Republic of Mining

Resource Rents, the Ring of Fire and the Future – by Livio Di Matteo

May 10, 2011

Livio Di Matteo is Professor of Economics at Lakehead University in Thunder Bay, Ontario. Visit his new Economics Blog “Northern Economist” at http://ldimatte.shawwebspace.ca/

May 9, 2011

American historian David Potter’s book People of Plenty argued that resource abundance shaped the American attitude towards possibility and opportunity. Abundant resources set the stage for wealth accumulation and created a society that believes that everyone can become rich through their own work and effort and that initiative and opportunity are the key to social mobility and success.

In Canada, we also have a tradition of resource abundance but it has generated not so much an ethos of aggressive individualism but one of more government involvement in the economy. Indeed, the resource rents from natural resources have played a role in government finance whether it was late nineteenth century Ontario’s forest sector (which generated at its peak 20-25 percent of provincial government revenues) or energy in Alberta and Newfoundland and Labrador today.

As Herb Emery and Ron Kneebone have recently written in Alberta’s Problems of Plenty (May 2011, Policy Options), in the Alberta context the main role of resource abundance and resource rents has been to augment both private and public consumption.

Plan Nord Versus Grow North: Quebec’s Northern Policy Trumps Ontario’s – by Livio Di Matteo

May 10, 2011May 9, 2011

Livio Di Matteo is Professor of Economics at Lakehead University in Thunder Bay, Ontario. Visit his new Economics Blog “Northern Economist” at http://ldimatte.shawwebspace.ca/

May 9, 2011

Quebec has just announced its own northern growth plan and it appears to be more focused and concrete in resource allocation terms than the recently released Ontario Northern Growth Plan. Ontario’s Northern Growth Plan was “a call to action and a roadmap for change” organized to provide policy direction for growth around six principles: (1) a globally competitive economy, (2) education and skllls for a knowledge economy, (3) aboriginal partnership, (4) networks of social, transport and communications infrastructure, (5) sustainable environment and (6) innovative partnerships to maximize resource potential.

The plan had detailed checklist for short, medium and long-term actions that required implementation and of course more planning including regional plans within the region. Indeed, if one could summarize the Ontario plan, it is simply a plan to rule all plans and the planning is not over yet. The major resource announcements that accompanied it were five million dollars for a policy institute (on which little has been said since) and a few million dollars to begin integrated transport planning.

Will the [Harper] Tories please the [Ontario] North? – The North want in! – (Thunder Bay Chronicle-Journal – May 6, 2011)

May 8, 2011

The Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario. This editorial was originally published on May 6, 2011.

“Second, Harper is anxious to encourage economic activity and the
North’s Ring of Fire mining development is just the sort of success
story he admires and will want to brand Tory blue. …

… Make FedNor independent again, give it a northern minister like
Rickford, and let the Conservatives practise the efficient government
that they preach.” (Chronicle-Journal Editorial – May 6, 2011)

AMONG the theories floating around after this week’s election is that, besides a split between left and right and another between Quebec and the rest of Canada, the results suggest a form of class distinction between urban and rural Canada.

One such example is Ontario where much of the south, including wealthy Toronto and its suburbs and the burgeoning technology centres, voted Conservative while the North mostly picked the NDP.

A superbly tailored Tory campaign convinced economically-conservative minded voters to choose the offer of stability while large sections of the have-not hinterlands opted to register their disapproval of Conservative and Liberal approaches by supporting the social democratic message of Jack Layton and the NDP.

Asian demand ‘tsunami’ to buoy commodity prices – Vale [Canada CEO Tito Martins predicts] – by Matthew Hill (Miningweekly.com – May 6, 2011)

May 9, 2011May 8, 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.

