Posted November 10, 2018 08:25:38 A massive boom in iron ore mining in Canada has fuelled the boom in the metals industry, with mining operations expected to hit $5 billion this year.
“Canada is becoming a boom destination for the world, and I think it’s going to continue,” said Andrew Waugh, head of commodities at mining company Rio Tinto.
Rio Tto owns and operates the world’s largest iron ore mines in Western Canada, including the mines in Thunder Bay and Fort St. John, B.C. Rio has also been developing its own iron ore deposits, but these are not currently under contract.
“We have not found any iron ore in Canada,” said Waugh.
“There are not a lot of mines in Canada, but we’ve got some good ones, which will make the investment worthwhile.”
Iron ore is the third most valuable metal after gold and copper, after copper and zinc.
The world’s most valuable ore, known as molybdenum, is found in China and Australia, and is also used in the production of batteries, medical devices, solar panels, and batteries for the aerospace industry.
According to the Canadian Geological Survey, there are more than 200 iron ore and copper mining operations in Canada.
“It’s not a very large market, but that’s because the world needs that commodity,” said Chris Harker, a mining analyst at the Calgary-based research firm Bernstein Research.
“When you look at it as a whole, there’s been a huge boom.”
While the industry in Canada is expected to grow at an annual rate of 6 per cent in 2020, Waugh said it is still far behind the U.S. where the industry is expected in 2021 to hit a peak of $25 billion.
“What you have to do is go out and acquire the world-class ore, and you can’t go out there and buy cheap iron ore, you have have to buy premium quality, because you need that iron ore to make batteries, solar cells, or aerospace products,” said Hark, adding that Rio Ttinto plans to spend about $10 billion on iron ore this year, and expects to see $10.5 billion in total mining investments in the coming years.
In 2018, the Canadian government introduced a new, more stringent mining regulation known as the Mining Act that requires that the majority of mining operations be certified as environmentally friendly, with no mining activity taking place on land that is sensitive to local communities or wildlife.
“These mines have the environmental responsibility of their operation, and they have to adhere to the law and regulations,” said the Canadian Mining Association’s Brian Smith.
“So when we see mining activity, we don’t see anything in our region that would be environmentally problematic.”
Rio TTO, a subsidiary of Rio Tio, is expected on Friday to report its first quarterly profit in three years.
It said it had more than $5.4 billion in cash and short-term investments at the end of June, up from $4.6 billion a year earlier.
Rio also reported a $1.9 billion operating profit in the first quarter of 2021.
Rio is the world leader in iron, with its mines in the region including Thunder Bay, Fort St John, and Fort Erie in B. Canada.
The company’s CEO, Mark Treadwell, said the company has seen a significant increase in demand from the global market for the material.
“The U.K. has been very strong, so the demand is now going to be even greater.
There’s no doubt that the demand will increase globally,” said Treadwelly.
“I think we’re going to have an even stronger demand for the iron ore coming from China.
The Chinese demand for our ore will increase.
And then it’s the rest of the world which has been particularly strong, that we’re really excited about.”
Waugh predicts the boom will continue.
“This is the end result of a global demand that’s growing.
The supply is also increasing,” he said.
“You have China and the rest.
And we have our own country, so that will give us a boost as well.”