Dear Editor,
The comments of Manitoba’s Minister of Growth, Enterprise and Trade during the public announcement of the Manitoba First Nation Mineral Development Protocol implied that the First Nation communities’ consent would be required before exploration permits would be issued. He went on to say that communities could decide not to have exploration and mining in their traditional land use areas. This is essentially a veto, which would have huge implications for the survival of Manitoba’s mining industry.
Manitoba is blessed with abundant mineral resources and a long rich mining history, having produced many world class deposits which it continues to churn out every 15 to 20 years, once boasted of two smelters and has a world class zinc refinery.
There is great potential for new mineral discoveries in Manitoba and even new mining camps, where much of the province is still underexplored compared to eastern Canada. Despite this, Manitoba’s share of junior exploration is now almost non-existent. Spending is under $6 million compared to $61 million next door in Saskatchewan. Adding to northern Manitoba’s current woes were the shutdown of the port at Churchill and the rail line servicing it; the closure of the Birch Tree Mine in Thompson last year and the closure of the smelter this year. In Flin Flon, Hudbay just shipped their last ore from the Reed Lake Mine while the Triple Seven Mine may have just three years left. To support our communities and the province, more mines need to be discovered. There is no shortage of targets, we simply need more explorers and investment dollars. Steps to reverse this trend must start now or we will not have a mining industry in seven years.
So what happened in our province? Manitoba exploration companies struggled to get exploration work permits, especially outside the established camps. Companies just gave up and left and the sector dwindled.
To address the work permitting issue and other problems, Minister Blaine Pedersen set up a committee so First Nations peoples could benefit directly from resource exploration and development activities in their traditional land use areas. Each community would be able to benefit through training, employment, revenue sharing, business partnerships and other business opportunities from the exploration stage right up to and into mine production. The idea was obviously to address the needs of communities with high unemployment but also to unblock and speed up the permitting process, which had stalled because there were no firm incentives in the consultation process for First Nation communities. The protocol was strongly endorsed by Manitoba Saskatchewan Prospectors and Developers Association (MSPDA), which felt it was long overdue.
The training, jobs and business partnerships would bring a better quality of life to communities and further make the skill sets developed transportable across Canada. It is important that these communities, with growing populations, have opportunities to prosper from the exploration investment of new mining development, but this requires ongoing certainty of permitting and reasonable stability. Projects will only move forward in a pro-development environment that gives certainty to investment dollars.
During the announcement of the Manitoba First Nation Mineral Development Protocol the Honourable Blaine Pedersen stated that he would respect and not issue permits where those communities don’t want mining. His statement essentially removed the stability and certainty that exploration venture capital requires. It removes control by the province, the duty of which is to ensure that all residents and businesses of Manitoba can benefit from its resources. If implemented, it is almost certain that the province will turn away millions of dollars in resource investment. So now it has moved from not just being all about permitting but also to all about certainty of tenure and process.
It takes hundreds of targets tested to find a mine. The role of junior exploration and prospectors is to test as many targets as possible. Juniors are essential to form the base of pyramid to feed discoveries to mining companies. However, unlike mining companies, juniors have no income from mining and rely on high risk investors to fund their exploration. Without junior exploration, - and we need more, not less - discovery rates will plummet. Conditions that welcome investors will see exploration dollars flow into the province and into the hands of northerners, but the opposite is also true. Investors simply will not put hundreds of thousands or in the case of more advanced projects, millions into a project if it can be shut down arbitrarily by a veto. Investors simply invest elsewhere where there is certainty and they feel welcomed.
The implied veto gives First Nations jurisdiction over the mineral rights. Such action would overrule the Mines Act and Regulations of Manitoba and the jurisdiction of province provided by the Natural Resources Transfer Act of 1930. Such action would also compromise the rights of innocent parties who acquired mineral dispositions legally. Each First Nation community would have the right to change their mind, or could add financially unsupportable demands on a project. This level of uncertainty will direct future project financing away from our province and see Manitoba rapidly gaining the dubious distinction of being the least friendly place to explore in Canada.
All residents of Manitoba have a right to the benefits of resource development throughout the province. These resources pay for everyone’s social benefits of health, education, roads and other services. First Nations should have a big say in what goes on in their traditional land use areas. The Supreme Court has ruled that First Nations communities must be consulted and accommodated by governments. Certainly, any community in Canada should have a say in what happens in their own backyard.
First Nations communities may think having the final say is great and what they want, but it is not good if it works against their chance for real prosperity. Because of the uncertainty it creates, a veto would cancel all of the positive aspects that the protocol achieved. Chances for revenue sharing, job training, and new First Nations business partnerships would be significantly diminished. Money follows opportunity and relative certainty of process. Northern Manitoba is the big loser if a veto comes into effect because mines will not be discovered at a rate that makes the industry sustainable, as discovery rates further plummet because of a lack of exploration dollars. Northern communities will find it extremely difficult to support themselves and related infrastructure, which will burden the rest of the province. All northerners need to realize the effect and high cost of a veto. The province’s role is to play honest broker between industry rights and First Nations rights taking into consideration all the economic, social and environmental realities.
A better quality of life for First Nations people and mining, the largest industry in the north, and second largest in Manitoba are tied together are not unrelated, but the industry must be to be sustainable. Without a significant change in the incentives for exploration in Manitoba and a climate of stability in permitting and development, mining will be destroyed in Manitoba and all its northern communities will be far worse off. The rules must be transparent for investors to feel welcomed and realize security of land tenure, with a reasonable expectation that exploration is allowed to proceed in a timely manner and investors can expect a reasonable chance of a return on their investment.
The Conservative government planted a fabulous tree with the protocol, then proceeded to cut off the water supply to it. Perhaps it was bad wording by the minister in an unscripted speech. To not clarify exactly what he meant will be an irresponsible act and likely the greatest setback for mining in the history of Manitoba. This is a disaster in waiting, and the minister should review the consequences of his viewpoint.
We hereby request that the minister, or the premier, make a clarifying policy statement whether or not a veto was implied. This will allow investors, industry and indigenous communities to have a clear and transparent understanding on the security of their mineral rights and investments. The current situation is confusing and bad for business and the markets are reacting accordingly.
Stephen Masson
President
Manitoba Saskatchewan Prospectors and Developers Association
