ARCHIVE: 5 MINUTES WITH . . .
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Mining the Potential of Canada’s North
February 16, 2010
Jim Gowans brings over 30 years of practical management experience in most aspects of the mining industry—including exploration, major projects, operations, and human resources—to his position as chief executive officer of De Beers Canada.
Mr. Gowans joined the De Beers family of companies in March 2006. Previously, he was senior vice-president and chief operating officer with PT Inco Indonesia, overseeing the company’s operations on the Indonesian island of Sulawesi and the implementation of an aggressive growth strategy.
He earned his bachelor of applied science in mineral engineering (mining and mineral processing) from the University of British Columbia in 1974. From there, he joined Cominco (now Teck Cominco) and advanced through various technical and managerial positions.
He moved on to Placer Dome in 1993, where he was engaged in global strategic planning. As vice-president, design and research, he was responsible for project design and for the Research Centre, where he spearheaded the drive to certify the research lab to the ISO 9002 standard. After a stint as vice-president, human resources, overseeing global talent management, Jim was promoted to executive vice-president, Canada. In that position, he managed Placer Dome’s complete portfolio of Canadian operations until late 2001.
Canada is currently world’s third leading producer of rough diamond, which rose substantially in 2008 when the Snap Lake and Victor mines began ramp up to full production. The Snap Lake Mine in the Northwest Territories is De Beers’ first diamond mine outside of Africa and Canada’s first completely underground mine. The first diamonds were produced in August 2007. Victor is an open pit operation and Ontario’s first diamond mine, recovering the first production diamonds in December 2007.
InsideEdge: You are a lead investor in the Conference Board’s Centre for the North. What do you hope the Centre can do for Canada’s northern regions?
Jim Gowans: De Beers Canada has been exploring and operating in Canada’s North for quite a long time and understands the current and potential economic opportunities for both business and residents. Our hope is that the Centre can bring together all stakeholders and coordinate their input, priorities, and resources into a common vision that all northerners can participate in for the benefit of all.
It is my belief that there isn’t a good understanding within the broader populace of Canada regarding both the opportunities and the challenges of “the North.” Having The Conference Board of Canada’s unbiased researchers dig into these issues and put them in front of the general public, as well as governments, would be particularly useful for those of us who are keen to be involved in the opportunities.
InsideEdge: What do business leaders and policy makers need to know about the North to make effective decisions about the future of Canada’s North?
Jim Gowans: As in any jurisdiction where there are competing interests, business leaders and policy makers would benefit from a clear understanding of the priorities of all stakeholders. That includes local communities, territorial and federal agencies, and larger government bodies. A consistent, clear direction will provide a stable environment on which business and other investors can base very important financial commitments, especially at a time when the global economy has suffered greatly and the competition for investment dollars is extremely fierce.
Significant issues are also affecting both levels of government in these areas of Canada. These issues, in turn, affect economic development.
In addition to a clear vision for the region, we need clear commitments from the various governments to address the challenges quickly, so as not to limit the North’s ability to make a positive impact on Canada’s future—which I happen to believe could be large!
InsideEdge: Canada is a global leader in mining, but some industry leaders have raised concerns that we are at risk of losing our edge if we do not innovate in areas such as geosciences and environmental technologies. How do we increase our efforts to develop and implement innovative processes and technologies, so that we can build on our existing advantages?
Jim Gowans: There are a few ways in which Canadian mining can increase efforts regarding innovation and technologies. The first is the easiest—the mining industry needs to get better at telling our story. You are correct when you say Canada is a global leader in all areas of mining, from exploration and extraction to investment, environmental stewardship and corporate social responsibility. We’ve just been too humble—and, some would say, too Canadian—by not blowing our own horn enough to draw attention to the great work we continue to accomplish and the new frontiers we continue to cross, day after day.
A more challenging aspect of the continuous development of processes and technologies involves increased collaboration by industry peers, research agencies, and governments. The advances in technology developed and used by Canadian mining companies are incredible and have largely been financed by individual companies. There’s a win-win here for all involved, if the industry can be included in more Canadian research programs to share the cost burdens—and the breakthroughs they will gain by working together. Canada has to take advantage of having such a large physical footprint covering so many unique local climates and geological conditions, as we can develop techniques and technologies in our industry that can be applied in just about any other location in the world. In addition, north of 60 is the next great frontier, and Canada needs to accelerate development of our knowledge and expertise in that environment to remain the world leader.
It is also critical that the federal and provincial governments maintain, if not enhance, their investments in geosciences for the North. The Geological Survey of Canada made a significant impact on our resource development by sending geologists into the field to map and develop a knowledge base for the industry, for literally generations. If this commitment was focused on the North, then I think it would have a huge positive impact on the development of the North.
