Wednesday 22nd November 2017

Resource Clips


Posts tagged ‘alberta’

B.C. Securities Commission under fire as half a billion in penalties remains unenforced

November 21st, 2017

by Greg Klein | November 21, 2017

Although some small cap companies seem to consider regulators the bane of their existence, big-time scammers might take a more benign view. A Postmedia investigation has revealed that the British Columbia Securities Commission—with 234 staffers and a $46.6-million budget—has collected less than 2% of $510 million in fines and payback orders issued over the last decade. The collection rate manages to fall even farther, to less than 0.1%, for 29 such orders of $1 million or more that total $458 million.

B.C. Securities Commission under fire as half a billion in penalties remains unenforced

Although the BCSC responds that the con artists may have hidden their assets or disappeared, journalist Gordon Hoekstra reports, “Postmedia tracked down $31 million in potential assets linked to the fraudsters,” including homes in affluent B.C. suburbs, Las Vegas and Hawaii.

Among available enforcement strategies, the BCSC “can file any of its decisions in B.C. Supreme Court, a simple administrative exercise, which automatically makes the penalties an order of the court,” Hoekstra points out. “If a property has been transferred to someone else, for example, a spouse, to escape a penalty, that may also be considered fraud.”

Regulators in other provinces do somewhat better, according to the study. Securities commissions in Ontario and Alberta achieved 18% collection rates over the last decade, while Quebec reached about 20% over the past four years. The U.S. Securities and Exchange Commission hit nearly 60% during the past five years.

The exposé seems to have taken both of B.C.’s main political parties by surprise. In a written statement NDP Finance Minister Carole James noted the commission operates at arms-length from the government. “We would encourage any proposals from the BCSC on any new mechanisms they may need to collect the fines,” she stated.

“No details were released by James, who ministry officials said was unavailable for an interview, on how the provincial government would follow up or monitor any proposals,” Hoekstra added.

As for the opposition party that had been government during most of the 10-year period, the BC Liberals “said in an e-mail that ‘unfortunately’ no MLAs were available for comment. The Liberals have 41 sitting MLAs, including two finance critics, Shirley Bond and Tracy Redies.”

At a regulatory crossroads

October 4th, 2017

It’s time to fix federally induced problems, says the Mining Association of Canada

by Greg Klein

The fundamentals behind the last supercycle remain in place, insists Pierre Gratton. Yet the Mining Association of Canada president/CEO warns that the country has lost ground as a global industry leader. While the current upswing continues, the transition to a cleaner, lower-carbon future will call for even more mineable commodities. Whether Canada participates to its fullest potential, however, depends largely on policies directed by Ottawa.

Addressing a 230-strong Greater Vancouver Board of Trade audience on September 27, Gratton noted that by 2015 Canada lost its first-place spot for exploration investment. The usurper was Australia, which proved itself “much more strategic and successful over the past decade.” Meanwhile this country’s list of active projects has fallen to nearly half its 2011 peak of 2,700. Only two new projects came up for federal environmental assessment in 2016, an historic low. “We’ve got world class deposits sitting idle,” he added, citing Ontario’s Ring of Fire, Nunavut’s Izok Corridor and British Columbia’s New Prosperity.

It’s time to fix federally induced problems, says the Mining Association of Canada

Pierre Gratton: “Hopefully we’ll get it right this time, we’ll lock
it in, we’ll know what the rules are and get down to business.”
(Photo: Matt Borck, courtesy Greater Vancouver Board of Trade.)

Yet opportunities have been improving, he maintained, and not just because of stronger commodity prices. In addition to continued growth among emerging economies, carbon-reducing measures call for new technologies that require more mining products. That’s the case for electrified transportation, wind and solar generation, and energy storage.

“The transition to a low-carbon future is not years away from now—it has already started and it’s accelerating at a rapid pace.” Unless Canada turns that to its competitive advantage, “we will lose this opportunity to other countries… It’s going to be us, Australia or someone else.”

Moreover, Canada can produce these commodities “as a leader in sustainability.” This country “already operates some of the lowest-emitting, highest-tech and most socially responsible mines in the world.” Gratton credited companies that implemented MAC’s Towards Sustainable Mining program with reducing greenhouse gas emissions. And altruism can be rewarding: “Our Canadian-made mining standard has caught the attention of Apple and other global companies that see it as a program robust enough to demonstrate responsible sourcing.”

