Category Archives: potash
Thu Mar 16, 2017 | 1:44pm EDT
By Zandi Shabalala | LONDON
Smaller mining companies seek IPOs but deals remain modest
FIILE PHOTO: Workers are seen underground South Africa’s Gold Fields South Deep mine in Westonaria, 45 kilometres south-west of Johannesburg, South Africa, March 9, 2017. REUTERS/Siphiwe Sibeko/File Photo
Stock market flotations of smaller mining and metals companies are set to pick up this year, although a return to the flood of deals five or six years ago remains unlikely while investors rebuild their bruised confidence in the sector.
A continued rally in metals prices is galvanizing some firms into raising capital on exchanges across the world to fund exploration and plow cash into existing projects, with others also preparing initial public offerings.
But with investors’ memories fresh of a bloodbath in mining stocks in 2015, the firms’ ambitions are modest: they are joining small-capital indexes or listing on junior markets in deals typically worth $10 million or less – far from Glencore’s $10 billion flotation in 2011 when commodities were booming.
“We are at the early stages of a cyclical recovery so you would expect to see the first signs of resurgence in the IPO market,” said Michael Rawlinson, Global co-head of Global Mining and Metals at Barclays.
So far this year, the bulk of IPOs have been in Australia, where nine mining companies have already filed to list their shares on the Australian Stock Exchange. That compares with 10 new issues for the whole of 2016.
Lee Downham, head of EY’s global mining & metals transaction advisory services, said the small-cap indexes in Toronto, London and Australia would see the bulk of initial activity until investors built up the confidence for larger cash calls.
“The sector needs to regain shareholder confidence before the bigger fundraising takes place,” he said.
Investors were stung when mining indexes in London, Australia and Toronto fell between 27 and 50 percent in 2015, with Anglo-American (AAL.L
) losing 75 percent of its value.
However, commodity prices began their revival last year, sending Anglo-American back up nearly 300 percent and making it the best performing blue chip in London, albeit from a low base.
GOLD EXPLORERS DOMINATE
Gold exploration companies, including Huntsman Resources and Raptor Resources, have dominated the Australian crop of IPOs so far as they take advantage of bullion prices rising in 2016 for the first time in three years.
Huntsman Resources is an exploration company with projects in the Democratic Republic of the Congo and Australia, while Raptor Resources explores for gold and copper in Australia.
Also expecting to list in Australia is lithium-focused Marquee Resources, which plans to raise $2.7 million from investors to find and develop exploration projects.
The London Stock Exchange, which hosts three of the world’s largest five mining firms, listed two companies last year – rare earths miner Mkango Resources (MKA.L
) and uranium miner Aura Energy (AURA.L). They followed just one flotation in 2015.
Mkango chief executive Will Dawes said the miner listed on London’s junior AIM market to fund its projects, increase liquidity and broaden its shareholder base while maintaining its Toronto listing.
Rainbow Rare Earths RWBR.L raised $8 million from its listing in London in January to fund its Burundi project.
“Circumstances seem to be more optimistic for junior mining IPOs in the short to medium term than they have been before,” said Martin Eales, chief executive of Rainbow Rare Earths.
Performance of the new listings has been mixed. Shares in Mkango and Rainbow have not added that much value but Aura Energy has surged about 75 percent.
There have been two new mining listings on the Toronto Stock Exchange so far this year, and the bourse said more are expected in the coming months. In 2016, there was a 38 percent increase in cash raisings by mining firms from 2015.
“Assuming that things continue the direction they are going with commodity prices, and there is every indication that there will, we will be seeing a large number of new listings,” said Orlee Wertheim, the head of business development for mining at TSX.
However, industry experts said that while there was a marginal improvement of new listings, investors were still cautious and this could affect how many companies actually make it to market.
“In terms of our pipeline, we are definitely seeing more flow of potential transactions,” said Jeff Keating, director at SP Angel Corporate Finance. “There is more interest in mining companies but I don’t believe that it is going to lead to a flood of IPOs or a return to where we were five or six years ago.”
