Mines more costly in Far North, finds report: Mining Association of Canada makes case for tax incentives to spur Northern mines.

AuthorMigneault, Jonathan
PositionMINING

It came as no surprise to the Mining Association of Canada (MAC) that it's more expensive to mine in the Far North than in the south, but thanks to a new report, the association has quantified that difference.

"In the case of base metals, or gold mines, the difference is really significant," said Pierre Gratton, MAC president and CEO.

In its report, called Levelling the Playing Field, the association found the capital costs for base metal mines are, on average, 2.5 times higher in the Far North.

The capital costs for gold mines were around double in the North, and the capital costs for diamond mines were 15 to 20 per cent higher.

MAC defined the Far North as the territories, and northern and remote regions of the provinces, including the Ring of Fire deposit in northwestern Ontario.

Gratton said most mines in the Far North need to have very high grades, and to last for many years, to be viable investments.

But to meet growing demand for materials in emerging economies like China and India, Canada will need to step up to the plate, or the demand will be met by another country, Gratton said.

And the most potential for new mines in Canada, he said, lies in the Far North.

"We are seeing our industry go increasingly north," Gratton said.

"Unless we change the current economic equation in the Far North, we're still going to go slowly, and only the highest quality and highest grade mines actually get built," he added.

Part of that economic equation includes government investments in infrastructure, such as recent powerline extensions in British Columbia, and the Ontario government's...

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