Mining in Canada

Canada needs mining

Minerals and metals contribute to Canadians’ lives every day. They are the building blocks of our modern society and provide key ingredients for buildings, vehicles, transportation networks and food production. They are in countless consumer products that we rely upon—from toothpaste to bicycles to electronics. Clean technologies that are vital to a cleaner, more sustainable world, as well as computers, smartphones and medical instruments, all require minerals and metals.

Canada is a large landmass with a rich mineral endowment. Hundreds of thousands of Canadians from across the country have used their knowledge, skills and entrepreneurship to build an industry that is among the world’s largest producers of minerals and metals. In 2016, some 200 mines and 7,000 quarries produced more than 60 minerals and metals worth $41 billion.Footnote 1

Clean Energy Applications
Minerals are enablers

Canada is primed to respond to growing demand for commodities required in clean energy technologies. The country is a key global producer of copper, nickel, and cobalt, and hosts advanced mineral projects for rare earth elements, lithium, and graphite. These commodities are crucial in the production of solar cells, high-density batteries, and wind turbines.

Canada ranks in the top five producing countries for 13 major minerals and metals. We are:

  • First in potash;
  • Second in uranium and niobium;
  • Third in nickel, cobalt, aluminum and platinum group metals; and
  • Fifth in gold and diamonds.

Mining is a general term that encompasses a range of activities, including mineral exploration, mineral development, mine production, mineral processing, mine site reclamation and much more. These activities contribute socio-economic benefits—be they exploration and mining in northern, remote or isolated communities, or legal and financial transactions taking place in urban centres such as Vancouver, Toronto and Montreal.

A pan-Canadian Industry

If you took a mining tour of Canada, you could start in the Yukon to experience the latest gold rush, and then travel to the Northwest Territories where diamonds shine (it is the world’s third largest producer of diamonds by value). In Nunavut, gold and iron ore mining provide a glimpse of the mineral potential of the territory. Heading to Newfoundland and Labrador, you would find significant iron ore and nickel. New Brunswick would highlight its smelting capacity, Prince Edward Island its quarrying operations, and Nova Scotia would reveal zinc and a resurgent gold mining industry. In Quebec you would see the most diversified mining industry in Canada, which includes products such as iron ore, zinc, gold and diamonds. Ontario—the largest minerals and metals producer in Canada—counts gold, copper and nickel as its main products, while Manitoba is the top Canadian producer of zinc. In Saskatchewan, you would enter a world-leading potash and uranium mining area, while Alberta produces metallurgical coal (an irreplaceable ingredient for steel making). The same “Met coal” is the top product of British Columbia, and the province is Canada’s largest producer of copper.

Ports in British Columbia are a major gateway to get Canadian minerals and metals to and from Asian markets. Ports in Quebec and Atlantic Canada serve the same purpose for European and South American markets, and ports on the Great Lakes, railways and roads serve the U.S. market.


Mining-related activity takes place across the country

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Canada’s geological terrane provides a rich and abundant variety of mineral resources. There are currently over 60 minerals and metals produced from coast to coast to coast. Mineral exploration has also increasingly diversified, leading to the discovery of rare earth elements, graphite, chromite, coal and potash.


British Columbia

  • Elk Valley (metallurgical coal)
  • Kitimat (aluminum)
  • Northern BC (copper, gold, molybdenum, metallurgical coal)
  • Southern BC (copper, gold, molybdenum)
  • Vancouver (exploration, mine financing, allied industries)
  • Trail (lead, zinc)

Alberta

  • Coal

Saskatchewan

  • Northern Saskatchewan (uranium, gold)
  • Southern Saskatchewan (potash, coal)

Manitoba

  • Northern Manitoba (nickel, cobalt, gold)
  • Flin Flon (copper, zinc, gold)

Ontario

  • Northern Ontario (gold, palladium, platinum, copper, zinc, diamonds)
  • Sudbury (nickel, copper, cobalt, allied industries)
  • Timmins (gold, silver)
  • Toronto and southern Ontario (salt, uranium refining, exploration and mine financing, allied industries)

Northwest Territories

  • NWT (diamonds)

Nunavut

  • Nunavut (gold, iron)

Quebec

  • Abitibi and James Bay Region (gold, copper, zinc, diamonds)
  • Rouyn-Norando and Val-d’Or (gold, copper, silver, zinc)
  • Havre St. Pierre and Sorel-Tracy (titanium)
  • Montreal and area (metal smelting and refining, allied industries)
  • Northern Quebec (nickel, copper, cobalt, platinum group metals)
  • Saguenay Region (aluminum refining, niobium)
  • Schefferville and Fermont (iron)

Newfoundland and Labrador

  • Labrador City and Wabush Area (iron ore)
  • Voisey’s Bay (nickel, copper, cobalt)
  • Island of Newfoundland (gold, nickel refining)

New Brunswick

  • NB (zinc, lead, metal smelting)

