As uranium soars above US$100 per lb., can it last? / 14
THE NORTHERN MINER | MARCH 2024
GLOBAL MINING NEWS
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Feds must force pensions to fund Canadian mining, Lassonde, Giustra say FINANCING
| Aussie retirement plans dwarf Canucks in domestic investment
BY COLIN MCCLELLAND
O
ttawa has to pressure pension funds to invest billions in Canadian mining, a radical change from their almost non-existent stakes, if the industry is ever going to produce enough metals to fight climate change, veteran entrepreneurs Pierre Lassonde and Frank Giustra say. Canada’s eight largest pension funds hold some $2.1 trillion in assets but only a quarter was even invested in the country last year, according to research by Montreal-based fund manager LetkoBrosseau. The so-called Maple Eight devoted just 3% to Canadian equities, the lowest of a group of six countries including the United States, the United Kingdom and Japan, data show. “They’ve taken the vast majority of this money — 75% of it — and invested it outside Canada to create jobs outside of Canada to the detriment of Canadians,” Lassonde, a founder of Franco-Nevada (TSX: FNV; NYSE: FNV) and a former president of Newmont (NYSE: NEM, TSX: NGT), said in a February phone interview. “Essentially, the mining industry has been ignored.” Pension funds are not investing in large Canadian mining companies, which may in turn invest in juniors, in part because few domestic options remain. Switzerland-based Glencore’s (LSE: GLEN) acquisition of most of Teck Resources’ (TSX: TECK.A/TECK.B; NYSE: TECK) coking coal assets in November for about $9 billion is the latest large deal scooping up Canadian assets. Xstrata, now part of Glencore, bought nickel giant Falconbridge for $39 billion in 2006, the same year Brazil’s Vale (NYSE: VALE) purchased the country’s other main nickel producer, Inco, for $19 billion. Australia’s Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO) followed a year later in acquiring aluminum producer Alcan for $38 billion. Lassonde and Giustra say pension fund investing might have helped them stay. “We’re talking about very large companies, mining giants that we lost to foreigners,” said Giustra, who founded Lions Gate Entertainment (Fahrenheit 9/11, The Hunger Games) and helped start Wheaton Precious Metals (TSX: WPM,
Teck Resources’ Highland Valley Copper mine in British Columbia. TECK RESOURCES
PM44082538
PENSION FUND REQUIREMENTS FOR DOMESTIC INVESTMENT: Pierre Lassonde
Frank Giustra
NYSE: WPM; LSE: WPM) and Endeavour Mining (TSX: EDV; LSE: EDV). “These aren’t risky companies. This was the backbone of our mining industry in this country.”
sion funds around the world is 52%, according to LetkoBrosseau. Pensions are the largest single repository of wealth in most countries and globally hold nearly US$50 trillion. Reaching net zero emissions by 2050 will require annual clean energy investment worldwide to more than triple by 2030 to around US$4 trillion, according to the International Energy Agency. Just mining enough battery metals over the next three years will cost as much as US$450 billion, the agency said. In 2022, Ottawa budgeted nearly $4 billion in spending on critical minerals by 2030 but it’s not clear how pension funds are being engaged to support projects.
Rules eroded Indeed, Canadian pensions were required to invest 90% of their assets domestically in 1990, but federal governments gradually reduced the limit before removing it entirely in 2005. Total domestic exposure as a percentage of assets ranges from 55% held by the Healthcare of Ontario Pension Plan to 13% run by Public Sector Pension Investments (PSP). The average of other pen-
1990: 90% 2005: 0%
“The government of Canada continues to engage with critical minerals stakeholders, including pension plans and other institutional, arms-length investors,” Michael MacDonald, a spokesman for the federal Natural Resources Ministry, said in an emailed reply to questions. Pensions on P11 >
Agnico looks to Mexico ops to patch labour woes / 22
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