Mining minister says B.C. bouncing back

British Columbia's reputation as a region where the mining industry could flourish hit a low point in the 1990s, but the picture is completely different today. That's how Bill Bennett, the Canadian province's minister of state for mining, sees the situation after returning from a jam-packed Mineral Exploration Roundup event in Vancouver in January. The atmosphere at Roundup this year was "almost elation," Bennett said in an interview with Mining News. "Commodity prices are behind us, but there was also a lot of specific interest in British Columbia."

Bennett's assessment of the previous British Columbia government's record is scathing. "In the '90s no consideration was given to stability," he said. "There were strikes and arbitrary and capricious decisions about resource development. It's taken five years to convince the world that we were for real." Premier Gordon Campbell's Liberal Party came to power in 2001, ousting the New Democratic Party.

"Juniors have always known that British Columbia was under-explored," Bennett said. "For a decade they became very nervous. They were afraid they wouldn't be able to sell projects to majors because of decisions like Windy Craggy." A Canadian company called Geddes Resources tried for several years to develop a copper mine at the Windy Craggy site in northwestern British Columbia, but environmentalists opposed the project and in 1993 the British Columbia government closed the area to mining by designating it a wilderness park.

Bennett: investors are back

At the same time, investor confidence in junior mining companies plummeted due to the Bre-X fraud, exposed in 1997, when core samples from a deposit in Indonesia were salted by a Canadian company and huge gold resources turned out to be non-existent. As a result, Canada tightened its laws on reporting mineral resources. Today investors are back, according to Bennett. "What we found this year at the gold show in Vancouver as well as Roundup was that the place was full of ordinary individual investors," he said. Risk can be reduced if investors do their research: "Investors have to take the responsibility to investigate before they put any money down," Bennett added.

Mineral exploration expenditures in British Columbia in 2005 totaled C$220 million, up 70 percent from 2004, and there were more than 650 exploration projects in the province, up 38 percent from 2004. Northwest British Columbia saw the most activity, with 191 projects and expenditures totaling C$100 million. The number of exploration budgets in British Columbia with budgets in excess of C$1 million was 43, up 43 percent over 2004, according to the Ministry of Energy, Mines and Petroleum Resources.

The largest exploration projects in British Columbia are NovaGold's Galore Creek project, where around C$50 million has been spent so far, and New Gold's New Afton project, which has seen C$20 million in expenditures, Bennett said.

The future of some other advanced exploration projects, in particular bcMetals' Red Chris project, depends on the improvement of infrastructure in northwestern British Columbia.

This is the only part of the province that lacks advanced infrastructure.

"Even the far northeast has rail lines, power lines and dams," Bennett said.

"The government realizes that we won't have a meaningful expansion of mining in the northwest until electricity is available up Highway 37.

The questions are, how do you pay for it, who should pay for it, and what the size of the extension should be."

First Nations relations important

Relations with First Nations are also important for mining projects in British Columbia. "Mining in places like the northwest will not succeed if mining companies and government are constantly fighting with First Nations," Bennett said. "First Nations have to be more involved in decision-making. What they're asking for is reasonable, they want to be included, and they want help understanding the technical information that's coming in."

The British Columbia government announced Jan. 25 a C$2.3 million expansion of its program to train youth from rural and aboriginal communities to work in the mining and mineral exploration industry. This includes $1 million to create prospector and environmental teams to provide hands-on experience for young people. When people are out doing subsistence activities they often come across abandoned mine sites and the environmental teams will clean up scrap metal and other materials on these sites, Bennett said.