But if environmental progress bodes well for Canadian mining, the policy environment remains uncertain. The 2012 regulatory reforms of the previous Conservative government lost both public and investor confidence, Gratton argued.

Ottawa now needs to put “the principle of one project/one review squarely into action. We need a federal process that no longer places an unfair and unequal burden on Canada’s mining sector alone, which has sadly been the case since 2012.”

For a couple of these pieces, like the Fisheries Act and the Navigation Protection Act, I think the mining industry is probably going to come out fine. The Environmental Assessment Act, I don’t know.

The Liberals, he said, are “committed to review and replace all of the federal reforms of the previous Harper government…. For a couple of these pieces, like the Fisheries Act and the Navigation Protection Act, I think the mining industry is probably going to come out fine. The Environmental Assessment Act, I don’t know. At this point it is still so much in flux it is hard to know exactly where this will land.”

Six years of regulatory uncertainty with the prospect of more to come contributes to “this question mark in Canada. And hopefully we’ll get it right this time, we’ll lock it in, we’ll know what the rules are and get down to business.”

Returning to climate change, Gratton noted some industry initiatives, including wind energy reducing diesel dependency at Diavik and Raglan, and the transformation of B.C.’s former Sullivan mine into a community-owned solar plant that sells electricity to the grid. Goldcorp’s (TSX:G) Borden project, anticipated for 2019 production, would be Canada’s first all-electric underground mine.

Not only would the battery-powered fleet cut emissions, it “will significantly reduce ventilation costs,” Gratton stated.

“But we need to do more to spur innovation.” MAC proposes government support for innovation superclusters, a possible “catalyst to achieve transformative outcomes for our industry and help re-establish Canada as a global leader for mining innovation.”

Northern infrastructure, bringing both roads and electricity to isolated areas, again complements both the industry and the environment. Gratton pointed to the Northwest Territories’ planned $150-million all-season road to the Tlicho community, and the federal/Yukon $360-million road that would access the Coffee and Casino projects, two potential mines that would “contribute billions in new investment … and thousands of direct and indirect jobs.”

With federal funding available for green infrastructure, here’s an opportunity to take more communities off diesel, fully open up B.C.’s Golden Triangle and deliver to Yukon and the projects up there reliable, clean energy.

Referring to the 344-kilometre extension of B.C.’s Northwest Transmission Line in 2014, Gratton said: “I’ve a pitch for you today. Why not finish the job and take that line all the way to the Yukon? With federal funding available for green infrastructure, here’s an opportunity to take more communities off diesel, fully open up B.C.’s Golden Triangle and deliver to Yukon and the projects up there reliable, clean energy.”

Undiscouraged by the rugged 800-kilometre gap between the provincial and territorial grids, he added, “I was meeting recently with Yukon officials and they’re very interested in this. I remember also that Premier Horgan, when he was Energy and Mines critic, was a big champion of this project too. So here’s a nation-building project that maybe he can get behind.”

“I could talk about many other things as well, but the key takeaway is that we need to reposition Canada and enhance our competiveness going forward. And it’s critical because other countries are doing the same.”

But in response to an audience question about native consent, was he optimistic or euphemistic? “We’re not in a world of veto,” Gratton insisted. “We’re in a world of deep and meaningful engagement.”

Speaking with ResourceClips.com, he said MAC’s supercluster proposal could create regional centres for excellence focusing on mining and exploration in Sudbury and Vancouver, processing in Quebec City and oil sands in Edmonton.

There are some issues where we’ve made real progress with this new government that we hadn’t been able to make under the previous government.

Although it’s too early to evaluate the Liberals’ performance, the former Chretien-era government communications guy did say, “There are some issues where we’ve made real progress with this new government that we hadn’t been able to make under the previous government.”

Environmental permitting delays, he pointed out, “have been horrendous. At times it takes five years after an environmental assessment before you get your permit. The previous government announced a policy that would shorten that to eight months but didn’t do anything to implement it. This government has actually put in place the tools to make it happen. So we are seeing those timelines shrink.”

Additionally Ottawa now consults with MAC much more than did the previous government. The Conservatives’ lack of dialogue, he stated, “could be why they got things wrong.”

