EDITORIAL PAGE (October 07, 1991)

“It is very fashionable today for investment people to call themselves contrarian. . . . It is our opinion that the term `contrarian’ is presently overused and misunderstood. While we might fancy ourselves as being contrarian, so do a hundred other investing people. In fact, consider this logic: if it is `in’ to be contrarian, then it must be `out’ to be conventional. And if it is `out’ to be conventional, then that must be the true contrarian opinion.”

From the August issue of The ABC Perspective published by ABC Funds of Toronto.

If the mining industry’s political partners needed any clarification on the state of mining in Canada today, they received a clear message in Nova Scotia recently.

Delegates to the annual mines ministers’ conference held in Halifax in September were invited for a tour of Rio Algom’s East Kemptville tin mine near the scenic town of Yarmouth.

They could well be the last group to tour the mine, because the day after their visit, Rio announced the mine would close on January 3, 1992. The reason? Inability to compete with operations in Brazil and Malaysia. While the East Kemptville deposit’s ore grade is low, the higher productivity and political stability in Nova Scotia could have kept the mine going. What Rio couldn’t control was the falling price of tin and the soaring value of the Canadian dollar.

The deposit hasn’t been mined out. There are a few years of ore — make that mineralization — left at the mine. (Ore, of course, is material that can be extracted at a profit.) And the community certainly supports continuing operations at the mine.

East Kemptville has been a good corporate citizen contributing about $15 million to the local economy every year without putting undue stress on the environment or posing health or safety risks. Those factors, however, are simply not enough when dealing with a global marketplace such as that found in mining.

None of the mine ministers who attended the Halifax conference took the opportunity to tour the mine. If they had, they would have been impressed with Canadian miners’ skill and innovation at work. There was no lack of interest from the 45 members of the conference’s supporting cast who did take the tour. East Kemptville is, after all, the only tin mine in North America and one of particular technical interest for its geology and its milling innovations. What was also clearly evident during the tour was the extent of efforts being made by the mine’s highly skilled staff to get recoveries up from 63% in 1989 to 75% in 1990 to a targeted 81% this year. The trends East Kemptville couldn’t buck, however, were those of falling prices and rising costs. Tin has dropped to US$2.75 per lb. from US$4.62. Cost of operations in U.S. currency, the international currency of trade, has increased as the Canadian dollar, recently at 88.33 US cents, continues to climb toward its 12-year high of 88.59 set in August, 1990.

All the technical expertise, capital investment, community goodwill and plain hard work from the 225 people who ran the mine make little difference when faced with those kinds of trends.