Canadian mining on shaky ground

The state of the global economy is dampening the mining boom in Canada, says the Territorial Outlook: Winter 2013 report published by The Conference Board of Canada’s Centre for the North.

“Mining development and production will provide a solid economic foundation for Canada’s territories,” says Marie-Christine Bernard, associate director of Forecasting and Analysis.

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“However, base metal prices are only now firming up, after slipping in 2012. And tight financial markets are making it more difficult for mining companies to raise capital, which is delaying or downsizing projects,” she adds.

Nunavut’s mining sector is experiencing both accelerating growth and downside risks, for instance.

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Production at the Meadowbank mine far exceeded initial predictions in 2012, and output is expected to rise over the next three year. But its Mary River iron ore project was scaled back from a $4-billion expenditure to a $740-million.

However, even with the downgrade, overall economic growth in Nunavut is forecast to be 3.4% in 2013 and 8.8% in 2014.

The Northwest Territories might grow by 0.2% in 2013, which is an improvement over declining real GDP in 2011 and 2012. The diamond mining industry is both maturing and entering a long-term decline, but the territory’s fortunes aren’t tied exclusively to diamond profits since metal ore mines will be developed.

Yukon’s real GDP is forecast to increase by a strong 6.3% in 2013 as mineral production continues to climb, and as construction gets a lift from mineral development. Yukon’s next mine will be Victoria Gold’s Eagle gold mine and that’s set to begin construction this year.

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The Territorial Outlook is published twice yearly to examine the economic and fiscal outlook for each of the territories. It examines output by industry, labour market conditions, and the demographic make-up.

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