In todays Calgary paper
Diamond mines on Tory wish list
Tom Olsen
For The Calgary Herald
Mark Norris
The Alberta government is expected to introduce tax breaks or revamped royalty rates in a bid to boost exploration for diamonds as it moves toward establishing the province's first mine for the precious stones.
A committee including industry players and Tory MLA George VanderBurg will recommend the province move quickly to increase the amount of diamond exploration now being done in Alberta.
VanderBurg said the committee's report will be in the hands of Energy Minister Murray Smith and Economic Development Minister Mark Norris next week. Both ministers have already indicated support for incentives to promote the search for diamonds in Alberta.
VanderBurg was effusive about the potential of diamonds to be a long-term and healthy contributor to Alberta's economy.
"It's so exciting," said the MLA for Whitecourt-Ste. Anne. "The potential for Alberta to have a diamond mine is unbelievable. If we spent five per cent of the time we spent developing oil and gas, we would have an industry in the province that's second to none."
VanderBurg said Alberta lags behind all other provinces when it comes to offering incentives for exploration.
The federal government offers so-called flow through shares for investors -- essentially allowing dollar-for-dollar tax credits for exploration money spent.
Virtually all other provinces sweeten the federal pot by offering tax credits of varying degrees: 15 per cent in British Columbia; 10 per cent in Saskatchewan; and up to 35 per cent in New Brunswick. Alberta offers no such incentive.
"The task at hand is to find new ways for investors to put up the cash for junior mining companies to go out there and explore," said VanderBurg.
His enthusiasm is backed up by recent discoveries, most notably those made in northern Alberta by Ashton Mining of Canada Inc.
"We have discovered 37 kimberlites to date, 24 of those contain diamonds," said Brooke Clements, Ashton's vice-president of exploration.
Kimberlite is a rock formation that typically hosts diamonds.
Clements said one find "contains a commercial quantity, but it's buried too deeply" to make mining economically feasible.
Ashton and other companies continue the search, however.
"We have found a good neighbourhood for diamonds," said Clements. "Now we just have to find the right address."
Incentives from the province would bring in more investors and greatly boost the chance of success, he said.
Economic Development Minister Mark Norris said diamond mining is a good economic diversification away from reliance on oil and gas.
"We're always looking at new ways to diversify the economy -- diamond mining is now first and foremost one of the ones we're going to spend a lot of time on," he said. "What we have been finding is some other jurisdictions in Canada have very interesting programs that they offer to the drillers to get them to come there.
"We know the product is here, it's proven. We know it's some of the best grade in the world. But the economic structure is not as competitive as it should be with some other jurisdictions. We're working on that right now."
Energy Minister Murray Smith said royalty holidays may be one way to encourage investment.
Under that scenario, companies that tap into diamonds would only have to pay a royalty rate as low as one per cent to the province until they earned back the cost of their initial investment. After that, the rates would rise.
"One thing to remember is Alberta has no sales tax, so that helps right off the top," said Smith. "We are committed, as a government, to create the best environment possible for investors to help realize the potential for diamond mines in this province."
Smith and Norris will review the committee's recommendations and take them through the government process later this year.
Pamela Strand, president of Shear Minerals Ltd., said the greater the commitment to exploration, the greater the chance for success.
"There is a high potential for diamonds in Alberta," said Strand. "We have a lot of evidence with discoveries, particularly by Ashton.
"It's a numbers game. It takes perseverance and money into the ground. The more money we spend, the better chance of finding a diamond mine."
olsent@theherald.southam.com |
