Republic of Mining

Canadian resource companies looking like winners – by Peter Koven (National Post – August 9, 2011)

August 9, 2011

The National Post is Canada’s second largest national paper. Peter Koven is their mining reporter.

During the last recession, Canadian resource companies got a painful reminder of the need to maintain healthy balance sheets. And their current prudence means their shares are unlikely to collapse to the extent they did in 2008 and 2009 if a new recession takes hold, experts say.

Canada’s mining and oil and gas firms have been virtual models of fiscal responsibility over the last two years. Despite an environment of sky-high commodity prices, they have mostly been content to accumulate cash and avoid the high-risk acquisitions that would put their balance sheets at risk.

“I can’t think of any established producer that’s cash-hungry right now in our space,” said David Garofalo, chief executive of HudBay Minerals Inc.

That risk-averse approach was far less common in the months and years leading up to the 2008 meltdown, when multi-billion dollar, all-cash deals were the norm in the resource sector.

HudBay sells Guatemala mine to stick to mining techniques it knows well – by Mary Gazze (The Canadian Press – August 8, 2011)

August 9, 2011

http://www.canadianbusiness.com/

TORONTO – HudBay Minerals Inc. (TSX:HBM) sold a promising nickel mine in Guatemala to focus on Canadian and Peruvian projects the company can develop using mining techniques it has been using for more than eight decades.

Analysts said Monday the sale was a long time coming because the Guatemala project had a different geology than HudBay’s other mines and prospects.’ “We have been expecting a sale of the project for some time – admittedly,” said TD Newcrest analyst Greg Barnes .

“We are somewhat pleasantly surprised that management was able to secure a price for the project that is very close to the value for the asset.” Late Friday, Toronto-based HudBay announced the sale of its 98 per cent stake in the Fenix project to global miner Solway Group for US$170 million.

Plan calls for Northern resources to stay here – by Ron Grech (The Timmins Daily Press – August 9, 2011)

August 9, 2011

The Daily Press, the city of Timmins newspaper. Contact the writer at news@thedailypress.ca.

NDP Leader Andrea Horwath unveils Northern Ontario platform

Standing in front of the idled Xstrata Copper smelter in Hoyle, Ontario New Democrat Leader Andrea Horwath unveiled planks in her party’s Northern platform, which she claims would have prevented the mining facility from closing.

Flanked by NDP candidates from four Northeastern Ontario ridings, including MPP Gilles Bisson (NDP — Timmins-James Bay), Horwath said if elected, her government would ensure forestry and mining resources are processed where they came from.

The NDP say they would amend the Mining Act so that resources mined in Ontario must be processed in Ontario. “It makes no sense to pull raw resources from the earth and process them somewhere else,” Horwath said.

Currently Section 91 of the Mining Act requires mining companies extracting ore in Ontario to get permission from the government before being allowed to ship the ore outside of Canada for processing.

If it is mined in Ontario, process it here, Horwath says – by Tanya Talaga (Toronto Star – August 9, 2011)

August 9, 2011

Tanya Talaga is a Queen’s Park 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.

In a campaign swing through northern Ontario, NDP Leader Andrea Horwath vowed to stop resources mined in the province from being exported if they can be processed here. “Companies are pulling them out of the ground and shipping them elsewhere for processing and it doesn’t have to be that way,” Horwath said Monday from Dubreuilville, Ont.

“We need to be conscious about what is happening with our natural resources. It helps us put some control over how much of our resources get processed and it creates good jobs for Ontario families.”

Horwath said the time to secure mining and resource jobs is now as Ontario begins to develop the Ring of Fire, a $30 billion chromite deposit nearly 500 kilometres northeast of Thunder Bay. In December 2010, Swiss mining giant Xstrata announced it was shutting down its Timmins Kidd Met Site smelter and transferring the operation to Quebec. The move eliminated 700 jobs, she added.

Commodities expected to play catch-up – by Brenda Bouw (Globe and Mail – August 8, 2011)

August 8, 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. Brenda Bouw is the Globe’s mining reporter.

Commodity stocks have been hit harder than the price of the products themselves during the recent rout on global markets, a sign that commodities have further to fall as fears of another recession intensify.

Investors need only refer back to the last global recession to see how the sharp drop in mining, agriculture and energy stocks eventually led to a slump in prices for commodities such as copper, potash and oil.

While commodities have held up relatively well in recent days, in comparison with their related stocks, analysts say that could change if the market freefall continues.

“It is not unusual for falls (or rises) in the prices of commodity-related equities to be of a different magnitude to falls (or rises) in the prices of the commodities themselves. But over time, relative price fluctuations have tended to come out in the wash,” John Higgins, senior markets economist at Capital Economics, said in a recent report.

Gold Mania in the Yukon – by Gary Wolf (New York Times Magazine – May 11, 2011)

August 7, 2011

http://www.nytimes.com/

When I first met Shawn Ryan and Cathy Wood, in 2005, they were living with their two young children in a small cabin outside Dawson City, at the northernmost end of the paved road system in Canada’s Yukon Territory. It was a beautiful site in the summertime, with clear water lapping the banks of the Klondike River and the sky still bright at midnight. But the sun hit their roof for the last time each year in early December and didn’t show up again for six weeks. Temperatures in the dead of winter could reach 50 below zero. Wood sometimes feared that their children would freeze. Back then Ryan and Wood already knew they had found gold, but they didn’t have proof.

