Editorial Western’s vote of confidence

Familiarity breeds contempt, according to the old adage. It often takes an objective “outsider” to recognize qualities that may be taken for granted by those who know a situation too well.

So it seems with Western Mining Corp.’s entrance onto the Canadian mining scene. In one week the Australian mining giant committed in the neighborhood of $360 million for Canadian mining companies. Together they own and operate five mines, all but one of which is in Canada. That kind of entrance is bound to steal the limelight.

Australia is very similar to Canada in its reliance on the mining industry. In both countries mining has been and continues to be a cornerstone of economic well-being, yet in both it is often forgotten by legislators and castigated by the public — people who enjoy the wealth created by industry. Both countries are geologically blessed with great mineral resources and both boast of stable, conservative societies that respect the role and rights of investors.

Canadian companies have made significant moves into Australia. Witness the role of Placer Pacific and Noranda Pacific. And there have been significant forays by Australian companies into Canadian territory as well — Pamour Inc. and City Resources are two examples.

But the move by Western — apparently based on a desire to create a significant North American profile — is unprecedented. There is, of course, much debate on the merits of the Australian company’s investments and the price paid. That would be true of any investment of this size, and that debate will only be resolved by the performance of these companies over time.

But Western obviously has faith in North American mining and particularly in Canada. Perhaps it knows something we don’t. Perhaps it more fully appeciates the environment for the mining industry that exists here.

Regardless, Western’s investment is a welcome vote of confidence in the Canadian mining industry.