Republic of Mining

PwC Report: Minerals and metals scarcity in manufacturing: the ticking timebomb – by Malcolm Preston and Joseph Herron

December 8, 2011

This is the foreward to PwC’s recent report on resource scarsity: Minerals and metals scarcity in manufacturing: The ticking time bomb

Malcolm Preston is PwC’s Global Sustainability Leader and Joseph Herron is PwC’s Global Industrial Products Leader

The world’s growing population, an increase in GDP levels and changing lifestyles are causing consumption levels to rise globally – creating a higher and higher demand for resources. Governments and companies are
becoming increasingly cognisant of the scope, importance and urgency of the scarcity of both renewable and nonrenewable natural recources including energy, water, land and minerals.

The interrelationships between these resources are strong, which means that both the causes of scarcity and the solutions to it are complex. There can be a fine line between ‘just in time’ and ‘just not there’.

Policymakers are starting to take action on the issue of resource supply. The European Union is pursuing a number of initiatives to mitigate the risks of minerals and metals scarcity by using scarce minerals and metals more efficiently in applications, by recycling, and by developing substitutes. It is also pushing for trade policies that favour international open markets for scarce minerals and metals.

RepublicOfMining’s Stan Sudol interviewed about Far North Act on The Gary Doyle News Radio Show

December 8, 2011

570 News listeners have come to know the “Gary Doyle Show” as a voice for better living in the community. Each day from Noon to 3:00pm, Gary brings a non-controversial and non-confrontational approach to topics of lifestyle, money, health, finances and more. With the big news stories of the day in mind, Gary will also …

Eyes turn to Vale, Steel hearing – by Carol Muggigan (Sudbury Star – December 8, 2011)

December 8, 2011

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

Ontario labour leaders will be watching Sudbury today when lawyers for Vale Ltd. and United Steelworkers present final arguments in a drawn-out complaint by the union to the Ontario Labour Relations Board.

Depending on the outcome, the result could “put a real chill on the collective bargaining process,” said McMaster University professor Wayne Lewchuk. USW complained to the board about the firing of nine members during the union’s bitter year-long strike against Vale from July 2009 to July 2010.

Vale dismissed the workers, one of whom retired after the strike, because of alleged misconduct on picket lines and in the community.

The union wants the labour board to order Vale to have the dismissals dealt with by a provincial arbitrator, said USW Local 6500 president Rick Bertrand.

Quadra Takeover Up for Grabs With Escalating Price Driving Deal – by Tara Lachapelle and Liezel Hill – (Bloomberg.com – December 8, 2011)

December 8, 2011

http://www.bloomberg.com/

Quadra FNX Mining Ltd. is poised to secure the largest takeover price increase in North America as the cheapest copper bid on record leaves room for Vale SA (VALE3) or Antofagasta (ANTO) Plc to make a competing offer.

Poland’s KGHM Polska Miedz SA agreed this week to buy Quadra for C$2.28 billion ($2.26 billion) including net cash, valuing the Canadian miner at 5.2 times net income, the lowest for a copper takeover of similar size, according to data compiled by Bloomberg. The price is also a 36 percent discount to net asset value, based on analysts’ estimates compiled by Bloomberg. After closing 5.4 percent above the bid yesterday, Quadra is more likely to draw a higher offer than any other deal greater than $500 million in North America, the data show.

While the Vancouver-based company agreed not to solicit rival proposals to KGHM’s C$15 a share in cash, Quadra may still lure offers from Vale (VALE5) or Antofagasta with its copper deposit in Chile and mines in the U.S. and Canada, according to Stifel Nicolaus & Co. With analysts expecting Quadra to reach C$18.28 in the next 12 months as an independent company, a bidding war may push the price tag to as much as C$28.25, 88 percent higher than the current agreement, said Salman Partners Inc.

Not all native stories centre on a ‘crisis’- Thunder Bay Chronicle-Journal Editorial (December 6, 2011)

December 8, 2011

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

The housing crisis at the James Bay-area First Nation of Attawapiskat is troubling and needs to be fixed, but the attention being paid to it on a national scale shouldn’t overshadow the many Aboriginal successes.
A panel of Toronto journalists who convened on CBC Radio last week commented that if the media wanted to, it could report on a First Nation “crisis” every day.

Unfortunately, this is so because there is no shortage of Aboriginal communities across Canada that, like Attawapiskat, continue to struggle intensely with dilapidated homes, broken-down drinking water systems and the ravages of drug addiction.

Every so often, just like what’s happening now, the national media will zoom in on one community in particular, reinforcing in the minds of urban dwellers (and possibly urban-based journalists) an extremely lopsided and distorted picture of Aboriginal people in general.

NEWS RELEASE: Rare earth metals scarcity: A ‘ticking timebomb’ for the world, asks PwC?

