In Defense of Canadian Mining Companies

William Strachan

I have stood on the precipice of a portion of land in the Ecuadorian Amazon (land slated to be replaced by a copper mine) and wondered how it would be possible to transform such an infinitely massive space with all its natural wonder into a sand, gravel, and earth reservoir wherein enormous machines extract some of the resources that fuel the world.

  The situation forced me to confront the reality of the extraction industry. It’s nasty. There is no way around it. That piece of land, and all the others replaced by mining projects, will be inextricably scarred. That’s not to mention tailings’ ponds and other fallouts from mining activities. With such high tolls one can go to extremes and wonder whether mining should be permissible at all. Such a conclusion is quickly withdrawn, however. Resource extraction is necessary to the world economy. Period. The question is, then, not whether or not to mine but how to mine.

The best option is to minimize the adverse consequences of mining operations. Easier said than done. As seen in various media releases, mining companies are constantly embroiled in scandal. Protests, related deaths, environmental degradation, the list goes on. I would put forward the argument that some manifestation of these tensions is unavoidable. It’s what happens afterwards that is.

Too often is the finger pointed at mining companies when things go awry. For example, allegations of human rights abuses surface and suddenly people start screaming from the rooftops, condemning companies and demanding project withdrawal. This is totally inappropriate in most circumstances.

To condemn mining companies and demand project withdrawal is to bite the hand that feeds because love it or hate it the Canadian mining industry is linked to our economic well being. Take the speaking notes of Mr. John Eby, Vice Chairman of Scotia Capital, from his address to the National Press Club Newsmaker Breakfast titled “Mining in Canada: Dynamic, Innovative and The Bedrock of our Country” (November 22, 2005):

“There are more mining companies listed on the Toronto Stock Exchange and the TSX Venture Exchange than any other exchange in the world. Over 1,100 mining companies are listed, from small start-up firms to world-leading producers. The total value of these firms is more than $150 billion US. In 2004, Canada outranked all other exchanges around the world for raising equity capital, financing C$6 Billion, equalling the total amount raised in all the equity markets of the rest of the world put together. It is these numbers that make Toronto the global centre of mine financing. Canadians are global leaders in mining.”

He continued:

“Canadian firms have interests in more than 6,400 properties in over 100 countries around the world – an investment of $50 billion or 12 percent of Canadian investment abroad. In many countries, Canada and Canadians are defined by our mining industry, — our expertise, our high safety and environmental standards, and our investments in their communities. The fact is, mining is one of the few – and perhaps the only – sectors of the economy in which Canada excels internationally. As the Globe and Mail said a few months ago, mining is one of the ten things that Canada does best. Mineral production contributed almost $37 billion to the Canadian economy last year. We exported over $28 billion of minerals and primary metals to over 130 countries, making a significant contribution to Canada’s trade surplus. In terms of jobs, 369,000 Canadians are directly employed in mining and mineral processing. These are largely skilled jobs, often in remote locations that put life into our national policies of regional economic development. And for every job created in the mining industry, more than one other job is indirectly created in the Canadian economy.”

Now, back to the “How?” of mining.

As previously mentioned, the extraction industry is dirty. There’s no doubt about that, but there is a process that Canadian companies go through before operating abroad. Host countries, represented by governments, must be in lawful agreement. This is protected by rigorous anti-corruption legislation that holds Canadian companies accountable to ethical business practices. For example, Niko Resources and one Canadian Senator are currently being investigated because they allegedly did not abide by this law in Bangladesh. Then, as a form of best practice, Canadian companies work diligently to attain the “social license to operate”. In other words, they need permission from local communities before commencing operations. The problem is that governments don’t always represent the majority of interests on the macro level, and neither do local leaders on the micro level. What I want to highlight here is that it is NOT the duty of Canadian companies to ensure compliance between political leadership and majority interests (except in extreme cases such as in Sudan and DRC).

Would it be better if Canadian companies avoided operating in marginalized nations? Perhaps for our own conscious, but someone is going to do it and it’s better Canadian companies than countries with different methods.