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Mining considered key to building the new green economy – Business in Vancouver

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Copper mining, crucial to electrical technology, is among the top sectors powering the green energy revolution | sergeyryzhov/iStock/Getty Images Plus

The CEO of one of B.C.’s biggest copper mines believes the “ultimate death” of the carbon economy will fuel new investments in infrastructure and responsible mining projects.

“Fundamentally, I believe that we are in one of these once-in-a-century economic changes, and that’s fundamentally driven by the ultimate death of our carbon-based economy – which is a mature economy now – and the transition to a green energy economy,” said Gil Clausen, president and CEO of Copper Mountain Mining Corp. (TSX:CMMC), which operates Copper Mountain near Princeton.

According to Michael Goehring, president and CEO of the Mining Association of BC, this “once-in-a-lifetime pivot point” presents a significant opportunity for the province’s mining industry and broader economy.

“Mining as an industry is an exciting place to be right now,” he said during a panel discussion on responsible mining at the BC Natural Resources Forum last week. “Mining as an industry is being viewed as a solution.”

Metals and minerals such as those found in B.C. play a necessary part of economies’ transition to cleaner energy sources and more environmentally friendly products.

“Copper is a critical element in our transition to a global green energy economy. Wind turbines, electric vehicles and energy distribution systems all rely on copper, and we expect demand will continue to grow,” said Clausen, adding that Copper Mountain Mining is “fully committed” to that broader economic transition.

But miners’ ability to supply that transition with sufficient resources to meet demand is not without its barriers. The sheer length of time it can take to get a project approved, built and operating can restrict supply. Weak commodity prices can also erode the economic viability of resource extraction.

“We’re going to see a gap between supply and demand, and I think that’s going to be quite significant,” Clausen said.

At the time of writing, the spot price of copper was about US$3.60 per pound, according to Kitco Metals – around the highest price the metal has fetched in the last five years. Its 60-year peak was nearly a decade ago, at close to US$4.50 a pound.

“There are a lot of projects that are marginally economic, unfortunately, in B.C. right now with current copper prices, but we could really see that change overnight and wake up a few years from now and have $6 copper,” said Kelly Earle, vice-president of communications with Skeena Resources Ltd. (TSX: SKE).

Earle noted that there has been some global interest in B.C. copper projects. Last year, for example, Australia’s Newcrest Mining Ltd. (TSX:NCM) acquired a large copper and gold land package from Skeena Resources for $7.5 million.

“The key factor though is really going to be the price of copper,” she said.

In addition to supporting a climate-conscious pivot to clean energy, B.C. miners are looking inward, and focusing on reducing their emissions and environmental footprints.

Copper Mountain Mining has committed to achieving carbon neutrality by 2035, and is striving to be one of the lowest greenhouse gas-emitting open-pit copper mines globally in the next 10 years. This year, it will implement Phase 1 of its electric trolley assist project, to reduce diesel consumption.

Pretium Resources Inc.’s (NYSE, TSX:PVG) Brucejack Mine in northwest B.C. emits 0.05 tonnes of carbon dioxide equivalent per ounce of gold – 10 times below the average emissions of intermediate gold producers, said company president and CEO Jacques Perron. Pretium is testing battery-powered electric haul trucks to replace the diesel trucks it uses underground.

“Responsible mining, at the end of the day, for me it means that we care,” said Perron. “Responsible mining is making sure that we consider everybody, and we look at all possible ways to minimize the impact of our activities.”

Skeena Resources is working to advance the second chapter of the Eskay Creek Mine project, which previously operated as an underground mine powered entirely by diesel. This next phase is envisioned as an open-pit operation that will run on green energy, a transition made possible by a hydroelectric power station less than 10 kilometres away.

“We are leading the way in building an economy that runs on green power,” said Earle. 

hwoodin@biv.com

@hayleywoodin

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Fed officials signal rates may head to ‘restrictive’ levels to stabilize economy – PBS NewsHour

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WASHINGTON (AP) — Federal Reserve officials agreed when they met earlier this month that they might have to raise interest rates to levels that would weaken the economy as part of their drive to curb inflation, which has reached a four-decade high.

READ MORE: U.S. prices see smallest rise in eight months, spurring hopes that inflation may be peaking

At the same time, many of the policymakers also agreed that after a rapid series of rate increases in the coming months, they could “assess the effects” of their rate hikes and, depending on the economy’s health, adjust their policies.

After their meeting this month, the policymakers raised their benchmark short-term rate by a half-point — double the usual hike. According to minutes from the May 3-4 meeting released Wednesday, most of the officials agreed that half-point hikes also “would likely be appropriate” at their next two meetings, in June and July. Chair Jerome Powell himself had indicated after this month’s meeting that half-point increases would be “on the table” at the next two meetings.

All the officials believed that the Fed should “expeditiously” raise its key rate to a level at which it neither stimulates or restrains growth, which officials have said is about 2.4 percent. Some policymakers have said they will likely reach that point by the end of this year.

The minutes suggest, though, that there may be a sharp debate among policymakers about how quickly to tighten credit after the June and July meetings. The economy has showed more signs of slowing, and stock markets have dropped sharply, since the Fed meeting.

Government reports have shown, for example, that sales of new and existing homes have slowed sharply since the Fed meetings, and there are signs that factory output is growing more slowly. Gennadiy Goldberg, senior rates strategist at TD Securities, suggested that the minutes released Wednesday might reflect a more “hawkish” Fed — that is, more focused on rate hikes to restrain inflation — than may actually be the case now.

