A version of this column was recently published in the premier issue of Onotassiniik, Wawatay’s Mining Quarterly http://onotassiniik.com/
Stan Sudol is a Toronto-based mining analyst, communications consultant and owner/editor of the RepublicOfMining.com website. www.republicofmining.com stan.sudol@republicofmining.com
While this year’s PDAC mining convention was filled with gloom and doom for both junior explorers and large miners, let’s remember that we are still in the middle of one of the largest expansions of mining activity in the history of mankind. Even in past commodity super cycles – the most recent occurred from the mid 1940s to the late 1970s – there were significant “corrections” but the overall trend was always upwards.
Well-respected Scotia Commodity expert Patricia Mohr recently stated that she feels that there will be a slowdown in exploration and mining activity in the next few years but the “bull run” will return in the second half of the decade.
As hundreds of millions of people in China, India and other developing nations urbanize and industrialize they will need the minerals that we dig out of the ground in northern Ontario and Canada. Mining has always been a boom and bust business and it is no different this time.
However, this slowdown will also give the First Nations surrounding the Ring of Fire a chance to access their training and infrastructure needs, allow ample time to complete and resolve environmental studies – hopefully Cliffs and the federal government will come to their senses and switch to the broader Joint Review Panel Environmental Assessment that most First Nations in the Ring of Fire prefer – as well as resolve outstanding resource revenue sharing issues with governments.
But it is not only the two major mines – Cliffs and Noront – in the isolated Ring of Fire that is generating excitement and hope in the northwest. There are seven other advanced exploration projects and one proposed expansion – all of these are within or near existing infrastructure – that has the potential to create thousands of direct jobs and joint venture business opportunities. These projects range from the open pit gold mines by Rainy River Resources and Osisko Resources to the Stillwater PGM/Copper project and the Bending Lake iron property.
The city of Thunder Bay, in partnership with the Fort William First Nation, has just completed a draft report titled Advantage Northwest-Mining Readiness Strategy that recommends appropriate government investments in power and transportation infrastructure and training initiatives. One recent estimate put the value of minerals in the ground from these 10 projects at approximately $130 billion – many feel this figure could go much higher.
This reminds me of the 1950s when the entire northern Ontario economy boomed supplying mineral and forest products to a rapidly growing North America and Europe and Japan which were rebuilding after the Second World War.
From 1951 to 1961, Northern Ontario’s population grew to 722,000 from 536,000, the largest increase in its history. The North’s resource wealth and taxes contributed enormously to building the world-class infrastructure and social programs that benefited the entire province.
That boom generated tens of thousands of well paying industrial jobs and created labour shortages throughout the North. My Polish immigrant parents moved to Sudbury due to the many jobs in the nickel mines.
My father worked for Inco Limited all his life. He built his own house in a thriving working class neighbourhood, and helped raise two boys with a stay-at-home mother. The only tragedy of that prosperous era was not including the many aboriginal communities with Northern Ontario’s resource boom.
Much of the poverty in the region’s First Nation communities would have been alleviated with the abundance of work that allowed my parents and the tens of thousands of other immigrants to have decent livelihoods and the ability to send their child to college or university. We missed a great opportunity to establish a large Aboriginal middle class!
With this resource boom, Canada and Ontario has been given a second chance to “right a historical wrong” with northern First Nations communities. It has not been a smooth process, mistakes have been made, but there are many, many successes stories that are often overlooked by the mainstream media.
Detour Gold recently started production at their open-pit gold mine north of Cochrane,Ontario. The company has spent $400 million on Aboriginal businesses or joint ventures during the construction phase and roughly 25% of the workforce is from regional First Nations communities.
They are working hard to ensure operational contracts such as catering and building of tailing dams are with Aboriginal joint ventures.
Two summers ago, a visit by Prime Minister Stephen Harper to Agnico-Eagle’s Meadowbank gold mine near Baker Lake, Nunavut highlighted the enormous benefits of mining for the local Inuit. Approximately 38% of the 1,100 employed are Inuit from the Kivalliq Region.