(Story corrects number of Toronto listings this year in eighteenth paragraph.)
(editing by David Stamp)
Mon Mar 13, 2017 | 1:02pm EDT
Uralkali sees potash demand picking up after 2016 earnings slump
The logo of Russian potash producer Uralkali is pictured at the company’s stand during the St. Petersburg International Economic Forum 2016 (SPIEF 2016) in St. Petersburg, Russia, June 16, 2016. REUTERS/Sergei Karpukhin
Russia’s Uralkali, the world’s largest potash producer, said its core earnings fell 38 percent in 2016 as prices of the crop nutrient tumbled and sales volumes shrank.
Uralkali, along with other potash producers, has been hit by strong competition and low prices for agricultural commodities, but the company said on Monday that it expects total global potash demand to rise by 1-2 million tonnes this year to 62 million to 63 million tonnes, driven by China.
Last year the world’s top potash importers – India and China – delayed signing new purchase contracts until the end of the second quarter and start of the third quarter, putting downward pressure on the global market.
“Softening of the key markets, along with a severe export potash price decline resulted in a weaker performance in 2016,” Uralkali said in a statement.
It reported core earnings, or EBITDA, of $1.2 billion for 2016, and said revenues fell 27 percent to $2.3 billion. Its net profit, however, jumped to $1.4 billion from $184 million a year earlier due to a foreign exchange gain and fair value revaluation of swaps, the company said.
Uralkali forecast China would buy between 14.8 million and 15 million tonnes of potash this year while India would purchase 3.9 million–4.2 million tonnes.
Lower potash prices and carry-over stocks could lead to higher demand for Chinese imports this year, Uralkali said.
Expectations for a good monsoon season and also low carry-over stocks are expected to support India’s import demand, but India’s potash subsidy reduction may be a challenge for demand growth, it said.
Shares of Uralkali and its global peers rose last week after Belarusian President Alexander Lukashenko said he was ready for a mutually beneficial compromise in cooperation with Uralkali.
Uralkali quit a trading alliance with Belarusian potash producer Belaruskali in 2013, intensifying competition in the global market. Lukashenko has said several times since then that he was ready to consider resuming cooperation.
“We have always been and remain committed to constructive relations with Belarus and Belaruskali, but we have not been at the meeting (with Lukashenko) and cannot comment on its results,” Uralkali’s Chief Executive Dmitry Osipov told a conference call for analysts.
Uralkali expects its 2017 capital expenditures to be flat at around $320 million and plans to refinance up to $1.4 billion of its debt, it told the call.
(Reporting by Polina Devitt; Editing by Louise Heavens and Susan Fenton)
First orders under $455m potash deal for Vancouver junior
March 7, 2017
Encanto Potash Corp. (CVE:EPO) has announced the first set of orders under agreement with Metal Mineral Trading Co. of India, a state-owned trading agency to supply 2 million metric tonnes of MOP annually.
Vancouver-based Encanto said the Indian firm has ordered in total 120,000 tonnes of muriate of potash which the company will source from existing producers pending the commercialization of its own project. Encanto values the deal at C$36 million or US$27.3 million.
Encanto is advancing a $2.9 billion potash project in the Saskatchewan province of Canada in a joint venture with the Muskowekwan First Nation and is currently working on an updated feasibility study for the project.
India imports roughly 6 million tonnes of muriate of potash a year, a substantial portion of a global industry for the crop nutrient of roughly 50 million to 60 million tonnes. The potash price has been under pressure since 2011 and is currently languishing around the $220 a tonne level. MOP prices peaked in 2009 shy of $900 a tonne.
Encanto, worth $51 million on the venture market in Toronto after gaining 57% in value this year, would be the first junior mining company to bring a potash mine into production in an industry dominated by a handful of global giants based in in North America and Russia. Encanto’s proposed mine about 100 km northeast of Regina will also be the first potash mine in Saskatchewan on First Nations land.
According to a 2013 pre-feasibility study, the project boasts proven and probable reserves of 162 million tonnes, with plans for a 2.8 million tonne per year mine with a 50-plus year life. The proposed mine would employ 1,000 people during construction and 500 permanent jobs when complete.