InsideEdge: Many mining operations are located on or near Aboriginal lands, and mining companies are the single biggest employer of Aboriginal peoples in Canada. What are the next steps to strengthen the relationship between De Beers and the Aboriginal population?
Jim Gowans: Diamond mining in Canada has developed at an unprecedented pace, leaping to third place in global production by value in just one decade. Aboriginal peoples have played a critical part in that development, from exploration to operations.
At De Beers Canada, we’re proud of the partnerships we’ve built thus far. Now that we have impact benefit agreements in place with the eight local communities adjacent to our two mines (in the Northwest Territories and northern Ontario), we’re focusing on maximizing the various benefits outlined in those agreements. That means ensuring we work where we can with the communities to support them in growing their capacity and reaping the benefits in a sustainable way. Benefits during a project phase are often focused on the short term, from the project’s beginning through construction, while the operations phase could continue for decades.
Working with our partners to stay aligned on a long-term vision that benefits all sides will remain the key to the success of the partnerships. Building capacity within the Aboriginal communities—be it in governance, education and training, or business development—must continue to be our ongoing focus.
InsideEdge: As a CEO and former vice-president of human resources, what do you see as the unique challenges that a mining company faces in attracting and retaining the workforce it requires to succeed?
Jim Gowans: The biggest challenge that faces mining companies time and time again is that you cannot move the ore body once you find it. You look around and realize two things: you’re close to an area that has some mining history, or you’re in the middle of nowhere. In each case, the recruitment and retention of your workforce will be difficult.
In an established mining community, you generally have very low unemployment in the region, and the pool of skilled workers is experienced but already gainfully employed. You can get their attention, but it will be a very competitive process regarding salary and benefits, etc., which can drive costs above the standard business model. You also tend to have some success attracting people to move to a community, if it has a good reputation as a place to live.
When you are in a remote location, you are generally away from a large pool of experienced miners or skilled tradespeople and face the challenge of recruiting enough experience to a new or isolated place. At the same time, you’re trying to train and hire from the local population, who may not have the exposure to, or interest in, working in the mining industry.
In addition, you are usually asking the workers to spend an extraordinary amount of time away from their home while working a rotation that often sees the worker at the remote mine location for half of the calendar year. Add to that the fact that most remote mines in Canada are in extreme weather locations, which can test even the hardiest Canadian resident. Maintaining the workforce you have trained and developed, in the face of the untenable rotations for the employees’ families, is our largest ongoing HR challenge.
To be fair, compensation in mining is well above the national average for Canadian workers. While you can overcome recruitment challenges through a strong salary and benefits package, retention tends to be tied to: living up to your commitments to personal development and opportunities; a business culture that demonstrates its core values every day; and a workplace that acknowledges the contribution of its employees. We also find retention improves with the inclusion and development of the local workforce. People working close to home—even if it’s on a two-week rotation—seem to find more of a comfort level by being close to, or on, the land they know. That applies to both Aboriginal and non-Aboriginal persons.
InsideEdge: What do you see as the prospects for the mining industry as it comes out of the recession?
Jim Gowans: Those of us who have been around the mining game understand its cyclical nature, and many of us have seen more than one recession. With that experience, we know we have to focus on ensuring we operate with sound business practices, which can sometimes be eroded during the good times. This past year has certainly been a wake-up call for the industry as a whole to refocus after an unprecedented run of record prices and huge production increases. Having said that, Canadian mining companies in general responded quickly to the events of 2009 and, I believe, have positioned themselves well for an effective recovery. Moving forward, the focus will have to include a stronger understanding of the various economies around the world, as the pace of development in both traditional and developing markets is still being assessed by all parties in the aftermath of the economic slowdown we’ve just experienced.
There are numerous projects in the North. With commitment from the various levels of government to making these projects a reality, I think there are great opportunities. Once there is more development of resources in the North, that will lead to more exploration activity and hence more discoveries. It is very early days for mineral resource development in the North.
InsideEdge: As a member of the Conference Board’s board of directors, what do you see as the most significant contribution that the Conference Board can make to building leadership for a better Canada?
Jim Gowans: I think that what The Conference Board of Canada does now provides the best contribution to building leadership for a better Canada—that is, quickly analyzing the issues in Canada, assigning researchers to get to the bottom of the issues, and then, from the results of the research, providing direction to policy makers and business leaders to help them address those issues effectively. The Conference Board has the ability to get out front on the key issues facing Canada’s leaders and provide direction to address those issues—that needs to continue to happen.
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Chief Executive Officer
De Beers Canada
Centre for the North
Territorial Outlook January 2010