sharing in governance of extractive industries
Canadian mining companies have proved to be remarkably adept at identifying new markets in some of the lesser known parts of the world. From Eritrea in the Horn of Africa to Romania in Central Europe Canada’s uncanny ability to spot opportunities and to carry out the required surveys and raise the appropriate finance is something that puts the North American country firmly in the vanguard of countries that have successful Extractives Industries. The degree of scientific data, research and capital outlay is substantial and the need to assemble highly professional teams, as well as deal with often remote and inhospitable locations is something of an art. Canada’s own landscape can be forbidding, but appears to provide the perfect breeding ground for individuals with a ‘can do’ attitude and a desire to get the job done.
Mining has always been a challenging enterprise and is certainly not for the faint hearted. Setbacks and disappointments are all part of the daily round. Whilst the challenges of Mother Nature are one thing, there are also other factors to take into consideration these can range from local business customs, logistical challenges, legislation and tax regimes and probably most vexing of all powerful environmental lobbies. Mining companies are well used to the fact that they are invariably portrayed as the villains in the piece intent on despoiling the landscape and riding roughshod over the views of local people. To anyone who has any real insight into the mining industry this is often a long way from the actual truth and there is often a genuine desire to put in place measures that minimalize environmental damage, whilst also ensuring that local communities genuinely benefit from economic engagement and the opportunity for capacity building. More often than not local governments and municipalities are to blame for adverse publicity for not involving local communities from the outset and then when indignation sets in they take fright and begin to backtrack on commitments. There are questions surrounding corruption, but generally Canadian companies have a highly developed sense of what processes and procedures they are expected to follow. Even the most sensitive and professional of companies need to be aware that in the age of Social media adverse publicity can soon do damage to a company’s share price and indeed its reputation. Transparency, vigilance and sensitivity are essential.
An interesting recent example of a Canadian company facing a setback has been that of Gabriel Resources (www.gabrielresources.com) Having set its sights on creating Europe’s largest open cast gold mine in the Transylvanian village of Rosia Montana in Romania it has found itself on the receiving end of a formidable campaign from environmentalists. Romania certainly is in need of foreign investment and for years suffered neglect under Communism. Unemployment and low wages are a real problem, as is the brain drain of young, educated Romanians. Gabriel Resources recognised that it could bring substantial benefits, both locally as well as to the national government, but possibly had under estimated the fierce pride of many Romanians. Anyone who has seen Wild Carpathia (www.castelfilm.ro/node/258) will appreciate that Romania really does possess a unique habitat and this goes some way to explaining the strength of the Save Rosia Montana campaign (www.rosiamontana.org) For all the reassurances that every effort will be made to mitigate any environmental damage the Romania Parliament has decided to reject revisions to a new mining law that would have allowed Gabriel Resources to undertake its grand project. As a consequence the share price has taken a substantial hit and now there is an element of back to the drawing board. Those engaged in mining are no strangers to setbacks and no doubt Canadian mining companies are all the stronger for the lessons learned.
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