GEOLOGIC SURVEY BRANCH AND ENCOURAGEMENT OF MINERAL EXPLORATION DEVELOPMENT AND PRODUCTION (2002 – Revised 2005)

 

Natural resources remain a significant component of the provincial economy. Many of our smaller communities are directly supported, and all other communities (especially cities) are indirectly supported, by mineral, oil and gas exploration, extraction, and production activities. Vancouver has one of the largest professional exploration and mining communities in the world, and can become a global centre of excellence for such activities.

 

British Columbians expect their subsurface resources (which belong to all British Columbians) to be managed wisely by the provincial government for the optimum benefit of all citizens. A thorough knowledge and clear understanding of those resources is a prerequisite to fulfilling that mandate. This requires a strong and properly funded Geologic Survey Branch (GSB) with crews working in the field to develop and enhance BC’s geologic data-base, (information that can be used to benefit a variety of other uses other than mining as well).

 

Experience around the world has demonstrated that those jurisdictions with active GSB’s strongly supported by government are by far the most successful in attracting exploration investment, and experience across Canada has shown that every dollar invested in government geological surveys returns at least $3 (and more likely $4 or $5) in short term private sector exploration, exploration which leads to new discoveries and further new investment, and long-term jobs and tax revenues. Government monies spent on their GSB’s and fieldwork has been shown to be a good investment in our future.

 

In recent years funding for the GSB has degraded to the point that BC Geological Survey geologists spent very little time in the field gathering new data. Geologic mapping of BC has lagged significantly (currently about 20 years) behind Canada’s other major mining provinces. (At recent mapping rates of 0.7% per year it would take 140 years to complete the first iteration of mapping of BC at the 1:50,000 scale required for mineral exploration.)

 

As GSB funding has declined private sector investment in exploration declined even faster, putting the survival of our metal mining industry in doubt as known reserves are exhausted. “The most fundamental industry concern remains the lack of exploration and development expenditures in the province over the past 10 years.…  There have been no new significant discoveries in the 1990’s … Unless the province creates and environment that is conducive to exploration and development, the industry faces a very uncertain future in BC”. (Price Waterhouse,  2001).

 

Unfortunately the 60% reduction made in the GSB budget (from already very low levels) resulted in the cancellation of all field operating funds so that geological mapping of the province may now never be completed.  Further, the BC GSB is currently blessed with a world class team of skilled and experienced geologic talent which, once lost, can never be replaced.

 

In 2004-05 the GSB’s base budget was a mere $1.8 million; in ’05-06 the base budget is expected to be in the $3 million range. To sustain the industry knowledgeable observers have estimated that a minimum investment of $10 million annually is required to fund the GSB (this is in addition to that spent by the exploration sector on specific exploration projects which last year was an estimated $130 million, up significantly from $25 million only a few years ago, but still insufficient, and spent mainly on well advanced, known, not grassroots projects.)

 

Recognizing this problem the province is taking the initiative to establish a new private and independent agency tentatively called ‘Geoscience BC’ (GBC) with a one-time funding commitment of $25 million, ($5 million of which is designated for oil & gas related geoscience). The province hopes this new agency will be able to leverage more funding from the federal government, other agencies, and from the private sector.

 

This is a positive initiative. However, it is no substitute for a properly funded GSB. The need for geoscience will be on-going; a one-time contribution will not suffice.

 

Moreover, the new entity (GBC), is intended to have a very small permanent staff and is expected to conduct its geoscience work through short term contracts – useful, but making it very difficult to maintain consistent standards of excellence. On-going reevaluation of existing data in light of new information requires extensive knowledge of the entire geologic data-base. This is neither encouraged nor facilitated by the use of private sector contractors, not is the maintenance of uniform standards of quality of data collection where the driving factor in awarding contracts will be price. A properly funded GSB with its permanent staff retains a significant body of beneficial ‘corporate’ knowledge that cannot be replaced, and cannot be established in the new GBC model.