If you look at it carefully it’s not a wave, it’s a tsunami. [Chinese urbanization] …
I see, for the long term, this scenario of scarcity to remain for at least five years …
I don’t believe producers will have capacity to cope with this huge movement in
urbanisation, people need raw materials…” (Tito Martins, CEO Vale Canada Ltd.
and Executive Director, Base Metals – May 6, 2011)

TORONTO (miningweekly.com) – The world’s second-biggest mining company, announcing record first-quarter profits, on Friday said a “tsunami” of Asian urbanisation would lead to shortages in iron-ore supply at least until 2016 as miners failed to keep pace with demand.

Basic materials executive Tito Martins said that debt problems in the US and Europe would not change this. “It’s a big wave coming. If you look at it carefully it’s not a wave, it’s a tsunami. The earthquake started maybe 10, 15 years ago, when China started moving huge quantities of people from the countryside to the city,” he commented on a conference call.

Martin echoed comments that Anglo-Australian miner Rio Tinto made earlier this year that China had accomplished a magnitude of industrialisation over the past two decades that had taken the Western World 250 years to accomplish.

Expect strong growth, [in Northern Ontario] say bank officials – by Harold Carmichael (Sudbury Star – May 6, 2011)

May 6, 2011

The Sudbury Star, the City of Greater Sudbury’s daily newspaper. This article was published on May 6, 2011. hcarmichael@thesudburystar.com

The immediate future looks good for the Northern Ontario and Greater Sudbury economies, the chief economist of BMO Bank of Montreal said Thursday.

“I’m going to say roughly 3% growth, continued strong growth,” said Sherry Cooper. “I wouldn’t make too much of the recent decline in commodity prices, especially for the base metals. It’s the precious metals, actually, that have taken most of the hit.

“So, from a perspective of copper, nickel and other base metals, we will not see substantial change. If anything, the prices are likely to jump up further.” Cooper said global demand for metals is strong and appears poised to stay that way.

“Much of that global demand is coming from the emerging markets. The emerging market growth is a longer-term fundamental. It’s certainly here to stay for the next decade, at least.”

Ring of Fire needs ecosystem planning – by Julee Boan and Justin Duncan (Sudbury Star – May 6, 2011)

May 6, 2011May 6, 2011

The Sudbury Star, the City of Greater Sudbury’s daily newspaper. This column was published on May 6, 2011.

Julee Boan is Boreal program manager at Ontario Nature, and Justin Duncan is a staff lawyer with EcoJustice.

The Ring of Fire represents a huge economic opportunity for Ontario. But more surprisingly, it also represents a big environmental opportunity.

As perhaps one of the world’s most valuable chromite deposits, the area represents a chance to open up a whole new field for the Canadian mining industry. With global demand for minerals soaring, there’s a tremendous opportunity in the Ring of Fire to create new jobs and economic opportunities after some hard years in Northern Ontario.

The environmental opportunity is less well-known. Ring of Fire is located in the heart of one of the largest remaining intact ecosystems left on the planet. That’s a pretty astounding statement and sounds like something you would more likely hear about the Amazon.

But careful mapping of the world’s intact forests has zeroed in on the boreal forests and lowlands of Ontario’s far North as one of our last chances to protect a natural system where all the pieces are still in place and working; from wolves and caribou to millions of nesting birds and lakes jumping with fish.

NEWS RELEASE: Canadian Mining Technology May Extend Future Space Missions [Sudbury NORCAT]

May 5, 2011

About NORCAT

The Northern Centre for Advanced Technology Inc. (NORCAT) is a not-for-profit, non-share incorporated company based in Sudbury, Ontario Canada. NORCAT has been developing space mining equipment since 1999, with the primary focus on a drilling unit for subsurface exploration. http://www.norcat.org.

SUDBURY, ONTARIO–(Marketwire – May 4, 2011) – The Northern Centre for Advanced Technology Inc. (NORCAT), under Canadian Space Agency contract, is developing innovative drilling technology which will shape the future of Canada’s contribution to future space missions. This project supports Canada’s role in the Global Exploration Strategy as a key component of the utilization of planetary resources for mission support.

