Business in the Canadian Context
ADMS1010 – Summer 2012 – Troy Young
Lecture 10 – Natural Resource Industry – July 12 2012
- 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
- 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,
- Computer/TV screens silicon, boron, lead, barium, strontium, phosphorus, indium
- Cosmetics and jewellery iron oxide, kaolin, zinc, titanium, dioxide, gold,
- 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,
- 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
- 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
- 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
- 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
- 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
- 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 (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
- 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
- Canada is the United States largest source for imported oil.
- Two types of oil reserves
- 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
- 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