On May 4, 2009, BC celebrates Mining Week in recognition of the tremendous contributions made by the mining sector to the province. However, many are not viewing Mining Week with the same level of optimism as they did in 2008.
It is almost impossible to talk about the mining industry without mentioning the global economic downturn. Between May 2008 and May 2009, the world has changed dramatically.
So what does this mean for mining?
The mining sector is not immune to global economic forces. Many projects that were set to start in 2009 have been put on hold or postponed indefinitely because many companies have been left without sufficient capital or access to financing to start projects.
Other new projects have faced environmental assessment challenges and a roadblock of government bureaucracy. Adding to the uncertainty, the drop in commodity prices has affected major BC mining companies, resulting in the layoff of over 1,500 workers.
Although the situation is critical, it is not irreversible. The potential still exists for continued growth and stability in the mining industry.
?There is no question about the potential for British Columbia to lead the global market in mineral exploration and development as the economy recovers,? said Pierre Gratton, President of the Mining Association of BC. ?There is high development potential here, but in order to take advantage of that potential, we need to graduate more companies from the exploration stage into production.?
There are signs that commodity prices are gradually improving. Copper prices that had fallen from $3.60 US per pound at the beginning of 2008 to $1.40US per pound at the end of 2008 have started to inch up slowly.
The Globe and Mail reported that BHP Billiton Mitsubishi Alliance and Nippon Steel Corp. have agreed on a price of $128US to $129US per tonne for coking coal. This is lower than hoped for but higher than originally predicted.
Companies and employees are hoping that this will be enough to keep current mines in operation. Moreover, over 20 new mining projects are still active and are in the process of provincial environmental review and permitting.
BC is Canada?s largest producer of copper and coal, producing approximately 40 percent of the country?s overall share of copper and 66 percent of coal. Millions of dollars have been invested in BC?s mining infrastructure.
In 2007, the gross revenue for BC?s mining sector was $6.9 billion. In 2008, $367 million was spent on exploration. Over 850 mining and exploration companies are in Vancouver alone, making it home to more mining company headquarters than almost anywhere else in the world.
What does this tell us? That BC has a mining future and that it is too important for anyone to ignore. In fact, the Mining Association of BC reports that ?economic stability and strength in the mining sector translates into improved overall economic health for the BC economy.?
Mining Week 2009 is an opportunity to look forward, to recognize but not overreact to the current downturn. It is a time to make prudent and wise decisions about our future and to celebrate the contributions mining and the mining community have made to BC.
Mining Week 2009: A time to celebrate!
Krista Drost is the BC Mining Coordinator for the Christian Labour Association of Canada (CLAC), one of BC?s largest mining labour unions.