Recently, I went to see them again in their new home in Whitehorse, the territorial capital, and I sat with Ryan one night as he talked business over the phone. His right arm was stretched around the back of his head, holding his BlackBerry to his left ear. “Those guys were at 6 cents a share last year, now they are over a buck, and they got nothing,” he said. “When you look at it, it’s like a hundred claims.” The shares Ryan was talking about belonged to a mineral-exploration company, one of his many competitors. The claims are mining claims, a government license to extract minerals from a 50-acre patch of wilderness. To Ryan, a hundred claims is pathetic. He and Wood own more than 35,000 claims. “We just passed Luxembourg, and over the summer we’ll be the size of Samoa,” he continued, describing just one of his projects. Credible estimates of the amount of gold still buried in his properties run to the billions of dollars.

Ryan is the king of a new Yukon gold rush, the biggest since the legendary Klondike stampede a century ago. Behind this stampede is the rising price of gold, and behind this price is fear. As the Federal Reserve keeps interest rates very low to stimulate the economy, gold bugs make nightmarish predictions that loose money and a huge federal deficit will crush the value of the dollar and bring ruinous inflation.

CIA eyed Canadian economy, mining during Cold War – (CTV Edmonton – The Canadian Press – August 7, 2011)

August 7, 2011

http://edmonton.ctv.ca/

OTTAWA — The CIA secretly painted Pierre Trudeau as a politician torn between being a leader of the Third World and a genuine player with global industrialized nations, declassified records show.

The January 1982 assessment of the Liberal prime minister’s ambitions is among several detailed — and until now virtually unknown — analyses of the Canadian economy by the U.S. Central Intelligence Agency.

Through the U.S. Freedom of Information Act, The Canadian Press obtained more than a dozen CIA reports that explore various aspects of Canadian commerce, industry and technology during the Cold War era.

The assessments reveal a keen interest in Canadian affairs on the part of an agency better known for waging a covert war against East Bloc spies in the decades leading up to the 1989 fall of the Berlin Wall.

CIA analysts pored over almost every available map of Canada, scrutinized Canadian mineral production, pondered Japanese interest in Alberta’s tar sands, catalogued shipping trends and kept an eye on Canadian dealings with the Communist world.

NEWS RELEASE: Mining Industry Payments to Canadian Governments Increased by 65% in 2010

January 23, 2012August 5, 2011

OTTAWA, Aug. 4, 2011 /CNW/ – The Mining Association of Canada (MAC) today released its annual report on the level of payments made by the mining industry to Canadian governments. The report, prepared by ENTRANS Policy Research Group, details the direct revenues that accrue to government from the industry in the form of corporate taxes, royalties and employee income taxes.

“The mining industry makes a significant contribution to Canada’s economy each year,” noted MAC’s President and CEO Pierre Gratton, “ranging from capital investment, stock market activity, Aboriginal community jobs and training, and northern development. The level of payments made to governments detailed in this study is another useful measure of this contribution, particularly valuable because these revenues are used to support health care, education and other critical government services.”

Highlights from the report include:

Read more

Asbestos killed my father. Now my mother is sick – by Heidi von Palleske (Globe and Mail – July 28, 2011)

August 5, 2011

Globe and Mail -Facts and Arguments

When I was a child, I went to a Christmas party at the factory where my dad worked. There was a Santa and presents. My siblings and I went along with the other children on a tour of the factory.

I didn’t care about the machinery or how it worked. I only marvelled at the fairy dust in the air and how it seemed to sparkle when the light hit it. To me, it was magical, not something that would be a carrier of death.

Death has its own sound. It is the rattle of my mother’s lungs as she struggles for air. The purring sound she makes when the breath finally finds its way in. The rasp of her voice as she speaks.

My 79-year-old mother is dying. She’s dying just as my father did four years ago. There is no way to slow the process. No hope for a cure. There is no relief. Once mesothelioma is discovered, it is already too late.

No Avon for Yukon’s Bard [Klondike’s Robert Service] by Tristin Hopper (National Post – July 30, 2011)

August 5, 2011

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

Robert W. Service never witnessed the Klondike Gold Rush.

In 1898, thousands of goldseekers were sailing to Alaska by steamship, hiking over the Chilkoot Trail, paddling rickety rivercraft up the Yukon River and cramming into tent cities in Dawson City. Wild West-style gunfights were erupting in coastal Alaska. Red-coated Mounties were risking death and dismemberment in the harsh northern wilderness. Grizzled prospectors were striking it rich under the maddening midnight sun.

The Bard of the Yukon, meanwhile, was here in British Columbia’s Cowichan Valley – milking cows, shoveling manure and swatting at mosquitoes. “They say he was in plays, but he wasn’t very good,” says a clerk at the Cowichan Valley Museum in Duncan, B.C.

