As the old year draws to a close, this is an opportunity to take a long look back at 2007 and make note of some of its significant events. Not all of us will remember this year for the same reasons, but here are a few things that stand out for me.
For the fifth straight year, COMMODITY PRICES remained strong. Gold, copper and nickel have reached near-record prices. The interest in so many high-priced commodities makes raising money for exploration and development easier than it has been for 40 years.
I will admit to holding my breath and dreading the inevitable cyclical downturn, but so far I have been wrong, and that is fine with me. Better yet, the analysts who get paid for prognostication are generally in agreement that prices will continue their upward climb for another two to five years.
SUSTAINABLE DEVELOPMENT is becoming a reality for indigenous people worldwide. The idea has moved from providing education and healthcare to villages near foreign mining developments, to signing new impact benefit agreements with Canada's First Nations. The operative word is "benefit" - in the form of support for local businesses, job training and a deepened respect for the land and people.
The STRONG CANADIAN DOLLAR, as it briefly topped the U.S. dollar in November, had Canadians rushing south to do their holiday shopping. Canadian retailers and manufacturers have felt the pinch, but the mineral industry has felt it less so. As long as production costs are controlled, Canadian mines can remain profitable because the minerals industry is much less reliant on differences in currencies for its profits.
A significant component of the production cost is labour, so the current LABOUR SHORTAGE is of great concern to the industry. As so many employees are eligible to retire in the next five or 10 years, there are not enough new geologists, mine engineers and trained professionals being educated to replace them. North American schools cannot fill the demand, so perhaps the industry should be looking for professionals from foreign countries, especially if the federal government can simplify the process by which their credentials are recognized in Canada.
I will remember 2007 as the year NON-GOVERNMENTAL ORGANIZATIONS (NGOs) in Eastern Europe put their politics ahead of local peoples' welfare. Toronto's Gabriel Resources would have developed the Rosia Montana gold project in Romania, had it not met with such a well-funded wall of opposition. That means the current environmental problems stemming from previous mining will not be remediated, people will not have jobs or new houses with running water and heat, nor will the area benefit from the many economic spin-offs that mining would create. Some of the NGOs got this one very, very wrong.
The last 18 months marked the birth of a new growth industry - MERGER MANIA. Beginning with Xstrata's takeover of Falconbridge and Vale's takeover of Inco, merger proposals continue to fly around the industry, aimed at companies of all sizes and specialties. Rio Tinto's takeover of Alcan was big, and even bigger is BHP Billiton's bid to take over Rio Tinto. I've lost track of the number of junior companies involved in takeovers and mergers, both friendly and hostile. I can't help thinking that the legal profession is the greatest beneficiary of all this action.
That's what 2007 looked like to me. Readers are free to wade in with their own opinions.
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