December 8, 2011

Click Here For: Minerals and metals scarcity in manufacturing: The ticking time bomb

Chemical, energy and auto industry in ‘red alert’ over disruption of supply
Manufacturers will struggle to keep up with demand
14 raw materials named as ‘critical’

London, 7 December 2011 — Seven core manufacturing industries could be seriously affected by a shortage of minerals and metals, which could disrupt entire supply chains and economies, according to new PwC research.

PwC surveyed some of the largest manufacturing businesses across manufacturing, chemicals, automotive, energy/renewable energy, aviation, metals, infrastructure and high-tech hardware to see what impact such a scarcity would have, and where, over the next five years.

Of these, business leaders in automotive, chemicals, and energy sectors fear they will be hit hardest according to PwC’s Minerals and metals scarcity in manufacturing: A ‘ticking timebomb’, report.

PwC Website: Minerals and metals scarcity in manufacturing: The ticking time bomb

December 9, 2011December 8, 2011

Click Here For: Minerals and metals scarcity in manufacturing: The ticking time bomb

The fine line between ‘just in time’ and ‘just not there’

With a growing population, increasing GDP levels and improving lifestyles, we’re consuming more and more. Renewable and non-renewable resources—energy, water, land, minerals—are in ever-higher demand. And since the relationships between these resources are strong, both the causes of, and the solutions to scarcity are complex. Which, for a manufacturing organisation with a global supply chain, can spell trouble.

Minerals and metals scarcity—explosive prices, delivery delays

In Minerals and metals scarcity in manufacturing: The ticking time bomb, we explore the impact that minerals and metals scarcity is likely to have on seven manufacturing industries. We interviewed senior executives in many of the leading organisations that are central to the future growth of these industries to gauge the relevance and effects of this scarcity.

We found that the supply of many minerals and metals is struggling to keep up with rapid increases in consumption, resulting in price hikes and delivery delays. For example, dysprosium, an essential component of super magnets, and tantalum, an important component in aircraft and medical equipment, automotive electronics, mobile phones and LCD screens, have both experienced explosive price increases in recent years.

NEWS RELEASE: First Nations to Develop New Power Line to Replace Diesels

December 7, 2011

This general sustainability video from Goldcorp includes the company’s Aboriginal engagement activities at the Musselwhite Mine in Northwestern Ontario.

SIOUX LOOKOUT, ON, Dec. 6, 2011 /CNW/ – Numerous First Nation Communities are working to bring transmission line connectivity and green energy development to remote First Nation communities currently operating on expensive diesel generators in Northwestern Ontario.

Wataynikaneyap Power is being formed as a First Nation led company to design, permit, construct, own and operate a 230 kV transmission line to bring additional grid connection to Pickle Lake. The Company is proposing a two-phase planning and permitting process to bring connectivity to the remote First Nations.

The first phase would reinforce the grid at Pickle Lake and the second phase would extend the grid north of Pickle Lake to service the remote communities. Significant pre-development work has been completed, including a routing study for the new line to Pickle Lake (Phase 1).

Canada’s great native uprising – by Barbara Kay (National Post – December 7, 2011)

December 7, 2011

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

One of my most enduring political memories occurred during the 1995 referendum campaign. The 16,000 Cree Indians in and around James Bay illuminated their resistance to Quebec’s separation from Canada with a reminder that the fate of Quebec’s remote, undefended (and indefensible) hydro-electric facilities was theirs to command. Their not-so-veiled threat awoke me to the obvious fact that Canada’s great territorial mass, a bulwark against external menace, also makes it vulnerable to domestic insurgents.

Most of Canada’s energy and transportation hubs run through native lands. Revanchist natives sometimes taunt Canadians with merely inconvenient road and rail blockades; yet these also semaphore the real economic disaster they could inflict on us if they chose to wage an actual sustained campaign of violence and disruption. Covert, sometimes overt, intimations of an approaching crisis speckle the discourse. Recently, for example, Justice Murray Sinclair, chair of the Truth and Reconciliation Commission, said, “Canadian society must heal the damage caused by the Indian residential school system or deal with the violence that will be undoubtedly unleashed against it.”

It seems the more money that is thrown at native problems, the more resentment over past injustices grows, which in turn leads to contests over ungoverned spaces.

Quebec Bill 14 a blow to mineral industry – by Marilyn Scales (Canadian Mining Journal – December 6, 2011)

December 7, 2011

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

The Quebec government has introduced Bill 14 that will give local communities rather than the province the right to control where and when mineral exploration and development takes place. It has the Quebec Mineral Exploration Association (AEMQ) up in arms, and with good cause.

In the words of the AEMQ, the bill is appalling and the government is abandoning its fiduciary responsibility to manage mineral resources. Bill 14 gives that responsibility individually to 1,200 local entities, making the administration of Quebec mineral resources “messy” and “incoherent”.

