Wednesday 21st November 2018

Resource Clips


Posts tagged ‘iron ore’

Baffinland Iron Mines sets high Arctic high volume shipping record

November 8th, 2018

by Greg Klein | November 8, 2018

Competing with northern European coal and its own past performance, Baffinland Iron Mines claims the largest shipping program by volume for the Canadian and Scandinavian high Arctic. During an 86-day season that ended October 17, some 71 voyages carried an average 71,750 tonnes of iron ore each from the company’s Milne Inlet port at 71.25 degrees latitude. Destinations included continental Europe, the UK and, in a first for iron ore bulk transport, two trips along the Russian coast to Taiwan and Japan.

Total tonnage came to about 5.1 million, surpassing the previous 4.1-million-tonne record set by Baffinland in 2017. The ore comes from Mary River, 100 kilometres by road from the port.

Baffinland Iron Mines sets high Arctic high volume record

This year’s season included the world’s first two bulk transports
of iron ore through the Northern Sea Route to Asia.
(Photo: Baffinland Iron Mines)

President/CEO Brian Penney attributed “a successful, safe and responsible shipping season” to employees and shipping partners, as well as the support of northern Baffin Island communities and the Qikiqtani Inuit Association.

The Mittimatalik Hunters and Trappers Organization support an onboard monitoring program “to ensure no adverse environmental impacts or impacts on Inuit shipping vessels,” the company stated. “These programs combined scientific and traditional Inuit knowledge. No health and safety or environmental incidents occurred during the shipping program.”

An application before the Nunavut Impact Review Board proposes to replace Baffinland’s tote road with a railway linking the mine with Milne Inlet. Following community consultations, NIRB expects to make its recommendation in June, Baffinland communications officer Jason Leite tells ResourceClips.com. The federal cabinet decision should follow in 30 to 90 days.

The company also hopes to lay track south to a proposed Baffin Island port at Steensby Inlet. The Steensby route and facilities were approved in 2014, although market conditions prompted the company to scale its plans down radically to an Early Revenue Phase.

“The plan to go south to Steensby is still on the horizon and it’s part of our expanded growth outlook over the next decade, or even 15 to 20 years,” Leite says. “We’re taking a tiered approach to our expansion programs.”

The company’s eventual goal is 30 million tonnes per year. Last month Baffinland received federal approval to increase annual production from 4.2 million to six million tonnes despite a negative NIRB recommendation.

Held jointly by Nunavut Iron Ore and ArcelorMittal, Baffinland credits Mary River with “the highest grade of direct shipping iron ore in the world.”

Read more about Canadian arctic shipping.

Active participants

November 7th, 2018

A new study finds greater native involvement in resource projects

by Greg Klein

A new study finds greater native involvement in resource projects

Representatives of Nemaska Lithium and Nemaska Cree negotiate the Chinuchi Agreement in 2014.
(Photo: Nemaska Lithium)

 

Trans Mountain—it’s likely been Canada’s biggest and most discouraging resource story this year. The subject of well-publicized protests, the proposed $9.3-billion pipeline extension met federal court rejection on the grounds of inadequate native consultation. But any impression of uniform aboriginal opposition to that project in particular or resource projects in general would be false, a new report emphasizes. In fact native involvement increasingly advances from reaping benefits to taking active part, with corresponding advantages to individuals and communities.

That’s the case for the oil and gas sector, forestry, hydro-electricity and fisheries, with mining one of the prominent examples provided by the Montreal Economic Institute in The First Entrepreneurs – Natural Resource Development and First Nations. “While some First Nations oppose mining and forestry or the building of energy infrastructure, others favour such development and wish to take advantage of the resulting wealth and jobs,” state authors Germain Belzile and Alexandre Moreau. “This cleavage is no different from what is found in non-indigenous cities and villages in Canada, where there is no vision for the future that everyone agrees upon.”

A new study finds greater native involvement in resource projects

Visitors tour a cultural site at the Éléonore mine.
(Photo: Goldcorp)

Mining provides a case in point, and the reason’s not hard to understand. “In 2016, First Nations members working in the mining sector declared a median income twice as high as that of workers in their communities overall, and nearly twice as high as that of non-indigenous people as a whole.”

“Between 2000 and 2017, 455 agreements were signed in this sector, guaranteeing benefits in addition to those stemming from extraction royalties due to rights held by First Nations on their territories.” Those agreements often include native priority in hiring and subcontracting, which helps explain why “6% of indigenous people work in the mining sector, compared to only 4% in other industries.”

Of course the proportion rises dramatically in communities close to mines. MEI notes that Wemindji Cree make up about 25% of Goldcorp’s (TSX:G) Éléonore staff in Quebec’s James Bay region. The native total comes to 225 workers out of a community of 1,600 people. Their collaboration agreement also makes provisions for education, training and business opportunities.

At another Quebec James Bay project, Nemaska Lithium TSX:NMX expects to begin producing concentrate in H2 of next year. Collaboration with the Nemaska Cree began in 2009 and brought about the 2014 Chinuchi Agreement covering training, employment and revenue sharing, among other benefits. The community holds 3.6% of Nemaska stock.

