Mining consultants views mixed on free trade

As the contents of the Canada/ U.S. Free Trade agreement continue to unfold, it’s clear that greater cross-border access will be offered to Canadian mineral producers.

But the agreement may also provide some advantages for Canadian- based mining consultants already operating in the U.S. market.

“In future the principles of national treatment, right of commercial presence and right of establishment will be extended to a number of service sectors including consultants to the mineral industry,” says Henry Armstrong a Counsellor at the Canadian Embassy in Washington.

While Armstrong called this a historic breakthrough, a couple of Toronto-based mining consultants have mixed views on how much they can take advantage of the new rules.

“I don’t think it will open up a whole new set of opportunities but it will make it easier for us to transfer technology across the border,” said Bob Dengler, president of Dynatec Mining Ltd.

Under the current rules, when equipment is transferred from the U.S. into Canada, operators must pay 1/60th of a 10% duty calculated on the value of the machinery for every 30 days it remains in this country.

As a result, companies like Dynatec, which specializes in building and designing mine shafts, pays close to $40,000 to operate a $2-million raise drill and 1,000 ft of drill- pipe in Canada for one year.

However, since most of the new U.S. mines are tending to be open pit heap leaching operations, Dengler says his company will have only a limited opportunity to benefit.

He says free trade will offer greater incentives to a company like Wright Engineering of Toronto which specializes in building metallurgical processing plants.

With U.S. projects valued at around $150 million, Wright Engineering is one of the largest Canadian consulting firms operating south of the border. Among several American projects, Wright is currently building a processing plant at American Barrick Resources’ Mercur mine near Salt Lake City, Utah.

“At this stage, we are thinking of opening an office in the U.S.,” said Wright President Tom O’Gryzlo who lists Reno and Denver as possible sites.

Free trade, he says, will give his company the right to obtain green cards for a number of Canadian engineers who will work in the new office.

According to O’Gryzlo, it will also make it easier for his company to transfer technical information across the border. “Try taking a drawing across the border at the moment,” said O’Gryzlo who claims that a number of Wright employees have been turned back this year.

“We try to comply with the rules but immigration authorities sometimes give you a real hassle,” he said.