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Canada’s oil sands region becomes country’s COVID-19 hotspot

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Osum Oil Sands

By Nia Williams

CALGARY, Alberta (Reuters) – Canada‘s remote oil sands region in northern Alberta has become a COVID-19 hotspot, disrupting essential annual maintenance work at its massive oil sands plants.

The oil-rich province of Alberta is battling the highest rate of COVID-19 in Canada as the country grapples with a third wave of the pandemic, and on Thursday hit a record for new daily infections, topping 2,000 a day for the first time. The Regional Municipality of Wood Buffalo, home to the oil sands, has the highest rate of active cases per capita in the province.

Maintenance work is critical for production from Canada‘s oil sands, which hold the world’s third-largest crude reserves and produce 3.1 million barrels per day, accounting for roughly three-quarters of the country’s total output.

Twelve oil sands plants including Canadian Natural Resources Ltd’s Horizon and the Suncor Energy-owned Syncrude project are tackling outbreaks while in the middle of annual maintenance projects that require flying in extra workers from as far away as Atlantic Canada.

In total, there are 822 active cases at oil sands sites, according to Alberta Health. One worker has died.

Suncor has pushed back the maintenance turnaround on the U2 upgrader at its base plant site by at least a month to see if infections subside, said Terry Parker, executive director of the Building Trades of Alberta, representing 18 local unions.

“It’s a very stressful situation right now that they are facing,” Parker said, adding some workers were leaving the oil sands because of fears about becoming infected. “The owners are taking the precautions necessary, and we are still contracting this disease.”

A Suncor spokeswoman said the company is making minor adjustments to pre-work and day-to-day activities, but it remains on track with its planned maintenance.

CNRL, Suncor and Syncrude said COVID-19 safety protocols are in place. They have implemented rapid testing and isolation camps in a bid to slow the COVID-19 surge.

One contractor at CNRL’s Horizon plant, which has 328 active cases, the highest among the oil sands sites, said workers are tested every four days but that seemed to be having little impact on the outbreak.

“You have 8,000 people on site for four weeks, it’s going to be a thing,” he said, declining to be named because he is not authorised to speak to media.

Indigenous leaders this week called for stricter measures to control the spread of the virus and accused Alberta Premier Jason Kenney of “prioritising profits over lives” by allowing infected workers to come to the region.

Gil McGowan, president of the Alberta Federation of Labour, called on Kenney to shut down work sites with outbreaks across the province, including the oil sands, to get the virus under control.

“This is a recipe for needless infection and needless deaths,” McGowan told Reuters.

Alberta has more than 21,000 active COVID-19 cases, including 632 people in hospital.

 

(Reporting by Nia Williams; Editing by Christopher Cushing)

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Calgary Stampede to proceed with limited events

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The Calgary Stampede, an annual rodeo, exhibition and festival that is also Canada‘s biggest and booziest party, will go ahead this year after being pulled in 2020 due to the pandemic, though it will not look and feel the same, an event organizer told CBC Radio.

“It won’t be your typical Stampede … it’s not the experience that you had in years past,” Kristina Barnes, communications manager with the Calgary Stampede, told a CBC Radio programme on Friday.

She said organizers were still deciding whether to include rodeo or the grandstand show in this year’s version.

Known as “the greatest outdoor show on earth,” the Stampede draws tourists from around the world for its rodeo and chuckwagon races, but much of the action happens away from official venues at parties hosted by oil and gas companies.

“The Safest and Greatest Outdoor Show on Earth is what we’re going to call it this year,” Barnes said, adding the organizers are working directly with Alberta Health to ensure Stampede experiences stay “within the guidelines” that may be in effect in July.

The event is scheduled to take place between July 9-18, according to the Calgary Stampede website.

Last month, Alberta Premier Jason Kenney told reporters the Calgary Stampede can probably go ahead this year as Alberta’s coronavirus vaccination campaign accelerates.

Barnes and the office of the Alberta premier were not available for immediate comment.

The cancellation of the event last year was a crushing disappointment for Canada‘s oil capital.

The news comes as Alberta has been dealing with a punishing third wave of the pandemic, with the province having among the highest rate per capita of COVID-19 cases in the country. Data released on Friday showed the province had 1,433 new cases, compared with the seven-day average of 1,644.

