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2 THE GLOBAL COMMODITIES REPORT ISSUE 04 3

Over the years, Rio Tinto Alcan, a global leader in the aluminium industry, has been fuelled

by dreams of a better future. Together, people of the Haisla First Nation and Rio Tinto Alcan

are taking these dreams one step further with a historic legacy agreement and are now actively

supporting each other toward a common vision: a cleaner environment for future generations.

THE HAISLA NATION AND RIO TINTO ALCAN: A STRONG ALLOY

99% vision1% aluminium

C3NTENTS

EDITORIAL

MINING

ENERGy

07

issue 04 | November 2011

Welcome to the “Meeting Minds, Making

Mines” CAMA conference edition of

The Global Commodities Report.

The Man In The Middle and The Moose In The Room

Heading into the 19th annual Canadian Aboriginal Minerals Association conference, “Meeting Minds, Making Mines”, its President, Hans Matthews, sees much done and much to do.

A Reasonable 1,000,000 Ounces a YearWe talked to NovaGold Resources President & CEO Rick Van Nieuwenhuyse about operating in Alaska and northern BC, the involvement of indigenous peoples, and working with major mining partners.

Teck On Board - By Jeff BorsatoTeck Resources, NovaGold’s partners in northwestern BC, takes a five-fold approach to sustainability.

First Nation Rising - By Jeff BorsatoThe Cree Regional Economic Enterprises Company helps build companies and communities among the Cree First Nation. Cree leaders are especially keen to engage aboriginal youth.

08

18

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38

46

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82

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interview

interview

interview

interview

Social License RenewalWith a meteoric rise in gold production ahead of them, $5billion New Gold Inc. is staying grounded in their host communities and environmental settings. It takes time and commitment, but it’s right.

Going UndergroundCementation Canada takes creative approaches to their underground mine construction projects, community relations, training and safety, making them one of Canada’s top employers.

Both Sides Now - Colin Webster of GoldcorpPartnering with First Nations communities takes time, perspective and skill. Canada’s second-largest gold producer created a portfolio to help keep those relationships healthy and productive.

The Right Footing: Rio Tinto Alcan and the Haisla First NationWith a $2.5 billion upgrade in the works, it was time to re-engineer the social relationship as well.

Salt Cellar: Goderich Port ExpansionThe town of Goderich is spending $47million to expand its port facilities on Lake Huron, mostly for Sifto Salt’s underground mine – the largest of its kind in the world.

2020 Vision for the Kidd MineFor a mining town like Timmins, Xstrata Copper Canada’s announcement extending the life of the world-class Kidd Mine is welcome news.

Hidden in Plain Sight: Why corn ethanol still struggles

We asked John Caupert, Director of the National Corn-to-Ethanol Research Center in the heart of the American midwest, for his take on how an industry got lost where agriculture and energy policy meet.

4 THE GLOBAL COMMODITIES REPORT ISSUE 04 5

From the Editor

6 THE GLOBAL COMMODITIES REPORT ISSUE 04 7

November 6-8, 2011Pan Pacific Hotel, Vancouver

“Canada’s mining sector is set for a hiring spree in the coming quarter, making it the most upbeat sector in the country ...” Globe and Mail, March 3, 2011

“The booming Northern mining industry will power economic growth in all three Canadian territories this year, according to The Conference Board of Canada’s Territorial Outlook - February 2011.” Native Journal, March 2011

CONFERENCE HIGHLIGHTS

Focus on Training and Employment!

Financing Aboriginal equity in mining projects!

DON’T MISS THE MONDAY NIGHT BANQUET

With entertainment by Juno-nominated, award-winning

CRYSTAL SHAWANDA

19th ANNUAL CONFERENCE

PRESENTINGSPONSOR

DIAMONDSPONSOR

Aboriginal Community Development through theMining Sector

MEETING

MINDS,MAKING

origiinal CCommunity l h h h

MINES

CONFERENCE CHAIR

Chief Shane GottfriedsonTk’emlúps Indian BandKamloops, B.C.

PREMIERSPONSOR

Sponsored by:

The CAMA EditionIt takes work to build a bridge, but by all accounts it’s

we get to speak with so many high-calibre people in the mining, energy and agriculture sectors who are making a difference to how their industries per-form, innovate and relate to stakeholders.

When we set out to create a progressive magazine that would engage forward-thinking companies and organizations and tell the good news about the re-source sectors, the concept called for a fully online publication. (Which it is, and we have some excit-ing developments to tell you about … soon.) We just didn’t plan on ever physically printing the magazine.

CALLING CAMAbut while scouting for stories, we came across the canadian Aboriginal minerals Association (cAmA). immediately we saw how cAmA’s mission to bridge the needs and interests of First Nations communi-ties with those of mining companies lined up with our editorial and design focus on resource develop-ment that is innovative, sustainable, responsible and inclusive.

one conversation led to another, and now we are excited to align a special printed edition of Gcr with the 19th annual cAmA conference, “meeting minds, making mines: Aboriginal community and resource Development in a Growing economy”, No-vember 6-8, 2011 in vancouver bc. We trust you’ll enjoy the interviews and articles relating to organi-zations and companies that are leading the way in collaborative and mutually prosperous relationships between the dynamism of mining companies and their First Nations partners, hosts and neighbours.

one of the themes that kept coming through while writing, editing and compiling this issue was the im-portance of bridge-building people who have lived both sides of the equation: First Nations attach-ments and mining career aspirations. that’s got to be a healthy, helpful dual-perspective, though i know it isn’t always easy.

our kudos to the indigenous and industry leaders as they compare successes and challenges at “meeting minds, building mines” in vancouver, and our on-

line readers around the world. We hope you’ll enjoy both versions of the Global commodities report, physical and/or virtual.

“BUT WAIT, THERE’S MORE!”the extended, online edition of this issue of Gcr includes additional stories about communities, com-panies and organizations in canada, Australia and the united states that are making a difference, each in their own way, to the life and work of people en-gaged with the resource sector.

From the cAmA conference in vancouver to an ontario salt mine, us corn ethanol to Aussie iron, a major aluminum smelter upgrade to the world’s deepest mine, and more gold and copper than you can imagine. so if you’re flipping through this mag-azine, we hope you’ll also visit us online to see the bigger picture at the-Gcr.com

Gcr PeoPLeWe’re also pleased to introduce Dana Friesen, our new Assignment editor and Pacific-standard-time Guy who’s out beating the global bushes for story ideas. And Kulvir singh is our new Designer, who is picking up the task of telling the Gcr story through design and layout. our good friend and designer/il-lustrator Jay Wall has moved on to focus on spe-cial projects particularly in community activism – thanks, Jay, for getting us off to such a great start.

And once again, our appreciation goes out to the readers, business leaders and community contacts who keep giving us positive responses to the content and design of Gcr and the niche we are carving, no, excavating: telling the good news in resources with engaging content and dynamic design. Keep digging,

David Hicks Editor

8 THE GLOBAL COMMODITIES REPORT ISSUE 04 9

Hans Matthews and CAMA

Heading into the 19th annual Canadian Aboriginal Minerals Association

conference, “Meeting Minds, Making Mines”, its President, Hans Matthews, sees

much done and much to do.

As a canadian First Nations member and a veteran of the mining indus-try, Hans matthews knows the minds of both miners and indigenous peo-ples. He studied Geology and earth sciences at brock university in st. catharines, ontario, and the university of Western ontario in London. During his mining career he worked for companies ranging from juniors to majors such as sherritt Gordon, Placer Dome, Noranda and Xstrata, doing everything from claim staking to mining to raising capital.

He then created the canadian Aboriginal minerals Association 20 years ago, as a not-for-profit Aboriginal corporation, and moved back to a First Nations reserve 15 years ago. cAmA’s 19th annual “meeting minds, making mines” conference is being held in vancouver, November 6-8, with over 50 corporate sponsors.

the cAmA founder and President spoke with The Global Commodities Report from their offices just north of sudbury on the Wahnapitae First Nations reserve.

The Man In The Middle and

The Moose In The Room

The Global Commodities Report: You have a considerable mining career and a First Nations background – how did you come to be a facilitator between them?

Hans Matthews: When the oka crisis happened in 1990 in Quebec [a 78-day armed standoff between mohawk First Nations and the local municipal, Quebec provincial and canadian federal govern-ments, involving both the provincial po-lice and armed forces, over a proposed land development on disputed lands] i saw how my mining co-workers frowned upon (to put it politely) Aboriginal land interests. they felt like the whole coun-try was going to lose out with mining in-terests moving away to south America, that the Aboriginal communities were causing uncertainty over lands, and so on.

so in 1991, i contacted some of my na-tive friends who were community lead-ers and economic development people to see if we could bring the two parties

together. We contacted about 350 na-tive communities and asked them to re-spond to a survey asking if they wanted an organization that would help them work with mining and minerals compa-nies in employment, environment and so on. the response was very positive, so we listened and formed the canadian Aboriginal minerals Association. And we’ve been going strong since.

GCR: With lots still left to do.

HM: right. our original business plan was to be out of business, because if ev-erything went well there wouldn’t be a need for a national association, every-thing would happen locally, everyone would be happy and the world would be a better place to live in. [smiles] but we are still around.

GCR: Did you have any governmental backing or guidance or input?

HM: No, zero. We vowed not to take a

dime of government money or have the government involved in the mandate and administration of the association. At the time, we saw that a lot of community associations depended heavily on gov-ernment programs. We said, “You know, that is a very inefficient process – why don’t we tackle it at the grass roots lev-el? it’s the companies and the commu-nities who are affected so our objective should be to get those people involved in funding and driving the organization.”

GCR: With membership fees around $50, you’re not exactly on a membership drive.

Hm: it just barely covers the cost of stamps and maintaining our website. We knew that communities couldn’t af-ford a lot and didn’t want them to use monies that could be allocated to social programs or economic programs in or-der to be a part of us. our measure of success was how many ‘marriages’ we created. to illustrate, when we started our association there were four or five agreements between the Aboriginal communities and mining companies – today there are close to 200. We are not claiming to be responsible for that, but many Aboriginal communities have told us that we contributed to it.

GCR: How popular is the annual CAMA conference?

Hm: Attendance started with 50 people in 1993 and we anticipate over 1,000 this year. our membership hovers around 300. our focus is on the conference and the task of bringing the parties together. We have Directors from Quebec to bc,

and one in oklahoma; and work with many communities throughout canada, in south Africa, mongolia, Australia, ecuador and Peru. We are sharing prac-tices around the world.

GCR: Consulting?

Hm: Yes. in our travels, we are quickly learning that communities around the world have the same needs, and so do mining companies whether it be certain-ty and security of investment or access to resources or shareholder value, what-ever. the communities generally want a legacy for their children, a really strong youth component and a focus on future generations, as well as safe drinking wa-ter, safe environment, infrastructure and such. We can say, “While canada is still far from perfect, this approach has worked well in canada.”

Just a few months ago we were in mon-golia and the herders and communities were amazed at the similarities, even in some of the cultural aspects, between canadian Aboriginal groups and mon-golian herders. And then the same in Australia.

GCR: With concrete results from your in-put?

Hm: oh, yes. For example, a south Af-rican company flew people from a local community to Northern ontario to visit other communities to see what they are doing; and also company executives were coming into communities to see what was going on. You know it’s not a costly thing, it provides certainty, including

10 THE GLOBAL COMMODITIES REPORT ISSUE 04 11

for shareholders, and they see that for the amount of effort, time and money it’s worthwhile. that was the idea for Annual conferences, as these facilitated ongoing dialogue for international com-munities and companies.

GCR: On your website you talk about “moving from consultation to consent.” Is there a next phase that you are moving towards from consent?

