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Mining: From “Old Economy” in the 1990s to “Sexy and Strategic” in the 2010s – by Paul Stothart

Paul Stothart is vice president, economic affairs of the Mining Association of Canada. He is responsible for advancing the industry’s interests regarding federal tax, trade, investment, transport and energy issues. This article was published in April, 2011.

It is unlikely that any sector in Canada has undergone a transition in recent decades comparable to that seen within the mining industry. 

The mining sector in the 1980s and 1990s was an afterthought. Mineral prices worldwide were in the dumps. Exploration and prospecting, in effect a form of R&D aimed at finding tomorrow’s stream of commodities, was neglected and the amounts invested were piddling. Attention to attracting new talent to the industry was minimal. 

University mining programs closed. The sector was shunned by Canadian politicians and policymakers as old-school, dark and dirty, and non-technological. Economists and financiers held similar views. Even the leading companies such as Inco and Noranda were viewed as complacent and staid despite being world-leaders in many respects. 

The contrast with Canada’s shining beacons of the day was stark.

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EDITORIAL: Holding [Northern Ontario forestry] tenure hearings only in Toronto ludicrous, disrespectful – by Ron Grech (The Daily Press-April 5, 2011)

Ron Grech is a reporter for The Daily Press, the city of Timmins newspaper. Contact the writer at  
rgrech@thedailypress.ca

It is yet another show of disrespect and a slap in the face to Northern
residents. Is it any wonder that Northerners’ disdain for Queen’s Park
and the current provincial government is at a near-boiling point?
(Ron Grech-Daily Press, April 5, 2011)

After gaining the Ontario forest industries’ support on the prickly subject of tenure reform, the provincial government lost it again because of contentious wording in the draft legislation that passed second reading just over a month ago.

As it is currently worded, Bill 151 would empower the government to revoke a wood allocation if “the party holding the agreement, licence or commitment is not optimally using the forest resources.”

The industry is concerned that allocating forestry licences based on subjective interpretations of optimal or preferred use opens the door to political pressure.

Nonetheless, Ontario Liberal government seems intent on not only shooting itself in the foot, but severing it off altogether.

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Memo to Drummond and McGuinty: Consolidate Ontario Mining Programs at Laurentian University– by Stan Sudol

Laurentian University

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

The Sudbury Basin itself, is the third most strategic and richest hardrock
mining centre in the world. The four combined mining clusters found in
Sudbury – mineral operations, education, research and supply and
services – are globally unique. (Stan Sudol-April 6, 2011)

Ontario’s mining industry is facing a perfect storm of skills shortages – mining engineers and geologists – at a time of severe provincial budget constraints. These fiscal problems will only diminish the mineral sector’s post-secondary education programs at a time when global economies are experiencing the most extraordinary demands for metal products in the history of mankind – a commodity super cycle.

According to the Mining Industry Human Resource Council’s (MiHR) 2010 Canadian Mining Industry Employment and Hiring Forecast report, under the baseline scenario the Canadian mining industry will need to hire 100,000 new workers by the end of 2020. This is the number of workers required to fill newly created positions and also to meet replacement demand as workers retire or leave the mining industry.

That forecast represents MiHR’s baseline scenario, if commodity prices perform better than expected (the expansionary scenario), the cumulative hiring requirements could reach nearly 135,000 workers by 2020.

Last month in a speech in Calgary, Mark Carney, the Governor of the Bank of Canada remarked, “Commodity markets are in the midst of a supercycle. …Rapid urbanization underpins this growth. Since 1990, the number of people living in cities in China and India has risen by nearly 500 million, the equivalent of housing the entire population of Canada 15 times over. …Even though history teaches that all booms are finite, this one could go on for some time.”

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[Murilo] Ferreira tapped to replace [Vale CEO Roger] Agnelli – by Harold Carmichael (Sudbury Star/Reuters-April 6, 2011)

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

The new boss of Vale is no stranger to Greater Sudbury. Murilo Ferreira visited the city several times after the Companhia Vale do Rio Doce SA — now Vale — bought Inco in 2006.

In fact, Ferreira was chief executive officer of Vale Inco when he left Vale in 2008. He is returning to Brazil-based Vale, where he will replace Roger Agnelli as CEO next month. During his 2007 visit to Sudbury, Ferreira announced a $400-million investment in the company’s operations here, including work on Totten Mine.

“As I look to the future, there is again a simple word about our vision: growth,” Ferreira told more than 50 community leaders at a luncheon at Science North. “We are growing at CVRD. We are growing at CVRD Inco. And we are growing right here in Sudbury … This is an exhilarating moment for us on a number of levels.

