Soon after the fall of the Berlin wall, we descended on Wismut, East Germany with proposals to help them cleanup the old uranium mines, mills, and tailings impoundments that the Russians left behind.  The large American consulting firm that I was working for at the time, believed that with our UMTRA Project experience, we were well-suited for the work.  So too did a small Canadian consulting company. 

The small Canadian company got the work.  Maybe they were more technically proficcient–but I doubt it.  The real reasons they won, at least by our American company analysis, was that the Canadians came with a CIDA grant and that made them much cheaper than we could be. 

The Canadian consultants did some work, made some good freinds, taught the East Germans a bit, and then withdrew—for the East Germans were well-educated, well-organized, and soon realized they could do the work themselves.  We all remained friends and when I got back together with the folk of the small Canadian company, we drew on the engineering advances made at Wismut to formulate a way to reclaim an oil sands tailings impoundment.

That is, to my mind, a good use of CIDA funding.  The CIDA funding helped a small Canadian group beat out a large American group, new technology was developed, and Canada was the ultimate beneficiary. 

So it is with mixed emotions that I read in today’s Globe and Mail that CIDA is funding large international mining companies in remote places.  Companies getting CIDA grants include: Barrick Gold, IAMGOLD, and Rio TInto.  Countries where there are CIDA-supported projects include: Peru, Ghana, Mali, Senegal, and Mongolia.  

There are critics of CIDA suport for big mining companies.  This from the Globe and Mail report:

The practice is fuelling the ire of some NGOs and critics of the mining industry, which lambaste the government for subsidizing the so-called “corporate social responsibility” projects that are put in place by profitable companies. Jamie Kneen of MiningWatch Canada said the government is helping the mining industry to put a positive spin on their operations, despite their negative environmental and human-rights records.

Supporters claim just the opposite.  Again from the Globe and Mail report:

But World Vision Canada, which is working with Barrick Gold and CIDA in Peru on a $1-million project, is defending its actions as having a positive impact on children and families.   “We have to be realistic here, there is self-interest on the part of every party here,” said World Vision Canada president Dave Toycen. “Anything we can do to encourage and advocate for better mining practices, and support the communities that they are displacing or affecting, we’re contributing to a better lifestyle and environment for them.”

In a statement issued by her office on Thursday, Ms. Oda said her government wants to encourage Canadian firms to help “local populations,” arguing that extractive industries – referring to mining and oil and gas – are creating jobs and economic development.   “This approach of partnership will result in enriching the local communities, building a stronger skilled workforce and reducing poverty for many families,” she said. “Creating sustainable economic growth in developing countries is key to reducing poverty.”

It is difficult to work out from the reports if the CIDA money is going to the mining companies or to smaller groups, such as World Vision Canada, who seek to do good things around mines to promote that old cliche of sustainable development. 

I am torn between two hats.  As a taxpayer I find it bad that tax money should go to support big mining companies.  As an investor, I am off to buy share in those mining companies, for if they can wrest money out of the taxpayer, so much the better for me as an investor.   My third hat, that of a moral being, supports the spread of Canadian ideals by way of teaching those locals how to respond to mining—why they may develop cities as viable as Vancouver with its vigerous sustainable mining industry.

Another long report is from the Ottawa Citizen.  They shed this light on the CIDA-funded, mining-associated projects:

Last year, our Minerals Make Life program raised awareness about the contribution of minerals to economic growth, innovation and national security in America. Thanks to these efforts, we saw the momentum around the minerals conversation grow in Washington and throughout the country.

• In this video, Carol Raulston, senior vice president of communications for the National Mining Association, provides a recap of key findings and milestones from 2011 that will help enhance our efforts advocating for smart mining in 2012, including:
• Reports by the U.S. Department of Defense and PricewaterhouseCoopers that revealed the importance of a steady minerals supply to the U.S. military and hi-tech and automotive sectors, among others;
• The introduction of the “Critical Minerals Policy Act of 2011” by Sen. Lisa Murkowski (R-Alaska), aiming for an in-depth analysis of our nation’s minerals needs and the ability to meet those needs domestically; and
• The passage of a similar bill by Rep. Doug Lamborn (R-Colo.), the “National Strategic and Critical Minerals Policy Act of 2011,” which received bipartisan approval in the House Committee on Natural Resources in June 2011.

As we begin the new year, we must remain focused on advocating sound policies that promote a strong U.S. minerals mining sector and improve our economy. We hope you will support our efforts by sharing this video with your I Think Mining readers.

The news wires are abuzz with the announcement that Obama has caved into his party’s environmental wing and killed the Keystone pipeline that would have carried Canadian oil to the refineries along the gulf coast.  Obama spluttered some words about reducing car fuel consumption as a way of making up for the jobs the pipeline would have generated.  Let us face it: Obama has caved to the environmentalist who threatened to withdraw their support if he did not kill the pipeline.  One of those fancy magazines that I read a while ago had an article by Bill McKibben spelling out the full threat.   Here is one report on his role:

On November 6, 2011, Bill McKibben arrived at Washington, D.C.’s, Lafayette Park to protest the proposed Keystone XL pipeline, designed to carry oil 1,700 miles from Alberta, Canada, to refineries on the Gulf of Mexico. McKibben, a Vermont writer and environmentalist, had been one of 1,252 people arrested in front of the White House in August and September, protesting the same pipeline. He’d spent two nights in the district’s Central Cell Block, and now was back with thousands more people and a bold new plan.

Here is McKibben’s response to the announcement;

“Assuming that what we’re hearing is true, this isn’t just the right call, it’s the brave call. The knock on Barack Obama from many quarters has been that he’s too conciliatory. But here, in the face of a naked political threat from Big Oil to exact ‘huge political consequences,’ he’s stood up strong. This is a victory for Americans who testified in record numbers, and who demanded that science get the hearing usually reserved for big money.   We’re well aware that the fossil fuel lobby won’t give up easily. They have control of Congress. But as the year goes on, we’ll try to break some of that hammerlock, both so that environmental review can go forward, and so that we can stop wasting taxpayer money on subsidies and handouts to the industry. The action starts mid-day Tuesday on Capitol Hill, when 500 referees will blow the whistle on Big Oil’s attempts to corrupt the Congress.” 

