Canada’s mining industry is on the right path to continued prosperity despite current market volatility, says the Mining Association of Canada (MAC).
In a speech to members of the Vancouver Board of Trade, MAC President and CEO Pierre Gratton said regulatory reform, investment in infrastructure and promotion of strong trade relations with countries such as China, the world’s biggest consumer of metals, will keep Canada globally competitive.
Despite a slowdown in Chinese growth to 7.6 per cent in the second quarter, from decades of 10 per cent average annual growth, Gratton noted that most prices remain at relatively high levels, despite a fall off in recent months, and emphasized that the long-term fundamentals that have supported rising commodity prices over the past decade remain.
“The mining super cycle is not over, it is taking a pause. This is the nature of the mining business, which is cyclical,” said Gratton. “The industry is generally better prepared for the current slowdown compared to last time, which was much more dramatic.”
Gratton says globalization and the rise of Asia, and China in particular, are behind the steadily rising metal prices in recent years, and the quick recovery from the 2008-09 global financial crisis. Rapid industrialization in China is driving demand for minerals and metals used in a wide-range of construction and manufacturing applications, as the country builds out its infrastructure base. This means China is a major consumer of two of B.C.’s top-producing commodities—copper and steel-making coal.
“China will continue to drive demand for minerals and metals well into the future, and is being followed by a number of emerging nations such as India and Brazil.”
This accelerated Chinese growth is propelling investment in the resource sector, in particular mineral-rich countries such as Canada. It has never been more important for Canada to remain competitive to take advantage of this strong, steady growth.
“Canada has always thrived on trade and the two-way free flow of goods and capital,” Gratton said. “We need to stay the course as a free trader, and proactively engage the emerging new world order or be left behind.”
MAC estimates approximately $140 billion of new mining investments for Canada over the next five to 10 years. B.C. is expected to see more than $30 billion in investment over the next 10 years thanks to its wealth of minerals and its position as Canada’s gateway to key Asian markets.