Republic of Mining

Goldcorp chair Ian Telfer’s name in an OSC insider trading probe is a high-profile symbol – by David Olive (Toronto Star – February 9, 2012)

February 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.

Chances are you have not heard of Eda Marie Agueci. Until she was suspended by her employer a few days ago, Agueci was a drone in a second-tier Toronto investment firm. She is alleged by the Ontario Securities Commission with being at or near the centre of a ring of friends and relatives engaged in improper insider trading practices at least from 2007.

By contrast, you might well know of Ian W. Telfer, 65, chairman of Vancouver-based Goldcorp Inc., one of the world’s largest gold-mining enterprises.

Telfer is a highly regarded figure, and rightly so. He built Goldcorp into an enterprise with $3.8 billion in 2010 and profits of $1.6 billion, with resource-development projects on four continents. Goldcorp has created a multitude of jobs worldwide, and kept Vancouver on the map as a centre of mining expertise when much of that activity has migrated to Calgary and Toronto.

Along with his 40 or so years of mining expertise, Telfer is a philanthropist whose largesse includes the Telfer School of Management at his alma mater back East, the University of Ottawa.

Historic Canada-China trade agreements benefit both mining sectors – by Dorothy Kosich (Mineweb.com – February 9, 2012)

February 9, 2012February 9, 2012

www.mineweb.com

After 20 years of negotiations, Canada and China are closer to ratification of a Foreign Investment Promotion and Protection Agreement that may benefit mining and mining services in both nations.

RENO – The Canada Mining Innovation Council applauded Wednesday’s announcement by Prime Minister Stephen Harper that Canada and China completed negotiations on a historic Foreign Investment Promotion and Protection Agreement (FIPA).

Negotiations for this agreement took 18 years and major players in mining, manufacturing, and the financial sectors were consulted to get to this stage. Harper and Chinese Premier Wen Jaibao Wednesday signed a declaration of intent which must be legally reviewed and ratified by both governments.

If ratified, Canadian mining companies would enjoy more protection and promotion of their Chinese investments through legally-binding rights and obligation. Wen also called for studies into the feasibility of a free-trade agreement between China and Canada.

Jiang Shan, minister counselor from China’s Ministry of Commerce, told China Daily, “Chinese enterprises could make forays into or add investment in the categories of coal, iron ore and potash manure.”

Gold miners need gold above $1,650 to keep nose above water – by Geoff Candy (Mineweb.com – February 8, 2012)

February 9, 2012

www.mineweb.com

According to a number of gold company CEO’s it costs about $1,200 to pull an ounce of gold out of the ground.

CAPE TOWN – For the gold industry to keep its nose above water and maintain the current production base, gold prices need to stay above $1,650 an ounce.

Speaking to Mineweb from the sidelines of the 2012 African Mining Indaba conference, AngloGold Ashanti CEO, Mark Cutifani, said, at a price of $1,650 per ounce, gold miners are “only just returning the weighted average cost of capital for the industry”.

This is the number that gold miners need to work from on a real basis he says, but added, “The average cost to produce an ounce of gold, all up, everything loaded in, is about $1,200 to $1,250.

Harmony Gold CEO, Graham Briggs, agrees with Cutifani saying, from Harmony’s perspective, the all-in cost to pull an ounce of gold out of the ground is around $1,250. This figure includes everything from the cost of the Harmony head office to maintenance and its exploration programme which is why it is higher than the $958/oz cash operating cost figure reported by the miner at its half year results on Monday.

Sudbury slowly growing – by Mike Whitehouse (Sudbury Star – February 9, 2012)

February 9, 2012

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

Greater Sudbury’s population has increased over the past five years by about the paid attendance of the average Sudbury Wolves home game, figures show.

Population changes in communities across Canada from 2006 to 2011 were disclosed Wednesday by Statistics Canada, the first of a series of reports in coming months based on results of last year’s country-wide census.

It’s the third census in a row Greater Sudbury’s population has increased — a success for a community that has endured serious population declines in the recent past, a city official says.

