Despite pandemic, Canada's mining industry benefits from soaring price of gold

As many sectors grapple with the devastating financial effects of COVID-19, Canada's mining industry is reporting gold has managed to hit record high prices.

This week, the price of gold reached $1,950 USD per ounce — more than $2,600 CAD.

For those in the mining industry, it's welcome news, indicating more money and more opportunity. 

Pierre Gratton, the president and CEO of the Mining Association of Canada, it will have a positive ripple effect for the Canadian economy as a whole. 

"We do pay the highest wages in the country, so those people are then spending their money and that also helps the rest of the economy that is hurting," Gratton said. 

Good news for copper, nickel

And it's not just gold that's on an upswing, said Gratton, but the price of copper and nickel have also spiked in recent weeks. 

The mining industry's ability keep the pandemic largely at bay could be part of the reason investors are returning to the mining sector in Canada, he said.

"The mining industry in Canada has done exceptionally well, so far, in keeping [COVID-19] out of the mines. All of this is good news." 

Exploration and projects

Gratton said the higher price of gold is also prompting renewed interest in mining projects.

Efforts like IAMGOLD's Côté Gold project, located about 20 kilometres southwest of Gogama, Ont., between Timmins and Sudbury, which had been put on hold — is now moving ahead, with operations expected to start in 2023.

That project alone, is set to create more than 1,000 jobs and once it's up and running, it's expected there will be about 450 jobs for the life of the mine, which is anticipated to be 18 years.

Gratton sees only bright times ahead for the industry — no matter what happens with COVID-19.

"Gold has historically has always been a safe haven and if there's anything about the current time we're in, it doesn't feel particularly safe," he said, "So investors tend to flock to gold." 

"Until the investor community starts to see a little bit more stability, when they start to see something closer to normal in the United States, until that happens I think gold is going to remain a safe haven and is going to be strong," he said.