Mining Sector Overview Over the past few years, the mining industry has experienced a boom in growth, with high commodity pricing leading to increased exploration and development. However, this new growth is different from previous eras of high demand, and today’s mining industry has had to adjust to a new, volatile reality over the past several years. With new developments have come new risks, higher input costs, and demographic changes which have led to a decreasing availability of skilled labour. Barrick Gold has responded, for example with an expanded role in workforce development. The table below outlines a number of major trends and their impacts. GLOBAL Theme Description of Trend Implications for Marathon Strengthened Demand Increased demand, fueled by development in emerging economies, combined with a limited current supply, has boosted prices. Higher prices mean that previously unprofitable developments are now being undertaken. Marathon needs to support the local prospectors and junior explorers to ensure that deposits in the region are being developed while the market is so favorable. Increased Risk As demand grows, the supply of key inputs becomes more volatile, increasing the challenges in meeting steady production goals. Some companies have reacted by integrating mining assets, as well as supply and service functions into their activities, to mitigate supply risks by gaining greater price control and security. Marathon can assist companies in mitigating risk by ensuring the community can offer local or regional supply at all levels of the value chain and by helping smaller companies in building supply relationships locally and in the region. Increased Input Costs and Costs Volatility While the demand for mining products has risen, so have the costs of transportation, business services, chemicals, fuel, electricity and construction materials. Despite higher prices, some products which require high levels of inputs during the extraction process may not be profitable should particular costs rise (example, electricity or fuel). Once again, by strengthening the local supply chain and local infrastructure, MEDC can assist in mitigating risk by ensuring the community can offer local or regional supply at all levels of the value chain.
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Recommended Initiative Priority, Role Timeline Partnerships Increase industrial lands inventory for development. High Partner Long Term MNDM, NOHFC and FedNor, Ministry of Natural Resources. Determine viable supply options: Future development land purchase by municipality Identify Crown Land Vacant land at the Marathon Airport. High Partner Long Term MNDM, NOHFC and FedNor, Ministry of Natural Resources. Develop plan to bring viable land options forward. High Partner Long Term MNDM, NOHFC and FedNor, Ministry of Natural Resources. Continue to maintain a list of available, vacant, and/or for sale properties in the public and private sectors. Lead Ongoing MEDC Logistics Infrastructure Marathon has the all the components of a logistics hub. However, the integration of these components will require considerable resources and collaboration over a long period. 7: LOGISTICS INFRASTRUCTURE Recommended Initiative Priority Role Timeline Partnerships Develop strategy and plan to mobilize road, rail, air and water into an integrated multi-modal logistics strategy to capitalize on mining and other sector opportunities. The vision could include the development of a Commercial Transportation Service Centre. Medium Facilitator Long term NOHFC and FedNor, First Nations
Address strategy and plan for each transportation mode to realize vision: Road – road upgrades to port and ring of fire industrial roads that connect highway 17 to Highway 11 Rail – deployment of this asset Air – attract a scheduled service airline (cargo and passenger) Water – development and operation Medium Facilitator Long term NOHFC and FedNor CP Town of Marathon Mill purchaser Gap Analysis Apply for Government Funding to undertake a gap analysis to determine required infrastructure upgrades (from strategy). Medium Facilitator Long term NOHFC and FedNor Business Development Initiatives – Entrepreneurship, Research and Innovation 8: Recommended Initiative Priority Role Timeline Partnerships Identify businesses seeking expansion opportunities. Create a forum and ongoing dialogue to explore interest in value chain opportunities identified. High Lead Short term Chamber of Commerce, MEDC Work with local businesses by providing the tools to help them capitalize on value chain opportunities. High Lead Short/medium term MEDC, Chamber of Commerce
A thorough evaluation of potential trade-shows should be undertaken to ensure they are a fit for Marathon in that they have the potential to deliver quality leads. The trade show evaluation should assess: The quality of exhibits, representation of quality companies that could be potential investor candidates as opposed to an over representation of academia, industry associations, government and so on. Where possible and if an attendee list is available - the quality of attendees the presence of key decision makers. While quality is always better than quantity, the number of registrants/exhibits should be taken into consideration. Feedback from DFAIT and MEDI and Marathon’s mining industry network Objectives Typically objectives will centre around: Attracting potential investors i.e. lead generation. Developing manufacturing partnerships to create jobs. Contribution to awareness building of Marathon as a mining service supply centre and potential for prospectors and juniors. Relationships to build on existing networks in the mining sector. Pre-Show Lead Generation and Outreach Typically, exhibit lists are available on the show website. Show evaluation work will contribute to list building and can be fine tuned to identify potential target companies, and applicable phone and email contact information for pre-show out reach. Where possible, this should be supplemented by the attendee list. These lists are occasionally available on the website. Also, shows are increasingly providing virtual networking facilities to enable participants make pre-show connections. Failing that, show organizers are sometimes willing to provide attendee information. Outreach activities can be supplemented by special events with invitations to prime prospects. Show organizers can be helpful in facilitating media relations activities by way of features in the show magazines and in their own pre-show outreach. Opportunities for show program advertising and sponsorships to reinforce the message can be investigated. Other initiatives might include features in applicable publications that align with the show audience.