Recently I spent a month in California.  The Republicans amongst my friends were convinced that if the USA just pulled out enough of its own natural gas, they would not need to import oil for the next three hundred years—if only Obama would let them frac the ground and pull out the gas.  Now these are Orange County Republicans, so I have no reason to dispute their opinions—or do I?

The point is that as good Republicans they were scathing of socialistic Canada and their pride was offended by the thought that they would have to rely on Canadian oil to fuel their big SUVs.   So they were not too worried about the pipeline going through.  “Let them sell the stuff to China,” was one profound opinion.   And that is probably just what will happen.

Another side of the issue: this morning I was interviewed by one of those firms that makes a living predicting a terrible upcoming shortage of workers in the Canadian mining industry.  They get government funds to put out gloomy report after gloomy report predicting a near-collapse of Canadian mining unless we…….well you can guess the rest.  It includes spending more Canadian government money, whatever it is. 

How long will it be before somebody comes out and tells us that killing the Keystone pipeline is a blessing for Canadian mining companies—it will lessen the demand for Canadian oil sands mining and hence the demand for so many non-existant workers.  Not unemployment understand; just that fewer of those precious, non-existant workers will not be required to make oil to send to the USA.   

When I mentioned to him that with so many unemployed workers in the USA, aka not at work building a pipeline, he breathed a sigh of fear.  “Don’t need to be importing workers from the USA now, do we?”

So maybe it will all work out as McKibben hopes: Obama is re-elected; SUVs go away; we all take up baking for each other as a profession; people do not move from the place they are born, but write poems about clear ponds;  the wives weave sack-cloth like Penelope of old; and maybe the Chinese economy bursts its bubble, reducing the need for oil from Canada piped via Vancouver. 

I somehow doubt this.  We are not all rich on popular but impractical books.  We cannot all afford to go to protest to be thrown in jail.  Most of us want a warm house, a dependable car, an occasional trip in an plane to visit grandkids, and gainful employment.   And the Chinese are no different, even though they censor such thoughts. 

In some ways, I hope that Obama’s silly decision will be to the benefit of the Canadian economy: build our own refineries, pipelines, and distributions systems.   I suspect this decision will lessen rather than enhance Obama’s re-election progress.  He will just have to leave the White House and go write books with McKibben and Gore.   Is the prospect that Romney might win an approve the pipeline one of the reasons, Obama changed his previous decision to delay a decision until after the election?  I read it was the Republicans who forced his hand, and they stand to benefit.

Whatever, this is a fantastic example of politics affecting mining.  And the story will continue to unfold.

PS.  Here is a link to the best blog posting on the issue that I came across in browsing the web on this issue.  It tells of a worker, a tradeunion worker, opposing the pipeline.  He captures the dilemmas and conflict perfectly.  You may not agree with him; but it is worth reading.  Here is part of what he writes and concludes; although I cannot see how his plea for full employment is logically consistent with the rest of his argument:

That’s where I first learned something about working on pipelines.  I worked building the Texas-Eastern pipeline as it wound its way through the rolling hills of Central Pennsylvania.  Small teams of operating engineers, pipefitters, and laborers traveled across the state doing work we enjoyed and that we understood to be useful and important.  (We didn’t know then what we know now.)  It was a great job and I was a member of a great union, Laborer’s Local 158.  We formed friendships and shared a solidarity that touched us all deeply.

On another job building a railroad bridge across the Susquehanna river, a buddy of mine got fired by a hubris-filled college kid.  (The kid’s dad owned the construction company so the kid had been made chief foreman over all laborers.)  We struck and shut the job down.  The operating engineers, carpenters and ironworkers supported us.  Without that support we would have lost, but we won and my brother laborer was hired back.

To my friends in the climate protection, environmental, and sustainability movements I say:  We can’t let climate protection make victims of workers who happen through no fault of their own to be in the way of changes that are necessary to protect the climate.  Work with us in the labor movement to better understand that sustainability starts at the kitchen table.  Support full employment policies, support Blue-Green Alliance’s Jobs 21 campaign, support the AFL-CIO’s program for full employment, and fight for a just transition that protects the wellbeing of workers and communities who may be hurt by side effects of climate protection policies through no fault of their own. 

From Deloitte a new report Tracking the trends 2012, The top 10 trends mining companies may face in the coming year.  The report starts with this quote:

As nations around the world industrialize and populations strive to improve their standards of living, mining has come to take a more central role on the world stage. Gone are the days when conversations about commodity prices were confined to industry analysts. Today, mining is front page news – every day and across the globe. For mining companies, this greater visibility comes with greater responsibility.

  The report deals with these topics and make these conclusions:

• Costs of business: The pace of production has picked up and overall costs are up. The report sets out various cost-control strategies
• Commodity prices: Are we at a new benchmark high or in the middle of a bubble that is ready to burst?
• Profits: Government taxes are targeting the mining sector and go above and beyond the introduction of new tax laws
• Corporate social responsibility: Demand is intensifying for corporate social responsibility which can translate into smoother project roll-out
• Talent shortages: Looking at how to bridge the talent gap and find willing workers
• Capital projects: As commodity prices fluctuate and the gap between supply and demand gets wider, companies will need to adopt more innovative solutions
• Non-traditional financing: new financing sources require new levels of knowledge and cultural engagement
• Risk: Big is getting even bigger: countering unexpected risk as companies diversify
• Volatility: Planning for the unpredictable
• Legislation: countries are competing to become the most vigilant regulators in the world. Companies need to take proactive steps to implement stronger compliance processes and policies.

The point that interests me is Corporate social responsibility: Demand is intensifying for corporate social responsibility which can translate into smoother project roll-out.

