Mining downturn a chance for governments to craft competitive policies: World Bank (Northern Miner – March 13, 2015)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

Like other regions, Latin America has seen a slowdown in mining investment thanks to the global decline in commodities prices.

But however much it might hurt in the short-term, the slowdown represents a chance for Latin American countries to rethink their strategies around mining and the industry’s strategic role in spurring economic development, says Paulo de Sa, Practice Manager with the World Bank’s Energy and Extractives Global Practice group (GEEDR).

“It’s an opportunity for governments to think about competitiveness of their industries,” he said at a World Bank sponsored forum on mining in Latin America during the Prospectors and Developers Association of Canada convention in March.

While in previous commodity downturns, countries cut taxes to remain competitive in a “race to the bottom,” de Sa is hopeful that this time around, governments will explore other ways to achieve competitiveness. “We believe there are many, many ways of continuing to be attractive to mining investment other than just reducing the taxes,” he said.

To give governments some ideas on how to do that, the forum heard from officials from several different jurisdictions inside and outside of Latin America.

Data and innovation

While focused on Latin America, the forum looked at the experience of two successful mining jurisdictions in other areas of the world: Australia and British Columbia.

Robert Hough senior leader of Australia’s largest science agency, Commonwealth Scientific and Industrial Research Organization (CSIRO), noted that Australia heavily invested in the past in generating geological data to support industry.

“We recognized fairly early on the need for delivering pre-competitive data – publicly funded collection of pre-competitive data across the whole continent,” Hough said.

“That’s very important in new jurisdictions — a rounded collection of that pre-competitive data and what kind of data needs to be deployed out there to actually encourage exploration and obviously the potential for future mines in a given jurisdiction.”

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