On the Level Ontario mining faces almost insurmountable hurdles

“Go north, young man, go north.” But not in Ontario.

There’s nothing wrong with the geological environment in that once-prosperous province, but governments are changing the fiscal and operating environment.

Mining in Ontario is in deep, deep trouble. Ironically, it is currently celebrating what it calls 100 years of Mineral Resource Partnership. Over that period it has built up a huge bureaucracy, loading the dice ever more against the operator.

Looking back to the ’50s when I was field engineer for this paper, I used to make semi-annual sweeps of the then-booming mining camps of northwestern Ontario. But what a sad change one finds there today.

Taking the CP’s famed Canadian (gone) out of Toronto overnight to White River, I would taxi to Manitouwage to visit Noranda’s lucrative Geco base metals mine (still operating) and the adjoining Willroy (closed). Then catch the mail truck to a tiny flagstop called Hemlo (well before the nearby gold discovery) for the train to Port Arthur where I would pick up dad’s car and drive to Beardmore and Geraldton to visit the Leitch, Little Long Lac, MacLeod-Cockshutt and Hard Rock gold operations. There are no mines in either of those camps today.

I would then drive to the booming iron range at Atikokan, dropping in at the North Coldstream (closed) copper-gold operation at Burchell Lake on the way. Both Steep Rock and Inland Steel’s Caland Ore were pouring out millions of tons of high-grade ore and pellets. These are now down tight as are the Sherman, Adams, Lowphos and Marmoraton iron mines. The only remaining iron ore producer in Ontario today is at Wawa, which is also slated for closure. Yet just across Lake Superior in the U.S., iron ore mines are booming, employing some 6,000 miners extracting much lower-grade ore.

Then on to Winnipeg, Man., for a flight to Red Lake and Pickle Lake. Red Lake then boasted seven producers Madsen, Starratt, Campbell, Dickenson, Cochenour, Mckenzie and McMarmac (only two remain) while Pickle had two fine dividend-paying producers Pickle Crow and Central Patricia (both closed).

In those days The Northern Miner regularly carried a full column of dividend announcements from mining companies, mostly from Ontario firms. These are few and far between now.

Exploratory drilling is at a standstill. Other than Sudbury, there are only one or two new producers on the near horizon. And after the tough new mining act kicks in, it could be five years before we see any more because of the lengthy permitting process, an authority tells me.

Even after obtaining today’s demanding work permits, the holder faces further impediments. If work is to be carried anywhere within the northern watershed (almost the entire north country), he must obtain Indian approval before actually commencing.

Even getting anyone to serve as a director or officer of a junior company operating in Ontario today could be difficult. The New Democratic Party’s new labor ministry has just tabled legislation that would make senior officers, not just directors, personally liable for up to six months of employee wages if a company goes under. Furthermore, it covers anyone who might resign from a failing company at the last minute, the intent being to go back a year before the bankruptcy.

And today the cost of closing a mine can be steep. Indeed it could well cost as much to close a mine in Ontario as opening it payable in advance via bond posting. Even old mine sites going back to the turn of the century are now being cleaned up by the government and charged against present land owners who had nothing whatsoever to do with the operation. I hate to think what it might cost to close the likes of the Denison uranium mine at Elliot Lake.

Unquestionably, Ontario’s mining attraction is slipping and slipping badly. Premier Bob Rae must seriously address the all-important cost of doing business or mining in dear old Ontario is headed right down the drain, for the rising disparity in operating costs in the U.S., Mexico and Chile are driving our mine developers and money in that direction in droves. For starters, he must realize he has a couple of kooks in his fledgling cabinet who should be shown the exit door before they bankrupt the province.