Quebec miners must tackle infrastructure and more to thrive: Ernst & Young
(Montreal, 13 September 2011) Resource nationalism, skills shortage and infrastructure access represent the top challenges for mining companies around the world — and Quebec is no exception, Ernst & Young says.
“Overall, Plan Nord offers long-term vision and political support for mining companies operating in this still-tough economy,” says Zahid Fazal, Ernst & Young Partner and Plan Nord team leader. “But companies that strategically address these risks head on could gain a competitive edge.”
Fazal says while the industry has changed tremendously in the past year, zeroing in on the most relevant risks here is key. “Although resource nationalism leads the global list, infrastructure in particular is even more challenging in Northern Quebec, where it means everything from power and rail lines to high-speed internet and cell phone access. Significant and strategic investment in infrastructure, which is supported by Plan Nord, will be instrumental to the success of the plan, and the region.”
Daniel Roth, Ernst & Young’s Montreal-based Infrastructure Advisory Services leader, agrees. “Plan Nord has the potential to increase Quebec’s competitiveness on the global stage, and as with mining projects everywhere, having the right infrastructure in place is critical. Planning and financing this infrastructure will be a complex process, and requires industry collaboration with public sector agencies.”
Although a skills shortage continues to threaten the global and local industries, Fazal says Plan Nord addresses the challenge in a way that could bring new opportunity. “$80 million over five years in increased recruitment efforts, educational programs and training centres has been built into Plan Nord. This will help ease a potential skills shortage, which can decrease costs and increase productivity and growth over the long term.”
He points to maintaining a social licence to operate as a key threat for the Quebec industry. Ranked fourth on this year’s global list, the issue must remain on the radar, Fazal says, with Bill 14 proposing significant amendments impacting mining and exploration in the region.
According to Ernst & Young’s annual Business risks facing mining and metals 2011–2012, the top 10 global risks are (2010 ranking in parentheses):
- Resource nationalism (4)
- Skills shortage (2)
- Infrastructure access (6)
- Maintaining a social licence to operate (5)
- Capital project execution (new to the list in 2011)
- Price and currency volatility (9)
- Capital allocation (1)
- Cost management (3)
- Interruptions to supply (new to the list in 2011)
- Fraud and corruption (‘under the radar’ in 2010)
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