OTTAWA – After years of riding surging metal prices and spending freely on takeover deals and massive new projects, Canadian miners were forced to tighten their belts in 2013 as the cycle turned against them.
The industry took billions in write downs as companies re-evaluated projects that they believed were worth far more just a couple of years ago and slashed spending as falling commodity prices squeezed margins.
But it wasn’t just financial problems for the miners, as political and environmental issues made headlines around the world for several Canadian mining companies.
The largest company to face problems was Barrick Gold, which suspended nearly all of the work at its massive Pascua-Lama project high in the Andes mountain range.
The halt followed massive cost overruns and protests from an indigenous community living below the project who tried to have Barrick’s licence revoked and force a new environmental impact study.
The Supreme Court of Chile stopped short of ordering a new review and upheld the environmental permit, but put construction on hold until Barrick’s environmental commitments and work to protect the water systems is completed.
Jamie Kneen, of industry watchdog group MiningWatch Canada, said technology has made it easier for groups opposing mining projects to organize and disseminate information, even in remote areas around the globe.
“The level of awareness and information has been much greater than its ever been,” Kneen says.
“There’s whole countries that didn’t have mining industries before, like Mali and Senegal and Burkina Faso.”
Kneen said companies are now looking to develop projects in new, less accessible areas where indigenous people can be more protective of their culture and environment.
The rise of social and environmental concerns have come at a time of volatile commodity prices.
The price of gold, which broke US$1,900 an ounce in 2011, fell to around US$1,200 this year, while the price of silver, which started the year around US$32 per ounce, fell below $19.
Copper, which traded for about US$3.70 per pound at the start of 2013, was down about 40 cents for the year.
In Mongolia, Turquoise Hill suspended work on development of the underground copper mine at its Oyu Tolgoi project after the Mongolian government said financing for the project would require parliamentary approval.
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