Republic of Mining

Rio Tinto CEO Tom Albanese London Speech – Mining Issues, A Global View

July 9, 2010

This speech was given at the Melbourne Mining Club in London, United Kingdom on July 08, 2010. For more information on Rio Tinto, please go to www.riotinto.com

Introduction

Thank you for your kind introduction. It is a privilege to be addressing the Melbourne Mining Club here at Lord’s.

As an American, running a company with a strong presence in the two great cricketing nations of England and Australia, I hope you will forgive me for not daring to give you any personal insights into the complex game of cricket.

With a lexicon including terms such as ‘silly mid off’; ‘googly; ‘fine leg’; and ‘ball tampering’ – I think I’d better stick to the language of mining.

What I want to talk about this evening is a different kind of international contest, the face-off between challenge and opportunity in the global mining industry.

I will start in the present and touch on some of the topical issues of the day including the Mineral Resource Rent Tax. Then I’ll move beyond Rio Tinto’s solid Anglo Australian roots and look outwards to the wider world and the global economy; and then cover what a rapidly changing socio-economic landscape means for our industry.

National Post’s Diane Francis Highlights the Global Succes of Canada’s Mining Sector

July 8, 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.

Business commentator and author Diane Francis presented her views on mining as Canada’s hidden success story in her keynote address at a recent Ontario Mining Association conference. The National Post editor at large helped to kick off the OMA “The future of mining in Ontario: Is it golden?” conference June 14 in North Bay.

“Mining built Canada and mining still runs Canada,” said the Ms Francis, who has been a media fellow at the World Economic Forum in Davos, Switzerland, and at the Kennedy School of Government in the United States. “It should not be politically incorrect in Canada to support mining. We have nothing to be ashamed of. The only industry that is truly wealth creating is mining and in this country one in 10 First Nations people are employed in mining.”

“Mining is what Canada is all about and we in this country are riding a commodities rocket ship,” she said. “Four hundred million people are going to be born in the next decade providing a demographics of demand.”

Tentative Deal May End Year-Long Vale Strike With Sudbury Nickel Miners – by Marilyn Scales

June 10, 2015July 8, 2010

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

Vale and the 3,000-plus striking members of Steelworkers Local 6500 have finally hammered out a deal that may end a 51-week-long strike in Sudbury, ON. Union members are voting today and tomorrow (July 7-8) on a new five-year contract, and observers are optimistic.

The strike fuelled strong rhetoric from both sides. There were charges of not negotiating in good faith. There were arguments over picket line protocol. There were allegations of strikers being injured on the picket line. There were calls for government ministers to intercede. Vale replaced strikers with other workers on its payroll so that partial production could resume. There were suspicions that the company was out to bust the union. Negotiations broke off for lengthy periods. Both parties took their complaints to the courts. It took a mediator to reach the new deal.

The cost to the community was great. With over 3,000 workers on the picket line, Sudbury Mayor John Rodriguez was quoted as saying the city missed the spending power represented by a $4 million payroll for each week the strike continued.

Families broke up, homes were forfeit and a spike in suicides was reported.

Mining Supply Sector Huge in Sudbury and Northern Ontario – by Marilyn Scales

February 18, 2011July 1, 2010

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

We in the mineral industry often speak of “direct jobs” generated at mines and mills and “indirect employment”, those jobs as suppliers, manufacturers and consultants that spring up to serve the needs of the industry. We know that for every person directly employed by the mining industry there are several others indirectly employed.

Those numbers and others aspects of mining’s importance have been pinned down in a new survey prepared for the Sudbury Area Mining Service and Supply Association (SAMSSA). The Northern Ontario Mining Supply and Services Study looks at about 500 separate firms and organizations in what might arguably be called the “heart” of the mining sector.

The study found approximately 23,000 people are employed in the supply sector. That is a more generous number than the Ontario Mining Association came up with. But the OMA estimate of 480 direct mine jobs and 2,280 supply and services jobs in the province sounds too low by a factor of 10. The difference is probably due to differing definitions of what is a “mine” job or an “indirect” job. Either way, keep the multiplier effect in mind.

The SAMSSA study put a value of $5.6 billion on the supply and services sector in Northern Ontario.

Mining Industry Human Resources Council (MiHR) Working to Increase Aboriginal Participation in Mining Sector – by Lindsay Forcellini

June 30, 2010

Lindsay Forcellini is the Marketing & Communications Coordinator for the Mining Industry Human Resources Council (MiHR)

Bridging the gap: Mining Essentials Program poised to increase capacity for Aboriginal employment in mining

The Assembly of First Nations and the Mining Industry Human Resources (MiHR) Council are developing Mining Essentials: A Work Readiness Training Program for Aboriginal Peoples to create more employment opportunities for Aboriginal peoples and to provide a practical solution to recruitment challenges currently facing mining employers.

