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Canada's mild winter disrupts key ice road to remote Arctic diamond mines – Reuters Canada

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TORONTO, March 30 (Reuters) – An unusually warm winter in Canada this year has delayed the opening of a 400-kilometer (250-mile) ice road that is rebuilt every year as the main conduit for Rio Tinto (RIO.L), opens new tab, Burgundy Mines (BDM.AX), opens new tab, and De Beers to access their diamond mines in the remote Arctic region.
The Winter Road, which serves the region accessible only by air for 10 months of the year, opened with a two-week delay in the middle of February, disrupting movement of goods along the ice road built over 64 frozen lakes.
Earlier this week, the Tlicho government in Northwest Territories (NWT) restricted movement of commercial trucks for few days in one of the winter roads due to anticipated warmer weather across, opens new tab the North Slave Region.
While diamond production remains unaffected, the delay underscores the challenges that companies face as the mines that make Canada the world’s third largest diamond producer come to the end of their productive life.
It also highlights the infrastructure hurdle for the NWT and Nunavut that are positioning themselves as the next frontiers in the exploration of critical metals, such as rare earth, cobalt and lithium, in the transition to a greener future.
The delays in building the Winter Road, which first became operational in 1982, have happened in the past, but this year’s is the longest delay in recent years, according to Tom Hoefer, senior advisor to the NWT and Nunavut Chamber of Mines.
“We did start the road a bit later as a result,” he said.
Climate change, driven by the burning of fossil fuels, coupled with the emergence of the natural El Nino climate pattern, pushed the world into record heat territory in 2023.
The impact of El Nino this year resulted in Yellowknife, the capital of the NWT, recording a maximum temperature of zero degrees Celsius (32 degrees Fahrenheit) in December and minus 8.7 degrees Celsius (17.6 F) in February, making it the warmest winter days in a decade, according to data from Environment Canada.
The Winter Road opens between late January and early April and requires minimum of 29 inches (74 cm) of ice for vehicles that can carry 26,000 kilograms (57,320 lbs) of gross vehicle weight, to transport diesel and dynamite required to operate the mines.
On warmer days, the engineers have found ways to trick nature by creating artificial ice using giant sprinklers to spray water high up in the air so that they cool and form thick layer of ice when they fall.
Paul Gruner, CEO of the Indigenous corporation Tlicho Investment Corp & Group of Companies said this year the warm winter at the start and if there is a warmer end of the season or an early spring, it could risk an early closure.
“So when you’re nibbling away on both sides of that, you start to create a very short season,” Gruner said.
The Winter Road is jointly operated by Burgundy Diamond Mines, Rio Tinto (RIO.AX), opens new tab and De Beers of Anglo American group (AAL.L), opens new tab which run the Ekati, Diavik and Gahcho Kue diamond mines respectively.
De Beers and Burgundy Diamonds said operations at their mines have not been affected by the mild winter. Rio Tinto declined comment.
The Winter Road costs C$25 million ($18.54 million) to operate for two months, which is shared by the three companies based on goods transported on the road and distance traveled.
However, the mines have a operational life of around 20 years and as they reach the end of life, they need to be shut down.
Rio Tinto has said it will close the Diavik mine in 2026 and De Beers plans to shut Snap Lake end of this year, while seeking to extend the life of Gahcho Kue.

CHICKEN AND EGG

Canada’s remote Arctic region, home to around 86,000 people, is facing the complete closure of all the diamond mines by 2030 and is looking for ways to keep mining alive.
The lack of infrastructure is a challenge and the shortened seasonal use of the ice road could hurt investments needed to mine critical minerals.
“If you’re in the exploration phase … and looking at using the winter road as part of your core business model, the risks start to come into … your decision making whether or not to advance a project,” Tlicho Investment’s Gruner said.
Hoefer of NWT and Nunavut Chamber of Mines said the two Northern territories, which are as big as Europe, have the highest infrastructure deficits in Canada – one of the reasons for the very high costs of living and doing business in the North.
“It is a chicken-and-egg situation, the mining companies probably won’t come unless there is some infrastructure, it’s just too expensive,” said Heather Exner-Pirot, director of Energy, Natural Resources and Environment program at Macdonald-Laurier Institute.
It costs C$3 million a kilometer to build gravel roads, Pirot said.
Mining groups are pushing for a mega infrastructure project that connects NWT to Nunavut that runs through the diamond mines could help unlock the mineral riches in the region. At least 23 of the 31 critical minerals listed by the Canadian government is found in the NWT.
“When the project comes up, it would replace the roads that have served mining for 40 years, but until that happens, the ice roads are required,” Hoefer said.
($1 = 1.3483 Canadian dollars)

