Mining’s transformational potential: New report highlights growing economic impact, importance, of mining to Ontario

After two years of uncertainty and lockdowns that resulted in the largest drop in global GDP in history, I think we could all use a little hope this year, yes? A report by EY, commissioned by the Ontario Mining Association (OMA) in partnership with Ontario’s Ministry of Northern Development, Mines, Natural Resources and Forestry (MNDMNRF), offers a great deal of hope.

The State of Ontario Mining Report employs EY’s proprietary economic contribution model to assess the current state and potential future economic contributions of OMA members’ mining operations. It is clear that mining is the core of the Ontario economy – creating safe and high paying jobs, contributing to regional communities, and acting as an innovation frontrunner by adopting new technologies to unlock our competitive advantage. Ontario mines are a reliable source of strategic minerals that provide society with everyday essentials and are critical to the low-carbon technologies necessary for a greener future. The report outlines the industry’s nimble response to the Covid-19 pandemic, which allowed us to continue producing minerals and protect jobs across our supply chain, while protecting the health and safety of workers and supporting communities. The report also includes an in-depth Critical Mineral Analysis, which suggests that our industry is poised to play a leadership role in our post-pandemic recovery efforts, helping to enable the transition to a low-carbon economy both at home and abroad.

There are 41 active mining operations in the province that cover a diverse base of minerals, including precious and base metals, and non-metallic minerals. In 2020, Ontario produced eight critical minerals, with several more projects in the pipeline. Mining operations in Ontario contributed an estimated annual total of $7.5 billion to Ontario’s GDP, $3.3 billion in wages and salaries, and sustain over 48,605 full-time equivalent jobs in the province via direct, indirect and induced channels.

Approximately 73% of Ontario mining companies’ GDP contributions stay inside the province. The market value of the minerals produced by major mines in Ontario was over $10.7 billion in 2020, which accounted for 24% of Canada’s total. In 2019, major mining companies’ direct full-time equivalent employment in the province totalled over 21,000, with over $1.9 billion paid in total worker compensation.

Total market value of minerals produced in Ontario is projected (based on production volume and commodity prices) to reach $13.7 billion in 2025. In that same year, it is estimated that Ontario’s mining industry will contribute $9.3 billion in GDP, $3.4 billion in wages and salaries, and sustain over 51,800 full-time equivalent jobs via direct, indirect and induced channels.

Much of this growth will be driven by demand for responsibly mined raw materials, which is set to soar as the world gears up for net zero. As the move toward cleaner technologies progresses, end-user sectors will need stable access to growing quantities of raw materials, including Ontario’s critical minerals, while also decarbonizing their own supply chains.

Critical minerals analysis

EY performed a thorough analysis for each of the critical minerals deemed strategic to generating investment, increasing the province’s competitiveness in global markets, and creating jobs and opportunities in the mining sector. Profiles were created to demonstrate each mineral’s value chain, production level in Ontario, global trade patterns, price and demand outlooks, and economic and strategic importance to the Ontario economy. A data-driven framework demonstrates the relative economic importance and supply risk of each mineral on Ontario’s proposed critical minerals list, which was released for public consultation in June 2021. Moreover, this framework can be used to identify additional minerals to be included on the list.

Ontario’s vast mineral reserves are only part of our success equation. Mining companies are evaluated on the basis of their contributions to a sustainable economy, environment, and local communities. An environmentally conscious and socially responsible mining sector is key to Ontario’s long-term economic growth and prosperity.

The EY report illustrates that, across the province, mining companies are leaders in sustainability and environmental protection in areas including energy conservation, carbon emissions reduction, and adoption of clean technologies. Over three-quarters of Ontario’s mining companies participate in a carbon pricing scheme that aims to lower GHG emissions and spurs innovation. The vast majority of senior mining companies – 82% – have established carbon emission reduction goals and 64% have energy management targets. The mining industry in Ontario has adopted advanced clean technologies at higher rates than comparable industries. As of 2019, mining companies have had noticeably higher rates of adoption for energy storage and energy-efficient transportation and have surpassed the provincial average for air, waste, and water treatment technologies. Over 66% of water used by major mining companies in 2019 was recycled.

Ontario’s mining companies contribute to regional communities by prioritizing local hiring and suppliers, supporting health and education initiatives, and engaging with Indigenous communities. Proportionally, the mining industry is the largest private sector employer of Indigenous Peoples, who represented an average of 9% of employees in Ontario’s mining companies in 2019. In the same year, Ontario miners sourced 44% of supplies, materials and services from local regions, creating an economic multiplier effect. During the Covid-19 pandemic, Ontario’s mines have provided supplies and support to local communities, businesses, and hospitals.

Current corporate governance practices are reshaping the industry. Mining companies are implementing equity, diversity, and inclusion targets, voluntarily reporting on ESG compliance, and consider ESG factors in future investment decisions. Ontario’s mining workforce includes varying levels of representation for historically underrepresented groups, such as women (13%), Indigenous Peoples (9%), and other visible minorities (6%). Further diversifying the workforce and attracting more young people presents a success-determining challenge for mining companies. Just 8% of the mining workforce is 24 years old or younger while 22% of the workforce is 55 or older.

Opportunity to change the world

These demographics present an opening for people who recognize the opportunities that mining has to offer. The average weekly wage in Ontario mining is 70% higher than the average industrial wage in the province, with mine workers and mining support workers averaging a weekly salary of $1,900. Between 2001 and 2019, earnings for mining and quarrying grew by 66% while earnings for mining support activities grew 80%. Jobs in our sector remained stable during the pandemic, with mining being declared essential and companies taking effective action to protect workers’ health and safety. Ontario is one of the safest mining jurisdictions in the world and mining is one of the safest industries in Ontario, achieving a 96% improvement in lost time injury frequency over 30 years. We anticipate that there will be sustained demand for safe and high-paying jobs in our sector, given the long-term impact of the decarbonization-driven super cycle.

Ontario mining companies are committed to innovation and welcome workers from other industries who have transferable skills. Tomorrow’s economy will be built on sustainable technologies, sourced from responsible producers, so working in the Ontario mining sector is an opportunity to effect meaningful change in the world. As stated by Rob McEwen, speaking on The Northern Miner Podcast – episode 271, “If you are looking for a sexy career, where you can travel the world, you can earn top dollars, produce materials that will help create a greener world…and if you are ambitious, you can run the whole show in your mid-30s, then the choice is easy – it’s mining.”

For people seeking opportunities and professional growth in a purpose-led industry, how hopeful is that?

Chris Hodgson is president of the Ontario Mining Association.

The full report is coming soon to oma.on.ca.