Glittery, shiny gold nugget stocks get the most media attention but Canadian investors like mining stocks more, and there’s a good reason behind it. Why else would Toronto become the global headquarters of the mining industry? In fact, many mining companies in the world have headquartered in Canada, with the 2017 Mining Association of Canada report revealing that global equity mining came in at 57 percent on the Toronto Stock Exchange (TSX), easily making it the backbone of its natural resource industry.
Disappointments
Unfortunately for the country, the Canadian mining industry projects did not make the Supercluster list. What’s more, a key piece of legislation known as Bill C-49 did not get approved in the spring of 2018. Add the heavily regulated and fiercely competitive transportation of minerals by rail and it’s sure to send the mining industry in an unprecedented spin. In fact, such an issue already occurred back in May this year, when a threatened strike rattled the industry. There’s also a tentative agreement that the union reached that follows not the government’s direction but that of the Supercluster initiative, meaning the mining industry can be shut down anytime by a rail strike, leaving the industry vulnerable to manipulation of the market. With the government‘s reluctance to step in, as it has in the recent past, the industry now has to come up with some solutions.
Hope comes from somewhere unexpected
Though mining has a major influence on the economy and a global presence for Canada, one of its biggest issues is its environmental impact. For example, mine tailings and waste can concentrate and leach toxic metals into the aquatic ecosystem, while acidic drainage can cause flora to die and become replaced with less desirable species.
Of course, Canada’s overall pollution has come down but tailing still has a 16 percent stake on the National Pollutant Release Inventory (NPRI). Several firms on the Clean Technologies sector who did get Supercluster money may have some solutions, with a developing synergy between clean technology and mining has formed, such as green products that use metals and minerals as building blocks.
A 2017 World Report stated that increasing energy storage technologies, wind and solar technology would require an increased demand for mining products. Clean energy technology reminded government officials that 14 of the 19 minerals and metal for solar PV panels lie within Canada. The approval of MAC’s Sustainable Mining makes it a workable proposition for all.
Back in 2018, a private company named Alliance Magnesium Inc. received money from the Canadian government of $30.9 million for its innovative technologies to build a plant. If this firm goes public on the TSX, it may prove to be a good buy, seeing that it has an innovative technology that recycles mining tailings.
Plan Nord
In August 2018 the government brought up Plan Nord once more. Introduced in 2011 by a region to spur mining development in the far North of Quebec, it resulted in new infrastructure investment. It developed an all-weather road for Stornoway Diamond Renard mine that started production in 2016. Again, stock performance becomes dependent on the decisions of politicians as to when mining will have a dramatic upswing again. Canada plans on investing more than $180 billion for 12 years in green infrastructure, public transit projects, social infrastructure, transportation and trade routes in northern communities.
Changing the north
The mining industry enters a transition time, with new fields, new companies and new technology all in the making, presently within an extremely competitive environment in Canada. Expect upheavals and undulations as new companies enter the market. Nevertheless, enjoy the more stable time now with these top-notch stocks because before long clean technologies adoptions will disrupt it all.
Garibaldi Resources (TSXV: GGI)
Concentrated on E&L Nickel Mountain
Found high-grade nickel along with six other metals
Metallis Resources (TSXV: MTS)
Concentrated on Kirkham property
Found 3 kilometer stretch of continuous gold-copper mineralization
Standard Lithium (TSXV: SLL)
Pilot Mining at Bristol Dry Lake, California
Pilot Mining at Smackover, Arkansas
Proof of Concept plant completed at Richmond, British Columbia, Canada
Due to a series of disappointments handed to the mining industry from the Canadian government, the mining industry has begun to shift gears and hook up with clean technology companies favored by government bodies.