Aboriginal peoples have a strong history and future role in Canada’s mining industry and many Aboriginal communities are located within close proximity of Canada’s mines and exploration sites. Mining Essentials will ensure Aboriginal peoples have the essential skills and work-readiness training needed to enter the mining industry, increasing their capacity for employment in one of Canada’s highest paying industrial sectors.

The Mining Essentials Program was conceptualized after MiHR’s 2009 needs-assessment revealed national interest in an essential skills program for the industry. This pre-employment mining training program is a potential entry point to MiHR’s Canadian Mining Credentials Program, with curriculum based on industry standards. The benefits of the program include consistency in learning outcomes, increased worker mobility and bridging the gap between career seeker skill levels and employer demand level for skills.

The Arrogance of Inco – by Val Ross (Originally Published in May 1979 – Part 4 of 4)

June 10, 2015June 30, 2010

“The Arrogance of Inco” was originally published as the cover story in the May, 1979 issue of Canadian Business. Reporter Val Ross, who died in 2008, spent two and a half months researching and writing this lengthy expose of the then Inco Limited. It has become a “classic must read” for anyone wishing to understand the often bitter history between Sudbury and the company that defined the Canadian mining industry.

4-Troubles in the Province of Ontario

Nineteen hundred and fifteen was a rather wet year in the Sudbury district. The sulphur dioxide fumes from the open-air roasting heaps hung in sickening mists and low clouds over the region. In increasing numbers the local farmers brought damage suits against the nickel producers, Mond and International Nickel. In desperation the nickel companies turned to the Ontario Ministry of Lands, Forests and Mines for protection. They begged the government to remember nickel’s contribution to the defence of the Empire (this was the year before the Deutschland’s two trips to pick up nickel supplies for Germany).

Charging opportunism, they protested, “Lands are being taken up and a pretence of farming made…in the hope and the expectation that the same may be damaged or appear to be damaged so that a claim against the company may be made.”

The Ontario government agreed with the nickel men’s interpretation of events and dealt with the “smoke farmers,” as Inco dubbed the victims, accordingly. Whole townships near Copper Cliff and Sudbury were withdrawn from sale to settlers. When the remaining lots changed hands, “smoke easement clauses” were written in which denied the buyers the right to sue mining companies. These clauses, reviewed in 1942 during another spate of farmers’ and residents’ complaints, have been retained. To this day, no owner of Sudbury real estate has the right to sue mining companies for property damage.

There were, and remain, variants on the sulphur dioxide pollution problems in the Sudbury area.

The Arrogance of Inco – by Val Ross (Originally Published in May 1979 – Part 3 of 4)

June 10, 2015June 30, 2010

3-Foreign Wars, Foreign Conquests

World War One boosted International Nickel up fortune’s wheel. The demands of World War Two and the Cold War arms race would put the company over the top – and heading down.

In the second half of the century Inco reaped the consequences of what it had sowed in the first the demand it had created for nickel ultimately exceeded its capacity to produce it – and left a vacuum for new producers to fill. Its booming good health attracted envy from customers, who might, had Inco been less arrogant, have felt more loyalty to the company when the chips were down; and it also attracted the critical attention of governments, consumer groups and environmentalists.

No one foresaw this, of course. The company’s chairman and president during World War Two, Robert Crooks Stanley, the man who’d spent four decades of his life convincing the world of nickel’s place in civilian life, made the necessary adjustments to war in a spirit of confident responsibility. “The first obligation of every corporation,” he noted serenely, “is to give the utmost support to his [sic] government in the prosecution of the war.” He plowed $38.5 million of the company’s money into boosting production by 20% and expanding the Huntington rolling mill facilities. Just as in World War One, the company nearly doubled its nickel output. But to do so it sacrificed costs, efficiency and profits, which dropped from $37 million in 1939 to $25 million in 1945.

Meanwhile, Stanley’s friend and fellow board member, John Foster Dulles, was creating a niche for himself in the postwar world. Dulles chaired the corporate heavyweight Committee for a Just and Durable Peace sponsored by the National Council of Churches of Christ in America; advised the American delegation at the United Nations conference, and made more and more friends with the Republican party establishment. It must have seemed to the board of directors that the company’s postwar position would surely be enhanced by friends with such political power.

They were wrong.

The Arrogance of Inco – by Val Ross (Originally Published in May 1979 – Part 2 of 4)

June 10, 2015June 30, 2010

2-The Monopoly Years

Whether the 20th century would belong to Canada, as Laurier had promised, was anybody’s guess, but it was clear from the start that it would have a place for the nickel from Canada.

