Republic of Mining

Mining Marshall Plan for Northern Ontario – Stan Sudol

July 12, 2011June 8, 2011

Stan Sudol is a Toronto-based communications consultant and strategist who writes extensively on the mining sector. stan.sudol@republicofmining.com

What a difference a decade makes! Ten years ago, according to many in the Toronto-media, mining was a sunset industry and any modern industrial country/province should not be in such a supposedly “low tech” sector. Some even thought we should let the industry die and allow lesser developed and some politically unstable countries be the primary suppliers of mineral commodities.

At that time, Ontario budgets were only a billion or two in the red, and its manufacturing sector was the cornerstone of a strong economy. Today, emerging markets like China, India are competing with the U.S., Japan, South Korea and other developed nations for access to mineral resources around the world, the basic building blocks of any modern industrialized society. The mining sector has become one of the most strategic sectors of the global economy. And Ontario is a “have-not” province.

Currently, Ontario faces a number of key economic problems including an aging workforce, crumbling infrastructure and provincial budget deficits that will not be able to sustain existing social programs. In addition, the south’s manufacturing might, which supported Ontario’s high standard of living since the 1950s, is under extreme stress due to globalization, a weak U.S. market – the destination of almost 90% of our manufactured goods – and high electricity costs.

PwC Annual Review of Global Trends in Mining Sector – Mine 2011: The game has changed

June 7, 2011

07 Jun 2011

PwC firms provide industry-focused assurance, tax and advisory services to enhance value for their clients. More than 161,000 people in 154 countries in firms across the PwC network share their thinking, experience and solutions to develop fresh perspectives and practical advice. See www.pwc.com for more information.

For a copy of the report click here: Mine 2011: The game has changed

Excutive Summary

Welcome to PwC’s eighth annual review of global trends in the mining industry—Mine. These reviews provide a comprehensive analysis of the financial performance and position of the global mining industry as represented by the Top 40 mining companies by market capitalisation.

Last year we highlighted the growing optimism in the mining industry and demand fundamentals that were driving the industry back to boom times. The 2010 results have delivered on this expectation, but it is clear that the game has changed.

The mining industry has entered a new era. Demand continues to be stoked by strong growth in emerging markets. Supply is increasingly constrained, as development projects become more complex and are typically in more remote, unfamiliar territory. The cost base of the industry has permanently changed as lower grades and shortages of labour take effect.

To keep up with demand, the Top 40 have announced more than $300 billion of capital programs with over $120 billion planned for 2011, more than double the total 2010 spend.

PwC NEWS RELEASE: Top 40 global mining companies’ total assets could exceed $1 trillion in 2011

June 7, 2011

For a copy of the report click here: Mine 2011: The game has changed

Largest Canadian-based miners increased revenues by 38% in 2010: PwC report

TORONTO, June 7, 2011—The top 40 global mining companies—including nine headquartered in Canada—increased their total assets to US$943 billion in 2010 and are poised to break through the US$1 trillion mark in 2011 driven by record levels of cash, and property and equipment on company balance sheets, according a new PwC report released today.

The financial results of the Top 40 in 2010 are spectacular. Total revenues increased 32% to US$435 billion, breaking the US$400 billion mark for the first time. Net profit rose 156% to US$110 billion and operating cash flows grew by 59%, leaving more than US$100 billion cash-on-hand at year end.

The report also found the Top 40’s total year-end market capitalization increased 26%, driving up the market capitalization of the smallest company on the list to US$11 billion in 2010 from US$6.5 billion in 2009.

The top Canadian-based mining firms significantly contributed to the overall Top 40 financial totals. Together, the nine Canadian companies increased revenues by 38%. Net profit increased a staggering 1,536% to US$8.9 billion and operating cash flows grew 224%. However, the 2009 base for comparison is low as a result of Barrick Gold settling its gold sales contracts that year.

Canada mines discontent among the poor of Africa – Linda McQuaig (Toronto Star – June 7, 2011)

June 9, 2011June 7, 2011

The Toronto Star, which has the largest circulation in Canada, has an enormous impact on Canada’s federal and provincial politics as well as shaping public opinion. lmcquaig@sympatico.ca

While Canadians may think of ourselves as best known for owning the Olympic podium, among Africans we may actually be better known — and not particularly liked — for owning their natural resources.

Once beloved on the continent, Canada is no longer so fondly regarded in Africa.

The new, less enthusiastic view of Canada was vividly illustrated last month when more than 1,500 desperately poor Tanzanian villagers picked up machetes, rocks and hammers and stormed the mining compound of Canadian-owned African Barrick Gold.

The uprising — leading to the shooting deaths of seven of the villagers by police and security forces at the mine — is a startling reminder that theories widely held in the West about the benefits of foreign investment for the developing world are not always shared by people on the receiving end.

Mining activity near Sudbury, Ontario keeps construction firms busy – by Saul Chernos

September 13, 2018June 6, 2011

Daily Commercial News and Construction Record

Talk about construction and many people automatically think downtown and high-rise. But in fact it’s the polar opposite hundreds of kilometres north of Ontario’s industrial heartland, where some of the biggest projects go in the opposite direction, plunging close to three kilometres towards the Earth’s inner core.

