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Minerals and Metals in Canada: A Strong Commitment to Sustainable Development
Dr. Stephen LucasAssistant Deputy Minister, Minerals and Metals Sector
Natural Resources Canada
April 14, 2008
2
Outline
• Mining in Canada
• Challenges for Governments and Industry
• Canada’s Approach
• Sustainable Development
• Positive Investment Climate
• Environmental Performance
• Community Benefits
• Transparency
• Corporate Social Responsibility
• Conclusion - Working Together
3
Mining in Canada
• Significant contributor to Canada’s economy and the quality of life of Canadians
• Mining as an value-added cluster– Over 1200 junior exploration and mining
companies – Over 2200 suppliers of equipment and
services– Downstream materials and
manufacturing industries– World-leading financial centre
• Foundation for many rural and remote communities
• Largest employer of Aboriginal people
Metals22%
Non-metals 14%
Coal4%
Oil Sands(mining)
23%
Smelting and Refining
34%
$60 Billion Value of Production
Diamonds4%
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Global demand is growing, driven by China …
0
10
20
30
40
50
60
1990 1998 2006
Percent
Aluminum Copper
Nickel Iron ore
Source: AME Minerals Economics
China now consumes 25% of the world’s base metals versus 5% in the 1980s.
China imports $100 billion in metals annually.
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… leading to sustained high commodity prices …
0100200300400500600700800900
10001100
Gold Zinc
Copper
Nickel
Index 2000 = 100
Source: Uranium – Cameco long term industry average prices Other – LME;TradeTech
Uranium
Metal Price Index
6
… a global exploration boom …
United States9.8%
Africa14.7%
Canada12.1%
Australia19.3%
Latin America28.1%
Pacific/SE Asia7.7%
Rest of the World8.3%
2007 Worldwide Exploration
Total = $14B
Source: Metals Economics Group
1999 Worldwide Exploration
Total = Canada
21.2%
Australia
12.4%
Africa
16.1%
Rest of
World
16.6%
United
States
7.9%
Pacifi c and
SE Asia
4.0%
Latin
America
21.8%
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… and growth in Canadian mining investments around the world
Latin America
30%
Australia11%
USA35%
Africa11%
Europe 2%
Rest of the world11%
2001US$25.8 billion
2006US$64.4 billion
Australia13%
USA17%
Africa13%
Europe 7%
Rest of the world
6%
Latin America
44%
Source: Natural Resources Canada
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Complexity is increasing for industry and governments
Technical Complexity
CommercialComplexity
Social
Time
Ov
era
ll C
om
ple
xity
Technical Complexity
CommercialComplexity
SocialComplexity
Technical Complexity
CommercialComplexity
SocialComplexity
Shallow mines/pitsSimple processingMinor environ controls
Private companiesMarkets
Remote locationsLow expectationsGov’t control
Deeper minesHigher tech processingIncreased Environment controlsCosts increasing
LME developsEquity marketsCapex growing
Remote locationsNGO’s emergeEnvironmental
Laterite HPALHigher tech processingIncreased Environment controlsMining lower grades
Competition for capitalConsolidation of industryCost escalating
Local Partnerships Stronger NGOVisible across the globePolitically challenging locations
Capex = Capital Expenditure
LME = London Metals Exchange
NGO = Non-Government Organization
HPAL = High Pressure Acid LeachSource: VALE INCO
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Sustainable development: Canada’s approach to realizing the benefits of our natural resources
• Sustainable development of minerals and metals domestically and internationally
• Safe use of minerals and metals
• Inter-governmental exchange of best practices, collectively addressing challenges of mineral resources development
• Principle of multi-stakeholder engagement and cooperation
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Canada’s Investment Climate• Objective is an internationally competitive investment
climate, anchored in sustainable development– Based on principles of transparency, accountability, certainty,
democracy, institutional capacity and security
– Clear federal, provincial and territorial responsibilities
– Well-defined environmental review process and standards
– Clear land access and security of title
– Internationally competitive tax regime
– Minimum investment restrictions for foreign direct investment
– Reliable and accessible geoscientific knowledge
– Investment in research, innovation and people
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Pressure will continue to reduce the environmental footprint of mining …
• Regulatory standards tightening for GHGs, air pollutants, and water effluents
• Concerns about water supplies
• Concerns about mine waste management
• Need for improved mine site rehabilitation
• Concern about acid drainage
