Gold and Copper Mines in B.C.

Economics Blog #4
By: Alisha Tupchong

Gold and Copper Mines in B.C.

Summary of the Event

Taseko Mines Ltd.’s $800-million copper-gold Prosperity project was environmentally approved of by the British Columbia provincial government during the week prior to January 15, 2010. The Prosperity project, which pumps out copper and gold from the earth, is scheduled for construction this summer as it joins Copper Mountain Mining Corp.’s similar $440-million project. The demand for mining industries has increased recently, as there is more money to be made now than before. Copper is a metal highly demanded by China because it used widely in manufacturing. Back in the 1990s, the price of copper was less than $1 (U.S.) per pound; now, copper is around $3.40 a pound. While environmental controversy and poor relations with first nations communities have slowed development in the past, companies like Taseko Mines Ltd., who now have environmental approval by the provincial government, will be able to carry out their mining activities as demanded. The price of gold is also looking strong, according to the Energy and Mining Minister, breaking $1100 (U.S. per ounce). Now, all there is left to wait for is the approval of the federal government in the next several months.

3 Positive Economic Statements

If Canadian mining companies retrieve more gold and copper from the ground compared to other countries, China will look to Canada to import metals used for manufacturing, causing aggregate demand to increase, which in turn, will cause prices to increase.

If Canadian mining companies have an absolute advantage in retrieving gold and copper, stronger trade relations can build between Canada and other countries, creating a situation where Canada would specialize in gold/copper production, while the other country would specialize in another demanded product, leading to increased productivity due to specialization.

If prices for gold and copper increase, Canadian mining companies will increase productivity by hiring more workers, therefore supplying more jobs to Canadian workers, which lowers the national unemployment rate, increases the GDP, and increases the standard of living since more households are receiving more income.

2 Normative Statements

The Federal government should approve of Taseko Mines Ltd.’s Prosperity project because the prices of gold and copper have been increasing recently, which can create a greater profit for the Canadian company, especially since Canada has a large supply of natural resources.

Canada should focus on specializing in the production of gold and copper because the demand for these metals is very high due to their various uses in the manufacturing industry.

Opinion About What Should Happen

Canada should focus on specializing in the production of gold and copper because they are considered valuable resources and are widely demanded. Currently, the prices of these metals have been increasing, and with specialization, they can increase even more if Canada becomes one of the only countries to produce so much gold and copper in later years. While other countries will eventually run out of these metals, Canada will still have a relatively abundant supply due to its location. If Canada specializes in producing gold and copper, it can increase trade relations with another country, like China, that produces goods that Canada cannot produce. This creates a win-win situation, and the two countries will increase their productivity as they focus on producing the good that gives them an absolute advantage. As well, if Canada becomes one of the only countries to produce gold and copper in the future, it can profit greatly because the scarcity and high demand will increase the prices, therefore benefitting the Canadian economy as exports increase.

Works Cited

Ebner, David. "New gold, copper mines to spark B.C. economy." Globe Investor. The Globe and Mail, 15 Jan. 2010. Web. 18 Jan. 2010. .