Saskatchewan Mining Association celebrates 50 years of mining – by Bruce Johnston (Saskatoon StarPhoenix – May 26, 2015)

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Sask. offers ‘fertile ground’

Saskatchewan is considered one of the world’s most attractive places for a mining company to invest, with $7.3 billion worth of mineral production in 2014, world-class resources and a political climate that supports and encourages investment.

In fact, Saskatchewan ranked No. 1 in Canada and No. 2 in the world among jurisdictions that are attractive to mining investment, according to the Fraser Institute’s 2014 survey of executives of 4,200 global mining companies.

But that wasn’t always the case, as the sometimesrocky 50-year history of the Saskatchewan Mining Association shows. Even today industry and government don’t see eye-to-eye on everything, as evidenced by the SMA’s chilly response to the provincial budget’s deferral of capital cost deductions, which will cost potash producers $150 million this year.

As Neil McMillan, president of the SMA, noted there’s a fine balance between ensuring that shareholders get a reasonable return on their investment and the citizens get a reasonable return on their resource.

“We need to have a good balance of reasonable rate of return for the people of Saskatchewan – the owners of the resource – and the companies that risk their capital,” said McMillan, who is chair of Cameco Corp. and former president and CEO of Claude Resources. “The government has to have a fine touch to do that correctly.”

As to the changes announced in the spring budget, which are expected to carve up to $100 million off Potash Corp. of Saskatchewan’s bottom line this year, McMillan said retroactive changes to royalty and taxation regimes can cause “angst’ for mining company executives. “Changes retroactively to taxation and royalties, which are a form of taxation, are a real problem. The government has to be very, very careful with how they approach royalty reviews and what they do,’ he said.

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