Friday 14th December 2018

Resource Clips


Posts tagged ‘coal’

Drill-ready money

November 19th, 2018

Canada’s hitting a six-year high in exploration spending

by Greg Klein

Canada’s hitting a six-year high in exploration spending

Osisko Mining’s (TSX:OSK) Windfall project offers one reason why
Quebec leads Canada and gold leads metals for exploration spending.
(Photo: Osisko Mining)

 

Blockchain might offer intrigue and cannabis promises a buzz, but mineral exploration still attracts growing interest. A healthy upswing this year will bring Canadian projects a nearly 8% spending increase to $2.36 billion, the industry’s highest amount since 2012. According to recently released data, that’s part of an international trend that puts Canada at the top of a worldwide resurgence.

The $2.36 billion allotted for Canadian exploration and deposit appraisal forms just a small part of the year’s total mineral resource development investments, which see $11.86 billion committed to this country, up from $10.61 billion in 2017.

Those numbers come from Natural Resources Canada, which surveyed companies between April and September on their spending intentions within the country for 2018. The $2.36-billion figure includes engineering, economic and feasibility studies, along with environmental work and general expenses.

Canada’s hitting a six-year high in exploration spending

Trial extraction for Pure Gold Mining’s (TSXV:PGM)
Madsen feasibility studies encourages interest in
Ontario’s Red Lake region. (Photo: Pure Gold Mining)

Of that number, Quebec edges out Ontario for first place with $623.1 million in spending this year, 26.4% of Canada’s total. Ontario’s share comes to $567.5 million or 24%. Last year’s totals came to $573.9 million for Quebec and $539.7 million for its western neighbour. Prior to that, however, Ontario held a comfortable lead year after year.

Third-place British Columbia gets $335.5 million or 14.2% of Canada’s total this year, an increase from $302.6 million in 2017.

On a per-capita basis, Yukon’s enjoying an exceptional year with an expected $249.4 million or 10.6% of Canada’s total. That’s the territory’s second substantial increase in a row, following $168.7 million the previous year.

Saskatchewan dips this year to $187.2 million (7.9%) from $191.2 million in 2017. But the Fraser Institute’s last survey of mining jurisdictions placed the province first in Canada and second worldwide.

Nunavut drops too, for the third consecutive time, to $143.9 million (6.1%), compared with $177 million in 2017. The Northwest Territories’ forecast declines to $86.2 million (3.7%) this year after $91.2 million last year.

Canada’s hitting a six-year high in exploration spending

Among companies leading Yukon’s exceptional performance
is White Gold TSXV:WGO, with substantial backing from
Agnico Eagle Mines TSX:AEM and Kinross Gold TSX:K.
(Photo: White Gold)

Especially troubling when contrasted with Yukon’s performance, data for the other territories prompted NWT & Nunavut Chamber of Mines president Gary Vivian to call on federal, territorial and native governments and boards to help the industry “by creating certainty around land access, by reducing unnecessary complexity and by addressing the higher costs they face working in the North. Sustaining and growing future mining benefits depend on it.”

The pursuit of precious metals accounts for $1.5 billion in spending, nearly 64% of Canadian exploration. Ontario gets almost 31% of the precious metals attention, with 27% going to Quebec.

Base metals, mostly in Quebec, B.C. and Ontario, get 15.5% of the year’s total. Uranium gets 5%, almost entirely in Saskatchewan. Diamonds get nearly 4%, most of it going to the NWT and Saskatchewan. But nearly 11% of this year’s total goes to a category vaguely attributed to other metals, along with coal and additional non-metals.

Getting back to this year’s exploration total ($2.36 billion, remember?), senior companies commit themselves to nearly 55%, compared with nearly 51% last year. But the juniors’ share remains proportionately much larger than the pre-2017 years.

Additional encouragement—and on an international level—comes from S&P Global Market Intelligence. Using different methodology to produce different results, the Metals and Mining Research team found worldwide budgets for nonferrous exploration jumping 19% this year to $10.1 billion.

Juniors have been reaping the biggest budget gains at 35%. Over 1,651 functional exploration companies represent an 8% improvement over last year and the first such increase since 2012. But that’s “still about 900 companies less than in 2012, representing a one-third culling of active explorers over the past five years.”

The most dramatic spending increase hit cobalt and lithium, this year undergoing an 82% leap in exploration spending. That’s part of a 500% climb since 2015, SPGMI says.

