Global Economy Brings Opportunities, Growth to Remote Quebec Communities

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Researched by Industrial Info Resources (Sugar Land, Texas)--While we are all aware that we live in an ever-expanding global economy, many people fail to notice the drastic effects that this can have on day-to-day life. An area of North America where international infrastructure and economic development, particularly in India and China, is having a very obvious effect on day-to-day life is the sparsely populated Côte-Nord region of eastern Quebec.

According to the World Steel Association, global steel production grew 66% between 2000 and 2010, with China alone accounting for about 90% of this growth. In 1990, China produced approximately 66 million tons of steel per year. By 2010, this figure had grown 950% to 627 million tons. As iron-ore mining companies point out, India's steel production of 66 million tons during the 2010-11 fiscal year was more or less where China was in 1990. With a rapidly growing population and strengthening economy, India seems poised to soon hit the "critical mass" figures that brought exponential growth in steel production to China.

Obviously, coupled to this escalation in steel production is an increased demand for iron ore. Increased demand is raising the price of iron ore, making the reopening of closed mines, the expansion of existing mines, and the construction of grassroot mines very worthwhile undertakings. In a big way, Quebec's Côte-Nord region is feeling the effects of this growth, which is bringing growth, jobs, and a few problems that could provide significant opportunities for those prepared to be in the right place at the right time. For additional background information, see June 12, 2012, article - Quebec's Côte-Nord Sees Massive Economic Development from Increased Iron-Ore Demand.

The obvious benefit created from this growth is an increased number of jobs, which are appearing in all stages of the iron ore extraction and delivery process. As companies such as ArcelorMittal (NYSE:MT) (Luxembourg), Cliffs Natural Resources Incorporated (NYSE:CLF) (Cleveland, Ohio) and Adriana Resources Incorporated (TSV:ADI) (Toronto, Ontario) develop new and existing mines near the towns of Fermont and Schefferville in northern Quebec, construction jobs are created, often causing some concern to permanent residents of these communities as a lack of permanent housing causes many workers to be contracted on a "fly-in/fly-out" basis (two weeks on site at the job, followed by two weeks at a worker's permanent residence, for example). As these mining projects are completed, jobs to extract the iron ore (for a typical 30-year mine life) also will be created. In addition, rare earths exploration is under way in the far north of Quebec, which could bring even more growth to the area.

In addition to the iron extraction, downstream mining activities, such as iron pelletization and shipping, will see an increase in jobs. The Port of Sept-Îles, which ships most of the iron produced in northern Quebec, also will see increased jobs and residents. Sept-Iles expects to ship approximately 40 million tons of iron from its ports this year, which is forecast to rise to as much as 150 million tons in 2017. While an increased number of jobs is a positive result, such rapid growth also presents some problems, as well as significant opportunities.

For example, in Sept-Îles, available housing is incredibly hard to find. The city has an available vacancy rate of less than 1%. While city leaders fear that an inadequate supply of housing could, in fact, lead to the fly-in/fly-out workers, such as those that live in temporary housing near the mines, the opportunity exists for contractors to create developments and housing that should present no problem to sell or rent. In fact, the province and city provide incentives for residential construction in the area. In order to fill the upcoming jobs, the city needs to attract more permanent residents.

Industry is not turning a blind eye to the needs of the community. The heavy industry in the area, based around mining, iron-ore processing and shipping, and aluminum production, wants happy, well-situated permanent workers from the community. To this end, businesses such as ArcelorMittal and Aluminumerie Alouette, a joint venture of various global companies, are helping provide facilities to train the local workforce.

ArcelorMittal recently donated close to $1 million to the local college, Cégep de Sept-Îles, for a minerals technology wing, while aluminum producer Alouette will donate $10 million toward a metals research facility at the college. As companies come into the area, they commit to employing a certain number of Canada's Native Peoples, which in the Sept-Îles area are primarily from the Innu nation. Native Peoples account for approximately 10% of the college's students, and they receive training for these positions at the college's facilities. In addition, Cégep de Sept-Îles works closely with the various companies to understand their specific training needs, allowing students to become optimal employees.

The growth in Sept-Îles seems to be snowballing. The city will soon receive a massive influx of available power as hydropower projects in Quebec and Labrador come online. A feasibility study was released recently in regard to bringing natural gas into the area, which could open the door for further industrial development, including steel manufacturing.

Quebec's Côte-Nord region is obviously teeming with opportunities for both industrial and residential development. In Sept-Îles, the Seven Islands Development Corporation has 5,000 acres of prime real estate available for immediate sale. The land is in close proximity to power and rail facilities, and is very close to the Sept-Îles airport. Details about the land and the area can be found by visiting the company's website or by calling 1-614-793-2233.

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.