Lucky Sudbury, Far North Act and Mining Industry Terrible Image Speech – by Stan Sudol (November 8, 2011)

Stan Sudol gave the keynote address at the Ontario Prospectors Association’s 2011 Ontario Exploration & Geoscience Symposium – Sudbury, Ontario – November 8, 2011

Stan Sudol is a Toronto-based communications consultant and mining columnist. www.republicofmining.com stan.sudol@republicofmining.com

Check Against Delivery

Sudbury: The luckiest city in Canada

It’s always great to get back to my hometown.

Way back in 1977, I worked for Inco at their Clarabell Mill complex for a year before going to college. And in 1980, I was a summer student replacement worker at their Frood-Stobie mine.

So I will always be a “Sudbury boy” regardless of where I live.

Without a doubt, Sudbury is this country’s epicenter of mining.

In fact, the Sudbury Basin is the richest mineral district in North America and among the top three hardrock mining regions in the world.

Only South Africa’s Witwatersrand gold region, and their legendary Bushveld platinum complex, can match the concentration and expertise of underground mining here.

We are the luckiest city Canada.

I think we are even luckier than Fort McMurray the booming oil sands capital of Alberta.

Why, because Sudbury has four vibrant clusters of mining expertise.

Clusters are geographic concentrations of related companies in a specific field.

They compete with each other resulting in global innovation and the jobs of the future.

Internationally known Harvard Professor, Michael Porter, has traveled around the world and advised many nations about the benefits of industrial clusters.

Our first cluster is the numerous poly-metallic mines that have been producing nickel, copper, PGMs and many others metals for almost 130 years.

Experts feel there will be another century of mineral production yet to come. New deposits are still being discovered. QuadraFNX’s Victoria mine will be one of the richest in decades.

Our second cluster is the supply and services sector that allows the industry to economically dig that material out of the ground.

There are more jobs in supply and services than in the mines.

This sector provides billions in economic activity and its export potential is putting Sudbury on the map.

Dick DeStefano deserves the credit for establishing SAMSSA the industry organization and getting that ground-breaking study done that confirmed this cluster’s economic impact.

The mining education cluster is number three. They include the two colleges Boreal and Cambrian as well as Laurentian University.

I can’t stress how important it is to have this capacity to train the next generation of hardrock mining and geo-science technocrats.

Their expertise will be in demand all over the world.

The final cluster is the mineral research that is being done in Sudbury.

• Xstrata’s Technology Centre in Falconbridge
• Vale expertise in underground mining
• And the innovative research at Laurentian: just a few examples

This is globally recognized research!

Rio Tinto’s $10 million donation to CEMI, last year, attests to this.

Also, we must not forget the enormous amount of research in environmental restoration that has turned our internationally famous “moonscape to green-scape.”

In 2003, at a political convention, famous rockstar Bono proudly stated that the “World needed more Canada.” 

Well, we are just beginning the biggest commodity super-cycle in the history of mankind.

I say, THE MINING WORLD NEEDS MORE SUDBURY!

Commodity Super-Cycle

A few years ago, in the middle of the last recession, I wrote a column that was titled, “Yes Virginia – there is a commodity super-cycle.”

Considering the current upheavals in Europe and the depressed U.S. economy it needs repeating.

The last commodity super-cycle that took place between the end of the Second World War and the mid-1970s witnessed many peaks and valleys.

It’s no different this time. Except for one major issue: It’s MAGNITUDE!

In China, we are witnessing the largest rural to urban migration in the history of mankind.

It has been often said, that China needs to build two cities the size of Toronto and Sydney, Australia to accommodate that growth, every year!

And last month the world’s population has passed the seven billion mark. India, Brazil, Indonesia, and many other developing countries are following China’s lead and are urbanizing and industrializing their economies.

It is estimated that over the next 25 years, we will need to dig out of the ground as many minerals as consumed since the beginning of man.

Miners and prospectors will often tell you that “the best place to find a mineral deposit is in the shadow of a mine shaft.” 

Considering northern Ontario’s enormously rich and profitable mining past, we should be rapidly developing new projects.

Dalton McGuinty and the Far North Act

But there is a political problem. Dalton McGuinty, his green allies and the much detested Far North Act.

Many years ago, Globe and Mail reporter Roy McGregor wrote a column about the cancellation of the spring bear hunt.

He described the French and Mattawa Rivers as Ontario’s version of the Mason-Dixon Line that separated the union and confederate states in the Civil War era.

Truer words could not have been spoken.

If there was ever a piece of legislation that symbolized the cultural disconnect between Ontario’s north and south, the Far North Act would surely be it.

Only the various environmental movements supported this act.

It is rare to see northern communities, Aboriginal groups, and mining organizations all unified against a piece of legislation.

There is no reason to cut out 21 per cent of the province’s geography from resource development.

This is about twice as large as southern Ontario!

The potential cost to the province is extraordinary.

