A culture of "soft" entrepreneurs and flipping companies is behind Canada's lack of a homegrown mining megalith like Rio Tintoor BHP Billiton, according to industry experts at Vancouver's recent Bloomberg Canada-Asia dialogue.
"It's a bit harsh, but I think in Canada we tend to flip our companies more than in some other countries," said lawyer David McIntyre, a partner at Norton Rose Canada LLP, analyzing the reasons for Canada's lack of homegrown mining giants.
He pointed to China as a country geared at creating larger companies.
"[In China], they grow their companies and they're long-term buyers," he said. "In Canada, there is a tendency for our investors to want to get that 30% [takeover] premium and move on to the next thing."
Ian Telfer, chairman of Vancouver-based Goldcorp Inc. (TSX: G), posited another reason for the lack of Canadian world-class miners: so-called "softer" entrepreneurs.
"Canada seems to produce entrepreneurs that, once their net worth gets to a certain number and someone is interested in buying their company, they go, 'OK, that was great, thank you very much' and they're content to move on," he said.
"Whereas in other countries, there have been entrepreneurs where they want to hang onto that company, they want to control it for as long as possible, they want to grow it to be world class, they want to take over other entities."
Telfer said not all Canadian entrepreneurs are of the "softer, gentler" stripe – but many are.
He said another reason behind Canada's failure to produce a mining megalith is likely the sheer difficulty of the task.
"I'm not saying some won't do it, I'm not saying I won't try it, but it's a very difficult thing to do."
Telfer said he didn't see a role that government should play in the creation of larger companies, though he said it might be appropriate for government to make rules about foreign takeovers in certain sectors.
But Telfer said the secret to keeping companies Canadian longer term isn't about government intervention.
"The real defence of having your company taken over is to have a very high stock price so it's just too expensive for people to take over," he said, noting that Ontario has seen that with base metal companies with depressed stock getting bought up.
"Their stock prices were depressed and nobody bought them and so the foreigners came in and just bought them, right from under our noses," he said.
McIntyre added that, while Canada doesn't seem to grow global mining heavyweights, it doesn't appear to lack strong companies.
"We may not have created the BHPs and the Rio Tintos, but there's no shortage of strong companies that replace the ones that are gone – they keep coming," he said. "When the executives disperse from one of our majors, they create a whole bunch of other mining companies that then grow up and take their place." •
