COMMENTARY — Frustrating year for BC miners

.BGary Livingstone

From a mining perspective, the year past in British Columbia can be best described as “disappointing.” Although 1997 began with strong metals prices and the opening of two new mines, optimism was soon dampened. Despite the openings, mines in British Columbia are closing at a faster rate than they are opening; since 1990, 13 mines have closed, whereas eight have opened.

By mid-year, metal prices were beginning to erode, as was our relationship with the provincial New Democratic Party government. Exploration spending — the key to our future — was showing signs of serious weakness. The final tally for exploration spending in the province in 1997 is expected to be a near-record-low of $75 million.

Exploration expenditures need to be in the $150-to-$200-million range in order for mining to be sustainable. Such levels of spending, however, will not be reached until investors are reassured that the provincial government is committed to the future of mining.

As a first step towards the re-establishment of that commitment, industry and government spent the better part of two years negotiating an agreement on a new mineral exploration code. Yet, at the eleventh hour, and unbeknown to our industry, government prepared a draft of the code that was proposed as the final version. There were critical differences from what we had agreed to, and the draft proposal fell far short of what is needed to meet the goal of attracting new mineral exploration investment.

We were left with no option but to withdraw our support for the new code. The new code has not yet been established as law, and we are waiting to see how the government will proceed.

In April, we introduced a 7-point plan to create 22,000 family-supporting jobs over the next ten years. It was our response to the government’s highly touted priority — job creation. We took the plan to government and, together, established government/industry teams to tackle the first three points in the plan. However, to our disappointment, it soon became clear that there was little real commitment to meaningful action on the part of government.

Meanwhile, the government continued to push ahead with sweeping land use changes that are resulting in the alienation of resource land. Huge areas of British Columbia are being labeled as “off limits” to mining and other resource uses.

The most glaring example was the withdrawal of the Muskwa-Kechika region, an enormous amount of mineral-rich land the size of Nova Scotia. The area has effectively been declared a de facto park. The decision itself was bad enough, but the way in which the government is “selling” the move is worse.

The government is boasting to the public, through paid advertisements, that it has “protected” 4.3 million ha from development. However, the government is telling industry that only 1 million ha has been protected and that the remaining 3.3 million ha are open for mining. Who is being told the truth? Finally, a class action lawsuit was launched in the province’s Supreme Court on Dec. 17, claiming millions of dollars in damages on behalf of mineral claim holders in British Columbia who lost assets as a result of the provincial government’s decision to create additional parks and protected areas.

It was not a happy day for British Columbia’s mining industry. Supporting the lawsuit, which is akin to suing one’s own landlord, was not an easily chosen course of action for us. However, we saw no other option but to stand with and support those whom we regard as vital partners in our business. By their actions, the provincial government has effectively seized assets of these individuals, taken away what rightfully and lawfully belongs to them, with no compensation for their loss.

People who spend money on mineral exploration, whether one-man companies or major producers, will not invest in a province in which their investment may be at risk due to governmental “expropriation without compensation” tactics.

Is it any wonder that a Fraser Institute survey recently rated mineral-rich British Columbia as the least-attractive province to juniors and senior companies operating in this country in which to invest new exploration dollars?

It has been a frustrating 12 months, but the year is now behind us. Our hope for 1998 is that job creation will become the government’s top priority, not just in words, but in actions as well.

— The author is the president of the Mining Association of British Columbia.