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York University
Administrative Studies
ADMS 1010

Business in the Canadian Context ADMS1010 – Summer 2012 – Troy Young Lecture 10 – Natural Resource Industry – July 12 2012 Mining - Mining is the extraction of valuable minerals from the earth. - Any non-renewable resource that needs to be extracted (like oil or petroleum) is a specialized version of mining. - The earliest mines were flint mines. Flint was a material used to create tools and weapons in prehistoric times. Importance of Mining - Precious metals like copper, silver and gold have been mined since ancient times. - The quest for precious metals helped the Roman Empire to expand. Most of the Western world has some sort of historical tie (traditions, laws, etc.) to the Romans. In a sense, mining helped drive this along. - In the Middle Ages, copper and iron were the most sought after metals. - The development of the mounted Knight and the nobility associated with knighthoods created an arm’s race; armour, shields weapons were all made of metal. In many cases an armoured knight would be carrying well over 100 pounds of refined metal. - Coinage was also made of metals. - Advances in agriculture were made with the introduction of metal tools. - More food available leads to a population explosion. - The technological advances of the industrial revolution were made possible through the use of metals. - Without mining, there would be no civilization. Mining Helps Build… - Batteries nickel, cadmium, lithium, cobalt - Circuitry gold, copper, aluminum, steel, lithium, titanium, silver, cobalt, tin, lead, zinc - Computer/TV screens silicon, boron, lead, barium, strontium, phosphorus, indium - Cosmetics and jewellery iron oxide, kaolin, zinc, titanium, dioxide, gold, diamonds, copper - Electricity coal, uranium - Eyeglasses limestone, feldspar, soda ash - Leather clothing borax, chromium, zirconium, aluminum, titanium oxide - Musical instruments copper, silver, steel, nickel, brass, cobalt, copper, iron, aluminum - Sports equipment graphite, aluminum, titanium, calcium carbonate, sulphur - Sun protection zinc oxide - Steel nickel, iron ore, steel-making coal, zinc for rust-proofing - Vehicles and tires steel, copper, zinc, barium, graphite, sulphur, bromine, iodine - Wind, solar, hybrids nickel, aluminum, lithium, gallium, indium, germanium - Mining Association of Canada Mining in Canada - Mining is one of the most important industries in Canada. - In 2009, the industry contributed $32 billion to Canada’s gross domestic product (GDP) and employed 306,000 workers in the sectors of mineral extraction, processing and manufacturing. - Mining accounts for 19% of Canada’s exports. - Canada is the world’s largest exporter of minerals and metals. - Mining plays an important role in the cultural fabric of Canada; many mines are in remote or rural locations. - According to Natural Resources Canada, in 2001 there were 185 towns in Canada reliant on mining in one form or another. - 88 of these communities derive over 50% of their local economy from mining. - In Ontario, mining is a major employer in Northern Ontario. It is also one of the most significant employers and revenue sources for First Nations people. - Towns like Timmins, Sault Ste. Marie and Sudbury were formed in part due to mining activity. - Hamilton is an important city in Ontario due to the steel mills present there. The refinement of metal is an important related industry to the extraction side of mining. Sudbury - Sudbury was founded as a small lumber town. - In 1883, while blasting to assist with the construction of the Canadian Pacific railway, a large deposit of copper-nickel ore was found in the region. - It quickly developed into one of the most important mining centres in the world, even attracting the attention of American inventor Thomas Edison. - Sudbury became the fastest growing city in Canada. - It recovered very quickly from the Great Depression and experience periods of great prosperity. - The need for nickel during World War II helped Sudbury continue to grow. - Most of its economic problems were due to the fact that it was growing too fast to meet the demands of the population. - The combination of stripping the landscape of timber (to assist with the smelting and refining process) along with the acid rain produced by the refining process turned Sudbury into a darkened wasteland. o Soil eroded without the trees. o New growth could not grow without soil, exposing the bedrock which became stained from the acid rain. o It looked so much like the moon, that there was a popular misconception that NASA was training its astronauts in the area for the moon missions (they were actually their studying rock formations) - Sudbury owes its importance as a mining community (the largest in Canada) to the Sudbury Basin. - The Sudbury Basin is the second largest meteorite impact crater on the planet. It is also one of the oldest, having occurred over 1.8 billion years ago. - The Basin is 62 km long, 30 km wide and 15 km deep. - Because of this, copper and nickel ores are found relatively close to the surface. - Sudbury is one of the world’s largest providers of copper and nickel on the planet. Nickel - Nickel is named after a German myth. He was a mischievous sprite that was known to cause trouble. The nickel ore was mixed heavily with the copper ore that the medieval miners were trying to extract. - The presence of the nickel in high quantities made it next to impossible to refine the copper. - Its uses would be discovered in 1751. - Nickel has many uses. We find it in many different products including stainless steel, rechargeable batteries, electric guitar strings, microphone capsules, alnico magnets, coinage, and special alloys. - Nickel was Canada’s most valuable mined substance. In 2000, the nickel business was worth $2.4 billion dollars, ahead of gold ($2 billion) Petroleum - Petroleum (crude oil) has been used by humans for thousands of years. But for most of this time its uses were relatively limited. - With the invention of kerosene in the 1850s (produced to be a cheap alternative to whale oil, which was the main oil used in oil lamps at that time) petroleum began to play a more important role. - The invention of the internal combustion engine sealed petroleum’s place as one of the world’s most valuable commodities. - The world’s first commercial oil well was sunk in Poland in 1853. - Canada’s first well was at Oil Springs, Ontario in 1858. This was the first oil well in North America. - By 1864, Oil Springs and Petrolia were the centre of major oil refineries. This wouldn’t last long though; by 1880 oil production in this part of Ontario was surpassed by oil production in other areas. - The Oil Museum of Canada can be found in Oil Springs, with a replica of the first oil well as well as production wells located where the original well was, making this one of the oldest oil producing fields in the world. - 90% of vehicular fuels are petroleum based. - The world uses 30 billion barrels (4.8 cubic kilometres!) of oil each year. - The three top oil producers in the world are Saudi Arabia, Russia and the United States. - The United States is also the world’s largest consumer (21% of total global production) and importer of petroleum. - Canada is the world’s 7 largest producer of oil. It is also the 7 largesth consumer of oil. - Most of the oil produced in Canada is exported, and most of that goes to the United States. - Canada is the United States largest source for imported oil. Oil Reserves - Two types of oil reserves o Conventional o Non-conventional rd - Canada has the world’s 3 largest deposit of proven oil reserves behind Saudi Arabia and Venezuela. o Like Venezuela, Canada’s reserves are considered mainly non- conventional, meaning that it is harder to access. Athabasca Oil Sands - Production at the Oil Sands began in 1967. - Due to the difficulty of extraction and a declining price for oil, development was slow until the 21 century. - The 3 mine began operating in 2003. - Today, 47% of all oil production in Canada comes from the Athabasca Oil Sands. - If production continues to grow, Canada should be the 4 largest producer of oil by 2020. - The oil reserves at Athabasca are considered to be unproven. - They are estimated to be between 178 billion barrels and 2 trillion barrels. o If the 2 trillion barrels estimate is correct, the Athabasca Oil Sands will hold more than 8 times the oil reserves of Saudi Arabia, or more than the rest of the world combined. Regional Economic Disparity - Economic activity in Canada is localized. o 40% of economic activity in Canada occurs in Ontario. o The majority of manufacturing occu
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