 

(Reporting by Denny Thomas; Editing by Chris Reese)

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U.S. trade chief pressured to lift duties on Canadian lumber

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 As U.S. Trade Representative Katherine Tai prepares to meet her Canadian and Mexican counterparts on Monday to review progress in the new North American trade agreement, she is under pressure from home builders and lawmakers to cut U.S. tariffs on Canadian lumber.

Shortages of softwood lumber amid soaring U.S. housing demand and mill production curtailed by the COVID-19 pandemic have caused prices to triple in the past year, adding $36,000 to the average cost of a new single-family home, according to estimates by the National Association of Home Builders (NAHB).

Republican lawmakers have taken up the builders’ cause, asking Tai during hearings in Congress last week to eliminate the 9% tariff on Canadian softwood lumber imports. Senator John Thune told Tai that high lumber costs were “having a tremendous impact on the ground” in his home state of South Dakota and putting homes out of reach for some working families.

The Trump administration initially imposed 20% duties in 2018 after the collapse of talks on a new quota arrangement, but reduced the level in December 2020.

“The Biden administration must address these unprecedented lumber and steel costs and broader supply-chain woes or risk undermining the economic recovery,” said Stephen Sandherr, chief executive officer of the Associated General Contractors of America. “Without tariff relief and other measures, vital construction projects will fall behind schedule or be canceled.”

On Friday, White House economic adviser Cecilia Rouse said the Biden administration was weighing concerns about commodity shortages and inflation as it reviews trade policy.

The tariffs are allowed under the U.S.-Mexico-Canada Agreement on trade, which permits duties to combat price dumping and unfair subsidies.

The U.S. Commerce Department has ruled that lumber from most Canadian provinces is unfairly subsidized because it is largely grown on public lands with cheap harvesting fees set by Ottawa. U.S. timber is mainly harvested from privately-owned land.

Tai said she would bring up the lumber issue with Canadian Trade Minister Mary Ng at the first meeting of the USMCA Free Trade Council, a minister-level body that oversees the trade deal.

WILLING PARTNER

But Tai told U.S. senators that despite higher prices, the fundamental dispute remains and there have been no talks on a new lumber quota arrangement.

“In order to have an agreement and in order to have a negotiation, you need to have a partner. And thus far, the Canadians have not expressed interest in engaging,” Tai said.

Youmy Han, a spokeswoman for Canada‘s trade ministry, said the U.S. duties were “unjustified,” and that Canadian Prime Minister Justin Trudeau has raised the issue with U.S. President Joe Biden.

“Our government believes a negotiated agreement is possible and in the best interests of both countries,” Han said in an emailed statement to Reuters.

But builders are growing frustrated with a lack of high-level engagement with high-level Biden administration officials on the issue as they watch lumber prices rise.

“They are clearly still gathering facts, which is even more frustrating given that this issue has been going on since before the election, before the inaugural,” said James Tobin, a vice president and top lobbyist at the NAHB.

 

(Reporting by David Lawder and Jarrett Renshaw in Washington and David Ljunggren in Ottawa; Writing by David Lawder; Editing by Paul Simao)

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Centerra to fight Kyrgyzstan takeover of its gold mine

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Centerra Gold said on Sunday it has initiated binding arbitration against Kyrgyzstan government, after the parliament passed a law allowing the state to temporarily take over the country’s biggest industrial enterprise, the Kumtor gold mine operated by Centerra.

Recently, a Kyrgyzstan court also imposed $3.1 billion fine on Kumtor Gold Company (KGC), which operates the gold mine, after ruling that the firm had violated environmental laws.

The gold miner said that it intends to hold the government accountable in the arbitration for “any and all losses and damage” due to its recent actions against KGC and the Kumtor mine if no resolution is reached.

“The Government’s actions have left Centerra no choice but to exercise our legal rights, through the pursuit of arbitration and otherwise, to protect the interests of KGC, Centerra and our shareholders,” Centerra’s Chief Executive Officer Scott Perry said in a press release.

Kyrgyzstan has a long history of disputes with Centerra Gold over how to share profits from the former Soviet republic’s biggest industrial enterprise.

 

(Reporting by Maria Ponnezhath in Bengaluru; Editing by Lisa Shumaker)

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