“By giving municipalities the option to reject exploration activities, the government of Quebec is setting up an environment of unprecedented instability within Quebec’s mineral business sector. In spite of a favourable global environment and high metal prices, once adopted, Bill 14 will instil doubt on the stability and predictability of our mining system”, said AEMQ president Jean-Marc Lulin.

Investors question ‘cheap’ takeover offer for Quadra FNX – by Brenda Bouw (Globe and Mail – December 7, 2011)

December 7, 2011December 7, 2011

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.

Quadra FNX Mining Ltd. has agreed to a $3-billion takeover by Polish copper producer KGHM Polska Miedz SA, triggering criticism the company is accepting a low-ball offer due to an overly cautious view of the metal’s prospects.

The $15-a-share, all-cash bid offers a 40-per-cent premium to Quadra’s recent stock price. But some investors believe it’s a stingy offer that undervalues the company’s assets, which include the promising Sierra Gorda copper project in Chile and operations in Sudbury, Ont.

“Unless the operations are running much weaker than expected, we do not see why one of the most bullish copper companies is selling out so cheap,” said Cormark Securities analyst Cliff Hale-Sanders. .”

Toronto-based hedge fund West Face Capital Inc., which said Tuesday that it owns a 6-per-cent stake in Quadra, called the bid opportunistic. “Given the fact that the shares were trading at $16 a few months ago, it is puzzling that the board did not attempt to contact any other purchasers or run a process,” said chief executive officer Greg Boland.

Far North mischief – by Stan Sudol (National Post – December 7, 2011)

November 5, 2015December 7, 2011

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

Is Ontario’s Far North Act anti-aboriginal?

De Beers Canada and its Victor diamond mine is currently in the media spotlight regarding the poverty in the nearby First Nations community of Attawapiskat. Many are questioning why the community is not significantly benefiting from this diamond mine, located on its traditional territory. The Victor deposit — which is the smallest of Canada’s four diamond mines — just started production in July 2008 and has an expected life of 11 years. The mine employs about 500 people, half of whom are of First Nations background and 100 come from Attawapiskat.

This controversy highlights the widespread problem of aboriginal poverty, much of which lies at the feet of Premier Dalton McGuinty, environmentalism and the product of this marriage — the much-detested Far North Act. Praised by the south’s many well-funded and powerful environmental movements, this legislation cuts off half of the Far North to resource development — 225,000 square kilometres or roughly 21% of the province’s land mass — and turns it into parks.

The horrific downside to this green ideology is that mineral exploration and potential mines — the only form of economic development that could reduce the impoverished, Third World living conditions in First Nations communities — is being reduced or stopped in the affected territory.

With millions pouring into Attawapiskat, colonial blame only goes so far – by John Ivison (National Post – December 7, 2011)

November 5, 2015December 7, 2011

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

Failed colonial policies are the biggest obstacles to First Nation progress, Shawn Atleo told a gathering of native chiefs in Ottawa Tuesday. The Assembly of First Nations chief was referring to moves such as Ottawa’s decision to put the troubled Attawapiskat reserve in northern Ontario under third party management. “We simply can’t lurch from crisis to crisis and we can’t accept externally imposed solutions,” he said, before lauding the chief of Attawapiskat for demonstrating transparency and accountability.

Yet the decision to intervene was simply the government exercising its fiduciary duty. The apparent mismanagement of this band by its chief, council and the co-manager, who is meant to be advising the chief but turns out to be her “life partner,” made the worst of an already bad situation. Chief Theresa Spence spoke to the chiefs in Ottawa Tuesday and urged them to take an aggressive stand with the government. “We’re not going to take it anymore,” she said.

The simple fact is, she has been stripped of authority because money has been pouring into the reserve and yet conditions have deteriorated beyond any acceptable level.

Quadra FNX agrees to $3.5-billion takeover [by Polish miner KGHM Polska] – by Peter Koven (National Post – December 6, 2011)

December 7, 2011December 6, 2011

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

Canadian copper miner Quadra FNX Mining Ltd. has agreed to be acquired by Polish mining giant KGHM Polska Miedz S.A. in a $3.5-billion all-cash deal. The offer is worth $15.00 a share and is a 32% premium over Quadra’s closing price on Monday. However, Quadra shares traded at higher levels early this year.

The stock jumped 36% to $15.40 in early trading in Toronto, just slightly above the KGHM offer, as investors speculated on the possibility of a higher bid.

Paul Blythe, Quadra FNX’s chief executive, said in a statement that the two companies held talks earlier this year about a joint venture to develop Quadra’s giant Sierra Gorda project in Chile. Then in recent weeks, KGHM made a proposal for the whole company.

“The proposal represents a significant premium to the current share price and we are recommending that our security holders vote in favour of the transaction,” he said.