Mining Mindset: Myroslav Chwaluk – Protecting Resources Like Never Before

Anya:
Alright, let’s start. What’s going on in mergers and acquisitions nowadays? What’s cooking?

Myroslav:
That’s right. I think we’re seeing a lot of activity. The biggest issue that we’re dealing with in Canada is a more robust posture from our government on state-owned enterprises, particularly with the shifts toward critical minerals and the need for these minerals in the future economy.

Developed countries are really starting to protect their resources to secure domestic supply chains. In Canada, we have a legislative scheme that allows for national security reviews of incoming transactions. Historically, this was rarely used, but with the growing emphasis on critical minerals, it has become much more frequent. This can add significant uncertainty to transactions. Companies need to lay the groundwork carefully, but they can’t always control how the government will view their transaction or its outcome.

Anya:
China is a very specific case though. What about countries like Chile, Argentina, or some African nations? They also play an important role in critical minerals, especially with resources like copper and lithium.

Myroslav:
That’s a good point. In countries like Argentina and various regions in Africa, you see significant Chinese investment in developing assets. However, the Canadian approach stands out because it now extends jurisdictional control to Canadian companies owning assets abroad. For example, even if a Canadian company owns a critical mineral asset in Argentina or Chile, it can still fall under Canada’s national security review. This is a significant shift compared to just a few years ago.

Anya:
What are the legal challenges, especially when dealing with different countries? Are there common issues that come up, and what strategies can companies use to overcome them?

Myroslav:
The principal legal concern is mineral tenure—ensuring ownership and the ability to operate on the land. Companies need to ensure their rights are secure. We often rely on local legal experts and government relations teams to navigate these jurisdiction-specific challenges. In Canada, there’s also the constitutional duty to consult Indigenous groups, which adds complexity to permitting processes. In Chile, for instance, water permits can be a major hurdle due to the country’s dry environment. Each region has its unique challenges, but the groundwork in legal and social relations is critical.

Anya:
Permitting processes seem to take a long time, especially in developed countries. Why is that, and are there strategies to expedite them?

Myroslav:
Each country has its reasons for delays, often tied to bureaucracy. In Canada, for example, officials may hesitate to make decisions because of potential accountability if something goes wrong. The duty to consult Indigenous groups further complicates matters, as there’s often a lack of clarity on what constitutes sufficient consultation. In other countries like Chile, environmental concerns, such as water access, can slow down approvals. Streamlining these processes requires a commitment from governments to see the benefits of development and make decisive actions.

Anya:
Do you think the push for less carbon-intensive operations helps improve mining’s environmental impact?

Myroslav:
Yes, there are genuine benefits to less carbon-intensive operations, like using electric vehicles instead of diesel. However, the costs of these innovations can be prohibitive, especially for smaller operators. As costs come down for technologies like solar power, companies will feel less burdened by regulations and more willing to adopt sustainable practices. But there’s always a balance between regulatory requirements and financial feasibility.

Anya:
Many exploration companies don’t make it to production. Is financing the main reason, or are there other factors?

Myroslav:
Financing is a significant challenge, especially for early-stage companies that rely on equity rather than debt. However, management plays a crucial role too. Even with a promising asset, poor execution or lack of expertise can lead to failure. External factors, like environmental restrictions or geopolitical risks, also contribute. Success in exploration often requires throwing many darts to find the right opportunity.

Anya:
What about Ukraine? Do you see potential for its mining sector, especially post-conflict?

Myroslav:
Ukraine has potential, but issues like rule of law and regulatory certainty have held it back. A successful project could pave the way for others, encouraging investment and showcasing Ukraine’s ability to rebuild. While there will likely be caution initially, I’m optimistic about Ukraine becoming a resilient economic force with a robust mining sector in the future.

Anya:
Do you think mining will play a significant role in Ukraine’s rebuilding?

Myroslav:
Absolutely. Ukraine’s resource base has been underdeveloped, and the rebuilding process could unlock its potential. Additionally, Ukraine’s skilled workforce in sectors like tech could complement resource development. I hope that the country uses its resources wisely to support reconstruction and economic growth.

Anya:
Thank you so much for your insights, Myroslav. It’s been a pleasure speaking with you.

Myroslav:
Thank you, and thanks to K-Mine for this opportunity. I look forward to continuing the conversation in the future.

Anya:
Thank you. Take care.