A toast to progress and people Making it happen

Things are looking up in the mining business, at least relative to last year when dark clouds gathered over the otherwise successful Mining Millennium 2000, a conference organized by the Prospectors & Developers Association of Canada (PDAC) and the Canadian Institute of Mining, Metallurgy and Petroleum (CIM). The Voisey’s Bay nickel discovery was held hostage by everybody but Inco, the Diavik diamond project was stalled by bureaucratic uncertainty, and the Cheviot coal project was mired in legal limbo. Investors, economists and politicians were singing the praises of the “new economy,” and investment dollars flowed everywhere, except into the treasuries of resource companies.

There are still a few clouds hanging over this year’s PDAC convention — a worrisome downturn in the American economy, weakening metal prices and fewer people in the exploration game — but it’s possible to see blue-sky again. Diavik is well on its way to becoming Canada’s second diamond mine, Cheviot finally has all its permits (though production has been delayed), and Inco and the government of Newfoundland and Labrador are talking about reviving development of Voisey’s Bay. We hope these talks will break the long-standing impasse, but if they don’t, we know that the feisty presidents of Labrador’s three Chambers of Commerce (North, West and Straits) will urge provincial government leaders to get back to the bargaining table.

Base metal companies are in better shape than they were last year, and, thanks to the leadership of some senior producers, gold companies are coming to grips with their cost-reduction and marketing challenges. An enhancement of the flow-through share mechanism has made junior companies more attractive to investors, which, in turn, has led to modest improvements in exploration spending in Canadian mining camps this season.

The technology boom has also gone bust, and while this wasn’t good news for those caught by the downdraft, the subsequent shift in investor sentiment has allowed many resource companies to expand their coffers. What’s more, the mining industry has its house in order, thanks to the people who worked hard to improve disclosure and technical standards. The new rules will boost public confidence and make it easier to fish bad apples out of the barrel before any damage is done. Furthermore, investors realize that when a mining company reports earnings . . . they really are earnings. This can’t be said for the technology sector, which is now under scrutiny for its creative accounting practices, among other things. The Ontario Securities Commission has more than a dozen major investigations under way, and American regulators are also busy investigating high-profile cases.

The Canadian mining industry is far more diversified than it has been for decades. Back in the 1980s, and through most of 1990s, gold was the only game in town, which led to too many players chasing too few quality deposits and deals that never made sense. Those days are over. Along with new diamond mines and a primary palladium producer, mining and exploration today encompasses an impressive array of non-traditional commodities, such as tantalum, cesium, niobium and vanadium, to name a few.

Coal, oil sands — and even zinc miner Cominco — are benefiting from an energy crisis that hit the United States hard this past year. American consumers will think twice now before giving hard-earned cash to anti-development groups trying to stop new projects from going forward. And American President George Bush has served notice that domestic oil and gas projects can be explored and developed without compromising environmental standards.

The Northwest Territories is poised to become a major energy producer, this time with the support and backing of aboriginal groups. The territories has also seen its dream of a secondary diamond cutting and polishing industry come to fruition through private-sector investment, and through the hard work and determination of a gutsy coalition of business, civic, government and aboriginal leaders.

Much progress has been made during the past year, and the people who made it happen deserve a round of applause, or better yet, a toast.

There was plenty of good things to toast last year too, but somehow the glass seemed half-empty. This year, it seems a little more than half-full.