Lessons in resilience from a cyclical industry – by Chris Hodgson (Sudbury Mining Solutions Journal – February 23, 2016)

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When reflecting on the current state of the mining industry, there is plenty of scope for negative sentiment. The outlook of many analysts is cautious at best, given slowing growth in China and Brazil, muted conditions in Europe and a weak recovery in the U.S. — all of which contribute to an ongoing slump in demand, pushing prices downward. Given that mining is a price-taker in global commodity markets, it is easy to think that the situation is hopeless, but we have been through this before.

Although the sector is vulnerable to cyclical risk, the products of mining are essential, irreplaceable components of daily life and modern technology. Long experienced in dealing with this boom-bust pattern, Ontario mining companies are doing what they can to prepare for the next upswing by controlling costs and ensuring that their business models are lean and nimble enough to meet the requirements of fiercely competitive and changeable global conditions.

Ontario Mining Association (OMA) companies understand that a downturn is precisely the time to focus on future growth opportunities. To maintain our jurisdictional advantage and ensure that we can compete for highly mobile global mining investment, Ontario must likewise take immediate steps to maximize our gains when markets rebound.

Leadership in mining no longer hinges on good geology. Certainty of the rule of law and regulatory clarity is what gives us an edge when competing against other jurisdictions with significant mineral potential and lower costs.

As a high-wage/high-cost jurisdiction, it is critical that Ontario offers a low level of regulatory risk for investors to increase capital inflows into the mining sector.

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