Figures pegged Sudbury’s census metropolitan area population at 160,770 in 2011. That’s up from 158,258 recorded during the 2006 census, which was up from 155,225 in 2001.

[Sudbury Vale workers] Back to work – by Carol Mulligan (Sudbury Star – Febraury 9, 2012)

February 9, 2012

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

Vale’s five Sudbury mines should be back in production by the end of next week, says a company spokeswoman.

Production at the mines was halted Jan. 30 after an experienced development miner, Stephen Perry, was killed on the job at Coleman Mine on Jan. 29.

Since then, Vale has been working with employees to ensure all five mines in Sudbury — Coleman, Creighton, Stobie, Garson and Copper Cliff — are safe places for production and maintenance employees to return to work.

“Production will start resuming at our mines as safety issues are addressed and completed,” Vale’s Angie Robson said Wednesday. “We expect that by the end of next week, most of our mines will be back into production.”

Go west, young Canadians – by Margaret Wente (Globe and Mail – February 9, 2012)

February 9, 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.

“Like it or not, Canada’s stupendous natural resources are
our future. They are the envy of the world, and will ensure
our prosperity for many years to come….The question is not
whether we should develop these resources, but how wisely and
how well.” (Margaret Wente – Globe and Mail)

When Caterpillar closed a plant in Southern Ontario last week and threw 450 people out of work, some commentators treated it like a national catastrophe. Caterpillar, which is notorious for its hardball labour tactics, plans to relocate the jobs in Indiana, where people are willing to work for half of what the unionized workers in Ontario got.

I felt awful for the workers. Who wouldn’t? But Ontario has to compete with the entire world. And even if those jobs don’t move away, many are being swept away by new technology. The mighty engine of Confederation has turned into its rust belt. But nobody in the rest of Canada is feeling particularly sorry for us. We squandered the fat years on a vast expansion of our government and threw away our money on foolish green energy schemes. Now we face a gloomy decade of tax increases, deteriorating health care and deep cuts to everything. Did I mention that the average detached house in Toronto costs $606,000?

NEWS RELEASE: Canada world’s top exploration country for ten years

February 9, 2012

Metals Economic Group’s 22nd Corporate Exploration Strategies Study

U.S. dollar currency is used throughout this press release.

Vancouver, British Columbia, January 24, 2012 – According to Metals Economics Group’s (MEG) Corporate Exploration Strategies (CES), Canada has been the world’s top country for exploration for the last ten years, since overtaking Australia in 2002. Canada’s allocation for 2011 represents 18% of worldwide spending. (Metals Economics Group’s study covers expenditures for precious and base metals, diamonds, uranium, and some industrial minerals.)

“Three provinces—Ontario, Quebec, and British Columbia accounted for more than 60% of the $3.1 billion in planned Canadian nonferrous exploration spending in 2011”, states Jason Goulden, MEG’s Vice President, Research. “Of the 781 companies that planned to explore in Canada in 2011, almost 91% were based in Canada, together contributing about 82% of the planned Canadian nonferrous exploration total.”

Goulden adds, “Worldwide, Canadian-based companies accounted for more than half of the 2,400+ active explorers—each with a budget of at least $100,000—covered by the 2011 edition of CES, and together accounted for 40% of the $17.25 billion budgeted by all companies for nonferrous exploration in 2011.”

[Xstrata and Glencore] Last of the big mining deals – by Peter Koven (National Post – February 8, 2012)

February 8, 2012

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

Mick Davis began his discussion of the biggest mining deal in history in an unusual way: by ripping his advisors.

“An advisor is somebody who gives you advice on what you would like to do, and simultaneously advises the market on what you may do through the press,” the blunt chief executive of Xstrata PLC said on a conference call Tuesday.

His feelings are understandable. Thanks to a constant flow of leaks in the European press, the friendly takeover of Xstrata by Glencore International PLC, its key shareholder and the world’s biggest commodity trader, was considered a fait accompli long before it became official this week.

