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(Last updated: 6 Nov 2008)
Trends and opportunities
The market
Canada is one of the world’s leading mining countries and ranks among the largest producer of minerals and metals. Canada was the leading destination for global exploration spending in 2006, receiving of 19 per cent of world spending, followed by Australia at 11 per cent and USA at eight per cent.
Mining is an integral part of Canada's technology-driven, knowledge-based economy. The Government of Canada wants to ensure that this resource sector prospers and grows to its full potential. Canada already leads the world in mine financing and in the application of innovative, hi-tech exploration techniques.
Facts and Figures 2008 underscores the importance of the industry to Canada’s economy - the sector contributed C$42 billion to Canada’s GDP in 2007, employing 363,000 workers in mineral extraction, smelting, fabrication and manufacturing, and providing business to over 3000 companies supplying engineering, geotechnical, environmental, financial and other expertise. The province of Ontario is the commercial hub for Canada. Strong performance of the mining sector is driving a GDP growth of 2.9 per cent per annum.
Mining and exploration is backed up by a well-developed science and technology infrastructure in Canada.
Global business centres:
- Toronto is the world’s leading city for mining finance – TSX handled 80 per cent of worldwide mining equity transaction in 2007.
- Vancouver is the world’s leading cluster of exploration companies.
- Montreal houses important aluminium and iron ore companies.
- Edmonton and Calgary are global centres for oil sands expertise.
- Saskatoon has become the global centre for uranium and potash.
Worldwide commodity prices have increased substantially over the past five years. This has helped to fuel the mining boom in Canada. There have been large capital investments in uranium, nickel, gold, copper, potash, and diamond exploration. Analysts and industry professionals believe that this trend will continue for the next few years.
In 2007, total exploration and deposit appraisal expenditures reached C$2.6 billion; a 34 per cent increase from 2006. Various tax incentives available to mining exploration firms contribute to the growth of Canadian exploration. The discovery of more mineral deposits in Canada bodes well for the mining equipment industry, as more new mines will become operational in the years to come.
Canadian purchasing decisions are based upon the price, quality, productivity of the product, servicing of the equipment, and speed of delivery. As mining costs continue to escalate, companies are always interested in new technologies and finding ways to become more efficient.
Opportunities
The mining sector in Canada has a strong international presence offering expanded trade and investment opportunities. It is a market for many associated industries such as services, supplies, equipment, finance, transportation and the hi-tech sector.
A favourable investment climate, sustained by high commodity prices, and the various tax incentives available in Canadian jurisdictions contributed to the robustness in the exploration industry. Close to half of all expenditures reported in 2007 were related to drilling activities. The important factors of the growth profile of Canada is, that it is sustainable growth (being driven by sound industries with long term positive forecasts) and diversification of industries.
Competitive environment
Canada has a small, domestic mining equipment manufacturing industry. The majority of mining equipment in Canada is supplied by subsidiaries of large international manufactures. Manufacturers from the US own the largest share of the Canadian mining equipment market. Other large manufacturing nations that supply to the Canadian mining industry include Japan, Sweden, Germany and the UK.
BHP, Anglo-American and Rio Tinto are the three largest mining companies in the world and they all have operations in Canada. |