As global pressure for commodities increases and New Brunswick’s mineral endowment becomes better understood, a mini-boom may be just around the corner.
They were expecting it like a bill come due, with an odd mixture of dread and resignation. So, when the Swiss-based Xstrata PLC announced in February 2010 that it would not close down Brunswick Mine No. 12 after all, the relief among the 900-strong workforce was palpable. “What it means,” said Euclide Hache, a spokesman for the United Steelworkers union which represented them, “is that some people are going to continue to work, and not going to have to leave their homes.”
Behind the good news, however, was the achingly obvious: This was not a new lease on life for the half-century-old lead-zinc colliery near Bathurst in northern New Brunswick; it was merely a reprieve, purchased by fortuitously high metal prices in global markets. That fact was certainly not lost on many business leaders in the province who declared that the future of the regional economy depended, as always, on its steady industrial diversification.
Indeed, theirs was only the latest expression of a familiar refrain in economic development circles (typically in the southern cities), which insisted that the good, old days of natural resources — mining, forestry, the fishery — in New Brunswick were all but over. It was time to move on, to chart a course with the new, more durable tools of prosperity, to embrace the promise of “knowledge-loving” enterprise.
Now, two years later, as Brunswick Mine continues to await its inevitable shuttering, industry observers do not wholly repudiate the received wisdom, (economic variegation is still a key driver of long-term growth everywhere on the planet). But they do wonder if New Brunswickers truly appreciate the potential of the remaining wealth that lies buried beneath their feet.
“This province has long been blessed with a diverse and rich mineral endowment,” says David Plante, manager of the New Brunswick Mining Association. “Of the 22 major mineral commodities produced in Canada, we actually produce 18. In 2010, the value of mineral production in this province was $1.15 billion. That was off our record peak of $1.54 billion in 2007. But it still represents the greatest value per square kilometer of mineral production of any jurisdiction in Canada.”
This tends to explain why Plante and others prefer to see the impending closure of Brunswick Mine as merely the end of one particular era in a series of epochs that stretch in both directions along the temporal continuum. “The province’s mining history begins with the first coal extraction 350 years ago on the Grand Lake region,” he says. “Where we are is at the end of what I call the modern age, which began in the early 1950s with Brunswick Mine. Where we go, what the future holds for us in this province, is really quite interesting.”
And potentially lucrative.
In a recent blog post for the Globe and Mail, Moncton-based economist and consultant, David Campbell, wrote: “The Canadian economy has undergone a fairly profound shift over the past 10 years. The biggest change has been a shift in our goods-producing economy from value-added manufacturing to non-renewable resources development. As a share of total exports, fabricated metal manufacturing exports are down by 28 per cent. Meanwhile, oil and gas exports are up from only $104 out of every $1,000 worth of exports in 2001 to nearly double that figure over the first nine months of 2011. Mining sector exports as a share of total exports have increased 273 per cent and now represent the third most-important export sector.”
In an interview, Campbell expanded his point. “Natural resources have become so critical to the economy that if we decided to shut down the oil sands, it would have a massive ripple effect across the country. As for some people in New Brunswick who like to complain about Alberta, I would point out that we are up to our eyeballs in (oil sands wealth) through transfer payments and through direct jobs created . . . The question for me is whether places like New Brunswick are going to get on that bandwagon and develop their natural resources in a fair, equitable and environmentally sensitive way.”
To an extent, it already has.
The Potash Corporation of Saskatchewan is roughly a year away from completing a $1.7-billion expansion at its Sussex, N.B. mine (Piccadilly deposit), which will double its production capacity at the site to 14.9-million tonnes a year and potentially employ hundreds of workers. Another company, Atlantic Potash Corp., has signed a two-year agreement with the provincial government to explore a separate mineral play in central New Brunswick.
Trevali Mining Corp. of Vancouver announced in January that “initial mineral production commenced from the uppermost portions of its wholly-owned Halfmile polymetallic (zinc-lead-silver-copper-gold) sulphide deposit in the Bathurst Mining Camp . . . Ramp-up to full nameplate (2,000-tonne-per-day) commercial production will occur over the current quarter (to March 31, 2012).”
Saskatchewan’s Great Western Minerals Group continues to search for rare earth elements — Scandium, Erbium and Samarium (used in the manufacture of computer memories, DVDs, rechargeable batteries, cell phones, car catalytic converters, magnets and fluorescent lighting) — in the Benjamin River area of northeastern New Brunswick.
Meanwhile, despite the roiling controversy over hydraulic fracturing, shale gas exploration (and the production operations it promises over the next few years) could employ thousands of people, support hundreds of resource-based businesses and suppliers and generate hundreds-of-millions of dollars a year, in the form of taxes, licensing fees and royalties, to a province now stumbling under a $10-billion debt and $550-million annual deficit.
“Clearly, there is a future for mining in New Brunswick, just as there has been a past,” Plante says. “Mines have traditionally supported communities and regions of the province. But, more than this, they have had a significant impact on the provincial economy over long periods of time.”
Still, he concedes, the path to this future is not entirely clear of obstacles. “It’s really dependent on our ability to attract exploration investment,” he says. “This is the lifeblood of the industry. It’s akin to R&D in knowledge-based industries. Due to our size, we don’t attract the same relative size of investment as does, say, Ontario or Quebec. In 2011, we had about $25 million in exploration investment. That was up from the year before, but it was still off our record of $32.8 million in 2008. Exploration investment nationally is some $3.2 billion a year.”
The other challenge, Campbell says, is the paradox of New Brunswick’s particular geography. Though its land mass is small, it is the second-most evenly populated province (behind Prince Edward Island) in Canada. “We have more population per square mile,” he says. “If you’re in Saskatchewan mining potash or shale gas, chances are you are miles and miles away from the nearest town. That’s not the case here, so you’re always bound to run into someone who doesn’t want you around. It’s the ‘not-in-my-backyard-syndrome’. And it’s a real factor especially in this province.”
Ultimately, though, New Brunswick is rapidly running out of ways to imagine its future without a robust mining and minerals industry. Says Campbell: “The question is whether or not we want to sustainably fund our public services. If the answer is yes, then in this province we have to be serious about our natural resources. That’s the train we’ve got to board.”