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Chairman of Deloitte in Canada foresees another tough year for mining industry in 2014. Canada’s battered mining industry is in for another turbulent year with companies becoming “desperate” to slash costs, innovate and find new mines amid an aging workforce, says the chairman of Deloitte in Canada.
In a sneak peak of the accounting firm’s upcoming annual industry trends report, Glenn Ives said Thursday that the current downturn that has seen miners mothball large projects and company shares plummet will likely continue next year.
“We’ve reached a turning point in the industry,” he said in an interview.
“The pressures have continued to build and it’s coming to a head,” Ives said. The Tracking the Trends 2014 report, to be released Tuesday, highlights the top issues the mining industry must tackle in order to survive, from improving safety standards to strengthening relationships with governments and local stakeholders at international mine sites.
How to handle soaring costs will continue to dominate the ailing industry, the sixth annual report says.
For instance Toronto’s Barrick Gold Corp. was forced last month to shelve its massive gold-silver Pascua-Lama project as capital costs to build the mine tripled. Its share price has tumbled over 50 per cent in the last year.
And Cliffs Natural Resources Inc. shocked the industry when it announced last week that it was pulling back from the minerals-rich Ring of Fire in Northern Ontario because it couldn’t afford to move forward without the okay from the province to build an all-weather road to the remote site.
“We’re not finding the new high-quality mines that we used to,” said Ives, adding there will be a scramble to find new production to meet market demand.
While he is bullish on commodities prices, Ives pointed out that mining companies have been among the worst performers on stock markets this year. And for the first time in decades, there were no mining IPO’s (Initial Public Offering) on the TSX over the better part of 2013.
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