Rio Tinto forges ahead with US$20B Guinea project
Rio Tinto moved one step closer to realizing its massive Simandou iron ore project on May 26, signing an investment framework that gives Guinea a 7.5 per
cent stake in mine owner Simfer S.A., a Rio Tinto subsidiary, with the option to increase its share to 35 per cent over a 20-year period. The agreement was
ratified by the Guinean government in early June.
The Simandou project – an iron ore project owned by Rio Tinto, the Government of Guinea, Chinalco, and the International Finance Corporation – is located
in southeastern Guinea, 30 kilometres west of Beyla. The framework agreement ensures Guinean commercial and private users will have access to the two major
infrastructure components of the project: a 650-kilometre trans-Guinean railway that will transport ore from the site to Guinea’s coast, and a deep-water
port slated for the Forécariah prefecture. Those infrastructure projects will be owned for 30 years by a privately managed company called InfraCo, which
helps develop infrastructure in sub-Saharan Africa. After that, ownership will be transferred to the Republic of Guinea.
The investment framework is a major milestone for Rio Tinto, which in April launched a complaint in a New York district court against Vale and BSG
Resources for allegedly corrupt mining practices that led to the loss of Blocks 1 and 2 of Simandou.
Rio Tinto’s next step is to begin work on a bankable feasibility study, which should be completed in a year. Simandou would be the largest combined iron
ore and infrastructure project in Africa. Rio Tinto estimates the project could double Guinea’s GDP and create 45,000 jobs.
– Kelsey Rolfe
Coal producers to take stock at Vancouver conference
The Coal Association of Canada’s (CAC) annual three-day conference will kick off in early September with panels looking at how producers can weather the
industry’s challenging markets. The coal industry is currently facing an imbalance in supply and demand, with an overabundance of coal coming primarily
from Australia and Indonesia, and a lower need for coal in large markets like China driving prices down, according to Ann Marie Hann, CAC president. “The
global price of coal is at a level that hasn’t been seen in years,” she said.
CAC conference panels will examine measures companies could take to become more efficient in order to help them deal with the short-term imbalance and
better prepare them to rebound when the markets change. “We wanted to have a discussion about the industry’s current perceptions about the realities that
are facing them,” Hann said, “and more importantly, where do they see the markets moving, and what are they planning to do between now and then.”
The CAC’s conference will be held from Sept. 10 to 12 in Vancouver.
Roundup and VRIC buddy up
The Association for Mineral Exploration British Columbia (AME BC) and Cambridge House International will be aligning their annual conferences starting in
2016, they announced in early-June.
AME BC’s Mineral Exploration Roundup and Cambridge House’s Vancouver Resource Investment Conference will be held back to back at the Vancouver Convention
Centre in late-January 2016.
Gavin Dirom, president and CEO of AME BC, said the decision was made to accommodate delegates who travel to Vancouver from around the world for both
conferences but have to wait up to a week in between events. “[The conferences] are quite linked in many ways,” he explained. “Having a week of disconnect
just made no sense.” Dirom said he hopes aligning the conferences can help connect investors with the more scientific and technical sides of the industry,
“especially given the venture capital crisis that we’ve all been facing for over two years now.”
The organizations’ 2015 conferences will still be held a week apart, with Cambridge House’s Investment Conference running from January 18 to 19, and AME
BC’s Roundup from January 26 to 29.
GAC-MAC conference gives reason for excitement
For Dave Lentz, the 2014 GAC-MAC conference, held in Fredericton, signalled what he believes will be the beginning of economic improvement in Canadian
geosciences after a challenging year. At the 2013 Winnipeg conference “we were hitting the bottom of our economic cycle,” said Lentz, who chaired the 2014
conference. “Right now we’re just at the inflection, and we’re starting definitely on an upward path.”
This year’s annual conference, hosted jointly by the Geological Association of Canada (GAC) and Mineralogical Association of Canada (MAC), ran from May 21
to 23 on the University of New Brunswick campus and welcomed more than 700 attendees as well as federal Environment Minister Leona Aglukkaq, who made a
guest appearance. Session topics ranged from professionalism and accreditation to micropaleontology and geo-ecology, with three special sessions dedicated
to honouring prominent geologists and mineralogists: McGill University professor Andrew Hynes, and the late John Jambor and André Lalonde. Attendees also
got the chance to participate in many multi-day trips to local mineral deposits before and after the conference, including the Bathurst Mining Camp and the
Mount Pleasant area.