This is the other side of the issue of a social license to mine.  New mines may be started sooner and at lower cost if the locals concur with the plan to open the new mine.  If there is social unrest and demonstrations, the mine may be delayed or never start up.

What is happening in Peru right now is a case history in point.  Here is part of one report;

What with Welsh miners in the news and possibly becoming a feature of the presidential election, let us turn to a story of the death of four miners last year in a Welsh coal mine. Here is what Queen Elizabeth said in her Christmas message about the deaths:

“We’ve seen that it’s in hardship that we often find strength from our families; it’s in adversity that new friendships are sometimes formed; and it’s in a crisis that communities break down barriers and bind together to help one another,” she said.   “Families, friends and communities often find a source of courage rising up from within.    “Indeed, sadly, it seems that it is tragedy that often draws out the most and the best from the human spirit.”

This is the  story from Wales of how the community responded:

A FUND set up to help the families of four South Wales miners killed in the Gleision Colliery disaster has almost topped £1m.  The appeal was set up to raise money for the families of miners Phillip Hill, Charles Breslin, David Powell and Garry Jenkins just two days after the accident happened last September.

“It goes to the deep well of support and sympathy and really deep, deep anguish right through the communities of South Wales, particularly the former coal-mining communities, or existing coal-mining communities.”

The funds are being administered by three trustees – the Archbishop of Wales, Dr Barry Morgan, the general secretary of the National Union of Mineworkers in South Wales Wayne Thomas, and Tower Colliery saviour Tyrone O’Sullivan.

Mr O’Sullivan said yesterday: “It has been an incredibly surprising response.  The effect it has had throughout the world shows that miners are still a breed of people that are very much respected, never mind where they are in the world.”

He said part of the overwhelming response had been down to the shock of a mining tragedy in Wales for the first time in several years. “It is clear that Wales had never expected to see a mining tragedy again, and it came as a shock,” said Mr O’Sullivan.  “There are not many pits left in Britain, never mind Wales, and we had multiple deaths in this tragedy, and that caught everyone’s attention.”

But not all is well.  Seems the systems for safety and rescue are outdated. Note this response by politicians to the death of the miners:

I quote below parts of an email that I received.  I downloaded and read the report.  It is one of those reports based on asking “experts” their opinion.  There is said to be wisdom in the crowd, so let us grant the benefit of the doubt to this method of “establishing” facts, situations, and conditions.  Certainly what is reported is good news for the mining industry:  five years of minerals and metals shortage.  Surely that means more mining?  Not sure if it means more jobs, but things are looking up somewhat in that regard. 

Here is part of what the email said:

I thought you may be interested in a recent report that found 77% of major manufacturing industries consider minerals and metals scarcity a pressing issue causing stress for their suppliers. The PwC report, Minerals and metals scarcity in manufacturing: A ‘ticking time bomb’ surveyed 69 senior executives in seven different manufacturing industries across the Americas, Asia Pacific region and Europe.

Some key findings from the report include:

•  83% of respondents indicate their suppliers consider minerals and metals scarcity an issue and 61% believe their customers are taking the issue seriously.
•  Most regions and industries globally view an increase in demand as the primary cause for minerals and metals scarcity (84%), followed by geopolitics (79%) and extraction shortages (73%).
•  Risk arising from minerals and metals scarcity is expected to increase across all industries in the next five years.
• Respondents from the automotive sector (82%) have the most positive outlook when it comes to finding opportunities over the next five years in the midst of a metals and minerals shortage.

The impact of growing demand is highest for suppliers within the infrastructure industry. Other causes for the shortage and level of impact are noted in the table below:

Causes	High to very high Impact
Growing demand	65%
Geopolitics	54%
Extraction shortage	32%
Low substitution rate	38%
Re-use rate low	36%
Over demand (supercycle)	39%
Reserves running dry	30%
Insufficient Research and Development (R&D)	25%

Risk is growing
Risk arising from minerals and metals scarcity is expected to increase across all industries in the next five years. Industries within the renewable energy (78%), automotive (64%) and energy and utilities (57%) sector are currently experiencing instability of supply.

“Preparedness is critical to responding to the risks associated with the scarcity of resources,” says Semple. “Across different sectors, we’re faced with varying levels of preparedness. The majority (73%) feel they are sufficiently prepared, but some companies do not have adequate plans in place to reduce the impact of the shortage on their business.”

Areas of opportunity
Respondents from the automotive sector (82%) have the most positive outlook when it comes to finding opportunities over the next five years in the midst of a metals and minerals shortage. Overall, 43% of respondents across all industries view scarcity as a current opportunity, while 59% of respondents say the opportunity will grow in the next five years.

Europeans remain the most optimistic with 58% perceiving an opportunity at hand, whereas only 35% of respondents from North and South America sense potential for good prospects.

You can view the full report by clicking here.

Once more on the topic of unemployment and the role of mining in giving people jobs.  Today I received the following from the  U.S. National Mining Association, and it is an honor to be asked and to be able to comply.  Jamie Caswell writes as follows:

One of the few sectors that consistently added jobs in 2011 was U.S. minerals mining. Today, this industry supports 1.1 million American jobs nationwide and has enabled modern products such as aircrafts, medical equipment and state-of-the-art electronics to come to fruition.

Some of the fastest growing industries in America—including high tech, automotive manufacturing and renewable energy—rely on minerals to operate. In a December 2011 PricewaterhouseCoopers study, 67 percent of respondents—senior executives in these industries worldwide—said they expect their companies to be affected by minerals and metals supply scarcity in the next 5 years.

Hal Quinn, president of the National Mining Association, reflects, “If we are to foster American ingenuity, build a stable economy and create jobs in 2012 and beyond, the U.S. portfolio for growth must include a secure, domestic minerals supply. We must not allow our nation’s minerals needs to go unmet, especially when these very resources help put Americans back to work and drive our economy.”