Canada’s hitting a six-year high in exploration spending

Nemaska Lithium’s Whabouchi project in Quebec
contributes to the enthusiasm for energy metals.
(Photo: Nemaska Lithium)

Even so, precious and base metals retained their prominence as gold continues “to benefit the most from the industry recovery.” The global strive for yellow metal will claim $4.86 billion this year, up from $4.05 billion in 2017. Base metals spending will grow by $600 million to $3.04 billion. “Copper remained by far the most attractive of the base metals, although zinc allocations have increased the most, rising 37% in 2018, the report states. “Budgets are up for all targets except uranium.”

SPGMI finds Canada keeping its global top spot for nonferrous exploration with a 31% year-on-year budget increase. Second-place Australia achieved a 23% rise. The U.S. total places third, although with a 34% increase over the country’s 2017 performance.

In each of the top three countries, over 55% of the budgets focused on gold.

“Improved metals prices and margins since 2016 have encouraged producers to expand their organic efforts the past two years,” commented SPGMI’s Mark Ferguson. “Over the same period, equity market support for the junior explorers has improved, leading to an uptick in the number and size of completed financings. This allowed the group to increase exploration budgets by 35% in 2018.”

Conuma Coal Resources president Mark Bartkoski discusses his company’s hire-local policy

October 23rd, 2018

…Read more

Community spirit

September 21st, 2018

How new approaches to coal mining revived a B.C. district

by Greg Klein

How new approaches to coal mining revived a B.C. district

Two years after taking over a bankrupt company’s Peace River region assets,
Conuma employs over 750 people, a number that’s expected to reach 900 by year-end.
(Photos: Conuma Coal Resources)

 

Expertise, acumen and timing had a lot to do with it, but September 21 marks the second anniversary of a success story that strongly demonstrates mining’s intangible benefits. Two years ago Conuma Coal Resources re-opened its newly acquired Brule mine in northeastern British Columbia, then re-started two more open pits in the same region. While the advantages of resource industries often extend well beyond jobs and the economy, this is a company that actively pursues a mission in addition to profits.

But profitable Conuma is. It’s also the Peace River coal field’s only miner, following a 2014 downturn that closed the last of the district’s metallurgical fuel operations run by Walter Energy, Anglo American and Teck Resources.

How mining—coal mining at that—revived a B.C. region

The new company has re-opened three mines
in a region deserted by majors.

After Walter entered bankruptcy proceedings the following year, something like 80 firms looked over the company’s Peace assets, with a proposal coming from a liquidator that would have dismantled the projects, says Conuma president Mark Bartkoski. He and a highly experienced group put together their privately-held company in summer 2016.

“Our team saw an opportunity to run Brule differently, to work with the community and First Nations a little more progressively and, from a technical standpoint, we felt there were a number of mining changes that would add value.

“One thing we tied to our offer was a commitment to hire 200 people in the first few months. That probably swung the deal, but we ended up hiring 400 in that first four-month period. We purchased the company on September 9 and had the first coal come out on the 21st.”

That was Brule, which Walter suspended in 2014. Less than three months after resuscitating that mine, Conuma re-started Wolverine, idled by Walter in 2014. Last June Conuma re-opened Willow Creek, shuttered by Walter in 2013. Conuma now employs over 750 people, a number that’s expected to reach 900 by year-end.

“We mined 3.5 million tonnes last year, we’ll mine approximately five million tonnes this year, next year we’re projected to do six million tonnes and, by the time we get to 2021, we should be at about 7.5 million tonnes.”

How new approaches to coal mining revived a B.C. district

Conuma expects production to reach five
million tonnes this year and six million in 2019.

Processing takes place at Willow Creek. From there, rail transports the steelmaking stuff about 965 kilometres to Ridley Terminals near Prince Rupert, North America’s closest deep water port to Asia.

Conuma got early backing from the AMCI Group, a large American coal brokerage that brought experience and connections, gaining a majority share of Conuma.

But workers’ input also plays a vital role, Bartkoski emphasizes. The region’s coal “had the problem of being high-cost, so every time the market got tough, this was the first coal field to get cut.” There was a problem with consistency too.

“The quality of the coal, as far as low-sulphur, low-phosphorous metallurgical coal, is very good,” he explains. “But there was always a very high variation in the ash, which is how much rock was in the coal. Steel producers have a real problem when that ash varies a lot. So we worked with the employees, we came up with a couple of pro-active systems to be creative. We used to have an ash variation of about 1.5% ash, and currently we’re running 0.18%, which is fantastic. We’ve had three of the world’s largest steel companies come to look at our quality control program and the question is, ‘How in the world did you guys go from one of the worst ash variations internationally to one of the best?’

“It’s not enough to do well only when the market’s good,” he points out. “You have to get costs down, keep debt low and maintain a high-quality reputation so when the market gets tough and tight—and it’s probably not going to stay like this forever—we’ll remain the preferred supplier.”

