Module 2 Mining Basics

Mining has been part of the North American economy for centuries. Aboriginal people used rocks for tools, building materials, decorations, and weapons. They also recovered materials from these rocks - copper, flint, chert, siltstone, obsidian, and ochre. Copper was used for adornment, sculpture, shields, daggers, and spearheads. Flint was used for starting fires and making knives, scrapers, spear points, and arrowheads. Red ochre was used for painting. Aboriginal people traded these materials throughout the Americas.

Mining is again playing an important role in the lives of many Aboriginal people. Some 1200 Aboriginal communities are located within 200 km of 180 active mines and 2500 exploration propertiesExploration Properties: an area of land on which prospectingProspecting: the first step in exploration in which prospectors search for clues of the presence of valuable mineralMineral: A naturally-occurring, homogeneous substance that has a definite chemical composition and (usually) a crystalline structure. deposits. The objective of prospecting is to identify a target worthy of further testing by more expensive exploration methods., sampling, mapping, diamond drillingDrilling: the primary means of bringing rock samples to the surface. Often called “diamond drilling” since the bit used is made of diamond. Drilling is a major expense, costing $50 or more per metre. and other work involved in searching for or determining the extent of an ore bodyOre Body: a mineralized mass whose characteristics and economic limits have been examined. occurs..¹ Many of these communities go to great lengths to try and get benefits from these mining projects.

The mining industry is made up of many different interests and businesses. Here is a list of the main players:

• Government manages mineral claims and provides permitsPermits: legally-binding permissions that govern activities that may occur during exploration or mine operation, like quarrying, use or impact on water, building of transmission lines, etc. for exploration.
• Prospectors, using geological maps and other tools, explore for minerals that could lead to a mine.
• Junior Exploration Companies are smaller companies that look and test for marketable ore deposits. A few Juniors also own small operating mines. Juniors generally make their money by selling properties they have explored to larger companies. Juniors are very active in Yukon’s mining sector.
• Major Mining Companies (or “Majors”) employ many people with a wide range of skills and in every stage of the mining business. Majors make their money from the sale of the commodityCommodity: physical substances, such as metalsMetals: one of more than a 100 basic earth elements, grouped under minerals. Includes iron, lead, zinc, and copper., that can be sold or exchanged in a marketplace. they are mining.
• Technicians are specialists in complex tasks like warehousing, laboratory or environmental work, and computer services.
• Service Providers are independent businesses that are contracted to supply a mine with some of its needs. Drillers, couriers, helicopter pilots, geophysical surveyors, geologists, and caterers are all service providers.
• Equipment Suppliers and Manufacturers are service providers who build, supply or maintain mining equipment such as machinery, drills, trucks, and conveyors.
• Construction Companies build mining infrastructure, like roads, bridges, buildings, and processing facilities.
• Industry Associations address issues common to companies active in a sector of the economy. They also represent the interests of those companies before the public and government.
• Stock Market Investors channel their own capitalCapital: cash, property, equipment, services, and contracts or leases. or that of clients into the mining industry. They are especially important during the Exploration StageExploration Stage: the whole range of activity from searching for and developing mineral deposits. of mining.
• Some customers are manufacturers who purchase metals, diamonds, and other commodities and turn them into products. Other customers are end consumers. They purchase for their own use the products containing the mined material.

All or most of these players have to work closely with one another at nearly every stage of mining. The good news is that Aboriginal communities can no longer be left off the list of main players. However, as the *Case Studies show, even as “main players” Aboriginal communities do not always gain lasting benefits. That requires many other things, including a basic understanding of the five stages of mining. Without understanding the basics, a sound negotiation strategy cannot be designed.

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