Republic of Mining

Mapping the Economic Potential of Canada’s North – Chapter 3: Metal and Non-Metallic Mineral Mining

January 12, 2011January 3, 2011

The Conference Board of Canada is the foremost independent, not-for-profit applied research organization in Canada. It is not a government department or agency and conducts, publishes, and disseminates objective and non-partisan research on economic trends, as well as organizational performance and public policy issues. Click here for Mapping the Economic Potential of Canada’s North.

Please note that charts and maps are omitted from this posting.

The metal and non-metallic mineral mining industry has a long history of providing wealth and employment to Canadians. From the Klondike gold rush in the late 1800s, to the large-scale development and production of potash in Saskatchewan, to diamonds in the Northwest Territories, the industry has maintained its lustre on the global stage.

The industry has endured many boom-bust cycles in its history. In the 1960s, metal and non-metallic mineral mining directly accounted for over 2 per cent of the Canadian economy; by 2009, the industry’s share had shrunk to 0.5 per cent. But the situation is expected to turn around in the coming years as mining continues to be developed— particularly in Canada’s North.

The metal and non-metallic mineral mining industry
has a long history of providing wealth and employment
to Canadians.

Even in 2009—the worst year for mining in recent history—the industry contributed $6.5 billion to the
Canadian economy (in real terms) and continued to export a diverse variety of resources. There are many
spin-off benefits not included in the $6.5 billion: construction, transportation, utilities, warehousing, and
communications are some of the other industries that benefit directly from the development and production
of a single mine.

News Release: Conference Board of Canada – Mining And Related Support Industries Offer The Greatest Economic Potential For Northern Canada

January 12, 2011January 3, 2011

Ottawa, December 17 —The natural resources sector – and the industries that support it – provide the strongest potential for Northern Canada’s future economic development, The Conference Board of Canada concludes in a study for its Centre for the North, released today.

This report, Mapping the Economic Potential of Canada’s North, is one of a series of foundational studies for the Centre for the North. It is intended to provide a launch pad for further inquiry into the future economic development potential of the North.

“The economic potential of Northern Canada is highly dependent on its mining and oil and gas resources,” said Len Coad, Director, Environment, Energy and Technology Policy, The Conference Board of Canada. “These primary industries also drive growth in other sectors of Northern economies, including communication, electricity and transportation infrastructure, and commercial services. They can contribute to the prosperity of northern communities by providing jobs and supporting local businesses.”

The Conference Board uses the Northern Development Ministers Forum’s definition of the North as the basis for this research. Based on this definition, the North comprises the three territories and the northern parts of seven provinces – 80 per cent of Canada’s land mass in all, but it makes up less than seven per cent of the population. This study identified a collection of seven key industries—oil and gas, mining, forestry, fishing, utilities, construction, and tourism.

Breakaway Country [Northwestern Ontario] – by Livio Di Matteo

January 3, 2011January 3, 2011

The National Post is Canada’s second largest national paper. This article was originally published in the Financial Post on September 06, 2006.

Livio Di Matteo is professor of economics at Lakehead University in Thunder Bay, Ontario, and a co-author of a recent paper in Canadian Public Policy dealing with “Mantario.”

How can we empower people in these regions to help solve their own problems rather than wait for a supplicated solution from a pharaoh in a distant capital? In an act of supreme neglect, the Canadian federation has allowed its vital “zone of transit” [Northwestern Ontario] to decline to the point where an errant moose could choke the lifeblood of the nation. – Livio Di Matteo (Sept/06)

The isolated residents of northwestern Ontario are tired of life as a resource extraction colony. One option would be to create a new province – Mantario

The northwestern portion of Ontario, comprising the Districts of Thunder Bay, Kenora and Rainy River, represents 60% of Ontario’s land and an area the size of France. It was an imperial acquisition of the 19th-century when the province viewed itself as “Empire Ontario.”

It is a region rich in natural resources but sparse in population, and yet it is vital to the Canadian federation as an east-west transport corridor for road, ship and rail. Indeed, one can only imagine how different Canadian history might have been had northwestern Ontario become part of Minnesota. While alienation from Southern Ontario has affected all of Northern Ontario, sparking periodic calls to separate, the feeling has become particularly acute in the region stretching from White River to Kenora.

Thirty-Eight Years of Progress [Timmins History]– by Norman E. Green

January 2, 2011January 2, 2011

A Brief History of the Porcupine District

Hollinger Consolidated Gold Mines Limited: Public Relations Section – Timmins (This document was published between 1947 and 1949.

