Dec '08/Jan '09


A period of unprecedented expansion

Translated from the original in French by A. Lavoie

Part of the 25-kilometre pipeline that carries Goldex mine’s tailings to an old tailings site

With sharp increases in metal prices and a favourable climate, the Quebec mining industry went through its most significant expansion period of the last 20 years, with shipments totalling $5.5 billion in 2007. Exploration expenditures for 2008 are estimated to reach $460 million and several deposit appraisal and mine complex development projects are underway.

Four new mines started production recently: First Metals’ Fabie copper mine (March 2008), Agnico-Eagle’s Goldex gold mine near Val-d’Or (June 2008), Xstrata Zinc’s Perseverance mine in Matagami (October 2008) and Alexis Mineral Corporation’s Lac Herbin mine, also near Val-d’Or (October 2008).

Notable projects in the advanced development stage include the $360 million expansion of the LaRonde mine (Agnico-Eagle) in the Abitibi region (mining planned for 2011); the $95 million development of Lapa mine (Agnico-Eagle), also in the Abitibi region (scheduled for 2009); the $1 billion program to double production at the Raglan mine (Xstrata Nickel) in the Nunavik region (from 2008 to 2013); the $50 million development of the Opinaca mines (Goldcorp) in the James Bay area (2008); the three-year, $760 million Osisko project (Osisko Mining Corporation); the prefeasibility study-stage, $200 million Renard diamond project (Stornoway-SOQUEM) in the James Bay area; and Consolidated Thompson’s $410 million Bloom Lake iron ore project near Fermont (2009).

While these projects best exemplify Quebec’s mining industry boom, numerous other exploration projects are also significant. Notable are the Canadian Royalties’ projects, IAMGOLD’s Westwood project, Strateco Resources’ Matoush project, Virginia Mines’ and Breakwater Resources’ joint venture Coulon project and many others including the Iron Ore Company of Canada’s $300 million investment in Labrador that will greatly benefit its Sept-Îles port facilities on the North Shore.

Government policies

The vitality of the last few years can easily be attributed to the high metal and mineral prices that caused the industry boom. However, it must also be noted that the policies of the Government of Quebec help sustain natural resources development. Recognizing this in 2008, the Fraser Institute awarded Quebec the highest score on its Policy Potential Index and the second rank for its Mineral Potential Index.

The Quebec Mining Association (QMA) supported the spring 2008 budget announcement of an injection of $53 million in new credits over five years. The measures focused mainly on the implementation of a “Mining Heritage Fund,” the renewal of the Copper Plan, the creation of a National Mining Institute to work with partner organizations in the outlying regions, and measures to sustain vocational training.

The Quebec government also intends to implement a new mineral strategy. The QMA views this very favourably and intends to participate in its implementation. During public consultations, QMA proposed several measures to sustain the development of Quebec’s mining industry. These included: resource renewal; exploration support; access to resources; security of land use rights; a competitive, stable and predictable taxation regime; the training and development of mining sector workers; and the simplification and harmonization of the regulatory framework.

Challenges and issues for 2009

Human resources: The development of new mines and the retirement of older workers create significant manpower needs, posing a daunting challenge to the mining industry. In this regard, companies are actively collaborating with their partners and educational institutions to develop solutions that allow students to familiarize themselves with the actual work environment at various mines.

Health and safety: The new and diversified labour force comprising young people, women, First Nations people, immigrants and middle-aged workers transitioning from other industrial sectors presents a challenge to managers and supervisors who are responsible for achieving targets, especially those concerning occupational heath and safety.

In this domain, Quebec’s mining industry has attained a seventh consecutive year of improvement in accident prevention. There was a 13.5 per cent reduction in incident rates (all incidents considered together) in the first seven months of 2008. Globally, from 1989 to 2007, the combined incident rate in Quebec mines (for incidents necessitating compensation and work assignment modification) fell by 62.3 per cent and is now at the lowest level in two decades.

Environment and sustainable development: Cases concerning the environment and sustainable development are quickly piling up. Greenhouse gases, protected areas, water use, site rehabilitation, wetland protection, new regulations for the mining sector, etc. are becoming focal points.

The impact of mining activities on community life and the social acceptability of projects are now forefront issues for mining companies. Osisko Mining Corporation has set up the Fonds Essor Malartic Osisko, a sustainable development fund mandated to invest in local projects. This year, the fund will buy new computers for the local high school. At its Raglan mine, Xstrata Nickel distributed over $32 million in royalties to the local Inuit communities. About 30 mining companies and organizations have created the Fonds Restor-Action Nunavik, which raised more than $6 million to rehabilitate some 20 northern mine sites.

One example of sustainable development in the mining sector deserves to be signalled out, as it constitutes a Canadian first that can become a model for the industry. Since last August, the new Goldex mine (Agnico-Eagle) has been piping its tailings over 25 kilometres to the abandoned Manitou acid-generating mine tailings site. The non-acid-generating Goldex tailings, with their neutralizing potential, will help rehabilitate the site. This $48 million development, carried out in partnership with the ministère des Ressources naturelles et de la Faune who owns the site, also considerably limits Goldex’s footprint.

Metal markets and the world economy: The vitality of the mining industry observed over the past few years in Quebec and across Canada is conjectural, in that it is based on the metals and mineral prices. Metal prices are already feeling the shockwaves of the American financial crisis. While gold once regains its position as a hedge against inflation in volatile markets, base metal prices decline.

At the time of writing this article, Premier Jean Charest had announced his desire to push the “Plan Nord” to develop the natural resources potential of the region north of the 49th parallel, a vast area representing 70 per cent of Quebec’s territory. The mining industry is already quite active in the James Bay and Nunavik regions with many ongoing mining, exploration and development projects. The industry is also entering harmonious relationships with local communities and First Nations people. The 2002 “Paix des Braves” agreement between the Government of Quebec and the Grand Council of the Cree helps foster the participation of First Nations peoples in the region’s mining activities.

The QMA is heartened by the government’s interest in the development of northern Quebec, a region whose considerable potential in diverse resources is evident from recent gold, zinc, nickel and diamond discoveries and mines.

Post a comment


PDF Version