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.
Canada’s mineral exploration and mining industry is asking Energy and Mines Ministers, currently in Winnipeg for their 73rd annual conference, to work on tackling several challenges that have resulted in Canada dropping to second place behind Australia as the most desirable mining destination in the world.
Prospectors & Developers Association of Canada (PDAC) President Bob Schafer said that as the downturn was still being felt by the mineral exploration and mining industry, action was required to ensure Canadians are able to capitalize on the great opportunities that lie ahead.
Restoring Canada’s status as the top exploration and mining jurisdiction in the world will require concerted and sustained effort by all jurisdictions, experts say.
“We will work with all jurisdictions and the Federal Government to ensure that Canada’s reputation and attractiveness as the premier location for global mineral investment is regained. In doing so, the substantial social and economic benefits—to all Canadians—that accompany these investments will be enjoyed,” Schafer said.
“The mining sector’s ability to continue its role as a powerful economic driver and top employer in regions across the country is in large part dependent on the decisions made by Canadians governments,” noted Mining Association of Canada (MAC) President and CEO, Pierre Gratton.
“There are incredible opportunities to achieve shared goals when it comes to socio-economic development, innovation, protecting the environment and solidifying Canada’s leadership in mining—let’s work together to seize them,” Gratton said.
A brief submitted by the Canadian Mineral Industry Federation (CMIF) details seven policy priorities that will help the industry overcome current challenges:
1. Financing for early-stage exploration: CMIF asks that all jurisdictions in Canada maintain and enhance fiscal incentives. In particular, the Ministers are asked to support the renewal of the Mineral Exploration Tax Credit (METC) and to sustain the flow-through shares system. These measures have helped Canada attract billions of dollars in investment and led to the creation of thousands of jobs in remote areas of the country.
2. Regulatory environment: The Ministers should ensure that the recently announced federal review results in an effective regulatory process that the public has confidence in, and that improves the competitiveness of the industry and attracts much-needed mineral investment to Canada. Federal-provincial coordination in this area is critical and provinces are strongly encouraged to participate fully in the review.
3. Aboriginal affairs: CMIF recommends that governments support efforts to enhance the participation of Aboriginal peoples in the industry through investments in health, education and skills-training, and government benefits and resource revenue sharing. CMIF also recommends that governments examine and address challenges related to how they are implementing the duty to consult.
4. Address the costs of operating in remote and northern Canada: CMIF recommends the creation of a northern infrastructure fund within the proposed Canada Infrastructure Bank, and strategic fiscal incentives to help offset the high costs of exploring and operating in remote parts of Canada.
5. Climate change, clean technology and innovation: The Federal Government should invest $50 million over five years in the Canada Mining Innovation Council’s Towards Zero Waste Mining strategy to achieve mutual goals of reducing GHG emissions and environmental impacts, and to support the transition to a lower-carbon future.
6. Land withdrawals: Removal of highly-prospective areas is reducing the attractiveness of Canada as an exploration destination. CMIF is calling on all jurisdictions to ensure that mineral potential is factored into all land withdrawal decision-making processes.
7. Strengthening Energy and Mines Ministers’ Conference: CMIF encourages Mines Ministers to undertake a study to understand how similar meetings are used as a means to drive improvements in government and industry performance.
Restoring Canada’s status as the top exploration and mining jurisdiction in the world will require concerted and sustained effort by all jurisdictions. CMIF looks forward to working in partnership with governments, industry, communities and Aboriginal partners to support a sustainable and competitive Canadian exploration and mining sector.
