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Nochane Rousseau, Leader, Mining Industry Services and Plan Nord Project – PwC. For more information, please visit PwC’s mining site at: www.pwc.com/ca/mining.
“The plan addresses these issues [infrastructure] by
outlining actions the Quebec government will take to
build the necessary strategic infrastructure in
territories with the highest economic potential—an
“if you build it, they will come” mentality.”
“Beyond being rich in resources, the province’s mining
industry is well established and affordable
hydro-electricity is a competitive advantage for miners
operating in Quebec.” (Nochane Rousseau, Leader, Mining
Industry Services and Plan Nord Project – PwC)
Twenty-five years may seem like a lifetime away, but the Quebec government’s Plan Nord could result in a huge transformation of Northern Quebec in what’s, in reality, a relatively short amount of time, given its ambitious objectives.
The numbers are nothing short of impressive. The Quebec Government projects Plan Nord to lead to over $80 billion in investments – $47 billion towards renewable energy and $33 billion for investments in the mining sector and public infrastructure such as roads, rail and airports. It will also create or consolidate about 20,000 jobs per year over a 25-year period. In its recently released plan, the government says it hopes the initiative will be to the coming decades what the development of La Manicouagan and James Bay were to the 1960-70s.
The mining industry could play a huge part in this investment. The 1.2 million km area the plan covers is a wealth of untapped opportunities that could surely captivate the interest of domestic and global mining companies. This territory produces all of Quebec’s nickel, zinc and iron ore, to name a few, and also represents a significant portion of gold production. There are already at least 11 new projects (Raglan Phase 2, Crevier, DSO, Mont- Wright and Port Cartier, Matoush, Renard, Nunavik Nickel, Arnaud, Bracemac- McLeod, Bachelor and Éléonore) that could be launched in the coming years in the territory that the Plan Nord covers.
But Plan Nord is not without some significant challenges. The plan’s current Achilles heel is a lack of existing infrastructure such as roads, airports, rail, hydroelectric facilities, housing and manpower. The plan addresses these issues by outlining actions the Quebec government will take to build the necessary strategic infrastructure in territories with the highest economic potential—an “if you build it, they will come” mentality.
How do they know investments will be made?
I can cite two reasons, the first being that Quebec has many attributes that make it attractive from a mining perspective. Beyond being rich in resources, the province’s mining industry is well established and affordable hydro-electricity is a competitive advantage for miners operating in Quebec. Mining companies also enjoy relatively stable mining legislation, excluding the potential impact of proposed Bill 14 to the Quebec Mining Act, which has some stakeholders worried it may repel foreign investors and weaken the government’s ability to attract the billions of dollars in investments needed to put Plan Nord into action. The second indicator of strong future mining investment is that we’ve already seen interest from mining companies: ArcelorMittal’s well publicized $2 billion expansion of its Mont-Wright iron ore mine being a case in point.
Infrastructure will literally lay the groundwork for more mining investment. Over the next five years, the government plans to invest $821 million for transportation infrastructure and $370 million for other infrastructure related to housing, health and education to name a few. In terms of energy, the government has undertaken to develop 3,500 MW of clean energy that could power the mines and local communities as well—an investment estimated at $25 billion. There is also a robust transportation plan that aims to build key roads and rail lines in the form of private-public partnerships, which will in turn spark more interest from mining firms.
Small communities, big stakeholders
Beyond obvious infrastructural issues, the social acceptability of mining operations is another challenge associated with Plan Nord.
Despite the fact that the area accounts for only 2% of Quebec’s overall population (astounding, considering it represents 72% of the province’s geographic area), mining companies must proceed with care to ensure they get the appropriate buy-in from near by local and Aboriginal communities.
The environmental and sustainability policies of Plan Nord, combined with ongoing communication with local and Aboriginal communities, will help to mitigate the risks to miners looking to operate in the region. It is also important to note that neighbouring communities may also be in a position to benefit from mining operations in terms of shared infrastructure and in employment opportunities.
What does the future look like?
It’s going to take some growing pains and a big level of commitment from industry, government and local and Aboriginal community groups before Plan Nord reaches its full potential. However, the future looks bright for Quebec’s mining industry, pending of course potential issues that could arise if Bill-14 is passed as proposed to amend the Quebec Mining Act.
Over the next five years, the building blocks should be formed in terms of infrastructure and social services, as well as a process to work collaboratively with community stakeholders and cultivating the future talent pool. Once these are in place, we expect heightened interest from miners to expand or set up shop in Northern Quebec, providing even more incentive for other miners to follow suit.