Republic of Mining

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.

Push area’s [Sudbury’s] expertise, official suggests [for Ring of Fire business] – by Carol Mulligan (Sudbury Star – May 18, 2011)

September 13, 2018May 18, 2011

The Sudbury Star, the City of Greater Sudbury’s daily newspaper. This article was published on May 18, 2011. cmulligan@thesudburystar.com

Cities like Greater Sudbury looking to benefit from the Ring of Fire should market their soft skills such as their knowledge base and skilled workforce, and not just “hard infrastructure” to companies developing the massive deposit.

Communities throughout Northern Ontario are looking to capitalize on development of the 5,120-square-kilometre deposit of chromite, nickel, copper, zinc, gold and kimberlite located about 500 kilometres northeast of Thunder Bay.

The co-ordinator of the Ring of Fire Secretariat, Christine Kaszycki, spoke to members of the Greater Sudbury Chamber of Commerce on Tuesday about progress in developing the resource and how businesses might get involved.

Kaszycki, who heads the secretariat established by the Ministry of Northern Development, Mines and Forestry last year, presented a high-level overview of the status of the Ring of Fire development.

Seven ‘intruders’ killed at African Barrick mine – Peter Koven (National Post – May 18, 2011)

May 18, 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 18, 2011. pkoven@nationalpost.com

When Barrick Gold Corp. spun its African properties into a new company last year, investors knew they were being sold high-risk assets that had their share of problems.

But they didn’t imagine this.

On Tuesday, African Barrick Gold PLC reported details of a horrifying incident at its North Mara mine in Tanzania. According to the company, about 800 “criminal intruders” armed with machetes, rocks and hammers broke into the mine site and tried to steal gold ore. The Tanzanian police were called in and were forced to open fire after being attacked by the intruders. Seven people were killed and another 12 injured.

“The police are making an investigation, so more details will come from them in the days and weeks to come,” a spokesman for London-based African Barrick said.

CBC Radio: Ring of Fire update interview with Ontario MNDMF Minister Michael Gravelle – (May 17, 2011)

May 17, 2011

An interesting interview between Sudbury CBC Radio Morning North host, Markus Schwabe, and the Honorable Michael Gravelle, Ontario Minister of Northern Development, Mines and Forestry. Click here: http://www.cbc.ca/video/news/audioplayer.html?clipid=1933462740

Commodities bloodbath ‘nothing to fear,’ mining tycoons say – by Lisa Wright (Toronto Star – May 17, 2011)

May 17, 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 17, 2011.

The recent slide in metals prices — make that a slaughter in silver — has been pretty hard to stomach for the stampede of investors who have taken a shine to the gritty mining industry lately. But Peter Munk, Ian Telfer and Bob Gallagher aren’t reaching for the Rolaids.

Nor are they the least bit bearish after two rocky weeks that saw silver plummet by 35 per cent, gold dip under the $1,500 U.S. per ounce watermark and a sharp pull back in construction-friendly base metals from aluminum to zinc.

Many investors are squeamish after the gut-wrenching correction which dragged once-soaring silver squarely into bear market territory. (A 20 per cent decline from a market high is the unofficial definition of a bear market.)

In fact ‘poor man’s gold’, as it’s known, suffered its biggest four-day decline in 28 years earlier this month after hitting a peak of $48.70 U.S. in April. Silver slid another $1.85 again Monday, closing at $34.35 in London.

POV: Political parties start to woo Northern [Ontario] voters for fall provincial election – by Wayne Snider (The Daily Press – May 16, 2011)

May 17, 2011

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

Then there is a true wildcard in place for the fall election: The Northern Ontario
Heritage Party. Their message is that Northern Ontario needs to take over control
of the economic future of the region because Queen’s Park — when coloured by
any of the tradition mainstream political stripes — simply wants to take wealth
from the North to feed the heavily populated south. (Wayne Snider, May 16, 2011)

Off and running

Last week’s Federation of Northern Ontario Municipalities conference was held to deal with municipal issues impacting the North. It turned into a launching pad for provincial election campaign debates. Anyone who wasn’t expecting the conference to be so politically charged, hasn’t been paying attention.

FONOM has been gaining a louder voice in the past few years. That’s because Northern municipalities have had a lot of concerns to voice. It seems Northern leaders have had an endless stream of provincial policies and legislation to contend with, many of which have been contentious.

The Far North Act, the Endangered Species Act (caribou protection), forestry tenure and now the Northern Growth Plan have caused municipalities to wave red flags, as our leaders fear more harm than good is being done to the Northern economy.

It is through groups like FONOM, the Northeastern Ontario Municipal Association and the Northern Mayors’ Task Force that the voice of the North has been raised to the level where it is at least being heard.

But there is a huge difference between hearing and listening.

Mining companies raise stakes in Whitehorse – by Paul Watson (Toronto Star – May 15, 2011)

May 16, 2011

Paul Watson is a columnist for 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 15, 2011.

WHITEHORSE—Park officers are normally on the lookout for rowdy campers, untended picnic baskets, guests that won’t go away and the odd ornery bear that lumbers into Wolf Creek Campground on this city’s edge.

Now they have to add voracious mining companies to the list of threats to fend off from the popular retreat in an old growth spruce forest overlooking the Yukon River.

Arcturus Ventures Inc., a Vancouver-based, penny-stock mineral exploration company, has staked its claim on the park, in a zone the city of Whitehorse has designated environmentally sensitive.

It’s a landmark where, every summer, some 60 campgrounds fill up with tourists who travel the Alaska Highway to the park to enjoy its hiking trails and spectacular wilderness vistas on the capital’s southern outskirts.