Mining investment and mineral shipments down in 2015, encouraging investment outlook for 2016

Québec, March 10, 2016 – After nine years of growth and a record high of $5.1 billion in 2012, mining investment in Québec continued to decline and stood at $2.3 billion in 2015, falling to a similar level as in 2009. Between 2009 and 2012, there was a particularly rapid increase in mining investment in Québec. Preliminary data for 2015 shows a 22.7% drop in mining investment from the previous year, and a 55.2% decline compared with 2012.

According to intentions expressed by mining companies, investment should reverse its downward trend and increase by 21.1% in 2016 to $2.8 billion. That increase is expected to be supported by on-mine-site development work, capital, and repair and maintenance expenditures ($2.6 billion; +23.4%), as exploration and deposit appraisal expenditures should remain stable ($219 million; -0.7%).

Mineral shipments dropped below $8 billion for the first time since 2010, totalling $7.7 billion in 2015. This represents a 9.7% decline from 2014.

These results come from the Survey on Mining Investment in Québec and the Preliminary and Annual Censuses of Mines, Quarries and Sand Pits. Preliminary data from these surveys are published today on the website of the Institut de la statistique du Québec.

Main mining regions in Québec

In 2015, the Nord-du-Québec ($886 million), Abitibi-Témiscamingue ($750 million) and Côte-Nord ($580 million) regions received 96.4% of total mining investment in Québec. The Côte-Nord and Nord-du-Québec regions were particularly affected by the drop in iron and base metal prices. Mining investment in those two regions declined by 30.7% and 29.8% respectively compared with 2014. The region of Abitibi-Témiscamingue, which mostly depends on gold mines, was spared for the most part, as investments only declined by 0.5%.

Investment in mine complex development in 2015

Mine complex development investment was down 21.8% from 2014. In 2015, mine complex development expenditures totalled $2.1 billion: $869 million in general rock work, $586 million in capital costs (non-residential construction, machinery and equipment) and $623 million in non-capital repair and maintenance expenditures. Capital expenditures declined substantially in 2015, dropping by 45.7% compared with 2014. This means that mining companies invested less in the construction and improvement of their mining facilities.

Gold mines figured prominently in Québec, accounting for 43.7% of mine complex development expenditures. Iron and iron-titanium mines ranked second with 27.0% of these expenditures, followed by base metal mines with 13.7%.

Exploration expenditures in 2015

Exploration expenditures, including deposit appraisal costs, stood at $220 million in 2015, down 30.6% compared with 2014, and down 73.6% from the record exploration expenditures of $834 million registered in 2011.

The Nord-du-Québec region ranked first in terms of exploration and deposit appraisal, with investments totalling $117 million, or 53.3% of the Québec total. It was followed by Abitibi-Témiscamingue where investments stood at $69 million (31.2%), then by the Côte-Nord region with investments of $19 million (8.8%).

Precious metals were the most sought-after commodities in Québec, accounting for 49.2% of exploration and deposit appraisal expenditures, for a total of $108 million, including $107 million just for gold. They were followed by base metals, which accounted for 26.2% ($58 million) of exploration and deposit appraisal expenditures.

Mineral shipments and employment in the mining sector

According to preliminary data, in 2015, the value of mineral shipments in Québec stood at $7.7 billion—a 9.7% decline from 2014 ($8.5 billion). The value of mineral shipments was under $8 billion for the first time since 2010, after record highs were reached in 2011 ($8.5 billion) and in 2014 ($8.5 billion). The administrative regions of Nord-du-Québec ($2.3 billion; +23.6%), Abitibi-Témiscamingue ($1.8 billion; +7.2%), Côte-Nord ($1.3 billion; -45.9%) and Montérégie ($1.1 billion; -17.0%) remained the main administrative regions in terms of mineral shipment value, accounting for 85.2% of the Québec total in 2015.

As forecast by mining companies, and if metal and mineral prices remain at 2015 levels, the value of mineral shipments should stand at $7.1 billion in 2016, down 6.7% compared with 2015.

The main mineral commodities sought in Québec in 2015 were gold ($2.4 billion), iron ore ($1.3 billion) and nickel ($850 million). Gold and nickel posted respective increases of 27.6% and 6.1% compared with 2014, while the value of iron ore shipments declined by 46.4%, a drop of more than $1.1 billion.

Employment in the mining sector totalled 15,934 person-years in 2015, down 9.9% from 2014. Mining employment is concentrated in the regions of Abitibi-Témiscamingue (3,420 jobs), Nord-du-Québec (3,015 jobs), Montérégie (2,836 jobs) and Côte-Nord (2,799 jobs).

 


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