Editorial: Mont-Wright iron mine to double in size

Eastern Canada’s reborn iron ore mining industry had another big growth spurt in mid-May.

• On the heels of the Quebec government announcing funding details of its Plan Nord to open up the province’s north to development, international steel giant ArcelorMittal has announced it will expand its already huge Mont-Wright iron-ore mining complex in Fermont, Que., from its current annual capacity of 14 million tons (12.7 million tonnes) of iron ore concentrate to 24 million tons by 2013.

Naturally, Arcelor is also looking at boosting its associated annual iron ore pellet production farther south at Port Cartier on Quebec’s North Shore, from 9.2 million tons to 18.5 million tons.

Combined, the expansions would cost an initial US$2.1 billion, and create 8,000 jobs during construction and 900 permanent jobs afterwards. ArcelorMittal aims to boost its companywide iron ore production to 100 million tons (91 million tonnes) by 2015.

The company describes its Canadian mining division, ArcelorMittal Mines Canada (previously named Quebec Cartier), as its “most important mining division in the world,” with annual sales of US$2 billion, and containing almost half of its global iron ore resources.

• Peru’s ever-dramatic political scene is heating up and polarizing again, with national presidential elections set for June 5. The first round of election eliminated three experienced, moderate candidates, leaving for the tight runoff election left-wing firebrand and former army officer Ollanta Humala, 48, and right-wing politician Keiko Fujimori, 36, daughter of disgraced, imprisoned former president Alberto Fujimori.

Both candidates are promising to make mining companies active in the country pay higher taxes in order to distribute more funds to the nation’s poor.

Popular Peruvian Nobel-Prize-winning novelist Mario Vargas Llosa, who ran for president and lost against Alberto Fujimori in 1990, said he would vote for Humala “unhappily and with fear,” and said the election was “like choosing between AIDS and cancer.”

At presstime, Peru’s federation of mining unions was planning to hold a nationwide strike on May 30 to step up pressure on the government to increase mining taxes, reopen the large La Oroya smelter, and improve miners’ benefits such as lowering the retirement age.

Reuters reported that unionized workers at Buenaventura’s Ucucchacua silver mine were ready to lay down their tools. However, past calls for strike action in recent years were not widely heeded by miners in the country.

Meanwhile, Canada’s Bear Creek Mining reported that the Peruvian government, in response to anti-development protests in Peru’s Puno region, set up a 180-day commission of ministers and elected local officials to study mining in Yunguyo and Chucuito provinces. The company’s Santa Ana silver project is in Chucuito.

Bear Creek said it is “disappointed with the delay that the study will cause, which is the result of the pre-election political situation in Peru, but will assist the government in reducing the political tensions which have arisen from communities distant from and unaffected by the Santa Ana project.”

• China has surpassed India as the world’s largest buyer of physical gold, according to the World Gold Council’s (WGC) latest Gold Demand Trends report for the first quarter.

Chinese physical gold investment demand  rose to 90.9 tonnes (2.9 million oz. gold) in the first quarter, up from 40.7 tonnes in the same period last year, and eclipsing India’s first-quarter tally of 85.6 tonnes gold, up only 6.3 tonnes from last year.

The WGC says the rise in Chinese demand was helped by increased availability of gold bars in China, promotion of gold as an investment vehicle by Chinese banks, and a loosening of gold import restrictions by the Chinese government.

The WGC found that first-quarter global gold demand totalled 981.3 tonnes (31.5 million oz. gold), up 11% year-on-year from 881 tonnes in the first quarter of 2010. In dollar value, this translated to US$43.7 billion in total demand, up almost 40% from the US$31.4 billion seen in the first quarter of 2010.

“This was largely attributable to a widespread rise in demand for bars and coins, supported by an improvement in jewellery demand in key markets,” the WGC said in a release.