It’s this environment that’s home to northern Ontario’s red-hot multi-billion-dollar mining and mining-construction sectors.

While revenues in Ontario from mining operations were pegged at roughly $10 billion last year, sales of related supplies and services rang in at $5.3 billion and could reach $6 billion this year, says Dick DeStefano, executive director of the Sudbury Area Mining Supply and Service Association (SAMSSA).

“The mining supply and service industry is being pushed fairly dramatically by a number of new explorations and expansions in northern Ontario,” DeStefano says.

Sales figures include actual supplies and services that don’t fit neatly into a construction umbrella, but the rise in activity is keeping construction-related firms busy building everything from roads and housing, to headframes and tunnels.

The Mining Association of Canada: Seize the opportunity to do more [for Canada Mining]

June 6, 2011

The Mining Association of Canada (MAC)’s mission is to promote, through the collective action of members, the growth and development of Canada’s mining and mineral-processing industry, for the benefit of all Canadians.

Dear Prime Minister Harper:

On behalf of the Mining Association of Canada, please accept our congratulations on the result of the May 2 federal election and your re-election with a majority mandate. This mandate provides you with a great opportunity to continue addressing the economic and social challenges that face our nation. We would like to use this opportunity to offer views from Canada’s mining industry with respect to some of the priority issues we believe should be addressed during your mandate.

The Canadian mining industry is a key contributor to Canada’s economic strength and is currently experiencing a marked resurgence driven by strong commodity prices, stimulating new investment, rising exploration, and growing exports. The industry accounts for some 19 per cent of Canadian exports, contributes over $10 billion in annual payments to governments, and provides business for 3,200 supplier companies, including around half of the freight revenue of Canada’s railroads.

While important in remote communities, the industry also generates prosperity in our major cities — Toronto, Vancouver, Montreal, Edmonton, Calgary, and Saskatoon — all feature areas of global mining leadership. The Canadian industry is viewed internationally as a leader in the corporate social responsibility field, making large investments in education and health-care facilities, nutrition programs, and community facilities in developing countries. The industry also reports progress each year against the mandatory social and environmental requirements of MAC’s respected Towards Sustainable Mining initiative.

Town hires ex-minister to lure [Ring of Fire] smelter northwest – by Mike Whitehouse (Sudbury Star – June 4, 2011)

June 4, 2011

The Sudbury Star, the City of Greater Sudbury’s daily newspaper. This article was published on June 4, 2011. mwhitehouse@thesudburystar.com

Mining analyst Stan Sudol argues government should pick up the estimated $2-billion
cost of building a rail line to move ore from the yet-to-be-developed Ring of Fire deposits
to potential processing sites. … That investment, he said, would be easily made back
through the resulting economic development and taxes created by the Ring of Fire
deposits, which include nickel, copper, zinc, palladium, platinum and chromite …

A provincial and federal commitment to build a 350- kilometre railway could be key to keeping ore from the largest mining find in a generation in Northern Ontario, an analyst says.

But what community that railway leads to is one of the most hotly contested questions in the north this summer. The prize — a billion-dollar ferrochrome smelter and hundreds of high-paying jobs — has communities across the north queuing to position themselves on the other end of the proposed railway.

Cleveland-based Cliffs Natural Resources will announce a site as early as September. Cliffs estimates 500 people will work on the smelter during construction and up to 500 when it’s operating.

Cliffs’ preferred location is a site just north of Capreol. But the company also said it would consider other locations in the north, including Timmins, Thunder Bay and Greenstone, the community closest to the mine site in the James Bay lowlands.

The world will hear more in the future from these OMA video competition winners

June 3, 2011

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 awards ceremony on June 1 for the Ontario Mining Association’s high school video competition So You Think You Know Mining highlighted the creativity and talent of a multitude of students from different parts of the province. Their productions gave the audience at the Royal Ontario Museum for the ceremony a glimpse of the potential for the future success of these young film makers.

So what does an operetta about mining, a mock press conference, a rap song, a demonstration on the uses of rare earth elements, a local mining deal carried out in Bengali, a parody of the Terry Tate linebacker skits, an animation where MiningMan saves the world, a guided tour of Timmins, a philosophical discussion on the complexity of the world and an exploration of mineral industry careers have in common?

The producers of those videos all walked off the stage with SYTYKM statues and cheques in recognition of their hard work and videographic talents. Topping the list as the Best Overall winner was Amanda Ceniti from Georgetown District High School for “Mining: A Musical.”

KWG Resources proposes going off the grid in Ring of Fire – by Ian Ross (Northern Ontario Business – June, 2011)

June 2, 2011

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 and this article is from the June, 2011 issue.

Junior miner proposes a separate James Bay lowlands power grid

If the Ontario government can’t supply competitively-priced industrial power, one Ring of Fire mining executive proposes going off the grid.

Moe Lavigne, vice-president of exploration and development for KWG Resources, said the price of public power is the determining factor on where the ferrochrome mineral processing will be located.

“We’re not a big player,” said Lavigne, “but we’re the only player in the Ring of Fire that understands the chromite industry, and we’re going to present our view of how we think it would be done in a perfect world.”

