OMA NEWS RELEASE: Global urbanization trend fuels long-term demand for Ontario minerals

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.

The continuing global trend toward greater urbanization holds the potential to fuel demand for Ontario mineral products well into the future.. The United Nations Population Division predicts that in the next 37 years, urban environments will accommodate three billion more people than today.

Chamber of Mines of South Africa Senior Executive Roger Baxter sees this ever increasing urbanization trend anticipated out to 2050 as providing positive opportunities for mining. Urbanization due to the inherent infrastructure that accompanies it and higher living standards are the main modern-day drivers of mineral demand.

You can’t build cities without roads, bridges, tunnels, transit, airports, train stations, houses, schools, hospitals, electricity grids and telecommunications networks. All of these vital components of urban infrastructure cannot be created without metals and mineral products.

The United Nations tells us that over the same period, 800 million people will become city dwellers in Africa and the total population of that continent will double to two billion people. It also forecasts one billion new urbanites in India, China and the rest of Asia by 2050.

“Supply will struggle to meet the growth in demand,” said Mr. Baxter in Johannesburg. “Despite the volatility in the short term, the long term fundamentals remain in place for continued growth in commodity demand.”
At an Ontario Mining Association board of directors meeting last year,

Gareth Watson, Vice President Investment Management and Research with Richardson GMP, in an address titled “Cautious Optimism in a Changing World,” also predicted this growth in Africa. At the time, he saw India as being in the early stages of becoming an economic powerhouse and further down the road, he believes Africa has huge potential for growth 40 to 50 years into the future.

Building infrastructure requires key components – nickel, copper, zinc, gold and silver. All of these are produced in Ontario. Infrastructure building blocks that Ontario falls short on are iron ore and coal, which are essential to steel production.

“The Ontario economy continues its slow recovery from the biggest world economic downturn since the Great Depression,” said the OMA economic study “Mining: Dynamic and Dependable for Ontario’s Future,” which was written by University of Toronto economists Peter Dungan and Steve Murphy. “Ontario’s manufacturing sector is struggling to regain lost ground, beset by a strong Canadian dollar and weak recovery in the United States.”

“Governments are initiating cutbacks at all levels,” the study suggests. “But with the natural resource commodities that the world wants and if it maintains an atmosphere conducive to investment, Ontario will continue to be pulled ahead by a strong mineral industry.”

This global trend toward increased urbanization offers Ontario’s economy optimism for growth. It also offers opportunity to improve Ontario’s international trade balance. “Since 2002, the overall international goods trade deficit for the province has more than quadrupled,” according the OMA economic impact study. “The trade surplus for Ontario mineral products has strengthened to more than $12 billion, remaining positive over the entire period.”

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