The mining industry is a significant
contributor to the provincial economy, accounting for about 3.0% of
GDP and 1.4% of employment. The value of mineral shipments is
expected to be $676 million in 2004, representing a 12.4% decrease
over last year. This is a substantial downward revision from March
when shipment value was expected to increase by 6.9%. Labour
disputes at both the Iron Ore Company of Canada (IOC) and Wabush
Mines were responsible for the revision. |
Iron Ore |
| Iron ore comprises more than 90% of
the value of total mineral shipments and is currently the main
driver of industry performance. This year was marked by lengthy
labour disputes at both Labrador iron ore mines. The United
Steelworkers union and IOC ended an almost three month strike at the
Labrador City mine on September 28, 2004 by reaching an agreement
that will be in place until February 28, 2007. Workers at the Wabush
mine ended a more than three month strike on October 10, 2004, when
they voted to accept a five year contract. |
| Value of Mineral Shipments
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f: forecast
Department of Natural Resources; Economic Research and Analysis
Division, Department of Finance |
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With the labour disputes ended, production has resumed at both mines and
it is hoped that some of the lost production can be made up during the
remainder of the year.
Nevertheless, the disputes will have a substantial impact on mineral
output this year. IOC is expected to ship 11.2 million tonnes of iron
ore products, a decline of 25% from 14.9 million tonnes in 2003. Wabush
Mines is forecast to ship 4.1 million tonnes of concentrate, down 18%
from 5.0 million tonnes in 2003. |
Exploration |
| Mineral exploration expenditures in 2004
are expected to be $31.0 million, an increase of over 34% from $23.1
million in 2003. This year mineral exploration has been focussing on
gold prospects in central Newfoundland; mineral exploration for
additional nickel-copper-cobalt at Voisey’s Bay; copper-zinc at Duck
Pond, southeast of Buchans; and iron ore in western Labrador. |
Voisey’s Bay |
| Development of the Voisey’s Bay nickel
project is currently on schedule. The project is expected to generate
500 person years of employment this year, versus 320 person years in
2003. Employment at the end of August stood at 1,949 with 1,582 employed
in the province. Project expenditures for 2004 are expected to be $449
million with the majority of expenditures related to continued
construction of the mine and mill in Labrador and the hydromet
demonstration facility at Argentia. Construction is also expected to be
completed on the Inco Innovation Centre at Memorial University. In
addition, the company has set aside $20 million for an advanced
exploration program, $8.4 million of which will be spent by the end of
2004 with the remainder to be spent over the next two years. First
production from the mine could be as early as 2005. |
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