Rates of Return In the Canadian Mining Industry — A Comparative Study

CIM Bulletin, Vol. 70, No. 787, 1977

Mitchell P. Rothman, Manager, Industrial and Regional Analysis, Economics Division, Canadian Imperial Bank of Commerce, Toronto, Ontario

This paper concentrates on profits and other measures of return in the Canadian mining industry, especially in the non-mineral-fuels sector. The paper examines the historical patterns of mining profits, both before and after taxes, as compared with profits in other sectors of the Canadian economy, as well as some of the more important influences on mining profits. These include the prices of mineral products, provincial and federal tax policies with respect to mining, and the effect of inflation on mining profits and the financial position of mining firms — in each case, comparing mining with the other sectors of the economy. Finally, the paper provides an analysis of current and prospective rates of mining profits in relation to the capital required to ensure the future viability of the Canadian mining industry.

Keywords: Mineral economics, Rates of return, Mining industry, Profits, Taxation, Inflation, Prices, Cost indices.