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Page 1 of 4 by Pierre Gratton, President & CEO of the Mining Association of BC (Presented at the Minerals South 2009 Banquet October 27, 2009)
Introduction
Good afternoon.
Before I begin, I would first like to thank the organizers of Minerals South for the opportunity to speak to you today.
Congratulations to the East Kootenay Chamber of Mines for organizing this excellent conference and trade show. Events such as these help our industry share the latest news, learn from each other and also connect with the broader community – the theme of this year’s conference.
Earlier this year, I gave a speech to the Vancouver Board of Trade that talked about the incredible talent our industry needs to succeed. I want to speak to you tonight about this, as well, with a bit more of a southern BC focus.
Big Brains and Why Mining Needs Them
I will begin by making two general but important statements about the mining industry and then talk about them. The first is that for an activity seemingly as simple as digging something out of the ground, mining is a complex business that has to have a lot of sophisticated minds working for it. The second is that mining drives more public policy development and even debate than most sectors I can think of, largely because of the first statement.
The Need for Big Brains
The first thing that makes mining a complex business is the science of finding a mine. We have over 12000 mineral occurrences in BC and less than 20 major mines. It takes years just to locate, evaluate, permit and construct a mine. To succeed requires not only a certain temperament, but also use of the very best in technology and scientific analysis and the curiosity, intelligence and training of geologists to look and look again. All of this activity is highly regulated, which requires an in-depth understanding of government, its laws, policies and regulations and thus the best legal minds and policy experts a country has to offer.
A mine is where you find it, and today this typically means that it’ll be in the few remaining parts of the world that have not been exhaustively explored. This means you’ll be interacting with communities that have had little to no prior experience with mining, and the task of earning one’s social license becomes a complex business involving the best minds in sociology, anthropology, archeology and related disciplines. While training in theology may not seem like a core competency for a mining company, at times it proved invaluable for the former Placer Dome when engaging with faith-based NGOs critical of the company’s projects. And sometimes, I guess, our sector needs all the help it can get, including a little divine intervention.
It can mean you’ll be looking to build in a pristine, untouched ecosystem with high conservation values that have to be understood and safeguarded, demanding scholars in biology and ecology. It can be in a jurisdiction like British Columbia, with evolving Aboriginal law and policy that adds new complexities to our business that few sectors of the economy ever experience.
Building a mine is a huge capital investment, often in the hundreds of millions if not billions of dollars. Major capital of this kind is not raised easily, and again some of the best legal, financial thinkers and accountants are required. Indeed, where would the industry be without PWC and KPMG?
The construction of a mine is itself no small engineering feat that has to take into account site-specific geography and chemistry so that environmental impacts are managed and properly mitigated. Terrane Metal’s 9000 page environmental assessment report for its Mt. Milligan project gives you a pretty good indication of the complexity of mine design and the seriousness of the undertaking, to say nothing of the additional need for skilled writers. If the mine is in a remote location, as is often the case, new infrastructure may have to be built, adding more engineering complexity to this massive undertaking.
The construction of a tailings facility must be built, managed and maintained to the highest engineering standards because it must not fail. Canada’s mining industry has led the world in the design, construction and management of tailings facilities, our best brains working at major engineering firms like Wardrop, SNC Lavalin, Knight Piesold, Hatch, Golder and Jacques Whitford, to just name a few – and to those in the audience from other firms I have failed to mention, let me apologize in advance.
New mines are high tech operations, using the very latest in remote technology to maximize extraction at the lowest cost and risk to human safety. The capital equipment is expensive and not always easy to replace, so needs to be handled with expertise. Labour is thus highly skilled, demanding investments in training and in HR personnel. This is one of the reasons why mining pays an average wage of over $110,000/year, the highest of any industry in BC. These are also reasons why we are very supportive of and applaud the BC government’s efforts over the past number of years to make the Province the most tax competitive environment for skilled workers in Canada. And why our sector strongly supports the HST, which will make ours a more competitive industry by reducing costs and paperwork.
Running a mine is no simple task. The years of experience and training behind your average mine manager is considerable. One former Teck Cominco mine manager, during a downturn, went on to run one of Vancouver’s port terminals – no prior experience in ports or transportation, but he had the skills to run a complex operation where every minute of activity – indeed every second – has an impact on the bottom line.
And running a mining company – dealing with international markets, international politics and all the other brains you have to rely upon or interact with – requires smarts and intestinal fortitude, though maybe not in that order.
In short, we need a lot of talent to succeed.
Our province benefits from this in more ways than we can think. First, it has made Vancouver a global mining centre, with around 800 headquartered companies and home to some of the best and brightest minds in mining law, mine financing and exploration anywhere in the world. Supporting these minds are world class mining educational and training institutions at UBC, Simon Fraser, and BCIT.
Vancouver’s strength, and its role as a global centre, benefits BC’s regions in more ways than we think. BC has a mining supply sector active across the province, in communities like Cranbrook. Hundreds of companies, from Finning to BC Bearings, to Cummings and Caterpillar, are active across BC, supporting thousands of jobs.
All this cerebral capacity is needed to enable the industry to operate in a highly complex work environment that thrusts us into multiple areas of public policy. We have a huge stake in the decisions our province and our country make, whether it has to do with infrastructure, environmental protection, climate change, health and safety, First Nations, tax policy or transportation.
When you touch on or are exposed to so many issues, you care deeply about the decisions others may make about them. It is not uncommon to hear the term “whining miners”, partly because it’s an easy rebuke, but also because there are few things we don’t care about.
But we are not whiners. We are immensely practical. We have to be. In our business, as complex as it is, we have to be problem solvers, doers, pragmatic and not at all dogmatic. If a new idea will help us build and operate a mine, it doesn’t matter how novel or far-fetched, we will consider it, we may champion it, we will find a way to make it happen.
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