Mineral Policy Lessons from Canada and Australia Philip Maxwell Mineral Economics program WA School of Mines Curtin University of Technology Western Australia
Mineral Policy Lessons from Canada and Australia Presentation to CEPAL seminar 8 April 2002
Plan of presentation The context of mineral policy Mineral policy regulation Australian and Canadian mineral policies An assessment
Economic policy goals Low inflation Full (high) employment Economic growth External balance Fair taxes High environmental standards Equitable income distribution Economic freedom and security
Policy instruments Fiscal policy (taxes and spending) Exchange rate policy Monetary policy (interest rates) Tariff policy Wages policy Environmental policy
Industry policy Uses policy instruments to regulate specific industry sectors Viz agriculture, minerals/energy, manufacturing, transport, communications, health, education, tourism etc.
The aims of mineral policy Rational development of mineral resources, using above policy instruments, to achieve broad goals of government Proper application must be seen in context of characteristics of mines
Characteristics of mines Development can generate economic rent Often established most efficiently on large scale (e.g. Chuquicamata, Escondida) Development often capital intensive Unusually large local, environmental and social impacts National economic impacts vary over relatively short periods
Plan of presentation The context of mineral policy Mineral policy regulation Australian and Canadian mineral policies An assessment
Main components of mineral sector regulation Mining and energy sector legislation Laws in related areas
Other important legislative areas Land Taxation Imports and exports Water Foreign investment and exchange regulations Safety Labour practices Environment
Workable mineral policies Government perspective is interests of community Company perspective is interests of shareholders Very important to have a policy regime that satisfies both major parties
Plan of presentation The context of mineral policy Mineral policy regulation Australian and Canadian mineral policies An assessment
Australia and Canada Large land masses/ sparse populations Significant mineral endowments Strong mineral exploration and mining traditions
Australia and Canada - 2 High income nations Well trained workforces Favourable infrastructure and institutions Mature mining nations Local companies are outward looking in globalisation era
Canadian mineral policy Historical perspective Jurisdiction Favourable for perhaps 100 years Largely provincial Mining legislation in major mining provinces Current tax regimes Efficient and transparent Competitive National mining policy documents 1987 and 1996
Australian mineral policy Historical perspective Favourable since 1960 Jurisdiction Controlled by states Mining legislation in major mining areas Current tax regimes Efficient and transparent Competitive National mining policy documents 1998
Plan of presentation The context of mineral policy Mineral policy regulation Australian and Canadian mineral policies An assessment
Current position Canada and Australia have emerged as leading mining nations since 1990 Their positions have been assisted by decline of mining sectors in US and Europe Sound mineral policy frameworks have assisted their fortunes
Challenges to competitiveness Challenge Indigenous issues Environmental compliance Greehouse gas emissions Canada Yes Yes Yes Australia Native title legislation Yes Major emerging concern
Challenges to competitiveness Challenge Labour relations Regional development issues Canada Sometimes an issue Yes Australia Improvement since 1990 Yes (rebellion against FIFO)
Final view Policy frameworks remain competitive for both Canada and Australia Several emerging issues challenging competitiveness Challenge to maintain pre-eminent positions during next decade and beyond