Hm: the word “consent” comes from different contexts. the most recent uN Declaration on the rights of indigenous Peoples contains articles for the free, prior and informed consent of commu-nities on resource projects. Not just con-sultation. the regional use of the word consent comes from what was implied or documented in the negotiation of [cana-dian] treaties where there was a spirit of a nation-to-nation relationship, mu-tual consent of the parties to share. At a local level, many communities now see impacts/benefits Agreements between themselves and mining companies as a form of consent. that’s where our orga-nization plays a role as an instrument of consent.

GCR: Sounds like a moving target.

Hm: it can be. one of the interesting things about the canadian and Austra-lian legal systems is that it continues to evolve in response to the supreme court. in many cases when there is a supreme court decision in favor of an Aboriginal group, or against, it often has an impact on policy regulation and eventually stat-utory changes. You might be aware that

the Government of ontario has recent-ly proposed changes to the mining Act, which is statutory – the references to Aboriginal “consultation” increased ten-fold in the latest version, versus the old version. it will be interesting to see the next chapter in community and mining industry relations when references are made to “consent” in the uN declara-tion.

Hans Matthews (right) and CAMA Vice-President, Jerry Asp.

12 THE GLOBAL COMMODITIES REPORT ISSUE 04 13

GCR: Did Canada actually sign that? I thought we were holdouts.

Hm: Yes, canada just signed on Novem-ber of last year. About a week after our last conference. there may be another, i believe New Zealand, hasn’t so far be-cause they have their own unique situa-tion with the maori.

GCR: What ongoing issues are primary at this point in terms of either economic opportunity or environment? It tends to come down to those two things, right?

Hm: Yes, though the larger issues are land issues and within that there are land titles, access to lands, ownership of lands, loss of land, loss of use of land… A big one in canada is outstanding land claims – there are well over a thousand now. When we started the mineral As-sociation there were maybe a couple of hundred. this creates a sense of uncer-tainty for both parties.

there are other issues in the North re-lating to resource development projects around other types of land claims such as specific and treaty Land entitle-ment where lands that were supposed to have being given to, or attached to, or awarded to a tribe or a band of indians as part of their reserve were not given. For example, there are treaty land enti-

tlement formulas where the government may have failed to add lands as reserve populations grew (acreage per family) and other kinds of treaty land entitle-ments. mis-measurement of reserves and other land claims are present in Northern ontario, Northern saskatch-ewan, Northern Alberta and elsewhere. How the crown [federal government] reacts or how quickly the crown nego-tiates can frustrate the community as well as industry.

our role as cAmA is to try, without prejudice and with the acknowledge-ment of these claims, to still get on with

business. can we proceed with develop-ment without derogation and delegating from Aboriginal rights and titles?

GCR: You moved back to the Reserve. Did you grow up on the Reserve?

Hm: No, my family grew up on re-serve, but i lived down in toronto. then

i moved back to the reserve and saw a great opportunity. Wahnapitae First Na-tion is surrounded by mining companies so our community currently has about six or seven agreements now with min-ing companies. through our arrange-ment with mining companies, we are fortunate that our unemployment rate is close to zero and our revenues from mining are quite significant so we don’t have to go cap in hand to government.

GCR: So independence from government, is that a goal?Hm: For many communities, that is an objective but keep in mind, community

leaders will assert that the government does have a duty to the community. Af-ter all, in my treaty area for example, there were millions of acres taken away at $4 per person a year annuity. in the sudbury area alone mining has gener-ated over $150billion in revenue at to-days metal prices [and a significant tax for governments] and for the communi-ties in this treaty area it has generated nothing. so do Aboriginal communities really want to let the government off the hook?

GCR: You have this perspective having worked with companies both large and small in various places, so you’ve lived the corporate side of the business as well. You’re bringing that mix, not just advo-cating for First Nations people but un-derstanding the sensitivities, the needs and even the blind spots on the corporate side.

Hm: that’s right, i was in senior posi-tions with these mining companies be-fore leaving the industry and i have a good understanding of the challenges – including such things as raising capital, initial public offerings, the limitations on spending exploration funds because of tax deductions, and the importance of shareholder communication, public re-lations and so on. so i feel comfortable in sitting down with any mining ceo to discuss how his/her company’s needs can be met by working with Aboriginal communities.

GCR: How do you find you’re received on the corporate side?Hm: there is a two-edged sword there:

“There are well over a thousand land claims now. When we started the Minerals Associa-

tion there were maybe a couple of hundred. This creates uncertainty for

both parties.”

14 THE GLOBAL COMMODITIES REPORT ISSUE 04 15

the other question is how i’m perceived in the Aboriginal community. because they equally could look at me and say, “You are pro-mining because you’re a geologist.” the mining company could say, “You live in a Native community and you run an Aboriginal resources asso-ciation so you’re obviously siding for the Aboriginal people.” What i say is, “take a look at our twenty-year track record, talk to any of those companies, or any of those communities.”

GCR: We interview a lot of companies and it seems like they are “getting it.” Do you think so?

Hm: the parallel concept is like in the ’60’s and ’70’s: as a mining company, en-vironment management was something you did it or didn’t do. You might design your project or tailings ponds or water crossings so you wouldn’t have an impact on the environment, but you didn’t have to. And it is almost the same approach today with Aboriginal participation – there is no big hockey stick telling min-

ing companies you must go talk to those communities. there are some provinces now requiring mining companies to con-sult in order to get their permits, mostly as a way of helping the government meet its own duty to consult, with very little to do with the obligations of the mining company in a practical sense.

but it gets serious. For example, we helped one mining company who ac-quired a project for several billions of dollars, and for every year of delay due to the non-settlement of a land claim (delays in permitting), it cost that com-pany $100million. We provided a liaison to firstly change the federal land nego-tiations team and secondly, to carry on with negotiations toward an impacts/benefits Agreement.

or for junior companies that have to spend their flow-through share funds by February of the following year – if they’re kept from spending it, then the tax benefit doesn’t accrue to the share-holder. We are at a threshold now where mining companies are actually put-ting a cost/benefit analysis to working with Aboriginal communities. And the canada revenue Agency pre-approves expenses allocated for Aboriginal con-sultation, which affects flow-through shareholders.

so it’s not just a cAmA or a mining company or a supreme court of cana-da but it is everyone now who is saying, “Alright, lets take a real look at this Ab-original engagement issue.”

GCR: You have helped bring things this

far where has been a shift in the mindset on the corporate side, communities are starting to get agreements and see ben-efits. What do you see as the task ahead? More of the same, or something different?

Hm: i don’t think the land claim picture is ever going away soon. it’s like the ele-phant in the room – or up here they call it the moose in the room. Depending on how the Federal Government develops policy, it could get even more aggravat-ed. there are going to be some test cases like the ring of Fire mineral region in Northern ontario and many more.

GCR: Are you optimistic?

Hm: that’s like asking me, if two peo-ple meet on a blind date, will they leave holding hands? i don’t know. While the community and mining company have a desire to have a relationship, there may be circumstances beyond the influence and control of the parties.

GCR: What about willingness on the com-munity side, do you see an issue where they need to come around?

Hm: in response many communites are increasing their level of technical aware-ness. For example, [miners] are consid-ering constructing a processing facility in our traditional territory, 20km north of my community. From our community skills base and experience in mining, our band is in a much better position because we have four environmental master’s students on our staff, i’m a geologist, we have full Gis (geographic information system) programming and map making,

and we have botanists and other exper-tise. so we can say to the mining compa-ny, “Feed us whatever information you want, whether it’s a 10-page document or something a metre thick, we will re-view it.”

many communities don’t have those re-sources. What would you think if a min-ing company came to a neighbourhood in burlington or montreal and said, “Here’s 10 boxes of a report – could you get back to us in 30 or 45 days with your comments?”

communities need more expertise, con-sidering that more than 40% of the 2,000-or-so reserves in canada are within 200km of a past mine or pro-ducing mine. Which is why profits from the cAmA conference go to build the needed skills in Aboriginal communities through contributions to local colleges, universities or Aboriginal students.$

aboriginalminerals.com1-800-443-6452

“It gets serious. One

mining company lost

$100million for every

year of delay due to

the non-settlement

of a land claim.”

16 THE GLOBAL COMMODITIES REPORT ISSUE 04 17

18 THE GLOBAL COMMODITIES REPORT ISSUE 04 19

NovaGold Resources and its partners are developing several gold and copper

projects that could catapult them from zero production straight into the middle

tier of North American producers. We talked to President & CEO Rick Van

Nieuwenhuyse about operating in Alaska and Northern British Columbia, the

involvement of indigenous peoples, and working with major mining partners.

NovaGold resources inc. won’t produce any gold for another six to eight

years, but it’s not too early to hold out a pithy corporate production

goal: One Goal: Low-cost million-ounce-a-year gold producer.

“i think it’s reasonable to have a 10-year goal,” says rick van Nieuwen-huyse, President & ceo. “We have two large scale projects and a high-grade project, significant partners, and plans that could produce that much gold, with significant amounts of copper and silver as additional levers to offset costs. And that’s not including any future success in exploration – which i believe we are bound to have given our track record.”

the projects and partners to which van Nieuwenhuyse is referring are Don-lin Gold (NovaGold 50%/barrick 50%) and Ambler (100%) properties in Alas-ka; Galore creek (NovaGold50%/teck 50%) and nearby copper canyon (No-vaGold 70%/teck 30%) in the north-western corner of british columbia; and the recently acquired san roque proj-ect in Argentina (NovaGold70%/marifil mines30%).

20 THE GLOBAL COMMODITIES REPORT ISSUE 04 21

these projects combined give NovaGold a net proven & probable reserve of 19.5 million oz. of gold metal, and 20.4 million oz. (gold equivalent) of silver and base metals. And lots of exploration upside. All of which makes a million ounces a year appear achievable.

EXPLORATION UPSIDE

Actually, its Donlin Gold property in Alaska (at the feasibility stage and al-ready one of the largest undeveloped gold mining projects in the world) is project-ing 1.3 million ounces per year, with the exploration potential to double in size.

At Galore creek in bc, studies are pointing to reserves of 6.8 billion pounds of copper, 5.5 million ounces of gold and 102 million ounces of silver over an 18-year mine life.

Ambler, projected to be an underground mine in Alaska is shaping up for an an-nual average of 67 million pounds of cop-per, 80 million pounds of zinc, 12 million pounds of lead, 11,000 ounces of gold and 866,000 ounces of silver, with a mine life of 25 years.

copper canyon, near Galore creek, is in exploration but so far pointing to in-ferred deposits containing 592 million pounds of copper, 1.3 million ounces of gold and 18.4 million ounces of silver.

When those projects kick in, successive-ly, those will be big surges of revenue. Not that the company is slacking off on exploration: they’ve been adding an av-erage of more than 2.4 million ounces of gold resources every year for the last 13 years. At total acquisition and discovery costs of less than $4 per ounce of gold.

The Global Commodities Report: You have massive production streams ahead of you, but you refer to yourself as an ex-ploration guy.

rick van Nieuwenhuyse: i grew up in Alaska so i have a natural affinity for things in Alaska and the North. i’ve worked a lot of my career up there. i still feed my exploration fix by putting together deals like our Ambler project.

GCR: In fact, you tripled your resource base at Donlin after your buy-in agree-ment with [then-owner] Placer Dome in 2001.

rvN: Yes, working on one of the largest gold deposits in the world ever is pretty exciting. And that is what Donlin is – it’s literally one of the largest gold deposits in the world. one doesn’t often get the opportunity to be involved with a project of that scale.

Likewise with Galore creek – it’s a very large copper, gold, silver porphyry and you don’t get to sink your teeth into one of those every day.

so on the construction and production side, i have a coo, Gil Leathley, a very senior guy with about fifty years of ex-perience, and under him we’ve been put-ting together mining, engineering, envi-ronmental and metallurgy, building out our team. the other thing is we do rely heavily on our partners’ expertise – barrick oper-ates 26 mines around the world and we are certainly happy to benefit from that

experience. same with teck, they being the largest canadian diversified mining company. both barrick and teck are great partners to have on our side.

