EDITORIAL PAGE (June 22, 1992)

The accepted wisdom is that all the easy finds in Canada have been made. Discoveries such as Hemlo a stone’s throw off the Trans-Canada Highway and Louvicourt in the shadow of Val d’Or’s existing headframes might give pause for reflection, but the point is well taken. Where in this vast land can you pick up a bargain for prospective ground?

The best answer today might be Manitoba. Geological potential, a strong tradition of mining, existing infrastructure including two smelters and a government willing to compete with other jurisdictions for mining investment are all working in the province’s favor.

But Manitoba has been neglected for the past decade. Political finagling has largely negated the appeal of its geological potential.

For one thing, Manitoba has the highest mining tax in the country at 20% of net profits. This disincentive is a drag on mining activity. But the neglect the province has suffered is exactly why there may be some bargains to be had. If the adage about looking for a mine where one already exists holds even a grain of truth, the dearth of activity in Manitoba is simply not justified.

Inco Ltd.’s nickel operations at Thompson are competitive on a worldwide basis, and the Flin Flon copper-zinc operations of Hudson Bay Mining and Smelting straddling the provincial boundary with Saskatchewan have been a mainstay of the province for decades. Other mining operations include Tantalum Mining Corp.’s tantalum mine near the Ontario border, the Trout Lake polymetallic mine (27% owned by the Manitoba government) and Hudson Bay’s Namew Lake nickel mine.

In fact, mineral output in Manitoba is worth about $1 billion a year, 7% of Canada’s total non-fuel mineral output, making it the country’s fifth largest mining province.

It also ranks sixth in terms of exploration spending — $35 million in 1991 compared with $124 million in Ontario, the leader.

Recent developments are likely to spur even more interest in Manitoba. New exploration incentives to attract investment and prospectors’ assistance programs, for example, have already been put into place and will likely boost grassroots exploration activity.

More important, however, is a tax holiday for new mines that comes into effect in 1993. It allows companies to forego paying mining taxes until capital costs for a new mine are fully recovered.

Plans by the provincial and federal governments to assist Hudson Bay with $187 million to upgrade its smelter and other metallurgical facilities at Flin Flon will have spinoff benefits, too. The costly improvements are a tangible commitment to the future and should prompt exploration for base metals as potential smelter feed.

Canada’s provincial governments are slowly coming to appreciate that mining can provide a reliable foundation for their economies. Unlike manufacturing plants or service industries, mines cannot be picked up and moved elsewhere. Once they’re established, they can offer many years of employment, capital investment, tax revenue and export earnings.

But the provinces — or at least some of them — are also learning that they have to compete to attract capital to make those mines. In that sense, Manitoba’s efforts are particularly enlightened. The changes it has implemented will make it even more attractive when compared to British Columbia, Ontario or Saskatchewan.

So when companies are targeting their limited exploration budgets these days, Manitoba may get some of the attention it deserves.