How new approaches to coal mining revived a B.C. district

Employee feedback should help the company
weather another downturn, Conuma believes.

Employee engagement doesn’t stop there. “We hold monthly meetings to talk to every crew about costs, about pro-active things we can do, whether it’s environmental ideas or whether it’s delays or accidents. When you involve people and truly listen to them, you get good results. We’ve been able to reduce our operating costs by 40% compared to the previous company—that’s awesome. Our injury rate right now is one-seventh of the North American average, which is phenomenal. We were the safest mining company in B.C. last year, and right now we’re on track to repeat that this year.”

Stressing both cost reduction and safety, employee feedback has contributed to an efficiency incentive program that currently averages workers over $1,000 a month each.

Longevity strengthens commitment to both the company and the community, he adds. Previously, Brule and Willow provided camp housing, where employee turnover averaged six and a half months, Bartkoski says. “We wanted to build a company that would support a healthy home life. Our goal was to train the local workforce to fulfill the needs. We have a training budget that’s about three times the size of most companies because we want to train people to be here for the long term. Right now over 80% of our people are local. They live in either Tumbler Ridge, Chetwynd or Mackenzie, and we’re really proud of that. That was a commitment I made to the mayors and the First Nations.

“As a matter of fact, a large amount of our truck drivers are single moms. That workforce hadn’t been encouraged in the past and in a lot of cases they’re people who want to remain part of the community. I hate to break the bubble of us macho guys but a lot of our best truck drivers are women.”

Although Bartkoski doesn’t make the comparison, Conuma’s training policy contrasts starkly with that of HD Mining International. The Chinese company planned to staff underground operations at Murray River, another proposed coal mine in the Peace, exclusively with Mandarin-speaking workers imported from China. An HD spokesperson later claimed the policy had been misunderstood, although the company made Mandarin a requirement for underground jobs.

I remember walking out of their office thinking ‘I’m not even going to say this to anyone’ because I didn’t think any of it would happen. But everything they told me did come to pass and in most cases sooner than they said they were going to do it. So it’s really been a shot in the arm for Tumbler Ridge.—Don McPherson, mayor of
the District of Tumbler Ridge

Looking ahead, Conuma projects 15-year lifespans for each of its three mines. A fourth, Willow South, should begin operations in about two years, Bartkoski says. Meanwhile the company and its staff participate in a number of extra-curricular projects, including their support for a children’s home in Vancouver and an orphanage in Bolivia.

Tumbler Ridge Mayor Don McPherson recalls his first meeting with Conuma management in summer 2016. “I remember walking out of their office thinking ‘I’m not even going to say this to anyone’ because I didn’t think any of it would happen. But everything they told me did come to pass and in most cases sooner than they said they were going to do it. So it’s really been a shot in the arm for Tumbler Ridge.”

McPherson arrived in the region before the town even existed, working as a mechanic on construction vehicles used to build the district’s first coal mine, Quintette, which Denison Mines opened in 1982. Since then he’s experienced a number of mining cycles.

“Two years ago, before Conuma, you could walk downtown and probably never see children,” he recalls. “Now you’ve got all these young people who’ve come to work at the mine. They brought their families. Our schools are full right now.” He estimates the town’s population at about 2,200, up from about 1,800 at one point.

Although the oilpatch, a windfarm, forestry and tourism have diversified the economy, mining’s still vital to the town built for mining.

Meanwhile Bartkoski’s enthusiasm seems irrepressible. “We’re very excited not only that we have a very good future in front of us here, but we’ve also proven that northeast B.C. coal, mined in a very aggressive, creative and engaging way, with not only the employees but also the community, can be a win-win for everybody—and a long-term win.”

How new approaches to coal mining revived a B.C. district

The company enhances staff commitment to both the job
and the community through a policy of training local residents.

Infographic: How Canada’s mining sector impacts the economy

August 14th, 2018

by Nicholas LePan | posted with permission of Visual Capitalist

Canada is a mining nation.

From the Rockies to the Canadian Shield, and from the Prairies to the North, the variety of geology that exists in the country is immense—and this has created a large and unique opportunity for groundbreaking mineral discoveries.

As a result, Canada is one of the world’s largest exporters of minerals and metals, supplying approximately 60 different mineral commodities to over 100 countries.

An intro to Canadian mining

This infographic comes to us from Natural Resources Canada and it highlights an industry that has given Canada a competitive advantage in the global economy.

 

How Canada’s mining sector impacts the economy

 

The mineral sector brings jobs, investment and business to Canada.

This impact stems from the whole lifecycle of mining, including exploration, extraction, primary processing, design and manufacturing processes.

Economic impact

Last year, the minerals sector contributed $72 billion to Canada’s GDP.

