The Conversation (0)
Quebec has released a revised, more modest version of Plan Nord, a mining development plan aimed at attracting investment to its resource-rich northern region. It will see the province invest about $1.3 billion in infrastructure and mining projects in the area over the next five years.
Flag of Quebec. Source: Wikimedia Commons.
Quebec just released a revised, more modest version of Plan Nord, a mining development plan aimed at attracting investment to its resource-rich northern region.
The plan, which applies to 1.2 million square kilometers of land, will see the province invest about $1.3 billion in infrastructure and mining projects in the area over the next five years. The hope is for that investment to garner $22 billion in private sector investments.
Another contributor to the plan is Hydro-Quebec, which will invest $20 billion in the plan by 2035.
The far north regions of Quebec contain deposits of iron ore, copper, gold, nickel, cobalt, uranium, zinc and other minerals, and while the province is one of Canada’s biggest iron ore producers, projects outside of the iron space will get priority.
Quebec Premier Philippe Couillard said the plan will create up to 10,000 jobs during the construction phase and may generate about $50 billion in investments by 2035. “By adding the measures funded entirely by the various departments and agencies and their partners, the interventions carried out on the territory of the Plan Nord will total nearly $2 billion over 2015-2020. To these sums, will add substantial investment from the private sector. Federal contributions will enhance the envelopes come,” he said in a government press release.
Couillard added, “[b]y raising the Plan Nord, the government is taking a strategic step in the continuing process initiated in 2011 to ensure harmonious and sustainable development of northern Quebec. With an updated version, our government will be able to achieve the goals it has set to showcase the North’s economic potential for the benefit of all of Quebec, to ensure the betterment being of local and indigenous people and to protect the environment and conserve biodiversity.”
Second time’s the charm?
This is the Quebec government’s second attempt at Plan Nord. Former premier Jean Charest’s first attempt to introduce the idea in 2011 was forced back to the drawing board when it was criticized by Parti Quebecois, the official opposition, environmentalists and First Nations groups. This newer version of the plan takes a more inclusive approach to the decision-making process.
“The Plan Nord can not exist outside of a close partnership with the communities that inhabit the territory and respect of development priorities that they are given. Continued dialogue with partners in the northern territories demonstrates the commitment of our government to maintain and strengthen the special relationship and dynamic it has established with the community,” Couillard said.
Who benefits?
As mentioned, while the Quebec government has hopes for a recovery in the iron ore market, Plan Nord will prioritize companies not focused on that metal. There’s been no announcement of exactly which companies will receive funding, but the province said money will be directed at 17 mining projects.
Quebec is home to a slew of mining companies, and it’s tough to speculate which will benefit. A few in the news lately include Focus Graphite (TSXV:FMS,OTCQX:FCSMF), which is the sole owner of the Lac Knife graphite deposit. Focus announced Thursday that it has launched a feasibility study for construction of a transformation plant.
There is also Richmont Mines (TSX:RIC,NYSEMKT:RIC), which has a couple of operating gold mines and multiple exploration projects, and Balmoral Resources (TSX:BAR), which is focused on gold and nickel-copper-PGM discoveries and is currently working on its Detour Trend project.
It’s also worth noting that the construction of a railway that would run south from Schefferville to the port city of Sept-Îles on the Gulf of St. Lawrence may be a component of the plan. In October 2014, Champion Iron (TSX:CIA,ASX:CIA) formed a partnership with the government of Quebec and Adriana Resources (TSXV:ADI) to advance the Labrador Trough rail line. The partnership, which has been named La Société ferroviaire du Nord québécois, société en commandite, was assigned the responsibility of managing the implementation of a feasibility study for the railway. At the time, the Quebec government planned to set aside $20 million from its Plan Nord fund to contribute to the study; however, no further news has been announced in regards to its progress.
Finally, there have been talks that Gaz Metro will receive a $50-million investment to expand its liquefied natural gas plant in Montreal. That would assist in supplying mining projects in the northern regions.
Of course, Plan Nord is still in early stages, so which, if any, of those projects it ultimately benefits remains to be seen. However, if everything goes according to the government’s plan, it will likely mean big things for mining in the province.
Securities Disclosure: I, Kristen Moran, hold no direct investment interest in any company mentioned in this article.