Republic of Mining

NEWS RELEASE: [Newfoundland and Labrador] Provincial Government Releases Phase Two Report from Voisey’s Bay Industrial Inquiry Commission

May 21, 2011

Human Resources, Labour and Employment

Report of the Industrial Inquiry Commission – Report No.2

Report of the Industrial Inquiry Commission – Report No.1

May 11, 2011

The Honourable Darin King, Minister of Human Resources, Labour and Employment and Minister Responsible for the Labour Relations Agency, released the second and final report of the Voisey’s Bay Industrial Inquiry Commission today.

“On behalf of the Provincial Government, I want to thank the commission members for their work during the course of this inquiry and for the advice they have provided,” said Minister King. “Over the coming weeks and months we will review the report and consult with stakeholders. Our government recognizes the seriousness of this matter and the impact this strike has had on Newfoundland and Labrador. The appointment of an industrial inquiry demonstrated not only our commitment to supporting a resolution to the Voisey’s Bay strike, but also our commitment to maintaining positive labour management relations in this province.”

The report addresses factors which led to the existing labour-management relations climate at Voisey’s Bay and options to improve them; local, provincial, national or international matters that may have contributed to the dispute; impacts of the dispute on other labour-management relationships; and the ramifications of this dispute.

What Newfoundland & Labrador can teach the rest of Canada about globalization [Vale strike] – by Armine Yalnizyan (The Progressive Economics Forum-May 20, 2011)

May 21, 2011May 21, 2011

Armine Yalnizyan is a senior economist with the Canadian Centre for Policy Alternatives. The Progressive Economics Forum aims to promote the development of a progressive economics community in Canada. The PEF brings together over 125 progressive economists, working in universities, the labour movement, and activist research organizations.

“Vale can’t escape scrutiny. Look at what they do in Thompson. This will be looked
at around the world. A Zambian mining president during the strike in Sudbury said if
this is the way they treat people in the first world we don’t want Vale in Zambia, in the
third world.” (Steve Ashton, MLA for Thompson, Manitoba)

Last fall Premier Danny Williams wondered what could drive anyone to let hundreds of millions of dollars slip through their fingers. Last week he got his answer.

The Roil report on the 18-month strike at Voisey’s Bay nickel mine in northern Labrador is an eye-opening case study in 21st century globalization, and has the potential to be a game-changer. It is the final output of an industrial inquiry commission appointed by now-ex-Premier Williams in October 2010.

At that time about 240 United Steelworkers had been on strike against global mining giant Vale since August 2009, labour relations had become toxic, and Innu and Inuit communities finally poised to make economic gains had become tragically split down the middle.

The commissioners reported that Vale ultimately lost an estimated $500 million to $1 billion in operating revenues; the workers lost over $9 million in wages over 2009 and 2010; the union spent about $4 million in legal fees, staff supports and strike pay; and Newfoundland and Labrador’s GDP took at 1.4% hit in 2009, 2.6% in 2010.

Barrick Gold: Controlling fallout from deadly clash [7 Tanzanian deaths]- Lisa Wright (Toronto Star – May 21, 2011)

May 21, 2011

Lisa Wright is a business reporter with the Toronto Star, which has the largest circulation in Canada. The paper has an enormous impact on Canada’s federal and provincial politics as well as shaping public opinion. This article was originally published May 21, 2011.

Stan Sudol, a communications consultant and mining industry blogger,
recommends that the Canadian government establish a fact-finding mission,
headed by a respected, retired, non-partisan individual, to go to Tanzania
“to shed light on this incident. It’s the only way to get credibility back to
the Canadian mining sector. No one is going to believe any report coming
from Barrick or the Tanzanian government,” he says. (Toronto Star, May 21, 2011)

Two words instantly come to mind in cynical business circles when a tragedy occurs under a big company’s watch: damage control. Barrick Gold Corp. landed in a firestorm of controversy last week when seven villagers were gunned down and a dozen more were injured in a brutal clash at its troubled North Mara mine in Tanzania, run by its African Barrick Gold division.

Though Barrick spun off its higher-cost African assets last year to the newly-created London-based firm, the Toronto bullion behemoth remains the majority owner.

And since Barrick’s name is literally on it, the Toronto headquarters is forced to wear — and ultimately repair — the hit to its global brand, and it won’t be easy, say industry watchers and public relations experts.

