Republic of Mining

Crisis in Mining – by Richard (Rick) Mills (Ahead of the Herd.com – May 2012)

May 5, 2012

As a general rule, the most successful man in life is the man who has the best information

A combination of mass retirements and increasing natural resource demand from emerging economies has created a crisis in the resource extraction sector – one which is definitely not on investor’s radar screens.

Currently there is a “massive talent gap” that is going to get worse because the global mining industry is experiencing the biggest wave of workforce retirements in 70 years – the oldest baby boomers turned 65 years old in 2011.

The Mining Industry Human Resources Council (MIHRC) has recently said that about 40% of the resource extraction industry’s workforce is at least 50 years old and one third of them are expected to retire by 2022.

The organization also forecasts that the Canadian mining industry will face a shortage of 140,000 workers by 2021 – this number of workers being needed just to maintain current levels of production.

The Petroleum Human Resources Council of Canada warned a severe oil patch labor shortage is looming and that the “patch” will need to hire 24,000 new employees by 2014.

[Ring of Fire] Open Letter to Cliffs Natural Resouces CEO from Mayor of Greenstone – by Renald Beaulieu (May 4, 2012)

May 5, 2012

May 4, 2012

OPEN LETTER

Mr. Joseph Carrabba Chairman, President and CEO Cliffs Natural Resources

Dear Mr. Carrabba

I am writing to you today to ask some questions that are unresolved following your presentation to the Aboriginal Business Council’s luncheon event in Thunder Bay, Ontario earlier this week.

As the Mayor of Greenstone, I and several members of my Council attended the event with the expectation that we would earn something about the company’s approach to matters that remain unaddressed. We left disappointed by the sheer lack of information.

Accordingly, since the matters are of such great urgency I am writing today to request your answers to the following questions.

1. You mentioned that Cliffs doesn’t come in and roll over local interests. With that in mind, could you please tell me if you are aware that area First Nations have unanimously endorsed the principle that the ore body should be refined in the same territory from which it is extracted?

Is Canada taking China for granted when it comes to energy? – by Claudia Cattaneo (National Post – May 4, 2012)

May 5, 2012

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

In the debate about whether Canada should welcome China’s growing investment in our energy, a couple of crucial points have been getting little air time: Canada’s energy isn’t as indispensible to China as some assume, and China is at least as motivated by learning how to operate in a Western market economy as it is by securing energy to fuel its future.

Junsai Zhang, China’s ambassador to Canada, drove those points home Friday — a rare attempt by the country to add its voice and bring back to reality a Canadian discussion it feels has gotten way ahead of itself.

“We haven’t imported one drop of oil,” Mr. Zhang said in an interview in Calgary. “It’s too early to say China imports your oil and gas. We are in a very good collaboration with Australia, with other Western countries. No problems. If we don’t import from here, we import from other countries. It’s OK.”

It’s a sobering and unexpected message. For all the concern about China’s increasing presence in Canada, not having the option of selling to that market would be a major setback. It would also be a missed opportunity to show global leadership.

The economics of energy conservation [The Danish Paradox] – Jeff Rubin (Globe and Mail – May 5, 2012)

May 5, 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.

Three years ago, Jeff Rubin left Bay Street to publish a book that warned that the world was on the brink of a period of deglobalization because of the rising cost of energy. Now, as he argues in his forthcoming book, The End of Growth, sustained high oil prices mean that advanced economies are gearing down into a new era of slow – or no – economic growth.

While most economists believe that zero growth means big trouble, Mr. Rubin says it does not have to be a disaster – because consumers in the developed world can learn to live with less, even in energy-hungry Canada. The former CIBC World Markets chief economist cites research to show that some of the happiest people on Earth live in slow-growth economies. Lofty oil prices will do more than any regulations to curb greenhouse gas emissions and slow urban sprawl. The transition to slower growth spells tough, near-term changes in the economy – but in the long run, the environment and its citizens might be better for it.

Just what does this new world look like, and what will it take to adjust? Some surprising answers lie an ocean away, in Denmark.

