In the past I have discussed some risks associated with the junior mining sector. In this article it is important to recognize what has been reported in the past about mining operations in Venezuela.
As countries discover that they have real assets that are meaningful there is some likelihood that these mines or mining projects may come under increasing political pressure. For example recently Australia announced a proposed tax of 40% on producing mines. Although a proposal at this point, it is verification of the point I am making.
For a historic example, the International Business Times article a few years back stated, “Hecla Mining’s Isidora gold mine is the third operation in just one week in Venezuela’s mineral rich Bolivar State to suffer a roadblock. Venezuelan workers have stalled operations of the country’s largest gold miner, citing poor working conditions and demanding that President Hugo Chavez nationalize the mine.”
I interviewed Laura Skaer of the Northwest Mining Association to look at some potential mining law changes that are proposed in the United States. But I went on to state that we forecast more difficulty in the mining sector on a worldwide basis. The Hecla situation was resolved but not to Hecla’s or the mining industries benefit. I consider it my duty to give you the big picture and the long-term perspective. Most people do not follow the mining industry closely but some proposed changes have potential long-range effects.
Every now and then The U.S. House of Representatives proposes a bill that can impact the mining industry. In this era of a “jobless” recovery any industry within the U.S. is vital to all concerned. For those with a bent toward the “green” sector let me agree, but also state – “If it can’t be grown it has to be mined.”
There is a great deal of misinformation and outright lies about the mining industry. In today’s world most (not all) mining activity is done in a way that impacts the environment in the least obtrusive way, and in almost all cases (under U.S. standards) the property is brought back to the natural conditions after the mining is completed. This is a fact that very few other than those in the industry are actually aware.
Again there are exceptions, but for the most part the fact is, modern life demands metals and rare earths to function. An excellent review of the truth about the current state of mining affairs is a documentary film titled “Mine your own Business.” If you can rent this DVD it is highly recommend as it tells the real story of mining from a completely independent source.
My concern goes beyond the United States when I ask, “What is to prevent Mexico, South America, Canada or Australia from looking to impose new mining legislation that profits government and hinders the mining industry?” Obviously, as stated earlier Australia already has, who is to follow next?
We suggest that those in the industry take our lead and get this message out to the press, radio, and even the business television audience. This, in our view, is the most important issue in the mining industry today, and hardly anyone is talking about it. It might just be one of the reasons the junior miners are doing so poorly. Perhaps the market senses some very detrimental legislation over the next few years.