Practically, we believe that you can add the most value to shareholders by ad-vancing your projects. but exploring is still a great route to add shareholder value quickly, like we just demonstrated with Ambler. After acquiring Ambler, we have continued to build that proj-ect out adding ounces of gold+silver and pounds of copper+zinc.

GCR: We recently wrote about the Copper Fox project, not too far from your Galore Creek property – they are also working with the Tahltan Nation.

rvN: Yes. the tahltan have decided as a First Nation that they like mining, that it has brought a net benefit to their region and they want it done properly – probably similar to a lot of local com-munities. they just want to understand what is going on and be involved in the

“The Tahltan] want

to understand what

is going on and

be involved in the

decision-making

process.”

22 THE GLOBAL COMMODITIES REPORT ISSUE 04 23

decision-making process. And that is the way we have approached working with the tahltan and in working in Alaska.

it is a little different in Alaska, because in Alaska the Native corporations ac-tually own the surface and sub-surface rights, whereas in canada, and specifi-cally with the tahltan, they have an Ab-original right and title. our approach is to work with the tahltan to develop a mine in a way that is also going to be beneficial to the tahltan as well as our shareholders. the best way to do that is get the thaltan involved early and often.

GCR: How early is “early”?

rvN: When Galore creek came up, my first meeting wasn’t in victoria to meet with the bc government – i flew to smithers and drove to Dease Lake and met with the tahltan leadership. since then we’ve met often and benefit from having a great working relationship. the project had some challenging years but when you work your way through chal-lenging times and come out the other side with a stronger bond, that is a great thing.

GCR: It becomes part of your shared his-tory. Providing you come out the other side together.

rvN: exactly. everyone learns.

GCR: How does it work in your Alaskan projects?

rvN: in Alaska the Native corporations own the land so it is different. Alaskan

Federation of Natives is a big organiza-tion that deals with policy level issues. on the industry side you have the coun-cil of Alaskan Producers and the Alas-kan miner Association, which certainly have Native corporation representation. there is a good, open dialogue in both forums. in Alaska the Native corpora-tions are very pro-business.

GCR: Does that simplify things?

rvN: it does, but we still have a com-mitment to consultation and communi-cation. At Donlin we have no less than 56 remote Alaskan Native villages to relate to in an economically challenged region where we’ll create 1,500 to 3,000 jobs during construction and 600 to 900 jobs during production.

GCR: So, I’ll ask point-blank: Is Commu-nity Relations, particularly Aboriginal Relations, a cost of doing business? Or better, good business practice? Or some-thing higher minded?

rv: Yes, it is good business practice, but i also think it is more of a broader, gen-eral public and industry awareness that it isn’t going to work any other way. A more holistic approach to doing busi-ness.

GCR: Do such “soft values” play well in the market?

rvN: it’s a “win” all around, actually. Developing a good rapport and working with First Nations and Alaskan Native corporations adds value for our share-holders, as well as for the First Nations

“It takes a bit of

effort and cost

up front, but the

outcome is you’ve

developed a local

workforce.”

24 THE GLOBAL COMMODITIES REPORT ISSUE 04 25

members and Alaskan Native corpora-tion shareholders.

GCR: How does that play out in practical terms?

rvN: to illustrate, in working with the calista corporation in Alaska, they didn’t have a drilling company. okay, if we are going to be drilling for the next 15 to 20-plus years, let’s help them form one – bring in a contractor we trust and that knows what they’re doing and have them form a joint venture on the calista lands.

We also did this with the tahltan with an environmental company because we are going to be doing environmental

monitoring for the next 20 to 30 years. so we helped set up a 50/50 joint ven-ture between rescan environmental services and the tahltan Nation Devel-opment corporation: rescan tahltan environmental consultants. it takes a bit of effort and cost up front, but then the outcome is you’ve developed a local workforce over a period of five years that are traveling 50 miles or 100 miles to work rather than, say, a thousand miles from vancouver or the lower 48 states.

there is also a huge social benefit in fact that local people are involved with the project. one, they are making money; and two, on the environmental side they are doing the work so they are ensuring that you are doing things right, because

they are doing the monitoring.

GCR: And those results go to … ?

rvN: the environmental Performance committee, made up of three tahltan and three company representatives.

GCR: You formed the company in ‘98, how did you find these projects?

rvN: exploration is a bit of a treasure hunt, so yes some didn’t work out and others not as well as we wanted. but certainly on Donlin, Galore and Am-bler we hit the mother lodes with all three. And we are very excited about a new project down in Argentina, in the rio Negro province. that one is early stage yet, but we’ve already started to

hit some very significant drill inter-sections over significant thicknesses - we are not talking about little skinny zones. We are talking about over tens of meters, if not hundreds of meters of drill thickness.

At NovaGold, i believe we are good at exploration, and putting deals togeth-er. in addition, i think we do a great job in another key area of business and that is working successfully on commu-nity engagement whether it be Alaskan Native corporations or First Nations or, in the case of Argentina, getting the local business community and citizens involved. it’s probably one of the prov-inces less familiar with mining than, say, santa cruz. so there is a learning curve for both parties.

AboriGiNAL eNG

26 THE GLOBAL COMMODITIES REPORT ISSUE 04 27

GCR: You had personal experience with Placer Dome but what about the effect on your company of working with majors like Barrick and Teck? Who is operating?

rvN: they are actually both 50/50 joint venture companies but we’re not shy about using their expertise. in the case of Donlin, the team is probably 80% barrick people, and with teck at Galore, more like 70/30. but in both cases there are corporate boards of four people: two from NovaGold and two from barrick or teck.

GCR: Ambler is quite different, being an

underground mine and wholly owned. How is this going to change your compa-ny?

rvN: it’s early days for Ambler, we’re going to continue to explore and we are very excited about a new exploration target called bornite where we are cur-rently drilling. in the end i don’t know whether we will develop that ourselves in partnership with NANA, or follow a similar model of bringing in a partner – time will tell.

GCR: Given that mining is cyclical, com-modities are cyclical, and you are look-

ing at a few years out, are you at all con-cerned about being caught on the wrong side of that wave?

rvN: We certainly have a bit of an odd market right now with commodity pric-es at or near all-time highs and equi-ties are, i would say, lagging. there is an expectation in the market that prices are going to come down and every time you turn around they go up. Gold has certainly done that, copper has certainly done that. We are still in the $3.50 to $4/lb. copper range and yet the produc-ers are being valued at $2.25-2.50. so that disconnect has to correct. i look at

supply and demand and we continue to under-produce copper. copper produc-ers have, for the last five years running under-performed by an average of 17% and this year is shaping up to be no bet-ter – that’s 17% less metal than planned.

And yet on the demand side india, china, indonesia and southeast Asia are con-suming more. those markets are about big numbers: 8-9% growth in china and india.

GCR: What about gold, in terms of sup-ply, demand and the cyclical nature of commodities?

rvN: the gold price chart for the last 10 years has seen a nice ramp-up. more recently it has gotten a little noisy with increased volatility and major spikes both up and down. over the last three months, gold has gone from $1,450 to the $1,900s, back down to $1,750 and then up to $1,850 and back down to $1650. those are pretty big swings. but it hasn’t gone to $600 dollars. in my view, the longer the financial woes of europe, united states and Japan continue, and the lon-ger governments continue to print more money, the more hard asset values will go up – and that is good for NovaGold.$

NE GOALLOW-COST MILLION-OUNCE-A-YEAR

GOLD PRODUCER

NovaGold Integrated Report 2010

NovaGold

Resources Inc.

novagold.net

stock symbols:

tsX:NG;

NYse AmeX:NG

28 THE GLOBAL COMMODITIES REPORT ISSUE 04 29

Teck On Boardby Jeff borsato

Teck Resources, NovaGold’s partners in northwestern BC, takes a five-fold

approach to sustainability.

While copper prices tripled during 2009 and 2010, roughly $1.50-4.50 per pound, and 2011 has proved volatile, exploration continues in the face of rising global de-mand. in spite of near record copper in-ventory levels in 2010, china’s construc-tion boom has remained a key driver to increased demand for much of this de-cade. A key player is teck resources, canada’s largest diversified mining com-pany involved in mining, smelting and refining. With nine mines in canada, the usA and Peru, producing zinc, copper, molybdenum, gold, coal, and zinc, teck remains at the forefront in full service mining operations.

Prior to the amalgamation of teck re-sources and cominco in 2001, each com-pany possessed a long and storied history in the canadian mineral sector. Formed in 1906, cominco’s sullivan mine in brit-

ish columbia operated from 1909 until 2001 before finally closing. starting with its flagship properties in Kirkland Lake, ontario, teck-Hughes Gold mines, as it was known in 1913, would continue as one of the largest employers in the region for decades before expanding operations across the country. teck cominco, as it became known after amalgamation, was re-branded in 2008 as teck resources.

teck is no stranger to operating in a challenging cyclical business environ-ment. Large mining operations require long term financing over decade-long pe-riods to bring new operations online. As exploration activity expands into remote regions in Northern canada and Alaska, working with First Nations communi-ties is critical to successful mining oper-ations. Partnerships with knowledgeable mining professionals and collaboration

30 THE GLOBAL COMMODITIES REPORT ISSUE 04 31

with communities at the mine site have been essential to teck and others’ suc-cess in these regions.

Key stakeholder groups for mining com-panies have traditionally included local governments, regulatory authorities, employees, financers and the commu-nity. Local and aboriginal communities have been placed in the spotlight in re-cent years as critical to the success of mining operations and minimizing im-pacts on the environment.

teck’s approach to aboriginal relations

ensures First Nations are recognized as an essential partner and not an ad-versary to mine exploration and devel-opment. teck’s 2010 Annual report on sustainability highlighted their goals to conduct human rights assessments of all operations by 2013, and by 2015 imple-ment company-wide policies for work-ing with First Nations based on the uN Declaration of rights of indigenous Peo-ples.

in a march 2011 report to the vancouver sun, David Parker, teck’s vice President for sustainability noted “[teck] engages

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Operations and Projects

Carmen de Andacollo

Antamina

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Coal Sites in BC and Alberta

Fort Hills Project

Highland Valley Copper

Pend Oreille

Quebrada Blanca

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Global Operations

Legend

Teck customers

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Steelmaking coal

Zinc

Energy

Corporate office

Exploration office

Technology office

Marketing office

Trail

Galore Creek

Mesaba

Relincho

Wintering Hills

Quintette

Frontier

Equinox

Perth, Australia

Wicklow, Ireland

Guadalajara, Mexico

Windhoek, Namibia

Ankara, Turkey

Richmond, British Columbia

Trail, British Columbia

02

01

Global Offices

Vancouver, British Columbia

Calgary, Alberta

Santiago, Chile

Toronto, Ontario

Spokane, Washington

Anchorage, Alaska

Lima, Peru

Beijing, China

13

15

14

12

11

10

Red Dog

Duck Pond

Fort Hills

Frontier Equinox

Wintering Hills

Quebrada BlancaRelincho

Carmen de Andacollo

Mesaba

09

05

03

GreenhillsLine Creek

ElkviewCoal Mountain

Highland Valley Copper

Fording River

Trail

0604

0404

0404

07

08

04

06

09

05

03

02

01

12

Quintette

Cardinal River

Galore Creek

04

11

15

Pend Oreille 07

03

04

05

05

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07

07

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Antamina02

08

01

Teck is a diversified resource company committed to responsible mining and mineral development with business units focused on copper, steelmaking coal, zinc and energy. We are also a significant producer of specialty metals such as germanium and indium.

