Canada is in danger of losing its global dominance in mining despite recent government initiatives to improve competitiveness, according to a report from the Mining Association of Canada (MAC). The report comes as debate about the hollowing out of the country’s mining sector grows. Mega-mergers by Canada’s two largest gold companies, Barrick Gold Corp. and Goldcorp Inc., stand to erode its global influence.
The Barrick tie-up, with Channel Islands-based Randgold Resources Ltd., has already resulted in job cuts and further decentralization away from Canada, a trend that will likely increase under Barrick’s newly inked joint-venture in Nevada with Newmont Mining Corp. Meanwhile, Newmont’s proposed takeover of Goldcorp will see the combined entity headquartered in Colorado, with only a regional office still in Vancouver.
“For decades, our industry has been a leader in the production of minerals and metals. A leader in mining services and supplies. A leader in mine finance. A leader in sustainability and safety, but that position is in jeopardy and will be lost without continued, decisive action at both the federal and provincial levels,” Pierre Gratton, MAC’s CEO said in a news release.
Among the key findings in the report:
- Canada’s share of international exploration spending has fallen for six years in a row.
- Over five years, we’ve lost our ‘Top 5’ ranking as a producer in seven of 16 commodities.
- Capital investment in the mining sector has fallen every year since 2012.
- Australia has extended its lead on Canada in terms of the number of firms supplying the sector and as a percentage of total foreign direct investment.
Renewing the Mineral Exploration Tax Credit for a five-year term, along with other government initiatives, could help reverse the trend but more policies are required, the report concludes.
(Source: Financial Post)