Editorial: A golden year – the top stories of 2011

With commodity prices strong, it was another highly dynamic year for miners and mineral explorers. Here’s our list of the year’s top mining stories:

10. Failed TSX-LME merger – In February the London Stock Exchange and the TMX Group announced plans to create a $6-billion exchange group that would have rivalled the NYSE Euronext in size. However, by May, rising nationalist sentiment in Canada had effectively killed the deal, as a “Maple Knight” of Canada’s biggest companies and financial institutions appeared and eventually tendered a superior bid for TMX.

9. Plan Nord – In May, the Quebec government unveiled an ambitious, 25-year Plan Nord to develop its resources and infrastructure in the province’s north. Near-term, it means the greenlighting of a road extension into the Otish Mountains, paving the way for the economic development of several mining projects.

8. REE bubble bursting – When the year began, rare earth element-seeking juniors were at the top of their game and share prices surged in response to the Chinese government slashing REE export quotas. By September the bloom was off the rose as investment bankers downgraded REE mining stocks and REE prices declined, only accelerating as the year ends.

7. Keystone XL – In a story that is still playing out but has implications for future mining rates in Alberta’s oilsands, the U.S. State Department’s approval of TransCanada’s proposed Keystone XL pipeline through the U.S. Heartland was delayed until after the U.S. presidential election to shore up environmentalists’ votes for President Obama. The project may yet be cancelled entirely, and there’s new pressure to go ahead with Enbridge’s even more contentious proposed pipeline through B.C., to a port at Kitimat.

6. Oddball projects – Higher commodity prices have resulted in a new crop of unproven but metallurgically innovative projects, including Verde Potash’s thermopotash play in Brazil, Orbite Aluminae’s new way to get aluminum out of clay in Quebec and First Point Minerals’ “naturally occurring stainless steel” nickel-iron project in B.C.

5. Oppenheimers exiting De Beers – A century-long chapter in mining has drawn to a close with the $5-billion sale by the storied Oppenheimer family of their 40% stake in De Beers to Anglo American.

4. Protests and rejections – Projects ran aground include: Bear Creek’s Santa Ana in Peru’s Puno region having its permit revoked owing to protests by Aymara citing concerns over potential water contamination; Taseko Mines’ continuing flak over its New Prosperity copper-gold project in B.C., despite mine-plan improvements; Coro Mining’s rejection by Argentina’s Mendoza province of its proposed San Jorge copper-gold project on environmental grounds; and Newmont halting Conga in Peru.
3. Mergers & acquisitions – The list of acquirers (targets in brackets) is long: ARMZ (Mantra); K+S (Potash One); Paladin (Aurora Energy); ArcelorMittal and Nunavut Iron Ore (Baffinland); Rio Tinto (Riversdale); NovaGold (Copper Canyon); HudBay (Norsemont); Cliffs (Consolidate Thompson); Duluth Metals (Franconia); Stornoway (Soquem’s Renard stake); Alpha Natural Resources merging with Massey Energy; EBX Group (Ventana Gold); Gammon Gold merging with Capital Gold, then buying Northgate as AuRico; Barrick Gold (Equinox Minerals), after Lundin Mining offered to merge with Inmet Mining, Equinox launching a hostile bid for Lundin, and Minmetals’ hostile bid for Equinox; New Gold (Richfield); Gold Fields (Iamgold’s stake in Ghana’s gold fields); Capstone/KORES (Far West); Mercator (Creston Moly); Glencore’s US$11-billion IPO; US Gold and Minera Andes merging; Nyrstar (Breakwater); Agnico-Eagle (Grayd); Endeavour and Adamus merging; Major Drilling (Bradley Brothers); and Winsway-Marubeni (Grande Cache). The year closes with Rio Tinto outbidding Cameco for Hathor, KGHM after Quadra FNX and Eldorado eyeing Eurasian.

2. Record then falling metal prices – Financial headlines in 2011 were dominated by U.S. and European debt problems. For metal investors, gold’s related rise above US$1,900 per oz. in late August was undoubtedly the high point, before the big crash in commodity prices in late September. The uranium market had its own crash earlier in the year after Japan’s Fukushima nuclear disaster.

1. Gold exploration frenzy – Record gold prices meant gold exploration picked up across the globe and hit a fevered pitch. A new twist in 2011 has been the rise to prominence of huge, low-grade gold deposits only economic at high gold prices, such those now being worked by Pretium, Tower Hill, Osisko, NovaGold and Trelawney.