A Melman Minute
By: Leonard Melman
In our opinion, one of the great regulatory
blunders of all time was enacted by the United States yesterday, and it is a
blunder which could have adverse effects on the mining industry, both major
miners and juniors. We are referring to the decision to make polar bears an
“endangered species.” There are many ramifications to this decision.
First, we believe it is based on wrong logic, to put it mildly. The concept
behind the regulatory change is that the polar ice sheet is shrinking and,
therefore, the habitat for polar bears is also shrinking, thereby diminishing
their population and threatening their future.
However, verifiable facts show otherwise. London’s Express newspaper recently
reported that the polar ice sheet has expanded dramatically this past winter and
they noted that much of the world has endured the coldest winter in decades.
Also, Comcast.net news service just reported that the polar bear population from
Alaska to Greenland has more than doubled from about 12,000 in 1960 to over
25,000 today.
Viewed objectively, one cannot help but wonder what logic is being utilized to
justify declaring as “threatened” a species whose habitat is improving and whose
population is increasing! However, regardless of the logic or lack of same, the
designation of polar bears as a “threatened species” opens the door to a host of
new regulations because anything which might impact the creation of CO2 - which
means virtually any activity relating to the exploration for, production of, or
consumption of fossil-based energy fuels - could be interpreted as negatively
impacting the size of the Arctic ice shelf and therefore as a threat to those
lovable ursine creatures.
Predictably, the environmental community immediately seized on this ruling as an
excuse to demand a cessation of activities which would further threaten the
viability of the Arctic sea ice. While their immediate concern was oil drilling
in Arctic seas, we cannot but doubt that somehow, mining activities near Arctic
waters will also be interpreted as endangering those poor polar bears’
existence.
It’s not as if the environmental community needs any further excuses to continue
and even accelerate their anti-resource development positions. For example, we
note an article that Imperial Oil Ltd. was just handed a decision by the
Department of Fisheries and Oceans that jeopardizes an $8 billion oil sands
project because Fisheries listened to a group of environmentalists who had
declared that Imperial Oil’s environmental-impact-assessment application was
incomplete.
The procedures that must be followed can be literally mind-boggling. First,
Imperial had to spend millions of dollars and years of preparation to obtain the
original permit. Now that Fisheries has revoked that permit, Imperial must
complete the study as required. Then, Fisheries must declare the application
complete and submit the total application to the Canadian federal cabinet for
approval to reinstate the original permit. In the meantime, all preparatory work
at the project must cease.
We are particularly concerned about the tenor of a statement made by Sean Nixon,
a lawyer for “Ecojustice”, which represents ‘green’ organizations. He discussed
the difficulties of having proper parliamentary hearings and opted for more
court actions. Here is his quote, as reported by Canwest News Service…
“So the courts, when the governments aren’t openly allowing debate about pace
and scale of oilsands development, become the avenue of last resort for groups
like the ones we were representing.”
It is our opinion that this statement says something very threatening - and
ominous. The environmental community is openly declaring that they are prepared
to use the courts in order to tie up resource development - and we believe this
applies to mining as well as petroleum exploration.
However, we are also happy to point out a story with very positive implications
for mining, and one which may help overcome environmental objections to mineral
development. High on the list of environmental goals is the development of a
fuel-efficient automobile which will not only burn less gas, but will do so more
efficiently. There are several goals in mind to accomplish this.
First, one goal it to create a thinner, stronger metal alloy which will allow
cars to be built with increased safety yet diminished weight. Many of the alloys
being developed involve the use of strengthening minerals such as molybdenum and
aluminum. New research is also taking place toward the use of magnesium as an
alloy component.
Next, development of hybrid vehicles and battery-operated ones is going forward
as well, and these vehicles will require huge quantities of metals such as
copper, nickel, rare earth minerals and other mined materials far beyond normal
usage in ‘conventional’ auto manufacturing.
And so, in order to achieve their environmental goals aiming at pollution
reduction and conservation of petroleum fuels, the environmental community will
be forced to acknowledge the absolute requirement to mine these metals. We
believe that this process will begin to bring some sanity, balance and reality
back into the environmental equation as it relates to the mining industry.
One last note for our readers to consider regarding high metals prices. We have
heard of construction sites being robbed as thieves gather high-priced copper
wiring, plumbing fixtures and so forth. But this process reached a new low when
it was reported that the Veterans’ cemetery in Lockerbie, Nova Scotia has been
the scene of the theft of military memorials erected to honor Canada’s fallen
war heroes.
When anyone has to sink to the level of robbing the graves of a country’s
soldiers who gave everything for their nation, our only thought is: “How low can
you go?” Apparently, the answer is, “very low indeed.”
As of about 9:00 AM, markets this morning are providing a genuine
shot-in-the-arm for mining advocates as gold is up over (all prices US$) $20 to
the mid-$880s, silver is up by almost 40 cents to just under $17.00 and platinum
has soared by over $50 per ounce to just under $2,100. Base metals are higher as
well with copper showing a particularly large gain of eight cents per pound this
morning. Crude oil has returned to within a dollar of its all-time high, the US$
is somewhat weaker and financial markets are slightly higher in the USA and
strongly ahead in Canada.
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