“operate” thinds ©

The Terrace Standard, Wednesday, March 10, 1993 - os All

The key is competitiveness

Mines want fair deal

By JIM O’ROURKE
Chairman
Mining Association
of B.C.
Mining in Canada has
deteriorated substantially over the

past few years. Our country has

been unable to attract risk capital

‘for the exploration and develop-

ment of our mineral resources.

In spite of attempts by our in-
dustry to alert government to ad-
just to the current global situa-
tion, they have been unresponsive

in competing with other jurisdic-

tions of the world,
The B.C. and Canadian mining

companies . are world » renowned ©

for their ‘ability to find hidden
mineral resources ina difficult

‘terrain, as well as develop and
int. an effi cient

manner.
‘A look at some “comparative
open pit mining costs

demonstrates that the B.C. mines
are operated on a cost competi-
tive basis. We have the ‘skilled

human resources and a: superior ~

supply ‘network which improves
our competilivencss in. spite of
our higher labour rates.

. Because many of our mines are.

comparatively lower grade, or in
the case of the.coal mines, require
a significant transportation cost
component, the unit costs of our

‘final products are comparatively

high.

_- Payments to government, unre-

lated to profit, were maintained at
the $400 million level. With the
tecently added capital tax, inspec-
tion fees, and B.C. Hydro’s divi-

-dend policy the direct payments

to’ governments will increase,

" with the effect of further eroding

profit potential. ;
Investors, both Canadian and

international, have lost con-

fidence and trust in our govern-

-ments to have.a sustainable mini-

ng industry. Events which create
the decrease in exploration fund-
ing and capital expenditures in

B.C, do not go unnoticed in the

global community.

Projected net mining revenues,
which are affected by mine
closures through the 1990s,
demonstrates that we do have a
problem which requires attention,

Net revenues from the mining
industry are forecast to decrease
by more than 20 percent by the
end of this decade, or approxi-
mately $500 million per year.

’ Governments make the rules
and have the responsibility of
stewardship of our mineral
resources. It is they who must
determine what is required to at-

_tract individuals and companies
to find our ‘mineral resources and

develop them.
Historically, the security of

_ mineral tenure, along with the

sharing of risk and profit was ac-
ceptable. Today, the rules are

clouded.

‘Negative factors affecting the
mining industry in. B.C. are the
high tax burden, both on profits,
but more importantly, those direct
charges of governments not re-
lated to profits.

The long approval process has
had an adverse affect on mining
as have the aboriginal land claims
and land for parks issues.

But most importantly, the un-
certainty that these issues have
created has destroyed: investor
confidence, Lastly, jurisdictional
overlap between the various
levels . of - government, which
again creates uncertainty and a
reluctance for investment when
the rules are unclear.

The future of mining in Canada
and British Columbia will not be
determined by the mining com-
panies, but will, in fact, be depen-

dent on aur government’s ability

to introduce an attitude, regula-
tions and incentives which will be
competitive on a global basis.
Everyone understands. that to
survive in the global community
we must be competitive in all
aspects of our business.
Governments cannot afford to

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during

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shake investor confidence. The
mining industry does not request
government to fund our risk capi-
tal.

We have demonstrated in the
past that our industry is capable

of raising risk capital when there —

is expectation of a retum with
reasonable risks. .

a Sign of the times

“MOUNTAIN OF slag still looms over what was once the prosperous mining
_ town of Cassiar near the Yukon border. Cassiar Mining Corporation was put

‘ny will undertake to put a new development on the site.

into receivership by the provincial government a little over a year ago and
when it closed, so did the town. The ore body is stilt good but the company
had too much debt. Assets were auctioned off last fall. Former residents are
now scattered throughout North America. There's no sign yet if a new compa-

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