Thursday, April 24th6.6°C
19345
21045

Quebec mining investment took deeper plunge than forecast last year

MONTREAL - Investments in Quebec's mining sector plunged deeper than expected last year, declining nearly 37 per cent from a record year in 2012 and marking the first annual drop in a decade, Quebec's statistics agency said Tuesday.

Preliminary numbers suggest investments in the sector fell to $3.25 billion from $5.13 billion a year earlier, due largely to lower gold prices and softer demand in China and emerging markets.

In October, the agency forecast a drop of at least 10 per cent in 2013 based on surveys of mining companies completed during the summer.

However, Raymond Beullac, an official with the statistics institute says he had a "gut feeling" that the numbers were optimistic and warned of a possible decrease based on comments expressed by executives.

"Between last summer up until January the situation has greatly degraded and the numbers have come down so the companies who at that time expected to be spending more money exploration-wise in Quebec were not able to raise the capital to do the work," he said in an interview.

He said a lot of big mining companies were expecting to see metal prices remain high, but were squeezed by rising costs when they fell.

"The first thing that goes in this situation is always exploration budgets so some of these investments they were expecting to be doing on some of their projects they're just sending that into the future," Beullac said.

"Hopefully in the next two to three years they'll come again looking at these projects and maybe at that time start investing again major amounts of money to bring them into production."

More than 96 per cent of the investments last year were in Quebec's mining regions of Abitibi-Temiscamingue, the North Shore and Northern Quebec, which all experienced decreases ranging between 27 and 37 per cent. Junior mining companies accounted for 65 per cent of all exploration expenditures last year.

Gold remained the most sought after metal. But its 37 per cent share of all exploration expenditures was down from 54 per cent in 2011. The price of gold fell to US$1,225 per ounce in December, from US$1,750 in September 2012.

Gold Corp. (TSX:G) is investing $1.4 billion to develop is Eleanor gold project in James Bay. ArcelorMittal is developing its Mont Wright iron mine.

Nickel mining is also increasing with major projects such as the Raglan mine by Xstrata Nickel and Nunavuk Nickel by Canadian Royalties (TSX:CZZ) in the northern regions of Quebec.

Beullac said investments in other commodities, particularly earth elements and graphite increased because higher prices and additional applications should make them attractive for years to come.

He said the situation in Quebec's mining sector is being felt in other Canadian provinces and territories, and around the world.

Natural Resources Canada is expected to release results for other Canadian provinces in the coming weeks and investments are expected to be down. Beullac expects Quebec will lose its top position for investments but isn't sure if it will fall behind Ontario, British Columbia and Saskatchewan.

The national numbers may also shed some light on whether Quebec's plans to increase in royalties had any unique impact on investments in province.

At this time, the level of activity in 2014 is expected to remain similar to last year's levels based on intentions expressed by mining companies in recent months.

The value of exploration expenditures and development is expected to grow 14 per cent to $374 million, after declining by 47 per cent to $328 million in 2013.

Although the outlook can quickly change, Beullac said the mining sector is expected to remain relatively strong over 10 to 15 years, compared to a "very bleak period" beginning in 2000.

The Canadian Press


Read more Business News

21231


Recent Trending




Today's Market
S&P TSX14554.25+20.86
S&P CDNX1014.453.47
DJIA16501.650.00
Nasdaq4148.338+21.372
S&P 5001878.61+3.22
CDN Dollar0.9065-0.0009
Gold1291.30+7.1001
Oil102.15-2.22
Lumber334.30+2.40
Natural Gas4.708+0.003

 
Okanagan Companies
Pacific Safety0.11-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.35+0.13
Cantex0.05+0.005
Anavex Life Sciences0.36-0.02
Metalex Ventures0.075-0.005
Russel Metals31.48+0.18
Copper Mountain Mining2.49+0.16
Colorado Resources0.265-0.005
ReliaBrand Inc0.11+0.03
Sunrise Resources Ltd0.03+0.005
Mission Ready Services0.250.00

 



21100

FEATURED Property
1927763#113 321 Whitman Road
3 bedrooms 3 baths
$324,800
more details
image2image2image2
Click here to feature your property
Please wait... loading


On living and dying

Our ability to live beyond our years has nothing to do with medical science; we will all live longer than our physical bodies, each of us will leave behind a personal legacy made up of our deeds, our ...


Learning to flirt with the edge

With all of the adventure activities I have done and still do, I wonder sometimes if the edge still exists. The systematic approach to learning a new adventure or extreme activity combined with the r...


Time spent prospecting

How much time should you put into prospecting? The question is a bit of a puzzle. Ideally, there would be a reference book that lists, by industry, how much time you should invest in prospecting acti...

_








Member of BC Press Council


20728