The US$41-billion all-stock deal, announced Tuesday, creates a new dominant player in the mining industry. It will have a market value of about US$90-billion (the fourth biggest overall), and combining Xstrata’s mining operations with Glencore’s extensive knowledge of commodity logistics and trading creates a company with unique expertise across the whole commodity value chain.

Ian Telfer helped ‘facilitate’ secret trades in insider tipping and trading scheme, OSC alleges – by Drew Hasselback (National Post – February 8, 2012)

February 8, 2012

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

Ian Telfer — one of Canada’s most prominent mining executives and chairman of Goldcorp Inc. — helped an old friend, the executive assistant of GMP Securities LP’s chairman, disguise an illegal insider tipping and trading scheme, the Ontario Securities Commission claims in a statement of allegations released Tuesday.

The OSC alleges that in at least two cases Mr. Telfer advised Eda Marie Agueci to communicate using her BlackBerry’s PIN-based messaging service to keep her activities secret from GMP. The securities regulator also alleges Mr. Telfer helped Ms. Agueci facilitate a secret trade in a company that eventually became Gold Wheaton Inc.

“His conduct was contrary to the public interest,” the OSC alleges.

The allegations against Mr. Telfer are part of a larger OSC case that names Ms. Agueci, who worked at GMP Securities for about 20 years, as the “central figure” in a scheme in which she is alleged to have used her position to access non-public information on pending deals, then pass this information to eight other individuals.

LNG hubs to make strange bedfellows – by Claudia Cattaneo (February 8, 2012)

February 8, 2012

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

As plans to build a natural gas liquefaction (LNG) hub on the British Columbia coast move closer to reality this year, the market is buzzing with talk of new partnerships and takeovers involving Western Canadian gas producers, potentially sweeping up big names like Encana Corp.

The trend has the makings of the next big thing and could shake up the natural gas sector in Western Canada, where prices are languishing at disastrous levels and cash-strapped producers are motivated to make deals.

Oil majors like Royal Dutch Shell Group PLC and national oil companies like Malaysia’s Petronas are evaluating as many as five plans to build terminals in the Kitimat area to export LNG to Asian markets and will need to secure supplies to keep them full.

So far, they have secured about 17.8 trillion cubic feet (tcf) of resources in Western Canada, but will need 39 tcf to meet current plans, CIBC World Markets estimates in a recent report.

Mixed messages – by Peter Foster (National Post – February 8, 2012)

February 8, 2012

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

The Keystone killers are waiting to ambush the Northern Gateway

This week, Prime Minister Stephen Harper went to Beijing to deliver a message to the U.S. , while Alberta Energy Minister Ted Morton came to Toronto to speak to B.C. Mr. Morton faced the tougher sell, which he attempted to soften, but further confused, by throwing “national energy strategy” into the pot.

The Chinese are gung-ho for Canadian oil, as are most Americans. However, Ontario’s Premier Dalton McGuinty has installed an expensive policy based on weaning the province off “dirty” oil to save the planet. As for B.C., it is at least as green but more crucial to the market diversification plans of Edmonton and Ottawa because no Alberta oil can reach China — or any non-U.S. market — that doesn’t pass through the province.

Opposition to a new trans-B.C. pipeline, Northern Gateway, is significantly related to the success of environmental NGOs in mounting a global campaign of demonization and disinformation against the oil sands. That campaign forced President Obama to kill/delay the $7-billion Keystone XL line, sponsored by TransCanada Corp., to ship up to 830,000 barrels of oil — mostly from the oil sands — to the Gulf Coast.

Official Welcoming Address to the Mining Indaba Conference 2012 – by Susan Shabangu: Minister of Mineral Resources for the Republic of South Africa (February 7, 2012)

February 7, 2012

This speech is from the Resourceinvestor.com website: www.resourceinvestor.com

CAPE TOWN, South Africa –

Programme Director: Mr Jonathan Moore; Organisers of the Mining Indaba; Honourable Ministers of Mineral Resources from other African countries; Members of the Diplomatic Corps; The investment community; Senior government officials; Delegates; Distinguished Guests; Ladies and gentlemen

Introduction

On behalf of the democratic Government of South Africa, I bid you the warmest of welcomes to our country, and to this region of the Western Cape, in whose capital city we meet today amidst its splendour and beauty.