In January Encanto signed a separate blockbuster agreement with India’s national farmers co-operative to supply a minimum of 5 million tonnes of potash per year for the next twenty years.
NACOF was established under the Indian ministry of agriculture and represents farmers in 25 out of 29 states across the subcontinent. India is home to some 55 million small scale farmers and NACOF boasts an annual budget of $7.7 billion according to a statement.
Last year a $700 million financing deal between a private Indian fertilizer company in the state of Gujarat and another Saskatchewan junior, Karnalyte Resources, fell apart. BHP Billiton’s giant Jansen potash project which at a potential 8 million tonnes per year would the the largest mine of its kind anywhere in the world, has yet to receive board approval even after the world’s top mining company spent $3.8 billion on the project.
The mining industry strikes something new – optimism
The Globe and Mail
Published Sunday, Mar. 05, 2017 4:45PM EST
Last updated Sunday, Mar. 05, 2017 6:28PM EST
For the first time in years, the global mining industry’s annual extravaganza has rattled into life surrounded by what looks suspiciously like a bull market.
Many commodity prices, from copper to zinc, have rocketed higher in recent months. Share prices have followed suit, and attendees to this year’s Prospectors & Developers Association of Canada (PDAC) convention in downtown Toronto no longer bear the dazed look of accident survivors.
But, even so, the opening day of the industry’s big bash on Sunday still struck a wary tone. Organizers expect 22,000 people to attend the show, which runs through Wednesday. That is roughly the same number as last year, but it is far below the 30,000 who flooded through the doors at the height of the commodity boom in 2011.
In happier times, the convention prided itself on being the spot for both hard-drinking parties and non-stop deal-making. It has become a more sober, restrained affair in recent years as the industry has struggled through a prolonged bleak patch.
Attendees to this year’s convention welcomed signs that the sector’s long ordeal is finally over, but nobody was declaring victory just yet.
“There’s definitely optimism here, but it’s of a cautious sort,” said Paul Robinson, a director at mining consultants CRU Group in London, and a speaker at the conference.
The surprise pick-up in mineral prices in recent months was based largely on China’s unexpected economic vigour, with an assist from U.S. President Donald Trump’s pledge to spend a trillion dollars on infrastructure, he said. The problem is that neither the Asian giant nor the U.S. President are a sure bet to keep on giving.
China, which consumes about half the global output of many commodities, remains the biggest uncertainty, Mr. Robinson noted.
He said Beijing’s decision in recent weeks to curtail aluminum production as a way to help ease air pollution is a positive signal because it indicates the Chinese government feels confident enough about the underlying economy to take the risk of throttling back on a key employer.
But skeptics warned that governments in Beijing, Washington and elsewhere are hard to predict. “One common factor for most [metals markets] is the outsized near-term importance of highly uncertain politics and policy,” Rory Johnston of Bank of Nova Scotia cautioned in a note.
Until the global trend becomes clearer, many miners are content to bide their time. However, unlike a year or two ago, when all the emphasis seemed to be on buttressing balance sheets, a growing number of companies are at least considering expansion.
“We’re being asked to talk to clients about a lot of the big projects that were put on hold back in 2012 and 2013,” said Dave Lawson, president of the global mining and metals market for Amec Foster Wheeler, an engineering consultant and project manager. “People are dusting off those projects and taking a new look at them … redoing the calculations and rethinking the economics.”
A slower industry has resulted in cheaper labour and more competitive bids on everything from construction to manufacturing, he said. Thanks to the improving cost picture, Mr. Lawson’s group has shaken hands on – although not yet officially booked – more than $300-million (U.S.) of new business in the first two months of the year, he estimated.
While big players mull a return to megaprojects, many smaller companies are paying an unusual amount of attention to minor metals, such as lithium and cobalt, where the case for buying is less about the global economy and more about technological trends.
Both lithium and cobalt are used in batteries and a host of promoters on the convention floor are delighted to assure passersby that demand for the metals can only climb as smartphones and electric vehicles become more popular.