B.C. election: Inconclusive result puts focus on Green Party

May 10th, 2017

by Greg Klein | May 10, 2017

What looks like British Columbia’s first minority government since 1952 will evoke plenty of speculation, not the least from miners. As cliff-hanger metaphors competed with seesaw comparisons throughout the night of May 9, the B.C. election came to an inconclusive result by ResourceClips.com press time. While the B.C. Elections website took most of the day and night off, CBC pegged the post-midnight results at 43 Liberals elected, 41 New Democrats elected and three Greens in the upper echelons (two elected and one leading, compared with just one seat last time).

B.C. election: Inconclusive result puts focus on Green Party

During the campaign all three parties professed support for mining, especially the continuation of flow-through tax credits. But the much more vexatious issue of permitting drew largely euphemistic responses.

Quoted by the Association for Mineral Exploration, NDP leader John Horgan pledged his party would address the uncertainty of permitting by working with Geoscience B.C., the B.C. Geological Survey and First Nations “to develop comprehensive mineral land use plans.”

In the same publication Green leader Andrew Weaver professed his commitment to fix B.C.’s “structurally broken” environmental review process, in which the “professional reliance model” has lost the confidence of First Nations and the general public.

Former mines minister Bill Bennett, who retired as the writ was dropped, reminded AME about his government’s inducements to native support, including royalty sharing and training programs.

But the mining-related issue that unexpectedly gained most prominence was thermal coal and its trans-shipment from the U.S. to Asia via B.C. The stuff “fouls the air. It fouls the oceans. It’s terrible for the environment,” Canadian Press quoted BC Liberal leader Christy Clark.

She spoke in response to the U.S. president’s 20% tariff on softwood lumber imports, most of which come from B.C.

Her proposed $70-a-tonne penalty would not only cripple thermal coal exports from the U.S., but also from Alberta, to the detriment of that province’s mines and this province’s ports. Clark’s comments didn’t acknowledge B.C.’s reliance—notwithstanding its hydro resources—on Alberta’s coal-generated electricity. That’s not to mention B.C.’s dependency on nuclear-generated power from Washington state. B.C. has banned uranium exploration.

Additionally Clark’s proposal would hammer the final nail in the coffin of Quinsam, B.C.’s last thermal coal mine. Hillsborough Resources suspended the Vancouver Island underground operation in January 2016 due to low prices.

A coal mining topic unacknowledged in the campaign was the election’s coincidence with the 25th anniversary of Nova Scotia’s Westray disaster, which killed 26 miners. Down Easterners marked that anniversary as a former director of mine-owner Curragh Inc, 83-year-old BC Liberal Ralph Sultan, swept to his fifth straight victory in the affluent riding of West Vancouver-Capilano.

Meanwhile preliminary results offer the Greens potential power that’s unprecedented for their party in Canada. All three projected Green seats are on southern Vancouver Island, also home to Canada’s sole Green MP, Elizabeth May. Apart from B.C., only New Brunswick and Prince Edward Island have Green MLAs, one each in those two provinces.

However B.C. Green leader Andrew Weaver stands apart from the other parties’ undistinguished professional politicians. A University of Victoria professor, he shared in the 2007 Nobel Peace Prize for his participation in the Intergovernmental Panel on Climate Change.

His influence, with maybe two other Greens, could be formidable. That might be especially true since this election will mark the first new government after the 2014 Mount Polley tailings dam disaster that challenged public support for mining.

B.C. and Nova Scotia commemorate coal mining disasters

May 7th, 2017

by Greg Klein | May 7, 2017

Two anniversaries six days apart serve as grim reminders of the sometimes deadly work of extracting resources often taken for granted. May 3 marked 130 years since the No. 1 Esplanade coal mine explosion in Nanaimo, British Columbia that left a death toll estimated between 148 and 153 men. May 9 marks the 25th anniversary of Plymouth, Nova Scotia’s Westray disaster, which killed 26 workers.

The 1887 Esplanade disaster ranks as Canada’s second-worst, after the June 1914 explosion at a Hillcrest, Alberta coal mine that killed 189 men. Esplanade was just one of many disasters that gave the Vancouver Island coal fields international notoriety for deadly working conditions. The loss of so many breadwinners devastated a population estimated between 2,000 and 6,500.

B.C. and Nova Scotia commemorate coal mining disasters

A monument to Westray displays 26 names as rays of light under
a stylized miner’s lamp. (Photo: Nova Scotia Federation of Labour)

“There would have been not one living soul in Nanaimo at the time who didn’t lose a family member, in-law, workmate or a friend,” local historian Tom Paterson told NanaimoNewsNOW.

