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Miners press ministers on northern infrastructure

0 174 Associations

by Don Wall

Recent statistics have indicated a drop in new mine launches over the past two years and so Canada’s miners were hoping to see policy breakthroughs at the Energy and Mines Ministers’ Conference in New Brunswick.
The Gahcho Kue diamond mine in the Northwest Territories was commissioned in 2016 as the world’s largest new diamond mine in 13 years, expected to produce 54 million carats of rough diamonds in its lifetime. Gahcho Kue, located 280 kilometres north of Yellowknife, is exclusively fly-in/fly-out with no road access.
The Gahcho Kue diamond mine in the Northwest Territories was commissioned in 2016 as the world’s largest new diamond mine in 13 years, expected to produce 54 million carats of rough diamonds in its lifetime. Gahcho Kue, located 280 kilometres north of Yellowknife, is exclusively fly-in/fly-out with no road access. - Photo: DE BEERS CANADA

But as Mining Association of Canada (MAC) executive Brendan Marshall sifted through the communique issued by the ministers on the conference closing day, Aug. 15, and compared them with six policy asks contained in a pre-conference brief submitted by the Canadian Mineral Industry Federation (CMIF), there didn't seem to be much to cheer about.

MAC had hoped to see progress announced on infrastructure spending in remote and northern areas, where most of Canada's future mineral wealth will come from, said Marshall.

The miners had been encouraged by Minister of Transport Marc Garneau's promise earlier this year to see 20 per cent — $400 million — of the $2 billion the Liberals have targeted for trade-enabling infrastructure spent in the territories.

This would be in addition, he said, to the $5 billion slotted for trade and transportation corridors within the Canada Infrastructure Bank (CIB) envelope.

MAC is pleased with the two initiatives but there was no progress in either space at the ministers conference, Marshall said.

"Is infrastructure represented in the communique? I would say yes," Marshall said. "Is it front and centre? I would say no."

"The most glaring thing I can see is the drop of almost 50 per cent over the course of the two years in projects for mineral investment,"

Brendan Marshall
Mining Association of Canada

Prospectors and Developers Association of Canada president Glenn Mullan had made the miners' case in the CMIF advocacy package released prior to the ministers' conference.

"Industry and government have an opportunity to work together to enhance exploration financing, infrastructure development and the regulatory certainty needed for a successful mineral exploration and mining industry in Canada...Mineral exploration and mining is a proven economic driver for Canada, providing critical job opportunities for remote and Indigenous communities, and must remain a source of employment for generations to come," said Mullan.

Marshall, who is MAC's vice-president of economic and northern affairs, said the association has determined that the cost premium paid by mining companies working in northern and remote regions with a paucity of infrastructure compared to southern miners is two to two-and-a-half, meaning it is that much more expensive to build a mine in the north.

The CMIF brief listed regulatory certainty, support for indigenous participation, effective climate change policies, land-use regulation and support for innovation in addition to the infrastructure issue as policy priorities requiring attention to stimulate exploration.

MAC and other stakeholders have also called for a northern business professional to be appointed to a position of leadership in the CIB, Marshall said, "so as the culture of that institution takes shape, that perspective will have been present from the outset. That is very important."

Marshall said the MAC had not received any confirmation that the CIB will recognize the point when it is up and running by year's end but the association will continue working with partners on advocacy.

The communique reflected a broad range of initiatives among the ministers on resource exploitation in all sectors with a reduction in greenhouse gas emissions frequently highlighted as a policy target.

On mining and minerals specifically, the ministers recognized the need for efficient regulatory regimes and enhanced competitiveness through all project phases and announced the launch of consultations on a new mining and minerals plan that would be led by Quebec.

The ministers also released a major projects summary report that indicated there are 471 major natural resource projects under construction or planned over the next 10 years, representing $684 billion in potential investment.

"The most glaring thing I can see is the drop of almost 50 per cent over the course of the two years in projects for mineral investment," said Marshall. "I think in 2015 it was $140 billion and now it has dropped to around $80 billion."

Marshall attributed the downturn in part to a drop in mineral prices in recent years, although he said the future looks brighter.

But federal policy decisions of the past few years were also a contributing factor, he said, including the elimination of several tax credits that reduced cost competitiveness and uncertainty in Canada's regulatory and permitting regime.

"We are at the outset of what we believe may be a prolonged, gradual upswing in prices, granted with certain volatility, and we are wondering the extent to which Canada will be able to share in that," he said.

Marshall said the provinces with the highest level of mining activity are B.C., Ontario, Quebec and Saskatchewan. B.C. has gold, copper and metallurgical coal coming on, while Quebec has rare-earth element mines that will support a transition to low carbon, as components of batteries, he said.

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