PDAC 2006 – The Academy Awards of the Global Mining Sector – by Stan Sudol

This article was originally published in the March 12, 2006 edition of Northern Life – Sudbury’s Community Newspaper. It is being posted for archival purposes.

Stan Sudol is a Toronto-based communications consultant, who writes extensively about mining issues.(stan.sudol@republicofmining.com)

The Prospectors and Developers Association promotes the exploration and development sectors of the Canadian mineral industry

The 74th annual PDAC (Prospectors and Developers Association of Canada) convention that ran from last Sunday to Wednesday was a smashing success, the biggest ever. It is the mining world’s version of the “Academy Awards” but spread over four days and with just as much networking, deal making and partying. PDAC is the largest gathering of mineral explorationists, developers, investors, bankers, financiers, analysts and government representatives in the world.

Established in 1932, the PDAC is a national not-for-profit organization that supports and promotes the exploration and development sectors of the Canadian mineral industry. There are about 1200 mining companies in Canada and almost 700 that are actively exploring worldwide on 3,500 projects. Canada is a global powerhouse in the mining sector and our expertise in many facets of the industry is well respected and in demand internationally.

Toronto’s stock exchange helps raise almost half of global venture capital for exploration and mining projects while about 65% of the world’s mining companies are listed here.

After the first hour walking among the 280 companies and governments promoting their supplies, services or jurisdictions or the 430 exhibit booths in the investors exchange that promote promising mineral deposits, information overload rapidly sets in. In addition, there are daily technical and policy sessions on a wide variety of subjects.

On the first day I had the opportunity to act as an unofficial tour guide for Sudbury councilor and Mayoralty candidate Lynne Reynolds. It was her first visit and we sat in on a nickel market lecture by Greg Barnes of TD Securities Inc., as well as toured the various displays. Lynne Reynolds said, “It’s absolutely critical for any person who is seeking to lead the City of Greater Sudbury to have a solid understanding of this dynamic sector and of our role in it.” She added, “I was pleased to see the City of Greater Sudbury so proudly represented at this prestigious international event by both major and junior companies, as well as manufacturers, suppliers and government”

As fitting with the host, the Ontario Government has one of the largest display booths and routinely uses the convention to announce new initiatives. Minister Bartolucci announced a new mining initiative called “Ontario’s Mineral Development Strategy.” In a news release, the Minister stated, “The Ontario government is moving to implement a strategy that will enhance the mineral sector’s global competitiveness, while opening new opportunities for all Ontarians.” I will devote an entire column to this new strategy later.

Greg Barnes of TD Securities Inc. gave an interesting lecture on nickel. Markets will be tight and prices volatile but “robust” over the next two years due to the usual suspects – Chinese demand, lack of new supply and labour issues in Sudbury. However, starting in 2008 with a new generation of nickel projects, the big four being Inco’s Goro, BHP Billiton’s Ravensthorpe, Australia venture and two Brazilian startups by CVRD, supply problems will be in balance. In addition, there are 13 other possible projects that if implemented at the same time will cause a nickel glut. Mr. Barnes feels these projects are needed but not at the same time and after 2012 the nickel market will go back to dealing with supply shortages.

South Africa Sudbury Links

Marc Couse is the Honorary Consul of South Africa in Sudbury. To even have an honorary consul for South Africa in Sudbury confirms the strategic importance of this community’s international mining expertise. Marc invited me to attend a mining investment seminar and hear Ms. Lulu Xingwana, South African Deputy Minister of Minerals and Energy speak about mining in her country.

South Africa is one of the world’s largest mining producers. The first and third most significant mining districts in the world – the Bushveld Complex and Witswatersrand Basin respectively – are located in this mineral rich country. South Africa dominates global production of platinum-group metals, chromium, manganese, and gold and ranks among the leaders in diamond output.

After the conference the mines minister will visit Sudbury. Cambrian College will be assisting in the development of a school of mining at the University of Limpopo which is located in the Bushveld Complex. The local college will help in course development and potentially exchanging teachers.

Deputy Minister Lulu Xingwana said “I recognize the importance of Sudbury from an international viewpoint on such matters as mining innovation and environmental rehabilitation. This visit will help foster future economic, educational and mining research relationships that can be developed between Sudbury and South Africa.”

During her investment seminar speech the Deputy Minister Lulu Xingwana also commented on the fact that mining companies must be prepared to do more that just dig the metals out of the ground. They must operate in a socially conscious and sustainable manner, to transfer skills and education to the workforce and share in the ownership and equity of the project with all South Africans.

In addition, foreign mining companies must support the infrastructure development of the poor and rural communities where most mineral deposits are found. She applauded Canadian companies for their commitment to poverty alleviation and identified with the challenges northern Aboriginal communities face with mineral development.

Aboriginal success stories

There is no doubt that future mining development in this country must include the full participation of Aboriginal communities on whose traditional lands will be found next generation of mineral deposits.

Bart Jack Senior, CEO of the Innu Development Limited Partnership gave a very eye-opening presentation about his community’s experiences with Inco’s Voisey’s Bay development during the “Aboriginal Participation in the Mineral Industry” technical seminars.

Voisey’s Bay Nickel project is on the traditional land of the Labrador Inuit and the Labrador Innu. Both Aboriginal communities were determined to be involved in this development as they bitterly remember being ignored by past resource projects that included iron ore developments at Wabush and the building of the Churchill Falls hydro project.

Mr. Jack admits that both sides were very nervous at the beginning because most Aboriginal people had no previous work experience. “Voisey’s Bay Nickel in some aspects are very willing to bend over backwards to train our people,” stated Mr. Jack.

The negotiations were long and hard but ultimately successful. All major operations contracts and 80% of operations procurement were awarded to Aboriginal businesses. The construction phase was used to successfully provide training and workplace experience for Aboriginals – more than 1,100 Aboriginal employees involved in construction since 2002. Currently, Innu and Inuit people comprise 50% of the operations workforce. Training and skills development are ongoing and the entire project exceeded all Aboriginal employment targets.

The opportunities for First Nations communities throughout northern Ontario are enormous. With the right provincial government policies, the mining sector has the potential to alleviate poverty, build appropriate infrastructure and ensure the next generation of Aboriginal children have a promising future.

Northern Ontario’s enormous mineral wealth

During the convention, I had the privilege of meeting Michael Barns, who has been called the “Pierre Burton of northern Ontario.”  Michael has published about 45 books, many on northern Ontario’s fascinating history. A member of the Order of Canada, he is currently working on a biography of Don McKinnon one of the two prospectors who discovered the famously rich gold deposit at Hemlo. From our two hour conversation – in which he gave me some great advice on my plans to write a history book on Sudbury’s nickel industry – I realized that PDAC would not have its global impact and influence if it wasn’t for northern Ontario.

 A century of rich mineral discoveries ranging from Cobalt, Kirkland Lake, Timmins, Sudbury, Red Lake, Hemlo and many others including the numerous camps in Northwestern Quebec funneled enormous amounts of wealth into Toronto and established that city as the undisputed financial leader of the global mining sector.

Michael Barns certainly agreed saying, “Northern Ontario enormous resource wealth has definitely enriched Toronto and provided significant tax revenue for all levels of government.”

The North must ensure that the corporate and political elite of this province never forget our past and promising future contributions towards the great prosperity and expertise that surrounded Michael Barnes and me at the PDAC convention.
Stan Sudol is a Toronto-based communications consultant who writes extensively on mining and provincial issues. stan.sudol@republicofmining.com

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