Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Weeks after Quebec’s ruling Liberal party re-launched the province’s asbestos industry with a $58-million loan to the Jeffrey mine, opposition leaders are calling the federal government to end what they call a “morally and scientifically indefensible” product.
According to The Toronto Sun, the Liberals are also under attack for not holding a public consultation on the re-opening of the underground mine, located about 160 km east of Montreal, which will sell most of its asbestos output to India.
“We were very shocked by Mr. Charest’s decision to announce an investment without holding a debate,” Parti Quebecois Leader, Pauline Marois, told reporters on the campaign trail Saturday.
The incentive to the controversial asbestos’ industry is only one of the measures the Canadian province of Quebec has taken recently to boost its already solid mining industry.
The most evident is the $80 billion northern-development plan for the Eastern province, dubbed “Plan Nord”, which has become a key part of the Liberal’s re-election platform.
Quebec’s premier, Jean Charest, says the strategy will allow the province to end “decades of federal equalization transfers, tackle its heavy debt, and bankroll its costly social programs,” reports Canadian Press.
He added the plan, which includes mining, energy and tourism projects, has the potential to become a game-changer for Quebec. But the opposition, led by Coalition for Quebec’s Future (CAQ), claims the plan will mainly benefit foreign companies and local mining firms close to the Liberals.
That is why investors, reports CTV.ca, are following closely the Quebec election race:
Desjardins Capital Markets advised investors in a recent research report that Plan Nord’s current form could be at risk.
“The plan in its current form could be at risk if there is a change in government or if a minority government is elected — creating uncertainty for investors,” said the July 30 analysts’ report, released a couple of days before the start of the election campaign.
“While political stability remains an important driver for investments, the development of mineral resources and related infrastructure will still occur when the economics are favourable — and these continue to be supportive.”
It is estimated that Plan Nord will generate $80 billion in public and private investment over 25 years, creating 20,000 jobs. The strategy, launched in 2011, focuses on developing the vast Canadian region north of the 49th parallel, which is about twice the size of France.
Read more on the Liberals’ northern-development plan for Quebec key facts >> >>
Comments
JIRKA
THE STANDARD OF LIVING IN CANADA IN GENERAL AND QUEBEC IN PARTICULAR HEAVILY DEPEND ON THE DEVELOPMENT OF ITS NATURAL RESOURCES. TO CRITICIZE THE FINANCING OF AN ASBESTOS MINE ANY MORE THAN FINANCING ANY OTHER DEVELOPMENT OR ANY OTHER MINE AND DOING IT FOR THE SAKE OF GAINING VOTES IS MACHEVILLIAN ER SIMPLY IGNORANT ER STUPID. MOST QUEBECERS KNOW WHICH SIDE THEIR BREAD IS BUTTERED ON