Policy
September 3, 2012

Mining public policy: The road ahead

Kevin Costante is Deputy Minister, Ministry of Northern Development and Mines for Ontario. He spoke with guest editor Vic Pakalnis.

What key public policy issues does the mining sector face?

Let me pick three: Aboriginal relations, the environment and commodity prices. There is a growing awareness and increased expectations of Aboriginal communities that they be involved in activities taking place on their traditional territories. We are struggling with how to reconcile the need to have a vibrant mining industry and also respect First Nations’ and Métis’ desires to be involved and ensure mining is respectful of their land and their history on that land. We need to ensure that the rules are clear through updating the Mining Act, and to assist the industry with their processes with First Nations so they can progress in an orderly manner when they have a viable deposit they want to develop.

We have seen some remarkable movement: 50 agreements between mining companies and First Nations signed and many more being negotiated. Some agreements involve employment opportunities; others involve business relationships or community benefits. The mining industry is the largest private sector employer of Aboriginal people in this country. There is a huge opportunity here – mining industry jobs are very high paying jobs. This can be a catalyst for an economic revival in many of our Aboriginal communities. When I was at the Victor Mine recently, I was told that over 40 percent of their workforce was Aboriginal, many of them from the James Bay coastal area. I think that is having a noticeable improvement in the health of those communities, and in the health of the individuals. It has often been said that the best health care plan in the world is a job.

Sustainable environment practices is the second key issue. The Victor Mine near Attawapiskat affects a very small piece of land. Mining has come a long way in terms of rehabilitating the land base they do use. There has been a remarkable greening in Sudbury over the last 20 years. Companies and communities have come together to improve the environment and to ensure that historic bad practices are never repeated. A century ago mines were just abandoned; now there are financial guarantees that help ensure mine sites are restored.

The price of commodities and sustainable communities is the third key issue. As they rise and fall, so do the fortunes of nearby communities. Layoffs and some temporary closing of plants are affecting communities. But hopefully prices will recover and they will re-employ their staff and start production again. The mining industry is resilient and innovative and will recover.

Mining doesn’t have the profile perhaps it deserves.

Mining is a huge piece of the economy. Last year, Ontario produced $9.6 billion dollars of mineral product from 42 mines. Mining is largely in the North, but about 20 percent of our production is in southern Ontario: salt mines in Goderich and Windsor, talc and gypsum and, of course, sand and gravel. The industry employs 20,000 people directly and another 80,000 indirectly.

The mining industry has a responsibility to educate. The Ontario Mining Association and the Canadian Mining Association have been at it for the past few years, hosting events here at Queen’s Park and, I understand, in Ottawa, events called “Meet the Miners.” This year they brought 50 senior executives and others from the mining industry to meet with various ministers and deputy ministers and members of the legislature of all three parties to tell them about mining – how important it is to our economy and some of the issues that they are facing – and to raise senior public executives’ awareness of mining.

The Ministry of Northern Development and Mines and similar organizations in other jurisdictions have a responsibility to make public service executives aware of the importance of mining: in our history and in our future. I grew up in Temagami quite close to Cobalt, which was a boomtown, quite a historic mining camp. Sudbury and Porcupine began as mining camps for major “rushes.” We have lost our knowledge of that history and that understanding of the continued importance of mining.

I guess for the first time in a long time mining is actually a key policy agenda item.

We all have a responsibility to showcase our robust, world-leading cluster of mining supply and services firms that provide these services all over the world. There are approximately 400 firms in northern Ontario providing mine design consultancy services, rehabilitation, manufacturing of mining equipment, and geophysical surveying. These firms do work in over 100 countries around the world. They are major players in exploration and developing mines in South and Central America, the U.S., Russia, China and India. It’s big business and we are world leaders. This rather dynamic cluster of mining services and supply companies is worthy of support and it can be a real driver for the economy.

Another area both this ministry and the mining industry need to make people aware of is the importance of mining to the Toronto Stock Exchange. The TSE is still the pre-eminent source of capital for the mining industry in the world.  

You have spent over 20 years advising governments of all three parties. What do you see as the current challenges?  

The biggest challenge is trying to respond at the speed that the world is moving. With the BlackBerry, instant communication, greater knowledge, and increasing transparency, people are much more insistent that things happen and happen quickly. At the same time, always responding at that speed can be dangerous. Our responses must be properly researched and thought out. I can see us trying to meet the challenge and put our decision-making systems on steroids. At times it will work and, I fear, sometimes it will fail.  

A really positive trend I see is an increasing focus on good quality public services. I recently renewed my passport. It took 8 days! I was completely flabbergasted (in a good way) and I see that happening in all sorts of public service activities where there is increasing emphasis on making sure we provide good, integrated, comprehensive service to the people where they live. Our challenge is going to be providing that service integration across provinces, municipalities and federally.  

What are your predictions on economic recovery and the role of mining?

The feeling is that the economic downturn is going to last longer than we thought and that has implications for the mining industry. There are positive signs that gold and silver are going to do well as people look for safe places to invest. I think many of the small specialty minerals are going to be in demand as the innovators continue to find new uses. China and India have the potential to revive the world economy. I don’t know if my crystal ball is all that clear, but certainly it is not all doom and gloom.  

Mining has to be seen in the context of the whole value chain. Let me use the example of the diamond industry in Ontario. It is more than just the 400 employed at the Victor Mine site. The real news is that Ontario is now part of the global diamond industry. We made sure when we negotiated the contract with De Beers that 10 percent of those diamonds would be cut and polished in Ontario. They are among the highest quality diamonds mined anywhere in the world and Sudbury will be the location for a new cutting and polishing facility.

Canada’s first diamond Bourse will be created in Toronto, where the five hundred or so companies involved can trade and sell cut and uncut

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