Even stalled projects can benefit communities. Uranium’s price slump forced Cameco TSX:CCO to put its majority-held Millennium project in northern Saskatchewan on hold in 2014. But the 1,600-member English River First Nation still gained $50 million from the project in 2014 and $58 million in 2015.

Or, to take an example not mentioned in the report, natives can also profit from an operating mine that fails to make a profit. In Nunavut, a benefit agreement with Baffinland Iron Mines’ Mary River operation gave the Qikiqtani Inuit Association $11.65 million this year, as well as the better part of $3.7 million that the QIA reaped in leases and fees. In production since 2014, Mary River remains in the red.

Of course some natives still oppose some projects. Last month Star Diamond TSX:DIAM received provincial environmental approval for its Star-Orion South project in southern Saskatchewan’s Fort à la Corne district. That decision followed federal approval in 2014.

Star says the mine would cost $1.41 billion to build and would pay $802 million in royalties as well as $865 million in provincial income tax over a 20-year lifespan. The mine would employ an average 669 people annually for a five-year construction period and 730 people during operation. But continued opposition from the James Smith Cree Nation calls into question whether environmental approval will suffice to allow development.

Similar circumstances played out in reverse for Mary River. Last summer the Nunavut Impact Review Board recommended Ottawa reject Baffinland’s proposed production increase. But support from the QIA and territorial Premier Joe Savikataaq convinced the feds to approve the company’s request. So the veto, if it exists, can work both ways.

James Smith opposition stems largely from Saskatchewan’s lack of revenue-sharing programs, a basic component of benefit agreements in other jurisdictions. “As a government it’s our position that we will not and do not consider resource revenue sharing as a part of any proposal going forward,” enviro minister Dustin Duncan told the Prince Albert newspaper paNOW. He said the province uses mining revenue “to fund programs for the benefit of all Saskatchewan residents and not just one particular group or region.”

The MEI report quotes an estimated $321 million in 2015-to-2016 revenues from natural resources overall for First Nations, a category that doesn’t include Inuit or Metis, and a dollar figure that doesn’t include employment or business income and other benefits.

While Trans Mountain stands out as an especially discouraging process, MEI points out that proponent Kinder Morgan signed benefit agreements with 43 First Nations totalling $400 million. After Ottawa bought the company, “several First Nations showed interest in a potential takeover. For some of them, the possibility of equity stakes was indeed the missing element in the Kinder Morgan offer.”

That might take negotiations well past the stage of benefits and further into active participation. As JP Gladu of the Canadian Council for Aboriginal Business told MEI, “The next big business trend that we are going to see, and that is happening already, is not only that aboriginal businesses are going to be stronger components of the corporate supply chain, but we are also going to see them as stronger proponents of equity positions and actual partners within resource projects.”

 

A new study finds greater native involvement in resource projects

The category of First Nations excludes Inuit and Metis.
(Chart: Montreal Economic Institute. Sources: Statistics Canada,
2016 Census, 98-400-X2016359, March 28, 2018)

Looking up, up north

October 5th, 2018

The territories reap tangible and intangible benefits from their biggest industry

by Greg Klein

The territories reap tangible and intangible benefits from their biggest industry

Baffinland president/CEO Brian Penney joins QIA president P.J. Akeeagok
and others at a signing ceremony for Mary River’s amended benefit agreement.
(Photo: Baffinland Iron Mines)

 

Nunavut’s environmental review said no to a mining proposal but Ottawa said yes. What happened?

Hoping to finally make a profit at its four-year-old Mary River operation, Baffinland Iron Mines asked permission to boost production from 4.2 million tonnes annually to six million tonnes. Worried about possible environmental effects, the Nunavut Impact Review Board recommended in late August that the federal government reject the proposal. But it was the NIRB recommendation that got rejected. Five cabinet ministers approved the mine’s request, for the time being anyway.

Swaying the decision was the support of the Qikiqtani Inuit Association, whose members “strongly support the Production Increase Proposal as a method of furthering Inuit aspirations in the region,” Ottawa stated. Support also came from Nunavut Premier Joe Savikataaq, who urged a swift decision in favour.

The territories reap tangible and intangible benefits from their biggest industry

It wasn’t long coming. Just one month after the NIRB forwarded its recommendation, Ottawa announced its approval, expressing concern about the socio-economic effects of shutting down the mine for part of the year once the 4.2-million-tonne limit is reached and about the mine’s long-term viability. Increased production will “allow the Inuit of the region the opportunity to maintain and more fully realize the economic and other benefits of the mine.”

That’s not to dismiss environmental concerns. Monitoring will take place until the end of next year, when permission comes up for review. Among other considerations will be the effects of dust on wildlife along a 100-kilometre trucking route from mine to port and of increased shipping on marine life. Considered one of the world’s richest iron ore deposits, Mary River also ranks as one of the planet’s northern-most mines.

The company received additional permission to build a 15-million-litre fuel tank and a 380-person camp at the Milne Inlet port, projects which the NIRB supported. Still under consideration by the board is Baffinland’s proposal to replace the truck route with a 110-kilometre railway.

