Canada is home to some of the world’s largest mining companies, many of which boast market capitalizations well over $3 billion. These companies extract billions of dollars in resources annually, yet the future of Canada’s mineral wealth which is critical to everything from economic growth to national security, depends on one sector that’s increasingly struggling in mineral exploration.
In my opinion it’s time for a bold and necessary shift in policy. I propose that any mining company operating in Canada with a market cap over $3 billion be federally mandated to reinvest at least 2% of its net revenue back into mineral exploration within Canada. The stakes for our economy, sovereignty, and future prosperity are too high to continue letting the burden fall solely on the shoulders of junior explorers, retail investors, and taxpayers.
Why This Mandate is Needed
The mineral exploration sector is in crisis. According to the Prospectors & Developers Association of Canada (PDAC), exploration financing fell nearly 35% between 2021 and 2023, with junior companies seeing the largest drop. Raising money in this environment has become nearly impossible for early-stage exploration plays, even when they hold promising deposits.
Major mining companies often wait until junior explorers de-risk projects through drilling, permitting, and environmental approvals and then swoop in with acquisitions. That leaves early funding to come from retail investors and government programs like flow-through shares, a system which ultimately socializes much of the financial risk.
It’s an upside-down system.
Mandating that large mining companies reinvest even a small fraction of their revenue into exploration would:
Stabilize the markets and help rejuvenate a struggling exploration sector
Create thousands of new jobs, from geologists to logistics to environmental monitoring
Take pressure off taxpayer-funded initiatives, while increasing the private capital pool
Fuel economic growth at a time when Canada is facing trade barriers, tariff threats, and global supply chain restructuring
Support critical mineral development, crucial for electric vehicles, batteries, and defense sectors
Let’s face it, without new discoveries, Canada risks losing its competitive edge in supplying the raw materials that power clean energy transitions and secure national interests. Exploration is not optional, it’s the lifeblood of mining’s future.
How Major Mining Companies Would Benefit
Critics might argue that mandating reinvestment is punitive, but it’s quite the opposite. With smart policy design, these reinvestment’s can come with strategic and financial advantages for majors:
Tax deductions or enhanced flow-through share participation could offset much of the cost
Ownership of equity or royalties in junior companies provides direct returns on exploration success
A first right of refusal on new discoveries would let majors secure future assets early
Oversight mechanisms would ensure shareholder capital is used efficiently and responsibly
Participation could also qualify for carbon credits, especially for projects involving critical minerals and ESG-compliant operations
By investing early in projects, majors not only de-risk their future pipeline, but they help shape it, while improving industry sustainability and social license.
How the Government Would Benefit
Canada’s current support for exploration through incentives like the Mineral Exploration Tax Credit (METC) and charity flow-through structures is well intentioned but limited in scale. I’ve written about this in the past but these programs rely heavily on taxpayer dollars and are vulnerable to political winds. By shifting some of the responsibility to the private sector, more specifically to the entities who ultimately profit from discoveries, makes economic sense. Such a policy would:
Reduce reliance on public funds
Increase taxable corporate activity, generating potentially hundreds of millions in annual tax revenue
Multiply local and regional economic impacts, especially in remote and Indigenous communities
Could Empower First Nations to invest and participate directly in exploration partnerships, especially if the government also proactively matches dollar for dollar investments. This would amplify their voice and equity stake in projects as they develop.
This creates a more inclusive and sustainable model of resource development while addressing long-standing grievances about Indigenous exclusion from project benefits.
How the Market Would Benefit
Right now, junior mining markets are a rollercoaster of volatility. An over reliance on retail investors and speculative trading has created instability, further scaring off institutional capital and painting a target on the mining sector for shorting. A mandate would inject “strong hands” into the ecosystem, long-term investors with strategic interest, not just short-term gains.
That would:
Tighten the share supply of junior companies, making them less vulnerable to short sellers
Improve investor confidence across the sector
Attract new investment, as stable backing from majors signals legitimacy and reduces perceived risk
More exploration leads to more discoveries. More discoveries attract more capital. And that capital, when deployed smartly, leads to new mines, new jobs, and a stronger Canada.
Conclusion: A New Era of Shared Responsibility
Canada is at a crossroads. As the world races to secure critical minerals, build resilient supply chains, and shift to a low-carbon economy, we need to ask: are we doing enough to sustain our own resource advantage?
The answer is no! there is no sugar coating it.
The imbalance between who funds exploration and who profits from mining must be addressed. Mandating a modest reinvestment from Canada’s largest mining companies would not only fix this imbalance, but it would unlock immense value across the economy, strengthen our mineral sovereignty, and create a more equitable system for all stakeholders, from First Nations to investors to the Canadian taxpayer.
Maybe it’s time that the companies benefiting most from Canada’s geology are also the ones helping to discover the next generation of mines.
Authored by: Mike Coyle
For the original source of this article please visit https://insidexploration.com/time-to-mandate-reinvestment-why-canadas-major-mining-companies-should-be-required-to-support-exploration/
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