OTTAWA—A sluggish global economy is dampening—but not dousing—the booming mining sector in northern Canada, according to a new Conference Board of Canada report.
Territorial Outlook: Winter 2013, published by The Conference Board of Canada’s Centre for the North, shows both positive and negative outlooks in Canada’s territories, with growth expected in the foreseeable future.
“The territories are not immune to the vulnerability of the global economy,” associate director of forecasting and analysis Marie-Christine Bernard said in a statement.
“New mine development and production will provide a solid economic foundation for Canada’s territories. 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.”
Nunavut’s mining sector is experiencing both accelerating growth and downside risks, according to the report.
Production at the Meadowbank gold mine in 2012 far exceeded initial predictions, and output is expected to rise over the next three years.
On the other hand, the Mary River iron ore project was scaled back from a planned $4-billion expenditure to a $740-million project.
The revised plan is expected to produce less iron ore and not include a rail line or the Steensby Inlet port, although it will begin operations earlier than it would have under the larger project.
Even with the downgrade, though, overall economic growth in Nunavut is forecast to be 3.4 per cent in 2013 and 8.8 per in 2014, according to the think-tank.
The Northwest Territories are expected to grow by 0.2 per cent in 2013, which is nevertheless an improvement over declining real GDP in 2011 and 2012.
The Conference Board said the diamond mining industry is both maturing and entering a long-term decline.
Luckily for the territory, its fortunes are not all tied to the diamond industry, with several metal ore mines set to be developed and explored over the next few years.
Stronger economic growth of 2.6 per cent is forecast for 2014.
Yukon’s real GDP is forecast to increase by a strong 6.3 per cent in 2013 as mineral production continues to climb and construction gets a lift from mineral development.
Yukon’s next mine will be Victoria Gold’s Eagle gold mine, which will begin construction this year.