Canada is the world’s foremost mining country and, despite decades of governmental neglect, the sector represented about $70-billion or 17% of the country’s estimated $400-billion in exports last year.
Fortunately, mining is on a serious upswing, led by raging commodity prices and actions by some enlightened governments, such as British Columbia’s. Two new mines will open this year for the first time in years, five are under construction and 18 more on the drawing boards.
In all, there are 650 exploration projects underway, and at least 30 discoveries have been made, which means there will be more mines down the road.
“Last year, there was $265-million in exploration spent, which is a record, the biggest ever,” said Bill Bennett, B.C.’s Minister of State for Mining. “In 2001, there was $29- million spent.”
Takeovers in the mining sector have hogged headlines this year, but these increases are the most important story for Canadians.
A measure of renewed interest is attendance at this year’s industry gathering in B.C., the “Mining Exploration Roundup” in Vancouver. Some 5,000 registered to network and attend its high-level technical sessions. In March, the world’s biggest confab — the Prospectors and Developers Association of Canada–is expected to host a record 16,000 in Toronto.
Canadians and their governments must realize that mining — along with oilsands technology, which is akin to mining — is what Canada does better than any other country. More than half the world’s mining financings are done in Canada.
“The two most important cities for the mining industry in the world are Toronto and Vancouver,” said Nova Gold’s CEO Rick Nieuwenhuyse in an interview.
B.C.’s uptick is impressive and shows what can happen when a pro-business government is in power. In a few years, the government of Gordon Campbell has boosted the province’s exploration spending to 16% of the Canadian total, up from 6%.
Another plus was the demise of the New Democrats, who ruined just about everything economic they touched, from shutting down mining to mishandling the energy and forestry dossiers.
Campbell’s regime has cut red tape, created a pro-mining attitude within the civil service and chopped capital taxes, which added to the cost of doing business. In addition, apprenticeship access has been improved in secondary schools to meet skills shortages, and Aboriginal involvement has been encouraged.
The province has also harnessed the Internet and boasts the best online database in the world. It will offer online permit applications by the end of this year.
“Mining revenues were up 37% to $6.29-billion last year, and mining now employs 7,000 directly and 21,000 indirectly in B.C.,” said Ron Pease, chairman of the Association of Minerals Exploration which sponsors the “Roundup”.
Underlying the buoyant figures, however, he pointed out that Canada is exporting less, when measured by volume. “We need more mines in Canada and have to fix the regulatory quagmire,” he added. “We need a clear, transparent and expedited process.”
The federal government drags its feet as do many other provinces or territories. This represents an impediment to expanding an industry that is one of Canada’s two biggest trump cards, along with oil and natural gas.
Mining, like the oil industry, creates high-paying, high-tech jobs. Average salaries in the sector are $94,000 a year. These industries also represent the only New Economy potential for Aboriginals and others living in the remotest portions of the country.
What’s interesting to note is that after 200 years of mining, there is still vast, unrealized potential. High commodity prices have made exploration in difficult regions viable and has led many to reopen mines that were not viable at low prices but now make sense.
“There are 25 mines now in development in B.C. which is the highest in Canada,” said Tom Schroeter, senior regional geologist in the province. “And now we have the Great B.C. Coal Rush.”
In the 1980s, Denison Mines Ltd. built a coal port in Prince Rupert and tried to exploit the large amounts of metallurgical coal in that portion of the province. But low prices, labour problems and financing issues with Japanese partners led to failure.
Today, there is renewed interest and the port is busy. Roughly, 37% of B.C.’s mining production is copper and 35% coal. But many other metals and minerals are plentiful here. This year, the first new metal mine to open since 1998 is Roca Mines Inc.’s molybdenum operation.
“A record amount was spent but more could have been, but there were constraints in terms of manpower and machinery,” said Mr. Schroeter. This was due to the massive oilsands development in Alberta.
“But our four-year forecast is that there will be $9.5-billion invested in 50 projects in B.C. creating 8,000 jobs,” he said.
The Yukon government is also getting its act together and posted record exploration spending of $83-million last year, said a spokesmen.
Diane Francis, Financial Post
© National Post 2007
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