Agnico-Eagle has implemented extensive internal training programs to help Inuit advance in the workforce by learning new skills. In 2011, almost 48% or $57-million of Meadowbank mining expenditures went to Nunavut based suppliers. And royalties will be flowing to the Inuit through their umbrella organization, the Nunavut Iunngavik Inc.
During the development/construction phase at Vale’s Voisey’s Bay, Newfoundland nickel mine, in excess of $500-million was spent with aboriginal contractors. About 54% of the workforce at Voisey’s Bay is from surrounding First Nations communities and almost 80% of the mine’s annual operating expenditures are with aboriginal businesses.
Between 1996-2011, the three diamond mines in the Northwest Territories spent $4.2 billion – 33% of total expenditures – with Aboriginal companies. First Nations secondary school enrolment increased from 36% to 56% and there was a 50% reduction of aboriginal recipients on social assistance.
There are similar successes at Xstrata Nickel’s Raglan project in northern Quebec, at the uranium mines in northern Saskatchewan, at Goldcorp’s Musselwhite gold mine, northwest of Thunder Bay and even at Debeers Victor diamond mine, notwithstanding the recent issues, almost half the workforce is Aboriginal and about 100 come from Attawapiskat.
The mining industry is the largest private sector employer of Aboriginals in Canada. According to a recent Ontario Mining Association economic study, First Nations account for 9.7% of the province’s mining workforce while the corresponding figure nationally is 7.5%. Aboriginals represent 3.8% of the Canadian population.
According to the Canadian Mining Hall of Fame four men are accredited with starting the Yukon gold rush in 1896 – George Carmack, his two Taglish Indian partners Skookum Jim Mason and Dawson Charlie and Robert Henderson.
It is widely thought that it was Skookum Jim Mason who actually found the first gold nuggets, but due to the racism of the time, Carmack arranged to sign his name with Mason on the discovery claim to avoid any problems with officials when recording the find.
In 1897, an Ojibwa couple named Louise Towab and William Teddy discovered gold near Wawa, Ontario. The brief Wawa gold rush started drawing hundreds of prospectors but unfortunately ended in 1906. Teddy Williams was reputed to have earned only $1,200 for the discovery while Louise apparently received a barrel of molasses and a brand new wood stove. Thankfully, times have significantly changed.
The current President of the Prospectors and Developers Association of Canada is Glen Nolan, former chief of the Missanawbi Cree and the first Aboriginal in the history of the 81-year-old organization to hold that position. The fact that his father and many of his relatives and members of the Missanabie Cree First Nation were employed at the now closed Renabi gold mine near Wawa that led him to a prospecting career in Western Canada and the high Arctic.
Wahnapitae First Nation member Hans Mathews is the president of the Canadian Aboriginal Mineral Association which marked its 20th anniversary last year and annually holds a large mining conference that advances Aboriginal community economic development through sustainable mineral development.
Henry Wetelainen, Chief Executive Officer of the Bending Lake Iron Group Limited, First Nations’ family history goes back seven generations in the Ignace/Atikokan region and he hopes to develop an iron ore deposit. Both sides of his family were prospectors and miners. If this almost one billion dollar initiative gets off the ground, it will be the first Aboriginal-owned mining project in Ontario, if not Canada.
And Shwan Batise, executive director for the Timmins-based Wabun Tribal Council has seen his organization establish many successful businesses in the mining service industry that range from temporary housing – including food and cleaning services – for Aurico employees at their Young-Davidson Mine to trucking operations.
The future of sustainable mining in northern Ontario and Canada depends on a close, mutually beneficial relationship with First Nations communities. There are still many challenges to overcome and the path to success will need a lot of good will on both sides, as well as a financial commitment from governments for health, education, training and other infrastructure needs.
But it’s worth the effort for the next generation of Aboriginal children who will have enormous economic opportunities their elders never had.