The QIA, which will participate in environmental monitoring, represents some 14,000 people in the Baffin region. Baffinland, co-owned by Nunavut Iron Ore and ArcelorMittal, employs about 2,000 staff and contractors at Mary River and Milne Inlet. This year the QIA’s Inuit Impact Benefit Agreement with Baffinland brought in $11.65 million, a considerable jump from $3.11 million the previous year. The group netted another $3.7 million in leases and fees, most of it from Mary River. That, from a mine that’s yet to turn a profit.

The benefit agreement looks even better with amendments announced just days after the production increase approval. “Our goal was to increase training and employment opportunities, and we have done that and much more,” said QIA president P.J. Akeeagok. 

The agreement comes up for review every three years. Apart from a modified royalty structure, these amendments call for Baffinland to spend $10 million on a state-of-the-art training centre, significantly expand the Inuit training budget, provide four communities with research vessels currently priced at $300,000 each and fund a $200,000 annual monitoring program. The amendments intend to “increase Inuit employment in all aspects of Baffinland’s organization” as well as provide “improved support for all residents of the Qikiqtani communities,” the company stated.

The same day the agreement was announced came news from the Northwest Territories of diamond mining’s benefits, tangible and intangible. Compiling information from recent socio-economic reports for the territory’s three mines, the NWT & Nunavut Chamber of Mines reported 3,450 person-years of employment in 2017, 46% of that going to northerners. Natives comprised 51% of the northern workers and women 15% of all jobs.

Altogether the three operations—the Washington Group’s Ekati, Washington Group/Rio Tinto’s (NYSE:RIO) Diavik and De Beers/Mountain Province Diamonds’ (TSX:MPVD) Gahcho Kué—brought $1.2 billion in spending last year, $834 million spent in the north and $325 million to northern natives.

“In addition to jobs, business spending and training, the diamond mines have also contributed billions of dollars in community contributions and in taxes and royalties paid to public and indigenous governments,” pointed out Chamber president Gary Vivian. “With continued progress on infrastructure investment, and regulatory and land access improvements, mining in the north is truly a sunrise industry. Our mining potential is huge.”

Overwhelming majority puts Quebec in new hands, New Brunswick still deadlocked

October 1st, 2018

by Greg Klein | October 1, 2018

Overwhelming majority puts Quebec government in new hands

CAQ incoming premier Francois Legault argued against unacculturated immigrants,
made popular funding promises and vowed to cut taxes. (Photo: Coalition Avenir Québec)

 

Updated Quebec results (with 2014 figures in parentheses)

  • Coalition Avenir Québec: 74 seats, 37.4% of the popular vote (21 seats, 23%)
  • Quebec Liberal Party: 32 seats, 24.8% (68 seats, 41.5%)
  • Québec Solidaire: 10 seats, 16.1% (3 seats, 7.6%)
  • Parti Québécois: 9 seats, 17% (28 seats, 25.4%)
  • Others: 0 seats, 4.6% (5 seats, 2.4%)

 

A seven-year-old party jumped from third place to government status as the Coalition Avenir Québec won the October 1 provincial election. Leading in a majority of seats half an hour after polls closed, the CAQ pushed the incumbent Liberals to second place, leaving the former official opposition Parti Québécois struggling to stay above fourth spot. Easily winning his riding of L’Assomption was incoming premier Francois Legault, a CAQ co-founder who previously created Air Transat and served as a PQ government minister. His CAQ has attracted disaffected Liberals as well as Péquistes.

PQ leader Jean-Francois Lisee lost his seat to a Québec Solidaire challenger.

Overwhelming majority puts Quebec government in new hands

Mining issues held little prominence as debate focused heavily on immigration but sidelined independence. Spending promises flowed freely with health care, education and child care giveaways coinciding with CAQ promises to cut taxes.

But just one week before the campaign’s official start date, the Liberal government announced $185 million of provincial money for the privately held BlackRock Metals’ iron ore-vanadium-titanium open pit development in the northern riding of Ungava. The money consisted of $100 million in loans and an $85-million investment, part of a total package of $1.3 billion attracted to the project. The Liberals also promised $63 million to build energy infrastructure in the Chicoutimi riding that would host BlackRock’s secondary processing facility.

Ungava’s Liberal incumbent placed third while the CAQ narrowly beat the PQ in a very tight three-way contest. In Chicoutimi, the CAQ won a strong victory over the PQ incumbent.

Last May Premier Philippe Couillard joined Prime Minister Justin Trudeau to announce $60 million in federal funding for an Alcoa NYSE:AA/Rio Tinto NYSE:RIO aluminum smelter to be built in the overlapping federal riding of Chicoutimi-Le Fjord. Three days later Trudeau called a by-election, only to see a Conservative defeat his Liberal incumbent.

The Quebec government invests heavily in projects ranging from junior exploration to operating mines through the Ressources Québec subsidiary of Investissement Québec. In August Legault said he would cut bureaucracy at Investissement Québec.

Quebec’s March budget posted a $1.3-billion surplus, but the province receives equalization payments that came to $11.8 billion this year and will rise to $13.3 billion in 2019. Currently the entire amount comes from the western provinces. Legault opposed the Energy East pipeline proposal from Alberta to New Brunswick.

