One is the federal government’s decision to assist putting the former Cyprus Anvil lead-zinc mine at Faro, Y.T., back into production back in 1986. The federal government really went out on a limb on that one, and The Northern Miner probably would have been the first to criticize if that project hadn’t worked out.
But, thanks to zinc prices that are more than double what they were when the project got the green light, the Faro mine is booming and the government officials look like geniuses.
Then there’s the Colomac gold project in the Northwest Territories. Getting investors to back that project appeared to hinge on a $15-million loan guarantee from Ottawa. But Ottawa refused to get involved, despite pressure that focused on political issues such as creating jobs and generating revenue in a high- unemployment area.
In retrospect, the government’s decision on Colomac looks like the right one, too. After all, Colomac is undeniably a high-risk venture. What’s more, other investors did fill the gap when the government backed out.
Hindsight, of course, is 20/20. Should government have become involved with coal projects in northeastern British Columbia? Has flow-through financing provided a net return? It’s easy to come up with answers when one is looking back.
In general, it’s difficult to justify government involvement in the private sector, but some past examples show that there are instances when it pays to bend the rules a little bit.
]]>
Be the first to comment on "Editorial Government help"