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Even giants like Rio Tinto tread carefully in Mongolia, where the government can’t seem to leave partnership agreements and the tax regimen alone. In October, Venezuelan nationalization enthusiast Hugo Chavez was re-elected president for another six years. But whether he serves the entire term remains to be seen. At press time he’s rumoured to be in failing health, possibly dead.
The list of countries and their various types of risk goes on. So does the list of various tax-and-royalty regimens. Apart from developing countries, jurisdictions like Australia, probably Quebec and possibly the U.S. now like mining as a source of windfall government revenue.
And what about Canada?
How well did Canada stand up as a favourable exploration and mining jurisdiction in 2012? That’s hard to tell because few people talk about the subject openly. The example of Darryl Stretch might explain why.
Yet increasing subjectivity in environmental decisions at both the federal and provincial levels has given Canadian governments an almost capricious power over resource development. That seems to account for B.C.’s rejection of Pacific Booker Minerals’ TSXV:BKM Morrison copper-gold-molybdenum proposal in October, despite a favourable environmental review. Later the same month, Ottawa announced it had expanded its definition of environmental issues so a wider range of ideological groups could participate in reviews.
New Ontario regulations announced in October will require early-stage exploration companies to consult native bands prior to drilling on Crown land. Should the bands object, a permit can be refused.
According to a March 27 Globe and Mail article, Ontario Prospectors Association executive director Garry Clark said unnamed native bands charge exploration companies for drilling by metre or by hole in secret deals that often top $100,000.
This year’s Fraser Institute Survey of Mining Companies rated Nunavut and the Northwest Territories third and fourth for corruption among high-income jurisdictions worldwide. For that reason, 16% of exploration and mining respondents said they wouldn’t invest in the NWT, while 8% said the same about Nunavut. The survey provided no details about the allegations.
Add these to your list of last frontiers
They might not live up to the cliché about “mining’s last frontier.” But some new frontiers that came to greater prominence in 2012 included Afghanistan, Greenland and South Sudan, among others. One frontier that’s been put on hold, however, is 1,600 metres underwater. In December Nautilus Minerals TSX:NUS shelved its plan to develop Solwara 1, “the world’s first commercial seafloor copper-gold project,” off the shores of Papua New Guinea. The decision came after the PNG government failed to meet a financing agreement, Nautilus stated.
Undeterred, the company reminded investors it “holds more than 500,000 square kilometres of highly prospective exploration acreage”—in the Pacific Ocean.
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