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Philip Cross, a senior fellow at the CD Howe Institute and former chief economic analyst at Statistics Canada, writing in the Globe & Mail shares his insights into Canada’s mining boom.
Canada has undergone an “historic boom” in mining investment and according to Stats Canada’s latest investment survey capital spending in the mining sector – this excludes money being pumped into energy and the oil sands – has risen to nearly $16 billion from a lowly $2 billion in 2000.
This places investment in the mining segment within firing distance of the funds flowing into Canada’s overall manufacturing sector which is pegged at $20 billion.
[G]rowth since the recession has been on a lunar trajectory, nearly doubling in just three years to $15.7-billion in 2012. In fact, the $8.6-billion increase in the level of investment in mining over the last three years equals the peak level of all mining investment reached in 2008.
The source of the surge in mining investment has been quite diverse, reflecting the widespread advance in prices. For 2012, gold leads the way with $3.6-billion of capital spending. But not far behind are copper-nickel-zinc mines at $3-billion, potash at $2.9-billion and iron ore at $2.7-billion as the Labrador Trough is developed.
It is noteworthy that despite this decade-long surge in investment, production of most of these metals remains well below their levels of a decade-ago, a reflection of how it takes ever-increasing amounts of inputs to extract metals (especially gold) as well as the long lags before these projects come on-line.
Continue reading at The Globe and Mail.
Comments
Doctorloyd
Every country with the government of Canada rules would be investing a lot in minning…and this is the smart way! Congrats to all red necks that are becoming millionaires in the TSX.