Challenging and opportunities for mining in BC

 Trent Ernst, Editor


One of the big events of BC Mining Week is the release of the annual Pricewaterhouse Cooper report on mining in BC.

While the 2014 report won’t be released until May 5 of this year, the cycle continues to spin down, with the idling of Walter Energy’s Canadian Operations in April of last year and the idling of AngloAmerican’s Peace River Coal Operations at the end on 2014.

But it’s not just met coal prices that have faltered over the last few years. Both copper, silver and gold have fallen from record, or near record prices a few years back.

Gold prices, which started at US$1700 an ounce in 2013 has fallen to US $1,195 today.

Silver prices, which started 2013 at US$32 per ounce has lost fully half it’s value, and is now only getting US$16 an ounce.

Copper hit a record high of US$4.60 per pound in early 2011. It’s down to US$2.72.

And, of course, Met Coal, which was up around US$300 in 2011 has dropped to less than US$110 these days.

In fact, zinc and lead are the only metals where the price has not dropped significantly over the last few years.

Over the last couple of years, mining companies have been forced to cut costs and do what they can to conserve cash.

“It has been a very challenging time for prospectors and explores here in BC,” Gavin Dirom says in last year’s mining report. Dirom is President and CEO of the Association for Mineral Exploration British Columbia.

Dirom says the funding crisis has hit BC exploration companies, as over half the mineral exploration and mining companies listed on the TSX are headquartered in BC. In 2013, BC Mining companies raised about $2.6 billion, down from $5.3 billion the year earlier.

Despite the downturn, exploration in BC has remained at near record levels, with $476 million spent on exploration in 2013, BC now attracts nearly over 24 percent of exploration spending in Canada.

As a whole, the BC mining industry made $8.5 billion, down from $9.2 billion the year before, which in turn was down from a record high of $9.9 billion in 2011.

One of the biggest mining stories in 2014 had nothing to do with mining at all. In August, the Northwest Transmission Line was officially opened. This new transmission line opens up a new area, known to many as BC’s Golden Triangle, to mineral exploration. This new area is nearly the size of France and has nearly a thousand known mineral occurrences and ten potential mines, including the Red Chris copper and gold mine.

This could create over 4,000 direct jobs over the next few decades, and upwards of $18 billion in capital investments.