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Does the Northern Ontario Need a Provincial Minority Government? – by Livio Di Matteo

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/

“A majority government is in many respects an elected dictatorship and once Rome
has spoken, the case is closed.  A minority government, because of its inherent
fragility, is much more open to debate and compromise.” (Livio Di Matteo-April 5, 2011)

In light of a federal election that may yet provide us with another minority government, it is useful to contemplate whether a minority government at Queen’s Park might not be a useful development for Northern Ontario.  While majorities provide stable government, they also provide an environment where it can sometimes be difficult to get your point of view across especially if your region is marginal in terms of its share of population and electoral seats.

Consider the last decade in Northwestern Ontario under a provincial Liberal majority government.  Despite persistent lobbying by Northerners for something to be done about the forest sector crisis, the provincial government (even with cabinet representation from the North) took a long time to recognize the problem and by the time it offered some relief, much of the sector had shut down.  Then there was the Far North Act, which sequestered large sections of the North from economic development with very little debate. 

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[Minmetals bid for Equinox] When is a miner Canadian? (It’s not as simple as you think) – by Boyd Erman (Globe and Mail-April 5, 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. berman@globeandmail.com

The multiparty merger fest that’s reshaping the copper mining industry in Canada has one very odd twist: The companies are here, but the metal is not.

The main assets in Canada for Lundin Mining Corp. , Inmet Mining Corp. and Equinox Minerals Ltd. are office space, Toronto Stock Exchange listings and investor interest. None is focused on Canada as a place to produce.

China’s Minmetals Resources Ltd., the interloper that on Sunday announced an intention to buy Equinox, is the only player that highlights its assets in Canada – a couple of exploration projects in the country’s North.

Inmet, which tried and failed to merge with Lundin, had an operating mine in Canada until last year, but no more; it now focuses on projects and exploration in countries such as Peru and Finland. The main assets for Lundin, the target of an Equinox takeover bid, are across the Atlantic, in Africa and Europe. Equinox’s big project is in Africa.

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The Outer Limits [Mining the Moon, Arctic and Underwater]- by Peter Koven (National Post – Apr. 5, 2011)

The National Post is Canada’s second largest national paper. This article was originally published in the Financial Post Magazine on April 5, 2011. pkoven@nationalpost.com

Mining the moon? The Arctic? Underwater? These one-time crazy ideas are fast becoming reality as companies challenge geographical boundaries to find precious commodities.

David Heydon remembers exactly when he was struck by the idea of mining underwater. He was on a flight from New York to his native Australia in 2002. His plans for a dot-com airline venture in the United States had collapsed after the September 11 terror attacks the previous year, and he wasn’t sure what would come next. Trying to get his mind off his failed business, Heydon looked out the window and saw nothing but water. A geologist and mining engineer by training, he couldn’t help but think to himself, “There must be huge mineral potential down there.”

When he pursued the idea, he was met with a lot of blank looks from industry types. Their thinking at the time was that since metal prices were still in the midst of a multi-decade bear market, why would anyone want to look for more minerals underwater? And, if this was such a good idea, why weren’t any of the major mining companies even considering it?

Fast forward nine years and Heydon, 55, looks like a visionary. Demand for many commodities has reached uncharted levels, prices are at or near record highs almost across the board, and the industry admits that grades are declining at the world’s largest mines. Plenty of other companies such as heavyweights De Beers and AngloGold Ashanti are now following Heydon’s lead and positioning themselves for the inevitability of a sea-floor mining sector. ” To meet demand, the mining industry must move offshore as oil and gas did years ago,” Heydon says.

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OMA member Goldcorp makes safety message personal for employees

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.

 

Ontario Mining Association member Goldcorp has produced a set of four safety videos for all employees that bring the importance of safety on the job closer to home – and the heart.  These videos were filmed at Goldcorp operations in Canada, the United States and Mexico and they are trilingual – English, French and Spanish.

They all emphasize the Goldcorp safety motto – “Safe Enough for Our families” — and they deal with each component of Goldcorp’s program Care, Think, Act.  “We want to instill a cultural change toward safety,” said Melanie Martin, video producer, Senior Executive Assistant and Regional Communications Leader at Goldcorp.  “We want to create a culture where people know they are all part of the same family and that we need to take care of each other.”

The safety message and commitment from senior Goldcorp management comes through loud and clear in the video package.  Steve Reid, Executive Vice President and Chief Operating Officer says “Safety is complex and our ability to grow it should not be underestimated. This is not a television show, it is real Goldcorp people telling real Goldcorp stories.”

