BC Mining Industry under the scope

July 02, 2013

PwC published its 2012 review of the BC Mining industry. It’s a sobering review of what took place in 2012.

A few highlights:

• BC gross mining revenues fell to $9.2 billion in 2012, down from $9.9 billion reported in 2011, due largely to lower prices of coal, copper and other metals compared to the year before.
• Pre-tax net earnings across the industry fell to $1.8 billion, down from $3.7 billion the year before, while cash flow from operations decreased to $2.2 billion in 2012 compared to $4 billion in 2011. Both drops are due to rising costs for labour, energy and raw materials.
• The number of people working in BC’s mining industry increased to 10,419 in 2012, up from 9,310 in 2011.
• Capital expenditures in the Nechako/northeast totaled $1.37 B - more than the rest of the Province combined.  Imperial Metals Corporation’s Red Chris project, is under construction in the northeast . Other active north-east BC projects in advanced exploration stages include: Turnagain, Red Chris, Schaft Creek, Galore Creek, Kitsault. Exploration projects include Tulsequah Chief, Foremore and Davidson Moly.
• The federal government’s recent implementation of a “one project, one review” environmental review process is also expected to help provide a global competitive advantage for mining companies in BC, as well as other provinces. The move, supported by the BC government and mining companies across the province, will eliminate the need to conduct two duplicate reviews for a single project.
• Many mining companies have negotiated directly with local First Nations to establish what have been called Impact Benefit Agreements (IBAs) or Participation Agreements (PAs). An IBA covers the operation and closure of the mine, while a PA lays out the guidelines for future communication and negotiations.
• The BC mining industry is the largest private sector employer of Aboriginal peoples. According to MiHR, approximately 6% of Aboriginal peoples work in mining in the province, as compared to 4% in other sectors. In March 2013, BC AMTA said it had so far placed 500 men and women from First Nation communities across the province into mining-related jobs. BC AMTA said 63% of those workers transitioned from unemployment. There are about 1,400 candidates in the program today.
• The completion of the Northwest Transmission Line (NTL), which is expected in 2014, will bring a huge boost to mining activity in that part of the province and is forecast to unlock billions in future revenue. This transmission line, now under construction, will stretch 344 kilometres north from near Terrace, up to a new substation being built near Bob Quinn Lake.

 

Commentary

Although there are currently no producing mines ‘north of 56’ in BC, the hottest exploration and development area is in the northeast. There is much happening in the north-east in hydro development and mining.

Sources

• a)http://www.pwc.com/ca/en/mining/mining-industry-british-columbia.jhtml and http://www.pwc.com/ca/en/mining/publications/pwc-mining-highlights-bc-2013-04-en.pdf