Michael Gravelle took another pummelling last week over the state of the province’s slumping mining sector, but he was right to point out that metal prices are in a deep trough, even if that explanation is beginning to sound a little lame.
Among other things, the veteran Northern Development and Mines minister was taken to task by Auditor-General Bonnie Lysyk for not doing enough to buck-up investment in this province’s mining industry.
Ontario’s chamber of commerce has been hammering on this point, too, although the ministry partially responded just before Lysyk’s report came out by pledging to make it easier for prospectors and junior companies to register claims.
Instead of physically driving stakes into the ground, they can fire up a computer and access a new electronic grid.
According to Lysyk’s report, Ontario is sorely lagging behind other provinces in terms of investment promotion, even though this province remains home to the majority of the country’s mines.
But metal prices are the key driver, and they always will be, even when Gravelle gets dumped on.
Despite the gloomy forecast for the Ring of Fire, several gold-mining projects continue to advance in other parts of Northwestern Ontario — very likely because gold’s value has remained above US $1,000 per ounce.
Earlier this year, a Toronto exploration company began the expensive job of going underground to firm up a potential new gold deposit just north of White River.
It’s easy to forget just how close Cliffs Natural Resources came to going forward with its plan to build the first chromite mine in the RoF, about 550 kilometres northeast of Thunder Bay.
Cliffs spent a sizable $500 million on pre-development work, while the province, on Gravelle’s watch, agreed to pay half of the cost of a $600-million north-south access road that Cliffs required. (That’s another thing that’s easy to forget when Gravelle is being dumped on.)
When metal prices started to fall two years ago, and investors began to notice that many Chinese infrastructure projects fuelling the demand for Canadian minerals had been over-built, Cliffs and other major companies were forced to pull up stakes and downsize.
That’s out of Gravelle’s control, despite what his critics might imply. But one thing the province can continue working on in the absence of big players like Cliffs is an RoF access road.
It was suggested again last week that this might actually happen, now that a like-minded Liberal government is ensconced in Ottawa. Surely it’s of national concern that Ontario remains the only Canadian Shield province without an all-weather road into its far north.
If that changes before Gravelle’s term as mines minister is up, he’ll have really accomplished something.
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