Prince Edward Island

  • PEI (peat, sand and gravel)

Nova Scotia

  • NS (gypsum, gold, coal)

Yukon

  • Yukon (copper, gold, silver)


The Minerals and Metals Industry

The industry is more than just mines. It is a community of Canadians employed in a range of activities, such as:

  • public geoscience
  • exploration
  • community engagement and consultation
  • environmental permitting and monitoring
  • health and safety
  • land use planning
  • financing and investment
  • mine construction and operation
  • technological innovation
  • services and equipment supply
  • the restoration of former mine sites
  • processing and refining

A key contributor to the economy

The minerals and metals industry is a major generator of wealth and employment for Canadians. In 2016, it directly or indirectly contributed $87 billion, or 3%, to Canada’s gross domestic product.

In the same year, it provided 596,000 jobs (403,000 direct jobs) in urban, rural and remote regions of the country. This includes approximately 11,000 Indigenous workers, making it the industry with the highest proportion of Indigenous workforce in the private sector. Mining jobs are high-paying jobs. In 2016, total compensation per job in the mining and quarrying industry was $115,174—nearly double the Canadian all-industry average of $59,903.Footnote 2

In 2016, the minerals sector invested $13.2 billion in new capital construction and in machinery and equipment, accounting for 6% of total non-residential capital investment in Canada. Two-thirds of this amount ($8.8 billion) went to mining and quarrying. Approximately one-third ($3.2 billion), went to “downstream” mineral-processing industries, including primary metal manufacturing, fabricated metal product manufacturing, and non-metallic mineral product manufacturing.


Capital expenditure for the minerals sector are spread across five sub-sectors

Source: Natural Resources Canada, 2016

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Capital expenditures in Canada’s minerals sector are spread across five sub-sectors: 67% for mining and quarrying (except oil and gas), 5% for fabricated metal product manufacturing, 17% for primary metal manufacturing, 9% for non-metallic mineral product manufacturing and 2% for mining-related support activities.

Smelting and refining are among the downstream mineral processing activities that add value to mined products. Canada counts 31 nonferrous smelters and refineries in Newfoundland and Labrador, New Brunswick, Quebec, Ontario, Manitoba, Alberta and British Columbia. They process a range of products, including nickel, copper, aluminum, gold, silver, cobalt, lead, bismuth, platinum group metals and others.

The Canadian minerals and metals industry is a global business, accounting for $89 billion—or 19%—of Canada’s merchandise exports.Footnote 3

The U.S. accounts for 55% of this amount, followed by Europe at 22% and China at 5%. Publicly traded, Canadian-based companies have total mining and exploration assets of $256 billion at home and in more than 100 foreign countries across six continents.Footnote 4

Canada is the leading global centre for mining finance. The Toronto Stock Exchange (TSX) and the TSX Venture Exchange are home to almost 50% of the world’s public mining companies, and in 2016, more than $189 billion of mining equity was traded on these exchanges. Combined, the TSX and TSX Venture Exchange list more mining and mineral exploration companies than any other exchange in the world and account for the largest share of global mining equity financing.Footnote 5

Mineral exploration companies invest heavily to discover new deposits and to advance mineral development projects. Their work focuses on “traditional” minerals and metals (gold, copper, nickel, etc.), as well those that support a greener economy, such as lithium, graphite and rare earth elements. These exploration activities leverage Canada’s deep pool of expert service and equipment suppliers, including environmental consultants, community consultation advisors, and drilling contractors.Footnote 6 More than 700 exploration and mine development companies are headquartered in British Columbia alone.

Public Geoscience Supports Informed Decisions

Public geoscience broadly refers to: geological, geophysical, and geochemical data; maps; surveys; information; and knowledge provided by governments free of charge.

The availability of public geoscience data and analysis helps exploration companies make informed decisions regarding their exploration plans. These companies leverage government geoscience data to identify areas of favourable mineral potential.

Mineral exploration activities are not always successful. Having a better understanding of geological environments allows explorers to focus on areas of higher prospectivity, while reducing investment risk. The availability of public geoscience data enhances Canada’s attractiveness as a destination for mineral exploration investment.

The geoscience activities of Canadian governments also generate information required for various public uses, such as studies related to land use and the environment, geohazards (e.g. earthquakes, landslides), public health, infrastructure planning, national defence, and sovereignty.
 

Canada’s competitive position

Canada has a long and successful history of sustainable mineral development and a strong, well-earned reputation as a leading mining nation. For example, in 2016 it received the Best Country Award for international leadership in governance and for showing the most improvement in terms of attractiveness to investors.Footnote 7 It is recognized as the safest place to invest resource capital,Footnote 8 and Saskatchewan and Manitoba are ranked the top two most attractive jurisdictions for mining investment in the world, while Quebec is sixth.Footnote 9

In the mining industry, comparisons are often made between Canada and Australia due to their similarities. Canada is ranked 10th for the size of its gross domestic product and Australia is ranked 14th.Footnote 10 Both countries have open economies with rich mineral endowments, strong public geoscience programs, and minerals and metals industries that remain a significant driver of economic activity. Both are home to a large junior mining sector, major mining companies, and mining service industries—all of which maintain a significant global presence. Geographic demand patterns for commodities including coal and iron have shifted towards Asia—and notably China. This favours Australia with its large-scale deposits near tidewater and its proximity to this key market.

