http://www.theglobeandmail.com/report-on-business/small-business/sb-growth/going-global/the-big-mistake-canadian-companies-make-in-china/article13837007/

http://www.theglobeandmail.com/report-on-business/small-business/sb-growth/going-global/the-big-mistake-canadian-companies-make-in-china/article13837007/

The Globe and Mail’s interview with Peter Nixon, an entrepreneur in Hong Kong born in Montreal. He speaks about the biggest mistakes that Canadian firms make in China in an attempt to broaden their international business scopes. A very interesting interview.

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Future of BC LNG industry

BC’s several LNG projects, including production facility and transportation infrastructure are included in the BC action plan. By developing our vast amount of gas resources, the LNG industry bring more than 100,000 jobs and revenue for BC by exporting it. Additionally, the proportion of power production in BC by LNG will significantly increase.

However, like all power/natural resource development businesses, there are hurdles to overcome, such as the environmental assessment and consultation with the public. While a couple of projects have received a ‘go’ from the government with export permits and approvals to the environmental assessment, there continues to be public disagreement, albeit LNG being the ‘cleaner and safer’ method to transport and generate power from.

Once the industry overcomes certain hurdles with reliable evidence and expertise, the future of LNG in BC can remain brighter than other power-generating commodities such as coal.

Astronomers identify 12 mine-able asteroids

According to mining.com’s news article released yesterday, researchers have found 12 asteroids that could be blasted into accessible orbit and mined. These are called “Easily Retrievable Objects (EROs)”.

What do these asteroids hold within them? It holds iron ore, nickel and other precious metals at much higher concentrations than those within Earth, with the recent asteroid that passed earth having an estimated value of $195 billion in metal and fuel.

Currently, two asteroid mining companies, Planetary Resources and Deep Space Industries are looking into the feasibility of extraterrestrial mining along with NASA.

Canada’s shale gas opportunity

It is evident that Canada is one of the world’s natural resource superpower with vast amount of reserves hiding underneath our lands. Natural gas is not an exception.

Most of Canada’s natural gas reserves sit at the Western Canadian Sedimentary Basin (“WCSB”) which extends from the Northwest Territories to Manitoba. There are lots of development opportunity there; yet not much of it has been developed to its full potential.

With Asian demand for liquefied natural gas rise, and provided that Western Canada’s LNG terminal project at Kitimat is completed, it will lead to major developments in Northern BC and Alberta to export natural gas.

Aside from international demand, there are domestic demands which will lead to even more development in the WCSB. As coal-fired generation plants are retired with the new regulation, power generation companies will slowly be changing the method of power production to natural gas – a cleaner and safer method. 

BC coal for India

An Indian delegation visited BC to meet with Premier Christy Clark last week.

The Indian government forecasts that by 2017, the country will need additional 47 million tonnes of metallurgical coal. Albeit BC’s annual production being 24 million tonnes, BC sits on an estimated coal reserve of 13 billion tonnes with several new metallurgical coal mines in the environmental assessment process.

Overseas coal demand, especially in India, Japan, China and Korea are eyeing into BC for the close proximity and political/geographical stability and technology.

Although there were no deals in the meeting last week, Indian maintenance of good relationship with the coal industry in BC and the increased coal demand from India imply increased coal export from BC in the future. 

With protests regarding additional coal exporting capacity occurring by various environmental groups and residents of the affected area, it is a hurdle which BC needs to jump over.

 

Alberta cancels leases near Fort McMurray

Alberta has cancelled some leases ‘to make room for urban development stimulated by oil sands development’. Primary reason was that Fort McMurray requires larger land base to accommodate new residential and commercial growth.

Companies who held leases which have been canceled are:
Value Creation
Alberta Oil Sands
Cavalier Land
E-T Energy
Cenovus Energy
Koch Oil Sands Operating ULC
Suncor Energy
Scott Land & Lease
Laricina Energy
Grizzly Oil Sands ULC

The above companies, according to Alberta Energy, will be compensated for the cancellation of lease.

Iamgold share performance

Iamgold share performance

The globe and mail’s Lou Schizas came up with an interesting analysis on Iamgold regarding its share performance given the gold market’s (or any other mining commodity markets’) downtime and expected ‘end of gold’s rout’ as discussed in my previous post. 

Although it is dangerous to assume that other company’s share will also make a comeback with just one company’s ‘assumed comeback’, this is indeed an interesting news that may indicate the recovery of gold soon.

Downed commodities market imply great buy season

The mining commodities market is struggling – gold and copper are the best examples. Like the prior post I discussed about the gold bear market, the same can be said for other mining commodities. 

Many companies, who owns significant number of producing assets and has many exploration upside potentials are now undervalued severely. 

Some evidences suggest that this bear market will not last longer and is nearing its end; long-term investors are seeing this as they invest in downed commodities such as gold and copper to undervalued companies, hoping for the recovery with enormous capital gains.

Although there are countless examples of this happening, one good example is a recent attraction of numerous buyers for Glencore Xstrata’s Peru copper mine with the estimated capex of $5.2 billion for the project, which is anticipated to go into production (400,000t/y Cu) near the end of 2014.