• Need to consider the impact of climate change on mining
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• Canadian Environmental Assessment Act provides the legal framework for federal environmental assessments
– Coordination by the Canadian Environmental Assessment Agency
• Bilateral harmonization agreements with provinces and project-specific arrangements
• Government commitment to improve regulatory performance and process certainty
– Major Projects Management Office
– Investment of $150M in regulatory capacity
• Engagement with communities
– Consultation with Aboriginal communities
… and for thorough and transparent environmental impact assessments
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Technology can offer solutions Green Mines – Green Energy: Biosolids to Bioenergy
Biosolids + Mine Tailings + Energy Crops = Green Fuel
Tomorrow?Today
Government-industry consortium in Canada is examining the use of “waste” organic materials (municipal compost, pulp and paper waste) to rehabilitate mine sites and establish energy crops (canola, corn, soy) for the production of biofuels
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Aboriginal communities are taking advantage of opportunities in the mining sector…
• Mining can help build self-reliant and sustainable communities through:Employment, training and transferable skillsDirect and indirect economic and business
opportunitiesImprovements in community infrastructure
and social fabric
Achieving community benefits – Aboriginal Participation in Mining
…and are securing benefits through agreements with industry
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• Ekati Diamond Mine, BHP Billiton Diamond Inc. (Northwest Territories)Spending target for Aboriginal and local
businesses. Workplace Learning Program
• Teaches essential skills in reading, writing
math, oral communication
• Voluntary and confidential
participation
• Work release time for attendance
– Aboriginal Underground Miners Training Program
– Community Partnership Program
Aboriginal Participation in Mining – Impacts & Benefits Agreements
(http://ekati.bhpbilliton.com)
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Building community awareness and capacity to benefit from mining
• “Mining Information Kit for Aboriginal Communities”Four modules: Mineral Exploration,
Mine Development, Mine Operation, Mine Closure
Content:• Description of activities
• Opportunities to get involved
• Acts and regulations
• Environmental and social impacts
• Employment and business opportunities
• Community experiences(www.nrcan.gc.ca/mms/abor-auto/mine-kit_e.htm)
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Multi-stakeholder Engagement
• Multi-stakeholder consultation and dialogue provide greater certainty for mining investment
• Grounded in transparency, access to information, democratic process
• Encourages corporate social responsibility and environmental stewardship
• Provides communities and Aboriginal Peoples increased understanding of the mining cycle, and opportunity to achieve social and economic benefits
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Transparency
• Transparency and strong accountability systems are essential components of good governance
The Extractive Industry Transparency Initiative as a tool to improve governance Canada became a member of EITI in Feb 2007 There is a need to adopt an approach specific to
mining - distribution of benefits is a key issue Kimberly Process is a good model
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Corporate Social Responsibility• Attention is turning to social and human rights issues
– Local communities have their own needs and expectations– Industry can find itself delivering services normally provided by
governments
• Government of Canada has been called upon to regulate industry abroad– Lead to CSR Roundtable process in Canada– In-depth discussion with stakeholders and experts on:
• Standards
• Incentives
• Reporting and conflict resolution
• Tools for implementation
• Governance
• Multi-stakeholder consensus report submitted to Government
20
Conclusions• Canada’s approach based on an internationally competitive
investment climate, sustainable development and principles of transparency, accountability and certainty
– Generates social and economic benefits and protects the environment – contributing to the quality of life of Canadians
• Mining is a global industry. Collaboration, sharing knowledge, expertise and leading practices improves natural resource governance in a global context.. ….we still have lessons to learn.
• There is a need for global dialogue and cooperation to address global issues facing governments and industry
– Opportunity through UN CSD review of mining in 2010/11
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www.NRCan.gc.ca