OMA Welcomes Improvements to the Northern Industrial Electricity Rate (NIER) Program

Posted on Thursday June 29, 2017
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The Ontario Mining Association welcomes Ontario government action on reducing electricity costs for some of the biggest job creators in Northern Ontario, including mining companies, to boost their competitiveness and help them continue to grow and benefit society.

Ontario's mining sector includes both fully integrated value chain miners and smaller mining companies. In all cases, electricity rate is the key to maximizing the value of our mineral resources, as high power costs serve as a barrier to investment, decrease flexibility with regards to new developments, reduce mine life, and may lead to value-added processing moving to other jurisdictions. 

After labour, energy is the second highest component of operating costs for Ontario mining companies. Given that Ontario's industrial hydro rates are among the highest in North America, steps taken by the government to update the NIER program represent progress toward achieving the economic policy objectives of maintaining and growing jobs and investment, while serving to benefit the environmental policy objectives of driving change in industry and reducing peak power. 

With the NIER program made permanent, and by accepting more new mining companies and extending the participation term from three to five years, the government is ensuring that the sector can count on greater rate stability over longer time horizons. The certainty will contribute to strengthening a sector that is vital to shaping our future. After all, moving toward a low-carbon economy is not possible without mining; metals extracted through mining and smelting processes are fundamental in the construction of green technologies such as solar panels, wind turbines, smart grids, and other low-carbon infrastructure.

The NIER requirement to complete energy management plans puts the goal of increasing efficiency and lowering carbon emissions into sharp focus for Ontario mining companies. With each passing year, evolving technological innovations make it more logistically and economically feasible to optimize energy use and reduce reliance on fossil fuels - especially as the cost of renewables falls and battery storage improves. To take advantage of the possibilities, however, mining companies need the support and collaborative action of government and society.

We are grateful to Michael Gravelle for charting the way on this as Minister Northern Development and Mines, and to Minister Bill Mauro for building on the achievements with an eye to the future. We look forward to more engagement on initiatives that will help us build our internal capabilities and foster an energy conscious culture, while contributing to Ontario's sustainable economic and social progress.