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TORONTO (miningweekly.com) – A recent independent report has highlighted the significant economic impact of Ontario’s mineral sector and found that all stakeholders – including miners, Aboriginal and other local communities, governments and supplier industries – benefitted from the sector’s activity.
The University of Toronto’s Rotman School of Management was commissioned by the Ontario Mining Association to assess the impact openpit and underground gold-mining scenarios in a relatively remote part of Northern Ontario would have on gross domestic product (GDP), employment and government revenue.
The school’s Peter Dungan and Steve Murphy of the Policy and Economic Analysis Programme authored the report and considered two hypothetic scenarios.
The first was to investigate the impact of building an openpit mine over three years at a capital cost of $750-million, while the second was to examine the impact on local economies of building an underground mine over the same period at a capital cost of $600-million.
The construction costs used in the study excluded all exploration, planning, permitting and other preconstruction expenditures.
The study found that an openpit mine would generate sales of $300-million a year, potentially for more than 20 years into the future, and employ 440 people on site with total compensation of $142 200 a worker.
The combined direct, indirect and induced economic impacts of an openpit gold mine were found to be “extremely large”. In its construction phase, the mine would add about $183-million to the Ontario GDP and generate more than 1 900 jobs a year. In its production phase, for each year of operation, the mine would add about $300-million to Ontario’s GDP and increase the province’s employment by more than 1 800 at a rate of compensation an employee well above the provincial average.
The combined impact on government revenues of a new openpit gold mine was also found to be significant. In the construction phase governments would collect $60-million a year from the mine’s direct, indirect and induced activity, while in the production phase, this would rise to $95-million a year. The provincial government’s share was about $25-million in the construction phase, and more than $38-million in the production phase.
For an underground mine, the study found that about $300-million in sales a year would be generated over an extended period, with on-site employment of 620 people and total compensation a worker of $145 500.
In the construction phase the mine would add almost $150-million to the Ontario GDP and generate more than 1 500 jobs in each of the three years. During production, the mine would contribute more than $330-million a year to the provincial GDP and generate 2 200 jobs a year, above the average compensation level.
In the construction phase of a new underground gold mine, governments would collect just under $50-million a year from the direct, indirect and induced impacts, with the provincial government receiving $20-million. In the production phase, all governments would receive over $100-million a year, with more than $40-million going to the provincial government.
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