in right now is difficult, but we see that the conditions exist for a more robust merger and acquisition environment,” Crosson said.

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Race for B.C.’s natural gas assets heats up – by Claudia Cattaneo (National Post – August 7, 2012)

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

While politicians argue over the risks and benefits of proposed oil sands pipelines crossing British Columbia, the market has tuned into a different fight. It’s about control of the province’s natural gas assets and could involve two oil heavy weights — Exxon Mobil Corp. and Royal Dutch Shell PLC.
 
Analysts say there are telltale signs the race to capture B.C.’s natural gas resources and to own liquefied natural gas (LNG) terminals on the northern coast is heating up.
 
The battle for intermediate gas producer Progress Energy Resources Corp. has left an unsuccessful suitor rumoured to be Exxon, a regulatory filing by Shell for the LNG Canada terminal that suggests it will need more resource to keep full, and the Kitimat LNG plant struggling to find long-term Asian buyers.
 
“I think that there are going to be big deals done in northeast British Columbia,” said Chris Theal, president and CEO of Kootenay Capital Management Corp., an energy hedge fund based in Calgary. Producers from Encana Corp. to Talisman Energy Inc., or their B.C. assets, could be in play, as well as the proposed Kitimat LNG plant owned by Apache Corp., Encana and EOG Resources Inc., he said.

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NEWS RELEASE: PR Associates President recognized for leadership in fostering Aboriginal business

July 26, 2012, Vancouver, BC – Robert Simpson, president of PR Associates, a national public relations firm, has been selected by the Industry Council for Aboriginal Business (ICAB) as a recipient of the Champion for Aboriginal Business award. Robert is being recognized for his work and mentorship with the Tahltan Nation, including development of the Tahltan National PR Communications (TNPRC) joint venture established with the Tahltan Nation Development Corporation (TNDC).
 
The ICAB Recognition Awards honour individuals and corporations that demonstrate leadership in developing Aboriginal/non-Aboriginal business relationships, and driving lasting, positive change. The Champion for Aboriginal Business award recognizes a non-Aboriginal individual who has demonstrated and established standards of practice that have resulted in the development of an Aboriginal/non-Aboriginal business relationship.
 
“Robert has a genuine desire to develop business relationships that benefit Aboriginal communities and to build capacity through mentorship, education and training. The Tahltan National PR Communications partnership is an example of this commitment, which enhances the public relations and communication capabilities of the TNDC in the interests of the Tahltan people,” said Bill Adsit, president and chief executive officer of the TNDC, the economic arm of the Tahltan Nation.

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