Here are the major minerals produced in Canada in 2017, along with their dollar values:

Rank Mineral Value (2017) Production (2017)
#1 Gold $8,700,000,000 164,313 kg
#2 Coal $6,200,000,000 59,893,000 tonnes
#3 Copper $4,700,000,000 584,000 tonnes
#4 Potash $4,600,000,000 12,214,000 tonnes
#5 Iron ore $3,800,000,000 49,009,000 tonnes
#6 Nickel $2,700,000,000 201,000 tonnes
#7 Diamonds $2,600,000,000 22,724,000 carats

According to S&P Global Market Intelligence, more non-ferrous mineral exploration dollars come to Canada than to any other country. In 2017, roughly $1.1 billion—or about 14% of global exploration spending—was allocated to Canada, which edged out Australia for the top spot globally.

Mining and communities

From mining in remote communities to the legal and financial activities in urban centres such as Vancouver or Toronto, mining touches all Canadian communities.

According to a study commissioned by the Ontario Mining Association, the economic impact of one new gold mine in Ontario can create around 4,000 jobs during construction and production, and can contribute $38 million to $43 million to the economy once operating.

Further, more than 16,500 indigenous people were employed in the mineral sector in 2016, accounting for 11.6% of the mining industry labour force, making it the second-largest private sector employee.

Innovation drives Canadian mining

Canada has an established network of academic thinkers, business associations, financial capital and government programs that support and promote new technologies that can help set a standard for mining worldwide.

Here are a few examples of innovation at work:

CanmetMINING is currently researching the implementation of hydrogen power to replace the use of diesel fuel in underground mines. Once this technology is adopted, it could reduce the GHG emissions of underground mines by 25% and improve the health of workers in mines by reducing their exposure to diesel exhaust.

New technology is turning what was once mine waste into a potential source for minerals. In the past three decades, six billion tonnes of mine tailings have accumulated with a potential value of US$10 billion. Reprocessing this waste can produce significant recoveries of rare earth elements, gold, nickel, cobalt and other valuable minerals.

Artificial intelligence and new remote-control technology can be deployed to operate mining equipment and find new discoveries.

All these innovations are going to change the nature of working in mines, while creating high-paid jobs and demand for an educated labour force.

Opportunity for future generations

A large number of Canadian miners are expected to retire over the next decade. In fact, Canada’s Mining Industry Human Resources Council forecasts 87,830 workers at a minimum will have to be hired over the next 10 years.

With game-changing technologies on the horizon, there will be plenty of opportunities for a new generation of high-tech miners. The future bodes well for Canadian mining.

Posted with permission of Visual Capitalist.

Jobs, revenues, share prices benefit as higher commodity prices boost B.C. mining

May 11th, 2018

by Greg Klein | May 11, 2018

Jobs, revenues, share prices benefit as higher commodity prices boost B.C. mining

A 75%/25% partnership of Copper Mountain Mining TSX:CMMC and Mitsubishi
Materials brought a former mine back into production, employing 430 workers.

 

The bull’s still not back but higher commodity prices continue to sustain a mood of cautious optimism among British Columbia miners, PricewaterhouseCoopers assures us. Its 50th annual report on B.C. mining sketched a broad picture of the province’s industry by surveying 13 companies, focusing on 15 operating mines, a smelter and seven projects in the exploration, permitting or environmental review stage.

Among survey participants, gross revenue hit $11.7 billion in 2017, a 35% jump from the previous year and reflecting an upward trend in the mining cycle. (Except for commodity prices, all figures are given in Canadian dollars.) Governments scooped up $859 million in total mining revenues from those companies last year, compared with $650 million in 2016.

Shareholders fared especially well, reaping 31.1% pre-tax gains from the companies involved, compared with 13.5% in 2016 and 6.3% in 2015. “This is the highest return we’ve seen in recent years and it has surpassed the historic high levels of 2012,” PwC stated.

Direct employment among the companies climbed to 10,196 jobs, compared with 9,329 in 2016 and 9,221 in 2015. PwC attributed most of the increase to Conuma Coal Resources’ two operating mines in the northeast.

Indeed, the participants’ metallurgical coal revenue rose to $5.2 billion from $3 billion in 2016 and $2 billion in 2015. Prices averaged $173 a tonne last year, up from $115 in 2016 and $101 in 2015. At a 50% increase over 2016, the steelmaking stuff struck the highest price increase of any commodity included in the report.

Revenue from copper concentrate came to nearly $1.9 billion, after $1.8 billion in 2016 and $2 billion in 2015. Average red metal prices rose 27% to $2.80 a pound, compared with $2.21 in 2016 and $2.50 in 2015.