New Vale CEO [Murilo Ferreira] sees growth with better gov’t ties – Reuters/Mining Weekly.com (May 20, 2011)

May 21, 2011

Mining Weekly is South Africa’s premier source of weekly news on mining developments in Africa’s most important industry. Mining Weekly provides in-depth coverage of mining projects and the personalities reshaping the mining industry. In order to advance Mining Weekly’s objective of positioning itself as a leading global provider of mining news, a full-time correspondent is based in Toronto, Canada and another in Perth, Australia.

RIO DE JANEIRO – The incoming chief executive of Brazilian mining giant Vale vowed on Friday to maintain the company’s booming growth while improving the frayed ties with government leaders that forced the ouster of his predecessor.

Murilo Ferreira, 57, will have to mend fences with President Dilma Rousseff, who led a campaign to remove outgoing CEO Roger Agnelli following years of bitter accusations that Vale was not investing enough in the steel industry or doing enough to help Brazil’s economy.

“Our relationship with the government will be open, frank, and constructive,” Ferreira said during a news conference at Vale’s headquarters in downtown Rio de Janeiro. “The company will continue working under the same vision that brought it success in recent years.”

‘The Thompson Project’ of 1961: Heart of the city – (Thompson Citizen Editorial – April 20, 2011)

May 21, 2011

This article was originally published in the Thompson Citizen which was established in June 1960. The Citizen covers the City of Thompson and Nickel Belt Region of Northern Manitoba. The city has a population of about 13,500 residents while the regional population is more than 40,000. news@thompsoncitizen.net

“Vale may have bought Inco but the resource is ours. They have no right to treat our
community and our province this way. … Since the 1950s, we’ve had an integrated
operation. Read the 1956 agreement – it talks about setting up a mining, milling, smelting
and refining operation. This was part of the social contract that set up this community.”
(Thompson, Manitoba MLA Steve Ashton)

Two days after Vale announced last November they were closing their Thompson smelter and nickel refinery in 2015, wiping out 500 jobs and $65 million in payroll directly, Thompson NDP MLA and cabinet minister Steve Ashton’s regular “MLA Report” column appeared in the Nickel Belt News. Normally, Ashton’s column is week-after-week pretty tame fare and likely to offend – well, no one. This column was different.

Because of our deadlines, the column actually arrived two days before publication and just hours after Vale made the announcement in Toronto. We picked up a few paragraphs from it for a day one news story online, characterizing it as “blistering.”

“Vale’s announcement that they are eliminating the surface operation here in Thompson is unacceptable,” Ashton wrote. “Since the 1950’s Thompson has had a fully integrated mining operation. The development of the refinery and smelter were integral parts of the 1956 agreement that established Thompson.

[Thompson, Manitoba Steelworkers President] Nychyporuk says ‘no’: USW rejects vision – by Ryan Flanagan (Thompson Citizen – May 21, 2011)

May 21, 2011

“We believe our community will not recover from the loss of our jobs or
any other related employment. We also believe this decision will change
the landscape of our community forever.” (Thompson Steelworker President
Murray Nychyporuk – May 21, 2011)

Almost exactly six months after Vale’s announcement that they will close their Thompson smelter and refinery by the end of 2015, the company and other local stakeholders have begun to turn their attention to what they want the city to look like after that point.

In a joint May 18 news release from the City of Thompson and Vale, the two groups announced the formation of the Thompson Economic Diversification Working Group (TEDWG), which will be chaired by the city and will also include representation from local business and aboriginal communities. Vale is funding the group, which is expected to last an initial 12 months for identification and implementation of a strategy.

“What I want this working group to do is go out there and really drill down,” said Mayor Tim Johnston. “Go out there and get the details of some proposals – I want them to be really detailed, looking at what are real opportunities.”