In parallel with Esplanade and Vancouver Island, the 1992 carnage at Westray was one of a number of Pictou County coal mining disasters. Although not as lethal as many of its predecessors, Westray took place under supposedly modern conditions and enlightened attitudes.

The mine was owned by privately held Curragh Inc, whose board of directors included former federal cabinet minister and short-term Liberal prime minister John Turner, and Ralph Sultan, now running for re-election as a BC Liberal MLA in a vote coinciding with the anniversary. A five-year inquiry brought a report entitled The Westray Story: A Predictable Path to Disaster.

Curragh declared bankruptcy in 1993. As CBC reported, criminal charges against two mine managers, as well as 52 non-criminal charges against the company, went nowhere.

The disaster did bring about the 2004 federal Westray Act, which “provided new rules for attributing criminal liability to corporations and representatives when workers are injured or killed on the job,” CBC added.

Every May 3rd Nanaimo City Hall flies flags at half mast. Among May 9th events near Plymouth will be a morning vigil and evening memorial service at Westray Memorial Park in Stellarton.

Saskatchewan and Manitoba first and second globally as mining jurisdictions

March 1st, 2017

by Greg Klein | March 1, 2017

Saskatchewan edged one notch upwards to take first place worldwide while Manitoba soared from 19th to second in this year’s Fraser Institute survey of mining and exploration jurisdictions. Those two provinces pushed last year’s top performer, Western Australia, down to third place. Canada’s other top 10 spot went to Quebec, rising to sixth from eighth the year before. All continents but Antarctica came under scrutiny but Canadian, American, Australian and European locales monopolized the top 10.

Farther down the list, the strongest Canadian improvements were Newfoundland and Labrador, climbing to 16th from 25th, and the Northwest Territories, now 21st, previously 35th. Most disappointing were British Columbia (falling to 27th from 18th), Nunavut (31st from 23rd) and Alberta (47th from 34th).

Those findings come from the survey’s Investment Attractiveness Index, which combines two other indices—Policy Perception, a “report card” on government attitudes, and Best Practices Mineral Potential, concerning geological appeal. Representatives of 104 companies responded with their 2016 experiences in mind, giving a numerical rating to questions in several categories regarding their likelihood of investing in a particular jurisdiction. The previous year 109 companies responded.

Here’s the top 10 globally for overall investment attractiveness, with last year’s standings in parentheses:

1 Saskatchewan (2)

2 Manitoba (19)

3 Western Australia (1)

4 Nevada (3)

5 Finland (5)

6 Quebec (8)

7 Arizona (17)

8 Sweden (13)

9 Ireland (4)

10 Queensland (16)

Here are the Canadian runners-up:

15 Yukon (12)

16 Newfoundland and Labrador (25)

18 Ontario (15)

21 Northwest Territories (35)

27 British Columbia (18)

31 Nunavut (23)

40 New Brunswick (45)

47 Alberta (34)

52 Nova Scotia (59)

At least those provinces and territories steered far clear of the bottom 10, where Argentina figures prominently:

95 Mozambique (84)

96 Zimbabwe (98)

97 India (73)

98 Mendoza province, Argentina (101)

99 La Rioja province, Argentina (109)

100 Afghanistan (not available)

101 Chubut province, Argentina (104)

102 Venezuela (108)

103 Neuquen province, Argentina (93)

104 Jujuy province, Argentina (86)

“We believe that the survey captures, at least in broad strokes, the perceptions of those involved in both mining and the regulation of mining in the jurisdictions included in the survey,” stated authors Taylor Jackson and Kenneth P. Green.

Download the Fraser Institute Annual Survey of Mining Companies 2016.

Exploring opportunity

June 17th, 2016

A capacity crowd attends the first annual Vancouver Commodity Forum

by Greg Klein
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A capacity crowd attends the first annual Vancouver Commodity Forum

 

“There’s excitement in the air,” said Cambridge House International founder Joe Martin. That’s the mood he senses as junior explorers emerge from the downturn. And certainly optimism was evident on June 14 as more than 450 people converged on the Vancouver Commodity Forum for an afternoon of expert talks amid a showcase of two dozen companies. Keynote speakers included Martin, Chris Berry of the Disruptive Discoveries Journal, Jon Hykawy of Stormcrow Capital, John Kaiser of Kaiser Research Online and Stephan Bogner of Rockstone Research.