The first thing I noticed on a flight into Copenhagen a few summers ago was a ring of wind turbines surrounding the city. Not far from the city’s harbor, the sweeping arc of offshore windmills is a hard sight to miss.

[Aroland First Nation] First Nation chief frustrated by Cliffs encounter – by Ian Ross (Northern Ontario Business – May 4, 2012)

May 5, 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.

A northwestern Ontario First Nation leader said his concerns about mining development in the Ring of Fire are falling on deaf ears with Cliffs Natural Resources.

Chief Sonny Gagnon of Aroland First Nation said his hour-long meeting this week with CEO Joseph Carrabba produced little in the way of results from the Ohio mining giant.

“He viewed what we gave him as threats and said he might not come back. Well, have a good life.” Gagnon met with Carrabba just prior to his May 1 speech in Thunder Bay at the Canadian Council for Aboriginal Business.

Carrabba told a lunchtime crowd that the company’s decision on the location of a much-coveted ferrochrome smelter was only days away.

The company’s technical work at its Black Thor chromite deposit in the James Bay lowlands is expected to advance into the feasibility evaluation stage in the next couple of months.

TSX Venture Exchange…Buy or Sell? – by Aaron Hoddinott (PinnacleDigest.com – April 29, 2012)

May 4, 2012

The TSX Venture has been the worst performing stock exchange in North America for over a year now.

For many companies on the TSX Venture, this is a time period filled with anxiety; much like it was in late 2008, the Venture has fallen to the hands of panic sellers. Investors are scared and have been thinking illogically for several months now. Companies that were being bought for $1.00 per share with heavy volume, just 12 months ago, are having a hard time finding bids in this market for $0.30. Volume and risk appetite have vanished. Again, this is similar to how it was in December of 2008 in that respect.

It’s funny how quickly the psyche of investors can change. And this latest correction in the TSX Venture (a 1 year collapse in value of roughly 45%), is a testament to how powerful emotions are when it comes to moving markets.

This latest correction is the second worst (from a percentage standpoint) in the TSX Venture’s history – yet commodity prices remain at historically high levels and the Dow continues to shake off all negative macro-economic data.

Venture investors are scratching their heads as to why this is happening. The truth is that the TSX Venture has always been a boom/bust exchange. It’s extremely volatile. The exchange has existed for 11 years and during that time, it has gone through 7 bear markets of its own (market downturns of 20% or more).

Safer Railways Act [Northern Ontario History] – Charlie Angus M.P. Ontario, Timmins—James Bay (Hansard -May 1, 2012)

May 4, 2012

Charlie Angus’ commentary was given inside Canada’s Parliament on Tuesday, May 1, 2012 at 1:05 pm.

Mr. Speaker, it is always a great honour to rise in this House and speak on behalf of the people of Timmins—James Bay, a region that exists because of the railway.

It is also important to talk about this bill on safer railways at a time when we have so many issues facing railways in Canada. It is clear that if we look at the simple test for whether government has vision, whether government understands the issue of infrastructure, whether government has a forward-looking vision, we look no further than rail. Rail has been the kicking dog of Liberal and Conservative governments looking to squeeze it, to undermine it, to so-called privatize it, and we have seen a continuing loss of service while the rest of the world moves forward with smart high-speed rail.

Just this past February, when the VIA Rail train derailed at Burlington, we had three people killed and 42 passengers injured. We see the $200 million in cuts that are coming to VIA Rail now under the Conservatives. We see the undermining of rail links in important jurisdictions across rural Canada like Churchill, Manitoba. We see the government’s complete lack of interest in the importance of a high-speed rail corridor that would connect Windsor to Quebec City through our densest populations and allow people who are pretty much trapped because of the density of traffic in the suburban regions of this country to be able to move at a reasonable rate.

NEWS RELEASE: New mining regulations require Anishinabek consultation: Chief Day

May 4, 2012

UOI Offices, Nipissing First Nation (May 2, 2012) – Changes to the Ontario Mining Act require direct consultation with the Anishinabek Nation, says Lake Huron Regional Grand Chief Isadore Day, Wiindawtegowinini.

