COMMENTARY — Planning for our future

This is a time when Canadians should be considering and encouraging the startup of new mines across Canada, and time is of the essence.

For too long, governments and communities have complacently accepted the economic contributions of operations in Sudbury, Ont., Flin Flon, Man., Yellowknife, N.W.T., and Kimberly, B.C. However, reserves in these places are not unlimited, and one day, after decades of continuous operation, these producers will be faced with dwindling stocks.

These mines and others have contributed billions of tax dollars to the Canadian economy, and have sustained thousands of workers with substantial annual incomes.

Those operations are serviced with railways, roads and airports, as well as regional hospital and educational facilities. A large segment of Canada has benefited directly from these services. Beyond these considerable contributions, it is important to stress that unique skills and progressive technologies related to mining have grown over the decades. Canada needs its mines and mining communities.

However, mining here is facing considerable adversity. In particular, environmental reviews imposed on operations, both old and new, by the government have resulted in operational constraints.

Also, metals markets have experienced substantial price declines. Canada produces great amounts of gold, silver, nickel, copper, lead, zinc and uranium, but the prices of those metals have fallen.

Only in recent times has there been evidence of a soft recovery. In spite of these adversities, mines continue to produce and maintain substantial workforces and admirable ore reserves.

The issue of native land claims is also of concern to the industry. For example, the provincial and federal governments, in concluding a major treaty with the Nisgas bands in northern British Columbia, have conceded a resource tenure in an area of 35,000 sq. km of mineral-rich lands. In Labrador, the Inuit are contesting and impeding the multi-billion-dollar programs of Inco at the Voisey’s Bay base metal deposit.

A major review and overhaul of the permitting process for mines is in order.

Each party with a stake in a proposed mining operation must be represented at the negotiating table from the outset, and clearly state its demands and expectations. Only then can those who provide venture capital formulate policies and make decisions with respect to the requirements of the markets.

Environmental bonds are an odious burden to carry when raising capital for mine projects. Some other form of security should be considered, even a fee on production income. Such a provision would provide for a substantial financial reserve, which would be used to pay for the closure of a mine and related environmental reclamation.

In addition, mines must be assured of adequate private and public support in order to stimulate the development of a profitable and responsible operation.

In the case of isolated mines, support must be offered to cover such vital services as roads, airstrips, power, schools and hospitals.

Furthermore, adequate “tax holidays” should be considered for such operations. Under such a plan, all investment capital must be recovered and a substantial capital reserve established prior to taxation. In this regard, all taxation agencies, whether federal, provincial or municipal, are included. The formula for the capital writeoff can be reviewed from time to time so that any attempt at undue delay is controlled.

As Canada is a country of vast land area and limited population, we require actions and attitudes that will stimulate the exploration and development of mines. Thus, the new millennium will be an invitation to even greater progress.

— The author, a retired mining engineer, resides in Vancouver, B.C.