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Canadian Minerals and Metals. Zora Toor Tarlochan Chane (TC) Mel Chua Zhilicka Sehgal. Industry Overview. Canadian Minerals and Metals. Minerals and Metals Industry.
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Canadian Minerals and Metals • ZoraToor • TarlochanChane (TC) • Mel Chua • ZhilickaSehgal
Industry Overview Canadian Minerals and Metals
Minerals and Metals Industry • Comprised of mineral exploration, mining and quarry industries, primary metals, fabricated metal products and nonmetallic mineral products industries • Includes Metal, nonmetal and coal mines, stone quarries, sand gravel pits, oil sands operations and manufacturing capacity (nonferrous metal smelters, refineries and steel mills)
Industry Characteristics • Extremely Capital Intensive • Exploration cost • Operation cost • Equipment cost • Recovery cost • Sensitive to changes in business cycle • Large, medium and small size companies
Industry Characteristics (2) • Very sensitive to fluctuations in exchange rates and commodity prices • Hedge: • Less speculative • Reduced exposure and uncertainty • Smooth cash flows • No Hedge: • Volatile cash flow • Tax • Self-correction in long run
Industry Characteristics (3) • Environmental consideration: • Noise pollution • Acid mine drainage • Changes in local water balance • Soil erosion • Disruption of animal life • Stringent environmental regulations
The Canadian Mining Industry • A Key Feature of Canada’s Economic Landscape • Canada is a leading producer and exporter of minerals and mineral-based products. • Canada is one of the largest mining nations in the world, producing more than 60 minerals and metals. • The industry employs some 388,000 Canadians • Contributed $40 billion to Canada’s GDP in 2008 (Statistics Canada, 2009)
Capped Diversified Metals and Mining Index vs TSE Market Index (1yr)
Capped Diversified Metals and Mining Index vs TSE Market Index (5yr)
Uranium • About Uranium • Process • World Production • Uranium Mining in Canada • Price • Supply and Demand
About Uranium • Two uses for Uranium: • 1) Military • 2) Civilian • Nuclear power is a clean source of electricity, and generation capacity is growing.
About Uranium (2) • Major Stages in Production of Nuclear Fuel: • 1) Uranium Exploration • 2) Mining and Milling • 3) Refining and Conversion • 4) Enrichment and Fuel Fabrication
World Production Source: Cameco, 2009
Uranium in Canada • Canada has three operating uranium mines and mill sites, one mine site, and one new uranium mine site under construction (all in Northern Saskatchewan). • Nuclear power provides approximately 14.7% of Canada’s electricity. • Over 80% of the uranium shipped from Saskatchewan mines goes to non-Canadian markets for the generation of electricity.
Uranium in Canada (2) • Canada is among the top producers of uranium in the world. • The uranium mining and milling industry is the only mining industry in Canada licensed and regulated by the federal government. • The Canadian Nuclear Safety Commission (CNSC) is the federal regulator for the uranium industry.
Future Uranium Demand (2) • China is expected to lead the world in the construction of nuclear power plants as electricity demand continues its rapid growth. • China is currently operating 11 reactors, building 20 and planning more. We expect it to have a net increase of 42 reactors by 2019. • India is also planning more reactors.
Zinc • About Zinc • World Zinc Production • Industrial Consumption
About Zinc • Zinc is most commonly used for galvanizing steel. • Other applications include: • Construction • Transport • Consumer goods and electrical appliances • General engineering
Zinc World Production Source: International Zinc Association
Copper Overview • About Copper • Copper Supply and Demand • World Copper Usage • Refined Copper Usage by Region • Prospects and Price
About Copper • Efficient conductor of electricity and heat • Flexible, strong, durable and resistant to corrosion
About Copper (2) • Conducting electricity and heat • Communications • Transporting water and gas • Roofing, gutters and downspouts • Protecting plants and crops, and as a feed supplement • Making statues and other forms of art.
Copper Supply and Demand • Demand • Growing demand because of: • Widespread use • Industrializing countries such as China and India • Supply • Copper supply comes from two sources: • Primary production (88%) ~ mine from the ground • Secondary supply (12%) ~ recycled copper scrap
Major International Trade Flows of Copper Ores and Concentrates
Leading Exporters and Importers of Copper Ores and Concentrates, 2008
Copper Prospects • Weak world economy due to financial crisis is expected to an overall global decrease in usage of 0.7% • Surging industrial output in China • China is the world’s largest consumer of industrial metals • Decline of 17% in the 3 major markets is partly offset by growth in apparent usage in China of 26% • Prices expected to stabilize by 2011 (ICSG)
Gold Overview • About Gold • Demand • Prices • Gold and the US Dollar
About Gold • Gold is used for: • Jewellery • Investment • Medium of exchange • Industrial
Coal Overview • About Coal • Energy Demand • Types of Coal • World Coal Consumption • Annual Coal Prices
Energy Demand • Primary energy demand has increased 50% since 1980 • Growth is forecast to continue at annual rate of 1.6% between 2004-2030 • 70% of this growth will come for developing countries • Fossil fuels projected to provide 80% of total energy demand into the future • Coal will see the largest demand increase in absolute terms (International Energy Agency)
About Coal • Coal is the world’s most abundant and widely distributed fossil fuel. • Coal is carbon-rich mineral deposit formed as organic plant matter decayed. • Coal generates the largest single source of electricity in the world. • Electricity generation, steel and cement manufacturing and industrial process heating.