The Ministry of Northern Development and Mines recently posted a number of regulatory proposals for the second phase of new regulations under the Mining Act on Ontario’s Regulatory and Environmental Registries. Ministry officials provided Anishinabek leadership with a written request to comment on the proposed regulations via the Environmental Registry by May 1, 2012.

The Anishinabek Nation asserts that First Nations have the right to be consulted and their interests accommodated on a direct, government-to-government basis on mining legislation that affects their treaty territories. Because of their unique historic and legal relationship with both levels of government in Canada, First Nations maintain that such public consultation processes as the submission of comments to the Environmental Registry do not meet the standards set by Supreme Court decisions on the duty to consult and accommodate.

“More than ever, the level of dialogue with First Nations is critical,” says Chief Day, who is Lands Portfolio holder for the Anishinabek Nation.

Halcyon days fading for Asia-Pacific mining companies-S&P – by Dorothy Kosich (Mineweb.com – May 04, 2012)

May 4, 2012

www.mineweb.com

S&P warns if China’s slowdown proves to be severe, it could take the wind out of commodities prices sails. Even with a soft landing, steel and aluminum producers will still weaken.

RENO (MINEWEB) – A key threat to the stable outlook of the mining sectors is a rise in inputs costs,” Standard & Poor’s credit analysts warned in a recent industry report card on Asia-Pacific metals and mining companies.

“A tighter labor supply and likely higher energy prices will pressure the profitability of many commodity producers. Metal producers will also be wrestling with more expensive raw materials,” the analysts advised.”

“For Asia-Pacific steel and aluminum companies, we forecast a negative outlook. Margins in this subsector will struggle with softening demand due to a global slowdown and abundant supply.”

NEWS RELEASE: Rainy River Resources Signs Participation Agreement with Rainy River Area First Nations

May 4, 2012

TORONTO, ONTARIO–(Marketwire – April 3, 2012) – Rainy River Resources Ltd. (“Rainy River” or the “Company”) (TSX:RR) and the Naicatchewenin First Nation, Rainy River First Nations, Mitaanjigamiing First Nation, Couchiching First Nation, Lac La Croix First Nation and Seine River First Nation (together, the “First Nations”) are pleased to announce the signing of a Participation Agreement (“PA” or “Impact and Benefits Agreement”) with respect to the development and operation of the Company’s Rainy River Gold Project, located in Northwestern Ontario. The PA is the culmination of negotiations initiated by the parties pursuant to a Memorandum of Understanding entered into in May of 2010.

The PA was developed together with the First Nations, each of which is a member of the Fort Frances Chiefs Secretariat, in order to define their participation in the development and operation of the Rainy River Gold Project. The agreement identifies key project milestones and ways to work together with the First Nations, as the Company initiates mine environmental assessment and permitting in 2012. The PA sets out a schedule of benefits that the First Nations communities will receive, including employment and business opportunities, funding to support skills development, occupational training and education, as well as equity participation. The PA reflects the Company’s continued commitment to environmental stewardship, respect for First Nations’ traditional culture and values and the need for economic sustainability.

Cliffs Natural Resources misleading investors, chief says – CBC News (May 3, 2012)

May 4, 2012

http://www.cbc.ca/thunderbay/

The Chief of Aroland First Nation says Cliffs Natural Resources is misleading its investors about the discussions surrounding its chromite property in the Ring of Fire, located in the James Bay lowlands.

Sonny Gagnon said Cliffs is telling people it is having good discussions with First Nations — and that the environmental assessment (EA) process is moving along.

“Very good discussions with the external stakeholders, and with the First Nations and with the governments and the environmental impact study is moving along,” Cliffs CEO Joseph Carrabba said on a first quarter earnings conference call, April 26. Gagnon says that’s inaccurate.

“I told [the CEO] ‘where did you get your information from? The EA process, we’re not happy with it’,” Gagnon said after he and other chiefs met with Carrabba earlier this week. “‘You’re not discussing nothing with the First Nations, so what are you talking about?’”

