BC gov’t misinformed

The government of British Columbia’s proposal to eliminate the vital functions of the British Columbia Geological Survey Branch or to farm these out, greatly reduced, to independent contractors was addressed by a meeting of the caucus committee on resources in early December. The proposals are ill-advised and could irrevocably damage the Survey.

The province is beset with economic problems, owing to financial mismanagement by the previous government, exorbitant U.S. tariffs on softwood lumber, the recent but cumulative paranoia among tourists, and the cratering of high-tech industries. The energy and mining sectors of industry are in the best position to alleviate these financial problems. But the government appears misinformed on several points of exploration and mining.

Mineral production in British Columbia is nearing an all-time low. The Sullivan mine is due to close at the end of the year. The only deposit of similar net value in the province was included in the Tatshenshini wilderness area. Reserves at the seven remaining metal mines will all be exhausted by 2010. Metal prices will rise in the intermediate future, but that will benefit British Columbia only if new mines can be developed. It is a bad strategy to explore while prices are high and to mine when they are low.

Mineral exploration and mineral production are distinct entities, linked by a thread of development work, from initial prospecting or grassroots exploration to the final development of a producing mine. This takes time, usually at least five years. Exploration is a “loss leader”; only one in ten thousand mineral occurrences yields a mine, and to find new mines, the major mining companies need thousands of prospects.

Fully seventy per cent of the mineral deposits of British Columbia were discovered by prospectors. This figure has been unaffected by technological advancements in recent years. Prospectors are unencumbered by the corporate philosophy of major mining companies; they cover more ground, and are a lot cheaper to operate.

As a consequence of this, larger companies such as Teck Cominco no longer carry out grassroots exploration but acquire mineral properties from prospectors and junior mineral exploration companies. Prospectors and junior mining companies lack the resources to develop large mines. It’s more efficient to bring in a major mining company to carry the cost (and reap most of the profits) of mine development.

Efficient mineral exploration requires a comprehensive geological database based on regional geological mapping, research and ongoing re-evaluation and re-interpretation of existing information. A neglected database declines in value with time. The existing database is far from complete; areas within two hours’ drive of Vancouver have not been mapped on a detailed or regional scale in more than 50 years. To put this in context, the discovery of tectonic plates in the earth’s crust dates from 30-40 years ago.

Prospectors and many junior mineral exploration companies do not have the independent resources to carry out this type of research. The larger mineral exploration groups (for example, Hunter Dickinson) and major mining companies, despite their non-involvement in grassroots exploration, are reluctant to share their fund of geological information.

Farming out of piecemeal mapping contracts to independent contractors is impractical for three reasons: quality of work, continuity of experience, and conflict of interest. Consider the following:

– Independent contractors will be selected on the basis of cost rather than quality of mapping.

– Ongoing re-evaluation of existing geological data in the light of new information requires intensive knowledge of the entire database. Sharing of that knowledge among independent, competing contractors is unlikely, to put it mildly. The only way of ensuring effective collation in contract work is sole-sourcing.

– Who gets the contract? The only reasonable candidates are in conflict of interest, because they are already exploring for minerals in British Columbia.

– Sole-sourcing, at contract rates, compares unfavourably with the sole source already on hand: an experienced, dedicated team of geologists who have made the study of the Canadian Cordillera their lives’ work. The only rationale for it would be cosmetic; that is, to be seen to be reducing the payroll burden and transferring the inflated cost to a less publicly visible part of the provincial budget.

Assembling, re-evaluating and disseminating a comprehensive geological database by a disinterested third party is crucial to new mineral discoveries. The Geological Survey Branch is the only cost-effective team able to deliver this service. Destroying it is an irreversible step; once scattered to other employment, the team cannot be reassembled. This step should not be taken without a lot more consultation, this time with all of the mineral industry.

Studies across Canada have shown that, in provinces with an attractive business climate, every one dollar of investment in government geological surveys generates three dollars in private sector exploration. The British Columbia Liberal Party’s stated intention during the 2001 election campaign was to make the province attractive again for business. The present policy of destroying (there is no gentler word for it) the existing Geological Survey Branch will effectively remove any incentive for prospectors to find mineral deposits in British Columbia. As a consequence, the metal mining industry will all but disappear by 2010. With it will go the rural communities that depend on mining, together with at least 8,000 jobs. Employment in mining and mining-related jobs, together with revenues collected from mining, totalled more than $4 billion in the year 2000. The cosmetic effect of “saving” $4 million from the Geological Survey Branch’s budget (and $350,000 from the Regional Geologist Program) will be measured in the eventual loss of approximately $1,000 per British Columbian per year.

I find it grimly amusing that a political party whose election platform was to “get the province back to work” is effectively completing (surpassing) the work of the much-vilified New Democratic Party government in its wilful destruction of the infrastructure for a badly needed resource industry. I suspect that neither the electorate nor potential investors will share my amusement. Only the desperation of imminent bankruptcy could panic a farmer into “saving” money by not buying seed.

Perhaps it is neither desperation nor panic, but this administration’s actions will be interpreted as such by investors whose interest the province can ill-afford to lose. The provincial government ought to reconsider this ill-advised and irrevocable action.

— Paul Metcalfe is a professional geoscientist based in Bowen Island, B.C.