Canadian Mining Journal

Feature

Ontario Mining Association members envision the future


While our business is digging up minerals and metals, the core focus of Ontario miners is unearthing people’s potential. OMA members have committed to devising an industry-wide innovation strategy to enable responsible and sustainable growth of Ontario’s mining industry, while delivering accelerated improvement in health, safety and environmental performance through collaborative action and innovation.

Mining has been a part of Ontario’s fabric since the 1800s. The major discoveries and mine development of the 20th century underpinned Ontario’s rise to the status of Canada’s most populous and wealthiest province, and supported Canada’s development as an industrialized and globally competitive nation.  As Ontario moves toward a low-carbon, innovation and knowledge-based economy in the 21st century and beyond, mining will continue to play a crucial role.

Minerals and metals extracted and processed through mining are essential, irreplaceable components of modern technology and the building blocks of innovation—from lifesaving medical devices to planet saving green devices like solar panels, wind turbines, hybrid cars and advanced energy solutions. With society shifting away from fossil fuel dependence and relying on more alternative energy sources, global use of mining products will only grow. As a place known around the world for its safety and environmental leadership, efficiency, productivity and corporate social responsibility, Ontario has every opportunity not just to be a model mining and smelting jurisdiction, but also an indispensable link in the world’s mineral supply chain.

Though the number fluctuates with various commodity price changes, the value of Ontario’s mining production is the highest in Canada – $10.8 billion in 2015, despite the challenging market conditions – and the sector makes significant tax contributions to all levels of government, which pay for public priorities like healthcare, education and infrastructure, supporting Ontarians’ standard of living.  Mining offers versatile and rewarding careers, particularly for young people.  Wages in the mining industry have increased 40% over the last decade, an amount that is twice the rate of inflation, and are 37% higher than the average for goods producing industries in Ontario. Worker health and safety is a top priority. In 2016, the province’s mining industry met its zero fatality objective. This is a significant achievement, marking yet another step toward achieving zero harm.

As Ontario’s Minister of Labour recently pointed out, “Ontario’s mining sector has a strong culture of health, safety and collaboration, which continues to deliver positive results in the workplace for mining workers.” Recent data support this. According to Ontario’s Workplace Safety and Insurance Board, Ontario industry sectors are demonstrating continuous improvement and mining companies compare favourably with other workplaces. The 2015 lost time injury (LTI) average rate for 2015 Schedule 1 employers was 0.85, down from 0.92 in 2014. Of 16 industry sectors, seven sectors were above this rate, nine were below. In 2015, mining was below the Schedule 1 LTI average, with a rate of 0.63 – down from 0.64 in 2014, and continuing the improving trend of the Ontario mining industry, which has reduced its LTI rate from 1.81 in 2002.

While the safety of workers is paramount, Ontario miners are also working hard on improving their capacities as environmental stewards by adopting effective management strategies and technologies to reduce the environmental impact of mining operations. Much effort is being devoted to making Ontario’s mines energy efficient. The industry has lower GHG emissions than most other industries in Ontario, and its carbon footprint is set to become smaller over time, allowing Ontario to produce some of the lowest-carbon commodities in the world. With a clear focus on the future, Ontario’s dynamic mining industry is continually evolving to meet society’s changing needs and expectations, as well as our own exacting standards.  From adopting lower emission and renewable energy technologies to developing the world’s first fully electric mine, innovation is the key to ensuring our sector’s global competiveness and future success. Ontario’s mining companies understand the imperative to challenge the industry status quo – about half of Ontario mines introduced innovations in 2014.

Having a strong, innovative mining sector has numerous positive secondary effects.  Mining has links to other industries and sectors in the economy, contributing to an economic multiplier effect. For example, the industry provides a major boost to our financial sector, with the Toronto Stock Exchange and TSX Venture Exchange currently raising more mining equity capital than any other exchange. Other sectors benefit as well, including manufacturing, engineering, education, legal services, transportation, construction, environmental management and geological surveying/analysis, among others. In some parts of the province, especially in the Far North, mineral resource development is critical to creating high-value jobs and entrepreneurial opportunities. Over the last few decades, Aboriginal-industry relationships and partnerships have evolved tremendously through the conclusion of various types of agreements (more than 122 in Ontario) related to mine development that have proven to be successful in securing benefits for many Aboriginal communities.

While previous investments have established Ontario’s position as the major producer of metals and minerals in Canada, and while it is clear that mining benefits all parts of the province, attracting the highest Canadian total investment in mines at $2.9 B, maintaining and expanding the benefits that responsible mining brings to our communities and to our economy requires that the costs of doing business remain competitive, while we develop our natural resources to their full potential.

Mining companies function in a fiercely competitive and increasingly mobile global market, and Ontario mining companies’ profitability is challenged by the combination of falling or stagnant global commodities prices and rising input costs.  We are still feeling the effects of the global downturn in commodity markets – the extended period of lower prices and volatile demand for many commodities has resulted in a significant impact on earnings, balance sheets and investor perceptions of the sector. Ontario has room to improve its competitiveness. In particular, our jurisdiction is burdened with high labour and energy costs, which limit revenue potential and dampen investment, especially in difficult economic times. Notwithstanding, mining creates more economic value (as measured by GDP) for the energy it uses than most other industries, including chemicals, cement, pulp and paper, and iron and steel. Unlike in traditional manufacturing, however, extremely long timelines and large capital expenditures are needed to discover a viable ore deposit and bring it into production. A complex regulatory environment results in a particularly expensive and time-intensive process.

To overcome the challenges, it is important to understand and benchmark our current contributions, strengths and failings, while identifying new opportunities and drivers to enhance Ontario’s competitiveness. We encourage CMJ readers to visit oma.on.ca, weigh the information and send us your thoughts.

Chris Hodgson is president of the Ontario Mining Association.


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