[Northern Ontario] Getting rail-roaded again – SOAPBOXING – by Dave Dale (North Bay Nugget – May 3, 2012)

May 4, 2012

http://www.nugget.ca/

Charlie Angus might be a natural front runner for the first premier of Northern Ontario — if the often knee-jerk fascination with separating the province materializes some day.

Comments by the NDP MP for Timmins-James Bay in the House of Commons Tuesday demonstrated an impressive grip on history, politics and the potential mishandling of a major economic opportunity.

Angus was speaking during a debate over federal rail safety legislation, which opened a window for him to touch on the ominous threat facing the Ontario Northland Railway.

Some people are already tired of the the topic. They don’t want to hear another word about the Ontario government’s intention of selling off Ontario Northland Transportation Commission assets. Protesting what they consider inevitable is a waste of their time.

Even those who make a living commenting publicly about news events have to fight off the urge to yawn when community leaders huddle over strategic communication campaigns.

Australia trolling for Canadian skills – by Jameson Berkow (National Post – May 4, 2012)

May 4, 2012

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

CALGARY — Control over scarce resources has spawned more than a few wars throughout history and the fight for skilled labour is simply the latest.

This weekend, dozens of Australian companies will be taking part in a Calgary jobs expo to woo Canadian-trained scientists and engineers to relocate Down Under. The expo, which will move on to Vancouver and Edmonton next week, comes as Canada’s resource sector is struggling to keep skilled workers.

“Right now there is a global war for talent in any resource or mining industry,” Rupert Merrick of Working In Ltd., the Australian company organizing the expo, said during a Thursday news conference. “The skills that they need are not present in sufficient numbers within their own country.”

Australia alone will need to recruit 100,000 skilled professionals to develop more than A$150-billion in mining and liquefied natural gas (LNG) projects set to roll out in the near future. With domestic labour extremely limited, local firms have turned to Canada for talent with great success.

Higher resource prices lead to more deals done – by Bryan Borzykowski (Globe and Mail – May 3, 2012)

May 3, 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.

This has been a busy year for Brian Pukier, a partner with law firm Stikeman Elliott LLP and head of its Toronto mergers and acquisitions group. After a slow summer last year, the M&A space is finally back to normal, he says. “We’d always like more deals, but our firm is keeping busy,” he says.

Mr. Pukier’s firm does a lot of work in the resource space; he’s seen a lot of deals done in mining, energy and oil and gas, in particular. He points to high commodity prices, demand from Asia and higher overall confidence in the economy as reasons for the increase.

M&As won’t return to 2006-2007 levels, when everyone was making deals, he says, but the rest of the year will only get better. “As long as banks are lending, which they are, then I think we’re going to stay at least consistent,” he says.

While this country’s M&A market is doing nicely, the same can’t be said for the rest of the world. Global M&A activity last quarter was down 23 per cent year-over-year, according to Dealogic, a London, U.K.-based company that helps banks analyze capital markets.

Quebec’s Front-Line Forests [Plan Nord] – New York Times Editorial (May 2, 2012)

May 3, 2012

http://www.nytimes.com/

In April, the government of Premier Jean Charest introduced a bill in the Quebec National Assembly that seeks to protect nearly 150 million acres — half of northern Quebec, an area the size of France — from industrial development, including logging, mining and petroleum exploration. The bill matters, not just to Canada but to the world: The boreal forests and tundra of northern Canada remain a relatively intact ecosystem, absorbing more carbon than the world’s tropical forests and providing a vital buffer against global warming. Industrial development would weaken that buffer, and, as things stand now, there is almost nothing to prevent it.

As envisioned by Mr. Charest, the bill would have made a firm commitment to prevent all industrial activity. As revised by government bureaucrats, the latest version promises only that, at some future point, steps will be taken to “protect the environment, maintain biodiversity, enhance the natural heritage and promote the sustainable use of resources.” Mr. Charest is the leader of a majority government, so the bill will almost certainly pass. Before it does, it needs to be strengthened to prohibit even piecemeal development in this sensitive region.