Despite a slight decrease in shipments, a 38% price increase lifted participants’ zinc revenue to $1.2 billion, compared with $877 million in 2016 and $818 million the previous year. Prices swelled to an average $1.31 a pound, compared with $0.95 in 2016 and $0.87 in 2015.

Participants’ gold revenues rose to $829 million from $651 million in 2016 and $519 million in 2015. Although B.C. produces the yellow metal largely as a copper byproduct, the 2017 increase largely came from Pretium Resources’ (TSX:PVG) Brucejack mine, which began commercial production that year. Average prices underwhelmed, however, at $1,259 an ounce, although slightly less depressed than the $1,248 in 2016 and $1,160 in 2015.

Silver revenues slipped to $509 million from $589 million the previous year and $535 million in 2015. Average prices wallowed around $17.08 an ounce, compared with $17.11 in 2016, up from $15.71 in 2015. B.C. mines generally garner silver as a byproduct of metals like copper, gold, lead and zinc.

As for lead, it dropped to $224 million in revenues from $255 million the previous year, despite prices rising to $1.05 a pound from $0.85 in 2016.

Molybdenum more than doubled to $104 million from $45 million in 2016 and $51 million in 2015, thanks to higher volumes and prices, which reached $7.07 a pound from $6.37 in 2016.

[The return on shares for participating companies] is the highest return we’ve seen in recent years and it has surpassed the historic high levels of 2012.

Saying “the worst may be over,” PwC stated: “Many in the industry haven’t felt this positive since it was recovering from the fallout of the 2008-09 global financial crisis. There’s cautious optimism the industry will continue to recover.”

But a warning came from an otherwise upbeat Bryan Cox, president of the Mining Association of B.C.: “Mining projects are capital-intensive, multi-year commitments, from exploration to mine development and operation, necessitating clarity, consistency and co-ordination from governments for investors to deploy capital. If any one of those three Cs is missing, then capital investment is at risk.”

This marks PwC’s 50th such report since 1967, when “Lester B. Pearson was Canada’s prime minister, W.A.C. Bennett was the premier of British Columbia and [get this!] the Toronto Maple Leafs won the Stanley Cup. As for mining, in 1967 the price of gold was about $35 per ounce, copper was trading around $0.50 per pound and the Britannia mine, now a museum, was still producing copper, gold, silver and other metals and minerals.”

Download 50 years on… The mining industry in British Columbia 2017.

Appalachian coal country rejects Don Blankenship’s political ambitions

May 8th, 2018

by Greg Klein | May 8, 2018

Audacious as it was, a disgraced former mining boss’ campaign for a U.S. Senate nomination fell to defeat on May 8. West Virginia Republican voters rebuffed Don Blankenship’s candidacy in the primary election.

Blankenship headed Massey Energy for a deadly decade which killed 54 of the company’s workers, 29 of them at the 2010 Upper Big Branch explosion in West Virginia. Six years later a court sentenced the former CEO to one year in prison and a $250,000 fine for conspiracy to evade safety regulations.

Appalachian coal country rejects Don Blankenship’s political ambitions

Having spent millions of his own money on the primary,
Blankenship might consider a third-party candidacy in the
November election. (Photo: Blankenship campaign)

Despite that, Blankenship entered the Republican primary in the same state, at times presenting himself as an advocate for mine safety. As the contest progressed, some observers gave him odds of winning.

But although considered a strong contender as E-day opened, he trailed his two opponents until 9:50 p.m. local time, when CNN projected his defeat. Less than half an hour later Blankenship conceded.

During the campaign he denied his criminal conviction was related to Upper Big Branch, or that he had even been convicted of a crime. Blankenship claimed he’d been convicted simply of not preventing others from committing crimes. He also alleged a cover-up of government regulations that endangered miners: “The truth is that [the U.S. Mine Safety and Health Administration] cut the mine’s airflow, the mine exploded and Obama’s friends, staff and appointed judges covered up the truth.”

In September Blankenship’s tactics provoked an angry response from Cecil Roberts of the United Mine Workers of America, who said: “The facts are clear: 54 people were killed on Massey Energy property while Don Blankenship ruled that company with an iron fist, 29 of them in the Upper Big Branch mine on April 5, 2010. Don Blankenship was convicted of establishing a scheme to circumvent federal mine safety and health law, thereby putting Massey workers at enhanced risk. The fact that he only served a year in prison remains one of the greatest travesties of justice that I have witnessed.”

Blankenship also charged that incumbent state Democratic Senator Joe Manchin “has blood on his hands,” having “failed to successfully advocate for effective mine safety regulations even as over 270 American miners have been fatally injured since the 2010 UBB tragedy.”

