The selling off of Canada

By MICHAEL HARRISAt what point does Canada become a toy country?

In August, the last of the major Canadian steel makers was sold to United States Steel Corporation for $1.1 billion. Earlier, Dofasco was sold to a European company which has since been swallowed up by Mittal Steel Co. of India.

This latest foreign takeover is just one in a list that is becoming longer than the Canadian winter. Canadian mining giant Inco Ltd., is now owned by Brazil’s CVRD, and Falconbridge Ltd. of Sudbury — which Inco tried unsuccessfully to acquire — is the property of Xstrata, a Swiss-based company. The combined selling price for these two famous Canadian companies was $38 billion.

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BHP Billiton, Rio Tinto Acquisitions Depend on Metals Prices, Demand

Posted by Dan Denning on Jun 19th, 2007

Now that South African Marius Kloppers is running Australian-icon BHP (ASX:BHP), is he more interested in Canadian aluminium producer Alcan (NYSE:AL) or America’s own Alcoa (NYSE:AA)? Or should he be more interested in his own shares?

Kloppers does not exactly have the same problem David Neal has at the Future Fund. Neal has to invest the money in something to offset a future liability. He cannot return cash to public pensioners.

BHP, on the other hand, does not have to make an acquisition. In February the company bought back nearly US$13 billion in its own shares. Chip Goodyear decided the best use of cash was to return it to the shareholders in the form of a buy-back.

Whether the new regime at BHP – or Rio Tinto (ASX:RIO) for that matter – decides to pursue major acquisitions depends on where they think we are in the commodity cycle. If you think we’re at the top of the cycle, where prices are more likely to decline than increase, you return cash to shareholders, or save it for a rainy day when assets are on sale for cheap. Or, cashed-up from years of bumper profits, you see consolidation in the sector as the big fish buy the little fish, and prices for metals gradually (or not so gradually) decline back to cyclical lows.

But BHP and Rio must think there is more life to the boom yet. We don’t know what their price forecasts for base metals are. But we do know nearly everyone on the planet has been surprised and taken a bit off guard by the strength and persistence of metals demand from China and the emerging world and is rushing to meet the demand with new resources.

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Rio Tinto says receives approval to buy Alcan

SYDNEY (Reuters) – Global miner Rio Tinto Ltd/Plc (RIO.L)(RIO.AX) said on Monday it has received U.S. anti-trust clearance for its $38.1 billion acquisition of aluminum maker Alcan Inc (AL.TO).

The U.S. approval follows the province of Quebec’s government approval for the takeover earlier this month.Rio formally launched a pre-agreed offer for Montreal-based Alcan in July, trumping an earlier hostile offer by U.S. rival Alcoa (AA.N).

Rob Zaleski: Anti-mining activist Churchill writes last warning

Rob Zaleski  —  8/27/2007 9:19 am

The whole idea never made sense to Roscoe Churchill.

Why would Wisconsin, with its rich abundance of lakes and forests, even consider opening its door to the mining industry? the retired elementary school principal from Ladysmith would ask.

Why jeopardize all that, he’d say, for an industry with a truly wretched past — as evidenced by the scarred landscapes of northern Minnesota and Michigan’s U.P.?

And nobody knew more about the industry’s misdeeds than Churchill and his wife Evelyn, who spent many summers in the 1970s and ’80s checking out mine sites throughout the United States and Canada.

“If there’s an open pit mine that hasn’t caused major pollution, I’d like the (Wisconsin) Department of Natural Resources to show me where it is,” he grumbled in 1991, shortly after the DNR approved permits that allowed the Flambeau Mining Co. — a subsidiary of Utah-based Kennecott Minerals Co. and British mining giant Rio Tinto — to build a 32-acre open pit copper mine near the Flambeau River in northwestern Wisconsin.

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