[Thompson, Manitoba MLA] Steve Ashton threatens Vale with provincial mining legislation on smelter and refinery shutdown – by Ryan Flanagan (Thompson Citizen – May 20, 2011)

May 21, 2011

“The 1956 agreement isn’t just about municipal services, though we believe that has
to be addressed to protect Thompson’s interest. It’s also about the fact that under
that agreement, Inco as it then was has a preferred position in this province on a
whole series of things. Clearly, if they think they can take the value-added out and
not see any consequences, they’re wrong.”
(Thompson, Manitoba MLA Steve Ashton – May 20, 2011)

Minister says if 1956 agreement isn’t going to be relied on by company, then all bets are off

It’s been more than six months since Vale announced their plans to close their Thompson refinery and smelter by the end of 2015, and more than three months since a group of local stakeholders traveled to Toronto to present Vale senior management with their proposals to reverse that decision, or at least minimize its impact on Thompson.

What’s changed in that time? To hear Thompson MLA Steve Ashton tell it, nothing.

“We’re disappointed, provincially, and I’m certainly disappointed that Vale is still not addressing the direct issue,” said Ashton on May 20. “We continue to believe that the issue here is value-added jobs from the resource, and we certainly have not given up on the smelter and refinery.”

[Mining Sector] Labour-short Oz poaching Canucks – by Michael Madigan (Winnipeg Free Press – May 20, 2011)

May 20, 2011

Michael Madigan is the Winnipeg Free Press correspondent in Australia. He writes about politics for the Brisbane-based Courier Mail.

They’ve ravaged Calgary and pillaged Edmonton, and Canadians can be sure to see a whole lot more of them in the years ahead. Australian mining companies are turning corporate Vikings as they grow increasingly desperate for what has become a rare and precious resource — skilled labour.

That Canadian mining companies also resemble Norse seafarers in their own desperation to feed the insatiable appetite of Canada’s resource sector doesn’t faze the Australians.

The Australian organizer of a recent jobs fair in Canada, Rupert Merrick, says the globe’s booming energy sector is crying out for skilled workers, and all is fair in love and war.

A bridge between two worlds [Aboriginal Communities and Canada Mining Sector] – by Diane Jermyn (Globe and Mail – May 18, 2011)

May 19, 2011

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous impact and influence on Canada’s political and business elite as well as the rest of the country’s print, radio and television media.

Miners have started engaging the aboriginal communities on whose land they dig. But is it enough?

Leanne Bellegarde tries to connect communities. She’s a member of the Kawacatoose First Nation in Saskatchewan, a lawyer, and now, the director of aboriginal strategy for PotashCorp.

Native people are the youngest and fastest growing demographic in Saskatchewan. PotashCorp, a global potash producer in the province, projects it will need 800 new workers over the next two years, thanks to expansion and retirements.

But what should be an ideal match – people wanting jobs and a company needing workers – presents deep challenges. Many jobs at PotashCorp require Grade 12 or equivalency. Ms. Bellegarde says it’s difficult to find people who meet that bar in First Nations and Métis communities. And so the jobs often go to qualified outsiders, frustrating aboriginal people.

PotashCorp is one of many mining companies in Canada that realize engagement with native communities isn’t just a feel-good enterprise but an economic growth strategy. But while this engagement goes far deeper than in the past, some say it’s just the beginning of what’s truly needed.

A Golden Opportunity: How Tanzania is Failing to Benefit from Gold Mining – by Mark Curtis and Tundu Lissu (October 2008)

May 19, 2011

Published by the Christian Council of Tanzania (CCT), National Council of Muslims in Tanzania (BAKWATA), and Tanzania Espicopal Conference (TEC) – Financed by Norwegian Church Aid and Christian Aid

A Golden Opportunity: How Tanzania is Failing to Benefit from Gold Mining (October 2008)

Executive Summary

Gold mining is the fastest growing sector of Tanzania’s economy. Minerals now account for nearly half the country’s exports and Tanzania is Africa’s third largest gold producer. Yet ordinary Tanzanians are not benefiting from this boom both because the government has implemented tax laws that are overly favourable to multinational mining companies and because of the practices of these companies. Tanzania is being plundered of its natural resources and wealth.

Between 1997 and 2005, Tanzania exported gold worth more than US$2.54 billion (bn). The government has received around $28m a year in royalties and taxes on these exports, amounting to just 10 per cent over the nine year period. The 3 per cent royalty has brought the government only an average of US$17.4m a year in recent years. Raising the royalty rate to, say, 5 per cent would have increased government revenues by around US$58m over the past five years.

