Canada is in danger of losing its global dominance in mining, despite recent government initiatives to improve competitiveness, according to a report from an industry association.
The report, by the Mining Association of Canada, 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 remaining 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, CEO of the association 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, the country has lost its ‘top five’ ranking as a producer in seven out of 16 commodities where it held that position.
• 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 companies supplying the sector and as a percentage of total foreign direct investment.
• Despite this, the sector still represents 5% of total nominal GDP and 19% of the value of Canadian goods exports in 2017.
• The Toronto Stock Exchange and Venture Exchange raised nearly one-third of the world’s total equity capital in the sector in 2017, making them top mining and exploration listing exchanges.
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.