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Groups recommend tax credits to help build infrastructure to reach remote sites.
The cost of building new mines is up to 2.5 times higher in northern Canada than in the rest of the country, creating major obstacles to extracting metals in remote regions and putting the industry’s long-term viability in jeopardy, warns a new report.
A significant cost premium is directly linked to the lack of infrastructure in the north, says the report released Tuesday by several industry groups, including the Mining Association of Canada and the Prospectors and Developers Association of Canada.
The study shows that unlike many of their southern counterparts, mining companies operating in these remote areas need to invest in costly but essential ports, power plants, winter roads, permanent roads and housing. And in most cases, there are also sparse populations or no people for hundreds of kilometres from the project or mine.
Despite Canada’s leadership in the global mining business, reserves for several base metals such as nickel, lead and zinc have been in significant decline since the 1980s, and production volumes have fallen relative to other mining countries, the report notes.
“Resolving these issues involves increasing exploration activity to make more discoveries as a means of replacing declining reserves, and then bringing new and existing discoveries into production,” it says.
“Remote and northern parts of Canada hold the key to resolving both challenges,” the document states, referring to the territories and the northern regions of the provinces.
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