Commentary: BC’s mineral exploration and development industry will continue to be a strong economic catalyst

It is with excitement, pride and optimism that we at the Association for Mineral Exploration British Columbia (AME BC) look forward to the year ahead. In 2014, B.C.’s resilient mineral exploration and development industry will continue to gain momentum, building on progress in 2013 and bolstered by mine openings, many advanced projects, a strong geological endowment and supportive geopolitical climate.

The strength, resiliency and experience of the industry were put to the test in 2013, and not surprisingly, the industry rose to the challenge. For many companies in the mineral exploration and development industry, last year provided an opportunity to build strategic partnerships, raise venture capital and private equity, enter into joint-venture agreements and explore not just here in B.C., but anywhere in the world.

The industry is well acquainted with the cyclical nature of the commodity sector, and many AME BC members have been taking this opportunity to prepare for the next upswing in the markets. While they may make modifications to their exploration programs and spending plans for the short-term, it rarely dampens the optimism for the future and spurs creative thinking for exploration activities and project development. Because of this optimistic spirit, combined with experience and a determined mindset, many advanced projects in B.C. made progress last year.

B.C. exploration expenditures in 2012 reached a record high of $680 million, and spending in 2013 is expected to be many hundreds of millions of dollars yet again. Internationally, B.C. is increasingly seen as a safe haven for investment in mineral exploration compared to other jurisdictions due to its mineral-development potential, stable government, infrastructure and improvements in its permitting regime. It’s estimated that B.C. attracted 21% of the exploration spending in Canada in 2013, compared to just 11% during the economic downturn in 2008–2009.

Most of the expenditures do not support grassroots exploration in B.C., but are occurring at advanced mineral and coal exploration and development. Mineral exploration, especially work undertaken by junior companies, is the lifeblood of the mining industry. Sustained investment in grassroots exploration and geoscience is required to discover new deposits. These will lead to advanced projects and new major mines in B.C., such as Mt. Milligan, a $1.5-billion open-pit copper–gold mine developed by Thompson Creek Metals. that employs 350 people north of Prince George. Construction of the mine started in late 2010, and the first ore was shipped in September 2013. And the industry will be further buoyed by seeing the 2014 opening of B.C.’s next major copper–gold metal mine, Red Chris, owned by Imperial Metals.

Also very exciting, the 287 kV Northwest Transmission Line from the Skeena substation to Bob Quinn is under construction by BC Hydro with a planned completion date of May 2014. This important infrastructure will bring electrical power to northwest B.C. and reduce the region’s reliance on diesel-generated power.       

B.C. is fortunate to have a government that supports responsible mineral exploration and development. But, for our province to reach its potential, improvements in ensuring access to land for exploring and a consistent, fair and science-based approach to permitting and environmental assessments are required. In an internationally competitive investment climate, having certainty of access to land, and robust and timely permitting, and environmental-assessment processes are essential elements to sustaining investor confidence, making new discoveries and advancing projects to development and into production.

Geoscience, prospecting and exploration are the only ways to discover valuable and rare mineral deposits, which may eventually become economically feasible to develop. But without access to the land there can be no discovery. The provincial government must commit to protecting the public’s valuable mineral, metal and coal-bearing lands. Reducing the land base and access to prospect, explore and potentially develop these critical resources results in lost social and economic opportunity for everyone, and is ultimately unsustainable.

Building positive relationships with First Nations is integral to responsible mineral and coal-resource development. In many ways, B.C. is a model for how industry, government and First Nations are working together to establish business ventures and economic-development agreements that benefit First Nations and provide more certainty and clarity for the exploration and development industry.

Mineral exploration and development are economic drivers in the province. The best indicator of successful mineral exploration and development is seeing a new mine open. These mine projects boost provincial and local economies, which improves infrastructure, health care and education for everyone, and provides much-needed family sustaining jobs for local communities.

The theme of AME BC’s upcoming Mineral Exploration Roundup 2014 conference is “resources for life,” which recognizes how essential metals, minerals and coal are to our modern society and everyday life. Consider that copper is a critical source for electrical wire, brass creates naturally bacteria-resistant door handles and gold is in mobile phones, while green technologies rely on steelmaking coal, which is used to make wind turbines, electric vehicles and bicycles.

The province’s excellent mineral and coal development potential and strong demand from Asia for commodities such as copper, gold and coal will be key catalysts for B.C.’s economy and the success of AME BC members operating here, especially given our geographical closeness to these markets. But we must not forget, or take for granted, B.C.’s international expertise in mineral exploration and development.

With more than 2,000 exploration, mining and service and supply companies, and the largest concentration of geoscientists in the world, our province is the undisputed global centre of excellence for the mineral exploration and development industry.

— Gavin C. Dirom is the president and CEO of AME BC.)