ON THE RIGHT TRACK The Canadian mining industry is recovering, as certain commodity prices are steadily increasing
Despite the recent global economic down- turn, the Canadian mining industry will remain one of the world’s largest minerals and metals producers for the foreseeable future, says industry body the Mining Association of Canada (MAC).
“The Canadian mining industry was some-what subdued during the first half of this year, which has also been the case in other major mining jurisdictions, such as South Africa,” says the MAC president and CEO Pierre Gratton.
However, he maintains that the Canadian mining industry is starting to recover, as prices of several commodities, such as base metals zinc, lead and nickel, are steadily rising.
This is despite the decline in metallurgical coal and iron-ore prices, which have negatively impacted on some Canadian producers.
“Copper prices, thankfully, never really dropped, as was predicted by several analysts. Copper prices continue to hover around $3/oz, which, for Canadian producers, is quite a good price,” Gratton says.
Meanwhile, he points out that Canada is the world’s second-largest uranium producer, after Kazakhstan. However, Canadian uranium producers are still waiting for the price of uranium to rebound, following Japan’s Fukushima Daiichi nuclear disaster in March 2011.
“Although there has been some recovery across all commodities, there is still a sense in the indus-try that better times are on the horizon,” he says.
Gratton maintains that the global mining industry is exploring new opportunities again, mostly regarding acquisitions and expansion projects.
He adds that Canadian mining companies are focusing less on growth and more on controlling costs, improving balance sheets and preparing for what will invariably be another upswing in the global mining industry in the next three to five years.
Northern Canada Prospects
Canada is the fourth-largest country in the world by land mass, spanning
9 984 670 km², which is why Gratton believes that there are significant mineral deposits still to be found and, therefore, significant potential for mining companies.
“Northern Canada, like many parts of Africa, has historically been underexplored and is believed to contain significant mineral explor-ation potential.”
Gratton explains that, historically, there were no detailed geological mappings of Canada’s northern regions, which include the Yukon, the Northwest Territories, Nunavut, Northern Quebec and Northern Labrador.
“We have, however, seen investment by the federal and provincial governments in the geological mapping of this area over the past ten years.”
Gratton says parts of northern Canada are sparsely populated and the local infrastructure, such as power stations, ports, roads and rail, is not sufficiently developed to support large-scale operations, despite the region containing several high-quality, proven mineral deposits.
The MAC has, for the past ten years, emphasised to government policy-makers that significant investment in infrastructure is required in the northern region to unlock mining potential.
Gratton tells Mining Weekly that Canadian Prime Minister Stephen Harper has travelled to this region every year since he was elected in 2006 to highlight the potential for mining and manufacturing operations, should there be sufficient investment.
However, Gratton laments that, until the federal and regional governments change the underlying economic conditions, the development of new mining operations in the northern region will remain slow.
Meanwhile, the MAC is nearing completion of a study that compares, in relative terms, the capital-cost investment and operating costs of establishing a gold mine in Nunavut, in northern Canada, with establishing a gold mine in the south of Canada, where mines have easy access to electricity and transport infrastructure.
The study found that it was two to two-and-a- half times more expensive to establish a gold min- ing operation in the north of Canada, compared with establishing one in the south.
“Therefore, mining companies have to find deposits that are significantly large, with high-grade ore, to ensure that establishing a mining operation is economically viable,” he concludes.