Quebec mining sector answers critics
(National Post)
Updated: 2010-04-27 09:46
Stung by controversy over a uranium project on Quebec's North Shore and an unflattering report from the province's auditor general, Quebec's mining industry is now trying to set the record straight with a new study that says the sector will contribute significantly to the economic recovery.
About $4-billion worth of mining investment projects have been announced and should get off the ground before 2013, officials with the industry's two largest trade groups told reporters on Monday. Since 2000, exploration activity alone has increased on average by 65% a year, reaching $440-million in 2008.
"I don't think this is a political game," Association mini¨¨re du Qu¨¦bec chairman Michel Leclerc said when asked if the study increases the industry's sway among lawmakers. "We simply want to show to the people who we are as a group. Because obviously we didn't know. Six months ago, we didn't know [these] numbers."
He said while residents of outlying areas such as Abitibi are more knowledgeable about mining companies and their activity, "there is a perception we have to change" among people in larger cities.
Quebec's mineral industry generates 2.4% of the province's gross domestic product and 52,000 jobs, the study concludes. It has contributed $281-million a year on average since 2000 to the provincial treasury in taxes. Ten new mining projects, nine worth $200-million each, will start this year.
The study is the first to measure the entire value of mining activity, from exploration to initial transformation. It found that Quebec's mining suppliers, who manufacture ventilation systems and other products, have generated a sub-industry in their own right, more than doubling their exports over eight years to $196-million in 2008.
The findings come one year after a hard-hitting report by Quebec's auditor general noted the province collects little in royalties from mining companies. The Quebec government moved in its latest budget to address that situation, raising mining duties to 16% by 2012 and switching to a "mine-by-mine" system of taxation, which means companies will no longer be able to apply the losses at one mine to lower the profits of another.
More recently, a public outcry hitting the industry erupted late last year after 20 doctors quit at a regional hospital in Sept-Iles to protest plans to build a uranium mine nearby. The doctors said they feared for the health of their families and the region's populace. Vancouver-based Terra Ventures Inc. froze its exploration of the site in December.
Quebec produces some 30 minerals, including gold, silver, copper and zinc. Stornoway Diamond Corp. said last month it is on track to open the province's first diamond mine, an operation that could yield 1.8 million tonnes of kimberlite every 12 months.
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