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DJ Vale SA Shareholders Confirm Murilo Ferreira As New CEO – (Trading Charts.com – April 4, 2011)

Trading Charts.com is the source for free quotes & charts – over 30,000 stock market, forex & commodity futures price charts & quotations following nearly every North American (and many international) stocks and futures contract.

By Matthew Cowley, Dow Jones Newswires; Diana Kinch in Rio de Janeiro contributed to this article.
  
SAO PAULO, Apr 04, 2011 (Dow Jones Commodities News via Comtex) — The controlling shareholders of Brazilian mining giant Vale SA on Monday picked Murilo Pinto de Oliveira Ferreira, a former company executive, to replace the outgoing chief executive, Roger Agnelli.

Ferreira will take over May 22, although the appointment needs to be confirmed by Vale’s board of directors, Vale said in a statement.

Ferreira was a surprise choice, and the O Estado de Sao Paulo newspaper said that he was hand picked by President Dilma Rousseff. Ferreira joined Vale in 1998 as head of the firm’s aluminum operations, and left in 2008, when he was president of Vale’s Canadian operations, Vale said.

Speculation in recent days had focused on Tito Martins, who currently heads up Vale’s Canadian business.

The shareholders of Valepar–the holding company which has a majority of Vale’s voting shares–met Monday to choose the replacement for Agnelli, who leaves offices amid reports of a rift with the government.

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Vale takeover fell short – by Laura Stricker (Sudbury Star-April 2, 2011)

The Sudbury Star, the City of Greater Sudbury’s daily newspaper. This column was published on April 2, 2011. lstricker@thesudburystar.com

ELECTION: NDP leader in a whirlwind tour of Sudbury on Friday 

“(One key issue) was on the whole question of foreign ownership … I think the bar
could have been set much higher with regard to what (Vale) was required to do to
benefit the people here — the workers and the community.” (Jack Layton – NDP Leader)

Foreign ownership should be handled in an open and transparent manner, Jack Layton said Friday, citing Vale’s takeover of Inco in 2006.

Layton stopped by The Star office Friday with Nickel Belt MP Claude Gravelle and Sudbury MP Glenn Thibeault. He praised the two men for their success in bringing issues important to Sudburians, including the takeover, to prominence in the House of Commons.

“Our MPs from Northern Ontario, and particularly these two, have really driven some of the key issues that are of concern in this community,” Layton said.

“(One key issue) was on the whole question of foreign ownership … I think the bar could have been set much higher with regard to what (Vale) was required to do to benefit the people here — the workers and the community,” he said.

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Boreal Forest Agreement: It’s time to forgive and move forward – by Stephen Kakfwi (Thunder Bay Chronicle-Journal-April 4, 2011)

The Thunder Bay Chronicle-Journal  is the daily newspaper of Northwestern Ontario. This opinion piece was originally published on April 4, 2011.

Stephen Kakfwi is the former premier of the Northwest Territories and former president of the Dene Nation.

Nishnawbe Aski Nation Grand Chief Stan Beardy recently called for the termination of the Canadian Boreal Forest Agreement (NAN Targets Boreal Agreement, Chronicle-Journal, March 22). While I agree that the process to reach that agreement was flawed, and that the announcement could have been handled better, I believe it is time for collaboration, not conflict.

Finding a way to protect our land and ways of life is essential if we want to survive. As Aboriginal people, we are first and foremost survivors. Since Europeans first arrived here in 1492, Aboriginal peoples have had a near-death experience. The spread of epidemics decimated our population, the invaders took our land and diminished our natural resources.

Ever since, native peoples have fought hard to take back our land and regain control of our lives. We even fought and changed the Constitution of Canada so that we could govern ourselves.

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Engineering shortage after recession – by Adelle Larmour

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. This article is from the April, 2011 issue.

Retiring workforce and declining immigration creating gaps in engineering sector

An aging and retiring workforce, coupled with declining immigration rates, has increased the demand for engineers as the economy picks up speed. There appears to be a gap in several areas, led by civil engineers, according Daniel Young, acting CEO for the Ontario Society of Professional Engineers, a member- service organization representing almost 10,000 members.

“As we come out of the recession, there is a tremendous need for engineers, particularly in the manufacturing sector,” said Young, adding that as industry gears up, there are not enough engineers to fill the demand.