Please help us inform your I Think Mining readers as to the importance of minerals mining by sharing the study on your site.

Thank you for your continued support.

Sincerely,

Jamie Caswell

Communications Specialist

National Mining Association

jcaswell@nma.org

(202) 463-2667

Contrast this report with the following hysterical, internally-contradictory email from a fellow, Brian Wilson, who every so often send me his diatribe.   Let me get in some of my comments on what he writes before you read what he writes. 

Those of you who regularly follow this blog know that I am no fan of politicians, either in general or specifically.  I am currently reading a 1921 book by Bernard Shaw Back to Methuselah in which he writes: “Essentially the rulers are all defective; and there is nothing worse than government by defectives who wield irresistable powers of physical coercion.  The common-place people submit, and compel the rest to submit, because they have been taught to do so as an article of religion and a point of honor.”  Even Shaw, who hated politicians, saw that the fault also lies in ourselves.

Yet I cannot accept Bill Wilson’s thesis that it is all Obama’s fault.  Wilson’s analysis would be more cogent and valuable if he took on all politicians past and present, and also those hoping to be president–as sad an pathetic a bunch of defectives as ever I have seen.  Wilson’s focus on getting rid of Obama does nothing to advance the debate or make conditions propitious for new mines. 

Wilson may have a point re repealing what he calls blue-sky laws in recalcitrant states.  But being a Canadian as well as an American, I find it hard to believe Obamacare is the cause of all America’s ills.  Or to believe that higher taxes properly applied and focussed won’t be needed to pay down the debt built up by decades of greed and profligacy. 

Enough read for yourself what he says, but be careful for it is high propaganda at its most shrill. 

Since Barack Obama assumed office, according to the Bureau of Labor Statistics, the total population over age 16 has grown by 5.845 million to 240.5 million, and yet, since then, the civilian labor force has actually shrunk by 349,000 — from about 154.2 million to 153.8 million. 

This is a startling contradiction, and it is at the heart of why the unemployment rate is much higher than the 8.5 percent being reported.

The problem is that the measured civilian labor force participation rate has fallen from 65.7 percent to 64 percent since Jan. 2009, reflecting people who have lost hope and simply stopped looking for work.  If those people were still counted, the actual civilian labor force would be 4.176 million higher than is reported at about 158 million.

Based on this analysis, the number of unemployed is actually closer to 17 million instead of the 13 million reported jobless.  That is simply astounding.

Instead of 8.5 percent, the effective unemployment rate should be closer to 10.9 percent, and the underemployed closer to 17.4 percent, or 27.3 million.  This is what we mean when we say that the unemployment rate is no longer a valid economic indicator.

Propaganda is not going to get the real unemployed into jobs.  It’s not going to help families keep their homes.  It’s not going to help college graduates to enter the work force.  We’re nowhere near where we should be, and it’s Obama’s fault.

It’s his regulatory burdens that are being imposed through the Environmental Protection Agency’s (EPA) carbon endangerment finding and through Obamacare.  It is he who is insisting on raising taxes on job creators, and playing class warfare to cobble together a constituency that wants to apparently take from their employers’ purses.  It is Obama who has refused to get the nation’s crushing debt load under control, where the $15.2 trillion national debt is nearly larger than the entire economy. 

To get the economy moving again, the government needs to slash corporate tax rates, which are the highest in the world of advanced economies.  It is imperative that the regulatory overkill come to an end.  The dollar needs to be strengthened to lower costs and stabilize energy and food costs.  The debt needs to be paid down and retired, and the budget balanced. Onerous federal securities laws and state-by-state blue sky laws need to be repealed that make it cost-ineffective for new businesses to raise capital.

In short, it must become competitive to do business here in America again.  And that will probably not happen so long as Obama is in office.  It is clear the nation needs new leadership that is intent on actually creating jobs and restoring hope, instead of ignoring the despair of Obama’s lost labor force.

In a previous posting on this blog, I made my mining predictions for 2012.  One of them was that we would be regaled by a continuing plethora of articles saying mining will be detrimentally affected by a shortage of workers.  Here is one comment on that posting (I edit for spelling and punctuation): 

The current demand for mining positions including laborers, semi-skilled, and skilled is around 30,000 for Western Canada alone. This does not include the oil sands industry. This number will double by 2015. Combine this with the petrochemical industry we have a predicted shortfall of about 100,000 by 2018. In Fort Smith BC we have zero unemployment with ads for plumbers for $250,000 per year. The restaurants are stealing waitresses from each other at about $18.00 per hour. In Alberta ESSO stations are offering a big screen TV for new employees who will stay longer than 6 months. In Fort McMurray you can work at a automotive shop selling spark plugs for $28.00 per hour. In Edmonton, most restaurants are not open from Monday to Wednesday for lack of employees. Pulp and Paper plus Sawmills are offering millwrights signing bonuses to stay on for two-year contracts for as much as an additional $50K in pay. We currently have an advertisement campaign in Canada and the UK including TV commercials looking for people to move to Canada for these jobs. We did the same campaign after World War two. Currently 11% of our population in Canada is retired. By 2020 that number will increase to 25%.

In spite of the comment and the numbers, I am not convinced.  I wish the situation were as clear-cut as the comment implies and that I could tell you that wherever you are, whatever you do, as long as you are prepared to come to Canada and work, there is a job for you. 

First let me note that on the basis of a number of cases that I know of, it is near impossible to get into Canada to work.  The worst instance is a white man and his white wife of great skills willing and wanting to come to work in the mining industry; they are nearly a year into dealing with government-paper-pushers who continue to delay.  Last month the company seeking to employ them retained an immigration lawyer to help.  So to the commenter I say: maybe Canada needs workers, but unless you are coming to work in an ethnic family food-stall, forget it.  It is a terrible hassle to get in unless you have a job waiting and your new employee is prepared to retain an immigration lawyer.

