Unlocking value through collaboration
Canadian mining companies are increasingly embracing the power of partnerships as they understand that working together with industry outsiders offers a new lens through which to see opportunities, bringing more diversity of thought to issues.
The need for partnerships today derives from technological forces such as automation, as well as from the changing expectations of shareholders, regulators and the communities in which miners operate.
Opportunities can come from anywhere. The challenge is to find them, use the talent and expertise from beyond traditional mining sources and embrace the risk that comes with the opportunity.
The stories in our report explore the impacts and benefits of proven financial partnerships, the potential of new alliances in the area of digital transformation and how these partnerships are enabling mining companies to keep pace with global change and even get in front of it.
Monica Banting, Mining Partner, PwC Canada
As economic, political and societal changes sweep the globe, some mining companies are turning to technology partnerships to keep pace with shifting developments and expectations. Goldcorp Inc.'s implementation of Watson, a cognitive supercomputer system developed by IBM Corp., is one of these innovative alliances.
In phase one of their partnership, the companies input vast amounts of mining data into Watson to try to predict the location and size of ore deposits more accurately in Goldcorp’s Red Lake mine. Phase two, now under way, involves training Watson with the right algorithms and questions with the expectation that it will soon be able to help with the merger and acquisition process.
The key to cognitive computer systems like Watson is their ability to learn from their interactions with data and humans —not becoming outdated. Both companies are very optimistic about the technology and see the partnership, which represents Watson’s initial foray into Canadian mining, producing benefits that will extend across the entire sector going forward.
Vice President of Technology, Goldcorp Inc.
When the recent downturn threatened Quebec's mining sector, partnerships began to emerge to help energize the industry, thanks to a unique blend of financial alliances that combine resources from capital markets, the provincial government and Quebec’s institutional investors.
Champion Iron Ltd. is one on a growing list of mining companies that have benefited from this strategy. They were able to purchase the distressed assets of Bloom Lake iron ore mine from Cleveland-based Cliffs Natural Resources Inc. in April 2016. To complete the acquisition, Champion raised money from the Québec government, through Investissement Québec.
With these partnerships in place, Champion was able to approach the Caisse de dépôt et placement du Québec (the Caisse) pension fund manager, which together with fund manager Sprott Resource Lending Corp. agreed to provide debt financing to help restart the mine. In addition, Investissement Québec, Fonds de solidarité FTQ (the Fonds) and the Caisse have previously collaborated with Stornoway Diamond Corp. to help fund Quebec’s first diamond mine—fostering economic development in the province.
For mining companies, the benefits of receiving investments from the likes of the Caisse, the Fonds and Investissement Québec extend beyond the cash—these partnerships promote relationships, trust and knowledge of the industry and capital markets.
CEO, Champion Iron Limited