Low metal prices, government red tape, jittery investors conspire against exploration industry
Mineral exploration in northern Ontario has been on a steady decline for the past four years, and that’s causing some to worry.
The executive director of the Ontario Prospectors Association is used to the cyclical nature of the exploration industry, but he said he isn’t used to this.
“Exploration in northern Ontario is the lowest it’s been, probably since I’ve been in the business, and I’ve been in the business 30 years,” Garry Clark said.
He estimates the number of people employed in the industry is half of what it used to be, when metal prices were up.
Figures from the Ministry of Northern Development and Mines confirm the severity of the situation. The number of active claims in the province has dropped by more than 16,000 thousand in the last five years. And exploration spending in Ontario is down about $100 million, compared to last year.
The president of the Northern Prospectors Association said the uncertainty is forcing people to leave the industry — and there’s fear they could be gone for good.
“You either have to be lucky enough to have the same people come back or train new people,” Gino Chitaroni said.
Stimulating the industry?
Despite the downturn, the ministry says Ontario is still the top jurisdiction for exploration in Canada.
The Prospectors and Developers Association of Canada made suggestions on how to stimulate the industry at this week’s Energy and Mines Ministers’ Conference in Halifax.
PDAC executive director Andrew Cheatle said the government could put in place the mineral exploration tax credit (METC).
“This helps investors [who invest] in what is naturally a high risk sector,” he said.
“We’re calling for the METC to be doubled and put in place for about three years.”
Cheatle said his association is also calling for more infrastructure investment to unlock mineral potential.
Mines minister Michael Gravelle said there’s an understanding that junior companies need easier access to capital through flow-through shares and other mechanisms.
For the rest of this article and an interview with Minister Gravelle, click here: http://www.cbc.ca/news/canada/sudbury/ontario-mineral-exploration-slows-to-a-crawl-1.3163313