When a mining company CEO thinks about the relative merits of finding and opening a new mine or buying one in the stock market, one factor in his thinking is the growing hostility toward his industry. Even though companies now allot huge percentages of total capex to environmental protection,
Many communities fear the effect on their environment of a new mine. They also hear from agitators that the industry has always been run by heartless capitalists who care neither for their workers, nor the communities in which their mines are located; even if local governments enforce reasonable standards on such cynical companies, the mine will shut and may even be abandoned the next time metal prices sink to a level that makes it unprofitable. Heads they win, tails we the people lose, scream the critics. Miners should not dismiss these allegations too quickly, nor reject all organized opposition to opening new mines as irrational leftism. This is an industry with a lot of history. And much of it is bad. It is fair to assert that few, if any, major industries have a worse record of pollution, disregard for workers' safety, and for wiping out the income-base of communities, than the mining industry. In 1959, gold's price was frozen (by Bretton Woods) at $35 anounce, which meant that almost no mines were profitable. They were being sustained by what was called Emergency Gold Mining Assistance, a federal government program, also known as "Cost Aid, "that paid the mines extra amounts per ounce produced in relation to costs, if the mines sold their output to the government. The program was introduced during the strong inflation that broke out after World War II. (The gold the government acquired during the years of this huge subsidy program went to the Bank of Canada. In recent decades the Bank has been selling off all that gold acquired.) Heading a mining company today requires determination to succeed and a sensitivity to the market, particularly in this period when metals are reaching and exceeding historic high prices.
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