Commodity Super-Cycle and Decline – Page 65

China as an Economic Superpower – Implications for the Canadian Mining Industry – by Paul Stothart

December 9, 2010November 3, 2008

Paul Stothart is vice president, economic affairs of the Mining Association of Canada. He is responsible for advancing the industry’s interests regarding federal tax, trade, investment, transport and energy issues. This article was originally published in May, 2007.

There is no shortage of printer’s ink being spilled in recent years writing about the emergence of the Chinese economy. This is, without question, one of the top global news stories of the past decade. After 15 years of double-digit annual growth, the size of the Chinese economy has now reached a state where continued double-digit growth has very meaningful implications for many industries and countries.

Where 10 per cent growth in 1990 may not have had much impact on a global scale, similar growth in
2007 on a much larger economic base has reverberations throughout the global economy.

The emergence of China as a world economic power, and its continued growth, will have direct implications for the Canadian mining industry in three important areas.

Impact 1 – Driver of World Mineral Prices

First, China remains the prime driver of world mineral prices. China is building a domestic infrastructure for 1.3 billion people and is concurrently expanding its role as the world’s manufacturing centre for many product areas. The country simply cannot meet its own needs for copper, zinc, nickel, and other core ingredients of a transportation, power, and communications infrastructure.

Is China Buying Africa? – by Paul Stothart

December 9, 2010September 20, 2008

In a recent column, I noted that China remains the prime driver of world mineral prices. In building a domestic infrastructure for 1.3 billion people, while expanding its role as the world’s factory, China simply cannot meet its burgeoning demand for copper, zinc, nickel, and other raw materials. In response to this growing gap, China now imports $100 billion worth of base metals annually, buying 25 per cent of the world’s supply today versus a 5 per cent share in the 1980s. As a specific example, China’s share of world consumption of zinc has tripled from 10 to 28 per cent in a mere decade, while the US share has fallen from 16 to 10 per cent.

This dramatic growth in raw material demand is one of the central factors leading to a second, equally significant development; namely that China is becoming an important catalyst to the growth of Africa—a continent that offers untapped raw material supply and market demand potential. In decades past, few observers of global economic development would have envisioned the emergence of such a linkage. Few thought beyond the traditional model, where aid flows from the west would supposedly some day pull Africa to a more advanced state of development.

The Commodity Super-Cycle Will Benefit Sudbury for Years to Come – Stan Sudol

February 25, 2008February 25, 2008

Stan Sudol - Executive Speech Writer and Mining Columnist There is no doubt that the impending recession in the U.S. is causing economic upheaval across Ontario which exports about 86% of its manufactured goods to our southern neighbour.

Over the next few years as the province copes with a high Canadian dollar, competition from China and high energy prices, many communities in Ontario may be faced with a declining standard of living unless we can find sustainable solutions.

However two recent reports confirm that the commodity super-cycle has a long life ensuring that Sudbury – the location of approximately half of the province’s mining production – will be an island of prosperity as the region’s mineral products, supply and service sector and mining expertise is in great demand around the world.