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Federal stats paint bleak mining picture
NWT ranks below Botswana for investment attractiveness

Jessica Davey-Quantick
Northern News Services
Wednesday, March 22, 2017

Natural Resources Canada's latest statistics estimate mineral exploration and production in the territory fell by millions in 2016.

Preliminary estimates for last year's mineral production show the total value of NWT mining production is down by $541 million. Spending intentions for 2017 exploration also dropped by $2.1 million and diamond production is estimated to fall by 28 per cent as well, by $480 million in 2016.

A week after the NWT & Nunavut Chamber of Mines circulated the statistics, Industry, Tourism and Investment Minister Wally Schumann spoke of doing everything possible to support the industry.

"We are prepared to look at every aspect of the NWT investment climate that we can influence," he said in legislative assembly on March 9. "Tax incentives, royalties, regulations, everything must be on the table, and we must use the best knowledge available to guide our actions."

Earlier, he had announced the Mining Incentive Program has been expanded, adding $600,000 in investment to qualifying exploration and prospecting projects.

The GNWT also announced earlier this month the Work Credit Program, which offsets costs for mineral explorers, has been extended as well. To keep claims active, companies need to complete work or submit cash in lieu. The program multiplies the value of the exploration by 1.5 - meaning companies need to spend less money to keep their claims in good standing. The program, started in 2015 on the recommendation of the now-defunct Mining Industry Advisory Board, has been extended for an additional two years, beginning April 1.

Mining consultant David Connelly pointed to a lack of power and transportation infrastructure as a hindrance to growth.

"This is a huge hurdle," he stated in an e-mail to Yellowknifer.

"There is a need for government to be visionary and build power and transportation infrastructure to attract development."

In its annual Survey of Mining Companies 2016, the Fraser Institute pointed to another issue that inhibits spending in this sector. The report states "overlapping and conflicting regulator groups/levels of government" as well as "internal conflict" between government departments, and delays in permitting "all act as deterrents to investment in the Northwest Territories."

Connelly disagrees with this assessment.

"If you are patient and thorough and put in the time and effort to work with the system and consult with stakeholders, it is actually improving and becoming more predictable," he stated.

The statistics back him up. On Feb. 28, the Fraser Institute reported the NWT rose up the ranks of jurisdictions for investment attractiveness, from 35 to 21. That left the territory below six other Canadian provinces as territories, as well as Sweden and Botswana. The rankings were weighted 40 per cent by policy and 60 per cent by mineral potential.

Schumann estimated more than 10 per cent of the NWT workforce is directly employed by the mining sector, with many more depending on the industry's spin-offs.

"Our government recognizes what is at stake, and we are committed to improving the competitiveness of our jurisdiction," he said.

Schumann was not available for comment as of press time.

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