We are actively exploring for copper, zinc and gold in the Americas, Asia Pacific, Europe and Africa.

We are headquartered in Vancouver, Canada. We own, or have an interest in, 13 mines in Canada, the US, Chile and Peru, as well as one metallurgical complex. We have expertise across a wide range of activities related to mining and minerals processing including exploration, development, smelting, refining, safety, environmental protection, product stewardship, recycling and research.

09

12

13 08

10

5

Teck is a diversified resource company committed to responsible mining and mineral development with business units focused on copper, steelmaking coal, zinc and energy. We are also a significant producer of specialty metals such as germanium and indium.

We are actively exploring for copper, zinc and gold in the Americas, Asia Pacific, Europe and Africa.

We are headquartered in Vancouver, Canada. We own, or have an interest in, 13 mines in Canada, the US, Chile and Peru, as well as one metallurgical complex. We have expertise across a wide range of activities related to mining and minerals processing including exploration, development, smelting, refining, safety, environmental protection, product stewardship, recycling and research.

09

12

13 08

10

32 THE GLOBAL COMMODITIES REPORT ISSUE 04 33

34 THE GLOBAL COMMODITIES REPORT ISSUE 04 35

with communities of interest early to understand local priorities and avoid or mitigate impact by considering com-munity needs into project design.” being named to the Dow Jones sustainability World index (DJsi) was a corporate milestone, confirming that teck’s sus-tainability practices rank among the top

10 percent of companies in the resource industry worldwide.

A proven sustainability strategy is criti-cal to the success of teck’s joint ventures with NovaGold at their Galore creek and copper canyon projects in North-west british columbia. copper canyon,

situated close to Galore creek, remains in exploration but so far points to depos-its of 592 million pounds of copper, 1.3 million ounces of gold and 18.4 million ounces of silver.

Highlighting the need for a collaborative approach to exploration and develop-

ment, teck and NovaGold worked close-ly with the resident tahltan Nation of b.c. at Galore creek. NovaGold’s Presi-dent & ceo rick van Nieuwenhuyse was raised in Alaska and spent much of his career there. His experience with Aboriginal communities in both Alaska and bc helped to guide exploration in

Teck 2010 Annual Report124 125

Teck’s Board of Directors from left to right: (standing) Jack Cockwell, Chris Thompson, Jalynn Bennett, Norman Keevil III, Takashi Kuriyama, Hugh Bolton, Janice Rennie, Warren Seyffert, Mayank Ashar, Brian Aune; (seated) Norman Keevil, Donald Lindsay. Not shown: Felix Chee, Takuro Mochihara.

36 THE GLOBAL COMMODITIES REPORT ISSUE 04 37

partnership with the tahltan.

teck and NovaGold sought to ensure access for tahltan businesses to supply goods and services throughout the mine life and during mine closure. Discus-sions with tahltan stakeholders ensured that a truly collaborative strategy could

be implemented.

tahltan involvement at Galore creek resulted in teck and NovaGold mak-ing modifications to the project design. changing a pipeline to better transport concentrates from the mine-site not only addressed tahltan concerns about noise and dust created by truck trans-port, but also improved the economics of moving the concentrates.

elsewhere, teck seeks ways to mitigate risks from mining operations, from land disturbance, tailings and effluents, to emissions to air from smelting and refin-ing operations. For example, the phase-two launch of teck’s $5.5 million efflu-ent spill reduction Program to reduce the risk of spills at their smelting and refining operations in trail bc is under-way with significant positive results.

teck’s sustainability strategy is holis-tic in that it focuses on five key areas: health & safety, economic impacts, en-vironmental management issues, com-munity engagement and development, and responsible stewardship of their products. their efforts to involve First Nations at each stage of exploration, de-velopment and operations have proven to be a successful element.$

Claire Chamberlain, Principal Geologist, North America Exploration Team “In exploration, I have the chance to go places few other people have gone – and those places become my office.”

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38 THE GLOBAL COMMODITIES REPORT ISSUE 04 39

First Nation Rising

by Jeff borsato

The Cree Regional Economic Enterprises Company helps build

companies and communities among the Cree First Nation. With

five companies under its auspices serving growing industries

and a growing populace, Cree leaders are especially keen to

engage aboriginal youth

“We want to be seen as a national player, to show canadians that First Nations people can stand among the best businesses out there.” that was the message Jack blacksmith, President of the cree regional economic enterprises company (creeco) had when asked what his vision is for the largest First Nations eco-nomic collective in canada.

resource development has sparked renewed interest in north-ern canada and First Nations people have sought to benefit from exploration and development taking place in their communities. taking a proactive and long-long term approach, the cree Na-tion of Quebec sought out clearly defined and legally secured rights over a host of economic activities taking place in northern canada.

40 THE GLOBAL COMMODITIES REPORT ISSUE 04 41

With the signing of the James bay Northern Quebec Agreement (JbNQA) in 1975, the cree gained important po-litical, social, economic and cultural rights. A board of compensation was established with representatives from nine cree bands to receive, administer, use and invest compensation contem-plated under the JbNQA. creeco was born from this collective body to maxi-mize employment and act as an econom-ic engine to the cree Nation of Quebec.

incorporated in 1982, creeco acts as a holding company for five cree cor-

porations that focus principally on de-velopment in the cree communities of Northern Quebec: the cree construc-tion and Development company, Ges-tion ADc, Air creebec, valpiro and eeyou baril. creeco President Jack blacksmith stresses the importance of these majority cree-owned companies. “cree peoples used to be on the exterior of development taking place in our com-munities, creeco was developed to give access to cree’s business opportu-nities and create sustainable jobs in the community.”

Asked where he sees creeco in the fu-ture, blacksmith highlighted the impor-tant role of cree youth. “in 15-20 years we hope to see the youth taking a bigger part in creeco’s activities, not just in First Nations communities but across the country.”

Assisting youth via job programs and efforts in schools, creeco helps raise awareness of the opportunities avail-able in their communities. Asked what makes creeco unique among First Nation’s organizations, blacksmith not-

ed, “What makes us unique is that our board of directors is all cree and most member companies are almost entirely cree owned.”

CREE COMPANIESA founding member of creeco is Air creebec. established in 1982, Air cree-bec focuses on flight service to various First Nation communities and mine sites in Quebec and ontario. in what became the largest commercial transac-tion ever undertaken by canadian ab-originals, the cree became 100% own-

Cree Construction

and Development

employs upwards

of 800 during

peak construction

pevriods.

42 THE GLOBAL COMMODITIES REPORT ISSUE 04 43

ers of Air creebec in 1988 after buying out their partner’s share in the compa-ny. matthew Happyjack, President and ceo of Air creebec, spoke proudly of the importance of being entirely cree-owned. “We are very proud to be cree-owned and hope others can follow our footsteps.”

His vision for the future of Air creebec points to “continuing improvements and expansion of the passenger side of business while staying focused on in-creasing contracts in Quebec’s minerals industry.”

Working closely with Air creebec is its service arm, valpiro. Providing ground and aircraft service operations, valpiro ensures the gears of creeco’s machin-ery continue turning without a hitch.

Air creebec works with creeco show-ing crees greater opportunities as to-morrow’s air traffic controllers, flight mechanics and pilots, and helping ex-pand the ranks of crees in all sectors of the Quebec economy.

Among the largest construction compa-nies in Quebec, the cree construction

and Development company (ccDc) is creeco’s largest partner. owned en-tirely by the James bay cree, ccDc employs upwards of 800 workers during peak construction periods. President William macLeod points to the ccDc’s achievements. “ccDc has built its ex-pertise, resources, knowledge and ca-pacity to compete among the large con-struction companies in Quebec.”

Access to large bonding requirements and iso certification were significant achievements to macLeod. “these are not easily attained or retained by a First Nation company, but we understand the aspirations of the clients we work for, especially in First Nation communities.”

With over half of senior staff belonging to aboriginal groups, macLeod stresses the importance of First Nation mem-bers taking leading roles in the booming resource development sector. “the de-velopment in hydro [electric] resources, mining, and infrastructure is predomi-

nantly in the north, where our commu-nities are located. We work closely with First Nation groups impacted by these developments so they can share in this growth.”

Large construction projects pose a va-riety of risks to both environment and people. speaking to the added respon-sibility of working with many employ-

ees who hail from his own community, macLeod points to their health & safety efforts. “ccDc’s catering arm, Gestion ADc, was second in health & safety of all the construction and catering compa-nies working at the seven-year Hydro-Quebec development project.”

NORTHERN GROWTHDeveloping and delivering catering and janitorial service projects, Gestion ADc provides opportunities for cree at con-struction and mine sites across Que-bec. in fact, Gestion ADc was named to Profit magazine’s 100 fastest growing

44 THE GLOBAL COMMODITIES REPORT ISSUE 04 45

companies in 2008.

operating as a supplier to ccDc’s larger projects, eeyou baril is a recent addition to the creeco family and is headed by reggie Neeposh. Highlighting the devel-opment taking place in northern Que-bec, Neeposh notes, “canada is in a great position to benefit from global natural resource demand and northern canada is where these resources are available.”

Neeposh stresses the importance for creeco to convince aboriginal youth to return to their communities and par-ticipate in the economic development taking place. “i believe that other com-panies will gradually take that route considering the increase of population in the communities, more jobs opportuni-ties and increased demand for goods and services.” other creeco businesses include a new Quality inn & suites (with anoth-

er on the way), eeyou eenou realties and eeyou Power (renewable energy), and creeco’s insurance department insures over $2billion in eeyou itschee territory assets.

since the 1975 signing of the JbNQA, the cree population has more than doubled and development has outpaced growth rates in other parts of canada. creeco’s continued growth reflects the community’s development and their

success for future crees and First Na-tions people.$

Cree Regional Economic Enterprises Companyouje-bougoumou,

Quebec

creeco.ca

46 THE GLOBAL COMMODITIES REPORT ISSUE 04 47

Robert GallagherNew Gold President & CEO

Social License Renewal

With a projected meteoric rise in gold production ahead of them, $5billion New

Gold Inc. is staying grounded in their host communities and environmental

settings. It takes time and commitment, but it’s right.

Despite a heady pace of gold produc-tion, with two- and four-fold produc-tion increases in the offing, New Gold is keeping their aboriginal and com-munity relations, environmental, sus-tainability and health & safety prin-ciples front and centre.

right out of the gate, vancouver-based New Gold inc. emerged from a three-way amalgamation in 2008 with a leap into gold and copper develop-ment and production. three years in, their goal for 2011 is to produce 380,000 - 400,000 ounces of gold from their properties in Australia, mexi-co and the united states, with three more projects slated: the New Afton mine near Kamloops bc is on track to double New Gold’s average annual

cash flow when it starts up next year; the el morro development in chile should add even more revenue begin-ning in 2015, and the ensuing black-water property in central bc shows signs of being much larger still.

that’s a promising growth strategy; in terms of defence, New Gold has also focused on driving down their cash cost producing gold from almost $600/oz. three years ago to $354/oz this year. “something that helps there is that although the costs of our inputs are rising (some dramatically) our secondary copper and silver produc-tion act as natural hedges,” explains robert Gallagher, President, ceo and Director. “so as input costs rise so do our copper and silver revenues.”

48 THE GLOBAL COMMODITIES REPORT ISSUE 04 49

CONTEXT IS EVERYTHINGbut the realities of mining are more than resources, methods and balance sheets. “it’s easy enough to get your licenses from the government, and once you have got them it is pretty hard to lose them,” says Gallagher. “but our social license, basically your acceptance from the com-munities around you, can be harder to obtain and, if you don’t have the right attitude, just as hard to keep.”

