EDITORIAL PAGE (April 20, 1992)

Strategic alliances are nothing new. A business combination of any sort — a joint venture, a merger, a partnership — could be described as such. But in current use, the term has come to mean a common strategy of the major players in specific industries. For example, through a strategic alliance, Japanese steel makers were able to manipulate the price of coal downward by providing capital for mining projects throughout the world to the point of oversupply.

In mining, alliances between major mining companies are nothing new. The purchase of Falconbridge by Noranda and Trelleborg is one example, the interownership of Teck Corp., Cominco, MIM and Metallgesellschaft is another. Perhaps most interesting in these combinations is the global context — the combination of companies in Canada, Sweden, Australia and Germany to name just a few — and the notable absence of U.S. players.

But in terms of a national mining policy, a means of forming strategic alliances to further the objectives of Canadian mining companies and to meet the challenges that are peculiar to working in Canada, we have only scratched the surface.

There are some notable successes, particularly in the realm of research into mining techniques and equipment. But the one we find most intriguing, and the one that addresses what we consider to be the major issue facing Canada’s mining industry today, is a new effort aimed at research solely into exploration — the exploration technology division of the Mineral Industry Technology Council of Canada.

As Teck President Norman Keevil pointed out when unveiling the new co-operative venture, it is orebodies on which mining companies are built and the record of major discoveries in this country over the past 10-15 years has been dismal. With a couple of exceptions such as Hemlo and Louvicourt, we are living off the discoveries made 25 years ago or more.

Over the past 20 years the industry has invested about $12 billion (in 1989 dollars) on exploration, but has precious little to show for it. And that does not include the flow-through money that shows up as something of an anomaly in historical exploration spending trends.

The remarkable period of discovery of the 1950s and 1960s came about because of the fortuitous combination of a new geological concept of volcanogenic deposits and the new technique of airborne electromagnetic surveys. Although major discoveries in Canada have been rare in recent years, we’re confident that Canadian geology has not yielded up all its treasures. There are many more major discoveries out there waiting to be made, but to find them we need new tools and new concepts to guide their use.

A co-operative effort to come up with those is an exciting step in that direction. The tools that are developed could be put to use here in Canada and elsewhere in the world, further enhancing our reputation as a leader in mining innovation and expertise.

Individual companies may eventually have to compete for the orebodies that are uncovered, but joining forces — not simply to work a project but to raise the whole level of exploration expertise — is a bold new concept.