Some officials, particularly Raphael Bostic, president of the Federal Reserve Bank of Atlanta, have indicated since this month’s meeting that the Fed could reconsider its pace of rate hikes in September.

At the meeting, Fed officials agreed to raise their benchmark rate to a range of 0.75 percent to 1 percent, their first increase of that size since 2000. The officials also announced that they would start to shrink their huge $9 trillion balance sheet, which has more than doubled since the pandemic.

The balance sheet swelled as the Fed steadily bought about $4.5 trillion in Treasury and mortgage bonds after the pandemic recession struck to try to hold down longer-term rates. On June 1, the Fed plans to let those securities start to mature, without replacing them. That should also heighten the cost of long-term borrowing.

Powell has said the Fed is determined to raise rates high enough to restrain inflation, leading many economists to expect the sharpest pace of rate hikes in three decades this year. Powell says the central bank is aiming for a “soft landing,” in which higher interest rates cool borrowing and spending enough to slow the economy and inflation. But most economists are skeptical that the Fed can achieve such a narrow outcome without causing an economic downturn.

WATCH: Inequality persists as the U.S. economy recovers from the pandemic

Stock prices have plunged on fears that the Fed’s rate hikes will send the economy into recession. The S&P 500 has fallen for seven straight weeks, the longest such stretch since the aftermath of the dot-com bubble in 2001. The stock index nearly fell into bear-market territory last week — defined as a 20 percent drop from its peak — but rallied Wednesday.

The minutes also showed that some policymakers decided it was appropriate to consider selling some of its holdings of mortgage-backed securities, rather than simply letting them mature. Sales would make it easier for the Fed to transition to a portfolio composed mainly of Treasurys, the minutes said. The Fed did not mention any timing of such sales but said they would be “announced well in advance.”

The Fed has said that by September it would allow up to $30 billion of mortgage-backed securities to mature each month, along with $60 billion in Treasurys. Many analysts doubt that the cap will be reached for mortgage-backed bonds, because mortgage rates having jumped more than 2 percentage points since the start of the year. That means that fewer homeowners will refinance their mortgages because their current loan rates are lower than what is now available in the mortgage market.

Fewer refinancings would force the Fed to sell mortgage-backed securities to maintain its plans to reduce its balance sheet.

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P.E.I. business group sets goals to boost economy — but first it needs workers – CBC.ca

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High-speed internet for all communities on P.E.I., increased wages and support for entrepreneurs — particularly women, Indigenous people and newcomers — were part of a new ​​five-year plan announced Wednesday to boost P.E.I.’s economy.

The Partnership for Growth formed in 2019, and over the last few years received input from more than 200 businesses.

The group has created a plan for economic growth that sets specific goals it wants to see met by 2026, such as increasing the Island’s GDP, improving wages and making P.E.I. a bigger player on the global market. 

“It’s now more important than ever to take the long term view, we’re coming out of COVID-19 our focus has been very short term, now we need to look at what are our priorities to make sure that we got back on track,” said Rory Francis, interim chair for Partnership for Growth.

But first, there are short-term issues that need to be addressed, including a shortage of workers in many industries.

Premier Dennis King said it’s important to work with businesses to help attract and maintain those workers.

‘Good blueprint’

“We also have to be a leader in making sure we have the housing for those that we’re going to need to do here, the skills training, there’s just so many components to this where government can be a leader but also a follower, a supporter as well,” he said.

“Government does best when we take our leadership from others and to have a group that has come together like this across so many sectors of the economy I think this gives us a good blueprint for that.” 

The province will continue to focus on immigration and creating business incentives to improve wages, King said.

The partnership has formed a committee that will help businesses figure out how to achieve their goals.

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German economy dodges recession as war, pandemic weigh – Financial Post

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BERLIN — The German economy grew slightly in the first quarter from the previous one, data showed, with higher investments offset by the twin impacts of war in Ukraine and COVID-19 that experts predicted would weigh more heavily in the three months to June.

Europe’s largest economy grew an adjusted 0.2% quarter on quarter and 3.8% on the year, the Federal Statistics Office said on Wednesday. A Reuters poll had forecast 0.2% and 3.7%, respectively.

The reading meant that Germany skirted a recession, often defined as two quarters in a row of quarter-on-quarter contraction, after gross domestic product (GDP) fell by 0.3% at the end of 2021.

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While household and government spending remained mostly at the same level as in the previous quarter and exports were down at the start of the year, investments grew.

Construction investments, boosted by mild weather, were up 4.6% from the previous quarter, despite price increases, and machinery and equipment investments rose 2.5%.

German business morale rose unexpectedly in May as its economy showed resilience, according to an Ifo institute survey published this week that found no observable signs of a recession.

However, there is no upswing in sight either, and Sebastian Dullien, director of the Macroeconomic Policy Institute (IMK), predicted the effect of the war and pandemic-linked restrictions in China – Germany’s biggest trading partner last year, according to official data – would be much greater in the second quarter.

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ING economist Carsten Brzeski said he was sticking with his baseline scenario of a slight GDP contraction in the second quarter after Wednesday’s reading.

“The build-up of inventories and weak consumption in the first quarter, as well as very weak consumer confidence, clearly dampen the optimism that traditional leading indicators are currently conveying,” he said.

A consumer sentiment index by the GfK institute inched up slightly heading into June from an all-time low in May, with household spending burdened by inflation.

The government forecasts economic growth of 2.2% in 2022. (Reporting by Miranda Murray and Rene Wagner; Editing by Paul Carrel and John Stonestreet)

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