Editorial The Biggest Bang for our Bucks

Are you a bright, experienced professional mine engineer who gets a thrill out of making new things go?

Well, the mining industry is looking for ways to implement innovative products or machines that will make the industry more productive, safe or efficient. So if you’ve got an idea:

Form a junior mining technology company; patent your idea and take your company to the public by underwriting it through the federal government’s new Mining Research and Development Tax Incentive Program (mr&dtip). This program, which is identical to the industry’s highly successful exploration flow-through financing program, enables you to publicly raise the money you need to research the patent rights on your idea, develop lab-scale and pilot-scale prototypes and prove up your idea in the field.

Sound like a piece of science fiction? Well, it is. But it is also we think, a logical, free enterprise alternative to the way research and development is done in the industry today. While there appears to be no shortage of ideas to technological change in the industry, deploying those ideas in the industry can be risky and costly. Corporate managers complain about the instability, complexity, inequities and the total burden of the present tax system which, they say stifles in-house R&D. And the engineers involved in the creative process itself would rather not deal with cumbersome corporate and government bureaucracies inherent in getting funds for R&D.

In 1983, the last year for which figures are available, only 22 mining companies reported allocating any funds for research and development. Only 15 of those (mainly the major, base metals producers) spent more than $1 million. The total spent by mining companies on R&D last year was about $178 million. The federal government, through Energy Mines and Resources, on the other hand, spent an estimated $286 million supporting mining R&D, mainly though canmet and the country’s eight mining degree- granting universities. The National Research Council and the Natural Sciences and Engineering Research Council of Canada provide additional funds as well.

During the same period, though, some $500 million was raised publicly by junior mining companies exploring for new, mainly gold, deposits in Canada. Is exploring for new cost-saving ideas any riskier, or any less valuable to the mining industry, or any less exciting to the public investor?

When Minister of State for Forestry and Mines, Gerald Merrithew, makes a major policy statement outlining his government’s commitment to the mining industry at a mineral outlook conference in Ottawa next month, we suggest this, the public sector participation in mining research and development, be one of the routes he take.