Canada continues to be a world leader in producing and exporting many important minerals and metals. In 2007, Canada’s mineral production was valued at $40.4 billion, up from $34 billion in 2006. This 19% increase was due to significant growth in the value of metal and non-metal mineral production. Coal production valued at $2.8 billion in 2007, decreased in value by 4.3% from 2006. The U.S. continues to have a strong presence in the Canadian market with an import market share of 63.8% in 2007, an increase of 1.5% over 2006.
Canada, with its population of just over 33 million people has a long history of mining and is rich in natural resources. The mining industry is predicted to grow for the next few years, as Canada has a favorable investment climate, sustained high commodity prices, plus continued world demand for minerals and metals (specifically China and India). One note to be aware of is that experts see a decline in mineral reserve levels in Canada. Government and industry are well aware of this inventory depletion and are trying to find solutions to increase exploration through government, both federal and provincial, tax incentives.
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 in 2008 and for the next few years. Thus the mining industry and subsequently the mining equipment industry will continue to prosper in Canada.
In 2007, total exploration and deposit appraisal expenditures reached $2.6 billion; a 34% 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. This trend is likely to continue in 2008, as most provinces are expecting increased expenditures in exploration.
Since Canada is home to over 2,360 head offices of mining and mining related companies, it is highly recommended that U.S. manufacturers of mining equipment consider selling to the Canadian marketplace. Buying decisions are made at these head offices for mines owned in Canada and around the world. There are 1,274 mining and exploration companies currently listed on the Toronto Stock Exchange (TSX) and TSX Venture Exchange, representing more than 59% of the world’s public mining companies. TSX mining stock trading has doubled between 2005 and 2007 from $107 billion to $309 billion.
By Judy Simonite