The requirement for mining activity on the moon or near earth objects in support of robotic and human activity is paramount. In Situ Resource Utilization (ISRU) is the process of using existing resources to produce valuable elements in space, such as oxygen and water. NORCAT’s expertise in microgravity mining leads the way in pioneering future space exploration missions.

McGuinty headed out his ‘Open’ door – by John R. Hunt (North Bay Nugget – 2010)

May 5, 2011May 5, 2011

The North Bay Nugget, established in 1907, is the daily newspaper for the northeastern Ontario community of North Bay. This column was originally published in 2010.

On the Rocks Column

Michael Gravelle’s recent trip to Timmins has convinced me that Ontario is on the verge of another political convulsion. It also reinforced my long-held conviction there is a grand plan in Toronto to close down as much of the North as possible and turn it into a park.

Gravelle is minister of Northern Development and Mines. Folk in Timmins may be forgiven if they think he is in charge of destruction and evacuation. I heard nothing in the throne speech Monday afternoon to change my mind. The Grits have high hopes for a mining development in the Northwest. The Northeast can be safely forgotten.

The McGuinty mob’s Open Ontario policy or gimmick only reflected its intellectual bankruptcy. Or perhaps it was designed by Ontario’s intellectual and cultural elite who refuse to recognize that 90% of Ontario is in what is called the North. They rarely visit it, never understand it, and view it and its residents with amused contempt.

Mining matters to North Bay, but perhaps not to McGuinty – by John R. Hunt (North Bay Nugget – 2010)

May 5, 2011May 5, 2011

The North Bay Nugget, established in 1907, is the daily newspaper for the northeastern Ontario community of North Bay. This column was originally published in 2010.

On the Rocks Column

Timmins is facing an economic disaster. Sudbury is still in a strike-bound mess. There is a tiny spark of good mining news not too far from North Bay but I am saving it until the end. The Timmins mess and Sudbury strike must be costing money in North Bay.

About 30 years ago I had an argument with some North Bay business types who challenged my contention that mining was important to the North Bay economy. I checked around and discovered about 800 people in the city were employed selling goods and services to the mining industry. A couple of years ago I read that it was then about 1,800.

Mining matters to North Bay. This explains why I blew my top last Thursday when I read and heard reports from Queen’s Park. A bunch of hopeful — and probably desperate — Timmins folk had gone to the big city to meet with Ontario’s beloved leader and assorted officials. McGuinty was their last hope. The Xstrata metallurgical plant is slated to close on or about May 1 and 670 jobs will go down the tube.

Is there a maggot in the new [Ontario] Mining Act meat? – by John R. Hunt (North Bay Nugget – May, 2010)

May 5, 2011May 5, 2011

The North Bay Nugget, established in 1907, is the daily newspaper for the northeastern Ontario community of North Bay. This column was originally published in May, 2010.

On the Rocks Column

Is there a maggot in the meat pie, a worm in the woodwork or a rat in the basement? I have that strange feeling that afflicts newspaper people when they suspect they are being conned. Smart housewives get it when an energy retailer says he will save them money.

I cheerfully admit I hope I am wrong. I am only concerned because I fear a small group I have long admired is to be flushed down the political tube.

Prospectors are my special minority and chances are that most people have never met one. By strange circumstance I have spent much time with all kinds of prospectors. I have no illusions. As a group they have the same percentage of crooks and charlatans as any other trade or profession. But they have had an incredible influence upon Canada’s development and growth.

You may have heard Michael Gravelle, the minister of Northern Development and Mines, talking about changes to the Mining Act. Everyone is supposedly delighted.

Northern [Ontario] growth plan amazingly ignorant – by John R. Hunt (North Bay Nugget – April 2011)

May 5, 2011May 5, 2011

The North Bay Nugget, established in 1907, is the daily newspaper for the northeastern Ontario community of North Bay.

