Outline

1. Minerals and Metals in Canada: A Strong Commitment to Sustainable Development Dr. Stephen LucasAssistant Deputy Minister, Minerals and Metals SectorNatural Resources CanadaApril 14, 2008

2. Outline • Mining in Canada • Challenges for Governments and Industry • Canada’s Approach • Sustainable Development • Positive Investment Climate • Environmental Performance • Community Benefits • Transparency • Corporate Social Responsibility • Conclusion - Working Together

3. Mining in Canada • Significant contributor to Canada’s economy and the quality of life of Canadians • Mining as an value-added cluster • Over 1200 junior exploration and mining companies • Over 2200 suppliers of equipment and services • Downstream materials and manufacturing industries • World-leading financial centre • Foundation for many rural and remote communities • Largest employer of Aboriginal people $60 Billion Value of Production Smelting and Refining 34% Non-metals 14% Diamonds 4% Metals 22% Coal 4% Oil Sands (mining) 23%

4. Global demand is growing, driven by China … Percent Aluminum Copper China now consumes 25% of the world’s base metals versus 5% in the 1980s. China imports $100 billion in metals annually. Iron ore Nickel Source: AME Minerals Economics

5. … leading to sustained high commodity prices … Metal Price Index Index 2000 = 100 Uranium Nickel Copper Zinc Gold Source: Uranium – Cameco long term industry average prices Other – LME;TradeTech

6. … a global exploration boom … 2007 Worldwide Exploration Total = $14B 1999 Worldwide Exploration Total = Source: Metals Economics Group

7. … and growth in Canadian mining investments around the world 2001 US$25.8 billion 2006 US$64.4 billion Rest of the world 6% Europe 7% Latin America 44% Africa 13% USA 17% Australia 13% Source: Natural Resources Canada

8. Complexity is increasing for industry and governments Local Partnerships Stronger NGO Visible across the globe Politically challenging locations Social Complexity Remote locations NGO’s emerge Environmental Social Complexity Commercial Complexity Competition for capital Consolidation of industry Cost escalating Overall Complexity Commercial Complexity LME develops Equity markets Capex growing Remote locations Low expectations Gov’t control Social Technical Complexity Laterite HPAL Higher tech processing Increased Environment controls Mining lower grades Commercial Complexity Technical Complexity Private companies Markets Deeper mines Higher tech processing Increased Environment controls Costs increasing Technical Complexity Shallow mines/pits Simple processing Minor environ controls Time Capex = Capital Expenditure LME = London Metals Exchange NGO = Non-Government Organization HPAL = High Pressure Acid Leach Source: VALE INCO

9. Sustainable development: Canada’s approach to realizing the benefits of our natural resources • Sustainable development of minerals and metals domestically and internationally • Safe use of minerals and metals • Inter-governmental exchange of best practices, collectively addressing challenges of mineral resources development • Principle of multi-stakeholder engagement and cooperation

10. Canada’s Investment Climate • Objective is an internationally competitive investment climate, anchored in sustainable development • Based on principles of transparency, accountability, certainty, democracy, institutional capacity and security • Clear federal, provincial and territorial responsibilities • Well-defined environmental review process and standards • Clear land access and security of title • Internationally competitive tax regime • Minimum investment restrictions for foreign direct investment • Reliable and accessible geoscientific knowledge • Investment in research, innovation and people

11. Pressure will continue to reduce the environmental footprint of mining … • Regulatory standards tightening for GHGs, air pollutants, and water effluents • Concerns about water supplies • Concerns about mine waste management • Need for improved mine site rehabilitation • Concern about acid drainage • Need to consider the impact of climate change on mining

12. … and for thorough and transparent environmental impact assessments • Canadian Environmental Assessment Act provides the legal framework for federal environmental assessments • Coordination by the Canadian Environmental Assessment Agency • Bilateral harmonization agreements with provinces and project-specific arrangements • Government commitment to improve regulatory performance and process certainty • Major Projects Management Office • Investment of $150M in regulatory capacity • Engagement with communities • Consultation with Aboriginal communities

13. Tomorrow? Today Technology can offer solutions Green Mines – Green Energy: Biosolids to Bioenergy Government-industry consortium in Canada is examining the use of “waste” organic materials (municipal compost, pulp and paper waste) to rehabilitate mine sites and establish energy crops (canola, corn, soy) for the production of biofuels Biosolids + Mine Tailings + Energy Crops = Green Fuel

14. Achieving community benefits – Aboriginal Participation in Mining Aboriginal communities are taking advantage of opportunities in the mining sector… • Mining can help build self-reliant and sustainable communities through: • Employment, training and transferable skills • Direct and indirect economic and business opportunities • Improvements in community infrastructure and social fabric …and are securing benefits through agreements with industry

15. Aboriginal Participation in Mining – Impacts & Benefits Agreements • Ekati Diamond Mine, BHP Billiton Diamond Inc. (Northwest Territories) • Spending target for Aboriginal and local businesses. • Workplace Learning Program • Teaches essential skills in reading, writing math, oral communication • Voluntary and confidential participation • Work release time for attendance • Aboriginal Underground Miners Training Program • Community Partnership Program (http://ekati.bhpbilliton.com)

16. Building community awareness and capacity to benefit from mining • “Mining Information Kit for Aboriginal Communities” • Four modules: Mineral Exploration, Mine Development, Mine Operation, Mine Closure • Content: • Description of activities • Opportunities to get involved • Acts and regulations • Environmental and social impacts • Employment and business opportunities • Community experiences (www.nrcan.gc.ca/mms/abor-auto/mine-kit_e.htm)

17. Multi-stakeholder Engagement • Multi-stakeholder consultation and dialogue provide greater certainty for mining investment • Grounded in transparency, access to information, democratic process • Encourages corporate social responsibility and environmental stewardship • Provides communities and Aboriginal Peoples increased understanding of the mining cycle, and opportunity to achieve social and economic benefits

18. Transparency • Transparency and strong accountability systems are essential components of good governance • The Extractive Industry Transparency Initiative as a tool to improve governance • Canada became a member of EITI in Feb 2007 • There is a need to adopt an approach specific to mining - distribution of benefits is a key issue • Kimberly Process is a good model

19. Corporate Social Responsibility • Attention is turning to social and human rights issues • Local communities have their own needs and expectations • Industry can find itself delivering services normally provided by governments • Government of Canada has been called upon to regulate industry abroad • Lead to CSR Roundtable process in Canada • In-depth discussion with stakeholders and experts on: • Standards • Incentives • Reporting and conflict resolution • Tools for implementation • Governance • Multi-stakeholder consensus report submitted to Government

20. Conclusions • Canada’s approach based on an internationally competitive investment climate, sustainable development and principles of transparency, accountability and certainty • Generates social and economic benefits and protects the environment – contributing to the quality of life of Canadians • Mining is a global industry. Collaboration, sharing knowledge, expertise and leading practices improves natural resource governance in a global context.. ….we still have lessons to learn. • There is a need for global dialogue and cooperation to address global issues facing governments and industry • Opportunity through UN CSD review of mining in 2010/11

21. www.NRCan.gc.ca