Mining investment crucial amid downturn, industry warns – by Lisa Wright (Toronto Star – May 28, 2015)

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‘Unlike the Maple Leafs, mining always bounces back,’ says Mining Association of Canada president

Mining is more resilient than the Toronto Maple Leafs, but Canada risks being shut out as a top global player as the commodity slump drags on, warns the president of the Mining Association of Canada. “It’s been tough,” Pierre Gratton told the Economic Club of Canada Wednesday.

He emphasized that the last six months have been “generally dismal” for miners and commodity prices, particularly iron ore and coal, and their near-term prospects aren’t great either, he said.

Mineral exploration financing was also “grim” in 2013 as global budgets to discover new projects dropped by 30 per cent, he noted, adding: “This decline is as worrisome as it is dramatic.”

And last year, after an eight-year reign as the top country for global exploration spending, Canada dropped to second place behind Australia.

“Although mining will continue to be an important part of our economy, we may be at risk of losing our status as a global mining leader if we don’t stay focused,” warned Gratton.

He pointed out that in 2013, the world’s 40 largest mining companies — many of which are based in Canada — booked record write-downs of $57 billion while the senior producers’ net profits fell 72 per cent to their lowest level in 10 years.

“The industry is in the midst of a significant downturn,” he said.

But government and private investors can learn from the past by investing in crucial infrastructure needed to build mines, particularly in remote regions of Canada.

“In the dot.com era, mining was abandoned, dismissed as a sunset industry whose time was over,” he said.
As a result, metal producers weren’t well-positioned in the early 2000s when the tech bubble burst and China’s expanding economy translated into unprecedented demand for resources and metals, Gratton noted.

For the rest of this article, click here: http://www.thestar.com/business/economy/2015/05/27/mining-investment-crucial-amid-downturn-industry-warns.html

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