More than two hundred years before gold was discovered in the Porcupine, a narrow winding trail made its way from Porcupine Lake to the Mattagami River. Indians and Trappers, carrying canoes and heavy packsacks on their backs, crossed this trail many times, intent only on reaching their destination at either end and continuing their journey.

Little did they realize that beneath their feet, in places close enough to be marked by their boots, lay unmeasured wealth, gold which has since played a prominent pat in all phases of the history of our country.

Following the discovery of silver at Cobalt, and the development of that area, interest in the possibility of similar deposits in the Porcupine district was aroused. In 1896, 1898, 1899, 1903, 1905, and 1906, parties of government surveyors working in the district were impressed by the nature of the country and the possibilities it offered. In 1908, Dr. W. A. Parks, of Toronto University, examined the district and in his report stated: “I regard the region south of Porcupine Lake as giving promise to the prospector.”

The 2010 Tom Peters Memorial Reclamation Award

January 2, 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.

This posting came from the Ontario Mining Association’s 90th Anniversary Publication (October/2010): http://www.oma.on.ca/en/resources/OMAat90three.pdf

The 2010 Tom Peters Memorial Reclamation Award was given to the Penokean Hills Field Naturalists (PHFN), the City of Elliot Lake and Rio Algom Limited for the work they did in converting the Milliken tailings management area (TMA) into a 182-ha wetland that includes marsh, bog and shoreline, as well as mature mixed forest.

The Milliken mine and mill operated from 1958 to 1964, producing 5.7 million tonnes of tailings to the Stanleigh TMA. During this period an estimated 76,500 tonnes of tailings were released to Sheriff Creek in an area later rehabilitated to form the Milliken TMA, This 17-ha area was remediated in the late 1970s. Drainage channels were installed on part of the tailings. The flat area that remained was covered by three feet of sandy gravel to form a ball field while the rest of the tailings area was flooded to form a wetland. The field was transformed in 1978 into an equestrian practice and competition field. In 1997, a berm was constructed at the outlet of the wetland to ensure the tailings remained saturated. In 2000, the berm and spillway were upgraded to safely cope with a probable maximum precipitation event.

In 1990, Erwin Meisner of the Penokean Hills Field Naturalists, asked Rio Algom whether it would consider transforming Sheriff Creek Park into the Sheriff Creek Bird Sanctuary. (The naturalists recognized the diversity of bird habitats that had evolved in the area.) With the support of Rio Algom, the PHFN secured support from the city and established a bird sanctuary at the park. In 1996, PHFN and Rio Algom entered into a “Stewardship Agreement” that identi¬fied operational objectives and prescribed activities for the sanctuary.

Ontario’s First Nations Have Become Key Stakeholders in the Mining Sector

January 2, 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.

This posting came from the Ontario Mining Association’s 90th Anniversary Publication (October/2010): http://www.oma.on.ca/en/resources/OMAat90three.pdf

The Aboriginal Relations Committee was formed in 2006 to improve communications between the mining industry and First Nations, and to assist the government to develop consultation models to match evolving court decisions.

Jeremy Wyeth, De Beers’ representative at the Ontario Mining Association, was the first to suggest that the association set up the committee and served as its first chair. He later went on to be the OMA Executive Director for 2007 and 2008. The current chair is Jonathan Fowler, a geologist who has worked at De Beers for 42 years, 28 of which have been spent in Canada.

As an exploration geologist, Fowler was usually one of the first people De Beers sent in to investigate remote areas. In the field, he would talk to hunters and trappers and tell them about the work De Beers was planning. This practice evolved into communicating with local communities then with community leaders. Due to the remoteness of the exploration projects, the locals Fowler dealt with were usually First Nations.

Ontario Mining: From the Past to the Future – by OMA President Chris Hodgson

January 2, 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.

This posting came from the Ontario Mining Association’s 90th Anniversary Publication (October/2010): http://www.oma.on.ca/en/resources/OMAat90three.pdf

Perhaps no industry plays a greater proportionate role in helping to develop First Nation capacity than mining. In Ontario there are in excess of 40 Impact Benefit Agreements

that have been signed between First Nations and mining companies. The industry is playing an expanding role in providing employment and entrepreneurial

opportunities for Aboriginals. – OMA President Chris Hodgson, Oct/2010

This year, the Ontario Mining Associ¬ation is celebrating its 90th anniver¬sary – a worthy measure by any yardstick. We thank The Northern Miner for this special publication to acknowledge the OMA’s anniversary and for sharing in the association’s landmark occasion.

