Rates of Return in the Mining Industry

The rates of return on investment are examined for several major Canadian mining companies. Because we are dealing with a highly cyclical industry, subjected to widely fluctuating metal prices, rates of return are examined over a 20-year period. Conveniently, the first decade examined reflects the period when the industry enjoyed incentives to develop deposits; during the second decade, incentives were reduced and the industry became the most heavily taxed industry in Canada. The high rates of inflation since 1973 have distorted the real rates of return on investment if one considers replacement cost.