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In 2011 alone the mining industry grew by 21.5% reaching a value of $2,997 billion and is showing no signs of slowing down globally; it continued to grow in 2012 and is now projected to be almost $5000 billion by 2016 (Fast Market Research, 2013). The mining industry employs over 300,000 people in Canada, accounting for $36 billion of Canadas gross domestic product. However, the outlook in BC is not as positive as it could be. The government has been delaying the ability for companies to obtain federal permits for new mines; putting many of those projects and potential jobs at risk. Michael Mcphie of the Mining Association of BC stated Its strictly and solely to do with the inability of the system to permit these projects in a reasonable time. Thats the only reason these arent into construction nowIf present sky-high commodity prices start to slide, the capital to build the projects could disappear. The association believes that the government agencies responsible for permitting these projects are simply understaffed and with higher staff levels the delays could be diminished (Stothart, 2011).
CURRENT CHALLENGES
Corporate Social Responsibility According to Jenkins and Yakovleva (2006), concerns about the sustainability and social responsibility of businesses have become an issue in many industries, and none more so than the mining industry. Voluntary initiatives are a major factor for mining companies for four main reasons as described by Walker and Howard (2002): 1) The public opinion of the mining sector is low and this opinion is based more on the extraction and depletion of natural resources and the environment than by the sectors performance in pricing and safety. 2) The mining sector has been continuously targeted on international levels. This is shown by multiple community and environmental groups who constantly oppose the development of mining operations throughout the world. 3) Due to all the social responsibility concerns, investors are becoming more interested in the social, environment, and ethical dimensions of a company before they are concerned about the business aspects of the company. 4) Mining companies have a difficult time maintaining a license to operate. This makes having a strong community and social presence even more important. If a mining company comes into trouble with the community due to environmental concerns it will make it much harder for the company to maintain its licence. These four factors are all very important for a mining company to understand; social and community involvement is becoming more and more important. Companies need to ensure they are doing what is right not only for their company, but also for the surrounding environments and communities where the company operates.
Talent Gap The current mining workforce in Canada continues to age, and fewer young people are entering the mining sector. This could potentially limit the industry in the future as the mining industry captures fewer younger workers than the overall labour force in Canada. Companies need to begin to implement programs to help improve the attraction and development of younger workers in the mining industry. There are currently so few young workers in leadership roles that the long-term outlook for power positions should be of concern for mining companies (Government of Canada, 2013) Water pollution Although not a direct challenge in terms of a business perspective, water pollution is something that needs to be addressed by the mining companies. If the mining companies are responsible for the pollution, the long-term effects on a companys reputation with the communities and government would be in jeopardy if the pollution is not dealt with correctly. The large amounts of mining done in British Columbia can result in four main types of water pollution. The results of acid mine drainage, heavy metal contamination and leaching, processing chemicals pollution, and erosion and sedimentation can all have a negative effect on the water quality in the surrounding areas of mining operations, and can even filter into areas where no mining operations are present. Mining companies need to stay on top of their water pollution to avoid heavy fines from the government and most importantly not to jeopardize their companys reputation with regards to starting new projects (Mining Watch, 2011) Complex Project Review Process The current project review process works well, however Gratton (2009), explains there are five aspects of the process that can cause problems for mining companies: 1) There is a lack of federal and provincial timeline harmonization. 2) There is a lack of legislative timelines under the Canadian Environmental Assessments Act 3) There is a lack of clear policies and guidelines with respect to Aboriginal accommodation. 4) There is a limited capacity of the federal authorities to review new projects 5) There is dissatisfaction with the joint federal-provincial review process
SUMMARY
Globally the demand for mining resources will continue to grow being driven by countries such as China and India. Being a major player in the Canadian economy the BC mining industry has the ability to continue to meet some of this demand. If the province continues to educate its young workforce correctly it will continue to build leadership roles within the industry and allow the mining companies in the province to be successful while giving back to the surrounding environments and communities. Although there will continue to be challenges for start-up companies and mining exploration, the demand for resources is expected to remain steady for the foreseeable future allowing the BC mining industry to continue to be successful (PricewaterhouseCoopers, 2013)
Report by: Cameron Kroeker 29472115 Com 390 Sect. 116 September 28th 2013
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