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Mining in Canada’s North set to soar?

Employees of a Canadian mining company, drill for gold, copper and silver in August 2011 in northern Quebec. Poland's KGHM copper giant on Tuesday finalised a 2.9 billion Canadian dollar (2.2 billion euro, $2.9 billion) deal for Canada's Quadra Mining, KGHM said in a statement on its website. (AFP Photo/Jacques Lemieux)

Mining production in Canada's northern regions could nearly double by 2020, but only if key hurdles such as lack of infrastructure and a growing skills shortage can be resolved.

The Conference Board of Canada's Centre for the North predicts mining output for metallic and non-metallic minerals from northern regions will expand by 91 per cent from 2011 to 2020, a compound growth rate of 7.5 per cent.

Mining is a key driver for the region, the report released this week shows, which includes the country's northern territories as well as regions across seven provinces.

"All things being equal, the mining output in Canada's North will grow by 91 per cent from 2011 to 2020. That's all economics-speak, and that's great if it stood alone," said Anja Jeffrey, director of the centre, which released its report earlier this week.

"But economics never stands alone. The rest of the report is an analysis of the risk to that growth potential, the barriers as well as the opportunities."

Challenges for Canada's North

Inadequate or non-existent infrastructure is often the greatest deterrent to mining development in the North, while a major shortage of skilled labor and a clunky regulatory process are also key problems.

More discussion needs to be focused on environmental stewardship and respect for aboriginal rights in order for projects to be developed sustainably, says Jeffrey, noting clarity around mine closures is also critical for local communities.

In a separate release on Wednesday, Perrin Beatty, president and chief executive of the Canadian Chamber of Commerce said "one of the dark clouds on the horizon for the mining sector" is the growing skills crisis.

"The skills crisis is the most acute problem facing the mining industry over the short term. Depending on commodity prices, the mining industry will need between 75,000 and 141,000 workers between 2011 and 2021," the report said. "Fifty per cent to 80 per cent of these hires will be needed to replace retiring workers."

The mining industry employs more than 320,000 Canadians and core mining industries contributed $35.6 billion to Canada's gross domestic product in 2011, the business association said. In that same period, mining exports were $102 billion, over a fifth of the nation's total exports.