New Market Report Now Available: Canada Mining Report Q1 2014

From: Fast Market Research, Inc.
Published: Wed Nov 27 2013


Canada's mining sector will see continued, though slow, growth. Diversified mineral deposits and a steady pipeline of investment make Canada a continued destination for mining firms. Indeed, the country is a top 10 global producer of zinc, lead, iron ore, nickel, copper, gold, silver, uranium and potash. With many companies both headquartered and producing in Canada, the mining sector is crucial to the Canadian economy. Thus, we expect Canada's political leadership to maintain favourable tax and regulatory policies for the sector. Exogenous factors though, including weak developed world growth and slowing, less commodity-intensive growth in China, will weigh the industry.

Full Report Details at
- http://www.fastmr.com/prod/723436_canada_mining_report_q1_2014.aspx?afid=301

Global demand growth for metals is likely to remain slow and a surplus of several base metals, including iron ore, zinc, and nickel, will persist over the coming quarters. However, decreasing ore quality at some major existing mines and rising costs among major mineral exporters should encourage new exploration across Canada's untapped resources. While Canada is less cost competitive on a per-unit-of-output basis compared to some developing-world exporters, its technological, infrastructure, and governance advantages makes it an attractive investment destination. We therefore forecast positive, though modest growth, of 2.5% on average per annum between 2014 and 2017.

Canada will remain home to many of the world's junior miners, who engage in both domestic and international exploration and development activities. However, junior miners are facing financing difficulties in the current environment despite Canada's well developed capital markets. Both equity financing and mining mergers and acquisition activities have slowed. We see private equity (PE) investment in the mining sector becoming increasingly prominent though, as PE firms seek investments in mining companies currently at multi-year low valuations. Canadian tax and royalty policies are set to remain favourable for mining firms, though Canada's dual-tiered regulatory system, comprising both provincial and federal stakeholders, can become problematic. Project approval can sometimes take upwards of several years, and different provinces can propose their own tax and royalty schemes on local investment.

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