economic impact analysis of the saskatchewan mining supply...
TRANSCRIPT
April 4th, 2017
Saskatchewan
Pam Schwann, President, SMA
Eric Anderson
Executive Director, SIMSA
Economic Impact Analysis of the Saskatchewan Mining
Supply Chain
SASKATCHEWAN MINING ASSOCIATION
• Voice of the Saskatchewan mining industry.
• Over 40 member companies that are producing, developing or exploring for minerals in Saskatchewan
o PotashCorp, Mosaic, Agrium, Cameco, AREVA, Westmoreland Coal, Silver Standard Resources, HudBayMinerals, BHP Billiton, K+S Potash Canada Inc., Denison, Rio Tinto, Vale, Shore Gold Inc. Western Potash, and dozens of exploration companies.
2016 PUBLIC PERCEPTION SURVEY
Survey says…
• 97% think mining Industry is important
• 89% supportive of mining industry
• 85% favorable view of mining companies
• 87% confident mining will be important to SK future
• 75% confident in the regulatory system
• 79% view mining as positive career choice
• 65% believe mining industry is supportive of
reducing GHG
SASKATCHEWAN IS A CANADIAN &
GLOBAL LEADER IN MINING
#1Canadian Mineral
Investment Attraction
#1 Global
#1 Potash
Producer
Global
(30%)
#2 Uranium Producer
Global
(22%)
#4
Value of Mineral Product $5.5B
(drop)
#1 Industrial Employer
of Indigenous
people
#4
Canadian Expln $193
M
LeadingClient of Rail and Vessel Transport
MINING: PILLAR OF LOCAL &
PROVINCIAL ECONOMIES
• >25 producing mine facilities stretch across fabric of Saskatchewan
• Employment and business opportunities
• Over 30,500 direct and indirect jobs
• Over $2.5 billion annually on wages, goods, services
• Over $1.5 Billion in royalties and taxes.
• Minerals sector accounts for > 6% of provincial GDP
What is the economic contribution of the
Mining Sector – producers + suppliers?
• Mining & related suppliers not
captured by StatsCan
• Mining, quarrying, and oil and
gas extraction together
• Manufacturing; finance;
transportation; professional,
scientific and technical
services; construction; all
separate
• “Tip of the Iceberg”
employment & GDP;
interconnections
suppliers
mining companies
What is the economic contribution of the
Mining Sector – producers + suppliers?• Diverse services & geography
• Tailored & responsive
• Survey (Praxis) in Nov 2015 –
Feb 2016
• Operational & New Spend;
% SK Suppliers; % Aboriginal
spend
• Response 7/9 mining
companies representing 90%
spend; 196/591 suppliers –
(baseline)
• 2014 - 2019
Northern Mining Supply Chain 1991-2015
•$6.7 B paid in northern wages and northern goods and services since 1991
•$950 M in 2015 for goods and services-- $388 M to northern companies & JV (41% of total purchases)
• $268 M million in wages in 2015; $106.5 earned by northern employees (40% total wages)
Northern Mining Supply Categories – 2015
• $388 M in goods and
services supplied by
northern businesses &
JV (41% of total).
• 19.5% of all goods &
49% of all services
supplied by northern
companies& JV
Total Operating & Capital Spend 2014 – 2019
0 500 1000 1500 2000
Fuel
Chemicals
Logistics
Consulting/Prof services
Construction
Mining/Milling Consumables
Stationary Equipment
Mobile Equipment
Utilities
Total Operating and Capital
2019
2018
2017
2016
2015
2014
Operational Spend by Category 2014 – 2019
0 500 1000 1500
Fuel
Chemicals
Logistics
Consulting/Prof services
Construction
Mining/Milling Consumables
Stationary Equipment
Mobile Equipment
Utilities
Total Operations
2019
2018
2017
2016
2015
2014
Capital Investment by Category 2014 – 2019
0 200 400 600 800
Fuel
Chemicals
Logistics
Consulting/Prof services
Construction
Mining/Milling Consumables
Stationary Equipment
Mobile Equipment
Utilities
Total Investment
2019
2018
2017
2016
2015
2014
Mining Supply Chain – Aboriginal businesses
• Mine operations and new capital mine
projects – over $350M per year for the
survey period.
• Ongoing operations anticipated to grow
from $283M in 2015 to $295 M in 2019,
(28.6%) of total operating spend.
• New capital projects will increase from
7.5% to >19% of the total spend, although
the absolute purchase amount will
decrease from $74M to $60M.
Ya’Thi Néné“Lands of the North”
We are the Saskatchewan industrial, mining, oil and
gas supply chain
We will be 4-years old on April 10, 2017
In our creation, we received a lot of support from
the Ministry of the Economy, SaskBuilds, Priority
Saskatchewan, and Western Diversification.
14
Diverse membership of 102 companies (we’ve
grown by 38% through the past 4-months)
Represents 1,000s of employees
Combined annual sales of well over $3-billion
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Turn-key and other procurement events
Promote Saskatchewan member company capabilities
to resource companies and others
Educational events
Represent member interests (lobbying etc.)
Catalyst for Innovation
Promote Aboriginal Inclusion
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196 of 591 supplier companies listed in the province responded
It is presumed that the 395 companies that did not respond, had no or very small mining related sales to report
So it is assumed that 100% of the sales to the mining companies was from these 196 companies
17
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Table 3: Survey Results for Mining Supplier Location.
*Some suppliers have offices in more than one location
Region Company
CountEmployees
Saskatoon Region 137 8,755Regina Region 41 4,115Northern Region 16 605Estevan Region 8 66Western Region 7 84
Yorkton/Esterhazy Region 15 673
Provincial Total 224* 14,298
In 2014 earned just over $1.1 billion from mining related sales.
Sales to Saskatchewan mining companies in that year were $900
million with slightly more than $200 million in interprovincial or
international sales.
This suggests that Saskatchewan-based suppliers captured 65% of
mining company purchase dollars in 2014, a total of $1.7 billion
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Table 1: Multiplier Comparative Analysis by an Additional $10M in Sales of Product/Services Type.
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Gross Output Multiplier
GDP at Basic Prices Multiplier
Employment Multiplier
Labour Income Multiplier
Utilities 1.55 1.44 3.09 1.80
Construction Services 1.67 1.95 1.93 1.68
Manufactured Goods 1.73 2.22 2.48 1.92
Logistics 1.79 1.75 1.79 1.60
Professional Services 1.94 1.75 1.75 1.56
