Competitiveness major issue for mining industry

Canada’s prosperity will be seriously undermined unless action is taken to improve the country’s competitive position in mining and other industry sectors, Noranda Chairman Keith Hendrick told delegates to the recent annual meeting of the Mining Association of Canada (MAC).

Hendrick discussed details of a recent report from the series Prosperity Consultations for the minerals and metals sector, published following a 1990 review of the Canadian economy by Professor Michael Porter.

Concerns of the mining industry were clearly defined in the report which pointed out competitive shortfalls in such areas as the overall business climate, declining quality of education, lack of ambition and entrepreneurial spirit, adversarial labor relations, and a poor understanding and perception of the industry by the public and many government officials. These concerns were echoed by Tony Petrina, president of Placer Dome (TSE) and newly elected chairman of MAC, who said Canada faces a challenge to attract and keep investment now that many other countries are aggressively competing for capital to revitalize their mining industry.

“Capital is mobile and goes where it is wanted,” Petrina said. “Our greatest competitive disadvantage at home is indifference to mining. Mining is just barely tolerated in this country. And we can’t be hobbled at home if we are to be competitive abroad.”

At a news conference in Vancouver, Petrina said the competitiveness issue will be “front and centre” in his 2-year mandate as MAC chairman. The major aspects of this effort will be attracting capital to Canada against competition from developing countries; improving Canadian companies’ ability to keep at the lower end of the cost curve against richer orebodies and lower input costs elsewhere in the world; and increasing co-ordination among the various associations representing Canada’s mining industry.

Petrina said twice as many mines closed in Canada last year as were opened, and he said this partly reflects lengthy and costly permitting processes, increased tax burdens, as well as a thrust to alienate land for mining. MAC will also continue to ensure that the public and government have a better understanding of the industry. This may involve the industry developing a vision of its future and a marketing effort to communicate its message. Mining companies are also being asked to keep employees informed and abreast of environmental and other issues so as to become “ambassadors for mining” in their communities.

MAC will also be promoting partnerships and co-operative initiatives among various stakeholders within and outside the industry. These efforts include finding common ground with non-radical environmental groups, and resolving the adversarial nature of labor relations.