With over three decades in mining, Gal-lagher sees that industries across the board have changed with societal expec-

tations. “i’ve worked in indonesia, ven-ezuela, the Philippines and Honduras, as well as canada, the us and Australia. many companies used to feel they were fulfilling their responsibilities by provid-ing employment – just what was happen-ing ‘inside the fence.’ Now expectations have evolved greatly and you find with modern communications, the internet, NGos nearby… everybody is motivated to do the right thing for their host com-munities and the environment, not just what’s cheapest or most profitable,” he says.

“Personally i get the most satisfaction

from how we positively impact commu-nities and change the lives of people for the better forever. the concept of a tri-ple bottom line [financial, environment and social] is often talked about… maybe that’s my fourth bottom line, the lasting impacts on individual people.”

in bc, New Gold is finding ways to work with two local First Nations bands as the New Afton project nears production next year. Anne Wallin, the onsite Hr man-ager says, “i find it’s personal interaction that makes the biggest difference. that can be as simple as making sure when

any band member calls, we call them back to answer their questions. And we have a First Nations coordinator on site and she works closely with the bands.

“We also have a joint implementation committee for the bands’ participation agreement that has representation from both bands and answers questions at the grassroots level. We go above and beyond the letter of the law and go to the spir-it of what the legal agreement says. it is about getting to the heart of what is meaningful and what will make a differ-ence in the lives of the people that you are impacting.”

50 THE GLOBAL COMMODITIES REPORT ISSUE 04 51

engineering and

environmental solutions

www.knightpiesold.com

Knight PiésoldC O N S U L T I N G

Knight Piésoldwater resources

renewable energy

local knowledge, global expert ise

mining

environment

Preparing any local community for min-ing jobs is not as easy as asking who has a driver’s license; there’s a lot of educa-tion needed. “We held quite a few com-munity meetings to explain what un-derground mining is about, the safety concerns, the positions we will have, the skills required, etc.,” says Wallin. “then the federal government came forward with training funding and we were part of forming a non-profit organization called the british columbia Aboriginal mine training Association, and that has worked really well.”

this fall, at the annual canadian Ab-original minerals Association confer-ence in vancouver, Wallin will speak on New Gold’s relationships with the bands, the training Association and thompson rivers university in nearby Kamloops. cAmA is driven by Hans matthews, who spent years working for major and junior mining companies before creating

engineering and

environmental solutions

www.knightpiesold.com

Knight PiésoldC O N S U L T I N G

Knight Piésoldwater resources

renewable energy

local knowledge, global expert ise

mining

environment

52 THE GLOBAL COMMODITIES REPORT ISSUE 04 53

dards – it is an absolutely clean opera-tion.

“our mining operations are open pit and some people object to that as pollution. However, we were permitted because the project was judged as more than worth the impact given the benefits we are creating. there was one technical land use issue from 1993, well before we or our predecessor company were involved, but recently the municipal government clarified the law and cleared the way for permitting.” (the area has been mined since the spanish in the sixteenth cen-tury.)

“We have another 6 years of mining at cerro as things stand, but we are drilling the underground extensions and hope to extend the mine life, continue employ-ment and production and our connec-tion with the community.”

LEAVING WELLFor Gallagher “and all through our cor-

porate culture, from the mine site to the boardroom,” environmental and so-cial impact issues are at the forefront. “i sometimes joke that when i started mine managers were engineers and ge-ologists – now they are social scientists.

“but there’s no other way to do business. mines have a finite life and are not a re-newable resource – we feel that we will be judged successful if we finish a mine, reclaim the impacted areas and the local people can say, ‘Well, the mine is gone, but we are better off because they were here.’” $

the Association. “With his long career working in, and working with, the min-ing industry, and his First Nations heri-tage, Hans provides an invaluable link,” says Gallagher.

KEEP IT PERSONAL“Anywhere in the world, the key is per-sonal interaction. that’s how anyone de-cides whether to trust somebody. When someone comes along and says, ‘Don’t worry about your traditional lands and hunting and cultural heritage sites,’ they can sign off but they really don’t know, and they won’t find out for years into the future. the only way you can develop trust is to demonstrate that you have been a responsible operator else-where and be able to look them in the eye and talk to them and understand them, their concerns; and help them un-derstand you as a company, what your concerns are and your limitations. that takes personal interaction.”

one method at the New Afton project

is a quarterly ‘meeting of the chiefs’ – two First Nations chiefs and Gallagher as ceo. “We discuss any issues that are outstanding or any concerns, any hot buttons, and then do something social – we got them out to an outdoor hockey game last winter and they reciprocated in the spring by taking me out to play golf. You need both business and rela-tionship.”

NO GUARANTEESbut there’s no hassle-free guarantee. New Gold’s cerro san Pedro mine in mexico faced vocal opposition locally, a fair bit of negative (if vague) internet chatter and some bureaucratic confu-sion despite significant investments in local services and infrastructure. “For-tunately, most of that’s behind us,” says Gallagher. “but there will always be people who don’t like mining and don’t think the costs are worth the gains. And the internet is a great place to make whatever claims you want. but at cerro there has never been any breach of stan-

Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote Quote

New Gold Inc.vancouver, british columbianewgold.comstock symbols: tsX:NGD.cA, NYse Amex:NGD

54 THE GLOBAL COMMODITIES REPORT

Going Underground

Cementation Canada, an engineering and construction fi rm, takes creative approaches to their underground projects, community relations, training and safety … adding up to repeatedly being named a top Canadian employer.

Unless you’re an insider, mining still carries con-notations of being a rough ’n’ ready industry, so the general public might be surprised to hear that Cementation Canada, an underground mine engi-neering and construction company would repeat-edly be named a top Canadian employer. In fact, The Financial Post, named Cementation a Top 10 Canadian Employer for 2009, and MediaCorp dubbed them one of Canada’s Top 100 Employers fi ve times.

But for Roy Slack, in his role as President respon-sible for the North and South American opera-tions of the global Cementation group, such kudos simply a� rm the company’s approach. “Part of our mission statement is to be an employer of choice,” he says. “I am a fan of [these programs] because it makes you do two things: evaluate yourself, and look at the other top 100 companies. Each year it helps us improve.”

ISSUE 04 55

56 THE GLOBAL COMMODITIES REPORT ISSUE 04 57

interesting, when factors like ‘work space’, ‘atmosphere’ and ‘sociability’ are being weighed by tenderfoot media companies. “How we treat our people on site is very important to us,” says slack. “When you are dealing with miners working on a project, if their equipment is in good condition and their work area is well kept and if they are staying in a camp with good provi-

sions, everyone is happier, more effec-tive and safer.

“We recently went 17 months with no lost-time injuries. this year we have two lost-time injuries – of low severity, but they are still lost-times. but our us operations just celebrated 5 years of no lost-time injuries so they have done very well. 85% of our projects are zero

lost-time and 65% have no medical aid injuries either. so we are working very hard at that and i’m very proud of our results.

“During the downturn we didn’t get the top employer nod, i think main-ly because our employment numbers shrank and mining companies were hard hit by the economic downturn.”

GLOBAL PICTUREslack himself was first employed in min-ing as a summer job in northern ontario, which prompted him to switch his uni-versity major from psychology to mine engineering. He spent the 1980s work-ing for contractors and then started his own company. the uK-based cementa-tion group hired slack to find them an acquisition, but wound up having slack start up a new firm in 1998.

cementation’s us operations are wholly owned by cementation canada and to-gether the groups employ about 1,500. slack also has operational oversight of the south American operations, though they’re under the uK division’s owner-ship. “the global cementation business does over a billion dollars a year in rev-enue –the North American group rep-resents about $350 million of that.”

in 2004, cementation was bought by the murray & roberts Group, a 109-year old Johannesburg engineering and con-struction company operating in south-ern Africa, the middle east, southeast Asia, Australasia and North and south America. “murray & roberts is a large company doing over $4 billion a year in revenue,” says slack. “they are based in south Africa, a mining country, so we have a parent company that really un-derstands our business and they let us operate. they know that we understand our market and our culture so they let us manage our businesses.”

VARIETY, VARIETYcementation’s client list reads like the Who’s Who of canadian mining: Gold-

Shaft sinking operation by Cementation.

58 THE GLOBAL COMMODITIES REPORT ISSUE 04 59

corp, Hudbay, NewGold, Kinross, Xstra-ta, vale, rio tinto et al. “that’s certainly intentional,” says slack. “We have a di-versified list of both clients and com-modities and that is on purpose. mining is cyclical and if there is a slowdown in base metals we still operate in gold and silver, diamonds, salt and potash. so our commodity base is very diversified. early in the growth of our company we were very dependent on a couple of base met-als, so we made a point of diversifying in both commodities and clients.

“i believe the global cementation orga-nization is the largest of its kind in the world. You know, it is over a billion in revenue, with 16,000 employees globally, so it is a big organization. We are cer-tainly one of the leading contractors in North America, both in terms of size and in the complexity of the projects we do.”For example, their Piccadilly Project in New brunswick is a large project for cementation. “it is a twin shaft project for a potash mine for Pcs mining,” says slack. “And it is a design-build project, so we have done the engineering on it and are managing the construction so it is a large turnkey project.

“one shaft is about 850 meters down now, the other shaft is about 600 meters and going over a thousand, but there are some stations and other underground works in there as well.”

Northgate minerals’ Young Davidson gold property south of Kirkland Lake, ontario, is another interesting turnkey project. “We are unique as a contractor as we have an established engineering

group internally so we can do design-build work. so we are designing the shaft and the infrastructure there and managing the construction. but we pro-posed an innovative solution for them – a 5.5m. bore hole shaft excavated by mechanical means. instead of drill-and-blast, which we usually do, the rock is being cut by a raise bore machine.

“We start at the top, drill a small pilot hole down to the bottom and then con-nect a large reamer to the bottom. then pull the hole back up to full size. by do-ing it this way, we have saved them quite a bit of time and money – they are quite happy about that.”

(Photo opposite: this is the same ma-chine that cementation had on the mine rescue operation after the 2010 mining accident trapped miners in chile – a strata 950 raise bore machine.)

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60 THE GLOBAL COMMODITIES REPORT ISSUE 04 61

Another project of interest is the reso-lution copper operation near Phoenix, Arizona, for resolution copper. “this is a very large project and it has gone very well in terms of safety and schedule. it’s in a traditional, old-time mining area but it is all new development. the main shaft is 28 ft. in diameter and 6,200 ft. deep. And then we are also refurbishing an existing shaft as part of the project design.

INUIT PARTNERSHIPin April 2005, Kitikmeot corporation, representing an inuit group, and ce-mentation canada signed a unanimous

shareholder agreement to form a new company, Kitikmeot cementation min-ing & Development (KcmD).

“in 2004, i met with the principals from Kitikmeot corporation to explore pos-sibilities in the North. they were look-ing for a mining partner and we wanted to establish a long term relationship not a one-project thing, we wanted to make training a key part of it, and we looked for opportunities to work together.”

As a result, KcmD has two projects in, or adjacent to, the Kitikmeot region. the first is the Diavik Diamond mine, located in the Northwest territories where they built underground explor-atory declines. Now KcmD is also in-volved in underground diamond produc-tion as well.

the second, more recent, project is at the Hope bay gold mine with Newmont mining located in the Kitikmeot region on inuit-owned land. KcmD is under contract to Newmont to carry out the underground development for this ma-jor project, which began in october, 2010.

“Wherever we work in the North, we want to provide opportunities to North-erners, First Nations and inuit people,” slack says. “but our work is specialty work requiring specialized skills. so we developed the New miner training Pro-gram in 2004 – this utilizes our First Nation partners and gives them basic training within the first year to become miners.

“i’ve certainly learned from the Kitik-

meot experience. i think our company has. We understand the issues better and understand our partners better.”

