Quebec’s attempts to put an end to years of image-corroding uncertainty and lack of clarity for the mining industry are getting mixed reviews.
The Liberal government of Premier Philippe Couillard has revived plans to accelerate natural resource extraction in the vast northern reaches of the province. And the new Mining Act has helped bring greater predictability and transparency to a political environment many critics said was damaging Quebec’s reputation as an attractive jurisdiction for mining investment.
But problems and unresolved issues remain, even factoring in the current global commodities downturn, say some industry players and observers.
Take the case of Strateco Resources Inc., which recently shut down its uranium mining project in the Otish Mountains of northern Quebec after years of what its chief executive says have been frustrating dealings with provincial authorities.
“This has been extremely difficult,” Strateco president and chief executive officer Guy Hébert said.
For years, the government declined to grant Strateco the right to start underground exploration at the site, known as Matoush, despite the company jumping through hoops to get 22 permits from Quebec at different phases of the project, he said.
Strateco also has authorization from federal authorities and a permit from the Canadian Nuclear Safety commission. But last year the former Parti Québécois government imposed a moratorium on uranium projects until the province’s environmental review agency completes a lengthy public inquiry into the issue.
Boucherville, Que.-based Strateco has launched a court case against the government seeking to overturn the decision to halt Matoush, which Quebec’s Cree nation opposes for environmental reasons. And Mr. Hébert said some U.S. investors remain committed to launching legal action against Canada, under Chapter 11 of the North American Free Trade Agreement, over Quebec’s stalling on Strateco.
“Who, with knowledge of this situation, is going to invest in Quebec?,” Mr. Hébert said.
Raymond James mining analyst David Sadowski points out that uranium is a special case because of the perception by some that mining it is a “dirtier process” than for other metals. “I doubt Quebec’s decision would provide a disincentive to anyone beyond uranium explorers,” he said in an e-mail. “In any event, I would say Matoush is not economically viable in the current uranium price environment.”
The public hearings on uranium mining by the Bureau d’audiences publiques sur l’environnement (BAPE) are a useful step in assessing the potential impact of such activity, a spokeswoman for the minister of the environment, David Heurtel, said in an e-mail message.
“Social acceptability is an important element for the government,” the official said.
Nochane Rousseau, mining industry group leader for Quebec at PricewaterhouseCoopers, says the Strateco set-to is one factor in continued investor uncertainty over mining investment in the province. Also playing a role is a wait-and-see attitude after the ups-and-downs of the Plan Nord, the multibillion-dollar development strategy for the north that includes major infrastructure and energy investments to encourage mining activity, he said.
The plan was played up by the former Liberal government of Jean Charest as representing a huge boost for the Quebec economy. Then the PQ took over and scaled it down. Now the new Liberal government is once again touting the project. Mr. Couillard recently stated that the government is shifting its role from passive subsidies provider to a partner and investor in natural resource projects.
The government needs to reassure the industry and its financial backers that Plan Nord is for real this time and that true stability in the mining sector is the order of the day, Mr. Rousseau said.
Mr. Couillard is preparing trips to China and Iceland in the coming weeks to promote the Plan Nord and Economy Minister Jacques Daoust is heading to London for similar activities, Mr. Rousseau said.
Editor's note: The name of Raymond James mining analyst David Sadowski was misspelled in an earlier version of this story.Report Typo/Error