The 2015 conference will be held at the Palais des Congrès de Montréal.
Peter Watson named new NEB chief executive
Peter Watson, the deputy minister for the Alberta premier’s executive council, was selected to become the new chairman and CEO of the National Energy Board
(NEB), replacing the outgoing Gaeton Caron. Natural Resources Minister Greg Rickford made the announcement on June 13, with Watson assuming the position on
August 18. Lyne Mercier, an NEB board member, was also appointed vice-chair of the federal energy watchdog. “The comprehensive experience and knowledge of
these individuals will be invaluable during this critical time for our federal energy regulator,” Rickford said in a release.
Watson has served in the past as Alberta’s deputy minister of energy and deputy minister of the environment. In his current role as deputy minister of the
premier’s executive council, he is in charge of the province’s public service. He will be leaving this position to take on the NEB role.
Watson will see applications for some important projects pass his desk in the coming years including an application from TransCanada for its $12-billion
Energy East pipeline, which would move 1.1 million barrels of crude oil per day from Alberta to Quebec, and eventually further east to New Brunswick.
Kinder Morgan will also seek to expand the capacity of its Trans Mountain pipeline through British Columbia. Watson’s term at NEB will last for seven
Total E&P Canada has shelved its northern Alberta oil sands mining project indefinitely, citing issues with escalating costs. The Canadian subsidiary
of France-based Total SA announced in late-May that site work on the $11-billion Joslyn mine would be suspended, and the company would focus on engineering
studies aimed at reducing the costs of the project.
The move will cause up to 150 layoffs by the end of the year. Erin MacDonald, a Total spokesperson, said the company is attempting to redeploy the laid-off
workers to some of its international projects or to oil sands projects where Total is a co-investor.
The Joslyn project is targeted to produce 160,000 barrels of bitumen per day, according to the company’s submissions with the Alberta Energy Regulator, and
production is slated to begin in 2020. The site is about 65 kilometres north of Fort McMurray.
Total controls 38.25 per cent of the Joslyn project, with Suncor holding 36.75 percent, California’s Occidental Petroleum holding 15 per cent, and Inpex
Corp. the remaining 10 per cent. The decision to suspend the project was unanimous among the four partners, Total announced. The company, however, declined
to comment on how much it has spent on the Joslyn project so far, and what would need to happen for the company to return to the mine.
Quebec adopts federal transparency measures
The global trend towards transparency in the extractive sector is knocking at Quebec’s door. In its 2014–15 budget, the newly elected Liberal government
pledges to get in step with both the federal government and mining industry groups to set up new mandatory reporting standards for payments. Among other
things, the government would require extractive companies in the oil, gas and mining sectors to publish annual reports of payments of $100,000 or more on a
project-level basis made to all levels of government in Quebec, including aboriginal band councils. The standards would be harmonized with American and
European requirements and come into effect on April 1, 2015. The provincial initiative follows recommendations released in January 2014 by the Resource
Revenue Working Group, which comprises PDAC, MAC and civil society organizations. Prime Minister Stephen Harper gave his support to the group in June 2013
but, in the end, it is up to each province to set up its own disclosure rules. In Quebec, the mandate would fall under the Autorité des marchés financiers,
the province’s securities regulator. Ironically, representatives from Quebec’s Natural Resources Ministry declined to provide comment on the new
transparency initiative, stating it was too early in the process to discuss the matter.
– Antoine Dion-Ortega
First Quantum buys Lumina, Hudbay acquires Augusta
Already this year, we have seen a bidding war for Osisko and its Canadian Malartic golden goose, and Glencore sell its Las Bambas copper mine in Peru to a
Chinese consortium. Now, two more mining companies have penned multi-million-dollar deals to expand their project portfolios.
Vancouver’s First Quantum Minerals announced on June 17 that it had agreed to purchase Lumina Copper Corp. for $470 million to gain control of its Taca
Taca copper project in Argentina.