He pointed out that civil engineers are in huge demand because of the large number of retirements, a slowdown in immigration, infrastructure initiatives, and the fact that the universities have not graduated enough of them. As a 40-year veteran of civil engineering, Young said it is the most diversified of all the disciplines, which may be another reason for the demand compared to other engineering services.

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Time for Ontario Universities to Specialize in Programs They Do Best: [Ontario Provincial] Report – by Ciara Byrne (October 26, 2010)

About the Higher Education Quality Council of Ontario

The Higher Education Quality Council of Ontario is an arm’s-length agency of the Government of Ontario dedicated to ensuring the continued improvement of the postsecondary education system in Ontario.  The Council was created through the Higher Education Quality Council of Ontario Act, 2005. It is mandated to conduct research, evaluate the postsecondary education system, and provide policy recommendations to the Minister of Training, Colleges and Universities with a view to enhance the quality, access, and accountability of Ontario’s higher education system.

The report is available here: TheThe Benefits of Greater Differentiation of Ontario’s University Sector

Ciara Byrne, The Canadian Press: Tuesday, October 26, 2010

TORONTO – Ontario universities should play to their strengths instead of trying to be everything to everyone, the head of an advisory body on higher learning said Tuesday, as he called for schools to focus on the programs they do best.

A report commissioned by Ontario’s deputy post-secondary education minister by the Higher Education Quality Council is calling on universities to pick a specialty and stick with it, meaning Specialty U could be the future in Ontario.

“You will have the institutions doing what they do best, not trying to do what everybody else is doing,” council president Harvey Weingarten said Tuesday.

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Ontario Report: The Benefits of Greater Differentiation of Ontario’s University Sector – Executive Summary and Preamble

Greater Differentiation actually means the consolidation of university programs throughout Ontario’s post-secondary system in order to save money and improve quality. The study supports my past columns about the need to consolidate Ontario’s University mining programs in Sudbury and turn Laurentian University into the Harvard of the Hard-rock mining sector. – Stan Sudol

About the Higher Education Quality Council of Ontario

The Higher Education Quality Council of Ontario is an arm’s-length agency of the Government of Ontario dedicated to ensuring the continued improvement of the postsecondary education system in Ontario.  The Council was created through the Higher Education Quality Council of Ontario Act, 2005. It is mandated to conduct research, evaluate the postsecondary education system, and provide policy recommendations to the Minister of Training, Colleges and Universities with a view to enhance the quality, access, and accountability of Ontario’s higher education system.

The report is available here: The Benefits of Greater Differentiation of Ontario’s University Sector

EXECUTIVE SUMMARY

The Ontario university sector is already somewhat differentiated. A policy decision to increase the differentiation of the postsecondary system brings the following benefits:

• Higher quality teaching and research programs
• More student choice with easier inter‐institution transfer and mobility
• Greater institutional accountability
• A more globally competitive system
• A more financially sustainable system

Ontario’s postsecondary system can transition seamlessly and incrementally to greater differentiation with the judicious and strategic use of funding strategies already familiar to government. This transition to a more differentiated university sector is guided by principles including:

• Equal value on the teaching and research functions of universities
• Forging a contemporary relationship between Ontario’s colleges and universities
• Linking the differentiation policy to funding decisions
• More effective use of multi‐year accountability agreements and performance indicators to evaluate whether universities are meeting expected goals and targets

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Who will pay the bills for the education dream? – by Don Drummond and Daniel R. Woolf (Toronto Star-April 1, 2011)

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

Don Drummond is Matthews Fellow in global public policy at Queen’s University. Daniel R. Woolf is principal and vice-chancellor of Queen’s University.

We have reached the point in the post-secondary education system where significant
new thinking is required to reconcile a higher participation rate with the reality of finite
government resources. This will require willingness to rethink a system that cannot be
sustained. (Don Drummond and Daniel R. Woolf – April 1, 2011)

In this knowledge-based era, the economic spoils are increasingly going to those with higher education. In recognition, Canadian governments are setting ambitious targets for post-secondary education. Commitments to higher education are a part of every federal party’s campaign platform and this week’s Ontario budget includes funding for more than 60,000 new post-secondary education spaces over the next five years.

But owing to governments’ fiscal woes, students and their families will continue to bear a rising portion of the total costs of a quality post-secondary education. For many, this will remain manageable and the return will be a lifetime of higher earnings and increased quality of life. But without dramatic reforms to Canada’s financial supports for students, more and more will find the path to higher education blocked by financial obstacles. The damage will carry across generations because a key determinant of pursuing higher education is parents’ level of education.

About 70 per cent of the jobs of the future are projected to require some form of higher education.

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