Editorial: Top stories of 2014

Mining and mineral exploration are by nature businesses for optimists, but looking back over 2014, it’s hard not to conclude that difficulties and disasters tended to outweigh the brighter spots of achievement and growth. Here is our choice of the top stories of 2014:

10. Peter Munk’s exit — One of the giants of Canadian mining took his final bow in the mining world in April 2014, as Barrick Gold founder and chairman Peter Munk delivered his last address to shareholders at the company’s annual meeting. Having played a pivotal role in growing Barrick from modest beginnings to the world’s No. 1 gold producer, Munk’s reputation as a company builder is secured. As the year progressed, Barrick saw a major turnover in top management.

9. Rise of the house of Lundin — While other miners focused on cutbacks, the Lundin Group of Companies was a mine developer and bargain hunter. On top of financing numerous struggling juniors, the Lundin group piled up successes such as Lundin Mining’s start-up of its Eagle mine in Michigan and purchase of the Candelaria mine from Freeport-McMoRan; Fortress Minerals’ purchase of Kinross Gold’s Fruta del Norte project; and Lucara’s continued success in diamonds.

8. Crises in West Africa — A favourite destination for junior gold miners had a deadly year marked by an outbreak of Ebola that killed 7,300 people in Sierra Leone, Liberia and Guinea. Normally peaceful Burkina Faso was beset by political turmoil in October, with president Blaise Compaoré stepping down after countrywide street protests.

7. Perk up in diamonds — The supply and demand picture for diamonds has looked attractive for many years, but 2014 was the year when it finally translated into higher share prices for diamond companies, easier financing and renewed interest in exploration. Arguably the brightest spot in mining in 2014.

6. Tail end of M&A mania — This past year was the collapsing-star phase of the M&A bubble that peaked in 2006, as the same majors who pitched the bigger-is-better model back then are now selling shareholders on the virtues of “demergers.” At the low end of the food chain, dozens of struggling juniors were taken over in 2014 for only tens or hundreds of millions of dollars — and were grateful for it!

5. Battle for Osisko — There was one good ol’ fashioned takeover battle in 2014: Goldcorp’s jostling first with Yamana Gold and then Agnico Eagle Mines for Osisko Mining and its prized Canadian Malartic gold mine in Quebec. After several twists and turns, Agnico and Yamana won with a joint, friendly US$3.6-billion offer.

4. Collapse of iron ore prices — Shocking in its swiftness, by November iron ore spot prices had ducked below US$70 per tonne for the first time in five years — down 12% in a month and an astounding 47% from a year earlier. The reasons: slower than expected economic growth in China, and an oversupplied iron ore market courtesy of massive production increases by BHP Billiton, Rio Tinto, Vale and Fortescue Metals.

3. Collapse of oil prices — It’s a story that is still being played out: the drop in oil prices from well above US$100 per barrel at mid-year to press time values of US$56 and US$61 per barrel for WTI and Brent crude. With the prices for so many mined commodities falling in 2014, the oil price decline has been a welcome break for mine operators. On the downside is the rising political risk, as oil-dependent governments such as Russia’s get more desperate to make up for lost revenue.

2. Mount Polley talings dam failure — Mining made national news in Canada only once in 2014, and for the worst of reasons: the massive breach of the tailings impoundment dam at Imperial Metals’ Mount Polley copper mine in the B.C. interior. While its longer-term environmental effects are muted, the damage to the reputation of Canadian miners as competent mine builders suffered incalculable damage that will take many years to repair.

1. Tsilhqot’in decision — The legal landscape for mining companies active near aboriginal communities in Canada changed forever with the Supreme Court of Canada’s precedent-setting decision that the small Tsilhqot’in First Nation holds aboriginal title over 1,750 sq. km in central B.C. In effect, that land is no longer Crown land but title land held communally by the Tsilhqot’in First Nation, which has the right to exclusive use and occupation of the land, and the right to its economic benefits. The decision clarifies how a nomadic or semi-nomadic aboriginal group can establish title to land they occupied before contact with Western colonialists and continue to use to the present day.