Maybe those places stealing waitresses at $18 an hour should go ethnic.  The family places that I eat at serve healthier, tastier food than those places staffed off the street serving french fries and hamburgers. 

Then there is the German that I go to the opera with.  He is highly skilled.   But after a year is still struggling to get permanent residence.  Fact  is the system is set up to discourage, not encourage skilled worker to come to or stay in Canada. 

I get at least one email a day from people in the USA, South Africa, India, and elsewhere asking how to get a job in the Canadian mining industry.   All I can do is direct them to CareerMine and tell them to seek a job and persuade the seeking company to offer them a job and get an immigration lawyer to work.   Am I missing something?  Is there a central clearing house set up and managed by the mining industry to seek out foreign workers and help them to come and work in Canada?  I do not know of one. 

I know some of the senior guys in the oil sands industry go to conferences in other countries seeking to lure good delegates to Fort McMurray.   They tell me there are more people out there than they can get into the country. 

Come on guys, Canada is not seeking mining folk.  It is happier with new taxi drivers–every one I talk to came in recently by way of an arranged marriage–or brought their breeding wife in via an arranged marriage.  Talking of taxi drivers: have you ever counted the cabs waiting customers at the Fort McMurray airport?  At least thirty to forty every time I look.  And they tell me they wait up to three hours for a rider.  Of course most drivers are Somali refugees and unskilled for selling spark plugs or any other qualifications-requiring job.   They are refugees afterall, not skilled workers.  I reject these perspectives, however.  Everyone I talked to seemed intelligent, able, and willing.  But there is a none-too-subtle racialism against them.  And there is a tribalism that binds them to each other and the Big Man in charge.  That is terrible and we should be acting not pontificating. 

Americans are particularly unwelcome from what I can make out.  Afterall nearly nine percent of them are out of work.  Yet none I know of can get through the regulations to come to work in Canada.  Now another commenter on my original posting said that there is no shortage of people, only a shortage of qualified & skilled people. 

Maybe that is the issue.  Maybe those nine percent unemployed American not seeking to come to work in Canada are neither qualified nor skilled.  Damn me, that is why they are unemployed.  They are simply no damn good.  I say sorry to any I offend in saying this.  Be assured I do not believe it.  Any rate if the argument were true, nobody would have been let into Canada to begin with.

Looking at the numbers: the comment says that there is currently a 30,000 person shortage of workers in Western Canada alone.   If this is correct, how come the Irish civil engineer that I engage in the middle of last year went six month unable to find a job.  He is a fine fellow with excellent credentials, but could not get an engineering job.  I employed him on the basis of reading his masters thesis.  Not one of the companies short of skilled workers had bothered before that to read his thesis. 

The point is that if indeed the shortage numbers are true, and I do not believe they are, then the answer is incredibly simple.  Consider: European countries that have fought one another for thousands of years now allow free passage of workers across national boundaries.  Yet two countries, Canada and the US, which have had but one tiny (gang-related) skirmish in 1812, cannot open their border to the free-flow of workers. 

Let us face it, nationalism is at the heart of the issue.  Fear of competition is the reason we have a shortage of workers, if indeed there is a shortage.  Open the borders to Americans and, if those now out of work are not entirely unskilled and untrained, they will come.  Of course this will put out of work all those who make a living from making loud noises about the shortage of workers, so they will probably be the first to block opening the borders to people willing and able to work.  Next in line to protest will be those earning $18 an hour or getting $50K sign-on bonuses.  I cannot even begin to imagine what the NDP or people from Quebec who speak French will say in protest. 

As for the old continuing to work.  The only old people that I know who are not working are those with fat pensions from Canada Post or other Federal and Provincial sine-cures.  Ah well, they will just have to fork over more of those big pensions to be looked after by fewer care-givers.  I cannot believe any of them will wilt and wither away from lack of young workers to supply their demands. 

I cannot identify the person whose comment I comment on.  The posted name  is Rmmonsigneur.  It would appear they are from Fort Smith BC and in the mining industry.  Must work for a company with ads in the UK and Canada looking for people.  And that proves my point: why no ads in the USA?   Do we really need more arrogant trade-union specialists from the UK?  Or is it a nasty prejudice for those who love a queen and a fear of those who value life, liberty, and the pursuit of happiness above good government?  I do not believe the qualified American will insist on bringing his gun with him.

And what about all those people from South America who have mining and related skills.  I know some who would love to come.  But dear, dear, they are Hispanic and not pure white.  Best leave them south of the equator and ready to expand mines there for Canadian mining ventures. And best leave those First Nations folk in run-down houses.  Can’t expect them to leave their traditional way of life, dependent on government hand-outs, to come take up the 30,000 jobs going begging in Western Canada. At the most they are prepaired to fly-in and fly-out an hour or two to a benevolent mine. 

It is almost as bad as here in Orange County, California, where nobody will sell their house to move closer to a job.  The house tax situation, namely Proposition 13 that sets house property taxes at the house purchase price, precludes folk from selling and buying new.  Why take on addded property taxes when it is cheaper to use gas from Canadian oil sands?  Who cares about crowded freeways and emissions? 

As for moving, as the old Jewish lady said to me today when I told her of Arizona civil engineering graduates who can’t find jobs in Arizona but who will not move to another state for a job: “They are the privileged class; they will not move for a job; they consider it their right to be able to work where they choose, not where there are jobs.  Why, I left Chicago to come to Orange County to find a job.  The kids at this school would never do that.” 

The point is that the people are out there wishing and willing to come to Canada as we all did as immigrants to work and prosper (or are they?).  But Canada is putting the impediments in place for racial, political, historical, and other irrational reasons.  Maybe that is why Vale and Rio TInto, and BHP are looking to expand here in Canada.  We are just too bogged down by fear, selfishness, and ethnic pride to grab the new world. 

On rereading the above, I acknowledge that I have been particularly provocative.  I say sorry if I offend.  But before you explode, consider what I say in it entirety and in its context.  The fact is that the numbers, if true, are not supported by the stories I hear or the people I talk to.  There is a vast disconnect somewhere.  I may not identify it, but it is there, and we need more honest talk before we get the heart of it.

