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Keeping the competitive mining edge

The long-term demand for metals is strong. The nearly eight billion people on the planet want new stuff and almost all of it comes from mines.
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Douglas Morrison, president and CEO, Centre for Excellence in Mining Innovation; network director, Ultra-Deep Mining Network in Sudbury.

The long-term demand for metals is strong. The nearly eight billion people on the planet want new stuff and almost all of it comes from mines. Therefore, the current economic situation is temporary, so long as the industry learns the lessons of the last couple years and is seriously reformed to consistently meet the demand of the global economy; not too hot, not too cold. This is really important to Canada because mining is a really important part of the Canadian economy.

Mining represents about $55 billion or almost 4 per cent of GDP, $700 million a year in royalties and taxes and almost $90 billion of export value — nearly 20 per cent of the total. There are almost 1.5 million jobs in Canada dependent on mining, with 400,000 of them directly involved in mining and processing. In Canada, it employs more Aboriginal people than any other industry and has the potential to hire many more.

The average salary in mining is $110,000/year, some $35,000 more than the average in manufacturing, construction or forestry. None of these jobs can be exported abroad. So long as the mines are globally competitive, the jobs stay here. This is a seriously important industry.

The last time we saw a collapse of global commodity prices on the current scale was around 1980. The impact on the mining industry took a year or two to take effect, but many mines in Canada, including those owned by both major mining companies in Sudbury, began to contract and even closed down for a short period of time.

When these mines reopened they were able to complete the transition to the kinds of mining methods — variations on open stoping with backfill — that have since become commonplace around the world.

These companies were strong supporters and drivers of the technological developments that improved the safety and stability of mines around the world. In other parts of the world, the application of the block-caving technique used in copper porphyries expanded. The common factor in the success of these methods over the last 30 years has been the economies of scale.

There is a view that this crisis — some 35 years after the last — will spawn a similar rejuvenation of mining with the advent of new technologies and disciplines to improve the economic returns of mining operations. I think it is a great deal more complicated than this.

Back then we had many more experienced miners, technologists, geologists and engineers than the mines and plants could employ. We had universities and colleges staffed by teachers with practical experience in the industry, as well as being well-educated in all the disciplines the industry needs.

We had a strong exploration sector capable of finding a lot more ore, and a relatively light burden of environmental regulation and community consultation; from exploration through to mine closure. We had a broad base of mineral processing expertise and contracting companies with staff experienced in completing new mines and plants on budget and schedule.

For many years the economies of scale covered up many of our problems, but for our deep mines we need to forget economies of scale and focus on the economies of quality: working faster, cheaper and smarter. This won’t be easy — innovation is not easy — that’s why it doesn’t get done every day.

We don’t have the human resources we had 35 years ago. We face shortages in every discipline the industry needs, an average age of over 50, and an educational sector that cannot replace more than 25 per cent of our current workforce.

But maybe there is an advantage in this. With experience comes a level of intransigence, a resistance to change. With fewer resources, ‘not changing’ ceases to be an option, so the only question is change to what? And this is where new people and new ideas come in.

Canada still has more bench strength in mining expertise than any other mining jurisdiction in the world. But once this bench strength has retired for good, our experiential advantage will be gone, and we are too small a population to recharge the industry.

The cost of doing nothing, or doing too little too late, is far greater than the cost of taking action. Mining is an industry of national importance and no other sector of the Canadian economy is as globally important. We have the opportunity to be the primary agents of change in a global industry that desperately needs it.

This is the time for the federal government to invest in innovating the mining industry and enable us to create an industry that can meet the needs of a globally sustainable society in the 21st century.