Dec '10/Jan '11

President's notes

The future and the fundamentals

By Chris Twigge-Molecy

Despite the famous admonition, "All predictions are risky, particularly about the future," I have decided to take out my crystal bail for our Outlook 2011 issue. lt is increasingly clear that China and its mineral needs will be a key driver of our short-term future. ln addition, this year's China Mining Conference revealed there is a strong political will within China to pursue more sustainable and socially responsible mining practices. This represents a substantial opportunity for our environmental and CSR practitioners.

When looking at Chinese investments internationally, the Chinese approach to project development is fundamentally different from the Western approach, and this can cause stress and frustrations. To minimize this, the CIM International Branch has launched three initiatives:

  • The first was in November when we co-hosted the very successful "CIM Mine Finance and Capital Markets" day in Beijing.
  • The second was to sign a MOU with the China Non-Ferrous Metals lndustry Association to organize activities sharing best practices in CSR, the environment, safety and recycling. Over time, we expect to build meaningful technical exchanges with the huge Chinese mining and minerals sector from these two platforms.
  • Third, our reserve definition and valuation committees continue to have discussions with various Chinese bodies to try to harmonize the Chinese approaches and definitions with ours.

Closer to home, I was fortunate enough to spend a couple of days at the Newfoundland Branch annual meeting. What a dynamic event with over 700 attendees and a strong M4S program for the local schools. From the excellent technical program, it was also clear that rare earths are not so rare.

Returning to where I began, in my view, 2011 will be a great year. Chinese growth will continue (albeit at a likely reduced rate closer to eight per cent), and commodities will still be required to support it. However, we must enjoy it while we can. The Chinese government is vigorously pursuing its stated goal of material and energy self-sufficiency. I would suggest this is a serious concern for the longer term. ln the short-to medium-term, however, this is good news for us.

I wish you and your families the best for the holiday season and the year ahead.

Chris Twigge-Molecey, CIM President

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