2012 North America Mining Sector Update, a Navigating the Currents of Change Video Webcast on Industrialinfo.com

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Researched by Industrial Info Resources (Sugar Land, Texas)--North America has a diverse mining industry, with leading reserves of coal, oil sands, precious metals, iron ore, minerals, potash, uranium and copper. According to the recently released Mineral Commodity Summary for 2012 compiled by the United States Geological Survey, the estimated value of mined materials in the U.S. was $113 billion (almost split evenly between coal, metals and minerals). This is up about 12% compared with 2010.

Last year was a turnaround period for mining project development in North America after the 2008-09 time period, when a number of projects were placed on hold or cancelled. Project construction starts more than doubled in 2011 when compared to 2010. Metals & Minerals companies kicked off more than $35 billion in projects in 2011. The majority of this was for mining projects in Canada.

North America's abundant natural resources, including oil sands, coal, precious metals and minerals, make it the largest continent for mining project development in the world, with 855 projects totaling $342 billion. Canada is the No. 1 country in the world for mining project development, with 395 projects totaling $258 billion. The U.S. is the fourth-largest country in the world for mining project development, with 393 projects totaling $66 billion.

There are $37 billion worth of projects currently under construction in North America and $10 billion approved. In addition there are 262 projects totaling $57 billion scheduled to begin construction in 2012.

Canada is home to the granddaddy of all mega-mining projects: Imperial Oil Limited (TSX:IMO) (Calgary, Alberta) plans to spend more than $30 billion to develop the Kearl Oil Sands mine near Fort McMurray, Alberta. Construction began in 2009 on the first $10 billion train. Right before the New Year, approval for the second train was announced. Construction of the second train won't start until the latter half of 2013.

Globally, like 2011, commodity prices tied to resources supply and demand will be a key driver for mining project development in 2012. In North America, Oil & Gas exploration and production, as well as a recovery in the steel manufacturing sector is driving mining projects for feedstock materials like iron ore and frac sands. Minnesota happens to be a hotbed of activity for both of these materials. Essar Steel started construction last summer on a $1.1 billion taconite mine and pellet plant addition in Nashwauk, Minnesota. Structural Erection of more than 27 buildings on site has started and completion is expected in 2013. A second phase could add $500 million to the price tag. This is just one example of resurgence in iron ore mining activity.

Steel demand from automakers has improved. Capacity utilization, while not exceptional, is up compared to 2008 downturn numbers. The rising cost of raw materials is causing steelmakers to invest in secure supplies of coal and iron ore. For example, Steel Dynamics Incorporated (Butler, Indiana) is getting into the iron ore mining and alternative iron business by investing in organic growth projects in Minnesota. The project will use new technology developed by Magnetation (Grand Rapids, Minnesota) to extract iron ore concentrate from previously mined waste tailings at taconite mining operations.

Also this year, Nucor (NYSE:NUE) (Charlotte, North Carolina) is ramping up construction on a direct reduced iron plant in Louisiana. The project is estimated to involve more than 500 contractors at peak construction later this year.

Click here to join Joe Govreau, Industrial Info's vice president of research for the Metals & Minerals Industry, as he discusses North American metals and minerals project development in this edition of "Navigating the Currents of Change."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.