Pundits might wonder to what extent the CAQ’s success depended on its proposal to expel unacculturated immigrants. But any criticism of la province spéciale will have to be muted, even if the plan calls for unwanted foreigners to be packed off to Anglo Canada.

The PQ’s demotion hardly spells the end of separatism now that the party shares the independence vote with QS and possibly the CAQ, which has equivocated on the subject.

As for last week’s New Brunswick election, results remain in limbo. With 22 seats, the Conservatives edged out the incumbent Liberals by a single riding. Speculation focuses on either party making a deal with the People’s Alliance or the Greens, which won three seats each.

The Green result triples its N.B. legislative standing, continuing the party’s progress in Canada. Last June the Ontario riding of Guelph elected that province’s first Green. Canada now has eight Greens elected provincially (three in N.B., three in B.C., and one each in Ontario and Prince Edward Island), along with one elected federally in B.C. In B.C.’s legislature, the party holds the balance of power under an agreement with the New Democratic Party minority government.

Reaching arctic mines by sea

September 10th, 2018

Operating in northern Canada often means creating your own transportation routes

by Greg Klein

Amid all the controversy over spending $4.5 billion of taxpayers’ money to buy a pipeline project whose $9.3-billion expansion might never go through, Ottawa managed to come up with some good, if relatively minor, infrastructure news. Rehab work will begin immediately on an idled railway connecting with a port that together linked Churchill, Manitoba, with the rest of Canada by land and the world by sea. Should all go to plan the private-public partnership would be one of just a few recent success stories in northern infrastructure.

Operating in northern Canada often means building your own infrastructure

The arctic Quebec riches of Glencore’s Raglan mine
justify an especially roundabout route from mine to market.

Denver-based owner OmniTRAX shut down Churchill’s deep-water port in 2016, blaming the demise of grain shipping through that route. The following year the company said it couldn’t afford rail repairs after a flood washed out sections of the line. Now the railway, port and an associated tank farm come under new ownership in an “historic” deal involving the Missinippi Rail Limited Partnership and the Fairfax Financial Holdings & AGT Limited Partnership.

“The consortium brings together First Nations and community ownership and support, along with significant private sector leadership and global investment capacity, and further, short line rail operation and shipping experience,” Ottawa enthused. As stakeholders heaped praise on the federal government, the source for much of the money seemed clear. But not even the purchase price, let alone details on who pays how much, have been disclosed.

Still the revitalization program, which could re-open the railway this coming winter, heightens the potential of resource projects in northern Manitoba and Nunavut’s Kivalliq region. As such, the apparent P3 success contrasts with a northern infrastructure setback to the northwest.

In April Transport Canada rejected a request to fund the bulk of a $527-million proposal to build another deep-water port at Grays Bay, Nunavut, along with a 227-kilometre year-round road leading to the territory’s former Jericho diamond mine. The Northwest Territories offered to build its own all-weather link, where a winter road now connects Jericho with three operating diamond mines in the NWT’s portion of the Lac de Gras region.

However the federal refusal prompted Nunavut to pull its support for Grays Bay. Undeterred, the Kitikmeot Inuit Association joined the NWT and Nunavut Chamber of Mines at last month’s Energy and Mines Ministers’ Conference in Iqaluit to argue the case for Grays Bay and other infrastructure projects. Chamber executive director Tom Hoefer said that with the exception of the NWT’s 97-kilometre Tlicho all-season road, the two territories have gone more than 40 years without government support for major projects. The last came in 1975, when Ottawa partnered with industry to build the world’s first ice‐breaking cargo ship, serving the former Nanisivik and Polaris mines in present-day Nunavut, he said.

With no power grids to our remote mines, [companies] must provide their own diesel-generated power, or wind in the case of Diavik. Being off the highway system, they must build their own roads—whether seasonal ice roads or all-weather roads. The ice road melts every year and must be rebuilt annually for $25 million…. Some of our mines must build their own seaports and all provide their own airports.—Tom Hoefer, executive director
of the NWT and Nunavut
Chamber of Mines

Hoefer compared the Slave geological province, home to deposits of precious and base metals along with rare earths and Lac de Gras diamonds, to the Abitibi. Kivalliq, he added, also offers considerable potential in addition to the regional operations of Agnico Eagle Mines TSX:AEM.

But while mining plays an overwhelming role in the northern economy, he stressed, it’s been up to northern miners to build their own infrastructure.

Baffinland’s Mary River iron ore mine co-owners ArcelorMittal and Nunavut Iron Ore want to replace their hauling road with a 110-kilometre railway to the company’s port at Milne Inlet, where ore gets stockpiled prior to summer shipping to Europe. Now undergoing environmental review, the railway would be part of a proposal to increase extraction from four million tonnes to 6.2 million tonnes annually and finally make the mine profitable. An environmental review already recommended rejection of the increased tonnage proposal, but the final decision rests with Ottawa. (Update: On September 30, 2018, Ottawa approved the increased tonnage application for a one-year trial period.)

The rail line, if approved in its separate application, could be in operation by 2020 or 2021.

That would make it Canada’s only railway north of 60, except for a CN spur line reaching Hay River, NWT, from Alberta and a tourist excursion to Carcross, Yukon, from the Alaska Panhandle town of Skagway. (Also connected by highway to the Yukon, Skagway provides year-round deep-water port facilities for the territory, including Capstone Mining’s (TSX:CS) Minto copper mine.)

