PDAC’s long-term strategy

Commentary

If Canada is to keep its competitive edge in mineral exploration, it must adopt a long-term strategy to increase exploration activity inside its borders.

This is the overriding message that the Prospectors and Developers Association of Canada is taking to Canada’s Mines Ministers conference when it meets in Whitehorse, Yukon, later this month.

In a brief to be presented to the ministers, the PDAC points out that this country is one of the world’s key targets for mineral exploration and is also a major player in the worldwide mineral exploration industry. However, with increasing global competition, a long-term strategy is required if Canada’s predominant position is to be maintained.

PDAC executive director Tony Andrews points out that the word “strategy” is key in this context.

“This is not a wish list; it is a strategy, each element of which will contribute in its own significant way to rejuvenating exploration and new discovery,” Andrews explained.

The brief points out that continuing strong global demand for minerals and metals represents an excellent economic opportunity for Canada. However, there is a decline in Canada’s mineral reserves and a need for new discoveries along the lines of Ekati or Voisey’s Bay.

In addition, the PDAC says, the country is a challenging and expensive place in which to work.

The PDAC presented a suggested strategy to meet these challenges to the mines ministers in 2005. All the ministers agreed to it and some action (such as extension of the Mineral Exploration Tax Credit [METC]) was taken. In this year’s brief, the association points out that reasons for developing a strategy still exist and reiterates the major points.

The strategy calls for sustained and prolonged investment in grassroots exploration. Components include: funding for the Cooperative Geological Mapping Strategy; extension of the METC beyond its new expiry date of March 2007; tax incentives for deep drilling in the vicinity of known deposits; and extension of the Canadian Exploration Expense to include the costs of community consultation, baseline environmental and feasibility studies and exploration for base metals in the vicinity of existing or past-producing mines.

Another major topic addressed in the brief is aboriginal affairs. Several jurisdictions, such as Quebec, have successfully implemented resource revenue-sharing agreements with aboriginal communities, and the PDAC is recommending that all Canadian provincial and territorial jurisdictions follow suit.

While it supports early and frequent consultation with aboriginal communities during the exploration process, the PDAC reminds the mines ministers that governments need to take action to facilitate this consultation. Communities and companies are doing their best to accommodate one another, but governments in Canada must provide direction on consultation in order to clarify the issue and help reduce the potential for disputes.

The brief also urges governments to accelerate the pace of resolving aboriginal land claims, since longstanding and unresolved jurisdictional issues can stir up conflict between communities and companies. Human resources present a major looming problem for the exploration industry. The PDAC believes initiatives are needed to recruit new workers and to develop the skills of current employees.

The association has already pledged to create awareness of opportunities in the industry and will be launching special initiatives to attract and retain employees.

As it has done in previous briefs to the mines ministers, the PDAC calls for the installation of a single national securities regulator applying one set of rules across the country. The passport system, it adds, is an interim step toward this goal. The association further recommends the development of securities laws that will, among other things, provide juniors with access to capital on a timely, cost-efficient basis.

Other areas addressed in the brief are the complexity of Fisheries and Oceans Canada’s organizational structure, the need for a national system of professional practice for geoscientists and integrated land management as a tool to deal with land use issues.

— The preceding is an excerpt from In Brief, a quarterly publication of the Toronto-based Prospectors and Developers Association of Canada.