KWG Resources has a 28 per cent stake in the high grade Big Daddy chromite deposit in the James Bay lowlands. In April, the company released a preliminary economic assessment (PEA) that recommends moving its remote deposit closer down the path toward production and into the feasibility study phase.

Innovation in hard rock mining alive and well in Northern Ontario – Dick DeStefano (May 2011 – Sudbury Mining Solutions Journal)

September 13, 2018June 1, 2011

Dick DeStefano is the Executive Director of Sudbury Area Mining Supply and Service Association (SAMSSA). destefan@isys.ca This column was originally published in the June, 2011 issue of Sudbury Mining Solutions Journal.

In the past weeks and months, it has become evident that the mining sector is on a continuous upswing. There is a general consensus that we are only at the midpoint of a super cycle in commodities and much needed mining products and services.

I was impressed during the recent Canadian federal election campaign to read and hear a much-awaited acknowledgement about the importance of Northern Ontario’s mining cluster from Michael Ignatieff, the leader of the Liberal Party of Canada. Ignatieff said “One of the great things about Northern Ontario — you see it everywhere – is that this is a part of the world that has absolutely world-class expertise in mining technology, mining research and mining science. And we mustn’t lose that.”

It has been a bit of a struggle over the past few years to inform and motivate government agencies and others that there is a major cluster of innovative mining supply and service companies situated in Northern Ontario. This cluster consists of world leaders in producing goods and services that are innovative and adaptable to the increased demands for efficiencies required by mines to reduce costs and operating expenses.

Statement from Barrick Gold Corporation concerning the North Mara Mine, Tanzania (May 30, 2011)

June 1, 2011

Introduction

Barrick Gold Corporation, and its affiliates and subsidiaries, operate in some of the most challenging environments in the world. Among Barrick’s operations and affiliates, the Mara region of Tanzania, in which African Barrick Gold (ABG) owns and operates the North Mara mine, is especially challenging. The North Mara mine is located in a very remote, underdeveloped part of the country in close proximity to the Kenyan border. In-migration from other areas and countries is rampant and law enforcement capacity is limited, making the area a magnet for transients, criminals and organized crime. Civil unrest due to poverty is a particular problem in the area, a fact widely recognized by Tanzanian authorities.

The vast majority of people living near North Mara share the same desire for security and safety as ABG and its employees. To that end, ABG is working with Tanzanian authorities to address a variety of issues that impact the community, particularly related to law and order. The end goal is to make this area safer for residents of the community and for the men and women who work at the mine.

The Investigation

It is against this background that ABG recently notified Barrick that it had received highly disturbing allegations of sexual assaults by the police and ABG security against local women. Following recent events at the Porgera Joint Venture in Papua New Guinea, employees have a heightened sensitivity to these issues. ABG has also been pursuing enhancements to its human rights program generally, in parallel to Barrick commencing its new human rights compliance program. Employees raised these allegations to external investigators retained by ABG to inquire into an unrelated matter.

Birth of a gold major [Osisko Mining] – Peter Koven (National Post – May 30, 2011)

June 1, 2011

The National Post is Canada’s second largest national paper. Peter Koven is the Post’s mining reporter. This article was originally published in the Financial Post on May 30, 2011. pkoven@nationalpost.com

By 2006, Osisko Mining Corp. knew it had a major gold discovery near the town of Malartic in northwest Quebec. But it also had a serious problem.

“Everything was fine and dandy with the drilling, except that when you were standing by the drill, you could throw a rock at the closest house,” chief executive Sean Roosen recalls.

Five years later, Osisko is hosting an opening ceremony for the Canadian Malartic gold mine on Monday. It will be the biggest gold mine in Canada once it reaches full production, with an estimated 625,000 ounces of gold output a year for the first five years. And as the project starts generating major cash flow, Osisko will enter the big leagues of Canada’s mining sector.

But getting here hasn’t been easy. Mr. Roosen remembers almost losing the company following the financial crisis in 2008. And there was that little matter of the town being in the way of the mine.

Rails to the Ring of Fire – Stan Sudol (Toronto Star – May 30, 2011)

May 31, 2011

The Toronto Star, which has the largest circulation in Canada, has an enormous impact on Canada’s federal and provincial politics as well as shaping public opinion.

Stan Sudol is a Toronto-based communications consultant, mining columnist and blogger: stan.sudol@republicofmining.com

Notwithstanding the recent correction in commodity prices, near-record highs for gold, silver and a host of base metals essential for industry confirm that the commodity “supercycle” is back and with a vengeance.

China, India, Brazil and many other developing economies are continuing their rapid pace of growth. In 2010, China overtook Japan to become the world’s second largest economy and surpassed the United States to become the biggest producer of cars.

In March, Bank of Canada governor Mark Carney remarked: “Commodity markets are in the midst of a supercycle. . . . Rapid urbanization underpins this growth. . . . Even though history teaches that all booms are finite, this one could go on for some time.”

Quebec’s visionary 25-year “Plan Nord” will see billions invested in northern resource development and infrastructure to take advantage of the tsunami in global metal demand and generate much needed revenue for government programs.