Projected for production next year, Amaruq comprises a satellite deposit for Agnico’s Meadowbank gold mine in Nunavut. The company has built a 50-kilometre all-weather road linking Amaruq with Meadowbank’s processing facility and the company’s 110-kilometre all-weather road—by far the territory’s longest road—to Baker Lake. Interestingly that’s Nunavut’s only inland community but the hamlet has seasonal boat access to Chesterfield Inlet on northwestern Hudson Bay. From there, still restricted to the ice-free months, ships can reach Churchill or the St. Lawrence Seaway.

Also primed for 2019 gold production is Agnico’s Meliadine, 290 kilometres southeast of Meadowbank. The company’s 25-kilometre all-weather road connects with summer shipping facilities at Rankin Inlet, 90 klicks south of Chesterfield Inlet.

With its Doris gold operation only five kilometres from the Northwest Passage port of Roberts Bay, TMAC Resources TSX:TMR hopes to mine two more deposits on the same Hope Bay greenstone belt by 2020 and 2022 respectively.

But the most circuitous route from northern mine to market begins in arctic Quebec using trucks, ship, rail and more rail, then another ship. Glencore hauls nickel-copper concentrate about 100 kilometres by road from Raglan to Deception Bay, roughly 2,000 crow-flying kilometres from Quebec City. That’s the next destination, but by water. From there the stuff’s offloaded onto rail for transport to a Sudbury smelter, then back by rail to Quebec City again. Ships then make the trans-Atlantic crossing to Norway.

This is Part 1 of a series about northern infrastructure.

Related reading:

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.

Infographic: The history of North American co-operation on aluminum and steel

May 23rd, 2018

by Jeff Desjardins | posted with permission of Visual Capitalist

As the global rhetoric around trade heats up, aluminum and steel are two metals that have been unexpectedly thrust into the international spotlight.

Both metals are getting considerable attention as journalists and pundits analyze how tariffs may impact international markets and trade relations. But in that coverage so far, one thing that may have been missed is the interesting history and context of these metals, especially within the framework of trade in North America.

Aluminum and steel in North America

This infographic tells the story of an ongoing North American partnership in these goods, and how this co-operation even helped U.S. and Canadian efforts in World War II, as well as addressing other issues of national security.

 

The history of North American co-operation on aluminum and steel

 

Aluminum and steel are metals that are not only essential for industry to thrive, but they are also needed to build infrastructure and ensure national security.

Because of the importance of these metals, countries in North America have been co-operating for many decades to guarantee the best possible supply chains for both aluminum and steel.

The history: Aluminum and steel

Here are some of the major events that involve the two metals, from the perspective of North American trade and co-operation.

1899
The Pittsburgh Reduction Company, later the Aluminum Company of America (Alcoa), begins construction of a power plant and aluminum smelter in Shawinigan Falls, Quebec.

1901
The company produces the first aluminum ever on Canadian soil.

1902
This Canadian division is renamed the Northern Aluminum Company

New uses and WWI

1903
The Wright brothers use aluminum in their first plane at Kitty Hawk, North Carolina.

1908
The first Model T rolls off the assembly line, and steel is a primary component.

1910
The U.S. and Canadian steel industries surround the Great Lakes region. At this point the U.S. produces more steel than any other country in the world.

1913
The U.S. passes the Underwood Tariff, a general reduction in tariff rates that affected Canadian exporters. Zero or near-zero tariffs were introduced for steel. (The Canadian Encylopedia)

1914
At this point, 80% of American-made cars had aluminum crank and gear cases.

World War I
The Great War breaks out. It’s the first ever “modern war” and metals become strategically important in a way like never before. For the first three years, the U.S. helps the Allies—including Canada, which is already at war—by providing supplies.

Steel was crucial for ships, railways, shells, submarines and airplanes. Meanwhile, aluminum was used in explosives, ammunition and machine guns. The Liberty V12 engine, which powered Allied planes, was one-third aluminum.

During this stretch, America produced three times as much steel as Germany and Austria. By the end of the war, military usage of aluminum is sucking up 90% of all North American production.

Inter-war period

1919
After the war, the interruption of European aluminum shipments to North America drives up Northern Aluminum sales to the United States. In 1919, U.S. aluminum imports from Northern Aluminum total 5,643 tons, while all European producers add up to 2,360 tons.

1925
After aluminum gains post-war acceptance from consumers, Alcoa uses this new momentum to strike a deal to build one of the world’s greatest aluminum complexes in Quebec on the Saguenay River.

These facilities become the base for Northern Aluminum, which changes its name to the Aluminum Company of Canada (Alcan). By 1927, the area includes a new company town (Arvida), a 27,000-ton smelter and a hydro power plant. This complex would eventually become the world’s largest aluminum production site for WWII.

1929
The Roaring Twenties saw consumer culture take off, with auto and appliance sales escalating. Steel and aluminum demand continues to soar.

World War II

1940
Canada and the U.S. establish the Permanent Joint Board on Defense, still in operation today. Near the same time, the Canadian-American defence industrial alliance, known as the Defence Production Sharing Program, is also established.