PS.  The day after posting this, I received two emails providing long comment.  Here are parts of those comments. They belie what I say above and add a welcome air of new opportunity.

I am an American who decided to move to Canada because of the job opportunity in mining relative to the US.  After I moved I found out I was a Canadian citizen thru my mom, because of a law change in 2009. But originally I came to Canada as an American. For me it was really easy.  I first had to find a job on my own in Canada.  After that it only took a letter of employment from my employer and $150. After 20 minutes at the border I was issued a NAFTA work permit valid for 3 years.

 I think some of the reasons that Americans do not seek work in Canada are

• The perception of higher taxes (they are higher)
• Generally Americans are totally unaware there are jobs in Canada or Canada at all
• Most unemployed Americans are unskilled and aren’t going to get a letter of employment to be a waitress or worker in a service industry

I don’t know what percent of the unemployed in the US could qualify as tradesmen and work in the oil sands or mining.  Maybe tradesmen are in short supply even now in the US and aren’t unemployed.  In Arizona the mines were constantly advertising for skilled tradesmen.  Maybe Canada knows the US doesn’t have unemployed tradesmen and this is why they don’t advertise in the US.  But I do agree there is a silent polite prejudice against Americans in Canada.  I see it in my own family.  Canadians are very accommodating of other cultures/countries except Americans and America. 

If you are a skilled American and want to work in Canada, it is easy.  You have to want to live in Canada and probably most Americans don’t want to live in Canada because of higher taxes and colder weather.  If you don’t have a useful education or trade you are SOL. From what I have heard from my skilled South African and European friends is that it is incredibly difficult for them to move to Canada and that is obvious protectionism on Canada’s part.

And from the second comment:

Workforce shortage in Canada.  I found it interesting that the government their doesn’t let in skilled workers.  I suppose Australia is starting to open up to skilled mining people.  My work visa was approved in 3 weeks (supposed to take 8) but I’m geussing they had immigration experts push my papers through kind of like what you called the immigration lawyers.  The mining industry is a global industry so I think big companies should be open and willing to move guys all around.  Our company brings many from Indonesia on work visas to fill the void in Australia. 

What does the new year hold for mining?  If we truly knew, we would grow rich; we would buy and sell at the right time; and we would buy the right stock in the right commodities just before the price rose.

Any predictions for 2012 are premised on interpretation of the past and hope stemming from the present.  So let me try to set out my predictions for this coming year in mining.  We will look back at the end of the year and judge.  For now take what I write with a grain of salt, add your own pepper, and act according to your best judgement. 

The easiest prediction to make regarding 2012 mining is that we will continue to be bombarded by facile articles telling us of the shortage of people to work in the mining industry.  My advise is to avoid these articles or at least ignore them.  There are plenty of people of skill out there just waiting for a chance to get into the mining industry.  At the very least, old men like me will continue to be available. At the best, all those whose industries will continue to decline are ready and willing if given the chance. 

The next easiest prediction is that we will continue to be bombarded by articles about the price of gold.  It will go up; it will go down; it will remain steady.  Indian demand will fall as the price goes too high; substitutes will be used; governments will confiscate the stuff to settle debts; rich executives will buy in bulk and hoard it on their private vaults.   My prediction is that gold will hover where it is until the U.S. Presidential elections are over, and then fall once it is clear who will attempt to run the country for the next four years. 

The price of oil and hence the value of our oil sands stock will stay around $100 a barrel, until it is clear whether or not we are going to bomb Iran for closing a strategic waterway.  I cannot believe that anybody will be foolish enough to let that happen, so I bet on oil at $110 by the end of the year. 

There will be more spectacular mining accidents.  That is inevitable.  Let us hope they do not involve the massive failure of one of those large tailings impoundments being built in South America.  For that would put a damper on all mining.  Maybe ICMM should send a delegation to those large facilities to help keep the mining industry viable.

More governments will want to tax more and expropriate mining assets.  If the economy booms, the governments will get greedy for a bigger share.  If the economy tanks, the governments will see mining as a way to raise money.  Maybe the United Nations should set up a committee to preserve mining assets in vacillating countries. 

Take-over bids will abound as will the continued penetration of the Chinese into world mining and mines.  Vale, Rio Tinto, and BHP will continue in the news as they lock out workers, promise miracles at Pebble and Potash, and seek to negotiate deals for diamonds. 

The things we cannot predict that will affect mining include the name of the new Canadian NDP leader, the Iowa Republican presidential pick (I rather hope it is Ron Paul with whom one can agree fifty percent of the time and despair the rest), the Australian political and economic drift, and the fate of the Euro.  I suspect U.S. house prices will continue to fall and the economy to drift.  I cannot see how unemployment is going to be decreased to any substantial extent.  I fear the Chinese property bubble will burst.  And Iran will continue to make the atomic bomb.  Nothing in North Korea will happen that will affect mining.  Cuba may change, but nickel will still flow from it mines and prop up a basically crazy situation. 

Conference will come and go and sanctimonious pronounce will be made in dull keynote speeches.  I suspect we will continue to see an increasing drift to easier availability of papers on the web, although I fear for those sites that charge for old papers.  There are always equivalents available at no cost. 

So as the sun shines out there and my bike beckons, let me leave you with a request to comment below on your predictions for 2012 in mining. 

And a final photo to remind you that predictions are a joke regardless of whether they are  up or down. 

PS.  This posting was repeated on Mining.com and elicited three comments which I cut & paste into the comment section below.   Thanks for these comments; they add perspective and insight I do not have. 

For no good reasons that need detain us here, I recently had occassion to go back through old I THINK MINING blog postings.  I was surprised to see how much I had written on the topic of global warmining in 2007 and thereafter.  The surprise is how little things have changed in those years since I first took up the topic.  Rather than write something new on an old topic, I simply collate and present below an edit version of some four or five piece that I wrote on the topic in 2007 and 2008.  Enjoy and let us have your opinions about why things have not changed and if there is still a need for change.