Celebrating important anniversaries provides an excellent opportunity to reflect on the past for individuals and organizations. These anniversaries also give impetus to look where we are today and to measure accomplishments of how much progress has been made. However, they should also be used to look to the future and predict where we may be at anniversaries yet to come.

The OMA is one of the longest-serving trade organizations in the country and its strength rests with its dedicated member companies.

Since 1920, there have been 15 different Canadian prime ministers, 17 different Ontario premiers and 32 different Ontario mines ministers. In 1920, we lived in a world without televisions, computers, internet, satellite communi¬cations, high-level medical diagnostic equipment, cell phones, super highways and global airline routes. Mankind has provided the ingenuity, and mining has provided the materials to create these advances in modern society.

News Release: Sherritt Provides Update on the Ambatovy Project

January 2, 2011

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Click here to view: Sherritt International Corporation 2009 Corporate Social Responsibility Report

TORONTO, December 17, 2010 – Sherritt International Corporation (“Sherritt) (TSX:S) announced today the approval of increased capital costs for the Ambatovy Project to a total budget of US$4.76 billion, which includes a contingency of US$50 million. Sherritt intends to fund its 40% share of the capital cost increase directly.

During second-quarter 2010, the construction of the power plant, which was being executed under a turn-key contract, was identified as having high potential for delay in completion. The
slower construction progress on the power plant attracted additional costs in terms of management and engineering personnel and is the major contributing factor to the higher expected capital cost. During third-quarter 2010, Sherritt and the EPCM contractor assumed control of construction of the power plant.

Ian W. Delaney, Chairman and CEO of Sherritt commented, “We have thoroughly reviewed every facet of this Project and I am confident the required steps have been taken to keep it on track to produce metal by the summer of 2011. While the variance from our original capital projection is 5%, we felt the steps taken were necessary to ensure that the plant will operate as designed, and that we can ramp up production at a rate which will enable nickel to be delivered to customers as early as possible.”

News Release: Sherritt to acquire a controlling interest in the Sulawesi Nickel Project

January 2, 2011

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Click here to view: Sherritt International Corporation 2009 Corporate Social Responsibility Report

TORONTO, December 1, 2010 – Sherritt International Corporation (“Sherritt” or the “Corporation”) (TSX: S) today announced it has executed an earn-in and shareholders agreement with a subsidiary of Rio Tinto Limited (“Rio Tinto”) whereby Sherritt will acquire an interest in the Sulawesi Nickel Project (the “Sulawesi Project”) in Indonesia. Subject to satisfaction of certain conditions, Sherritt will acquire a controlling 57.5% equity interest in the holding company that owns the Sulawesi Project, and Rio Tinto will continue to hold the remaining 42.5%. Sherritt has been appointed as the Operator and will license its commercially-proven, proprietary technology to the Project. As consideration for its interest, Sherritt has committed to fund US$110 million towards producing a feasibility study from which a development decision will be made.

In compliance with Indonesia’s Mining Law, local Indonesian interests are expected to acquire a 20% interest in the Project. Following that event, Sherritt and Rio Tinto together will indirectly own and control an 80% interest in the Sulawesi Project, which will give Sherritt a controlling interest and a 46% economic interest with Rio Tinto maintaining a 34% economic interest.

Castro’s Favourite Capitalist- by Rachel Pulfer (Walrus Magazine, December, 2009)

December 29, 2010

The Walrus is a Canadian general interest magazine which publishes long form journalism on Canadian and international affairs, along with fiction and poetry by Canadian writers. It launched in September 2003, as an attempt to create a Canadian equivalent to American magazines such as Harper’s, The Atlantic Monthly or The New Yorker.

Will Sherritt International come to regret dealing with Communist Cuba? CEO Ian Delaney doesn’t think so.

The sun is rising over Old Havana, but the man standing at the balcony rail is in the shade. He gazes out over the city’s crumbling rooftops but seems oblivious to the sun-washed beauty of the harbour. His stare is blank, disengaged. He will give only his first name, Rodolfo. He is the operator of the camera obscura. One of many curiosities in the old port, the centuries-old technology uses a system of mirrors to project a 360-degree view of the exterior onto a bowl-shaped interior screen. Fidel Castro reportedly had the camera installed to ensure that he could see all parts of Havana from a protected vantage point. It’s now a tourist attraction.

“I was a teacher,” says Rodolfo. “I was earning less than 20 convertible pesos [around $25] a month. Then, last summer, I got on with Sherritt. With a bonus, my salary bumped up to 50 convertible pesos a month.” Unfortunately, his prosperity was short lived. Earlier this year, the project was cut. “If you know anyone at Sherritt, please talk to them,” he says. “Get them to start it back up.”

