The mining industry in Canada has great potential. However, it is not performing as one would have expected because of the challenges it faces from time to time. The ‘rare earths’ in northern Quebec hasn’t yet been fully exploited so far. This undertaking would also require more investments in terms of cash and personnel.
Let’s, for instance, take a look at the activities of one leader in the mining sector. The CEO of Geomega Resources Inc (CVE:GMA) Kiril Mugerman wants to start in a new project in Montreal. This official seeks to set up a recycling plant that will majorly focus on the production of the rare earth oxides. They are such elements that formed part of the reasons tensions rose between China and the United States. This has been commonly referred to as the U.S.-China trade war.
The current state of affairs
The company has already started its operations. It hopes to succeed in its mining activities of the rare earths in northern Quebec. Reports indicate that the business channeled large sums of money to make the whole thing a success. However, the turn of events is proving something else. The company seems to have drifted from its initial game plan and is now into recycling activities.
The past decade hasn’t been very good for the Canadian rare earths sector. Initially, this area had more than a hundred explorers and whatever is being experienced at the moment is an imitation of where things used to be. Reports show that the number of companies still conducting their operations here is quite small. ]
However, there is a reason to smile in other segments. For instance, reports depict a remarkable performance in Canada’s mining industry.This was witnessed at the start of the year.The gold prices rose by a margin of 1% in Q1 2019.
There are also other reports indicating that Canada will be channeling resources into expanding production activities. Analysts reveal that capital expenditures are going up in the sector.This implies that there is renewed confidence in the segment among the investors which is encouraging.
Efforts to improve market conditions are ongoing and this segment will be seeking to make the most of that.
Asides from the remarkable performance in the gold segment, it has also been reported that some Canadian companies have staged remarkable business performance . Those companies have taken slots in the TOP 40 best performing companies globally. These include the Goldcorp,Agnico-Eagel Miones Group and others.
You need to understand that Crystal Lake Mining Corp (CVE:CLM) at some point used to be a top performer. However, things aren’t looking quite attractive as time progresses. That is because it has become rather difficult for Canadian companies to determine their destiny. This is the case because of the significant influence that China has on the global market. Sources indicate that China has about three-quarters in terms of the global market control and sadly there is nothing that can be done about it.
The rare earths segment is a major contributor to a wide range of items including wind turbines, washing machines, electric vehicles, and hard drives. Analysts say that the demand for this sector will witness significant growth with demand said to escalate by a significant margin.
China’s control problematic for some of the Canadian mining activities
However, it would not be wise to forget China’s control while making projections about the future. There are fears over China’s dominance of the supply chain. This implies that there are chances the country might end up manipulating the market for its good. As expected, this is a good enough reason for a large number of investors to quite.
Efforts are ongoing to improve matters. For instance, the Canadian government has recently been engaging in progressive discussions. It has been looking out for ways in which it will succeed in its goal of fostering the ailing sector in North America.
Mugerman’s remarks reflect the real situation in the entire mining industry in Canada. He says that Geomega Resources won’t be giving up on its goals and objectives. He reveals that the company will uphold its focus in the mining project. However, he is quick to admit that it is challenging for the company to thrive as much as investors would have wished.
The mining industry will only thrive is more is going to be done in terms of efforts and allocation of resources. Analysts say that the government needs to move in and help the sector to focus.