Mark Morabito is chairman and CEO of King & Bay West, a Vancouver-based merchant bank and technical services company that specializes in the resource sector.
The mining cycle always comes back — let’s take full advantage of the opportunity on our doorstep. After spending the better part of the last half-decade in a bear market, the mining industry is feeling the early effects of two forces that will influence both companies in the sector and investors with the patience to play the long game.
Those who bought when almost everyone was ignoring natural resources will soon be rewarded for placing careful bets and biding their time. Considered against the backdrop of slower exploration activity and a lack of new deposits ready to come on-stream, the convergence of these forces is setting the stage for a powerful resurgence in the mining sector that will have an impact here in B.C. and across Canada.
China’s plan to urbanize rural areas, which have yet to experience the type of growth seen in the country’s coastal cities, combined with U.S. President Donald Trump’s $1-trillion plan to modernize America’s crumbling infrastructure, represents great opportunity for the mining sector in Canada and globally.
Regardless of one’s political views, it would be imprudent to ignore these developments as they will generate vast new demand for metals and other materials, the inevitable result being higher commodity prices — especially for iron, copper and zinc.
Signs are already pointing in that direction. BMI Research, one of the world’s most respected market analysis firms, recently upped its 2017 copper price forecast to $5,500 per tonne from $5,150 on solid Chinese demand growth and supply interruptions.
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