Weak global economy dampens Nunavut mining boom

Agnico-Eagle’s Meadowbank gold mine near Baker Lake is back on track, the company said last month. (FILE PHOTO)

The lacklustre global economy continues to make its presence felt in Canada’s territories.

The downturn is dampening — but not dousing — the mining boom under way in Canada’s North, says the winter 2013 Territorial Outlook from the Conference Board of Canada.

The Territorial Outlook, released March 18, looked at the economic and fiscal outlook for each of the three territories, including output by industry, labour market conditions, and the demographic make-up.

The territories are “not immune to the vulnerability of the global economy,” a news release about the outlook report said.

While new mine development and production will provide “a solid economic foundation” for Canada’s territories, base metal prices are only now firming up, after slipping in 2012.

And tight financial markets are making it more difficult for mining companies to raise capital, which is delaying or downsizing projects — as a recent Fraser Insitute survey and a new Natural Resources Canada survey on 2013 spending on mineral exploration in the territories points out.

Nunavut’s mining sector is experiencing both “accelerating growth and downside risks,” the release on the outlook report said.

Production at Agnico-Eagle’s Meadowbank gold mine is expected to rise over the next three years.

But the Mary River iron mine project was scaled back from a planned $4-billion mine complex to a much more modest $740-million project.

Even with the downgrade of the Mary River iron mine project, the Territorial Outlook report forecasts overall economic growth in Nunavut to be 3.4 per cent in 2013 and 8.8 per in 2014.

The Northwest Territories are expected to grow by 0.2 per cent in 2013, “which is nevertheless an improvement over declining real GDP in 2011 and 2012.”

Yukon’s real GDP is forecast to increase by a strong 6.3 per cent in 2013 as mineral production continues to climb and construction gets a lift from mineral development.

You can order the full territorial outlook here.