NATIONAL INPUTcementation has also been involved with cAmA (canadian Aboriginal minerals Association) over the last several years. “i think it’s important, if you’ll let me get a little bit philosophical about min-ing in general,” he says. “mining in can-ada is provincially managed (except for the nuclear industry and uranium.) so the mining industry is somewhat frac-tured in canada – groups become local. And the same can be true for First Na-tions, despite their federal interaction. the cAmA concept is to look at both mining and First Nations challenges on a national basis, which i think is health-ier for all concerned.“i like that concept because it would be so easy to do an ontario one and a bc one, and there are groups like that. but i don’t think they get the same benefit of the experience as, say, the Kitikmeot have in the Arctic and various inuit

groups in Newfoundland. everyone is dealing with similar issues but looking at different solutions. Discussions on a national basis are going to help every-one.”

cementation is also working with the mining industries Human resources council, trying to establish a national format for mining training. “right now, every provincial group has a different program and different requirements. but miHr has created the first program for national certification. so this would be very beneficial for the First Nations, it is good for us (because we work across canada and it allows our people to move around) and something that will help our industry nationwide.” $

raise bore machine.

Cementation Canada Inc. North bay, ontariocementation.ca

ISSUE 04 63

Both Sides Now

the Global commodities report interview with colin Webster of Goldcorp inc.

colin Webster is Goldcorp inc.’s Direc-tor of Aboriginal, Government & com-munity relations, canada & usA. We spoke with him at his toronto office, just before heading out for meetings with a First Nation community north of sioux Lookout, ontario.

The Global Commodities Report: Colin, you are a Mining Engineer, how did you wind up with a title like Director of Ab-original, Government & Community Re-lations, Canada & USA?

colin Webster: there are both profes-sional and personal aspects. Profes-

sionally, i graduated from Queen’s uni-versity in Kingston, ontario and have been in the mining industry for almost 20 years. my experience has been pri-marily on the environmental side of the business. i entered environmental consulting in 2004 with my own con-sultancy business called blue Heron solutions for environmental manage-ment. my partner and i started that together and built it into a small and successful boutique firm with 12 peo-ple.

We provided services primarily to the mining industry, resource developers

In Canada, where Aboriginal governance is a federal, nation-to-nation

relationship, and resource development is under provincial jurisdiction, let

alone the cultural dynamics, partnering with First Nations communities in

mining projects takes time, perspective and skill. Canada’s second-largest gold

producer, Goldcorp Inc., created a portfolio to help keep those relationships

healthy and productive.

64 THE GLOBAL COMMODITIES REPORT ISSUE 04 65

in general. With my mining expertise i focused on project development, per-mitting, and reclamation & closure. All have a significant community engage-ment component to them. inherent to this type of work is the First Nations engagement component. that is the professional side of it.

the personal side of it is my mother was born and raised in a First Nation

community in Quebec, Kitigan Zibi Anishinabeg. being of First Nation de-scent, this role that i carry out is very dear to my heart.

GCR: With your mother’s heritage, did you spend much time on the Reserve growing up?

CW: Yes, i visited quite a bit as a child, but i didn’t grow up there – it wasn’t my reality. i grew up in Kirkland Lake, a northern ontario mining town.

GCR: Your environmental business was successful, in an in-demand field. Why switch?

CW: in 2009, i was providing an intro-ductory Aboriginal relations course to some Goldcorp representatives who were in the process of figuring out how to engage some of the First Nations communities in their neighborhood. i’d worked with Goldcorp before and joked that if they want this kind of help full-time, let me know. so they did.

i’d been interested in this area for a long time and it was clear that they wanted to do this and do it well, which was very important to me. i didn’t want to be brought in just to “deal with an issue” – i wanted to be heard, be listened to, make things happen, make changes. they convinced me that they wanted to become leaders in this area, created the position and i started in october 2009.

GCR: How do you spend most of your time?

Prootability, longevity and stability.

Services to the First Nations communities.

Transparency and leadership.

First Nations employment.

First Nations involvement in management.

Promoting the industry among youth.

203, Opemiska MeskinoOuje-Bougoumou, QuebecG0W 3C0Phone: (418) 745-3931Fax: (418) 745-3844Email: info@boc-creeco.ca

Our subsidiaries:

www.creeco.caVISIT US TODAY8

We have the mandate to provide services and

economic opportunity - including employment,

training and advancement to the Cree Nation of

Eeyou Istchee and beyond with the ultimate goal

of attaining self-sufficiency. Always strive for

excellence, create opportunities, be innovative, be

structured in its investment strategies - guided

by maximizing by maximizing returns while safeguarding its

assets and its values.

Maximizing social and economic returns to the First Nations

“Making a meaningfulcontribution to First Nations development”

66 THE GLOBAL COMMODITIES REPORT ISSUE 04 67

CW: our region encompasses five op-erating Goldcorp mines and one devel-opment project – three are in ontario, and the development project is in Que-bec. those four sites entail a First Na-tions engagement component, so i work with the site teams, provide guidance, advice and consistency across the re-gion in terms of how we engage those communities.

GCR: And you have two properties in the United States.

cW: Yes. on the us side there is more on the [mainstream] community side. We have a corporate social responsi-bility (csr) mandate that we’re for-malizing and are working towards en-suring that our csr efforts, across the entire company, line up with external standards.

us relations with First Nations are fundamentally different than in can-ada. very simplistically, in canada, as an industry proponent who is delegat-ed procedural aspects of consultation, you are at the forefront of the relation-ship. if we had a new us mine or mine expansion and needed to consult with Native Americans, we would go to the government and they would conduct the consultation on our behalf.

GCR: What would you hope for?

cW: my hope is that we will be viewed as being the company of choice, a com-pany that is willing to work with Na-tive communities.

GCR: In Canada, how big a piece is in-digenous or community engagement for your onsite staff?

cW: We have management represen-tatives at all of our sites who are doing this work as part of their responsibili-ties. each site has its own budget (we are very decentralized as a company)

so the sites are responsible for setting up their own budgets and executing on those budgets. each site also does it slightly differently. some have dedi-cated Aboriginal Affairs or First Na-tion managers while at other sites a lot of times it’s part of their role.

GCR: Now with community and Aborigi-nal roles, those interests don’t always line up exactly, do you find yourself having to navigate different priorities?

cW: At times, but it seems to be hap-pening less and less. the non-Aborigi-nal communities where we operate are recognizing that they have to engage

“My hope is that we

will be viewed as the

company of choice,

willing to work with

Native communities.”

68 THE GLOBAL COMMODITIES REPORT ISSUE 04 69

the Aboriginal population as well – there’s an awakening on the communi-ty side. With companies forming First Nations partnerships and engaging Aboriginal communities, people are trying to understand what that means.

GCR: I suppose that what companies are doing is another occasion for communi-ties and First Nations peoples to bump up against each other and get to know each other better.

cW: Yes, sometimes it’s how we can be involved in bringing the two together.

GCR: Why can’t a mining company say, Look we are engineers here to do our work, we can hire some people and do some training but really we are going to stick to our knitting?

cW: that is just not the way people do business anymore, it isn’t enough to generate economic activity. People don’t just work there – they live there. it’s far too complex a situation to be exclusive. You have to bring everything together in order to be successful.

GCR: How do you view the responsibility on the First Nations or Aboriginal side of relations. What do they need to be work-ing on to help these relationships work?

cW: the resource industry brings great opportunity to communities. i think First Nations would be well served focusing on economic develop-ment, the opportunities that are abun-dant in mining and how those com-munities can take advantage of those,

direct employment and training op-portunities and business development.

the industry is looking out into the fu-ture and seeing a labor shortage. First Nations populations and demographics align very nicely as a future workforce for the industry.

GCR: Is that why you’re sponsoring the youth forum at the CAMA (Canadian Aboriginal Minerals Association) con-ference this year?

cW: Yes, we felt that was an important area to sponsor. Aboriginal youth are near and dear to my heart, and i see them as being a big part of the mining industry down the road. so the earlier we engage them the better off we are going to be in the long term.

GCR: How do you actually bring together these two different mindsets and two dif-ferent sets of priorities, apart from being physically on the same piece of dirt?

cW: there is a variety of opportu-nities that can be bridged. but you have to be able to see both sides to see where those opportunities lie. it does take time but today’s mining industry has to be inclusive, otherwise you are going to have opposition that is vocal and consistent.

GCR: What do you see as regulatory or government roles in these relationships?

cW: they have an interesting rela-tionship because it’s a nation-to-na-tion, government-to-government rela-

70 THE GLOBAL COMMODITIES REPORT ISSUE 04 71

tionship with the First Nations. that relationship can be rocky and it can also be very good. A lot of times the industry’s perspective is that we are caught in the middle of a historical and complex situation. industry comes in wanting to move things forward and there are all of those relationship sen-timents that come into the room when you are talking with First Nations.

GCR: You come in regarding a mineral resource, which is provincial, but you’re dealing with an Aboriginal community,

which relates federally. That must get complicated.

cW: it does, but i sense on the govern-ment side a willingness to look at how industry can facilitate stronger rela-tionships, and how industry and First Nations manage to work together.

GCR: What do you think your relation-ships offer Governments?

cW: Well, we live it in real day-to-day experiences. i feel there’s room for

more sharing in terms of how their relationships and our engagements work and how governments could play a role supporting the engagements be-tween the industry and First Nations.

GCR: One of your corporate presenta-tions says that education drives growth. Obviously short-term training is good because you want employees through the gate. But education, that’s a longer term investment.

cW: Yes. if you look at the demo-graphics of the Aboriginal population in canada, youth is the fastest grow-ing group, and the communities have a younger average age. so there is op-portunity there for a future workforce. if we go back to the government con-tribution for a second, there needs to be a more substantial role for govern-ment in the education of Aboriginal people.

GCR: Problems in the youth sector are well known. Do you see education and the prospect of careers helping?

cW: Yes, and it’s starting but there is still a long way to go. Goldcorp has some informal youth engagement pro-grams and we are working on more formal lines. We are also looking at other strategic partnerships to help that along.

but i do feel that anything that is done has to be community-driven – supported by a chief of council, sup-ported by the elders, supported by the leadership in the community and the

Snapshot

Goldcorp Market Cap: $39billion

Annual Revenue: $4billion

Operations: 20 mines, 22 joint ventures

Locations: ontario, Quebec, south Dakota, Nevada, mexico, Honduras, Guatemala, Dominican republic, chile, Argentina

Gold Production: 2.7moz. projected for 2011

Reserves: P&P M&I InferredGold (moz.) 60.1 25.7 20.5silver (moz.) 1,300 458 117copper (mlbs.) 5,406 598 1,534Lead (mlbs.) 7,275 2,580 229Zinc (mlbs.) 17,575 8,269 608

72 THE GLOBAL COMMODITIES REPORT ISSUE 04 73

youth themselves. And do the legwork to make it successful.

GCR: Do you get pushback from commu-nities saying, Wait, wait, wait, this is go-ing too fast. Or on the mining side, Why aren’t we getting any action here?

cW: Good question. bridges take time to build. First Nations communities are very much about the relationship – once you have a strong relationship you can get a lot done. Great things. but it takes a lot of time and energy, and a lot of face time. And it doesn’t necessarily move as quickly as you would hope if you are on the industry side. so the two timelines don’t always coincide.

but if you can solidify the relationship, you can get along for quite a long time and grow together. As a good example, the musselwhite Agreement that was developed in 1996 was one of the very first Aboriginal impact benefit Agree-ments negotiated in the country and is still considered by many as “best prac-tice”. [musselwhite (Goldcorp, 100%) is a fly-in underground gold mine in northwestern ontario producing nearly a quarter-million ounces of gold annually.] that agreement was estab-lished in 1996 and it was founded in a relationship that exists to this day.

