How many mines can a government open? None – by Brian MacLeod (Sudbury Star – May 4, 2013)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

 Brian MacLead is the managing editor of the Sudbury Star.

It is a bit rich for politicians to announce the potential opening of new mines, but they’ve taken it on as a hobby. During the 2011 election campaign, Sudbury Liberal MPP Rick Bartolucci announced his government could “facilitate the process” so that eight new mines can open in the province over 10 years.

And this week, Sudbury Progressive Conservative candidate Paula Peroni topped that with an announcement that 10 new mines could open over the next five years by removing red tape and killing the Far North Act.

No word whether the NDP can beat that, but it doesn’t matter. Governments don’t make mines happen, private companies do.

What governments can do — as Bartolucci said –is “facilitate” a process, but isn’t that the government’s job? (Unless you’re an NDP government in B.C., perhaps.)

As a former mines minister, Bartolucci would, of course, have had insight into which mining companies were at certain stages in their exploration and permitting and development processes, but a lot of things have to go right in the world before these properties become a mine.

Peroni’s claim is even more odd, because it takes, on average, about 10 years to open a new mine from the time of discovery. If a PC government could facilitate the opening of 10 new mines in five years, much of that groundwork would have been laid during the reign of the previous Liberal government.

Regardless, there is so much more to opening a mine than the red tape the Tories are on about. And it isn’t all red tape. Environmental approvals, closure plans, negotiations with First Nations, court challenges, infrastructure approvals and many more plans are quite necessary, though there are indeed some frustrating issues, such as the sometimes quixotic demands of federal and provincial environmental assessments.

But as we’re seeing with Cliffs Natural Resources’ attempts to build a mine in the Ring of Fire, government regulations only are part of a much larger picture. As Sudbury Star mining columnist Stan Sudol pointed out in January, the ability of a company to raise funds for investment is critical. And the changing –and in Cliffs’ case dropping — demands for resources and thus decreasing commodity prices and share prices also affect a company’s ability green-light a mine.

Cliffs’ shares have dropped from $100 to less than $20, meaning it will have a hard time raising funds to build a mine in the Ring of Fire chromite deposit in the near future, and thus the potential of Cliffs building a smelter in Sudbury to process the material is dimmed, whether or not red tape is involved. Indeed, as Sudol observed, Cliffs itself may be open to a takeover by a larger mining company with very different priorities.

And with the global nature of mining companies these days, potential mines within a single company are vying for internal approvals and resources.

The two mines announced yesterday by Xstrata that will employ about 250 people are certainly a welcome development. It’s worth noting the five-year trend of zinc prices have returned to a fairly steady level after dropping significantly in 2008. Reliable prices mean reliable returns, which are a leading motivator for mining companies.

Streamlining regulations is a worthwhile exercise, and it might draw interest from mining companies, but it’s a long, long leap to promising mines.

For the original of this article, click here: http://www.thesudburystar.com/2013/05/04/pov-how-many-mines-can-a-government-open-none

Comments are closed.