Canada to boost support for mining, but faces challenges
Canada’s Prime Minister Stephen Harper is ready to launch an aggressive campaign to promote the country’s mining sector abroad, in an effort to redirect trade spending and foreign affairs to core economic interests.
Ed Fast, the International Trade Minister, began Wednesday a cross-country campaign to get feedback from experts and actors on what kind of support they think the government should offer to local mining companies.
According to The Globe and Mail, the move comes as the Harper administration starts warming up its campaign machine for the 2015 elections.
But Harper faces a challenging scenario. As a result of the global mining slowdown, Canada’s mining sector has been hit hard by weak commodity prices and lack of interests from foreign and local investors.
For the first time in a decade, Canada's normally bustling resource industry failed to book a single Initial Public Offering (IPO) on either the Toronto Stock Exchange or the TSX Venture Exchange in the first quarter the year, a PwC survey revealed.
While Canada remains the top destination for mining investments in the world, the sector has built a not so graceful reputation abroad. Local miners have been facing domestic opposition to their projects in all parts of the globe, including Greece, Colombia, Nicaragua, Peru, Bolivia, Dominican Republic, Slovakia, Romania and Israel.
In January, for example, hundreds of Greeks protested in Thessaloniki against several gold mining projects owned by Vancouver-based Eldorado Gold (TSX: ELD) (NYSE:EGO).
The following month, Catholic priests and small-scale miners marched with 5,000 locals in Matagalpa, Nicaragua, against a project owned by Vancouver-based B2Gold Corp.
In April tens of thousands of Colombians took to the streets of Bucaramanga, the country's sixth-largest city, to defend their water supply from Vancouver-based Eco Oro Minerals’ (TSX: EOM) gold project.
Recently, Toronto-based Barrick Gold (TSX, NYSE: ABX) admitted before a Chilean judge it had committed several violations in regards to its touted $8.5 billion Pascua Lama gold and silver project, straddling the border of Chile and Argentina.
And the most fresh example is the renewed opposition Gabriel Resources (TSX:GBU) is facing in Romania because of its Rosia Montana gold project. Only yesterday the country's president Traian Basescu asked the Parliament to withdraw a bill that would allow the London-based Canadian miner to move forward with it.
However the future looks auspicious. Canada is among the top-five producers of potash, uranium, nickel, platinum, aluminum, diamonds and steel-making coal. And Global demand for commodities is expected to grow by up to 75% over the next 15 years, according to the world’s No. 1 miner, BHP Billiton (ASX, LON, NYSE: BHP).
Image courtesy of the PM office.