GCR: What do you think the industry can learn from the Aboriginal community? Besides being environmental boots on the ground, understanding the way the ter-rain works.

cW: the First Nations view on envi-ronmental protection and how it in-teracts with everything is something that the industry is starting to look at and awaken to. that we’re not work-ing independently, we interact with society, we interact with communities, we interact with the environment, we interact with each other and we are all part of this thing called mother earth.

GCR: Now, when you are talking about engineering, finance and marketing peo-ple, when something like Mother Earth comes up does that actually reach them?

cW: it goes a little better than you’d think. i’ve been in the industry for 20 years and i see industry recognizing the connections.$

Goldcorp Inc.

vancouver, british columbia

goldcorp.com

stock symbol: tsX: G; NYse: GG

74 THE GLOBAL COMMODITIES REPORT ISSUE 04 75

The Right Footing

Rio Tinto Alcan and the Haisla First Nation

The Kitimat aluminum smelter was built smack in the middle of the claimed traditional territory of the Haisla First Nation back in the oblivious 1950s. With a $2.5 billion upgrade in the works, it was time to re-engineer the social relationship as well.

A long overdue formal agreement, called the “Haisla Nation – rio tinto Alcan Legacy Agreement”, has been achieved between rio tinto Alcan, the owner and operator of the aluminum smelter at Kitimat, british columbia, and the Haisla First Nation, both of whom re-side at the headwaters of the Douglas channel in northwestern bc.

While the first relationship protocol and series of meetings between the par-ties began just over a decade ago, the

current relationship took work, but both parties ratified the 30-year re-newable agreement in support of the aluminum operations at Kitimat. this smoothes the way for rio tinto Alcan to move ahead with its three-year, $2.5 billion modernization project and fa-cilities upgrade, establishes a Legacy trust Fund for Haisla community de-velopment, and opens up opportunities for Haisla members to participate and benefit via training, employment and procurements.

76 THE GLOBAL COMMODITIES REPORT ISSUE 04 77

the resulting Legacy trust Fund will receive annual payments and be man-aged by the Haisla Nation council and their trust Fund management compa-ny. the funds will be applied to social, economic and community development in the Haisla community.

colleen Nyce, manager, corporate Af-fairs and community relations at rio tinto Alcan (and also manager commu-nications and external relations for the Kitimat modernization Project), says that the new technology being installed in Kitimat will be the first application of the company’s proprietary AP40 alumi-num production technology, which prof-fers to boost aluminum production ca-pacity by almost half (from 282,000 tpy to 420,000 tpy capacity) while reducing

overall emission intensity by close to 50%. “And that includes a GHG reduc-tion of half a million tonnes a year,” she says. “it’s a significant investment for the company but it is certainly a win for all the other players as well - the envi-ronment; the region; the Haisla Nation; and the province of british columbia.”

AN AWKWARD START

You could say it’s about time. When the Alcan operations at Kitimat were origi-nally built in the 1950s, in the heart of the Haisla traditional territory, it was in an era when indigenous peoples’ inter-ests weren’t on the radar for corpora-tions and governments, and there was little thought given to the impact on the Haisla. When Alcan opened the smelt-

Haisla Nation - Rio Alcan Legacy Agreement - official document signing in Vancouver, B.C Haisla Nation - Rio Alcan Legacy Agreement

78 THE GLOBAL COMMODITIES REPORT ISSUE 04 79

er in 1954, it attracted a surge of about 10,000, primarily non-aboriginal work-ers and residents to the sparsely popu-lated area. both sides admit that the re-lationship has been strained at times.

When the facilities upgrade was first an-nounced in 2006, the Haisla approached the company about using this as an oc-casion for both parties to put relations on a better footing. the agreement took three and a half years to negotiate and was ratified by the band membership by just over two-thirds in 2010.

the agreement accomplishes three things. “First, it settled the past,” Nyce says. “the parties coexisted all these years primarily without paying much attention to the other. Yes, there was

friction along the way, but that has now been put behind us. second, it establish-es our current intention to work togeth-er, including employment, training and business opportunities. And third, the establishing of a cooperative relation-ship keeps our eyes on moving forward to the future – this is a 30-year commit-ment with 10-year renewal options.”

Nyce says that most of the short-term opportunities will be during the con-struction phase where Haisla members will gain opportunities for industrial work experience and procurement con-tracts. When asked how represented the Haisla are in the current rio tinto Alcan workforce, she admits, “i would say the number of Haisla workers in our current operation is rather low in com-

Haisla Nation-Rio Tinto Alcan Legacy Agreement - Celebration of the signing

80 THE GLOBAL COMMODITIES REPORT ISSUE 04 81

parison to the general population. there are many reasons for this, one of which is lack of education and training capac-ity which is being addressed by our joint ownership of a local training school, Kit-imat valley institute. there are a lot of effort and initiatives taking place as a result of our new relationship with the Haisla Nation and we feel quite confi-dent that the new opportunities being made available to the Haisla will gener-ate a lifetime of sustainable work and business opportunities.”

the downside of increased technologi-cal efficiency through the Kitimat mod-ernization Project admittedly will be that the permanent operating personnel needs will actually shrink from 1,400 to 1,000. but rio tinto Alcan notes that no layoffs are involved. “While the next

three years of construction will see an on site temporary workforce peaking at about 2,000, the permanent operation will gradually reduce by natural attri-tion (retirements),” Nyce says. “What’s great about all of this is not only will we have a bright new shiny world class smelter that is productive, efficient and environmentally friendly, but we will have secured the aluminium industry in british columbia for many more de-cades to come”.$

c01 GrouP

“Cut the Cake” - Haisla and Kitimat leaders celebrate their agreement.

Rio Tinto Alcan

Kitimat, bc

riotintoalcaninbc.com

Back up at the surface, the town of God-erich has the only Great Lakes Seaway-depth port on the east coast of Lake Huron. The town is spearheading a $47million refurbishment of the facili-ties – largely to maximize production from a recent $70million expansion of the Sifto mine, but also for other oppor-tunities.

According to Mayor Deb Shewfoot, God-erich’s longest-standing, the city bought

the port from the federal government in 1998 after four years of negotiat-ing. “The facilities were neglected and charging too much,” he says. “We bought it, reduced the fees and undertook a 15-year, $29million plan for overdue repairs and improvements.”

Shewfoot outlines this renovation as a $47million project that will expand the footprint to 15 acres, including landfi ll, new docks, storage facilities, new break

82 THE GLOBAL COMMODITIES REPORT ISSUE 04 83

SALT CELLARGoderich Port Expansion

The Canadian town of Goderich is spearheading a $47million project to expand its port facilities on Lake Huron, largely to accommodate the expansion of Sifto Salt’s underground mine – the largest of its kind in the world.

To picture the Sifto Salt mine in Goderich, Ontario, think:• down 550 metres below the surface (same as Toronto’s CN Tower is high)

• a series of large, high-ceilinged rooms with walls of solid crystaline salt

• where they blast the walls every night and spend the day scooping up the 92-98% pure salt with front-end loaders

• in a complex reaching 5km out and under Lake Huron

• that reaches all the way under the Great Lake to Michigan.

As long as there’s a need for rock salt for winter roads, swimming pools, water softeners and salt licks for livestock, Sifto can be in business.

wall and other repairs and access im-provements. the construction will cre-ate 500 jobs. the Province of ontario is kicking in $15.7million, sifto has agreed to $19million in additional fees over 5 years (with a 25-year renewable lease.) And no municipal taxes – the city’s God-erich Port management corporation will raise the balance through port revenues.

oddly, the upgrade was rejected as a fed-eral “build canada” infrastructure stim-ulus project. “Frankly, we were disap-pointed,” says shewfoot. “Nevertheless,

the city instigated this project, not only to relieve the production bottleneck at sifto but with additional interest from three or four grain companies, an aggre-gate and gravel company up north, and the local railroad spur.

“Naturally, sifto trucks through the winter, but also some 18,000 truckloads through the summer months which could be going by water. shipping by lake freighter is actually a more ‘green’ alternative and more economical for the company.”

Goderich Port Harbour

84 THE GLOBAL COMMODITIES REPORT ISSUE 04 85

vironmental assessment involved, in-cluding up to $1million for fish habitat rehabilitation for other locations. “We have also been in consultation with a First Nations group who have a pend-ing claim that begins on the north side of the river mouth where much of the work will be done,” says shewfoot.

“i have a vision for Goderich as a gate-way to southern ontario. You can ship to anywhere in North America from here in 48 hours,” he says. “And one of the more green things we can do is bet-ter utilize the Great Lakes waterways for shipping.” $

SALIENT FACTSthe michigan salt basin was an ac-cidental find at Goderich and the first recorded salt bed in North America. it was discovered in 1866 by sam Platt, a local flour mill owner who was pros-pecting for oil in the aftermath of the first North American oil well a couple of hours south in oil springs, ontario, in 1858. Platt’s discovery triggered some-thing of a “salt rush” of 12 local mines.

the original process was to flush the salt as a brine and boil off the water in large kettles. Now, sifto mines, crushes and ships 9million tonnes a year and there’s no end in sight for this resource.

the parent company, compass min-erals, based in Kansas, owns six other related companies, including a records storage business … that might sound off-point, but they archive documents 800m below the surface in an old salt mine in cheshire, england.

sifto is the largest local employer since expanding and a volvo heavy equipment factory closed three years ago. “the port improvements will help even out some of the seasonal peaks and valleys in jobs at sifto,” says shewfoot.

being located at the mouth of the mai-tland river, there are two phases of en-

Goderich Port Salt MineGoderich Port Salt Mine

86 THE GLOBAL COMMODITIES REPORT ISSUE 04 87

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88 THE GLOBAL COMMODITIES REPORT ISSUE 04 89

2020 Vision for the Kidd Mine

For a mining town like Timmins Ontario, Xstrata Copper Canada’s announcement that it is extending the mine life of

the world-class Kidd Mine is welcome news.

For the second time in the past three years, Xstrata Copper Canada has an-nounced that it is extending the project-ed mine life of the Kidd Mine. This time to 2020. The previous such announce-ment in 2008 had bumped the closure back to 2017.

Quoted in Timmins’ The Daily Press, the mine’s General Manager, Tom Semad-eni said, “We’re seeking to lengthen the life of the mine and the concentrator to 2020. Last year, our (expected) life

was 2017, we now think 2018, and we’re working towards 2020.”

The Kidd Creek Mine, as it was fi rst known, was discovered in 1964 and opened in 1966. It was one of the larg-est and richest volcanic massive sulfi de discoveries in the world, bearing copper, zinc, indium, cadmium, silver and sulfu-ric acid. The mine produces 3.4 million tonnes of ore per year, rendering 52,000 tonnes of copper and 45,000 tonnes of zinc in 2010.

Goldcorp Pit, South Porcupine

90 THE GLOBAL COMMODITIES REPORT ISSUE 04 91

Xstrata bought the Kidd operation from Falconbridge in 2006. In 2008, Xstrata decided to take the mine from 9,100 ft. in depth to 9,500 ft. at a cost of $148 million. This made Kidd the deepest base metal mine in the world and, due to the curvature of the Earth in the Canadian north, the closest to the center of the Earth. Deepening the mine over the last decade has cost $800 million. The Kidd mine and concentra-tor employ 1,400 and this latest mine extension is expected to add about 60 jobs.

In May of this year, however, Xstrata closed the Kidd smelting plant, taking 670 jobs with it. The concentrate is now shipped into Quebec to Xstrata’s Hoyle plant – now the only copper smelter operating in Canada. The Province of

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Living and mining happen in close proximity in Timmins, pop. 43,000.

Robert Calhoun of “Discover Abitibi” has seen 19 mining projects approved in the last 3 years.

92 THE GLOBAL COMMODITIES REPORT ISSUE 04 93

Ontario is launching a $225,000 feasi-bility study looking for future uses for the Kidd smelter facility.

