Dec '09/Jan '10

Voices from Industry

Canada’s role and responsibility on the international stage

By G. Peeling

Canada’s mining and mineral development expertise dates to the earliest days of our country. Indeed, the Geological Survey of Canada was established in 1842, a full 25 years before Confederation. Magnetic abnormalities were discovered in the Sudbury region in 1856 and a mining settlement was established in 1883, leading to 125 years of regional mineral development, value-added processing and wealth creation. In the ensuing decades, wealth has been created across the country — from gold in Quebec, base metals in Manitoba and coal in British Columbia to oil sands in Alberta, uranium in Saskatchewan and diamonds in the Northwest Territories. Mining generates significant employment, supplier relationships, tax payments and other benefits. The sector’s strengths are underpinned by innovative tax policies and sophisticated public and private sector technical skills, among other variables.

Canada’s mining industry plays a similar role internationally, with many companies having large global footprints. While our international presence grew most significantly after the global decline of nationalization in the 1980s, Canadian companies have invested abroad even as far back as the 1930s when Noranda acquired a controlling interest in Nicaraguan gold mines.

Foreign investment by Canadian mining firms has grown five-fold, from $13 billion in 1990 to $67 billion today. Companies such as Barrick Gold and Teck Resources have operations in many countries, including the United States, Peru, Chile, Argentina, South Africa, Australia and Tanzania. Barrick, Cameco and Potash Corporation of Saskatchewan have become the world’s largest gold, uranium and potash companies, respectively, while Teck is the world’s second-largest exporter of steel-making coal. Almost 5,000 mining projects financed through the TSX are located outside Canada. About 60 per cent of the world’s mineral exploration companies are Canadian — and they have interests in over 100 countries. The PDAC’s annual conference draws delegates from over 100 countries. This global leadership role is something that all Canadians should be proud of.

Mining activities can never be truly environmentally benign. Extracting ore from rock, where it may constitute less than one per cent volume, poses many technical challenges. Similarly, turning raw concentrate into 99.99 per cent pure metal also poses innumerable challenges, many of which have environmental considerations. Society needs such pure metal for cell phones, aircrafts, computers, solar energy, medical equipment and a host of other products used by social and environmental groups, businesses and average Canadians. Canada’s mining industry has strong expertise in minimizing and managing environmental risks. It also draws upon global networks to fill in knowledge gaps. Within our association, we facilitate regular dialogue on environmental and social issues through several committees and esteemed entities such as the Mine Environment Neutral Drainage program, the National Orphaned/Abandoned Mines Initiative, Towards Sustainable Mining, the Organisation for Economic Co-operation and Development, and the International Council on Mining and Metals.

Operations in developing countries bring added layers of complexity, involving transporting products over inadequate infrastructure, working with still-developing environmental and tax regimes, and drawing upon a labour supply that may not have advanced mining skills. Canadian companies work within these situations, making significant social and capacity-building investments that are documented within their corporate social responsibility reports. Progress in this regard is reinforced by rules and principles espoused by the World Bank, the Equator Principles banks, export credit agencies like EDC, and by the global accountability plan that was recently adopted by the Canadian government.

Our industry’s view is that the values contained in Bill C-300, a recent Opposition Private Member’s bill introduced in the House of Commons, run contrary to our established constructive culture and direction. The Bill opens wide a path through which NGOs or foreign companies could launch vexatious and frivolous complaints against Canadian mining and energy companies — with uncertain timelines, standards and mechanisms to resolve the allegations. The Bill would facilitate intrusion by the federal government into the other countries’ affairs that would be neither effective nor constructive. Defeating the proposed legislation would be the best way to ensure that Canadian companies continue to bring their skills, investments and community-building expertise to the world.

Gordon Peeling is the president and CEO of the Mining Association of Canada.

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