Visitors who aren’t in the mood to invest in a junior lithium play can check out the comparative merits of a host of mining jurisdictions, from Greenland to Mongolia, that are using the show to pitch their unique virtues.
One of the more intriguing presences at this year’s show is Brazil, which is seeking to reinvigorate its mining sector by cutting red tape and opening up many previously restricted areas to foreign investors.
Fernando Coelho Filho, Brazil’s Minister of Mines and Energy, is in Toronto to talk to miners and assure them that he intends to remove many of the bureaucratic obstacles to winning a mining permit.
“Our bureaucracy has been very tough to go through,” he said. “We know that. And we’re going to improve.”
Encanto Potash and Muskowekwan First Nation sign new mining regulation agreement
ALEX MACPHERSON, SASKATOON STARPHOENIX
Published on: February 28, 2017 | Last Updated: February 28, 2017 5:04 PM CST
Muskowekwan First Nation Chief Reginald Bellerose, left, and Encanto Potash Corp. President and CEO Stavros Daskos.
BRYAN SCHLOSSER / REGINA LEADER-POST
Encanto Potash Corp. has signed an agreement with Muskowekwan First Nation and the provincial and federal governments that it says will pave the way for construction of its proposed potash mine on the reserve northeast of Regina.
The agreement is expected to lead to the first First Nations Commercial and Industrial Development Act (FNCIDA), legislation that applies existing provincial rules to large-scale projects on First Nations land, the Toronto-based company said in a news release.
“By achieving this milestone, the first ever for such a planned large scale operation in Canada, we have been breaking entirely new ground,” Muskowekwan Chief Reginald Bellerose said in a statement.
“(We are not only ensuring) that we ourselves are a significant resource player in Canada for generations to come, but paving the way for other First Nations to achieve self-source revenues and a self-dictated future full of promise.”
Encanto has been exploring the possibility of a potash mine in southern Saskatchewan for years. It signed a joint venture agreement with the First Nation in 2010; in January, it announced two new 20-year sales agreements with India-based firms.
Gary Deathe, Encanto’s director of corporate development, said in an email that the FNCIDA agreement is a “long awaited and important step” toward establishing the mine.
Encanto still needs to raise around $3 billion to cover its capital costs.
Because projects regulated under FNCIDA apply existing provincial regulations to First Nations land, “it gives investors and developers certainty by ensuring that they are dealing (with) … well known and understood (rules),” Encanto said in the news release.
“This represents another critical piece being in place to allow for the eventual development of the first potash mine on First Nation land in Canada and the first … to complete the FNCIDA,” Encanto president and CEO Stavros Daskos said in a statement.
Feb 27 2017
Full report is HERE
Executive Summary 2016 Mining Survey
This report presents the results of the Fraser Institute’s 2016 annual survey of mining and exploration companies. The survey is an attempt to assess how mineral endowments and public policy factors such as taxation and regulatory uncertainty affect exploration investment. The survey was circulated electronically to approximately 2,700 individuals between August 30th and November 18th, 2016. Survey responses have been tallied to rank provinces, states, and countries according to the extent that public policy factors encourage or discourage mining investment.
A total of 350 responses were received for the survey, providing sufficient data to evaluate 104 jurisdictions. By way of comparison, 109 jurisdictions were evaluated in 2015, 122 in 2014, 112 in 2013, and 96 in 2012. The number of jurisdictions that can be included in the study tends to wax and wane as the mining sector grows or shrinks due to commodity prices and sectoral factors.
The Investment Attractiveness Index takes both mineral and policy perception into consideration
An overall Investment Attractiveness Index is constructed by combining the Best Practices Mineral Potential index, which rates regions based on their geologic attractiveness, and the Policy Perception Index, a composite index that measures the effects of government policy on attitudes toward exploration investment. While it is useful to measure the attractiveness of a jurisdiction based on policy factors such as onerous regulations, taxation levels, the quality of infrastructure, and the other policy related questions respondents answered, the Policy Perception Index alone does not recognize the fact that investment decisions are often sizably based on the pure mineral potential of a jurisdiction. Indeed, as discussed below, respondents consistently indicate that only about 40 percent of their investment decision is determined by policy factors.
