THE CANADIAN MINING industry's suc-
cess depends on its capacity to move its output to
markets efficiently, at competitive prices and via
modern infrastructure such as railways, roads and
ports. Power generation is also critical. Mines in
northern Canada face a special challenge because
of the lack of electrical grid capacity.
e slump in world commodity prices from
their peaks of 2011 has put a damper on the min-
ing sector in general and on mining infrastructure
procurement in particular. ere is cautious opti-
mism regarding mining plays in 2017, but nothing
like the exuberance that would be triggered by a
sustained rally in precious and base metals.
"I think prices need to go up a little bit more
and hold for a little bit longer," says Erik Goldsil-
ver, a partner at Borden Ladner Gervais LLP in
Toronto. "e increase in prices we've seen over
the past six to 12 months is positive, but there's
still some room to grow."
"Since the downturn," says Crae Garrett, a
partner at Norton Rose Fulbright Canada LLP
in Calgary, "many mining companies have tight-
ened their belts and haven't done any develop-
ment. e public sector has been driving what-
ever infrastructure development has taken place
for the mining sector — as the benefits outlast
the projects."
As for private investment in mining transport,
"a lot of the in-production mining activity already
has its infrastructure," says Garrett, "so you're look-
ing way more at exploration plays, and they always
get hit more in a downturn."
According to the Mining Association of Can-
ada, Canada no longer attracts the single largest
share of total global mineral exploration spending,
a ranking it lost to Australia in 2015. Says Gold-
silver: "ere are probably many reasons — gov-
ernment regulation, the Canadian dollar, more
mature projects here in Canada."
INFRASTRUCTURE FUNDING
NEW ROADS
TO RICHES
IN A DEPRESSED
MARKET FOR
COMMODITIES,
MINING COMPANIES
WILL HAVE TO RELY
ON GOVERNMENT
FUNDING, P3s AND
THE AMBITION OF
LOCAL COMMUNITIES
TO GET THEIR
PROJECTS OFF
THE GROUND
BY SHELDON GORDON
10 LEXPERT
|
2017/18
|
WWW.LEXPERT.CA
PHOTO:
SHUTTERSTOCK
