Mining investments in Canada’s province of Quebec dropped significantly more than expected in 2013, plunging about 37% from a record year in 2012, and marking the first annual drop in a decade.
According to preliminary data released Tuesday by Quebec’s provincial statistics agency, investments in the sector tumbled to $3.25 billion from $5.13 billion a year earlier, driven mainly by weak gold prices and softer demand in China and emerging markets.
The news shouldn’t come as a surprise for investors following the latest development in the east-central province.
Early last year, conservation group Canadian Boreal Initiative (CBI) published a poll results that revealed Quebec was turning hostile to mining.
And in December, think-tank Fraser Institute warned Quebec was quickly losing its edge as a consequence of mounting uncertainty over protected areas and environmental restrictions, as well as increased regulation and tax changes.
The province that ranked first worldwide from 2007 to 2010 as a desired mining destination, barely reached the 11th place out of 96 jurisdictions last year. In 2012, it was fifth.
More than 96% of the investments in 2013 went to Quebec’s mining regions of Abitibi-Temiscamingue, the North Shore and Northern Quebec, which all experienced decreases ranging between 27% and 37%.
Gold stayed the most sought after metal, but its share in the total exploration expenditures for the province plummeted to 37% from 54% in 2011.
Yet authorities are optimistic, projecting an increase of 14% to $374 million in exploration and development projects. In 2013, both dropped 47% to $328 million.
Junior mining companies accounted for 65 per cent of all exploration expenditures last year.
Canada’s federal government is set to release results for all the other provinces in March.
Image by Spacecat/via Flickr
