According to the Mining.com, data released by Natural Resources Canada (NRCan) shows that the country’s mining investment will reach 13.5 billion Canadian dollars in 2022, a record high in 10 years, an increase of 14% from the previous year. Mining investment also showed significant growth in 2023, which is expected to increase by 21% to 16.4 billion Canadian dollars.
NRCan believes that mineral and metal prices reflect the balance or instability of market supply and demand and are also leading indicators of mining investment.
When market conditions are unfavorable or financing is limited, companies often choose to retain capital, NRCan said. Conversely, when demand and prices improve, companies tend to accelerate investment plans because it provides them with opportunities to accelerate cash flow and increase profits.
In 2012, Canadian mining investment reached 16.9 billion Canadian dollars, and declined year by year in the following five years. In 2017, it hit a ten-year low of 9 billion Canadian dollars. In the following two years, Canadian mining investment rebounded, but fell again in 2020 due to the impact of the epidemic. Since 2021, Canadian mining investment has returned to pre-pandemic levels.
The peak in 2012 was mainly driven by rapid growth in demand from emerging economies. Supply gradually caught up with demand, causing both metal prices and investment to fall. After 2016, mineral product prices increased, and mining investment also increased before 2019.
At the beginning of the epidemic in 2020, many metal prices fell rapidly because anti-epidemic measures restricted global consumption. However, as demand rebounded after the epidemic, mineral product prices rose rapidly, even exceeding pre-epidemic levels.
In early 2022, the Russia-Ukraine conflict caused the prices of several metals to reach record highs. Russia is an important producer of precious metals, base metals and industrial metals in the world, and has large trade exchanges with Europe and Asia. Supply chain disruptions, economic sanctions and retaliatory measures have driven up prices for several minerals, including palladium, nickel, aluminum and potassium.
NRCan believes that the clean energy transition will continue, driving up demand for key minerals, especially cobalt, graphite, lithium and nickel required for power batteries.
From a broader perspective, total investment in Canada's entire mining industry, including mining services and downstream metal processing industries, was C$17.7 billion, an increase of 15%.