The top jurisdiction in the world for investment based on the Investment Attractiveness Index is Saskatchewan, which moved up to first from second place in 2015. Manitoba moved up to second place this year after ranking 19th the previous year. Western Australia dropped to third, after Saskatchewan displaced it as the most attractive jurisdiction in the world. Rounding out the top ten are Nevada, Finland, Quebec, Arizona, Sweden, the Republic of Ireland, and Queensland.
When considering both policy and mineral potential in the Investment Attractiveness Index, the Argentinian province of Jujuy ranks as the least attractive jurisdiction in the world for investment. This year, Jujuy replaced another Argentinian province—La Rioja—as the least attractive jurisdiction in the world. Also in the bottom 10 (beginning with the worst) are Neuquen, Venezuela, Chubut, Afghanistan, La Rioja, Mendoza, India, Zimbabwe, and Mozambique.
Policy Perception Index: A “report card” to governments on the attractiveness of their mining policies
While geologic and economic considerations are important factors in mineral exploration, a region’s policy climate is also an important investment consideration. The Policy Perception Index (PPI), is a composite index that measures the overall policy attractiveness of the 104 jurisdictions in the survey. The index is composed of survey responses to policy factors that affect investment decisions. Policy factors examined include uncertainty concerning the administration of current regulations, environmental regulations, regulatory duplication, the legal system and taxation regime, uncertainty concerning protected areas and disputed land claims, infrastructure, socioeconomic and community development conditions, trade barriers, political stability, labor regulations, quality of the geological database, security, and labor and skills availability.
For the fourth year in a row, the Republic of Ireland had the highest PPI score of 100. Ireland was followed by Saskatchewan in second, which moved up from 4th in the previous year. Along with Ireland and Saskatchewan, the top 10 ranked jurisdictions are Sweden, Finland, Nevada, Manitoba, Wyoming, New Brunswick, Western Australia, and Northern Ireland, which was included for the first time in the 2016 survey.
The 10 least attractive jurisdictions for investment based on the PPI rankings (starting with the worst) are Venezuela, Afghanistan, Zimbabwe, Mongolia, Philippines, Indonesia, Chubut, South Sudan, Mendoza, and Ecuador. Venezuela, Zimbabwe, and Chubut were all in the bottom 10 jurisdictions last year. Two out of the 10 lowest-rated jurisdictions based on policy were Argentinian provinces.
World’s biggest miner hasn’t given up hope for potash
Feb 21 2017
Jansen is now 64% complete and “shaft excavation is progressing,” according to BHP’s results for the first half of the 2017 financial year.(Image courtesy of BHP)
BHP Billiton (ASX, NYSE:BHP) (LON:BLT), the largest mining company by market capitalization, sees potash as a key commodity in which to base its future growth despite prices are still hovering just above $210 a tonne, less than a half what they were only five years ago.
“Our preference long term is to grow in oil and copper, then possibly potash,” the firm’s chief executive officer Andrew Mackenzie said when releasing first half of the year results Tuesday.
BHP seems to be in no rush to advance its massive $2.6 billion Jansen potash project in Canada’s Saskatchewan province. For years the company has been sinking shafts and installing some infrastructure on site, but has not fully committed itself to the project, nor received board approval for the mine.
BHP’s massive $2.6 billion Jansen potash project in Canada’s Saskatchewan province is now 64% complete.
“Excavation and lining of the shafts are steadily progressing,” according to BHP’s results for the first half of the 2017 financial year. It added that the engineering contract for feasibility studies for stage 1 of the project had been awarded.
When the work is completed – at the current pace towards the end of 2019 – Jansen would still be nowhere near a producing mine. That is expected to happen sometime “in the decade beyond 2020,” BHP has said.