It was a far cry from the tobacco-chewing, pistol-packing cowboy life Service had expected. In 1896, the 22-yearold former Scottish bank clerk boarded a steamer to Canada with a pistol, a sombrero and visions of Buffalo Bill-style glory. A cringe-worthy photograph from the time shows Service striking a gangsterish pose with a clay pipe.

Motherlode still eludes Chile’s [trapped miners] ‘Los 33’ – by Eva Vergara (Toronto Star – August 5, 2011)

August 5, 2011

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.

Associated Press

SANTIAGO, CHILE—One of the myths surrounding the 33 miners who were rescued after being trapped for 69 days deep inside a Chilean copper mine is that they’re all millionaires and no longer need to work.

The truth: nearly half the men have been unemployed since their mine collapsed one year ago Friday, and just one, the flamboyant Mario Sepulveda, has managed to live well off the fame. Most have signed up to give motivational speeches. Four, so far, have gone back underground to pound rock for a living.

“Los 33” have filed negligence lawsuits demanding $10 million from the bankrupt mine’s owners and $17 million from the government for failing to enforce safety regulations, but years remain before any payout.

Despite rumours that miners got rich off media interviews, most got only paid trips, hotel stays and the kinds of gifts that don’t put food on tables.

Governments got $8.4B from miners in 2010 – by Peter Koven (National Post – August 4, 2011)

August 4, 2011

The National Post is Canada’s second largest national paper. Peter Koven is their mining reporter.

After a stunning drop-off in 2009, Canadian governments are once again swimming in mining-related revenues. And those revenues are expected to grow even more in the months and years ahead.

A study by the Mining Association of Canada (MAC), to be released Thursday, shows federal and provincial governments pocketed a whopping $8.4-billion from the mining sector in 2010, or $5.5-billion if oil sands is excluded. It is a dramatic 65% increase from 2009, though still below the record years of 2007 and 2008, when the total haul was more than $10-billion each year.

Those records could fall very soon, according to MAC president Pierre Gratton. His organization estimates that “well over $110-billion” could be invested in new and existing projects across the country over the next five years to expand production. If that happens, thousands of jobs will be created and the government revenue haul from mining will get much bigger.

Xstrata to expand Canadian operations, sweeten payouts – by Brenda Bouw (Globe and Mail – August 3, 2011)

August 3, 2011

Global mining giant Xstrata PLC will use bulging profits to expand its Canadian operations and sweeten shareholder payouts, a sign of the industry’s rosy demand outlook despite global economic uncertainty alongside rising costs and government intervention.

Xstrata, based in Zug, Switzerland, said profits rose by about 30 per cent in the first half of the year, and the diversified miner more than doubled its dividend on the back of record-setting commodity prices.

“Our recovery has been swift and robust and we are now operating with good momentum to deliver a substantially stronger second half,” Xstrata chief executive officer Mick Davis told investors on Tuesday. He cited in particular strong demand from China, the world’s largest consumer of commodities, as the country continues its frenzied infrastructure build.

Outdoor enthusiasts preparing to cross line [challenging provincial bans] – by Wayne Snider (Timmins Daily Press – August 2, 2011)

August 2, 2011

Wayne Snider is the city editor for The Daily Press, the city of Timmins newspaper. Contact the writer at news@thedailypress.ca.

Most Northerners enjoy all forms of recreation in the outdoors. In fact, we love it. Activities such as hunting, fishing, hiking, canoeing and berry picking have been enjoyed for generations by Northerners. It’s part of our heritage.

For the most part, people in Northern Ontario are very laid back. It takes a lot to anger Northerners to the point where they are willing to be involved in an act of civil disobedience.

That stuff is usually reserved for activists down south — like anarchists at the G8 Summit. When the provincial government effectively banned public access to numerous remote lakes — including some where Northerners have traditionally enjoyed their outdoor lifestyle — it crossed the line. Big time.

Last fall, I interviewed Natural Resources Minister Linda Jeffrey on the subject.

Widows taking on Vale – by Carol Mulligan (Sudbury Star – August 2, 2011)

August 2, 2011

The Sudbury Star, the City of Greater Sudbury’s daily newspaper. cmulligan@thesudburystar.com

It’s not a sexy issue, but United Steelworkers’ J.P. Mrochek hopes to get candidates in the Oct. 6 provincial election talking about the need to change legislation affecting the survivors’ pensions of hundreds of Ontario widows. Two are the widows of members of USW Local 6500 in Sudbury, men who worked for Inco Ltd. for decades.

Marie-Rose Arbour’s husband, Lionel, died May 10, 2010, from lung cancer. The Workplace Safety and Insurance Board approved Arbour’s application for compensation and later survivor benefits for his widow, agreeing his cancer death was related to working in the sintering plant.

The plant operated for 15 years, refining semi-pure nickel into pure nickel, and is deemed responsible for hundreds of cases of lung and nasal cancers among workers. Former USW Local 6500 president Homer Seguin told The Sudbury Star in May 2006, a worker’s rate of contracting lung cancer doubled after one month in the sintering plant. After a decade, they were 13,000 times more likely to get nasal cancer.

Vale Ltd., the new owner of Inco, appealed the WSIB’s approval of Arbour’s claim.