On the Rocks Column

“The real challenge is to create viable economies that can survive after the natural resources are exhausted. There is something in the Northern psyche that seems to detest this basic idea. Rip out the silver and gold. Dig up the iron, copper and nickel. Pump out the last drop of oil. When it is all gone complain there is nothing to do. This seems to be the Canadian way.” (John R. Hunt – North Bay Nugget)

Take one ton of good intentions and mix an equal quantity of platitudes. Recruit a team of writers and tell them to please everyone and offend no one. You may then get the Northern Ontario Growth Plan that was recently dumped on the long suffering public.

In what can only be described as gigantic conceit, incredible optimism or amazing ignorance, the plan is supposed to lay out future developments in the North for the next 25 years.

The plan’s media release notes that Northern Ontario represents 90% of the province’s land mass. Another way of putting it might be that after all these years of Northern development, more than 90% of the population has very little desire or inducement to live in the North.

Voting begins for Ontario Mining Association’s SYTYKM People’s Choice Award

May 4, 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 Canadian federal election is not the only polling that will be taking place today. The on-line voting for the Ontario Mining Association’s So You Think You Know Mining (SYTYKM) high school video competition’s People’s Choice Award started May 1 and runs until midnight May 31.

Sixty videos, or about 75% of the total number of entries in this year’s SYTYKM competition, are in the running. Go to the OMA website www.oma.on.ca and click on the SYTYKM box. Then click on the People’s Choice Award panel. You can view the videos and cast your ballot electronically.

In order to complete the mechanics of voting, no pencil or paper is required. Click below your favourite video where it says “Vote for this video!” Then check your e-mail box for a confirmation message from the OMA and click on the link provided. This not only completes the voting process but it will ensure you are entered in the random draw to win an iPod.

North of 60: Frozen Out [Mining in the Northwest Territories] – by Bill Braden

May 4, 2011

The Canadian Mining Journal is Canada’s first mining publication. This article is from the magazine’s May, 2011 issue.

Why is NWT exploration slowing so drastically?

Grassroots explorers shun the NWT, discouraged by high cost, scant infrastructure, a regulatory system that’s still a work in progress, and two land claims

It’s not much of a dip — only $2 million from 2010 — but a new forecast for exploration spending in Canada confirms that mine finders have found friendlier places than the Northwest Territories to spend their exploration budgets.

Natural Resources Canada reported the trend in March, predicting the NWT will see only $83 million invested this year, less than half the money invested just five years ago.

Contrast that with Yukon’s projected $256.3 million this year, or Nunavut at $327.8 (up an eye-popping 71 and 24 per cent respectively from 2010) and it’s easy to see why the NWT should be worried, if not alarmed.

“The challenge is we’re facing a maturing [diamond] industry and it will take many [conventional] projects to replace an Ekati-size mine,” says Tom Hoefer, Executive Director of the NWT & Yukon Chamber of Mines. Currently, the territory has only four producing mines — three diamond, and the other, tungsten.

Building gender-balanced businesses in the minerals industry – by Catharine Shaw

May 4, 2011

The Canadian Mining Journal is Canada’s first mining publication. This column is from the magazine’s May, 2011 issue. Catharine Shaw is Business Services Manager, Mining Sector, Golder Associates and WIM Canada, Secretary.

Canadian women working in mining and exploration represent a human resource which is highly talented and yet their skills remain largely untapped. It could be said that there is some familiarity between career lifecy¬cles of women and the cyclical nature of a commodities business. For example, as the value of earnings fluctuate widely according to variations in the economy prompted by global supply and demand, often the career path of professional women in mining are impacted by the uncertainty to invest in female talent (equitable supply) and consistent long-term availability of this resource (demand).

The historical boom and bust nature of the mining industry poses additional challenges for short-tenure employees, such as women entering child-bearing years, who make choices during up- trending markets only to lose opportunities more heavily during the down turns. With that being said, every employer and employee is touched regardless of gender by booms and busts, however, the career path or lifecycles for women are unique when considering all choices that have to be made. Of course, not all professional women are alike when making career choices.