Commodity prices have pushed the mineral market to a $10.7 billion high and still there is opportunity for industry growth, says Ontario Mining Association president Chris Hodgson.
The question remains how?
"What we are trying to encourage is national and provincial policies that would create new mines," he says.
A report titled Ontario Mining: A Partner in Prosperity Building: The Economic Impacts of a Representative Mine in Ontario suggests that 480 direct jobs in an operating nickel and copper mid-size mine leads to 2,280 indirect employment positions.
The authors Peter Dungan and Steve Murphy, both from the University of Toronto’s Rotman School of Management indicate that the output of the same mine contributes $278 million to Ontario’s economy and $84 million to government revenues annually.
Moreover, most of the economic benefits stay local, since procurement is done within an hour’s drive of the mine site.
"If you get strategically smart (about this), you can generate a lot of wealth that will sustain Canada for future generations," Hodgson says.
It appears the federal government may be on the same page. The recent budget allocated $34 million over two years for a geo-mapping study along with a one year extension of the Mineral Exploration Tax Credit. It is the first time in 10 years Ottawa has acknowledged the industry’s potential, Hodgson says, but much more is required.
Governments may look at the mineral sector as a sunset industry and therefore fail to see the secondary potential that can be created, he says.
Canada cannot compete with manufacturers from India whose workers are paid pittance, compared to Canadian labourers. However, the province and Canada can build on the mining clusters, as Greater Sudbury has done, he says. Ottawa has not acknowledged Centre for Excellence in Mining Innovation (CEMI) as an "excellence centre," but international mining companies have through time and funding contributions.
Growing community wealth through mining royalties is key to independence, and economic diversification.
"This is good for Canada good for the province and good for First Nations, if it’s done properly," Hodgson says.
For example, an equitable share of the mine royalties could go a long way to the sustainability and independence of First Nation communities and local municipalities where the mines are located, he says.
The companies Hodgson represents are the larger mining service and supply houses with agreements in place to include First Nations. They have positioned themselves to feed the voracious appetite of China, India, Turkey, Brazil while Russia’s continues. Their steady demand for minerals is resulting in infrastructure upgrades as a result of urbanization.
"They are building the equivalent of a Canada every year," Hodgson says.
"Just think of this in terms of 800 million rural Chinese people becoming urbanized."
The demand started to accelerate in 2001. Since then, it has been driving mineral prices skyward. Hodgson says analysts are confident these prices will increase about 10 per cent a year for the next 10 to 15 years.
"I am just worried they (the governments) will miss the opportunity."
The North is home to approximately 90 per cent of Ontario’s 43 producing mines.
MINING INDUSTRY FACTS
Each employee produces more than $500,000 worth of mineral products a year, yet because it is such a highly productive technical sector, the industry is a small employer of people.
