Paul Stothart is vice president, economic affairs of the Mining Association of Canada. He is responsible for advancing the industry’s interests regarding federal tax, trade, investment, transport and energy issues. www.mining.ca This column was originally published October, 2009.
The development of the western oil sands constitutes one of the world’s most significant economic stories of recent decades. Technological advances and increases in crude oil prices from $20 per barrel in the 1990s to $140 in mid-2008 together reinforced the oil sands’ economic viability and, through hundreds of billions of dollars of investment, sustained its production growth from test-well quantities to volumes exceeding one million barrels per day.
As with any source of energy, the process of extracting oil from oil sands raises a range of environmental issues. Its rapid development has served to position this sector as target number one among some environmental groups. In this respect, it is important that NGOs and public policy stakeholders not ignore some key realities.
Economic contribution
Oil sands development has increased wealth and economic activity in western Canada during the past decade, creating 200,000 jobs, including many in central Canada that helped to offset job losses in the manufacturing sector. It is also estimated that each direct job translates to nine additional jobs among suppliers and indirect beneficiaries.
Like the recent record setting price of gold and the stock market recovery, the general mood at the annual Canadian Mining Hall of Fame dinner at the Fairmont Royal York Hotel a few weeks ago in Toronto, was upbeat, bright and a turnout. Master of ceremonies Pierre Lassonde, Chairman of Franco Nevada Corp. – the Billy Crystal of the mining sector – was practically “giddy” discussing the high price of gold and Tiger Wood’s problems. “Gold miners never had it so good, like mosquitoes at a nudist colony” quipped Lassonde. He continued, “there is not enough mustard in the U.S. to cover that hot dog,” in reference to Tiger Wood.
The Porcupine Gold Rush of 1909 was a transformative event in Canadian history, with three gold mines discovered by separate prospecting parties a few miles from each other. The rich discoveries made by Benny Hollinger (1885-1919), Sandy McIntyre (1869-1943) and John (Jack) Wilson (1872-1948) in northern Ontario wilderness led to the development of one of Canada’s premier mining camps and the founding of Timmins, the City with a Heart of Gold.
Graham Farquharson has earned a reputation as a senior statesman of Canada’s mining industry by demonstrating a commitment to integrity, fairness and technical excellence throughout his career with Strathcona Mineral Services Limited, a consulting firm he created with two partners in 1974. He is one of the industry’s most prominent consultants, best known for taking on extraordinary challenges, including developing and managing Canada’s first mine north of the Arctic Circle and debunking an Indonesian property once believed to host the world’s largest gold deposit.
Victor Wansbrough served Canada’s metals mining industry with distinction for more than 20 years as the first full-time Managing Director of the Canadian Metal Mining Association (CMMA), the forerunner of the Mining Association of Canada. His appointment in early 1947 was a surprise, as he knew nothing about mining at a time when the industry faced serious challenges, notably a labor shortage and a gold mining industry in decline because of rising costs and a fixed gold price.
Hugo Dummett was one of the world’s most respected economic geologists, aptly described as “the brains, the ideas and the energy” behind the first discovery of economic diamond deposits in Canada. In the 1970s and ‘80s, he worked with Canadian geologists Charles Fipke and Stewart Blusson and South African university professor John Gurney in a quest to find diamonds in North America. Almost a decade later, he convinced BHP Minerals to sign a joint venture with Fipke and Blusson’s junior company, Dia Met Minerals, and continue the diamond hunt in the Northwest Territories. The result of their collaboration was Ekati, Canada’s first diamond mine, and the development of a hugely successful, major new industry.
Peter Brown has contributed to the growth and prestige of Canada’s mining industry by helping many resource entrepreneurs and emerging companies gain access to venture capital that enabled them to acquire and explore promising mineral prospects or develop and operate new mines. He has been a dynamic force in the Canadian capital markets since 1968, when he joined Ted Turton in purchasing control of a small Vancouver brokerage firm for $23,000. By focusing on the small to mid-sized resource and junior industrial firms, long ignored by senior investment firms, he transformed Canaccord Capital Inc. (since renamed Cannacord Financial Inc.) into the largest independent investment dealer in Canada, with successful operations in Europe and the United States.