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Mining companies rank NWT last in Canada
Industry cautiously optimistic that regulatory environment improving as global NWT and Nunavut rankings improve Thandiwe Vela Northern News Services Published Friday, March 2, 2012
In the Fraser Institute's annual ranking of global mining and exploration destinations, the NWT moved up to 48th of 93 countries in 2012, from 52nd of 79 countries in 2011. Survey results represent the opinions of executives and exploration managers in mining and mining consulting companies around the world and, despite the slight rise in rank, those with operations in the territory say it still has a long way to go. "It takes a long time to encourage companies and it's not going to happen overnight," said Robin Goad, president and CEO of Fortune Minerals Ltd., proponent of the NICO gold-cobalt-bismuth-copper project just north of Whati. "You can destroy an industry overnight with poor policies and over-regulation, but you can't build an industry overnight. It takes a long, long time." Fred McMahon, Fraser Institute vice-president of international policy research, said the survey has influence around the world and it is often taken into account when bankers and miners are deciding where to invest. "I've been told by miners when they propose or seek investment for exploration, the bankers will ask how the area rates in the Fraser Institute survey," McMahon said, adding a recent analysis done in the United States showed that mining companies who invested in jurisdictions which place high in the survey, on average have greater returns to investors. Goad said this boils down to investor confidence and activity. "If I told you it's going to take me five years to get through a permitting process, would you invest in Fortune Minerals today or would you wait for four or five years to pass?" said Goad, whose NICO project is now at the tail end of the environmental assessment process, after more than three years. "We are getting through it but have we got a share price that reflects the value of the assets that we have? No. "Investors just don't have the patience to wait five years for permits." Goad said he has seen no evidence of corruption issues in the territory, but logistics and infrastructure costs aside, investors find gaining access to land in the territory difficult due to long-running land claim negotiations, and the lengthy permitting process across territorial government departments, federal government departments and regional regulatory boards. “As it currently stands, despite its tremendous mineral endowment, the North is a difficult place to operate," Goad said. Miners know that they need to pay taxes, follow regulations, and respect the environment, McMahon said, "so they don't have a problem with doing all of that. "What they have a problem with is when the regulations say one thing and it may not be actually followed through. "The regulations may mean something different than they say, the outcomes might be unreliable, special interest groups may be able to hijack the regulatory process. It's not that miners want loose regulations." Nunavut moved up to 36th place out of 93 countries this year, from 44th of 79 countries last year, in the survey. Although the NWT has consistently been at the bottom of the rankings for Canadian jurisdictions, Goad is encouraged by recent efforts to improve the regulatory process in the territory. "I'm gratified that the government recognizes there's a problem, and appears to be trying to do something about it," he said. "(Premier) Bob McLeod, I think gets it." David Ramsay, minister of Industry, Tourism and Investment, is aware of the issues raised in the survey that have proven to be an impediment to business in the Northwest Territories. "Certainly, when you have someone like the Fraser Institute pointing things out that we can improve on, that's something we take seriously," Ramsay said. "We're looking at making improvements and we certainly have great hope for the future as we move forward." The Fraser Institute, a Canadian public policy think-tank, has been conducting the annual survey of metal mining and exploration companies since 1997. The companies participating in the survey reported exploration spending of US$6.3 billion in 2011 and US$4.5 billion in 2010. Shares of London, Ont.-based Fortune Minerals Ltd. closed at $0.99 on Thursday on the Toronto Stock Exchange.
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