Even if mining has always been somewhat elusive in this region, may you have a chance to make interesting side trips, for instance, viewing where oceans converge, where wine farms abound, or where a world famous mountain with a flat top towers over a beautiful city.

Investing in African Mining Indaba 2012

It was Mark Twain, travelling the world more than a century ago, who called Table Mountain “a majestic pile” (Following the Equator, Dover Publications, USA, 1989, page 710). He described visiting the old Cape Parliament, “where they quarrelled in two languages and agreed in none.”

Cliffs Becomes Easy Target With Cheapest Mining Value in America: Real M&A – by Charles Mead (Bloomberg.com – February 7, 2012)

February 7, 2012

www.bloomberg.com

For all the acquisitions being struck in the mining industry, no company in North America is a cheaper takeover candidate than Cliffs Natural Resources Inc.

The biggest North American iron-ore producer yesterday sold for 6.4 times its cash from operations, after deducting capital expenses, according to data compiled by Bloomberg. That was less than every other metals or mining company in the U.S. or Canada exceeding $5 billion in market value, and a 70 percent discount to the median. Cleveland-based Cliffs, which analysts say will generate record sales in 2012, was also the least expensive relative to its estimated net income this year and next.

Mining takeovers accelerated to a four-year high in 2011 as companies sought to replace deposits and industrial growth in China and the developing world fueled demand for raw materials. With Glencore International Plc and Xstrata Plc (XTA) agreeing to merge to create a $90 billion global mining company, Cliffs may attract interest from BHP Billiton Ltd. (BHP) or Rio Tinto Group, Lutetia Capital said. An acquirer could pay a 30 percent premium and still get Cliffs for less than any comparable publicly traded mining company versus its free cash flow, the data show.

Xstrata-Glencore deal a possible game changer – by David Ebner (Globe and Mail – February 7, 2012)

February 7, 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.

VANCOUVER— The merger of Glencore International PLC and Xstrata PLC has the potential to spark a new wave of deals in the mining industry, particularly among copper producers, some analysts say.

The two companies are expected to announce an $88-billion (U.S.) deal Tuesday that will unite one of the world’s biggest traders of commodities with one of the largest miners of base metals. The new company will be a massive player in resources such as zinc, thermal coal, nickel and copper.

And even though their union has been anticipated for months, even years, the reality of a merged Xstrata-Glencore might be enough to jar others to action.

“There’s a big difference between almost pregnant and pregnant,” said Michael Locker of consulting firm Locker Associates in New York.

The natural resources deficit: the implications for German politics – by Anna Kwiatkowska-Drożdż (Centre for Eastern Studies – February 8, 2011)

February 7, 2012

http://www.osw.waw.pl/en

The Centre for Eastern Studies (OSW) is a Polish think tank dealing with analyses of the political, economic and social situation in the neighbour countries, Central and Eastern Europe, the Balkans, Southern Caucasus, Central Asia and Germany. (Warsaw, Poland)

Falling amounts of natural resources and the ‘peak oil’ question, i.e. the point in time when the maximum rate of extraction of easily-accessible oil reserves is reached, have been among the key issues in public debate in Germany on all levels: expert, business and – most crucially – the government level. The alarming assessments of German analysts anticipate a rapid shrinkage of oil reserves and a sharp rise in oil prices, which in the longer term will affect the economic and political systems of importer countries.

Concerns about the consequences of the projected resource deficit, especially among representatives of German industry, are also fuelled by the stance of those countries which export raw materials. China, which meets 97% of global demand for minerals crucial for the production of new technologies, cut its exports by 40% in summer 2010 (compared to 2009), arguing that it had to protect its reserves from overexploitation.