1941
Canada and the U.S. agree to co-ordinate production of war materials to reduce duplication, and to allow each country to specialize, with The Hyde Park Declaration of 1941.

The record proves that in peaceful commerce the combined efforts of our countries can produce outstanding results. Our trade with each other is far greater than that of any other two nations on earth.—Harry Truman,
33rd U.S. president, 1947

The principles of this declaration recognize North America as a single, integrated defence industrial base.

1942
Canada builds the Bagotville airbase to protect the aluminum complex and hydro plants of the Saguenay region, which were crucial in supplying American and Canadian forces. A Hawker Hurricane squadron is permanently stationed to protect the area.

1945
The Saguenay facilities were so prolific that Canada supplied 40% of the Allies’ total aluminum production.

Cold War and North American integration

1952
The U.S. focuses on Canadian resources after the President’s Materials Policy Commission warns of future shortages of various metals, which could make the U.S. dependent on insecure foreign sources during times of conflict.

1956
Canada and the U.S. sign the Defence Production Sharing Agreement, which aims to maintain a balance in trade for defence products. At this point, Canada relies on the U.S. for military technology—and the U.S. relies on Canada for important military inputs.

1959
The St. Lawrence Seaway opens, providing ocean-going vessels access to Canadian and U.S. ports on the Great Lakes. This facilitates the shipping of iron ore, steel and aluminum.

1965
The Canada-U.S. Auto Pact allows for the integration of the Canadian and U.S. auto industries in a shared North American market. This paves the way for iron ore, steel and aluminum trade.

1989
The U.S. and Canada sign a free trade agreement, which eventually gets rolled into NAFTA in 1994.

Modern aluminum and steel trade

2007
U.S. Steel buys the Steel Company of Canada (Stelco) for $1.9 billion.

Today
The U.S. and Canada are each other’s best international customer for a variety of goods—including steel and aluminum.

Posted with permission of Visual Capitalist.

Crucial commodities

September 8th, 2017

Price/supply concerns draw end-users to Commerce Resources’ rare earths-tantalum-niobium projects

by Greg Klein

“One of the things that really galls me is that the F-35 is flying around with over 900 pounds of Chinese REEs in it.”

That typifies some of the remarks Commerce Resources TSXV:CCE president Chris Grove hears from end-users of rare earths and rare metals. Steeply rising prices for magnet feed REEs and critical minerals like tantalum—not to mention concern about stable, geopolitically friendly sources—have brought even greater interest in the company’s two advanced projects, the Ashram rare earths deposit in northern Quebec and the Blue River tantalum-niobium deposit in southeastern British Columbia. Now Commerce has a list of potential customers and processors waiting for samples from both properties.

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F-35 fighter jets alongside the USS America:
Chinese rare earths in action.
(Photo: Lockheed Martin)

Of course with China supplying over 90% of the world’s REEs, governments and industries in many countries have cause for concern. Tantalum moves to market through sometimes disturbingly vague supply lines, with about 37% of last year’s production coming from the Democratic Republic of Congo and 32% from Rwanda, according to the U.S. Geological Survey. One company in Brazil, Companhia Brasileira de Metalurgia e Mineração (CBMM), produces about 85% of the world’s niobium, another critical mineral.

As Ashram moves towards pre-feasibility, Commerce has a team busy getting a backlog of core to the assay lab. But tantalum and niobium, the original metals of interest for Commerce, have returned to the fore as well, with early-stage exploration on the Quebec property and metallurgical studies on the B.C. deposit.

The upcoming assays will come from 14 holes totalling 2,014 metres sunk last year, mostly definition drilling. Initial geological review and XRF data suggest significant intervals in several holes, including a large stepout to the southeast, Grove’s team reports.

“We’re always excited to see this project’s drilling results,” he says. “We know we’re in carbonatite basically all of the time and over the last five years, in all the 9,200 metres we’ve done since the last resource calculation, we’ve basically always hit more material than was modelled in the original resource—i.e. we’ve always found less waste rock at surface, we’ve always hit material in the condemnation holes and we’ve always had intersections of higher-grade material. So all those things look exciting for this program.”

Carbonatite comprises a key Ashram distinction. The deposit sits within carbonatite host rock and the minerals monazite, bastnasite and xenotime, which are well understood in commercial REE processing. That advantage distinguishes Ashram from REE hopefuls that foundered over mineralogical challenges. Along with resource size, mineralogy has Grove confident of Ashram’s potential as a low-cost producer competing with China.

As for size, a 2012 resource used a 1.25% cutoff to show:

  • measured: 1.59 million tonnes averaging 1.77% total rare earth oxides

  • indicated: 27.67 million tonnes averaging 1.9% TREO

  • inferred: 219.8 million tonnes averaging 1.88% TREO

A near-surface—sometimes at-surface—deposit, Ashram also features strong distribution of neodymium, europium, terbium, dysprosium and yttrium, all critical elements and some especially costly. Neodymium and dysprosium prices have shot up 80% this year.

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Commerce Resources’ field crew poses at the Eldor property,
home to the Ashram deposit and Miranna prospect.