No one was under the illusion that its control wasn’t solidly in American hands. The International Nickel Company’s chief executives were American, its refining operations were located in America, and so were its marketing policymakers.

When, in 1890, US Navy tests demonstrated that nickel-steel plate was impervious to shells fired at a velocity of 1,700 feet per second, the Glasgow Herald prophesized the dawn of a new age. “When irresistible nickel-plated breach loader confronts the impenetrable nickel-plated ironclad [vehicle], then…war as a fine art will have come to an end.”

On the contrary, nickel flourished in war-making and war-making flourished with the help of nickel. The Spanish-American War of 1898 demonstrated the invincibility of US nickel-steel-plated ships. Soon nickel was almost entirely a military material. Demand for it quickened in the dreadnought-building races between the Great Powers. Then, in 1914, the guns of war sounded, and nickel boomed. Between 1914 and 1918, the output of the Sudbury area mines more than doubled.

How awkward when it was learned in the middle of the war that some of this product was destined for German guns!

The Arrogance of Inco – by Val Ross (Originally Published in May 1979 – Part 1 of 4)

June 10, 2015June 29, 2010

A century of power and profit – and now a sea of troubles

NICKEL, INCO. Clack the consonants of these two words on your tongue, and they sound similar. They used to be synonymous – nickel, Inco – in the public mind undoubtedly, in the company’s mind, indelibly.

The International nickel Co. (it was renamed Inco Ltd. In 1976) was in up to its elbows at the birth of the nickel industry, almost as responsible for nickel’s development as nickel was responsible for making Inco Ltd. the billion-dollar multinational empire it is today. Inco was nickel. And the company men and the metal left their characteristic mark on each other’s fate.

The metal, element 28, is greyish-white. You might describe the company’s subdued, Anglo-Saxon character in the same way. Among the metal’s most important properties are resistance to oxidization and corrosion, and insolubility in water. Alone, nickel us brittle, but it merges promiscuously with iron and other metals into a host of tough alloys. The company is tough too, resistant to change, at times rigid. And the men of Inco have forged some odd business and political alliances to increase their company’s strength and lustre.

Barrick Gold’s Pascua-Lama Project Supports the Indigenous Diaguita of Chile

June 29, 2010

This article is from the April 2009 issue of Beyond Borders: A Barrick Gold Report on Responsible Mining.

For more than a thousand years, the Diaguita have made Chile their home and thrived as a culture within its borders. Today, they are recognized as a distinct indigenous community living in Chile’s Huasco Valley. They have formed a close relationship with Barrick based on a shared mining history and a common focus for the future.

Barrick’s Pascua-Lama project is located 45 kilometers away from the nearest Diaguita settlement, making them the company’s closest neighbors.

THIS IS THEIR STORY

The history of the Diaguita begins around 1000 A.D., when the indigenous group first descended from the Andes mountain range to settle in Chile’s valleys. Anthropologist Franko Urqueta, who was hired by Barrick to study the Diaguita and has since written a book on the culture, says the population flourished between the eighth and 15th centuries, settling in the Norte Chico valleys and growing to a population of nearly 30,000 at their peak. The Diaguita formed an agrarian-based society, creating an extensive and highly efficient irrigation system able to sustain a large population. They were known as walking farmers – moving from the coast to the mountains depending on which climate would give them the best agricultural results. According to Urqueta, the Diaguita were an advanced society that valued art and artisans. Throughout Chile, they were known for their varied and beautiful pottery and weaving. These artisanal traditions continued despite years of submission, first by the Inca empire and then by the Spaniards. Today, less than 1,500 Diaguita remain, making their home in the Atacama Region, specifically in the Huasco Valley. One of the smallest of nine indigenous groups in the country, they are a tight-knit and vibrant community.

“Right from the beginning, we have respected the Diaguita and their ties to the land,” says Igor Gonzalez, president of Barrick South America. “We opened up the channels of communication and invited members of the community to discuss issues, to openly ask questions and to work together with us on the Pascua-Lama project.” Globally, Barrick actively engages with indigenous peoples in the areas where the company operates. The aim is to develop long-term relationships that are constructive and mutually beneficial.

Read more

Excerpt from Until the End – by Adelle Larmour (The Story of John Gagnon-Health and Safety Union Activist)

June 28, 2010

Adelle Larmour is a journalist at Northern Ontario Business and Sudbury Mining Solutions Journal. Contact her at untiltheend.larmour@gmail.com to order a copy of Until the End.

Chapter 48 – The History of the Northeastern Regional Cancer Treatment Centre in Sudbury, Ontario

The idea of building a Northeastern Regional Cancer Treatment Centre gained strength in the early ’80s, when Sudbury citizens began lobbying for this centre of excellence despite the difficult economic conditions. Maureen Lacroix, a proactive personality who has either chaired or sat as an executive member on more than 20 organizations involving housing, job creation, and healthcare, played a lead role in the effort to establish this full-service Centre in the city.

