40 Years of serving the mining industry
By Rajitha Sivakumaran
Sixteenth-century Canadian history tells the story of Jacques Cartier, French explorer and expert navigator, who arrived on the shores of Gaspé, Québec, searching for fresh prospects. Indeed, he thought he had found them in the form of diamonds and gold, but his return to France revealed that his discoveries were in reality quartz and pyrite. Although the province’s mining sector was not officially established until the 20th century, Cartier’s excursions mark the rise of an industry that would come to dominate Québec’s economy centuries later.
Launched in 1975 by a group of prospectors, the Association de l’exploration minière du Québec (the Québec Mineral Exploration Association or QMEA) serves as one of the principal voices of the mining industry in the province. The association’s main priorities are dialogues with economic and political stakeholders, business development and promotion of the industry. The QMEA arranges platforms for networking and employment opportunities through the annually-held Xplor and Explo-Abitibi conventions, where members can discuss scientific discoveries, technical problems, and political and legislative issues. The QMEA also helps its members develop sustainable practices and community relations.
Having been a lawyer for 15 years, Frank Mariage, the association’s chairman of the board, has a natural talent for governance. Along with the board of directors, Mariage manages the concerns of 330 corporate members and 1,800 to 2,000 individual members, representing mainly junior exploration companies in addition to industry giants like Agnico Eagle Mines and Goldcorp Inc. Membership includes companies from all aspects of the mining business from prospectors, exploration companies and drilling companies to geologists. Membership is even offered to students, who gain access to both a vast network and a recruiting platform.
The revival of Plan Nord
The mining industry is a capital-intensive business. Anything that involves helping members reduce operational costs and finding projects that can later be developed in a sustainable way — that’s where the QMEA comes in. Policy, law and regulation lie at the core of the QMEA’s existence and that’s why the association actively partakes in Plan Nord, a government proposal that aims to promote economic development in northern Québec. Luckily for the association and its members, mining is one of the sectors being promoted to increase employment and prosperity.
For the mining sector, this plan was presented under the Charest government four years ago, a time when mineral prices were sky high. Then things took a dive; prices came tumbling down followed by a change in government in 2012, and Plan Nord suddenly became Plan Mort. The 2014 elections brought with it the Couillard administration. Implementation of some of the measures that were initially presented has now begun with the formation of the Société du Plan Nord — the government entity now responsible for the development of northern Québec. With a budget of over $400 million, the Société will invest along with companies in the development of infrastructure.
The members of the QMEA are being directly and positively impacted by this. With infrastructure like roads, companies can now come into these northern regions and do business at a reduced cost. There is a substantial difference in cost when bringing equipment to a developed area like Val-d’Or compared to an undeveloped region like Baie-James, said Mariage.
Challenges: Prices, taxes and regulation
Challenges of the industry lie predominantly with the global state of the economy and markets. Although there has been some activity in gold and lithium earlier this year, the industry in general has suffered from a significant decrease in the price of minerals. Access to capital continues to be a challenge for the mining industry and the dwindling number of investments carried out in Québec is a reflection of this.
“We’ve essentially gone back 10 years in terms of investments in the exploration and development of projects,” Mariage said, although he expects conditions to improve. “The prices will go back up, but it’s just a question of when. In terms of the market and mining space, I think the worst is behind us.”
In the midst of this scenario, it especially does not help that mining companies are heavily taxed by the government. There exists a regulatory burden as well. Thirty years ago, starting an exploration project, defining your ore body, getting the permits and putting it into production took 10 to 12 years. Now that could take 20 years.
“Our industry faces more than 50 laws and regulations. Before the first minerals are extracted, there can be north of 200 permits that are required,” Mariage said. This has not escaped the notice of the government, however — it has launched a vast review of the regulatory regime in an effort to facilitate and streamline the process.
“Responsible and sustainable development and respect of the environment — those are always core values we share with the government, but there has to be a way to facilitate things. Not only does this increase delays in project development, but it also increases costs. Working in a world economy, where the projects are all over the world, we’re competing with other jurisdictions so we have to be efficient as well,” Mariage said.
Doing its part for the environment, the association, in collaboration with the Université du Québec en Abitibi-Témiscamingue and the government, is working to eventually establish certification regarding sustainable practices.
“Environmentally and socially, mining companies don’t govern themselves the way they did 40 years ago because practices have evolved for the better and for practices to evolve there has to be regulations attached to that,” Mariage said.
Mending the Mining Act
Four attempts to mend the Mining Act over a course of five years has created some tension between Québec’s mining sector and certain municipalities, but Mariage and the association are working actively to promote good communication channels between industry and government, specifically the Ministry of Natural Resources.
“One of the good things of all this turmoil is that it got the mining industry and municipalities to sit down, get together and try and work out a solution,” Mariage said.
This sit-down has resulted in section 3.04.01.01 of the Mining Act and although it is not in effect yet, it gives the regional county municipality, which is responsible for urban planning, the authority to identify territory that is incompatible with mining. But Mariage fears that this will result in even more territory being withdrawn from mining exploration.
“We respect and agree that it is important to protect territory. It’s important to protect different spaces within a municipality where it may not be optimal for mining exploration and thereafter mining exploitation, but let’s not do it blindly,” Mariage said.
Other sit-downs have been more positive. As there are projects located in the vicinity of First Nations communities, dialogues with these groups have increased. The mining sector is a leading employer and this has served both Native communities and mining towns.
“There is good expertise in Québec and we’ve developed very good practices not only in terms of how we conduct projects, but how we govern ourselves with First Nations and municipalities … I think it’s expertise that needs to be recognized and I will continue to be a promoter of that as long as I am president of the association and even after my term ends,” Mariage said.