Canada becomes top spot for exploration
The Mining Association of Canada reported that Canada is now the top destination in the world for mineral exploration, attracting 18 percent of global investment and that the country’s mining industry broke records in 2011 for exploration spending, production and exports.
Supporting this growth, Canada has developed world-leading hubs at Vancouver and Toronto for exploration and investment, respectively, said Pierre Gratton, president of the Mining Association of Canada.
Vancouver is the top destination for mining exploration, with the world’s leading cluster of exploration companies, while Toronto is the global hub for mining financing, with the TSX and TSX Venture exchanges accounting for $12.5 billion, or 40 percent of global mining equity capital, according to the report.
The report states there are 1,200 exploration companies in the Greater Vancouver area, while the Toronto Stock Exchange lists 58 percent of the world’s public mining companies.
London is still the global finance center for mining in terms of large transactions, but Toronto leads in terms of total value, Gratton said.
“As the mining industry has become more global, the significance of these two cities has grown,” he said. “It’s more appreciated today than it was say a decade ago, when Vancouver and Toronto were still dominant, but the industry itself wasn’t as much in the public eye.
“Today, we are one of the reasons Canada has out-performed a lot of the Organization of Economic Cooperation and Development countries, certainly the G8, because of our energy and mining prowess.
“And now people are taking a hard look at what is it about Canada and mining and they are going beyond the actual production numbers to see this whole other part of the mining eco-system that we have built in this country.”
He said besides the growing global role of Toronto and Vancouver, Sudbury is attracting research investment, making it a global research and development center.
The 2011 figures in the report, Facts and Figures 2012, show exploration spending in Canada at $3.9 billion, mineral production at $50.3 billion (with B.C. accounting for $8.6 billion of that) and exports at $101.9 billion. All three are record numbers, Gratton said.
In 2011, the industry employed 320,000 people in Canada, and paid $3.9 billion in royalties, $3.2 billion in corporate income tax, and $1.9 billion through employees’ personal income taxes.
With the emergence of Canadian mining as a global player has come greater scrutiny on Canadian corporations. Further, Canadian mining companies are increasingly operating in countries where there are security issues. Gratton noted, for example, that 11 Canadian companies are exploring or developing in Mali, where a civil war is escalating.
Gratton said the industry is changing in terms of how it interacts in countries where it is developing mines.
“There’s a lot more that you need to know how to do, including developing good and trusting community relationships. In some countries, you need to have security forces and you need to make sure they are trained in human rights because you are operating in a zone where there are, perhaps, para-military groups or there are insurgents. They are not necessarily safe zones. It is a much more complex environment than they reckoned with when they first went there.”
Gratton said there have been instances where Canadian companies have been involved in resource conflicts. However, those cases represent a shrinking percentage of Canada’s growing mining presence.