But once and if that finally happens, Jansen would be a game-changer in the potash industry, as it is expected to generate 8 million tonnes of crop nutrient a year, which would amount to nearly 15% of the world’s total.
Prices have also suffered from increased competition following the breakup in 2013 of a Russian-Belarusian marketing cartel that previously helped limit supply.
And while they have slightly recovered this month, a potential move by the Indian government to cut potash subsidies by 17% in the next financial year would hit demand from one of the world’s largest importers of the fertilizer, inevitably dragging prices down.
Jansen potash mine ‘important growth option’ for BHP Billiton: CEO
ALEX MACPHERSON, SASKATOON STARPHOENIX
Published on: February 21, 2017 | Last Updated: February 21, 2017 5:26 PM CST
BHP Billiton’s chief executive says the Anglo-Australian mining giant is open to “some form of sell down or joint venture” at its multi-billion-dollar Jansen potash mine under construction about 135 kilometres east of Saskatoon.
“(But) it’s been our experience to date that without a clear route to sanction … it is difficult to attract a large number of potential buyers,” Andrew Mackenzie told reporters and analysts Tuesday on a conference call.
The massive mine remains an “important growth option” for the Melbourne, Australia-based company, which is optimistic about the future of commodities over the next several decades, Mackenzie added, striking a more positive tone than in previous reports.
“We are trying to find ways of breaking (further capital expenditures) up into the smallest possible modules but also with the most respectable forms of capital productivity,” he said. “(But) it is going well.”
That outlook is consistent with the company’s stated plan to bring Jansen — which has an estimated capacity of eight million tonnes per year — into production in the decade following 2020. However, the mine’s future remains mired in uncertainty.
BHP Billiton has so far committed US$3.8 billion to the project, of which US$2.6 billion is currently being spent on the shafts. Analysts have estimated the mine will cost US$14 billion to finish, and further expenditures must be authorized by its board of directors.
The company said Tuesday that work is nearly two-thirds complete and “tracking to plan.” Chris Ryder, BHP Billiton Canada’s head of corporate affairs, told the Saskatoon StarPhoenix last month that the work will take another “couple of years” to complete.
BHP Billiton on Tuesday reported earning US$3.2 billion in the six months ended Dec. 30. By comparison, it took a US$6.4 billion loss in the fiscal year ended June 30, largely due to one-time writedowns.
A return to optimism in mining puts Canada at a crossroads
February 16, 2017
The Canadian Mining Association
To download a copy of Facts & Figures 2016, go HERE
Action needed for Canada to capitalize on potential rebound
Cautious optimism is returning to the global mining industry, which could spur mining companies to make new and significant investments. However, a new report from the Mining Association of Canada (MAC) shows evidence of declining Canadian competitiveness and the prospect for major exploration and mining investments to flow offshore.
“Very simply, Canada is not as attractive as it used to be for mineral investment, and competition for those dollars is growing globally. The recent elimination of federal mining tax incentives, regulatory delays and uncertainty, combined with major infrastructure deficits in northern Canada are all contributing factors that can explain Canada’s declining attractiveness. The time is now to put the right policy pieces in place to better compete for those investments and regain our leadership in mining,” stated Pierre Gratton, President and CEO, MAC.
MAC’s Facts & Figures 2016 report notes several indicators that reveal that Canada is not as competitive as it once was. Foreign direct investment into Canada’s mining sector dropped by more than 50 percent year-over-year in 2015. This is disproportionate to Canadian mining direct investment abroad, which only experienced a 6 percent decline. This imbalance indicates that companies are investing in project development, but may be less interested in doing so in Canada. Canada also no longer attracts the single-largest share of total global mineral exploration spending, having conceded first place to Australia in 2015. Further, no new mining projects entered the federal environmental assessment stage in 2016. If these trends continue, there will be fewer discoveries made and fewer projects that become operational mines in Canada.
“The policy landscape in Canada is full of uncertainty as we await the outcomes of major government decisions. The federal government is reviewing federal environmental legislation, is implementing a pan-Canadian climate change policy, and is working to address long-standing transportation and infrastructure issues. These are all necessary and positive steps, but they must result in boosting Canada’s attractiveness as a place to do business. At risk is a key sector of our economy, and one that leads the world in sustainable mining practices,” stated Gratton.