The fact that he only served a year in prison remains one of the greatest travesties of justice that I have witnessed.—Cecil Roberts,
United Mine Workers of America

Blankenship’s other controversial tactics included allegations that Senate Majority Leader Mitch McConnell’s wife, Transportation Secretary Elaine Chao, repeatedly used her position to promote her rich father’s shipping interests. He also hinted that McConnell’s family has drug trade connections and that primary contestant and West Virginia attorney general Patrick Morrisey contributed to the opioid crisis through his links to the pharmaceutical industry.

Two days before the vote, Blankenship told CBS he might run as a third-party candidate in the November election if Morrisey wins the primary. At press time Morrisey was projected to win.

Blankenship largely funded his own campaign with—so far—untold millions. Not even Blankenship knows how much, he told CNN. Morrisey said his staff would complain about Blankenship’s lack of spending disclosures to the convict’s probation officer.

Novelist John Grisham named Blankenship as the inspiration for The Appeal, a 2008 portrayal of a ruthless billionaire who finances and grooms the career of a friendly Supreme Court judge. Blankenship had reportedly donated millions to politicians and judges, including $3 million to a West Virginia Supreme Court of Appeals judge “who helped overturn a $50-million jury award against some of Massey’s units.” Grisham later wrote Gray Mountain, a damning account of the Appalachian coal industry.

A year following Blankenship’s 2010 retirement from Massey, Alpha Natural Resources bought the company for $7.1 billion, later paying another $209 million for fines, restitution and mine safety improvements, $265 million to settle a securities class action suit, and undisclosed amounts to families of the 29 Upper Big Branch victims.

Canadian exploration spending projected to rise 6%; Manitoba contradicts its Fraser Institute ranking

March 14th, 2018

by Greg Klein | March 14, 2018

It’s hardly a boom time scenario but mineral exploration within Canada should see a healthy 6% spending increase this year, according to recent federal government figures. Info supplied by companies shows an estimated total of $2.238 billion planned for exploration and deposit appraisal this year, compared with $2.111 billion in 2017. The second annual increase in a row, it’s far less dramatic than last year’s 29.6% leap.

Canadian exploration spending projected to rise 6% Manitoba contradicts its Fraser Institute ranking

The Natural Resources Canada survey compares preliminary numbers for metals and non-metals from last year with projected budgets for 2018.

Together Quebec and Ontario account for more than half the spending, with la belle province getting 27.3% of last year’s total and 29.3% of this year’s, while Ontario got 24.9% and 26.5%.

Some runners-up were British Columbia (12.2% of Canada’s total in 2017 and 13% in 2018), Saskatchewan (9% and 7.4%) and Yukon (7.8% and 7.7%).

Proportionately Manitoba enjoyed the greatest increase, a 42% jump from $38.5 million to $54.7 million, in a performance at odds with the province’s most recent Fraser Institute ranking. Less spectacularly but still impressive, the figures show Quebec climbing 13.9% from $576.5 million to $656.7 million. British Columbia gets a 12.9% increase from $257.7 million to $290.9 million, and Ontario 12.7% from $526.2 million to $593 million.

Some disappointments include Saskatchewan, falling 13% from $189.9 million to $165.1 million. Nunavut plunged 34.6% from $169.3 million to $110.7 million.

Nunavut has to address its land access issues. In the NWT, work on the proposed Mineral Resources Act and other legislation must be to improve the investment climate. Settling long-outstanding land claims and reducing the over 30% of lands off limits to development would also help, as would proactive marketing by indigenous governments.—Gary Vivian, president, NWT and
Nunavut Chamber of Mines

Addressing the territory’s performance along with its neighbour’s 10% drop, Northwest Territories and Nunavut Chamber of Mines president Gary Vivian said, “Nunavut has to address its land access issues. In the NWT, work on the proposed Mineral Resources Act and other legislation must be to improve the investment climate. Settling long-outstanding land claims and reducing the over 30% of lands off limits to development would also help, as would proactive marketing by indigenous governments.”

Combining figures for mine complex development with exploration and deposit appraisal, this year’s projected country-wide total rises 8.9% to $14.9 billion, the highest number in the four years of data released in this survey.

Commodities getting the most money are precious metals, although at a nearly 1.5% decrease to $1.35 billion this year from $1.37 billion last year. A more drastic drop was uranium, down 23.4% to $103.7 million. Base metals saw a 38.4% surge to $406.9 million. Coal’s projected for a 31.1% boost to $70.8 million.

Exploration and deposit appraisal expenses considered for the survey include field work, engineering, economics, feasibility studies, the environment, land access and associated general expenses. Natural Resources Canada did not consider work for extensions of known reserves.

