Back on track

Our annual feature on Canada’s Top 40 Miners, compiled by CMJ news editor Marilyn Scales, always provides a revealing snapshot of the state of the mining industry.

This year’s list, based on reported financials from 2017, paints a picture of companies that are starting to finally reap the benefits of years of austerity.

As opposed to last year’s list, when 15 companies reported lower revenues than the previous year, only two of our Top 40 this year reported shrinking revenue.

Moreover, 16 companies in this year’s list expanded their net earnings compared to only four in last year’s list.

There are several interesting standouts in this year’s Top 40, including two companies that made smart acquisitions that catapulted them up the list. Trevali Mining, for example, made its first appearance in the Top 40 after acquiring two zinc mines last year from Glencore and more than tripling its revenues. Similarly, Kirkland Lake Gold’s 2016 acquisition of Newmarket Gold and its high grade Fosterville mine in Australia helped it ascend our list nine spots.

Iamgold was another standout – despite remaining unmoved at No. 16 on the list.

The company boosted its net earnings by a whopping 825.8% on higher sales volumes, with a little help from the gold price.

We’re pleased to see that his year’s Top 40 miners are a healthier bunch than last.

Obviously, there’s more progress to be made, but it’s a positive trend we hope to see continued next year.

There’s lots more data to sift through – just turn to Page 19 to begin.

While Canada’s largest miners are getting back on track, the recent election of new Ontario Premier Doug Ford and his Conservative party in June points to regulatory uncertainty for mining companies around carbon pricing policies. Ford has pulled Ontario out of a cap-and-trade agreement struck with Quebec and California last year. It’s not yet clear what the financial consequences of that action will be, or what it will cost companies that have been buying and selling carbon credits in the program and had otherwise adjusted their business to the regime.

In addition, with the federal government’s plan to impose carbon taxes next year on any provinces that haven’t instituted their own carbon pricing schemes, Ford is joining Saskatchewan Premier Scott Moe in challenging federal jurisdiction to impose carbon taxes.

The federal Conservative party under leader Andrew Scheer is also strongly opposed to Ottawa’s imposition of carbon taxes on the provinces, and has pledged to come up with an alternate plan to meet carbon reduction targets set out under the Paris agreement that doesn’t involve a carbon tax.

If the federal Liberals are voted out in the next election in October 2019, it’s possible that the idea will go away – at least temporarily.

Regardless, mining companies, which have already started to measure and disclose their emissions, need to plan for the higher cost scenario. See Page 16 for some ideas on how.