The most interesting question asked of me regarding global warming is:  As a consultant, how can I make money providing advice to the mining industry relevant to global warming?   Here is my simple mining answer.

First work with your existing clients to help them reduce water consumption.  I suspect that water use will get more and more contentious.  Any act that reduces water consumption will be good engineering and good politics in the warmed globe.  In addition, I suspect that at most mines, a reduction of water consumption will result in a reduction of costs.  Maybe only a reduction of NPV (net present value) but still an overall cost savings.  Save money and save the environment—that is a deal that your community relations folk will love.  And it’s true. 

Next work with your existing clients to deal with reduction of gas emissions.  I am not an expert in that area so I say no more, but this seems like such an obvious opportunity.

A third opportunity as a consultant to the mining industry to make money out of global warming, is sequestration of carbon.  I know that the chemistry of freshly crushed rock is such that it loves to absorb atmospheric carbon.  The tailings impoundment is a huge source of freshly crushed rock at most mines.  Just imagine what the mine could do to reduce green house gas emissions for its own emissions.  And just imagine if your client could get into selling gas credits on the open market.  Maybe there is still “gold” in them thar tailings after all.

   I heard the other day of tapping into the heat in old mines shafts and underground workings as a source of energy.   Difficult as it is to believe that this way of tapping into the earth’s energy will be a significant source of cheap energy, it nevertheless is another opportunity for consulting services to the mining industry.

A more difficult consulting “opportunity” lies in keeping open the access ice-roads to the mines of northern Canada.  Then of course if these ice roads melt entirely, many a consultant will be needed to devise alternative ways to transport goods to the many mines now in the north and certain to be opened up in the warming north.  

How can mines benefit from global warming?  Greg Easterbrook, in the April 2007 Atlantic Monthly notes that in economics there are no zero-sum games; somebody will benefit from global warming.  His top nominees are the Inuit who rule Nunavut, a place that will change from a frozen waste land to a nice warm place.  

    Then there is Greenland waiting to be clear of the ice.  Both places probably contain ore bodies just waiting to be mined.  Is the mining industry ready?  The obvious action is to go exploring and stake claims.  This all seems like trivial, trash-press talk.  But just maybe it is not, and global warming may just be for real.  Rationale people might as well discuss how we are going to benefit from the inevitable. 

Easterbrook points out that the nations of the northern hemisphere, already blessed with resources, will probably benefit most from global warming.  He speculates that real estate prices in Buffalo will rise to levels now common in Florida.   He faces with equanimity the need to rebuild cities inundated by rising seas.  Can you imagine how much mining of sand and aggregate and metal will be needed to rebuild New York and New Orleans?  He notes that Canada, of all nations, stands to gain most from global warming—a possible explanation for its current blase attitude to emissions control and Kyoto implementation (in spite of the protestations of ambitious politicians relegated to opposition benches.)   

On the issue of whether planning to profit from global warming is immoral and a case of throwing in the towel, Easterbrook in an interview on the Atlantic website notes:

I think at this point some form of mandatory greenhouse gas restrictions are justified; the sooner the United States enacts them the better, as long as they are wisely written. I’m an optimist on this issue and I think that control of greenhouse gases will turn out to be cheaper than predicted and will turn out to work faster than predicted and that human ingenuity will be much more creative than people think. So within a realistic length of time—say, your lifetime—this problem of artificially triggered climate change will be brought under control. But even if reforms are really successful, as long as greenhouse theory is correct, a warming world is absolutely cast in stone—the armies of the world could not prevent it at this point. And even really successful programs of greenhouse gas reduction in the developed nations will not stop increasing accumulation in the atmosphere for at least several decades, and maybe longer. And unless greenhouse gas theory is totally wrong, in which case we don’t have to care about this, the world is going to get warmer and the climate is going to change and we must make our peace with it because we can’t stop it. That’s not capitulation, that’s pragmatism.

   Hence let us be pragmatic about the opportunities for the mining industry.  We leave the issue of curbing emissions in China and India (really the only way to achieve any real carbon emissions reductions) to the environmentalists, their Chablis and brie (to lift a phrase from Easterbrook.)   We leave the issue of carbon credits to the economists.  There must be a rationale free-market way to do this before we get stuck with ill-conceived government pie-in-the-sky emissions standards.

General Electric, GE, is singled out as the company most likely to succeed in a warming world.  They build power-generating windmills.  They are developing clean coal-powered plants and getting ready to build nuclear power plants.  How can the mining industry emulate this. Clearly investment in clean-coal, uranium, and platinum mines is a winner for the future.  Clearly investment in the quarries and pits that will be needed to build dikes to control rising waters and to rebuild displaced cities is logical.  Clearly exploration of the northern parts of Canada, Greenland, and Siberia make sense. 

The people to make these mines in currently ice-covered places, are now in the hotter parts of the world from which they will want to flee.  So mines should stop trying to solve the problem of future workers by making schoolhouse presentations.  Rather we should be seeking people of merit in other countries and bring them in rapidly, now, and proactively in the future.  And just maybe a mining industry group or association will fund somebody to write the other side of Gore’s story—not an attack, not a rebuttal, but a realistic analysis of what demands global warming will make on the mining industry and how we can meet the challenges of ensuring the continuation of societies that we can be proud of and benefit from, and I do not mean societies where we all ride bikes and eat tofu. 

   This piece would not be complete if I did not also note that global warming is now causing, and will cause great social change.  The April 2007 Atlantic Monthly also has an article that ascribes the tragedy in Darfur to global warming:  drought changed the relationship between the farmers and the pastoralists.  They no longer share resources, of which they are few to none.  Now they fight and kill and clear the land in the hopes of grabbing what little remains.   There will be vast movements, or attempted movements, of people from hot, desertified regions to more temperate climes.   Already Canada and Denmark are squaring off over distant islands in the north.  Can you imagine what will happen when heat-parched Brazil invades the cool parts of southern Argentina?  Maybe you had better get your mining in that part of the world done before the conflict begins. 