The international investment community closely monitors developments in each country to determine the best location in which to allocate capital. Based on a compilation of publicly announced exploration budgets, Canada is the top destination for mineral exploration investment among countries. In 2017, Canada attracted 14% of the exploration budgets of firms, just ahead of Australia at 13%.


More mineral investment dollars come to Canada than any other counntry
(1,525 companies budgeting $7.9 billion)

Source: S&P Global, 2017

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Canada leads in total mineral investments with 14% of the global share. As of 2017, this represented 1,525 companies budgeting $7.95 billion dollars. The total $1,101 million dollars of mineral investments amounts to more than any other country in the world.

But Australia is not our only competitor. A closer look reveals that while Canadian firms receive a greater share of exploration budgets than any other country, this share has declined in recent years. Over the same time, Australia’s share has remained relatively flat, and the region of Latin America has gained the most.Footnote 11


The number and value of major mining projects planned and under construction in Canada has decreased

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From 2014 to 2017, the number and value of major mining projects planned and under construction in Canada have decreased. Value is measured by total investments ($ billion), which continue to steadily decline.

There are other indications that Canada’s position as a destination for mineral investment is being eroded. For instance, Canadian reserves of selected metals have been trending downwards and the country has experienced a decline in the production volumes of key commodities.Footnote 12 The number of mining-related projects (mine constructions, redevelopments, expansions and processing facilities) planned and under construction dropped from 150 in 2014 to 101 in 2017. The value for such projects also decreased over the same time, from $166 billion to $80 billion.

There are numerous external factors that can explain changes to investment plans and project development timelines (e.g. market conditions and the overall economic outlook). Nonetheless, this trend underscores the need to foster a mineral investment environment that supports the competitiveness of the industry and Canada’s ability to attract scarce investment dollars.

The Canada Brand

Canada’s leadership in mineral resource governance and sustainable development have helped build a “Canada Brand” that is recognized around the world. Leadership on social responsibility (including partnership with Indigenous peoples, relationships with local communities, and a commitment to environmental protection), unparalleled access to capital markets, innovation and expertise across the clean technology and mining services and supply chains, have all contributed to the brand.

Canada’s brand is important to industry activity abroad and it supports international trade. A key component of the brand is corporate social responsibility (CSR) and the voluntary actions of companies that serve to integrate social, environmental and economic considerations into their activities. Canadian companies operating abroad are expected to respect human rights and all applicable local laws, and to meet or exceed recognized international standards for responsible business conduct.

Both the Mining Association of Canada (MAC) and the Prospectors and Developers Association of Canada (PDAC) have developed tools to help their members realize CSR abroad, and Canadian companies have demonstrated their commitment to do business responsibly (see sidebar).

Strong, trusted, and backed by a history of integrity and success, the Canada Brand provides a competitive advantage for the range of stakeholders participating in Canada’s minerals and metals industry. It identifies Canada as a trusted partner and as an attractive destination for investment.

Canadian Industry Providing International Leadership

Towards Sustainable Mining is MAC’s commitment to responsible mining. It is a set of tools and indicators to drive performance and ensure that key mining risks are managed responsibly at members’ facilities.

The program was established in 2004 to enable mining companies to meet society’s needs for minerals, metals and energy products in the most socially, economically and environmentally responsible way.

The program has been adopted by Finland, Argentina, Botswana and the Philippines. It was also included in Apple’s Supplier Responsibility Standards.

PDAC’s e3 Plus helps companies exploring for minerals improve their social, environmental, and health and safety performance. It was launched in 2009 by PDAC as its signature corporate social responsibility initiative.

The original incarnation of e3 Plus was simply e3, which stood for Excellence in Environmental Exploration. e3 was launched in 2003 and was quickly supplemented by the creation of toolkits designed to improve social and health and safety performance—the “plus” in e3 Plus.
 

We Want Your Ideas

Canada is a recognized leading mining nation with a strong domestic sector and a significant international presence. The minerals and metals industry is global, dynamic and highly competitive.

Canada must take steps to cement its status as a global mining leader, and to ensure that the industry continues to contribute to prosperity for Canadians.

Canada’s federal, provincial and territorial governments need your ideas to inform a Canadian Minerals and Metals Plan that will help us achieve our goals.

This discussion paper is a starting point.

It provides context, possible areas of focus and asks questions on how we can strengthen the minerals and metals industry.

Footnotes