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The Economy 2002 - Newfoundland and Labrador

The mining industry,  particularly iron ore, was adversely impacted by  the global  economic  slowdown in 2001
	Credit: Department of Mines and Energy Gold mining at Hammerdown

The mining industry was impacted significantly by the global economic downturn in 2001. The value of mineral shipments was about $815 million, down by about 16% from 2000, and employment declined by 5.5% to about 2,600.    Outlook For 2002 The value of mineral shipments is expected to decline marginally to $790 million due to weak markets. Negotiations toward a Voisey’s Bay agreement will continue.  Investment expenditures of $34 million are expected in 2002. Exploration expenditures are expected to be moderate due to reduced commodity prices and cash flows.   Iron Ore and Gold Iron ore, which accounts for about 93% of the value of the mining industry, was down by almost 18% in terms of volume and 16.3% in terms of value. The bulk of the decline occurred in the second half of the year, a trend that was consistent with weaker markets. Motor vehicle production in Canada, for example, was down by 9% from 2000.

Weak markets in 2001 also contributed to a decision by the Iron Ore Company of Canada (IOCC) at Labrador City to defer the balance of its multi-year $650 million capital investment program initially scheduled for completion in 2003. Gold production, the second largest mineral mined in terms of value, fell by 11% in 2001 and the value of production declined by 8.7% due to lower prices. The closure of the Nugget Pond mine, due to lower ore grade and reduced reserves, was a major contributing factor behind these declines.  Mineral Exploration Exploration expenditures in 2001 totalled $18.2 million, down from $23 million in 2000. During 2001, 15,663 claims were staked compared to 12,969 in 2000. This increase is the result of more exploration for nickel, platinum-pallidum and iron ore in Labrador, gold in central Newfoundland, and base metals in eastern and central Newfoundland.  The majority of current exploration programs are being undertaken by junior exploration companies, many of which are locally based. In addition, several major mining companies, such as Falconbridge Limited, Noranda Inc., Barrick Gold Corporation, and Hudson Bay Exploration and Development Company Ltd. were active during 2001.

The Economy 2002 - Newfoundland and Labrador

Mining: top  |  page 2

New Operations The mining industry continues to see new operations come on stream. Hammerdown (Gold) This mine, owned and operated by Richmont Mines, began commercial production in July 2001. Ore from the Hammerdown mine is processed at the Nugget Pond mill on the Baie Verte Peninsula. At full production, Hammerdown is expected to employ 80 people and operate for four years. Argentia (Stone Plant) Epoch Rock Inc. has operated a state-of-the-art stone processing facility since November 2001. The plant produces high quality granite slabs for export to the United States for manufacturing of various products including counter-tops and tiles. The operation currently employs 30 people, and is expected to employ up to 60 people at peak production. Hopedale (Stone Plant) The Labrador Inuit Development Corporation is scheduled to begin operating an anorthosite processing plant in the summer of 2002. The product will be exported to Europe for the production of headstones and furniture. The plant will employ approximately 20 people at peak production.  Duck Pond (Copper-Zinc) In late 2001, Aur Resources Inc. of Toronto, entered into an agreement to purchase this site from Thundermin Resources Inc. and Queenston Mining Inc. The project’s Environmental Impact Statement was approved in January 2002, and the owners are proceeding with development subject to the submission of an Environmental Protection Plan. Construction is slated to begin in 2002, with first production scheduled for 2004. This project is expected to employ up to 165 people at peak production. Voisey’s Bay Negotiations between the province and Inco on the development of the Voisey’s Bay nickel, copper and cobalt deposit are ongoing. The project, as currently envisaged, would include an open pit and underground mining operation in Labrador, and a processing facility at Argentia. Inco intends to build a pilot hydrometallurgical facility that will be followed by a commercial facility.

Iron Ore Shipments  Decreased in 2001  Source: Department of Mines and Energy   Related talks with aboriginal groups are also continuing. The provincial and federal governments are negotiating the Voisey’s Bay Chapters in the respective Innu and Inuit land claims agreements as well as an Environmental Management Agreement. Inco is negotiating Impact and Benefits Agreements with the Labrador Inuit Association and Innu Nation.   Training the Mining Employee of the Future: A Joint Government-Industry Initiative Up to 50% of the Iron Ore Company of Canada’s (IOCC) workforce are eligible for retirement by 2004. In addressing this issue, IOCC is taking a pro-active approach recruiting and training new workers to fill these vacant positions. In partnership with the College of the North Atlantic and its member unions, the company began a new apprentice training program in 1999 which combines in-class training with on the job experience. This program, named Mining and Mineral Processing Technology, is seen as an innovative and meaningful way to prepare for demographic change and to train the mining employee of the future. The first class of students started in January 2001 and the second class began in September 2001. Each class starts with 120 students

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This information was current as of March 11, 2002.
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