2012 saw economic uncertainty around the world exacerbated by growing financial troubles in Europe and deliberate slowing of China’s growth. This uncertainty was reflected in the mining industry with resulting downward trends for most mineral prices and great difficulty in securing funds for exploration, mine development and expansions, which led to a concerning and increasing number of project postponements and cancellations. The overall downward trend in the mining industry and investment has not been aided by an increasing amount of resource nationalism around the world.

Unfortunately, 2013 looks like being little better, although there could be signs of more certainty for the industry by the end of the year. The new year will be pretty much the same as 2012 with minimizing risk again to the fore for investors, meaning further difficult times for mining companies, particularly juniors, needing funds to advance their exploration, mine development or mine expansion projects. In most cases this will mean looking outside the square at innovative fund raising methods.

While these sentiments are of a general nature and intended to reflect the overall direction of the mining industry, there are some countries and regions that will do better than others in 2013, primarily due to the relative lack of resource nationalism and having proactive government and industry support as well as being rich in the resources that are heavily in demand and boasting strong existing infrastructure.

Having spent a few weeks in Ontario, Canada, during 2012, I believe Canada is one country where the industry is well placed to weather the uncertainty. The global financial crisis of later 2008/2009 hit Canada quite hard whereas Australia’s mining industry enabled it to get through fairly well unscathed. This time it is the other way around with Canada obviously having learnt some lessons from the GFC and Australia going down the path of increased taxes and fewer incentives with resulting troubled times for mining companies.

At provincial and national level, governments in Canada are doing what they can to promote growth in mining by cutting red tape and adopting positive tax policies. Geologically Canada has vast resources with much of the large wilderness areas in the north largely unexplored and exploration efforts being widely supported by the governments as well as by the expertise provided by mining industry organizations and educational establishments. It also boasts large reserves of minerals that are very much in demand and that appear to have very bright futures, including potash, diamonds, uranium, copper-gold and lithium. Canada also boasts the world’s most mining friendly stock exchange with the TSX showing its strength, particularly with capital raising.

There are some infrastructure issues but, unlike other parts of the world, these are being tackled with a united approach involving mining companies, mining contractors, communities, and local, provincial and national governments. Concerns expressed by local, provincial and national bodies about the exploration and mining processes are also being tackled in a co-ordinated manner with the exciting Ring of Fire exploration region in Northern Ontario being a perfect example owing to the proactive and unified approach being taken by the provincial government in conjunction with communities.

Chile in South America and parts of western and central Africa are also looking promising for mining in 2013 while in the Asia Pacific resource nationalism and political interference seem set to continue into 2013, to the detriment of the mining industry. There are some bright spots, including New Zealand, where the government seems to be making the right noises, some South Pacific island nations, Malaysia where there are positive developments, Cambodia, South Korea, Myanmar and to some extent Papua New Guinea, where there have been some disturbing recent resource nationalism influences. In Central Asia the future for the Kyrgyz Republic looks a little brighter since the 2012 elections while Kazakhstan appears to be losing some of its appeal. Indonesia and the Philippines still have plenty of potential, but this has been stated for many years and, unfortunately, 2013 appears to be little better than previous years for both nations.

It looks like being a difficult 12 months for investors and the mining industry in China owing to increasing costs, in Mongolia where political forces are having a detrimental impact on investment and Australia owing to global economic trends along with increased government interference and lack of incentives.

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Sylwia Pryzbyla, Editor

Sylwia Pryzbyla
Editor, ASIA Miner and Australian Editor, E&MJ
[email protected]

Sylwia Pryzbyla has more than two decades of experience in media and publishing industries.