Especially at a time of economic uncertainty and multi-billion dollar deficits that require significant cutbacks to our social programs.

What if there is another Sudbury Basin?

Or an Abitibi-Greenstone belt that gave us Timmins and Kirkland Lake?

We are just nibbling at the geological potential of the Ring of Fire!

To date we have found a multi-generational chromite mine and further nickel, copper and other mineral deposits. What else will we discover up there?

I don’t need to tell anyone in this room that prospectors and juniors are the lifeblood of the mining sector. You continue to discover much of Canada’s mineral wealth.

More than 50% of exploration expenditures are conducted by junior companies.

The vast majority rely entirely on the financial capital markets for their operating funds.

It’s a risky business to say the least.

Only one out of every 1,000 discoveries becomes a commercial operation, and it usually takes 10 years before production starts.

Provincial regulations mandate that junior mining companies must consult with Aboriginal communities before exploration work begins.

There is still much misunderstanding about the exact definition of “consultation”.

The current uncertainty of land tenure is making it difficult to raise exploration funding.

If the Far North Act was implemented a decade ago, the Ring of Fire may not have been discovered.

The Act’s requirement to cut half the far north off from resource development needs to be rethought.

However, you must give yourselves a collective pat the back. Regardless of all this confusion, exploration and other agreements are still being signed with Aboriginal communities.

A clear example of your resourcefulness!

Almost 200 of these agreements have been signed between senior and junior miners across the country. In northern Ontario about ninety have been recorded.

This is a clear indication that the majority of First Nations – notwithstanding the recent politics about the Environmental Assessment issue in the Ring of Fire – see the mining sector as a viable way to help reduce impoverished conditions in their communities.

Mining Industry Horrible Image

But the environmental movement has a very different perspective.

Mark Twain once said, “A lie can travel halfway around the world while the truth is putting on its shoes.”

Our mining industry in Ontario has a horrible image.

But to be quite honest, we can be our own worst enemy when it comes to dealing with the media.

The last few years have been terrible for our image:

• the KI First Nation/Platinex conflict,
• the year long Vale strike,
• Bill C-300 in Ottawa which brought out a large number of negative stories in the mainstream media about mining problems in developing countries
• the BP oil spill in the Gulf of Mexico
• the trapped miners in Chile that highlighting safety issues
• even the oil sands and the current keystone XL pipeline protests affects us negatively

And the worst incident that occurred this summer. It was the killing of seven people at Barrick’s gold mine in Tanzania by security guards.

Front page coverage in the Toronto Star and Globe and Mail, the two most respected broadsheet papers in the country highlighted this tragedy.

A recent 11 minute CBC news cast by Wendy Mesley further profiled Canadian mining problems in Latin America.

The general public does not always distinguish between these conflicts and northern Ontario.

To them, mining is bad everywhere!

For the anti-mining NGOs, this is like “shooting fish in a barrel.” They are media savvy, and have enormous influence with the public.

If I were to assign an animal to the mining industry, it would be an ostrich or the slow-moving brontosaurus.

A barracuda or keen predator like those raptors we saw in the movie Jurassic park, would best symbolize the environmental movement.

Our social license to operate is being challenged every where outside the established mining camps.

We need to become much more pro-active with the media. The mineral sector has many great stories.

From CSR initiatives, Aboriginal and environmental successes to modern practices and high-tech advances are just some of the potential stories.

The richest mining organization in the country is the Prospectors and Developers Association of Canada.

However, many feel it has significantly let down the entire industry with its lack of public or media education initiatives.

Even the egg farmers of Ontario has a successful advertising campaign using billboards, transit adds and radio spots that inform the general public about their industry.

Why can’t the PDAC do something similar? The run the annual Prospectors convention in Toronto which keeps breaking attendance records. It is the largest mining convention in the world. They certainly have the financial resources!

If we fail to change our image, how do we get the next generation of students to enter the profession? How do we get governments to change legislation that is detrimental to the sector?

Conclusion

Two days ago, a CBC radio announcer commented that “Resource rich Saskatchewan was no longer a halve-not province.”

Alberta’s solid financial footing is largely due to the oil sands in their north.

Next door in Quebec, even the American media took note of their bold and visionary Plan Nord to develop that province’s mineral riches and commit to building the necessary infrastructure.

Sadly, once proud Ontario is now a have-not province, receiving $2.2 billion in equalization payments during fiscal 2011-2012.

Our North has the tremendous potential to be one of the richest regions of the country.

The mining sector can significantly reduce aboriginal poverty.

And this part of Ontario could make major new tax contributions to an impoverished provincial treasury.

Historically mining has helped his province attain one of the highest standards of living in world.

We helped settle and explore our northern regions.

We helped turned Toronto into a global financial powerhouse.

Mining has an extraordinary past and a potentially prosperous and innovative future.

The industry needs to stop letting other people tell our stories.

And we need to engage the Toronto media in a more intelligent and strategic manner.

Thank-you and have a great evening.

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