What’s Happening in Mining: Q&A with Bob Rappolt

Bob Rappolt, a vice president based in North Bay, Ontario, leads Stantec’s mining practice in Canada. The industry has been on the upswing of late—here Bob shares his thoughts on why and what it means.

Q: What has created the current boom in the mining industry?
A: It is thanks in large part to the so-called “westernization” of developing countries. Places like China, Russia, India, Japan and Brazil—these are parts of the world where lifestyle expectations are changing. That boosts the demand for mineral resources and commodities, which creates a supply-and-demand problem and results in increased commodity pricing.

Q: Is this boom similar to previous upswings?
A: This boom is different. Typically, a boom might just be in base metals, say copper or nickel, or it might be in precious metals like gold because of currency fears. But in this particular cycle, all mineral resources are spiking. In my 30 years in the mining industry, I’ve seen five or six very volatile cycles when one or two resources would soar while everything else was normalized or lower. But in this cycle, everything is spiking. Typically, you’ll have a hot cycle for three or four years and then you’ll see a drop for three or four years. We started a hot cycle in 2004 and, even during the economic meltdown of 2008, we only slowed in the mining industry for about 12 months. Again, that’s thanks in large part to the demands of developing nations.

Q: What are some of the challenges this boom presents?
A: The biggest challenge is the talent gap. It is a global problem in the mining industry and it spans from surveyor to CEO. It’s not just the top people. We’re seeing a labour shortage across the complete range of roles within the industry. There are also challenges with vendors, the suppliers, and fabricators of the equipment we use. That comes full circle back to the demand for commodities. They’re in short supply, so the lead times to manufacture the supplies we need are longer and that impacts project schedules.

Q: How about the benefits of the boom?
A: Well, it’s great for the economy in North America and globally. It creates jobs. The other benefit of this particular spike, which analysts suggest could last another five to ten years, is that it gives the mining industry time to make long-term commitments to innovation, academic enrichment, and sustainability practices.

Q: Is there a risk of this bubble bursting?
A: There is always a risk of a bubble bursting—there is always risk. But you have to look at the anticipated global growth, the development, and the masses of people. Think about it: If you take two billion people who right now have nothing and give each of them a bicycle, a sink, and a mobile phone, that requires a lot of metal compared with North American current consumption. The demand is huge and obviously growing.

Q: How is Stantec responding to this new landscape in the mining sector?
A: The ability of our mining sector to take advantage of large, world-class mining projects and share work with other sectors within Stantec is a significant benefit. Our size, our breadth of expertise, and our corporate philosophy all make us uniquely qualified to take on these larger projects. Expanding commodity diversification to address those spikes in demand across the board is also one of our primary strategic initiatives moving forward.