A capacity crowd attends the first annual Vancouver Commodity Forum

Lithium, not surprisingly, stood out as a commodity of interest. While cautioning against over-enthusiasm for the exploration rush, Berry and Hykawy each affirmed the need for juniors to find new sources of the metal. Cobalt and scandium featured prominently too, as did other commodities including what Kaiser called “the weird metals”—lesser known stuff that’s vital to our lives but threatened with security of supply.

Kaiser also noted he was addressing a crowd larger than his last PDAC audience, another indication that “we’ve turned the corner.”

Attendees also met and mingled with company reps. Potential investors learned about a wide gamut of projects aspiring to meet a growing demand for necessities, conveniences and luxuries.

Presented by Zimtu Capital TSXV:ZC, the forum’s success will make it an annual event, said company president Dave Hodge. Berry emceed the conference, holding the unenviable task of “making sure Dave stays well-behaved.”

Read interviews with keynote speakers:

Meet the companies

Most companies were core holdings of Zimtu, a prospect generator that connects explorers with properties and also shares management, technical and financing expertise. Zimtu offers investors participation in a range of commodities and companies, including some at the pre-IPO stage.

After sampling high-grade lithium on its Hidden Lake project in the Northwest Territories earlier this month, 92 Resources TSXV:NTY plans to return in mid-July for a program of mapping, exposing spodumene-bearing pegmatite dykes, and channel sampling. The company closed the final tranche of a private placement totalling $318,836 in April. Hidden Lake’s located near Highway 4, about 40 kilometres from Yellowknife and within the Yellowknife Pegmatite Belt.

With one of the Athabasca Basin’s largest and most prospective exploration portfolios, ALX Uranium TSXV:AL has a number of projects competing for flagship status. Among them is Hook-Carter, which covers extensions of three known conductive trends, one of them hosting the sensational discoveries of Fission Uranium TSX:FCU and NexGen Energy TSXV:NXE. ALX’s strategic partnership with Holystone Energy allows that company to invest up to $750,000 in ALX and retain the right to maintain its ownership level for three years. ALX closed a private placement first tranche of $255,000 last month, amid this year’s busy news flow from a number of the company’s active projects.

A capacity crowd attends the first annual Vancouver Commodity Forum

Arctic Star Exploration TSXV:ADD boasts one of northern Canada’s largest 100%-held diamond exploration portfolios. Among the properties are the drill-ready Stein project in Nunavut and others in the Lac de Gras region that’s the world’s third-largest diamond producer by value. North Arrow Minerals TSXV:NAR holds an option to earn up to 55% of Arctic Star’s Redemption property.

Aurvista Gold TSXV:AVA considers its Douay property one of Quebec’s largest and last undeveloped gold projects. The Abitibi property has resources totalling 238,400 ounces of gold indicated and 2.75 million ounces inferred. Now, with $1.1 million raised last month, the company hopes to increase those numbers through a summer program including 4,000 metres of drilling. Douay’s 2014 PEA used a 5% discount rate to forecast a post-tax NPV of $16.6 million and a post-tax IRR of 40%.

Looking for lithium in Nevada, Belmont Resources TSXV:BEA now has a geophysics crew en route to its Kibby Basin property, which the company believes could potentially host lithium-bearing brines in a similar geological setting to the Clayton Valley, about 65 kilometres south. Results from the gravity survey will help identify targets for direct push drilling and sampling.

A mineral perhaps overlooked in the effort to supply green technologies, zeolite has several environmental applications. Canadian Zeolite TSXV:CNZ holds two projects in southern British Columbia, Sun Group and Bromley Creek, the latter an active quarrying operation.

With a high-grade, near-surface rare earths deposit hosted in minerals that have proven processing, Commerce Resources TSXV:CCE takes its Ashram project in Quebec towards pre-feasibility. The relatively straightforward mineralogy contributes to steady progress in metallurgical studies. Commerce also holds southeastern B.C.’s Blue River tantalum-niobium deposit, which reached PEA in 2011 and a resource update in 2013.

Permitted for construction following a 2014 PEA, Copper North Mining’s (TSXV:COL) Carmacks copper-gold-silver project now undergoes revised PEA studies. The agenda calls for improved economics by creating a new leach and development plan for the south-central Yukon property. In central B.C. the company holds the Thor exploration property, 20 kilometres south of the historic Kemess mine.

