Northern Ontario Municipal Association

April 29, 2011

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Agenda

• Ontario Mining Association• Mining in Ontario• Narrow Window of Opportunity• Recommendations

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The Ontario Mining Association• Mission - to improve the competitiveness of mining

in Ontario while striving for a safe and sustainable industry

• Currently 70 members representing mineral producers, contractors, suppliers, consultants and others associated with the industry

• Recently celebrated our 90th anniversary

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There are currently over 600 exploration projects underway across Ontario and investment is forecast to reach $939M in 2011, a new record.

Exploration and Mining Sequence

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Land Access Requirements

Mining/ Mine Closure Mining/ Mine Closure (5 sq kms) ------------------------------------(5 sq kms) ------------------------------------

Advanced Exploration Advanced Exploration (+5 sq kms) ---------------------------- (+5 sq kms) ----------------------------

Preliminary Exploration (Preliminary Exploration (X10’s sq kms) ----------------X10’s sq kms) ----------------

Land Acquisition Land Acquisition (X00’s sq kms) ------------------(X00’s sq kms) ------------------

Area Selection Area Selection (X000’s sq kms) ---------------(X000’s sq kms) ---------------

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A Safe Industry

• Ontario is one of the safest mining jurisdictions in the world

• Mining is one of the safest industries in Ontario. Based on 2010 data we seeLost time injury rate of 0.5 per 100 workers -

second best in the province.Total medical aid frequency rate of 4.5 per 100

workers - improved from 5.8

Ontario - Canada’s leading mineral producer• World class deposits plus many smaller scale deposits

sustained the industry for more than a century• Today’s 40 mine sites represent a high-tech, solution-

providing industry that delivers benefits to all parts of Ontario

• Productivity powerhouse with salaries that are among the highest in Ontario

• 100,000 employees in the cluster; Aboriginal workers represent 7.5%

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1800 1820 1840 1860 1880 1900 1920 1940 1960 1980 2000

Commodity Price Index in Real US Dollars: 1801-1999

Long-Term Trends in Relative Commodity Prices

SOURCE: Nesbitt Burns Economic Research

Window of Opportunity

Window of Opportunity• Many analysts agree the next 20 years will bring

commodity demand exceeding historical spikes– China needs to build 3 cities larger than Toronto every year

until 2030– Growth in global construction to outpace world GDP over

next 10 years• The industrial economy and the green economy are

complementary– The green economy is not possible without the use of

minerals and metals: wind turbines, smart phones, solar cells, hybrid vehicles, etc

• The world demands the products of mining. Mines will be built. Will Ontario benefit?

Window of Opportunity• 20 year window of opportunity can be spent on permitting

and approvals, or it can be spent opening mines

• Environmental and safety record not in jeopardy by speeding up development

• Align interests to ensure province, industry and community all benefit

• What better place to mine than in Ontario with its responsible environmental protection, world class safety record and desire to participate in new and emerging technologies?

Recommendations• Establish a target number for new mines in Ontario

– Ontario should balance conservation targets with development targets • Compress development timelines

– To take advantage of current window of opportunity, Ontario can no longer afford a 10-15 year development horizon. An engaged civil service, working aggressively with the industry and the federal government, could cut these timelines in half.

• Develop a rare earth elements strategy– Bringing our small deposits into production will provide Ontario with

inputs necessary in the manufacture of new technology • Provide for comprehensive and long-range geological data

collection and mapping

Recommendations• Align the interests by allowing local municipal and First Nation

communities to have a greater share of the benefits of mining– Maintain the current mining tax rate but shift the allocation of revenues

to allow greater benefit to the host community – Allocate mining tax from new mines to the host community (does not

affect the government’s fiscal plan outlook)

• Use the Northern Ontario Heritage Fund to spur the necessary transportation and power infrastructure needs for mining development

• Allow smaller and start up mines to benefit from the Northern Industrial Electricity Rate Program and the recent change to the Global Adjustment calculation

Recommendations• Support the Mining Industry Human Resource Council efforts to

attract, retain and develop employees at existing and new mines

• Lower Workplace Safety and Insurance Board premiums to reflect the safety record of the mining industry

• Implement environmental regulation that protects human health– There is significant scientific uncertainty and technological limitations

with regards to Regulations 194/05, 419/05 and the Toxic Reduction Act

Comments? Questions?

Chris Hodgson, PresidentOntario Mining Association

Suite 520, 5775 Yonge StreetToronto, Ontario M2M 4J1

Tel: 416 364 9301chodgson@oma.on.ca

www.oma.on.ca