HDD Waterwell & Mining lays groundwork as mining boom continues in Canada’s North
Historically, mining has taken a back seat to oil and gas exploration in Northern British Columbia (BC) and the Northwest Territories of Canada, but in 2008 the times are changing.
Today, the mining industry is booming, with Northern BC and the Northwest Territories (NWT) evolving into world leaders in exploration and production of diamonds, gold, molybdenum, uranium, iron ore and other minerals. Canada is in the midst of an exploration and mining boom driven by high demand and prices for commodities, fueled by the economic boom in Asian countries such as China, India, Japan and Korea. This enormous demand for energy and resources is forecast to provide a bull market in commodities prices for a long time into the future.
M-I SWACO HDD Waterwell & Mining, meanwhile, is looking to snag a share of this substantial pie by making the rounds at major mining shows in the north and introducing its products and engineering capabilities to large and small miners alike.
The NWT now supplies 15% of the world’s total diamond production, estimated at US $11.8 billion, which is growing with each new discovery. Currently, in terms of value, the NWT ranks third in the world in diamond production. Interestingly, five years earlier the NWT produced only 6% of the world’s total, and 10 years ago it yielded zero production.
The majority of the production currently comes from two operational mines in the NWT: the Diavik and Ekatimines. A third mine, the DeBeers operated Snap Lake operation, recently spent US $862.9 million on construction and is expected to reach full production in mid 2008. This will be DeBeers’ first mine outside of Africa and Canada’s first completely underground diamond mine.
Canada’s diamond producers have been leaders in developing partnerships, skills training, business and employment opportunities, and benefits for the First Nations upon whose traditional lands their mines have been developed. Northern colleges and resource companies have been working together to develop and train the local workforce to fill many available jobs.
NWT mines also are among the most profitable diamond mining ventures in the world. The ratio of diamond producing kimberlites is much higher in Canada. It has been reported that 3.1% of the 540 kimberlites found in Canada prior to 2003 were worth mining. By comparison, only 0.7% of the 6,395 kimberlites found elsewhere around the globe were worth mining. That means NWT kimberlites are four times more likely to become producing mines.
Action central for almost all resource development in the Arctic is Yellowknife, capital of the NWT. That was the site of the three day Geoscience Forum mining show that drew more than 800 delegates, including representatives of M-I SWACO HDD Waterwell & Mining, primarily from Canada’s North. During the show it was announced that US $112.2 million was spent in mining exploration last year.
M-I SWACO was at the show in force, seeking out future business opportunities and building new client relationships. Shawn Couglin, HDD Waterwell & Mining executive sales representative for Western Canada, and myself were present to introduce the company to DeBeers, Ekati, Diavik and numerous smaller resource companies that are still in the exploration stage. We introduced M-I products and technology and worked hard to open doors with future mining clients. We also met with community leaders to gain a better understanding of the protocols for doing business in their communities.
The second area where mining is booming is in Northwest BC, where it is the third largest industry, directly employing more than 11,000 people. BC is a major producer of copper, gold, silver, zinc and molybdenum, plus non metallic minerals and some rare earth minerals. Production was valued in 2007 at US $6 billion annually, consisting of 10 coal mines, 11 metal mines, 36 major industrial quarries, a number of placer mines and more than 1,100 aggregate pits. BC was estimated to account for about 17% of Canadian mineral exploration investment during 2007.
In late January, Vancouver, BC, Canada, hosted its 25th Annual Minerals Roundup with more than 6,700 registrants from 48 countries. This was a great forum for M-I SWACO to be exposed to exploration groups, hard rock drillers and mining companies in order to network and build industry connections. In attendance from M-I SWACO were North America Operations Manager Jay Preston, Couglin, Senior Account Representative Steven Short and myself.
Currently M-I SWACO Canada is focusing on the Northwest BC area where most of the mining is occurring. This area is serviced at the south end by Stewart, BC, which is a few miles from Hyder, Alaska, at the south end of the Alaska Panhandle. Stewart is a small town, but big in history, nature and beauty. Mining was Stew art’s beginning when 68 prospectors came to the head of the Portland Canal in the spring of 1898 looking for placer gold. This was the beginning of a prolific boom bust mining history. Since then many large mines have come and gone. The Premier, which opened in 1919, produced gold, silver, lead, zinc, copper and cadmium until it closed in 1968. Other legendary mines were the Big Missouri, Anyox and Granduc. Owing to the dramatic increase in metal prices and the efficiency with which resources can be mined with today’s experience and technology, many of these old producers are being reevaluated for possible reopening.
For new mines, Northwest BC is looking at the development of Galore Creek, Copper Fox Schaft Creek, Red Chris, Kucho Creek and several other developing ore bodies that will potentially come on line as producing mines in the next decade, with billions of dollars in capital investment to be made. With few roads, little infrastructure and a small population in the area, there will be tremendous opportunities for growth and prosperity.
This area also is home to the Tahltans — the First Nation community occupying the Stikine watershed of Northwest BC. This area encompasses some of the most incredible wilderness landscapes, wildlife populations, extinct volcanic cinder cones and mammoth glaciers and ice fields.
M-I SWACO presently is working on a memorandum of understanding (MOU) with the Tahltan Native Development Corporation (TNDC) for permission to work in Tahltan Traditional Territory. The meetings I’ve had with the TNDC focused on a partnership with M-I SWACO that provides benefits to the Tahltan for the right of access to pursue business opportunities on their traditional land.
Whether it be for diamonds, uranium, gold, silver, copper, molybdenum or other resources, the mining boom will continue at a feverish pace to find new discoveries that can be put into production. In the NWT we can expect another US $100 million plus to be spent in 2009 on exploration, with a possible similar amount spent in Northwest BC. For each discovery made by a junior exploration company, a major mining company usually is required to step in and finance the billion or multibillion dollar investment program that is required to bring a property into production.
