REVIEW OF THE MINING INDUSTRY: KEY EVENTS IN 2020 AS SEEN BY THE QUÉBEC MINING ASSOCIATION
Québec City, December 16, 2020 – The year 2020 has been challenging in many ways. However, the Québec Mining Association considers that this unusual year has still been positive overall.
The upheaval caused by COVID-19 was followed by a display of solidarity, leadership and resilience by all players in the mining industry, and public health and control measures were introduced immediately to limit the spread of the virus at mine sites. The effectiveness of the measures was recognized by the Québec government, which quickly authorized the resumption of mining activities. The measures clearly had a positive impact, since only a few cases of COVID were recorded among mining sector workers. The economic aspects were never allowed to take precedence over health and safety, and mining companies continue to maintain a high degree of vigilance.
Gold prices reached a historical record of 2,740 Canadian dollars per ounce. This made up for some of the losses caused by COVID-19 mine shutdowns, and also by the introduction of strict public health and control measures. For operating mines, the QMA estimated that the three weeks of work stoppages in the spring cost over $550 million in extra costs and lost production.
The Québec government unveiled its plan for the development of critical and strategic minerals. Québec’s mining industry will play a leading role, in particular by supplying the metals and minerals needed for transportation electrification and the energy transition. The QMA believes that the government’s message highlights the ability of the mining sector to offer a genuine solution to the issues of climate change, while potentially enriching Québec.
The QMA also published its most recent study of the benefits generated by the mining industry in Québec. It shows once again that the Abitibi Témiscamingue region occupies the pole position. Out of almost $10 billion spent throughout Québec, the Abitibi-Témiscamingue region accounted for $3.44 billion, while Montréal ranked third with $1.2 billion of spending.
Iron prices also performed well in 2020, since they reached a seven-year peak of over 50 US dollars per tonne. This points to a bright future for mineral development in the Côte-Nord region, where companies such as Québec Iron Ore have announced their intentions to expand their mining site.
Despite all this good news, 2020 also brought a measure of disappointment. For example, Québec lost its place in the Fraser Institute’s Top 10 list of the best mining investment destinations worldwide. By dropping from 4th to 18th place, Québec recorded its worst result since 2014, showing that the uncertainty of recent years has had an impact on investors. This is not an encouraging sign for the future.
Another disappointment came from the confirmation in December, by the Institut de la statistique du Québec, of a decline in mining investment in 2019. Instead of the expected increase of $400 million Québec saw a drop of almost $300 million, to a total of $2.98 billion. Because of its impact on the future of the mining industry, the QMA is concerned about this decline in investment in Québec mines, which is expected to continue into 2020.
Prospects for 2021
One of the things to watch in 2021, besides resource prices, will be Québec’s ability to benefit from the development of critical and strategic minerals. The Nouveau Monde Graphite project continues to attract attention along with lithium development, resulting in particular from the restructuring of Nemaska Lithium. More good news in September was that mining would resume at Stornoway Diamonds’ Renard Mine. With a credible relaunch strategy and a more favourable diamond market, it will be interesting to monitor developments at Québec’s first diamond mine.
With the end of the pandemic now in sight, it is clear that Québec’s mines will have a key role to play in the economic recovery of many regions and of Québec as a whole.
“This is the end of a challenging year. Québec’s mining sector can be proud that it has weathered the storm without too much damage thanks to the commitment of its workers and the application of strict public health and control measures. The mining industry has been recognized as essential by the Québec government and has taken responsibility for conducting operations in a safe manner. We can be proud of the results.”
“Strong prices for many metals have helped maintain mining activities in Québec. However, it is important to reverse the decline in investment and exploration expenditure in order to maintain a prosperous and permanent mining industry in Québec.”
- Josée Méthot, President and CEO of the QMA
About the Québec Mining Association
The Québec Mining Association (QMA) was founded in 1936 and speaks proactively for mining companies involved in exploration, extraction and processing, mining contractors and junior mining companies, along with suppliers, institutions, non-profit organizations and other mining sector partners. It is proud of the 48,006 jobs and total expenditure of $9.9 billion generated by Québec's mining industry in 2018, based on the most recent data. The QMA’s mission is to promote, support and proactively develop a responsible, committed and innovative mining industry in Québec.