 

The changes to the GSB have resulted in new programme directions. The Chamber is not opposed to the principal of public/private partnerships (P3’s); however the implications of the new policies as applied to this sector have not been fully considered.

 

Prospectors, not major companies, are still responsible for over 70% of new discoveries and they depend on the availability of both a comprehensive, up-to-date and easily accessible geologic data-base, and on access to knowledgeable people and advice within an established GSB.

 

Prospectors, and junior mining companies have very limited abilities to become involved in public/private partnerships, and major companies have been traditionally reluctant to share their store of geologic information, however acquired. Moreover, any private sector entity involved in a P3 relationship with the GSB or the new GBC will expect or demand a period of exclusive use of any information generated, effectively giving them a preferred and unfair advantage over other explorationists.

 

A public/private partnership approach to geoscience data collection is likely to prove to be an inefficient means of generating the geoscience data required to properly manage the province’s mineral resource, and to attract new exploration investment.

 

Another principal cause of the exodus of mineral investment from BC (despite our having some of the world’s best and most prospective geology) has been industry’s experience with BC’s regulatory structure.

 

BC has had for many years what has been called a “one-window” approach to permitting and approvals, an approach intended to streamline the regulatory process wherein applicants deal with just the former Ministry of Energy and Mines (MEM). In practice, however, this has meant a “one-window, - many doors” approach as MEM distributed the applications to all potentially interested ministries for comment and approval, resulting in unnecessary and unacceptable delays.

 

A true “one-window- full authority” approach wherein the new Ministry of Energy, Mines and Petroleum Resources is given full authority to manage the mineral resource (according to standards established by that Ministry in cooperation with other interested Ministries such as Environment and Agriculture and Lands is required.

 

The Chamber supports government and industry cooperation to ensure that mineral exploration, development, production, and processing continue to take place in and environmentally responsible manner. The MX (Mineral Exploration) Code is a significant step forward; a “Best Practices” handbook would assist in ensuring high standards are met while encouraging exploration by explaining the regulations.

 

Currently known reserves of operating metal mines in BC are likely to be exhausted within a decade and a half. As those mines shut down so will several thousand jobs, and rural communities will be severely impacted. Given the long lead times required to find and develop new ore bodies, there is now an urgent need to increase levels of mineral exploration.

 

THE CHAMBER RECOMMENDS

 

That the provincial government:

 

1. continue to publish clear statements of support for  mining and mineral exploration in BC and demonstrate faith, confidence and commitment in BC’s mineral potential by funding the Geological Survey Branch to a level that allows the Branch to put its crews to work in the field in BC, developing and enhancing BC’s geologic data base;

 

2. reaffirm the mandate of the Geologic Survey Branch and investigate ways to maintain services and access to information through both print and electronic media while working co-operatively with the new entity ‘Geoscience BC’;

 

3. continue to ensure that any partner or contract agreements entered into by the Geologic Survey Branch or “Geoscience BC” do not take business away from the private sector, or restrict access to information gathered at the public’s expense;

 

4. ensure that mineral exploration standards be clear, reasonable, and practicable for enterprises of all sizes, be designed to minimize the adverse effects on trade and investment, and be subject to periodic reviews and revisions (including the MX Code beginning in the year 2007) to ensure it is working effectively in the field. The MX Code should be supported by development, in concert with industry, of a “Best Practices” handbook for mineral exploration;

 

5. co-operate with the federal government in establishing and promoting mineral and exploration taxation policies that recognize the high level of risk to the investor;

 

6. ensure that approval processes for mining be streamlined in practice and that specific and firm deadlines for approvals for both exploration projects and mineral developments be clearly established and adhered to; and

 

7. designate the Ministry of Energy, Mines and petroleum Resources as the lead agency with full authority to issue permits within and appropriate time period and that approvals from the Ministry be based on consistent standards as determined by other relevant government agencies.