Value of industry cut in half in 2009

Kerri Breen
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Exploration hardest hit by recession

Drops in prices and in the production of iron ore, nickel and other metals have left the province's mining industry worth half of what it used to be.

The provincial government's preliminary figures set the gross value of mineral shipments at nearly $2 billion compared to last year's $4.6 billion.

Natural Resources Minister Kathy Dunderdale gives the opening address at the Mineral Resources Review conference Thursday morning at the Delta Hotel in St. John's. - Photo by Kerri Breen/The Telegram

Drops in prices and in the production of iron ore, nickel and other metals have left the province's mining industry worth half of what it used to be.

The provincial government's preliminary figures set the gross value of mineral shipments at nearly $2 billion compared to last year's $4.6 billion.

"As you all know, this has been a challenging year for the mining sector," said Natural Resources Minister Kathy Dunderdale at the Mineral Resources Review conference Thursday.

"We had celebrated several successive years of exciting growth and momentum in the industry, but we are not immune to global economic forces and that certainly had taken a toll."

Assistant deputy minister Richard Wardle gave a detailed overview of the mining industry's activities this year.

He said though there were some initial shocks, the industry wasn't as hard hit as expected and prices made a partial recovery in the beginning of the year. Though the numbers are down this year over last, the value of shipments is still about three times what it was in 2004 and more than double the average from 1996-2004.

Mineral exploration, which has expanded in the last few years, has declined dramatically with a projected $58 million to be spent this year compared to almost $150 million last year. Budget 2009 provided additional investments in exploration assistance and mineral promotion for companies.

Of the province's main mineral resources - iron ore, nickel and copper - the iron ore industry suffered the most this year, with the $800-million expansion of the Iron Ore Co. of Canada's Labrador City mine cancelled and a 45 per cent cut in production at Wabush Mines.

About half of the workforce at Wabush Mines was laid off early this year, but many have returned to work.

"We have every reason to believe that the iron ore industry in that part of the province is well on its way to recovery," Dunderdale said.

Production in the nickel industry has been substantially reduced by a shutdown in August and an ongoing labour dispute at Voisey's Bay.

The gold and antimony industries are the only metal commodities to experience growth this year, according to the projections.

But it wasn't all bad news for the industry. Dunderdale said China is aiding in the recovery of the province's mining industry by driving metal prices up and investing in projects like the Beaver Brook Antimony Mine.

Despite decreased production and layoffs in the iron ore industry, the province is experiencing the highest mining employment levels in 18 years.

As well, 400 jobs have been created and building plans have been speeded up for Vale Inco's $2.2-billion hydromet nickel processing plant in Long Harbour.

The facility is supposed to be up and running by 2013.

Dunderdale called the project the industry's most significant recent development.

"It has created tremendous excitement in Long Harbour and in surrounding communities."

Several new mining projects are in the environmental assessment phase and moving towards production, including two iron ore projects in Labrador West, and the reactivation of the St. Lawrence Fluorospar mines on the Burin Peninsula.

Dunderdale said the provincial government is committed to a maintaining and promoting mineral exploration and investment, adding that the mining industry is a major rural employer and contributor to the provincial economy.

kbreen@thetelegram.com

Organizations: Mineral Resources Review, Iron Ore Co. of Canada, Beaver Brook Antimony Mine

Geographic location: Long Harbour, Labrador, China Labrador West

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