The camera obscura is now Rodolfo’s principal source of income. With a monthly salary of 16 convertible pesos, he is one of millions of Cubans who are barely hanging on. Last year, the country’s agricultural sector was knocked out, due to a particularly fierce hurricane season. That, and collapsing markets for Cuban commodities — primarily nickel, oil, and gas — plunged the island into its toughest economic crisis in a generation. With deficits soaring and cash reserves low, the government is delaying payments on profit-sharing agreements with foreign investors, even going so far as to cancel the one to which Rodolfo alludes. This has forced a difficult balancing act on Ian Delaney — Cuba’s biggest outside investor, Rodolfo’s former employer, and the man known on Bay Street as Fidel Castro’s favourite capitalist.

Delaney is CEO and chairman of Sherritt International, a multi-billion-dollar commodities conglomerate based in Toronto. Eighteen years ago, he made a deal with the Cuban Communist leader.

Ontario Mining Association Helps Create a Safer Mining Workplace Through Better Training

December 29, 2010

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.

This posting came from the Ontario Mining Association’s 90th Anniversary Publication (October/2010): http://www.oma.on.ca/en/resources/OMAat90three.pdf

The Safety and Training Advisory Committee was formed in 2001 to provide the industry with a single voice concerning safety and training recommendations to the Ontario Mining Association’s board of directors and various safety associations, and to provide a sounding board for the Ministry of Training, Colleges and Universities’ (MTCU) Mining Tripartite Committee. The tripartite committee consists of labour, management and government, and meets at least four times a year to discuss changes to the common core training program.

The mandate of the committee is to provide advice and recommendations to the OMA board of directors and industry employers on issues related to health and safety and employee training. When new legislation is proposed or there are changes to Canadian Standards Association (CSA) standards that affect the mining industry the committee discusses these changes.

Fred St. Jean is chair of the OMA’s Safety and Training Advisory Committee. He is currently superintendent of safety for Vale, Ontario Operations. His technical background is in mines engineering and he has worked underground in various capacities including supervisor, safety supervisor and general foreman operations.

St. Jean is proud of the fact that many of the committee members are active on other provincial health and safety fronts including the Mining Legislative Review Committee and its subcommit¬tees, the Mining Tripartite Committee and the Safety Association Advisory Committee. He acknowledges that he has “a very talented committee with a very experienced, enthusiastic, and very well-connected group of people on health and safety matters in the province.”

Business News Network Reporter Andrew Bell Interviews Barrick CEO Aaron Regent – (December 14, 2010)

December 29, 2010

Toronto-based Business News Network (BNN) is a Canadian cable television specialty channel owned by CTVglobalmedia. BNN airs business and financial programming and analysis. BNN reporter Andrew Bell hosts the Commodities program. From aluminum to zinc and everything in between, every Tuesday through Thursday, BNN highlights the hot world of commodities and the companies that produce …

Responsible Mining at Barrick – Barrick Gold CEO Aaron Regent’s Viewpoint

December 27, 2010

Barrick Gold Corporation [Barrick] is a leading international gold producer, with a portfolio of 26 operating mines and nine advanced exploration and development projects located on five continents, and large land positions on many prospective mineral trends.

The following viewpoint came from the Barrick Gold Corporation 2009 Responsibility Report

In 2010, Barrick is focused on meeting production and cost targets, completing projects on budget and on time, and maintaining our strong financial position. These are all very important priorities; however, how we achieve these goals will be just as important as reaching them.

Over the past year since joining Barrick, I have met with a host of stakeholders – investors, government officials, our own employees, non-governmental organizations (NGOs) and suppliers. Listening to them has provided great insight into many of the broader trends that are affecting the mining industry.

We are seeing increasingly high public expectations of how companies should conduct themselves. There is also greater scrutiny of the mining sector by critics, NGOs, communities, governments, and other stakeholders, especially in developing countries. This is coupled with calls for more reporting, accountability, and legislative oversight of the mining sector. We see similar trends in project financing, where a major part of the discussion now focuses on social and environmental issues.

Mining, as an extractive industry, has a significant impact on the communities and environments where we operate. In order to mine, we must disturb land and use both energy and water. Our operations can also have a social impact on local communities, for example through resettlement or shifting social dynamics. I believe our efforts and innovative approaches in managing and mitigating these impacts are making all the difference, as we generate meaningful benefits for our host communities.