As charge nurse in the emergency unit, and later, assistant director of nursing services at St. Joseph’s Hospital between 1958 and 1965, Lacroix immediately recognized a gap in the system during monthly cancer clinics hosted by the hospital and later by Laurentian Hospital (1974).

It all took place in two little examining rooms in the emergency department at St. Joe’s. As many as 200 people could have been seen in the course of a day and a half. These were people who waited a long time to see a physician for life-and-death type of news.1

Although Sudbury could provide surgeries and some chemotherapy for cancer patients, advanced chemotherapy, immunotherapy, and radiotherapy2 were only available at Princess Margaret Hospital in Toronto. Lacroix also realized that when the patients returned home, hospital personnel lacked the expertise to administer cancer-specific medicines.

Also, there were those people who would return from Toronto after having their surgeries and chemo- or radiotherapy that had residual chemotherapy drugs to be given. There really weren’t people who knew the protocol about these drugs or how they should be administered.

Export Market Intelligence/Network Needed for Northern Ontario Mining Suppliers to Succeed – by Dick DeStefano

September 14, 2018June 28, 2010

Dick DeStefano is the Executive Director of Sudbury Area Mining Supply and Service Association (SAMSSA).

The recent Doyletech Study entitled Northern Ontario Mining Supply and Services – recently released placed a significant amount of emphasis in the value of the sector and its ability to create wealth and employment in Northern Ontario.

I was impressed with results that demonstrate that the 500 plus mining supply companies throughout Northern Ontario generate over $5.6 billion in sales and employees over 23,000 at peak times.

Notwithstanding the value of this enormous financial and employment footprint was the recommendation that an enhanced International Market Entry Strategy needed to be added to the existing Infrastructure within the Companies.

The first-order objective would be to assist sector firms and organizations enter export markets, through a shared-costs public/private partnership program that aided relevant organizations.

As well, it would support optimum approaches in terms of partnerships, distributors, and product/service profiles.

The three ways to conduct foreign market entry is by trade, contractual agreement, or direct investment.

Dirty Nickel Pig Iron’s Pollution, Cost and Impurities are Obstacles for China and No Threat to Sudbury – by Nick Stewart

June 24, 2010June 24, 2010

This article was originally posted on the Northern Life website on June 23, 2010.

The threat that Chinese-produced nickel pig iron poses to Sudbury’s nickel producers is overblown, according to mining analyst Raymond Goldie.

Speaking to the 11th International Platinum Symposium at Laurentian University’s Fraser Auditorium June 22, Goldie said that nickel pig iron — a low-cost substitute for refined nickel — is too flawed to pose a serious long-term threat.

“There’s two big problems with pig nickel,” Goldie, senior mining analyst and vice-president of Toronto-based Salman Partners, said. “Firstly, it’s dirty, and second, making it is dirty. It is in fact too dirty to be the sole source of nickel in stainless steel.”

Nickel pig iron is made by putting nickel-rich dirt in a specialized furnace. However, the end product is riddled with impurities, and must be blended with pure or virgin nickel to make stainless steel. For every pound of pig nickel, four pounds of virgin nickel is required.

Some in Canada Say Strike Shows Risk of Foreign Control (The Sudbury Vale Inco Strike) – by New York Times’ Ian Austen (Originally Published January 14, 2010)

June 22, 2010

The New York Times has the third highest weekday circulation in the United States (after USA Today and the Wall Street Journal) and is one of the country’s most influential newspapers.

SUDBURY, Ontario — Last July, the 3,300 unionized workers who normally work deep below this city in the vast nickel mines owned by Vale Inco did something unusual: they went on strike even though they had already been laid off temporarily.

Even by the standards of a mining city with a long and often bitter history of labor strife, the nearly six-month walkout by the Canadian arm of the United Steelworkers of America is exceptional, and not just because of its length. To many in Canada, particularly those in the labor movement, the strike has become a symbol of the pitfalls of allowing large corporations to fall under foreign control.

Even before Vale, an iron ore miner based in Brazil that was once state-controlled, completed its acquisition of Inco in 2006, there was a widespread debate in Canada about the “hollowing out” of the country’s corporate sector. Inco had tried to create a Canadian mining giant by offering to buy Falconbridge, a rival that also has extensive operations in Sudbury. But the unsuccessful effort touched off a series of maneuvers that resulted in Inco, one of Canada’s most prominent corporations, being owned by a Brazilian company few Canadians knew and many distrusted.

For Inco’s unions and their supporters, the unusually protracted strike is confirmation of those suspicions.