Mining’s contribution can’t be overlooked

The “glory days” of mining in Ontario are over, but cooperation between industry and government could foster new growth, says Lars-Eric Johansson, Falconbridge’s chief financial officer.

Drawing comparisons between Canada’s central province and his homeland, Sweden, Johansson told the Canadian Institute of Mining, Metallurgy and Petroleum’s Toronto Branch that Ontario miners are confronting the same kind of structural change the European industry experienced some 20 years ago. Sweden and Ontario share a similar land mass, population and — in terms of development and employment — the same north-south imbalance. Faced with depleting ore reserves, Swedish mining companies were forced to either diversify or look elsewhere for their ore in the 1970s.

“Our mining industry is in a similar state of decline,” said Johansson. “I think that’s inevitable.”

But he added that mining, which provides 30,000 high-paid jobs and produces $5-7 billion worth of minerals in Ontario each year, remains an important contributor to the provincial economy.

“Mining . . . generates wealth for this province. It has a stronger technological base than it is given credit for and its products have more Canadian content than the CBC (Canadian Broadcasting Corporation),” he said. Johansson is also encouraged to see Canadian companies setting up shop in Chile, Mexico and other countries, where they are likely to use equipment and expertise imported from this country.

He praised some of Ontario’s Ministry of Northern Development and Mines’ recent initiatives, including the “first-window” approach to permitting, new concepts to finance mine rehabilitation and the proposed Mining Reclamation Technology Centre for Elliot Lake, Ont.

But new environmental legislation, reduced land access for exploration and provincial Crown utility Ontario Hydro — the biggest thorn in Falconbridge’s side — are making mining in Ontario an unrewarding venture, he lamented. As a result of rate increases that have been more than double the rate of inflation since 1975, Falconbridge’s hydro bill will be about $107 million this year, up from $82 million in 1990.

By contrast, Sweden and Norway have maintained reasonable hydro rates and are introducing a free market for electricity.

“At one time, Ontario’s energy costs were a reason to come to this province and now they are driving business away,” he said.