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Braden Maccke
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I am an avid Investor and Investor Relations professional living in Vancouver, BC. I've been involved in Canadian public markets, particularly resources and junior mining for over a decade now.
My company:
Callinex Mines Inc.
My blog:
Thoughts on Canadian Junior Mining
  • Mining Labour In Canada, And The Labour-Resource Feedback Loop 0 comments
    Jan 21, 2013 10:15 AM

    A controversy has arisen in British Columbia over a private mining company's application to import foreign workers to fill positions at a coal mine they're developing. For the uninitiated, here are the basics:

    The HD Mining Project

    HD Mining is developing the Murray River Coal Project near Tumbler Ridge, BC. HD is a private entity, owned by Hui Yang Holdings and Canadian Dehua Lviang International Mines Corp. Since HD is a private company, they aren't required to file a technical report on the Murray River project with the securities exchange or make one available to the general public. Accordingly, we don't know the size of the resource. We are told that they've spent about $100M developing the mine and that it will be mined using the longwall method.

    Mining Methods and Labour

    Longwall mining is uncommon in Canada, so HD Mining applied for permission to post the jobs overseas and recently received that permission. Canadian unions and labour groups are unimpressed and have complained to the government that HD did not make enough of an effort to source the miners here in Canada before posting the job in China. Those opposed to HD Mining's importation of foreign labour feel that the workers aren't being imported because of special skills, but rather because they are accustomed to lower pay and fewer benefits.

    As a private mining company, HD Mining has been able to develop this project without making public disclosures of their progress. Private companies know who their shareholders are and can publish results internally. There is no scrutiny from investment authorities, stock exchanges, securities commissions, etc. and no ability for the public to invest in or evaluate the project. Accordingly, the mine's success or failure is borne financially by the private shareholders of this corporation.

    The Labour-Resource Feedback Loop

    As talent makes a positive contribution to resource development, so too does resource development make a positive contribution to talent. As new mines are discovered in Canada, and previously unknown techniques are used to develop and extract the resources, the techniques become part of the local skill set. Innovators often improve upon the techniques, making them safer and more effective.

    The improved techniques can then be used to improve the operation of existing projects, or perhaps to render previously sub-economic deposits operable. The development of those deposits leads to the training of a more capable labour force, and so on. This positive feedback loop has been the nexus of Canada's ascent to mining greatness. It is our sincere hope at Callinex that this continues, and that we are able to make our very best possible contribution to it, as small as it may be at first.

    We don't posit an opinion about HD Mining's controversial application to import labour for their Murray River Coal Project. We trust that those tasked with the stewardship of Canada's labour market will make the right decision concerning whether or not this import will contribute to or detract from the process of labour and resources helping each other develop locally.

    Local Labour in Canada

    In contrast to privately held operations, junior mining companies like Callinex exist in a very public space. Our capital comes from public markets so our projects must be written up in technical reports. The technical reports must be accepted by the exchange that our company trades on, are subject to the scrutiny of the BC Securities Commission, and are available for examination by investors and the general public. The exchange isn't in a position to tell us what type of workers to hire, but the public nature of our business would make the adoption of an uncommon mining method a difficult undertaking. It would likely invite questions of mining analysts and the general public.

    Callinex's ambition is to discover new mineral deposits in Northern Manitoba and British Columbia. To do this work, it's imperative that we employ local workers and maintain a presence in the local communities. Truthfully, local talent is the only way that we'll ever be able to create any degree of exploration success.

    For example, our ongoing drill program at Sneath Lake would not have been possible without the unique talents of Koop Geotechnical Services, out of Snow Lake, Manitoba. Koop's revolutionary Deep Penetrating Electromagnetic Survey outlined the targets that eventually became HudBay Minerals' Lalor Lake mine, 6 km northeast of Sneath. The same type of targets being outlined on our Sneath Lake property gave us a reason to begin a drill program, and could soon lead to a new mineral discovery.

    We don't know to what extent HD Mining employed local contractors in the discovery and development of their coal deposit. It could be that the imported labor represents only a portion of the total workforce for the project. HD hasn't made any disclosure to that effect. It's worth noting, though, that the discovery and exploration phases of Canadian mining projects aren't usually possible without the use of local talent and local labour.

    By Braden Maccke, Investor Relations Manager at Callinex Mines Inc.

    Publishing assistance provided by IR Smartt Inc.

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