MAC’s report also revealed the mining industry remained a strong contributor to the Canadian economy despite the downturn in 2015. The industry directly employed more than 370,000 people across Canada and remained the largest private sector employer of Aboriginal people on a proportional basis. An additional 190,000 worked indirectly in mining, with more than 3,700 companies supplying goods and services to the Canadian mining industry. In 2015, the mining industry accounted for $56 billion of Canada’s GDP and minerals and metals accounted for 19% of Canadian goods exports.
Policies that improve Canada’s mining competitiveness:
1) Improve the federal project review process – the process should be effective and timely, from pre-environmental assessment (EA) to post-EA permitting, with meaningful consultation with Aboriginal communities.
2) Invest in critical infrastructure in remote and northern regions – introduce strategic tax measures and ensure the new Canada Infrastructure Bank has a strong economic development focus for northern Canada.
3) Improve access to trade – ensure trade policies provide access to new and important markets, including China, and improve Canada’s transportation network to more efficiently move mineral and metal products to market.
4) Address climate change while protecting Canadian businesses – adopt policies that lead to meaningful greenhouse gas emissions while protecting emissions intensive and trade-exposed industries (EITI), like the mining industry. Failing to protect EITI sectors will result in “carbon leakage”—the shifting of production and the associated economic benefits from countries that are taking action on climate to those that are not.
5) Help expedite industry innovation – The Canada Mining Innovation Council is seeking a $50 million investment for the Towards Zero Waste Mining innovation strategy from the Government of Canada to accelerate the adoption of disruptive technologies that will support the transition to a lower carbon future.
To download a copy of Facts & Figures 2016, go HERE
The Mining Association of Canada is the national organization for the Canadian mining industry. Its members account for most of Canada’s production of base and precious metals, uranium, diamonds, metallurgical coal, mined oil sands and industrial minerals and are actively engaged in mineral exploration, mining, smelting, refining and semi-fabrication. Please visit www.mining.ca.
Canada losing ground as mining investment destination
Feb 16, 2017
Source: MAC’s Facts & Figures 2016.
While optimism is slowly but steadily returning to the global mining industry, Canada doesn’t seem to be in a good position to benefit from the increasing number of companies ready to make new and significant investments.
At least that is the conclusion from a report released Thursday by the Mining Association of Canada (MAC), which also warns of the possibility of seeing major exploration and mining investments flow offshore.
“Very simply, Canada is not as attractive as it used to be for mineral investment, and competition for those dollars is growing globally,” MAC President and CEO Pierre Gratton said.
Elimination of federal mining tax incentives, regulatory delays, uncertainty and major infrastructure deficits in northern Canada are all contributing to the country’s declining appeal.
The recent elimination of federal mining tax incentives, regulatory delays and uncertainty, combined with major infrastructure deficits in northern Canada are all contributing factors that can explain Canada’s declining attractiveness, Gratton noted.
The report also highlights the policy areas that Canada needs to pay attention to in order to seize future growth opportunities and re-gain its leadership in mining.
Some of the figures included in the report are quite telling. In 2015, foreign direct investment into Canada’s mining industry dropped by more than 50% from the previous year. In contrast, the country’s resources sector direct investment abroad only experienced a 6% decline.
According the industry body, such imbalance proves that Canada no longer attracts the single-largest share of total global mineral exploration spending, a top place it lost to Australia in 2015. Further, MAC says, no new mining projects entered the federal environmental assessment stage in 2016.
If these trends continue, the association warns, there will be fewer discoveries made and fewer projects to become operational mines in Canada.
Despite the challenges, the sector remains a key contributor to the Canadian economy, employing more than 370,000 people across the country and being the largest private sector employer of Aboriginal people on a proportional basis.
In 2015, the mining industry accounted for $56 billion of Canada’s GDP and minerals and metals accounted for 19% of Canadian goods exports.