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Canada-China Mining Partnership: Opportunities and Challenges

Explore the potential of Canada-China mining partnership in meeting China's resource needs and the implications for Canada as a seller, site for investments, investor in Chinese capacity, and competitor.

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Canada-China Mining Partnership: Opportunities and Challenges

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  1. Canadian Mining and the China ChallengeFOCALCanadian Foundation for the AmericasFebruary 10, 2006

  2. Canada’s Minerals and MetalsValue • $41.8 billion – 4% of GDP • 369,000 direct jobs • $17 billion paid in wages • 14% of total Canadian exports • $333 million in R&D expenditures • 60% of rail freight revenue • 75% of port volumes • Leading destination for exploration activity ($1 billion)

  3. China’s Need for Resources • 1.3 billion people • Rapidly urbanizing • Rapidly modernizing • Not self-sufficient • Infrastructure gap • GDP growth: 9.5% (2004) and 9.9% (2005) • Mineral imports valued at US$151.8 billion • Mineral exports valued at US$89.4 billion

  4. China – Some Mining Facts(2004) • 42,589 mining licences • 49 to foreign companies • 12,793 exploration licences • 202 mineral deposits discovered • 51 Canadian mining companies with active interests

  5. China Resource Needs (1) • Iron Ore Production 385 Mt • Iron Ore Imports 208 Mt • Australia 38% • India 24% • Brazil 22% • Canada, Peru, South Africa • Steel Production 273 Mt

  6. China Resource Needs (2) • Copper Imports 2.88 Mt • Aluminum Imports 7.0 Mt • Alumina Imports 5.9 MT • Nickel Imports 65,700 tonnes • Both copper and aluminum production hindered by power shortages

  7. China Resource Needs (3) • …booming Chinese economy … good times roll for Latin America’s private mining sector (DJCS, Jan.27/06) • Baosteel and nickel producer Jinchuan pledge $950 M (US) to revive nickel plant in Philippines (Reuters, Jan.30/06) • Strong demand from China helped push copper prices to record levels last year (Globe and Mail, Jan.23/06) • China’s    ’grab’ for commodities to continue (NP, Jan.23/06)

  8. China Resource Needs (4) • China has become aggressive in establishing trade relations with resource-rich nations (NP, Jan.23/06) • Metal prices hit record highs as China announces strong economic growth (CP, Jan.25/06) • The base metal industry is enjoying great market fundamentals and should continue to do so for some time to come (Aaron Regent, CP, Jan.25/06)

  9. Where the Deals Are • Africa • Brazil • Canada (?) • Chile • Peru • Philippines

  10. Mineral Reserve Levels:Crisis Looms

  11. Implications for Canada • As Seller • As Site for Investments • As Investor in Chinese Capacity • As Competitor

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