“The acquisition of Lumina is another step in First Quantum’s long-stated objective of geographical diversification through the acquisition of world class,
early-stage copper assets,” said First Quantum CEO Philip Pascall in a release. “Once the acquisition of Lumina has been completed we will immediately
review the Taca Taca project to determine the most efficient and economical timing for its development in the context of the projects that we are currently
Then, in late-June, Toronto’s Hudbay Minerals announced it had reached a friendly agreement to purchase Augusta Resource for roughly $555 million, after
Hudbay initially offered $443 million for it in February in a hostile takeover bid. Augusta is working on advancing its Rosemont copper project near
Tucson, Arizona, slated to become the third largest copper mine in the United States, with the intent to begin production in early-2017.
– Herb Mathisen
Joy Global scoops up Sudbury’s MTI
Mining equipment giant Joy Global completed its purchase of Mining Technologies International (MTI) for $51 million, the company announced in June. The
acquisition of the Sudbury-based company marks Joy Global’s expansion into underground hard rock mining products.
“MTI is a natural fit with the existing Joy Global product portfolio and strategy,” said Josh Wagner, the Illinois-based company’s director of product
management. “It provides a great building block for the company in the underground hard rock market.” Joy Global acquired “substantially all” of MTI’s
product lines, except for the company’s cylinder division and rail products, which will operate in North Bay under its former name, LHD Equipment Limited.
Robert Lipic, the former CEO of MTI, said the company may no longer offer a complete line of rail equipment but have a “more focused” approach instead.
MTI will remain in Sudbury, and, for the time being, will operate as a stand-alone unit under Joy Global’s recently established Hard Rock Mining division.
Wagner says the majority of MTI employees have become part of Joy Global and will “provide the foundation” for the new division.
Ross Gallinger out as PDAC executive director
The Prospectors and Developers Association of Canada (PDAC) is looking for another executive director, following Ross Gallinger’s decision to step down in
June. Gallinger had held the position since August 2011. The decision to leave the association was a mutual one between Gallinger and the board of
directors, according to PDAC spokesman Steve Virtue.
Under Gallinger’s leadership, PDAC was involved in an initiative to disclose payments that oil and gas and mining companies make to domestic and
international governments. Pierre Gratton, president and CEO of the Mining Association of Canada (MAC), credited Gallinger, who he has known for more than
a decade, as a “serious, ethical, responsible voice” for the exploration industry. “I thought Ross was outstanding, and I have to say that under his tenure
the relationship between MAC and PDAC has never been stronger, so I’m sad to see him go,” Gratton said. “He’s leaving some really big shoes to fill.”
PDAC’s board is creating a hiring committee to replace Gallinger in the near future. Until then, PDAC president Rodney Thomas will step in as interim
Ontario miners cautiously optimistic with Liberal victory
After a stunning Liberal victory in Ontario’s June election, which saw the party swept back into power with an unexpected majority mandate, Premier
Kathleen Wynne re-opened the legislature on July 2 and tabled the left-leaning budget her party campaigned on. This included a $1 billion commitment
towards infrastructure to the Ring of Fire that no longer requires matching funds from the federal government.
Chris Hodgson, president of the Ontario Mining Association, said the Ring of Fire funds are a positive step forward. “We’ve had a good relationship with
Premier Wynne,” he said. “The door’s always been open for our concerns, and we’re optimistic that will continue.” However, Hodgson said he hopes Wynne will
consider reducing the province’s industrial hydro rates, which are the highest in North America, to give the province’s mining industry more of an edge.
“We’ve made some strides with Premier Wynne in the last year, and we’re hoping to continue that progress,” he said. “It may never be a level playing field
[with energy rates,] but we need to be competitive.” (for more on the Ring of Fire, click here)
Northern Gateway: by the numbers
Enbridge got the go-ahead from the federal government on June 18 to begin building its Northern Gateway pipeline, which would stretch from Bruderheim,
Alberta, to Kitimat, B.C. Pipeline proponents argue the project is needed to move the expanded production expected in Alberta’s oil sands and help the
bitumen crude reach tidewater to access Asian markets. But the project has drawn criticism from both federal opposition parties, and the threat of legal
action from B.C.’s Coastal First Nations. “First Nations and our allies will protect our rights and the interests of future generations,” the group’s
executive director, Art Sterritt, said in a release. “We will never allow oil tankers into our territorial waters.”
Strateco suspends project, public review puts local industry in doubt