Canadian mineral output dogged by low prices

In 1997, the overall value of mineral production in Canada grew just 0.3% over the previous year, to $49.8 billion, according to figures released by Natural Resources Canada.

Significant price declines for several metals and fuel commodities were cited as the major contributors to the low growth rate.

Gains of about $150 million in both the non-metals and structural materials groups offset a $270-million decline in metal production. As a result, the total value of non-fuel mineral production increased by only 0.1%, roughly holding steady at the 1996 level of $17.1 billion. Following an impressive increase in 1996, the value of production in the fuels group increased by 0.4%, to $32.7 billion.

Canada’s coal production continued its record-breaking climb, reaching a level of 78.5 million tonnes in 1997. This surpassed previous highs reached successively in 1994, 1995 and 1996 (72.8 million, 74.9 million and 75.9 million tonnes, respectively). However, this noteworthy increase in volume was offset by price declines, such that the value of coal production remained virtually stable at $1.9 billion.

The fuel minerals accounted for 65.6% of the total value of Canada’s mineral production in both 1996 and 1997. Alberta accounted for most of the mineral fuels output, producing 79.1% of the total, followed by Saskatchewan with 10.3% and British Columbia with 8.1%. The other provinces and territories produced the remaining 2.5%.

Based on value of output, the top non-fuel commodities in 1997 were: gold, $2.5 billion; copper, $2.1 billion; zinc, $1.9 billion; nickel, $1.8 billion; potash, $1.5 billion; and iron ore, $1.4 billion.

As a result of sharply declining prices, the value of gold production fell by $300 million in 1997, despite a 2.7% increase in production, to 169.05 tonnes. The amount of copper produced declined by 0.9% to 646,500 tonnes, while the value of that production rose 0.3%. The amount of zinc produced dropped 12.5%, to slightly more than 1 million tonnes, but higher prices enabled the value of zinc production to reach record heights. Although nickel production fell by just 1%, to 180,000 tonnes, the value of that production plummeted 7.5%, as a result of lower prices. Meanwhile, the value of iron ore production rose by 8.3% as production volumes increased by roughly the same amount, to 37.28 million tonnes.

The value of output of the non-metals group, which includes minerals such as asbestos, potash, salt, peat and sulphur, grew by 5.2%, to $2.9 billion in 1997. The tonnage of potash produced rose by a whopping 14.5%, bringing in an extra $200 million, compared with 1996 figures. And the value of production of structural materials, including clay products, sand, gravel, stone, cement and lime, increased by 5.8%, to approach the $2.8 billion mark.

As in 1996, non-fuel minerals accounted for 34.4% of the total value of Canada’s mineral production, down substantially from the 40.6% registered in 1995. Ontario contributed the largest share of the non-fuel mineral output, accounting for 31.8% of the total value, followed by Quebec with 19.3%, Saskatchewan with 11.9%, British Columbia with 11.5%, Manitoba with 6%, Newfoundland, with 5.7%, and New Brunswick with 5.4%. The rest of the country accounted for the remaining 8.4%.