5/5/2023 0 Comments Capital expensesMining projects are large-scale operations. This marked a notable trend reversal from the 13% decline that was recorded the previous year, when significant challenges were imposed by the COVID-19 pandemic and the capital-intensive construction phase at several gold projects was completed. ![]() In 2021, CAPEX in Canada’s mining industry increased by 14% to $10.8 billion. The surge in demand will continue to exercise upward pressure on critical mineral prices, while also requiring that mining companies make substantial investments in order to support the transition to clean energy.Ĭapital expenditures in the upstream mining industry At the same time, the World Bank Group concluded that the production of minerals such as graphite, lithium and cobalt could increase by nearly 500% by 2050 to meet the growing demand for clean energy technologies. According to the International Energy Agency, a mid-century zero-carbon world will require a six-fold increase in the production of critical minerals by 2030. Looking forward, demand for critical minerals is anticipated to grow rapidly in order to meet the needs of the clean energy transition. Trends in CAPEX for the minerals sector are largely determined by those of the upstream mining industry, which is by far the most capital-intensive industry within the minerals sector, as shown in Figure 1. Increased spending is likely also covering the higher costs of doing business and rising inflationary pressures. This bullish trend is concurrent with a sustained rise in commodity prices, which have been further propelled in the first half of 2022 by the Russian invasion of Ukraine. Spending intentions for 2022 point to further growth of CAPEX, with a 17% increase to $16.8 billion. During that year, mineral and metal prices substantially increased because of supply disruptions caused by the COVID-19 pandemic and an anticipated increase in demand due to the green energy transition. Spending breakdown by province and territoryĬAPEX in Canada’s minerals sector Footnote 2 increased sharply by 11% to $14.4 billion in 2021.Capital expenditures in the downstream mineral-processing industries.Capital expenditures in the metals, non-metals and coal mining subsectors.Capital expenditures in the upstream mining industry. ![]() Information on capital spending is one of the useful indicators of broad economic conditions that can provide an outlook on how management views future market demands in relation to their company’s present productive capacity.įind out about Canada’s minerals sector CAPEX and its spending intentions: Capital Expenditures Information BulletinĪ capital expenditure Footnote 1 (CAPEX) is money spent to buy, build or upgrade assets, such as mines, machinery and equipment, that will benefit a company over an extended period of time.
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