Local Manufacturing
Current resource policies in BC favour the export of unprocessed natural resources over local manufacturing into value-added goods. This renders obsolete the potential long-term benefits that could otherwise be gained from the creation of stable manufacturing jobs. The following Recommended Solutions describe some approaches adopted in other jurisdictions to promote greater local use of mineral resources.
Recommended Solutions
Promote local processing and value-added manufacturing of mineral ore
[Tags: Value-Added; Socio-Economic Benefit]
Some jurisdictions have adopted legal provisions that promote the domestic processing of ore rather than its shipment overseas. For example:
- In Ontario, legal provisions require that all extracted ores and minerals be “treated and refined in Canada so as to yield refined metal or other product suitable for direct use in the arts without further treatment.”79
- In Manitoba, mining lease applications must include details of the proposed processing of minerals mined under the lease within the province. 80
- In New Brunswick, the regulatory authority is empowered to require miners to process in the province any mineral mined in the province when economically feasible.81
- In Saskatchewan, the provincial corporate income tax grants an incentive to corporations that process to the prime metal stage non-Saskatchewan, Canadian minerals imported into the province.82
- In New Zealand, the regulatory authority is empowered to direct petroleum mining permit holders to refine or process their product within the country.83
- In India, the National Mineral Policy states that emphasis should be placed on the export of minerals in value-added form.84
In BC, similar legal provisions have been adopted for the forestry industry. These require timber cut in the province to also be used in the province.85 Exemptions to these legal requirements are only available where the regulatory authority is satisfied that the timber would be in surplus of the requirements of the existing provincial timber processing facilities or where the timber or wood residue cannot be processed economically in the vicinity of the land from which it is cut or produced, and cannot be transported economically to a processing facility located elsewhere in the province.86 Although recent trends of raw log exports from BC suggest that these exemptions are frequent, the existence of these provisions in BC forestry laws highlights past recognition of the importance of local manufacturing as opposed to mere export of raw resources.
Ensure that domestic needs are met before exporting raw materials
[Tags: Domestic Need; Export; Resource]
Legal provisions that require domestic needs to be satisfied before raw materials may be exported can also promote local manufacturing efforts. To ensure such benefits remain with local communities, public consultation and joint planning efforts must be conducted. Various legal approaches have been adopted to meet this objective:
- Indonesian mining law mandates that the processing and purification of certain types of mineral mining commodities must first satisfy domestic needs.87
- The US Federal Land Policy and Management Act (1976) requires public lands to be managed for multiple and sustained yield, bearing in mind the country’s needs for domestic sources of minerals, food, timber and fibre. 88
- In Kazakhstan, the State has the right of priority to buy minerals from the share of foreign investor or non-state subsoil users at prices that do not exceed world market prices. 89
- In Alberta, coal leaseholders who export coal must first make available for sale to Alberta residents the coal these residents require for their own domestic household needs.90
Notably, in Vietnam, the state grants preferential treatment to minerals required for domestic use and grants priority to projects that apply modern technology in mining and processing activities, and that produce products of high socio-economic value and efficiency.91