EDITORIAL PAGE — The great Canadian way

The town of Cobalt, a quiet hamlet today, is said to be the cradle of Canadian mining. True, the discovery of nickel in Sudbury preceded development of the Cobalt silverfields (and to this day, Sudbury continues to prove its peerless mineral worth).

But Cobalt sparked what would become the noisy, splashy “Canadian way” of developing big strikes with a cast of colorful stock characters — grub-stakers, prospectors, geologists, promoters, speculators, stock brokers, bankers, et al. The main players were characterized by two types: hyped-up juniors on the lookout for any economic orebody, and cautious majors on the prowl for replacement orebodies.

The “show,” if we may call it that, has been replayed many times over, as discovery followed discovery in the Canadian North. The current diamond rush is only its latest incarnation.

In recent years, the Canadian way has proved popular, as country after country boarded the free enterprise express which, everyone hopes, is bound for economic glory through privatization, deregulation, revamped mining codes, and the like.

Fast becoming obsolete is the old bureaucratic attitude encapsulated so neatly in an anecdote related at a recent mining conference in Toronto hosted by the Canadian Council for the Americas (CCA).

The story goes like this: A few years ago, Argentine lawyer Rogelio Maciel tried setting up a meeting in Buenos Aires between a government official and a visiting mining client interested in doing business in that country. Repeated attempts at gaining access to the official proved fruitless. In fact, a meeting never did take place.

After his frustrated client left the country, Maciel queried the government minister about his lack of enthusiasm over a meeting that might have generated economic activity.

“The minister said he had little time as mining represented only 0.3% of Argentina’s gross domestic product (GDP),” Maciel told the CCA gathering. Of course, that attitude only ensured that mining’s share of GDP would never ripen beyond piddling amounts.

But Argentina, like practically every Latin American country (and African, Asian and Far Eastern nations, besides), has turned 180 in its attitude toward mining. The shift seems, by and large, genuine, though only time will tell which of these countries may backslide or dilute their policies when the commitment to “freer” enterprise is tested.

But while countries in Latin America and around the world have discovered (or, in some cases, re-discovered) the benefits of mining, the Canadian way of exploration and development, with its attendant hype and stock market machinations, is not to everyone’s liking. This was clear from views expressed at the CCA conference.

Peru (one of the truly hot countries this year) is a little wary of the Canadian predilection for risk capital. Roque Benavides, president of that country’s National Mineral and Petroleum Society, worries that some juniors might promote “wild projects” in Peru which turn out to be financially messy. “We, as Peruvians, want to show we are serious people,” he said. His is an important point. Some juniors have sullied the reputation of the industry by stock market manipulations. Others have been too insensitive to the cultural and social realities of the host countries in which they operate. But, like democracy, which tends to be messy, the Canadian system of exploration and development has been proven to work.

Our advice to the Peruvians? Screen the juniors if possible. Reject the least savory. But do maintain a mix of juniors and seniors. It makes for exciting and rewarding mine-finding.