It is scary to postulate that miners will be in great demand to create new cities below ground in cool, deep caverns.  Just like those around Kansas City, dug into the limestone and even now places where there are universities and offices.   Maybe the SME should keep on with the specialty sessions on urban mining, for that kind of mining may be key to many a city’s survival.  Just imagine how bad Houston and Phoenix could get.  The good news is that Iowa will become warm; we will have two growing seasons.  Maybe you should sell your mining stock and invest in Iowa farm land. 

I recognize this topic incites and inflames.  I recognize I am talking about potential changes bigger than those resulting from past global wars.  I recognize I may have been frivolous (this is a blog.)  In defense, please accept that my underlying purpose is to cut through the rhetoric, cut to the chase, and shake us all into an awareness and profound discussion of something we can cost-effectively ameliorate before it is an international tragedy.  I know that mines will continue and be but a tiny part of a much bigger debate.   But I believe that mines and the mining industry can and must do its fair share to prepare for changes we currently do not see clearly.  Join me in this debate, for in so doing we may stumble on the answer.

    Regardless of your opinion of the reality and/or causes of climate change, I suspect these are the relevant questions for the mining industry:

• What will climate change mean to the mining industry?
• How can the mining industry avoid negative impacts of climate change?
• How can the mining industry benefit from climate change?

I speculate that the first issue arising from climate change that may affect the mining industry is a growing shortage of water, or at least an increasing cost to getting the water needed to operate a mine. There may be greater social conflict involved in securing access to water between the mine and the surrounding inhabitants. Do we need increased research on minimizing water consumption in mining and processing?

Somehow I am sanguine. I cannot but believe that mankind will respond with normal resolution and enterprise. I must believe that free markets in democratic countries will make money making people comfortable. Even if that money-making involves selling research reports on the technologies needed to survive, succeed, and prosper.

Opposition won’t impress anybody. Only positive suggestions based on reality are of any potential value. This clarion call for leadership is prompted by the news that Caterpillar and the National Mining Association are at odds over global warming. Or at least over the need for a market-based approach to emissions control and hence over amelioration of global warming.

Let me clear the air by confessing my sins. I grew up where it was almost always sunny and warm and I like the sun. I will never appreciate rainy days like my colleagues who hail from the north of Scotland. To me the thought of a warmer place is a pleasant thought. I concur with the farmers of Iowa who welcome global warming on the basis that it will give them two crops a year like they get in California. I view with equanimity changes in global climate—it has all happened before. Just pass through any roadside cutting with the sediments from the vast floods of yore exposed to the casual glance. Two major extinctions are fact: one to set the stage for the dinosaurs and one, some 250 million years later to end them off. There have been others, so geology marches its course if another comes. I am not plagued by illusions of human inevitability and superiority. We are just another species, and in all likelihood will go the way of most species—straight to extinction.

That is a gloomy prospect, I know. And it is a difficult one to embrace when I watch grandkids playing on the grass, swinging on the tire strung from a high branch, and fighting over the newest GameBoy.

But I know that one of the most endearing human characteristics is the desire to survive. And we have the intellect and power to fight to survive. Sadly this sometimes takes the form of sectarian violence and ethnic cleansing. But for all that our most basic instinct is survival. And to those who are foremost in the fight over global warming, it is a fight over survival tactics. We can readily pass over the squabbles about the Hummer, the Mini Cooper, the hybrid, organic versus genetically altered, and emissions caps and trading mechanisms, if we see this as but a side-show in the bigger battle over a philosophy of survival.

Thus I must view the difference of opinion that characterizes the Caterpillar versus National Mining Association debate as a mere side show in a much greater fight to survive. We must admire the courage and verve of Caterpillar’s Chairman and CEO Jim Owens in supporting calls for a market-based approach to develop future clean technologies to reduce emissions and sustain the environment. We must admire his intentions in stating clearly “reducing greenhouse gas emissions can—and should—provide more economic opportunities than risks for industry and the economy.”

But then we turn to the statement by the National Mining Association President and CEO Kraig R. Naasz who says with equal conviction and force: “NMA is convinced that a real and sustained commitment to development of carbon management technologies can achieve meaningful improvements in energy efficiency and emissions of greenhouse gases—domestically and internationally—at less cost to our economy and energy security than will arbitrary caps on emissions.”

Jim Owens appears to acknowledge that government has to act to protect the commons for the good of society—if everybody grazes their sheep on the grass in the town square, soon enough there is no grass, and no sheep, and nobody has a warm woolen sweater. Naasz is a believer in the ur-power of the free market place. I have no idea personally what a “real and sustained commitment” is, but assuming it happens, Naasz assures us there will be “less cost to the economy”. I confess he sounds just like those folk in the 1970s who said we would ruin our economy by passing the Clean Air Act. I just do not believe him. Maybe we should award him the 2007 Club of Rome award—you remember those pessimists who predicted we would run out of everything before now.

I am a Libertarian in spirit for I believe that less government is good. I believe, however, that government should do what we cannot do alone and that includes restraining the evil and wicked, protecting us from common enemies, succoring the weak and afflicted for the common good and decency of society, and setting goals and objectives which involve compromises we would never reach individually. Thus I must throw my vote for some form of government cap on emissions and the establishment of a free-market system for divvying them up. We do that with the national budget and the tax system all the time. It is not a new idea. And conservatives and liberals alike manage to benefit.

Of course we should debate most vigorously the need for caps, the magnitude of the caps, and the market system for the caps. So maybe the news item about dueling CEO is good news: debate is alive and well on a topic that is at once obscure, complex, visceral, emotional, and at the core of our future survival as a nations, as a civilization, and as a species.