Canadian Manufacturing

Mining, related sectors an economic goldmine

Northern Canada rich with opportunities



OTTAWA: Natural resource sectors hold huge economic development potential in Northern Canada, according to a new report from the Centre for the North, a research division of the Ottawa-based think tank, Conference Board of Canada.

The report pinpoints several industries that will be key to the north’s economic development: oil and gas, mining, forestry, fishing, utilities, construction, and tourism.

Those sectors will also drive growth for other industries, such as communication, electricity and transportation infrastructure and commercial services, the report added.

The centre examined three territories and the northern parts of seven provinces, which make up 80 per cent of Canada’s land mass yet hold only seven per cent of the population.

It found mining opportunities in every region with emerging “hot spots” in the Yukon, Nunavut and Northern Ontario.

“The future looks bright,” says Len Coad, the board’s director of environment, energy and technology policy.

Coad points out that even in 2009 —the worst year for mining in recent history— the industry still contributed $6.5 billion to the Canadian economy in real terms and continued to export a diverse variety of resources.

He says on top of that, several mines will start producing in the next 10 years.

Cross-country look ahead:

In Yukon, the Bellekeno gold, silver, lead and zinc mine came into production this year. The Wolverine mine —zinc, copper, lead, silver, and gold— is due to start producing this coming year.

The Northwest Territories has Canada’s most recently developed mining industry—diamonds. Nunavut just opened its first gold mine and exploration activity has taken off.

In Northern Saskatchewan, there’s strong potential for expanded uranium mining and new mining of gold deposits.

Northern British Columbia has a variety of metal mines and a new electricity transmission line will spur the start of production in the Northwest.

Northern Manitoba will open at least two new metal mines in the near future and Labrador will see a boost in iron ore production from several mines.

For oil and gas, most of the potential lies in Western Canada, thanks to Alberta’s oil sands and shale gas in B.C.

Conventional gas reserves near the Arctic islands and natural gas reserves offshore Northern Labrador also offer long-term possibilities.

Ontario could be big player:

The report says Ontario’s “ring of fire,” a major mining exploration about 500 km north of Thunder Bay, could make the province a leader in chromite mining, with large exploration expenditures flowing into Quebec.

While most of the mining activity will be limited to the province’s north, other sectors elsewhere in the province have  solid potential as well, says Jeremy Jagt, a partner at the consulting firm, Grant Thornton Ltd.

“Energy, utilities offer significant opportunities for the southern part of Ontario,” Jagt says.

“Ontario, with the Green Energy Act, is becoming the burgeoning cleantech centre and when and if the US economy turns, there will be export opportunities,” he says.

Jagt added that despite the recent hit to the province’s manufacturing base, there’s potential for growth in the auto and heavy machinery production industries.

Challenges

The report identified several constraints for natural resource sectors in the north.

Climate, lack of infrastructure, a fragile natural environment, workforce issues, and distance to market stand in the way of oil and gas production.

The mining sector is up against supply shortages —especially skilled labour— huge transportation infrastructure costs, changes in demand for each commodity and long lead times to bring new properties to full production.

The report cautioned that environmental impacts will have to be carefully managed as well.

Photo: Jericho Diamond Mine pit in Nunavut, one of territories projected to see economic growth from natural resources activity.

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