All of these changes impact Timmins, a city of 43,000. “Xstrata is a signifi cant employer and between their investment and how that money circulates within Timmins, the economic benefi ts are

signifi cant,” says Robert Calhoun, the Project Manager of ‘Discover Abitibi’, a pilot geosciences project administered by the Timmins Economic Develop-ment Corporation, coordinating geo-science surveys and research in north-eastern Ontario. “The mine extension also gives the city more time to look at ways of diversifying the local economy.

“Fortunately, there are also several other very large developments in the surrounding territory for which Tim-mins will be a regional service cen-tre,” he says. “There’s the billion-dollar Detour Lake mine to the north of us; Lakeshore Gold is redeveloping their mine and mill on the east side of the city, and developing a new mine, Tim-

mins West, on the other side; Goldcorp is extending the nearby Hoyle Pond mine; Northgate Minerals is redevelop-ing the Matachewan gold mine … there is a lot going on here.”

“The bottom line here is that there are three spin-o� jobs for every mining job created.” $

Timmins-Mattagami River

ISSUE 04 95

Hidden in Plain Sight Why corn ethanol still struggles

Between all the US buzz the around clean energy, green jobs, secure energy supply, alternative (read, non-OPEC) sources of oil, and US farmers caught between over-productivity and agricultural subsidies … you’d think these would be golden years for corn-based ethanol. Well, it’s complicated.

We asked John Caupert, Director of the National Corn-to-Ethanol Research Center, for his take on the state of an industry where agriculture meets energy policy.

First, a bit of background. John caupert is the Director of the National corn-to-ethanol research center (Ncerc) af-filiated with southern illinois university in the heart of the us corn belt. He was raised on a diversified grain and live-stock farm nearby, took his bachelor’s and master’s degrees in agriculture eco-nomics and gravitated to the policy side of agriculture, worked for the National corn Growers Association and joined Ncerc in 2006.

this research, testing and training cen-tre was instigated by a $400,000 feasi-bility study commissioned by the illinois

corn Growers, a statewide commodity and trade group, 20 years ago. on the strength of that study, $14million in fed-eral funding and $7million in state mon-ey was secured in 1997 to create Ncerc.

caupert oversees a $3+million annual budget (90% is income from private sec-tor studies) and a staff that can run up to 20 or 30, depending on the studies underway and the number of students involved. Ncerc has trained 500 quali-fied ethanol plant personnel on their on-site ethanol pilot plant – originally built to 1:50 scale of a commercial plant, but now 1:250 due to the way industrial fa-

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cilities are scaling up.

Global Commodities Report: You have a number of programs and a pilot plant where you produce ethanol …

John caupert: All types of bio-fuels, ac-tually. right now, we are running our first ethanol project in 23 months. over the last two years, every project we con-ducted has been for virtually every bio-fuel except ethanol.

GCR: Why two years of doing other stuff?

caupert: that is where the client de-mand has been. Ncerc is a public, non-profit entity affiliated with the uni-

versity – “public” meaning that anybody can come here and do work. the private sector has been coming to our fermenta-tion labs and bio-fuels pilot plant to do a tremendous volume of advanced bio-fuel work, defined by the us environ-mental Protection Agency as basically anything other than ethanol – butanol, bio-butanol, embutanol … You name it, we’ve done work on it for somebody in the private sector.

GCR: So why is ethanol not an advanced bio-fuel?

caupert: the ePA defines advanced bio-fuels as having a greenhouse gas emis-sion 50% less than convention gasoline.

And anything other than corn-based ethanol. it is extremely political and there were some that worked very, very hard to have corn-based ethanol exclud-ed from the grocery list.

GCR: Objectively, on which side of that 50% emissions reduction marker would your corn-based ethanol land?

caupert: it would depend on the plant. if it was built prior to 2004, it would likely not meet that 50% reduction. but if that same plant adopted just one of the new process technologies commer-cialized over the last 5-7 years, such as corn fractionation, it would. if they adopted two or more new technologies,

their percentages would be overwhelm-ing. but again no matter how good they are, no matter how efficient they are, no matter how outstanding their carbon footprint is, they are still excluded be-cause of the language in renewable fuel standards. this is highly charged politi-cally and challenged almost constantly.

GCR: Who wants to exclude corn-based ethanol?

caupert: in 2008, we had a tremendous run-up in global food prices. corn eth-anol became an easy target for certain sectors of the media saying that corn which could be utilized for human food is being converted to fuel to be put in

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an automobile, and that this is the root cause of the increase in global food pric-es. this theory was totally debunked by folks like bruce Dale at michigan state university, the us Department of Ag-riculture’s Dr. Hussein chiappori, Dr. roger conway, chief economist at the us Department of Agriculture, and others.

but in 2008, crude oil went from $40 a barrel to $140 a barrel – nearly four-fold. And on average, the food on most Amer-icans’ plates travels 1,800 miles. there is a direct correlation between petroleum prices and food prices. Particularly in-ternationally, in countries dependent on imports of us agricultural products.

the myth was out there that corn etha-nol is a root cause of price increases in

the global food crisis and that campaign was very well funded. it was extremely difficult to track down where the mon-ey was coming from. but we know that groups such as grocery manufacturers and others were fueling anti-ethanol fuel rhetoric.

GCR: Petroleum lobbyists?

caupert: You might wonder, but the pe-troleum industry is our customer – they purchase bio-fuels to blend with their gasoline. At any rate, it’s a stigma that we still have – you can’t get a dollar out of Washington for anything related to corn-based ethanol. so for the last 24 months, our contracts have been for anything but corn ethanol.

GCR: So if not corn, are you working with

algae or beans or other grains? Or dirt?caupert: oh, we are still doing a lot of corn projects. but instead of ethanol they are converting it into other things. that same kernel of corn that won’t qualify as an advanced bio-fuel, we have successfully converted into many other fuels and bio-based chemicals. corn is a magical feedstock. there are well over 600 commercial products in the market-place made from corn.

but corn-based ethanol will be back again because it has been proven to work. it just works. it is the only com-mercially viable form of renewable fuel in the united states. the most efficient, proficient and sustainable. As a nation we have spent hundreds of millions of dollars in the last decade exploring cel-lulose-based ethanol and do not have

our first commercially running cellu-lose ethanol plant. Will there be one? Yes, there will. Probably in the next 18 months. but corn ethanol is not going to go away. there is just a lot of politics to be sorted out.

i am not saying, nor would i ever say, that corn ethanol is going to replace our petroleum supply of gasoline, and i don’t think anybody would ever argue that corn ethanol is a replacement. it is just one of a number of renewable fuels that can assist countries around the world in efforts to wean themselves off fossil fuels.

GCR: To wean off, or to stretch current supplies?

caupert: Good point. i would say both. We send about a billion dollars a day to [oil-producing] folks around the world. i work and live for the day when the unit-ed states has successfully weaned itself off of imported, foreign oil from nations that don’t like us very much. Getting off of oil completely is a fantasy, but we could wean ourselves away from those who are antagonistic toward us, and uti-lize renewable fuels as a complement to our existing fuel supplies.

GCR: What are the price implications?

caupert: the renewable Fuel Associa-tion has said that having nearly 10% of our domestic fuel supply made out of corn ethanol is keeping the average gas-oline price in the united states down by about 89 cents a gallon. that is a really big number. it means every time i pull

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into the filling station i’m saving $15-18 because this country is producing and utilizing ethanol.

GCR: What are the implications for ag-riculture?

caupert: What is often forgotten is that the corn ethanol industry in the united states was revitalized six, seven, eight years ago by corn farmers tired of three

decades of commodity prices that were either at or below their cost of produc-tion. so in places like iowa, illinois, Nebraska, south Dakota and minnesota they got together and said, ‘You know we need a value-added opportunity.’ And, boom, they revitalized the corn ethanol indus-try overnight. in some small rural com-munity there would be a meeting among local corn farmers to talk about building an ethanol plant and 500 farmers would pool not only their money but their com-modity corn and build an ethanol plant.

that is how and where and why this in-dustry was rebuilt. these us farmers said enough is enough, we are taking this in our own hands, and we had this rebirth of the corn ethanol industry.

GCR: Yet ethanol still has the air of nov-elty about it.

ethanol fuel from corn is not new. the industry has been around for 80 years. i

have photos from Lincoln, Nebraska, in the 1930s that show cars lined up at a filling station for corn-based ethanol.in the last three-to-five years, Wall street has become a major player. And the petroleum industry, evidenced by valero, the largest us-based oil refin-er in the united states, bought enough corn ethanol plants to the point where they’re about the third largest produc-er in all of the united states. there are about 200 of these corn ethanol plants in the united states. i would estimate half are still farmer-owned.

GCR: What side of the climate change debate do you see ethanol landing on?

caupert: there is another myth that for every acre of corn in the united states grown for ethanol, an acre of brazilian rainforest is being destroyed – again it is a complete fallacy. the brazilian Government has demonstrated that, if anything, as renewable fuel produc-tion increases, the pressures driving

destruction of the brazilian rainforest decreases. but again it is an accusation that is out there by the anti-corn etha-nol crowd.

there’s a professor at cornell univer-sity, Dr. David Pimentel, and for a few years he had a lot of horsepower as an anti-ethanol expert. by academic train-ing he is an entomologist, a bug doctor. that doesn’t disqualify him from talk-ing about corn ethanol, but when you deconstruct his anti-ethanol rhetoric, he simply doesn’t like corn. if you step

back, he simply doesn’t want us produc-ing corn in such volumes. ethanol pro-duction just becomes the symbol and target.

GCR: Getting back to climate, is ethanol going to help or hinder?

caupert: the facts are on the side of corn-based ethanol helping. A basic corn ethanol plant’s greenhouse gas emissions are 20% lower than for gaso-line. With the old technology in a stan-dard standalone plant – no upgrades, no modifications, no new process technolo-gies. upgrades change that rapidly.

GCR: But in my gas tank, ethanol wouldn’t change my emissions, would it?

caupert: it absolutely would. the 13bil-lion gallons per year of ethanol in the us domestic use of fuels cuts carbon emis-sions by nearly 2million tonnes per year. ethanol in the fuel supply is a cleaner burning fuel.

GCR: You are in the midst of a $3-4mil-lion construction project?

caupert: Yes, capital gift donations are financing a new fractionation system. it separates out various components of corn kernels at the front of the conver-sion process. the shell is a very, very strong bonded fiber coating – corn frac-ing removes that. it also removes the corn germ, where the oil is stored – a very, very high value food form. And what you are left with is the starch for conversion to ethanol. A kernel of corn contains about 73% starch.

The 13billion gallons per year of ethanol in the US domestic

use of fuels cuts carbon emissions by nearly 2million tonnes per year.

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a straight path to the markets.

GCR: Final question, what is your quest? Is there something that some potential thing that ethanol could be doing that you are reaching for?

caupert: i truly look forward to the day we break oPec’s hold through consum-er choice. And if the consumer choos-es to utilize bio-fuels wonderful, we all win. but for now that change would have to be driven by government mandates. Whether people love policies or loathe

them, the bio-fuels industry is a policy-driven sector of the economy. At least for now. $

“Whether people love policies or loathe them, the bio-fuels industry is a policy-driven

sector of the economy.”

National Corn-to-Ethanol Research

Center

edwardsville, illinoisethanolresearch.com

GCR: Okay, so the benefits of having a working pilot plant is practical experi-ence, it’s a real life demonstration, they see the real problems without you hav-ing to scale up to the size of a commercial plant.

caupert: Yes, our pilot plant fully em-ulates a commercial bio-fuel plant,

shrunk to fit in a 36,000 sq.ft. building. same processes and type of equipment, just smaller.

it is far more cost effective for the pri-vate sector to come here to do their scale-up work here, to do their learning, their proof of concept testing and finally their demonstration research. then it’s

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ISSUE 04 105

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