On the road to election 2013: Commodities and Liberal policy drive mining gains
Rising commodities prices, combined with largely mining-friendly public policy, have driven major mining industry gains in B.C. since the BC Liberals came to power in 2001, according to the local explorers association.
Gavin Dirom, president and CEO of the Association for Mineral Exploration BC, said that in 2002, shortly after the Liberals came to power, the global mining industry "bottomed out." Slumping commodities values, he said, had slowed global mining exploration to just $1.73 billion in activity in 2002 – a far cry from 2012's estimated $21.5 billion.
Dirom said B.C.'s exploration expenditures – a key metric of industry health – have since then jumped 1,600% to $680 million in 2012 from $40 million in 2002.
On the policy front, Dirom said the B.C. government has helped boost B.C.'s exploration industry over the past decade by:
- introducing the mining flow-through share tax credit;
- introducing the mineral exploration tax credit;
- lowering corporate taxes; and
- establishing Geoscience BC.
He added that, over the last decade, the B.C. government has helped improve the mining industry's relationship with First Nations. He pointed to last month's announcement of a revenue-sharing agreement between the B.C. government and four Ktunaxa First Nation communities.
"That's a world-leading public policy implemented here in B.C," he said.
Dirom said that, despite "pockets of challenges," interactions between the industry and B.C. First Nations have improved since the 1990s and are helping bring more certainty to B.C. as a mining investment jurisdiction.
However, Dirom also identified Liberal policy changes that have hurt mining.
"We were outspoken about the decision on uranium, we were outspoken on the decision on Flathead," he said, referring to the Liberals' 2008 uranium mining ban, and the 2010 decision to force miners out of southeast B.C.'s Flathead Valley to turn the area into a de facto park. (See "Exposing political manoeuvring behind B.C.'s 2008 uranium ban"– page 12.)
But he added that Christy Clark's government has mitigated some of those impacts by promising or contemplating compensation.
Heading into 2013, Dirom said the state of B.C.'s mining industry is "very, very positive," but he didn't attribute that to either B.C. policy or global economics. "It's definitely a complicated combination."