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Stewart Muir of Resource Works calls for a blood tax on imports from countries like Saudi Arabia

April 12th, 2016

…Read more

From carbon tax to blood tax

March 23rd, 2016

Canada should reject American hypocrisy and Saudi blood oil, says Stewart Muir

by Stewart Muir, posted with permission of Resource Works

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Don’t miss a new PBS exposé out March 29 featuring human rights abuses in Saudi Arabia, which sold $100 billion worth of crude oil to Canada between 2012 and 2015. Those who have seen the documentary say the footage is shocking to behold.

It’s a mystery why Canada is content to import billions in blood oil from Saudi Arabia while at the same time pursuing policies at home aimed at eliminating Canadian oil from the market.

Canada should reject American hypocrisy and Saudi blood oil, says Stewart Muir

Which world leaders would be happy to
see Canada stop producing its own energy?
(U.S. White House photo by Pete Souza)

Just before Christmas, the Saudis beheaded Filipino Joselito Lidasan Zapanta because he could not pay a ridiculous $1-million fine.

Policies aimed at curtailing western Canadian energy development will only make us more dependent on bloodthirsty Saudi oil, while eliminating tens of thousands of our best-paying jobs.

If we are content to let eastern Canada source its oil from a country that executes citizens who question the government, and at the same time sell armaments to Saudi Arabia, what does that say about our own democratic system?

Yet if Ottawa has any particular concern over the soaring suicide rate among Canadian oilpatch workers, that would be news to me.

For those who don’t believe you have to give up the economy to save the environment, the resulting question is simple: What is the way to stand up for Canadian families and stop rewarding Saudi princes for their despicable practices?

One practical step we can take today is simply to ensure that every Canadian policy on fossil fuels applies equally to all of our energy imports.

Until 100% of our imported products are in compliance, no Canadian products should face domestic prejudice.

I understand we need international trade, but Ottawa’s eagerness to source oil from a savage regime while taking measures to curb the oilsands remains a sore point with me.

One possibility is imposing a blood tax, much like a carbon tax, that rewards social responsibility. Our Charter of Rights and Freedoms, our parliament and our courts provide a yardstick that we could use to measure others against.

Obama’s Arctic vision and what we could learn

On a similar topic, last week saw a major existing supplier of Canadian oil take strides to massively increase its own oil production. I’m talking about the United States and its decision to pursue a long-term exploration plan for the high Arctic.

Come again? Isn’t U.S. President Barack Obama a climate crusader working hard to end the burning of hydrocarbons and stop Canada from building pipelines?

No, actually, he’s not. In case you thought moral suasion from Canada on addressing climate change was having any effect whatsoever on the U.S., think again. The fact is, the U.S. is obsessed with its own energy security and there is no way it will jeopardize a long-term supply of the fossil fuels that provide about 80% of its needs.

Canada should reject American hypocrisy and Saudi blood oil, says Stewart Muir

(Image: Resource Works)

Last week’s news from the U.S. Bureau of Ocean Energy Management will result in new oil and gas leases off the coast of Alaska. The map of the area that could be opened to drilling includes offshore territory Canada claims as its own.

Why is the U.S. doing this now? Simple: because Americans have a long-term plan for energy.

“If development starts now, the long lead times necessary to bring on new crude oil production from Alaska would coincide with a long-term expected decline of U.S. Lower 48 production,” reported the National Energy Council, which advises the U.S. government. “Alaskan opportunities can play an important role in extending U.S. energy security in the decades of the 2030s and 2040s.” (See page 13 of the report.)

So while the U.S. is taking pragmatic steps for long-term viability as an energy-intense nation state, in Canada we seem to be at risk of basing energy planning on “100% carbon-free” slogans that appeal strongly to some voters. The March 22 federal budget was heavy on climate and clean-energy promises that require (and deserve) focus. Yet as the budget also recognizes, our national future depends on the ability to evolve and improve the solutions we already have in place.

A National Energy Council for Canada

Much work is now required for Canada to figure out what it means to look for new ways to “expand and green” the economy and create opportunities for citizens. For now, the lack of a coherent Canadian energy strategy also means, as CBC pointed out last week, that questions are being raised as to whether U.S. energy development in the north threatens our very sovereignty.

Americans are no fools. They know that the longer time frame required for arctic projects is the result of remoteness, long supply chains, short exploration seasons due to ice, regulatory complexity and potential for litigation. The Americans know that it can take more than 30 years to line up all the necessary success conditions and that’s why they are getting cracking now.

