Repairing the damage caused by mining companies to the environment and developing the technology to ensure compliance with new environmental legislation will have a serious financial impact on the industry, a prominent economist for Informetrica said. Mining company shareholders could forego a minimum of $7 billion in dividends over the next 10 years; mine workers could face wage squeezes and some existing operations may be shut down, says Carl Soonen, vice-president of Informetrica.
The total cost of such measures by all businesses in Canada will be about $84 billion, Soonen estimates.
The task will not be particularly onerous, Soonen says, because the effect will be to reduce the 10-year growth rate from 30% to only 20%.
Paybacks are unknown because common property resources (for example, air and water) are not currently measured in an organized way.
However, certain mining communities (such as Flin Flon, Man., which has not implemented a pollution abatement plan) may be adversely affected and the effects will not be felt evenly across the country.
For comparison, Canadians will likely spend an additional $17 billion over the next 10 years on health care than they did in the previous 10 years.
On the upside, Soonen points out that the technological solutions found to reduce such damage in the future may involve the use of mineral resources, thus increasing demand for these resources.
Soonen was speaking at the 8th annual Mineral Outlook Conference in Ottawa.
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