Canada’s Natural Resources – Minerals and Metals

Petro Canada Rafinery by
Petro Canada Rafinery by Darren Kirby

Although mining has been conducted in Canada since the seventeenth century, the remarkably rapid development of the industry started at the end of World War I. Petroleum was found in the Midwest, iron ore deposits in Labrador, Quebec, and Ontario, and uranium in Ontario and Saskatchewan. Minerals and metals have become a significant part of Canada’s economy. Many of the essential consumer goods we use are provided by mining products, but also much of the infrastructure, electrical and communications networks, and housing industries depend on mining.

General Information

Canada, one of the leading mining countries in the world, produces more than 60 minerals and metals. In 2009, mining and related industries generated 2.7 percent ($31.9 billion) of Canada’s GDP. Canada is the world leader in the production of potash, and it is among the top five countries for the production of primary aluminum, cobalt, molybdenum, nickel, platinum group metals, salt, titanium concentrate, uranium, and zinc. Canada’s production of diamonds is the second highest in the world. Canada contributed 4.3 per cent of world gold production in 2009, the sixth highest in the world.

According to National Resources Canada, mineral and metal products (including coal) accounted for almost 35 per cent of coastwise shipping, more than 52 per cent of international shipping in 2007, and 50 per cent of the country’s rail freight traffic in 2009. Mining generated jobs for 307,000 people in 2009 — 2.1 percent of Canada’s total employment.

The strongest mineral provinces are Ontario (19.7 per cent), Quebec (19.3 per cent), British Columbia (17.8 per cent), and Saskatchewan (15.6 per cent). The Mining Association of Canada provides a map that illustrates key centres of mining activity across the country.

International Trade

Amethyst by Simon Law
Amethyst by Simon Law

Mineral products play an important role in Canada’s international trade, accounting for 19.2 percent of domestic exports in 2009. The most important trading partner is traditionally the US, accounting for 55 per cent ($35.1 billion) of overall mining export in 2009. The EU imports 20 per cent ($12.5 billion) of Canada’s mining products exported and Japan about 6 per cent ($3.9 billion). The UK and Belgium have the highest demand for Canadian diamonds (94 per cent of overall export in 2009).

China was most interested in nickel (20 per cent of Canada’s export) and copper (13 per cent). As it has been paying more attention to Canada’s resources, it is only a question of time about when China becomes one of the main trading partners in mining as well. This month, British Columbia announced that CKD Mines, developing the Gething metallurgical coal project, will receive $1.36 billion from two Chinese companies. The first, investing $860 million, is from CKD Mines, a partnership formed in 2010 that includes the Kailuan Group Co., Ltd, Shougang Group, and Canadian Dehua International Mines Group Inc. The second investment, at $500 million, is from a partnership between Shandong Energy Feicheng Mining Group Co. Ltd. and Canadian Dehua International Mines Group Inc.

“This investment clearly shows how confident China is in British Columbia’s world-class mining resources and strong investment climate,” said British Columbia’s Premier, Christy Clark. “These two projects support our BC Jobs Plan and according to the companies will create over 6,700 jobs and other economic benefits for British Columbians.”

Canada’s Gold

Gold by Simon Low
Gold by Simon Law

Canada ranked sixth in the gold production in 2009. As the price of gold rose under the concerns about the dollar and euro’s future, the importance of Canada’s gold mining has grown as well. The richest rushes in Canada are Klondike Gold Rush and Fraser Canyon Gold Rush.

The gold company, Barrick, established in Toronto, has the largest reserves in the gold industry, with about 140 million ounces of proven and probable gold reserves. It is added to the Dow Jones Sustainability Index – World and the Dow Jones Sustainability Index – North America. It is also the only Canadian mining company to be ranked among the top 100 companies in the world for its sustainability and performance by the NASDAQ OMX CRD Global Sustainability Index. Barrick’s strong earnings and its positive outlook on the gold price enabled the company to continue to make high return investments in its project pipeline and also increase its dividend this year.

This month, Victoria Gold Corp., a leading gold exploration and development company, announced the completion of a $30-million bought deal public offering of 46.8 million common shares plus 15.6 million flow-through shares.

Goldcorp Inc., one of the world’s fastest growing senior gold producers, expect to grow their gold production by 60 per cent over the next five years, and according to Financial Post:, it is among the Ten Best Employers for 2012.

The Canadian gold stock list is available here, signing that although the global market is deeply in trouble, the gold stock still doesn’t experience significant fluctuations.

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