Recent studies from PricewaterhouseCoopers showed a marked improvement in junior mining company finances and a relatively stable, if cautious, ambience for more senior Canadian companies.

Covering a different period with different methodology than Natural Resources Canada, a study by EY, the B.C. government and the Association for Mineral Exploration calculated a 20% increase in B.C. exploration spending from 2016 to 2017.

See the Natural Resources Canada survey here.

B.C. explorers boost spending for first time since 2012

March 5th, 2018

by Greg Klein | March 5, 2018

Despite a bad year for wildfires, it’s British Columbia’s first mineral exploration spending increase in four years and a substantial increase at that. The sector spent over $41 million more in 2017 than the previous year, a 20% jump to total $246 million province-wide. Most of the activity took place in two regions, with the northwestern Golden Triangle accounting for more than $11 million of the $41-million increase, showing a regional total of $82 million. In the southern Interior’s Cariboo, exploration increased by $19 million, 70% more than in 2016.

The data comes from the second annual British Columbia mineral and coal exploration survey released at PDAC on March 5 by EY, B.C.’s Ministry of Energy, Mines and Petroleum Resources, and the Association for Mineral Exploration. Twenty prospectors and 175 companies contributed responses.

“Although still considerably down from the peak years of 2011-12, there is cause for optimism that the upward trend will continue given the outlook for continued price stability, an overall strengthening of global market sentiment towards exploration, improvements in the capital markets for financing mineral and coal exploration, and a more favourable future market outlook,” the report stated.

The 2017 bleak spot was the province’s northeast, where exploration plunged 75% to $2.4 million last year, mostly due to diminished demand for Peace district coal.

Diamond drilling in B.C. more than doubled from 300,000 metres in 2016 to over 600,000 metres last year, accounting for 37% of total exploration spending.

Although the report cautions that it’s too early for a conclusion, the results seem to indicate the province has set a “reset” button on the mining cycle, as projects advance through the early stages. Grassroots work accounted for 41% of activity in 2016 but only 23% in 2017. Instead, last year saw an increase to 60% of exploration at the early and advanced levels, described by the report as the two stages following grassroots and preceding stages four and five: mine evaluation and mine lease.

The quest for gold accounted for 87%, or $37 million, of the province’s $41-million increase. Silver exploration spending more than doubled to $9.8 million, while zinc saw a nearly 50% leap to $8.2 million.

“It’s reassuring to see exploration spending returning to B.C., particularly as resource depletion returns to the list of industry risks,” commented AME director of corporate affairs Jonathan Buchanan. “We’re also encouraged to hear survey respondents remain committed to working with First Nations when sourcing new resource deposits to ensure benefits extend to the local or surrounding communities.”

Noting that the province’s mining revenues are “expected to approach $9 billion annually,” Gordon Clarke of the B.C. Mineral Development Office added, “It’s important to identify new development opportunities and encourage the continued development of a robust exploration industry.”

Among other encouraging signs for the sector, a November PricewaterhouseCoopers report pronounced an increase in market caps, financings, M&A and IPOs for TSXV-listed mining/exploration companies.

Download the British Columbia mineral and coal exploration survey 2017.

Visual Capitalist looks at China’s staggering demand for commodities

March 4th, 2018

by Jeff Desjardins | posted with permission of Visual Capitalist

China’s staggering demand for commodities

 

Over 50% of all steel, cement, nickel and copper goes there

The Chart of the Week is a Friday feature from Visual Capitalist.

It’s said that in China, a new skyscraper is built every five days.

China is building often, and it’s building higher. In fact, just last year, China completed 77 of the world’s 144 new supertall buildings, spread through 36 different Chinese cities. These are structures with a minimum height of 656 feet (200 metres).

For comparison’s sake, there are only 113 buildings in New York City’s current skyline that are over 600 feet.

Unbelievable scale

It’s always hard to put China’s size and scope in perspective—and Visual Capitalist has tried before by showing you 35 Chinese cities as big as countries, or highlighting the growing prominence of the domestic tech scene.

This chart also falls in that category and it focuses on the raw materials that are needed to make all this growth possible.

Year of data Commodity China’s % of global demand Source
2017 Cement 59% Statista
2016 Nickel 56% Statista
2017 Coal 50% NAB
2016 Copper 50% Global X Funds
2017 Steel 50% World Steel Association
2017 Aluminum 47% MC Group
2016 Pork 47% OECD
2017 Cotton 33% USDA
2017 Rice 31% Statista
2017 Gold 27% China Gold Association, WGC
2017 Corn 23% USDA
2016 Oil 14% Enerdata

Note: Because this data is not all in one easy place, it is sourced from many different industry associations, banks and publications. Most of the data comes from 2017, but some is from 2016.