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Reporting by Divya Rajagopal
Editing by Denny Thomas and Marguerita Choy

Our Standards: The Thomson Reuters Trust Principles., opens new tab

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Divya Rajagopal reports on Canada mining sector, where she covers breaking news on critical minerals deals, takeovers and mergers in the mining sector and how miners deal with climate change and ESG imperatives. Divya previously worked as a financial journalist with Economic Times and CNBC TV18 based out of India. She holds a Masters in Global Affairs from the University of Toronto and a Masters in Technology and Social Change from Lund University, Sweden.

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Telus prioritizing ‘most important customers,’ avoiding ‘unprofitable’ offers: CFO

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Telus Corp. says it is avoiding offering “unprofitable” discounts as fierce competition in the Canadian telecommunications sector shows no sign of slowing down.

The company said Friday it had fewer net new customers during its third quarter compared with the same time last year, as it copes with increasingly “aggressive marketing and promotional pricing” that is prompting more customers to switch providers.

Telus said it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers, down 30,000 and 3,000, respectively, year-over-year.

The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.09 per cent in the third quarter, up from 1.03 per cent in the third quarter of 2023. That included a postpaid mobile phone churn rate of 0.90 per cent in its latest quarter.

Telus said its focus is on customer retention through its “industry-leading service and network quality, along with successful promotions and bundled offerings.”

“The customers we have are the most important customers we can get,” said chief financial officer Doug French in an interview.

“We’ve, again, just continued to focus on what matters most to our customers, from a product and customer service perspective, while not loading unprofitable customers.”

Meanwhile, Telus reported its net income attributable to common shares more than doubled during its third quarter.

The telecommunications company said it earned $280 million, up 105.9 per cent from the same three-month period in 2023. Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.

It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year. Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.

Mobile phone average revenue per user was $58.85 in the third quarter, a decrease of $2.09 or 3.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.

It said customers are increasingly adopting unlimited data and Canada-U.S. plans which provide higher and more stable ARPU on a monthly basis.

“In a tough operating environment and relative to peers, we view Q3 results that were in line to slightly better than forecast as the best of the bunch,” said RBC analyst Drew McReynolds in a note.

Scotiabank analyst Maher Yaghi added that “the telecom industry in Canada remains very challenging for all players, however, Telus has been able to face these pressures” and still deliver growth.

The Big 3 telecom providers — which also include Rogers Communications Inc. and BCE Inc. — have frequently stressed that the market has grown more competitive in recent years, especially after the closing of Quebecor Inc.’s purchase of Freedom Mobile in April 2023.

Hailed as a fourth national carrier, Quebecor has invested in enhancements to Freedom’s network while offering more affordable plans as part of a set of commitments it was mandated by Ottawa to agree to.

The cost of telephone services in September was down eight per cent compared with a year earlier, according to Statistics Canada’s most recent inflation report last month.

“I think competition has been and continues to be, I’d say, quite intense in Canada, and we’ve obviously had to just manage our business the way we see fit,” said French.

Asked how long that environment could last, he said that’s out of Telus’ hands.

“What I can control, though, is how we go to market and how we lead with our products,” he said.

“I think the conditions within the market will have to adjust accordingly over time. We’ve continued to focus on digitization, continued to bring our cost structure down to compete, irrespective of the price and the current market conditions.”

Still, Canada’s telecom regulator continues to warn providers about customers facing more charges on their cellphone and internet bills.

On Tuesday, CRTC vice-president of consumer, analytics and strategy Scott Hutton called on providers to ensure they clearly inform their customers of charges such as early cancellation fees.

That followed statements from the regulator in recent weeks cautioning against rising international roaming fees and “surprise” price increases being found on their bills.

Hutton said the CRTC plans to launch public consultations in the coming weeks that will focus “on ensuring that information is clear and consistent, making it easier to compare offers and switch services or providers.”

“The CRTC is concerned with recent trends, which suggest that Canadians may not be benefiting from the full protections of our codes,” he said.

“We will continue to monitor developments and will take further action if our codes are not being followed.”

French said any initiative to boost transparency is a step in the right direction.

“I can’t say we are perfect across the board, but what I can say is we are absolutely taking it under consideration and trying to be the best at communicating with our customers,” he said.

“I think everyone looking in the mirror would say there’s room for improvement.”

This report by The Canadian Press was first published Nov. 8, 2024.

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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