Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Demonstrators outside hearings for the Matoush uranium project. (Image from archives)
A group of doctors, environmental groups and First Nations leaders gathered in Montreal Thursday to urge Quebec’s new premier to keep the moratorium on uranium mining until the risks and effects of these kinds of operations on nearby communities have been thoroughly studied.
The suspension of uranium mining in the province came in effect in April last year, making Quebec the third Canadian jurisdiction, after Nova Scotia and British Columbia, to halt exploration and development of these kinds of mines.
The Bureau d’audiences publiques sur l’environnement (BAPE), the province’s environmental watchdog, is currently beginning a yearlong study on the matter, which will be carried out in three phases.
The results of this consultation could be critical for the future of mining in the east-central province, which has been losing its allure to investors in the last few years.
Mining investments in Quebec dropped significantly more than expected last year, plunging about 37% from a record year in 2012, and marking the first annual drop in a decade. The jurisdiction has also fallen in the famous index of mining destinations put together every year by the Fraser Institute, an independent think-tank: From being the No.1 desired place to invest in mining from 2007 to 2010, it barely reached the 11th place out of 96 jurisdictions last year.
Experts think the uranium moratorium speeded up the fall and companies with interest in the area are a testimony of that. Strateco (TSE:RSC), based in Boucherville, has been waiting for years for a certificate of authorization from Quebec’s environment department to begin exploration work at its Matoush site in the Otish Mountains, about 275 kilometres north of Chibougamau.
The junior has began legal action against the provincial government and announced an impairment charge of $87 million in its accounts due to its inability to proceed with the project’s underground exploration program.
In November Quebec refused to authorize the Matoush underground exploration phase. Strateco said it had invested over $123 million to date in the project, the most advanced of about 20 proposed uranium mining projects in northern Quebec which were part of former Liberal premier Jean Charest’s plan to develop Canada’s north.
