Aboriginal Community Development with the Resource Sector Annual Conference – Opening Comments – By Hans Matthews, President of the Canadian Aboriginal Minerals Association

The Canadian Aboriginal Minerals Association (CAMA) is an Aboriginal, non-profit organization which seeks to increase the understanding of the minerals industry, Aboriginal mining and Aboriginal communities’ paramount interests in lands and resources.

Developing Minds, Managing Resources – November 2, 2008 (Saskatoon, Canada)

There are now more than 120 agreements in Canada between Aboriginal groups and mining companies. We are at a stage where it has almost become the norm for companies to negotiate agreements to gain access to the community, community lands and to initiate programs and services around environmental management, human resource (HR) development, business development, social planning and so on.

In addition, communities are receiving a share of revenues from mining projects and play a role in certain decision making with the company (generally in HR, environment, infrastructure planning, mine closure, and so on). Many communities, in the past, have not been exposed to such an extent to the mining industry as they are now, given the prominence of the industry (‘super cycle’), consultation requirements (government requirements), land settlement agreements (comprehensive land claim agreements) and impact/benefit type agreements.

As the momentum was created over the past five years in response to record commodity prices, more lands being acquired by resource companies and more Aboriginal communities engaging in benefits agreements with companies, we also saw a significant flaw in the process.

Communities were telling us they lacked or were short on capacity to take advantage of the opportunities at their ‘door step’. This included implementation of their agreements with industry, organizing the community to play a bigger role in decision making, attracting their youth to opportunities and investing revenues provided from resource projects (just to name a few of the challenges facing communities).

Resource companies could not understand why Aboriginal claims to lands increased over this same period, why some communities could not or were reluctant to participate in studies, committees and joint investments.

Not only has there been and continues to be a desire to develop mines and develop communities, but overall there is a need in these times, to develop the minds of all partners, whether it be the community, industry, government and others who play an integral role in the success of benefits agreements.

What do we mean this year with the theme “Developing Minds, Managing Resources”?

  • Today We are all continuing to learn and to develop approaches to secure our investments, secure benefits for our communities and to secure a future for the mining industry and our communities.
  • Today We are developing, by enhancing the capacity of our communities, to create businesses, enhance education, promote cultures, and each others’ perspectives on lands, resources and environment.
  • Today We are all developing an understanding that resource projects cannot proceed without the endorsement and acceptance of the Aboriginal community.
  • Today Many have also developed the mindset to say “it makes sense for Aboriginal communities and resource companies to work together to manage natural resources”, and to “the grow our financial and human resources together”.

Through these 120 plus agreements, it is clearly shown that relationships are developing as are the minds and mindsets of all the parties concerned.

Over the past five years, we have seen a very strong mining industry in Canada; however, as many who have witnessed the cycles in the mining industry know, good times can be followed by periods of bad times. The mining industry has been booming until a few months ago.

Many in industry say that there may be a “correction” in the economy, however remain optimistic that elevated metal prices will continue, while others may say that this depressed period is just a short-lived low, as demand for commodities, such as metals, will continue to be fuelled by domestic consumption and demand from China and India.

But, whether good or bad, the mining industry and community are developing approaches and learning to:

  • Develop human resource strategies to address the shortage of skilled workers.
  • Address, through agreements and partnerships social responsibility.
  • Help secure investments and indirectly the ability of partners to secure funding and investment dollars.
  • Advocate Aboriginal involvement in government approvals processes (e.g. Mining Act changes and so on) and,
  • Advocate the settlement of land claims and confirmation of Aboriginal title and interests.

With the Toronto Stock Exchange (TSX Venture Exchange) down more than 50 percent since the middle of 2008, some market analysts expect some significant changes are coming in the junior mining and mineral exploration sector with only the strong surviving (global equities have been falling for some 12 months, and they are now 33% below their high point). These changes could include, cutting costs, cutting staff and employment and related programs, suspending projects, and so on. There are some 1500 junior mining companies trading on the Toronto exchanges.

A number of junior mining companies could find new money difficult to obtain now as they commence 2009 mineral projects; they are encountering tight credit conditions, increasing operations cost pressures, fluctuating dollar exchange rates, and potential delays relating to permitting, infrastructure development and commissioning as well as plunging commodity prices.

Communities and industry are asking more questions today:

  • What will happen to the benefits agreements in place now?
  • Will this partnership momentum stop, given the current economic climate?
  • Are community expectations so high that the sudden suspension, delay or cancelling of a resource project, will derail what the parties have created in the boom?
  • Is it a ‘wake up call’ again, that the industry is a cycle…that good times follow the worst of times, and that next time communities will be in a better position?
  • For industry, when operations are in question, does the social responsibility stop or do the agreements stay alive…will companies be able to afford it, and can communities transfer their experiences, knowledge and skills to other remaining sectors of the economy or to the benefit of their own governance?

Today it even more important that the agreements, commitments and objectives of the community and industry are met, although for these to be achieved, we all have to work be realistic and ‘develop our minds together’ to effectively manage our valuable resources, our people, our lands and our resources.

We are hopeful that you will leave this year’s conference with the tools to help you on this path.

Thank you
Hans Matthews
Canadian Aboriginal Minerals Association