EDITORIAL PAGE — Home, sweet home

As Dorothy said fondly of Kansas, after her whirlwind trip to the weird and wonderful Land of Oz, “there’s no place like home.”

It would seem that her feeling is shared by a good many North American mining companies that have decided to explore in their own backyard rather than venture abroad in search of new discoveries. As one Canadian mining executive put it, “We may be over-regulated, but at least we know what the rules are.”

A few years ago, Canadian companies were all too eager to head overseas in search of new mines and reserves, largely to reduce the lengthy process involved in placing a new mine into production. For the demands placed on them go well beyond the traditional technical matters of tonnage, grade, throughput, recoveries, waste management and environmental planning. Instead, Canada’s mining executives have found themselves spending endless hours trying to accommodate the sometimes-conflicting demands of an ever-growing list of “stakeholders.” Environmental costs, for example, have skyrocketed, as every bird, fish and blade of grass must be monitored in painstaking detail — all so that bureaucrats, under pressure from environmental groups, may be placated.

Small wonder, then, that the promise of easier times abroad has lured Canadian companies to the four corners of the earth. But having now spent several years away from the nest, many are coming round to the view that Canada might not be so bad after all.

Companies have learned that it is no picnic exploring in regions where there are no roads and no infrastructure; nor is it at all easy negotiating deals in countries where there is no legal framework to protect business agreements.

In countries where the government has not made the transition fully from a state-run to a market-driven economy, mining joint ventures have to be negotiated step by step on a case-by-case basis. In some areas, mining companies are expected to bear the costs of running schools, hospitals and community facilities, while, in others, various political factions are still vying for control, and no one knows exactly who owns what. Geologists and other employees are concerned about working in areas with high health and safety risks. And the Busang affair in Indonesia has underscored the risk of political interference.

Even so, some mining executives believe the rewards of exploring in underdeveloped regions far outweigh the potential risks; others relish the challenge and adventure that accompany such ventures. But judging by the almost $1 billion spent on exploration in Canada last year, some still believe there’s no place like home.

The Timmins camp of Ontario, which is prospective for both base metal and gold deposits, is one beneficiary of this sentiment, as is Quebec, where exploration is picking up steam in both traditional and non-traditional areas; the diamond potential of the Northwest Territories continues to hold the interest of Aber Resources and a few others hoping to emulate its exploration successes; and a handful of hardy juniors is keeping alive the hopes of finding another Voisey’s Bay deposit in Labrador.

The Canadian government and many provinces have taken steps to keep investment capital at home in the face of increased competition from abroad.

Last year, the government unveiled an updated mineral and metals policy, which includes initiatives to improve the business climate and ensure the competitiveness of the minerals and metals industry. Although more needs to be done, this was a timely first step, which should help Canada retain its position as the largest exporter of minerals and metals in the world.