Regulations, delays drag on province’s mining industry
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Hey there, time traveller!
This article was published 26/02/2020 (1126 days ago), so information in it may no longer be current.
Oh, how the mighty have fallen.
There have been concerns about various elements of the Manitoba mining industry for several years, much of it focused on the downsizing occurring at Vale and HudBay’s operations in Thompson and Flin Flon.
According to the Fraser Institute’s Annual Survey of Mining Companies, the regulatory environment in this province continues to erode any enthusiasm the industry may have had for the province.
In the Fraser Institute’s latest report released this week, Manitoba’s ranking has fallen to the middle of the pack. Only three short years ago Manitoba ranked second among 104 international jurisdiction in the report’s investment attractiveness index.
This year, Manitoba was ranked 34th out of 76 jurisdictions.
The investment attractiveness index is a combination of the index on mineral potential, which rates regions based on their geologic attractiveness, and the policy perception index, a composite index that measures the effects of government policy on attitudes toward exploration investment.
For the first time in more than a decade, there were no Canadian provinces in the top 10 and Ashley Stedman, one of the authors of the report, said respondents indicated there were concerns broadly in a number of policy and regulatory areas across a number of provinces.
“We do know that Manitoba’s decline, particularly this year, is largely a result of concerns over the policy environment,” she said. “There were significant concerns raised about protected areas, socio-economic agreements, infrastructure, regulatory duplication… There are a number of policy areas that require improvement here.”
For instance, exploration companies need permits before they can start work, but there is great uncertainty as to the actual timing of the release of permits in Manitoba.
Manitoba and Northwest Territories had the highest percentage of responses indicating the permitting authority met its established time lines only about half the time or less.
When asked about the changes in the time to permit approval over the last 10 years, 68.8 per cent of respondents said in Manitoba said it has lengthened considerably. Only N.W.T. and Yukon came close to being that bad at 60 and 57 per cent respectively.
“It is a pretty good indication that there are significant investor concerns related to the permitting process in Manitoba,” Stedman said.
One official from an exploration company that is currently active in the field in Manitoba said he has heard of some companies that have had to refund capital raised through flow-through shares because they were not able to get their work permits in time. The tax deduction for flow-through shares requires actual exploration expenditures be undertaken within one and a half years of the funds being raised.
Max Porterfield, CEO of Callinex Mines, an exploration company that has been active in the Flin Flon area for decades, said while his company has not had a problem, he has heard complaints about permitting delays from many others, especially from those outside the Flin Flon region.
According to last year’s budget documents, mineral production in the province decreased by close to 20 per cent in 2018. Exploration, which did increase in 2018, has been floundering at about two per cent of the national total when the province had traditionally been holding its own at close to five per cent.
No officials from the province, the mining association or the committee to advise the minister on mineral development and attracting investment returned calls to talk about the province’s poor showing in this year’s Fraser Institute report.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.
Updated on Wednesday, February 26, 2020 10:10 PM CST: Fixes typo