Comparing Ashram’s inferred gross tonnage of nearly 220 million tonnes with the measured and indicated total of less than 30 million tonnes, Grove sees considerable potential to bolster the M&I as well as increase the resource’s overall size and average grade.

This season’s field program includes prospecting in the Miranna area about a kilometre from the deposit. Miranna was the site of 2015 boulder sampling that brought “spectacular” niobium grades up to 5.9% Nb2O5, nearly twice the average grade of the world’s largest producer, CBMM’s Araxá mine, Grove says. Some tantalum standouts showed 1,220 ppm and 1,040 ppm Ta2O5. Significant results for phosphate and rare earth oxides were also apparent.

Should Miranna prove drill-worthy, the synergies with Ashram would be obvious.

That’s the early-stage aspect of Commerce’s tantalum-niobium work. In B.C. the company’s Blue River deposit reached PEA in 2011, with a resource update in 2013. Based on a tantalum price of $381 per kilo, the estimate showed:

  • indicated: 48.41 million tonnes averaging 197 ppm Ta2O5 and 1,610 ppm Nb2O5 for 9.56 million kilograms Ta2O5 and 77.81 kilograms Nb2O5

  • inferred: 5.4 million tonnes averaging 191 ppm Ta2O5 and 1,760 ppm Nb2O5 for 1 million kilograms Ta2O5 and 9.6 million kilograms Nb2O5

Actually that should be 1,300 kilograms less. That’s the size of a sample on its way to Estonia for evaluation by Alexander Krupin, an expert in processing high-grade tantalum and niobium concentrates. “As with Ashram, we’ve already found that standard processing works well for Blue River,” Grove points out. “However, if Krupin’s proprietary method proves even more efficient, why wouldn’t we look at it?”

We’re always excited to see this project’s drilling results. We know we’re in carbonatite basically all of the time and over the last five years, in all the 9,200 metres we’ve done since the last resource calculation, we’ve basically always hit more material than was modelled in the original resource.—Chris Grove,
president of Commerce Resources

Back to rare earths, Commerce signed an MOU with Ucore Rare Metals TSXV:UCU to assess Ashram material for a proprietary method of selective processing. Others planning to test proprietary techniques on Ashram include Texas Mineral Resources and K-Technologies, Rare Earth Salts, Innovation Metals Corp, the University of Tennessee and NanoScience Solutions at Tufts University in Massachusetts.

Should proprietary methods work, all the better, Grove states. But he emphasizes that standard metallurgical tests have already succeeded, making a cheaper process unnecessary for both Blue River and Ashram.

Potential customers show interest too. Concentrate sample requests have come from Solvay, Mitsubishi, Treibacher, BASF, DKK, Albemarle, Blue Line and others covered by non-disclosure agreements. Requests have also come for samples of fluorspar, a potential Ashram byproduct and another mineral subject to rising prices and Chinese supply dominance.

A solid expression of interest came from the province too, as Ressources Québec invested $1 million in a February private placement. The provincial government corporation describes itself as focusing “on projects that have good return prospects and foster Quebec’s economic development.”

Also fostering the mining-friendly jurisdiction’s economic development is Plan Nord, which has pledged $1.3 billion to infrastructure over five years. The provincial road to Renard helped make Stornoway Diamond’s (TSX:SWY) mine a reality. Other projects that would benefit from a road extension towards Ashram would be Lac Otelnuk, located 80 kilometres south. The Sprott Resource Holdings TSX:SRHI/WISCO JV holds Canada’s largest iron ore deposit. Some projects north of Ashram include the Kan gold-base metals project of Barrick Gold TSX:ABX and Osisko Mining TSX:OSK, as well as properties held by Midland Exploration TSXV:MD.

But, Grove says, it’s rising prices and security of supply that have processors and end-users metaphorically beating a path to his company’s door. And maybe nothing demonstrates the criticality of critical minerals better than a nearby superpower that relies on a geopolitical rival for commodities essential to national defence.

Visual Capitalist: How copper riches helped shape Chile’s economic story

June 21st, 2017

by Jeff Desjardins | posted with permission of Visual Capitalist | June 21, 2017

Although Chile has always been noted for its abundant mineral wealth, the country was actually not a notable copper producer even at the beginning of the 20th century.

In 1907, for example, the United States was able to produce nearly 14 times as much copper as Chile. The reality was that shortages in capital, organization and water kept the country’s massive, low-grade deposits from being developed at any significant scale.

The copper standard

Things would change dramatically for Chile. The country has been the world’s top copper producer now for over 30 years, and today close to 50% of the country’s exports come from copper-related products.

This infographic comes from Altiplano Minerals TSXV:APN and it tells the story of how Chile tapped into its copper wealth to become the richest and freest economy in Latin America.

 

How copper riches helped shape Chile’s economic story

 

New milling technology, economic reforms and increasing investment attractiveness were catalysts that turned Chile into a copper powerhouse. In turn, copper exports helped propel the Chilean economy to new heights.

“The miracle of Chile”

This incredible leap can be summed up aptly with two facts:

1) Copper production went from under one million tonnes per year (late 1970s) to over five million tonnes per year (2000s).