We calculate that Tanzania has lost at least $265.5m in recent years as a result of an excessively low royalty rate, government tax concessions that allow companies’ to avoid paying corporation tax and possibly even tax evasion by some companies if allegations are true. This is a very conservative estimate, in that it does not cover all the gold mining companies or all figures for recent years (which are not publicly available). Neither does it cover the financial costs of other tax incentives such as VAT exemption, which are extremely difficult to estimate.

Thanks, we’ll take that [Resource Nationalism] – by Brenda Bouw (Globe and Mail – May 18, 2011)

May 19, 2011

States looking to tax or even nationalize assets are threatening global mining interests

As Glencore International prepared its public listing, the world’s largest commodities trader warned the market that the Bolivian government was trying to wrestle more control of its mines.

The Bolivian government, under socialist President Evo Morales, is overturning mining and investment laws to increase state control over its economy. The government wants to renegotiate contracts with companies such as Switzerland-based Glencore and give state mining company Comibol a controlling role in joint ventures, forcing companies to return concessions, according to Bloomberg News.

Bolivia, which has also seized oil and gas assets since the current government took power in 2006, is just the latest in a growing list of nations revising laws to squeeze more profits from resource extraction within their borders during times of spiking commodities prices. Many are taking a larger grab through increased taxes and royalties.

Some are using more extreme measures, like nationalization or expropriation of assets.

Bad Neighbors: Canadian Mining Companies in Latin America – by Liisa L. North (Canadian Dimension – Jan/Feb 2011)

May 18, 2011

Canadian Dimension is a Canadian leftist magazine founded in 1963 by Cy Gonick and published out of Winnipeg, Manitoba six times a year.

Last Year Alone, at least five opponents of Canadian mining projects were assassinated in Latin America: three in El Salvador, one in Guatemala, and one in Mexico. Critics of mining operations there and elsewhere were wounded and maimed in attacks while many, along with their family members, were threatened. Canadian mining corporations were not necessarily directly responsible for the deaths and acts of intimidation and violence, but some of them were carried out by company security personnel and current or former employees.

So it may be the case that the implicated companies are not legally liable, but alongside the local elites and states that license and promote extractive activities, they at the least bear a moral responsibility for creating the situations of conflict in which assassinations and other acts of violence take place.

Most Canadians are not used to thinking of their investors as human rights violators or of Canada as a “bad neighbor.” Sadly, since the early 1990s and especially over the past decade, the activities of our miners are earning us that reputation. The corporations themselves, of course, argue that they are bringing much needed employment and even “sustainable development” to the poor regions where they operate. If they are doing this, it appears to be a form of development that many do not wish to see in their communities.

Canadian mining corporations abroad

A spectacular expansion of Canadian mining investment in Latin America has taken place over the last two decades, part of the general growth of our mining investment abroad. Today, almost 60 percent of all mining companies are listed on the Toronto Stock Exchange. Our miners are prominently visible all over the southern hemisphere, and their operations have provoked demonstrations in front of Canadian embassy buildings in various Latin American capitals.

Canada: A Global Mining Powerhouse – by Cy Gonick (Canadian Dimension – Jan/Feb 2011)

May 18, 2011

Canadian Dimension is a Canadian leftist magazine founded in 1963 by Cy Gonick and published out of Winnipeg, Manitoba six times a year.

Most Canadians are not aware of it but with the help of the Canadian state, corporate Canada is beginning to throw its weight around the Global South – specifically, in metal mining locations of South America, Mexico, Africa and Asia. This has been a mainly recent development, taking off in the 1990’s but really accelerating over the past decade. Today, Canada’s metal mining industry accounts for about 12 percent of all direct investment abroad, second only to financial services.

Why are Canadian mining companies shifting their investments to the Global South? The reason is twofold. First, in Canada the easy to find ore has already been found so that new properties being developed are low-grade, high cost marginal projects. Second, besides giving diplomatic support, Canadian governments have introduced tax measures and the Export Development Corporation provides easy credit that together greatly facilitates the global expansion of Canadian mining.

Toronto is the mining finance capital of the world, raising 30 to 40 per cent of the world’s mining equity most every year, and Canadian mining companies account for a world-leading 40 percent of global exploration expenditure. As of a few years ago, companies listed on Canadian stock exchanges held interests in over 3000 mineral properties in Canada, 1400 in Latin America, close to a thousand in Africa and about 500 in each of the USA and Asia, Europe and the former Soviet Union.