EDITORIAL Curragh’s zinc mine a triumph for the North

The success of Curragh Resources’ rejuvenated zinc-lead mine is a triumph of many dimensions. It testifies to Clifford Frame’s tenacious ambition, it bolsters Canada’s position as a mineral producing nation and it demonstrates how the public and private sectors can co-operate to further regional development.

We were skeptical when Frame hatched his plan in 1985 to buy the shut down Cyprus Anvil open-pit mine at Faro, Y.T. To get the project off the ground it took $15 million worth of concessions from the Yukon government plus a guarantee from the federal government on a $15-million loan. That begged the question: if the project is worthwhile, why does it need public assistance? Canada’s other zinc producers, who compete directly with the reborn mine, were incensed and banded together to protest the governments’ involvement. That led to the most unbecoming spectacle of Donald Lowe, then president of Kidd Creek Mines, leading a band of five senior mining industry executives in denouncing government meddling in an industry devoted to free enterprise. That group seemed to dismiss two other controversies of the day involving zinc producers: that the federal government controlled the company that owned Kidd Creek or that only through government participation could Cominco finance the upgrading of its smelter complex at Trail, B.C.

Now, two years later, Curragh is mining more tons of ore at Faro than ever before at about half of what it cost before the mine closed in 1982. Curragh has paid back, out of cash flow, that $15-million loan the federal government guaranteed and the Yukon economy is enjoying the benefits that come with fuller employment.

Without doubt Curragh got preferential treatment. Not only did the government bend over backwards to make the operation viable, the bankers gave it one of the sweetest deals we’re aware of, letting Curragh pay interest on its debt only when it could afford to. Even the unions backed off so that Curragh could get the mine going. And, of course, Curragh had to go outside Canada to finance the project resulting in 46% of the mine being owned by an Australian company.

But the result is a mine which once represented 40% of the Yukon’s economy back in operation employing 400 people directly and many others indirectly. Cominco, Noranda, Falconbridge and other zinc producers, meanwhile, are all enjoying healthy profits.

If regional development in this country is to be anything more than political hot air, if the north is to enjoy some of the prosperity other Canadians take for granted, then projects like the Faro mine are essential.

That’s not to say governments must keep dying mines on publicly-funded life support systems. That type of approach is one that Canadians must resist the same way we must resist the urge to prop up uncompetitive industries by tariff barriers or any other artificial means. But, much the way flow-through shares funnel the money of individual Canadians into the less prosperous regions of Canada, so, too, can government assistance help get mines like Curragh’s back on their feet. The result in both cases is the creation of wealth and a more prosperous country for all Canadians.

The ability to offer that kind of assistance is something that must be protected in any trade deal. That sense of responsibility to other regions of the nation, much the same as one’s responsibility to help a fellow man who is down on his luck and needs but a helping hand to get back on his feet, is one of the fundamental characteristics that sets Canadians apart.

Those opposed to free trade may rail against opening barriers to commerce, but often that merely masks a willingness to defend their own comfortable status at the expense of others’ opportunity. One mine in the Yukon does more to ensure the continued vigor of the Canadian way of life than do a host of Margaret Atwoods or Bob Whites defending their protected income in the name of “cultural sovereignty.”