In Canada, we also have the potential to ensure that beneficial energy sources, ones that will be subject to unwavering environmental controls, are developed.

What we totally lack is a coherent national political vision—one that acknowledges the need to green our energy supply and lower our impact on the planet, one that also recognizes the economic realities of the present day.

An attempt at a national energy strategy, developed by the premiers at the Council of the Federation, represents a weak vision compared to the clear path that American energy planners are following. Placing national sovereignty far down the list of priorities is not a mistake that other countries are making today. Also unlike most countries, Canada occupies an enormously privileged position when it comes to the natural assets it possesses.

Last week, the National Energy Board reported that a heretofore wallflower of Canadian natural gas plays, the Liard Basin, is suddenly the belle of the ball. This source of gas (the cleanest fossil fuel) now turns out to be one of the biggest in the world. It straddles the Yukon, B.C. and the NWT. The upgraded estimates say the Liard has enough natural gas to meet Canada’s needs at 2014 levels of consumption for nearly 70 years. Meantime, the NWT is sitting on 200 billion barrels of oil identified in two NWT shale formations alone.

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Study enumerates coal’s benefits to B.C.

November 16th, 2015

by Greg Klein | November 16, 2015

Coal might be perceived as a dirty 19th century throwback but it’s hard to imagine life without steel. For British Columbians, it might be hard to imagine life without the province’s traditional industries. To underscore that point, Resource Works released a study on the economic benefits of five B.C. metallurgical coal mines operated by Teck Resources TSX:TCK.A and TCK.B.

Coal still fuels B.C. economy, report finds

Among the findings, the five mines supported 3,993 jobs in 2014 with a payroll totalling $457.6 million. Teck spent another $1.02 billion on goods and services for the quintet in 2014. Also attributed to the mines that year from a “small sample” of six suppliers were 345 jobs with a payroll totalling $34.5 million. With about 1,400 suppliers in B.C. and Alberta, “it is reasonable to deduce that the actual full benefits are much larger,” wrote author Marlyn Chisholm.

Her study didn’t consider taxes and royalties.

Although the five mines are concentrated in southeastern B.C.’s Elk Valley, the spinoffs spread widely. Nearly 60% of goods and services spending went to the Vancouver region, largely to shippers and suppliers.

Even during the downturn, B.C.’s “two largest revenue-generating commodities” are metallurgical coal and copper, according to a May report from PwC. Teck’s five B.C. coal operations soldier on but, to help cut Q3 production by 19%, each of them underwent three-week suspensions this year.

In last month’s Q3 results, Teck reported an average price of $88 per tonne, 20% lower than the same period in 2014, “reflecting oversupplied steelmaking coal market conditions and a decline in spot price assessments.” Prices reached as high as $300 a tonne in 2011. The company’s long-term assumptions foresee $130 per tonne.

Of $2.2 billion in impairments reported last quarter, Teck attributed an after-tax $1.45 billion to its steelmaking coal assets, which include the Cardinal River mine in Alberta. Another $300 million in after-tax impairments went to copper and $400 million to the company’s Fort Hills oilsands project.

Teck is Canada’s largest diversified miner and the world’s second-largest exporter of seaborne steelmaking coal, which accounted for 32% of the company’s business in 2014.

While Anglo American and Walter Energy have shut down their B.C. coal operations, HD Mining International won provincial environmental approval last month for its proposed Murray River metallurgical coal mine in northeastern B.C. The company, owned by Mandarin-speaking Chinese, intends to staff underground jobs with Mandarin-speaking Chinese.

Resource Works is a non-profit society that encourages “respectful, fact-based dialogue on responsible resource development” in B.C. A positive case for B.C.’s coal industry has also been presented by a coalition of B.C. miners, suppliers and unions.

Download the Resource Works study.

Read more about Resource Works here and here.

Update: On November 18 Teck announced the Q4 2017 closure of Coal Mountain, one of the company’s five Elk Valley mines, and the suspension of Coal Mountain Phase 2, which had been intended to extend the operation. “Teck will identify options between now and the end of 2017 to potentially replace the 2.25 million tonnes of annual coal production that were planned from CMO Phase 2 by optimizing production from its five other steelmaking coal mines,” the company stated.

The Coal Mountain decision came amid plans for 2016 spending cuts of $650 million and the elimination of 1,000 jobs globally.

November 16th, 2015

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