2) Despite this massive rise, copper as a percentage of exports fell. It went from a peak of 80% of exports to more like 50% today.

Over this time, as the economy diversified, Chilean GDP per capita (PPP) gained massive ground on the Latin American average and passed it in the early 1990s.

Chile’s GDP per capita today is the highest in Latin America of major economies:

 

  GDP per capita (2015, PPP)
Chile $24,170
Argentina $22,459
Mexico $18,370
Venezuela $17,430
Brazil $15,941
Colombia $14,164
Peru $12,639
Ecuador $11,839
Guatemala $7,704

 

That said, critics of Chile’s economy will point to its inequality. The country’s Gini Coefficient, according to the World Bank, is higher (less equal) than only a handful of Latin American and Caribbean economies: Panama, Belize, Haiti, Suriname, Honduras and Colombia.

Mining in Chile today

Today, Chile’s mines produce copper, gold, molybdenum, iron and silver. The country also produces more lithium than any country from its salars.

The country is the world’s undisputed copper heavyweight champion—it’s been the top producer for 30-plus years and holds an impressive seven of the world’s top 14 copper mines. The biggest mine, Escondida, produces over a million tonnes of the red metal each year, equal to 5% of the world’s annual copper supply.

The copper crown is likely to be held by Chile in the future, as well. According to the Chilean Copper Commission (Cochilco), between 2000 and 2015 about 35 copper deposits and three gold deposits were discovered in central-north Chile. They increased the country’s resources by 208.6 million tons of copper and 34.3 million ounces of gold.

The new copper discovered is roughly equal to 30% of global discoveries over the same time period.

Posted with permission of Visual Capitalist.

Peregrine Diamonds outlines Nunavut spending plans as Chidliak moves to pre-feas

November 25th, 2016

by Greg Klein | November 25, 2016

Having poured about $23 million into Nunavut so far, Peregrine Diamonds TSX:PGD plans to spend another $15.5 million to $17 million next year on its Chidliak project, the Nunatsiaq News reported November 25. Most of the $23 million went to Iqaluit, home to an estimated 7,590 people. “It will cost between $50 and $75 million to go from here to where we need to get to,” the journal quoted president/CEO Tom Peregoodoff.

Peregrine Diamonds outlines Nunavut spending plans as Chidliak moves to pre-feas

Chidliak would have a 10-year lifespan,
according to last summer’s PEA.

The Baffin Island project reached PEA in July, calling for a capex of $434.9 million, an amount relatively modest for an isolated operation but considerable for a territory of about 37,082 people. The company hopes to reach feasibility by H2 2019, complete permitting by the end of that year and begin construction in H2 2019. Should hopes, financing and feasibility fall into place, Peregrine might be digging diamonds by 2021.

Brothers Robert and Eric Friedland own about 25% and 21% of the company respectively.

New infrastructure would include an all-season road to Iqaluit, about 120 kilometres southwest. The government of Nunavut hopes to have an $85-million deep sea port built there by 2020.

The territory currently has two other mines in production, Agnico Eagle’s (TSX:AEM) Meadowbank gold mine about 300 kilometres west of Hudson Bay and Baffinland Iron Mines’ Mary River iron ore operation roughly 800 kilometres north of Chidliak. Baffinland trucks ore to its own port, 100 kilometres north of the mine.

Peregoodoff said the company has yet to negotiate an Inuit Impact and Benefits Agreement, but stated such a deal would probably resemble agreements signed with Northwest Territories diamond producers, the News added.

In October the paper reported Nunavut’s 14,000-member Qikiqtani Inuit Association received more than $24 million over two years from Mary River.

Should Peregrine meet its goal, Chidliak wouldn’t be Nunavut’s first diamond operation. Just across the border from the NWT’s Lac de Gras camp, Nunavut’s Jericho mine produced gems between 2006 and 2008. Shear Minerals gave up on its restart attempt in 2012, leaving taxpayers with a large part of an estimated $10.5-million clean-up bill.

Yet diamond mining transformed the NWT economy. According to figures supplied by the NWT and Nunavut Chamber of Mines, between 1996 and 2015 the industry provided over 50,000 person-years of employment, 49% northern and 24% aboriginal. By far the territory’s largest private sector industry, diamond mining created 29% of the NWT’s GDP in 2014. Direct and indirect benefits bring the number up to 40%, according to chamber data.

Read how diamond mining supports the NWT economy.

Peregrine Diamonds outlines Nunavut spending plans as Chidliak moves to pre-feas

NWT Premier Bob McLeod, far right, celebrates aboriginal governments’ contributions to diamond mining
on the industry’s 25th anniversary in the territory. From left are Stanley Anablak (Kitikmeot Inuit Association),
Darryl Bohnet (Northwest Territory Métis Nation), Don Balsillie (Deninu Kué First Nation), Felix Lockhart
(Lutsel K’e and Kache Dene First Nation), Bill Enge (North Slave Métis Alliance), Chief Ernest Betsina and
Chief Edward Sangris (Yellowknives Dene First Nation), Chief Alfonz Nitsiza and Chief Clifford Daniels
(Tłı ̨chǫ Government), and Premier McLeod. (Photo: NWT and Nunavut Chamber of Mines)