New study provides glimpse of mining’s potential for all of Ontario

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

A recently released regional economic study provides a glimpse of mining’s future potential to boost Ontario’s society and economy on a province-wide basis. “Mining in Northwestern Ontario: Opportunities and Challenges” focuses on the employment, infrastructure development and tax generating potential of nine advanced mineral projects in the region, which are anticipated to begin production between 2013 and 2017.

The direct, indirect and induced employment created in Ontario from these projects is expected to total 23,588, with 8,107 during the construction phases of these operations and 23,588 during the operating life of the mines, which is averaged at 17.5 years. More than 13,000 of these new positions are expected to remain in Northwestern Ontario. Potential tax revenues for federal, provincial and municipal governments is conservatively estimated to exceed $16 billion.

“Overall, the purpose of the study is to highlight the significant role that government policy related to the mining industry can have on the economy,” said the report. “Government, Aboriginal people and industry must collaborate to take advantage of these mining opportunities. Government policy decisions have significant impact on the very survival of existing mines and on the development of new mines.”

Using relatively current commodity prices, the study estimates the total value of un-mined metals at the nine sites examined to be greater than $135 billion. The breakdown of these metals would be about 42% gold, 17% copper, 16% platinum and palladium, 9% chromite, 8% nickel and 8% iron.

Of the nine sites examined, six are being developed by Ontario Mining Association member companies. They include Cliffs Natural Resources Black Thor property, Goldcorp’s Bruce Channel and Cochenour projects, Osisko’s Hammond Reef project, Noront’s Eagle’s Nest, Rubicon Minerals Phoenix and Stillwater Canada’s Marathon platinum group metals project.

There are, however, issues which must be faced to help make these mine developments real. They include Aboriginal involvement, managing labour market dynamics and infrastructure development such as rail, road and electrical power generation and transmission. Capital costs for road, rail and electrical system support for the nine projects is estimated at about $1.7 billion, or 10% of estimated taxes generated by the mines.

The study was commissioned by Ambassador’s Northwest with support from the City of Thunder Bay, Thunder Bay CEDC, Thunder Bay Ventures, Thunder Bay Chamber of Commerce, Northwestern Ontario Municipal Association, Lakehead University and Confederation College of Applied Arts and Technology.

There are six active mines in Northwestern Ontario operating at this time, including some of the largest gold mines in Canada. The study also noted nine developed mineral exploration projects in the region and 64 less developed exploration and prospective projects. “This study demonstrates that the projected wealth, the positive economic and social benefits and expected taxes that could be generated by these nine mines is substantial. Existing operating mines and other advanced exploration projects are not considered within this analysis. If these operations had been included, a much greater economic impact would have resulted.”

Mining in Northwestern Ontario accounts for about 15% of the province’s $10-billion plus annual mineral production industry. There are more than 600 active mineral exploration projects in Ontario at the moment. In 2011, mineral exploration expenditures in Ontario reached a record level of more than $1 billion, or 26% of the national total.

This Thunder Bay-based study clearly shows what new mineral development can do for employment, investment, infrastructure development and tax generation for one region of the province. This is the tip of the proverbial iceberg showing what similar responsible development can provide for other regions of Ontario and the province as a whole.

 

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