What challenges and opportunities are ahead for mining operations in Canada?
What challenges and opportunities are ahead for mining operations in Canada?
Canadian mining companies are facing an uncertain landscape, from navigating the impact of tariffs to managing rising costs. However, there are also new opportunities emerging in the industry. Addressing these challenges and capitalizing on these opportunities is crucial to navigate the current landscape and position your company for future growth.
The Canadian mining industry is facing an uncertain landscape — from navigating the impact of tariffs to managing rising costs. While the challenges fueled by broader economic uncertainty are the focus of most industry conversations, it is important to consider the emerging opportunities ahead as well.
Let’s discuss several key issues that mining explorers, developers, and operators are facing today and look at strategies to help you navigate these challenges and position your organization to thrive in the years ahead.
What challenges are mining companies facing?
Navigating the impact of tariffs
The evolving global tariff situation is causing uncertainty for mining businesses in Canada — particularly for those importing equipment and chemicals from the U.S. and China. This could lead to increased costs and difficulty absorbing these costs due to fixed commodity prices and has already fueled negative investor sentiment.
Capital availability
Economic uncertainty affects your mining company’s ability to raise funds for new projects, making the availability of capital a top risk. This is especially challenging for junior mining companies struggling to secure investments in order to advance their projects.
Cost management
Poor cash flow management causes you to rely heavily on borrowing or credit lines to service debts and cover operating expenses. However, acquiring high levels of debt leads to substantive interest payments that strain cash flow and impact your company’s financial health even further.
Supply chain uncertainty
It is crucial to review your supply chains to understand where you are importing from — and explore alternative markets to mitigate tariff impacts. A trade chain review can create a clear picture of your relationships and identify risk areas.
Labour challenges
Finding skilled labour willing to work in remote and harsh environments remains a key issue for mining companies. A lack of skilled labour can impact the operational efficiency of your business and its ability to scale operations.
What opportunities are ahead?
Commodity price increases
Commodity prices may increase if larger companies in tariff-affected markets push prices up. This could benefit Canadian mining companies operating outside these markets.
Recognizing this opportunity is the first step, but being prepared to take advantage, is crucial. Develop scenario plans with your leadership team to think through what commodity price increases could mean for your organization and what your business can do now to prepare to seize this opportunity.
Leveraging existing supply chain data
The threat of tariffs may cause businesses in a variety of sectors to look to other markets for certain products. Your mining company can use its existing supply chain data, gathered for Bill S-211 reporting, to better understand its trade chain and find ways to mitigate risk.
Hiring opportunities
Mining is a historically difficult sector to hire for. Potential layoffs in other sectors due to tariffs could create new hiring opportunities for mining companies, allowing you to attract skilled labour.
Consider your hiring strategy now and build plans for how you can take advantage of potential hiring opportunities. Individuals who may not have considered working in the mining industry could be more open to the idea as economic uncertainty jeopardizes their jobs.
Long-term industry resilience
Despite current uncertainties, the mining industry has historically weathered various challenges. Your mining company can adapt and find new ways to grow — however, it requires careful strategic planning and a strong leadership team.
Public Companies
Build your strategy for what comes next
Mining companies in Canada face significant challenges from tariffs, cost management, supply chain uncertainties, capital availability, and labour issues. However, there are opportunities in commodity price increases, exploring new markets, leveraging supply chain data, hiring opportunities, and the long-term resilience of the industry.
Your mining company can navigate the current landscape and position itself for future growth by addressing these challenges and capitalizing on opportunities. Contact a member of MNP’s Public Companies team to learn more. Our advisors have the expertise to help you plan for the next chapter of your organization — whether you’re thinking about expansion or looking to build resilience.
Contact Us
Brock Stroud CPA, CA
Partner, Public Companies
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