The Ontario mining industry was certainly not immune to the series of curveballs that hit during the past year. Wildly fluctuating raw material demand and prices, labour troubles and the advent of new legislation are all changing the way the industry there operates. To get a sense of how companies are handling the challenges, CIM Magazine recently spoke with Ontario Mining Association (OMA) president Chris Hodgson.
CIM: The world economy has gone through a fairly turbulent time. How has this affected your members?
Hodgson: The biggest challenge was the freezing up of credit markets, which contributed to the huge drop in global commodity prices. This caused exploration activity to decline drastically, which in turn led to some downsizing and mine closures. Lately, things are starting to look up. Some of those closures have come back onstream. Prices have bounced back too. Over the longer term, continued urbanization and development around the world means that raw materials demand, particularly from emerging economies, will increase significantly.
CIM: How does the Ontario mining industry fit into all of this?
Hodgson: Ontario has an extremely favourable geology, which makes it a great place to do mining. Resources are quite abundant, ranging from base metals, such as nickel, copper and zinc, to precious metals, such as gold, silver, diamonds, platinum and salt. We even have industrial minerals. But geology alone does not automatically ensure success. Companies need to feel comfortable in the jurisdictions in which they operate. Fortunately, unlike some economies, Canada and Ontario have strong traditions of respecting the “rule of law.” Certainty of ownership, which is extremely important to investors, is well-protected here and tenure rules — the right to bring a mine into production — are applied fairly.
CIM: October marks the fifth anniversary of your becoming president of the OMA. What are some of the organization’s main accomplishments since you took office?
Hodgson: I was a bit lucky because I took over the helm of a strong association that my predecessor, Patrick Reid, had led for more than 20 years. Much of my efforts have been devoted towards pursuing the OMA’s primary goal, which is to improve the competitiveness of Ontario’s mining industry. For example, we have continued to represent the industry at Queen’s Park. On federal issues, we make our positions heard though the Mining Association of Canada. We have also worked to build on the industry’s social license to operate, improved our outreach to First Nations, promoted employment opportunities in the industry and helped foster education about the industry. We also worked to improve our internal and external communications, including the development of a new logo and upgrading our website with a “members only” section, the distribution of timely e-news items and the posting of relevant economic, environmental and educational information.
CIM: Before joining the OMA, your career included stints as Ontario’s Minister of Northern Development and Minister of Natural Resources. What are some of the key government relations initiatives that the industry is now working on and how has your background helped you to lead in these areas?
Hodgson: Before entering politics, I had also worked as a real estate developer. That meant that by the time I joined the OMA, I had already worked both sides of the table. So I know how important effective cooperation is. The other thing I learned is that to influence the decision-making process, you first need to be at the table and to understand what your counterpart is thinking. That said, this may surprise you, but there are lots of similarities between government officials and business people. Both groups have a real desire to do what is right.
Right now, on the Ontario legislative front, there are two key pieces that affect our industry. The first is Bill 173, the Mining Amendment Act, which deals with mining explorers more than it does with operators, though we are pleased with its scope.
Bill 191, the Far North Act, which is before the House right now, is more challenging. We agree with the goal and certainly want to protect the environment; however, the act is vague and we would like clarification in some areas. If not, the act will not be helpful in making mining here competitive in a global sense. Not all we do involves contributing to the legislative process though. We also provide input into a lot of less visible initiatives, in areas such as human resources, energy, safety and training, and the environment.