China demand > world

There are five particularly interesting commodity categories here—and in all of them, China’s demand equals or exceeds that of the rest of the world combined.

Cement: 59%
The primary ingredient in concrete is needed for roads, buildings, engineering structures (bridges, dams, etc.), foundations and in making joints for drains and pipes.

Nickel: 57%
Nickel’s primary use is in making stainless steel, which is corrosion-resistant. It also gets used in superalloys, batteries and an array of other uses.

Steel: 50%
Steel is used for pretty much everything, but demand is primarily driven by the construction, machinery and automotive sectors.

Copper: 50%
Copper is one of the metals driving the green revolution and it’s used in electronics, wiring, construction, machinery and automotive sectors primarily.

Coal: 50%
China’s winding down coal usage—but when you have 1.4 billion people demanding power, it has to be done with that in mind. China has already hit peak coal, but the fossil fuel does still account for 65% of the country’s power generated by source.

Posted with permission of Visual Capitalist.

Visual Capitalist and VRIC 2018 look at the raw materials that fuel the green revolution

January 10th, 2018

by Jeff Desjardins | posted with permission of Visual Capitalist | January 10, 2018

 

Records for renewable energy consumption were smashed around the world in 2017.

Looking at national and state grids, progress has been extremely impressive. In Costa Rica, for example, renewable energy supplied five million people with all of their electricity needs for a stretch of 300 consecutive days. Meanwhile, the UK broke 13 green energy records in 2017 alone, and California’s largest grid operator announced it got 67.2% of its energy from renewables (excluding hydro) on May 13, 2017.

The corporate front also looks promising and Google has led the way by buying 536 MW of wind power to offset 100% of the company’s electricity usage. This makes the tech giant the biggest corporate purchaser of renewable energy on the planet.

But while these examples are plentiful, this progress is only the tip of the iceberg—and green energy still represents a small but rapidly growing segment. For a full green shift to occur, we’ll need 10 times what we’re currently sourcing from renewables.

To do this, we will need to procure massive amounts of natural resources—they just won’t be the fossil fuels that we’re used to.

Green metals required

Today’s infographic comes from Cambridge House as a part of the lead-up to its flagship conference, the Vancouver Resource Investment Conference 2018.

A major theme of the conference is sustainable energy—and the math indeed makes it clear that to fully transition to a green economy, we’ll need vast amounts of metals like copper, silicon, aluminum, lithium, cobalt, rare earths and silver.

These metals and minerals are needed to generate, store and distribute green energy. Without them, the reality is that technologies like solar panels, wind turbines, lithium-ion batteries, nuclear reactors and electric vehicles are simply not possible.

First principles

How do you get a Tesla to drive over 300 miles (480 kilometres) on just one charge?

Here’s what you need: a lightweight body, a powerful electric motor, a cutting-edge battery that can store energy efficiently and a lot of engineering prowess.

Putting the engineering aside, all of these things need special metals to work. For the lightweight body, aluminum is being substituted for steel. For the electric motor, Tesla is using AC induction motors (Models S and X) that require large amounts of copper and aluminum. Meanwhile, Chevy Bolts and soon Tesla will use permanent magnet motors (in the Model 3) that use rare earths like neodymium, dysprosium and praseodymium.

The batteries, as we’ve shown in our five-part Battery Series, are a whole other supply chain challenge. The lithium-ion batteries used in EVs need lithium, nickel, cobalt, graphite and many other metals or minerals to function. Each Tesla battery, by the way, weighs about 1,200 pounds (540 kilograms) and makes up 25% of the total mass of the car.

While EVs are a topic we’ve studied in depth, the same principles apply for solar panels, wind turbines, nuclear reactors, grid-scale energy storage solutions or anything else we need to secure a sustainable future. Solar panels need silicon and silver, while wind turbines need rare earths, steel and aluminum.

Even nuclear, which is the safest energy type by deaths per TWh and generates barely any emissions, needs uranium in order to generate power.

The pace of progress

The green revolution is happening at breakneck speed—and new records will continue to be set each year.

Over $200 billion was invested into renewables in 2016 and more net renewable capacity was added than coal and gas put together:

Power Type Net Global Capacity Added (2016)
Renewable (excl. large hydro) 138 GW
Coal 54 GW
Gas 37 GW
Large hydro 15 GW
Nuclear 10 GW
Other flexible capacity 5 GW

The numbers suggest that this is only the start of the green revolution.

However, to fully work our way off of fossil fuels, we will need to procure large amounts of the metals that make sustainable energy possible.

Posted with permission of Visual Capitalist.

The Vancouver Resource Investment Conference 2018 takes place at the Vancouver Convention Centre West from January 21 to 22. Click here for more details and free registration.