In what is being hailed as a renaissance for British Columbia’s mining industry, companies have turned in impressive results for revenues, net income and
cash flows in 2010, according to a recently released report by consultants PwC (formerly PricewaterhouseCoopers).
The provincial mining industry, benefitting from strong demand and rising commodity prices, reported total pre-tax net earnings of $3.7 billion in 2010, a
jump of 65 per cent from $2.3 billion in 2009. Gross mining revenues increased 13 per cent to $7.9 billion in 2010, coming in close to the provincial
all-time high of $8.4 billion in 2008. Cash flow from operations increased by 32 per cent to $2.9 billion and capital expenditures jumped 120 per cent to
“The 2010 financial performance of the B.C. mining sector was outstanding, driven by strong coal and metals prices and a lot of hard-working people in the
industry,” said Michael Cinnamond, leader of PwC's B.C. mining industry practice and co-author of the report. “The PwC report shows that just about every
aspect of the B.C. mining sector has done better than expected. Many of the positive trends we saw last year have continued into the first quarter of
The PwC report also cited the implementation of two new tax revenue-sharing agreements with the mining industry and First Nations, and the pledge by
federal and provincial governments to build the Highway 37 Northwest Transmission Line as major impetus for the rebound in mining.
“New mining projects are necessary for the long-term viability of B.C.'s mining industry,” said Erfan Kazemi, senior manager at PwC and co-author of the
report. “We are encouraged to see three new major metals mines in the construction phase and a pipeline of projects ready to go. This is a level of
activity not seen in B.C. in over a decade.”
Gavin Dirom, president and CEO of the Association for Mineral Exploration British Columbia, pointed to the return of the majors to B.C., including Xstrata
and Freeport-McMoRan, as more evidence of the revival of mining and exploration taking place in the province. “They can go anywhere in the world, but
they're choosing to come to B.C.,” he said.
In 2010, coal, as in years past, was the biggest contributor to net mining revenues, accounting for approximately 51 per cent of the total. Shipments
increased by 32 per cent to 22.3 million tonnes, while prices increased by 15 per cent to an average of US$181 per tonne.
But coal was not the only star performer in 2010. As China continues its march towards massive infrastructure development, total copper revenues increased
from $1.2 billion in 2009 to $1.4 billion, while stronger demand and increased prices for zinc and zinc concentrates raised net revenues by 29 per cent to
Silver revenues shone, jumping 44 per cent to $416 million. Molybdenum prices increased 42 per cent, yielding net revenues of $255 million. And although
shipments of lead and lead concentrates dipped by four per cent, a 24 per cent price increase raised net revenues by 13 per cent to $157 million.
Tom Schroeter, president, CEO and director of Vancouver-based Fjordland Exploration Inc., is cautiously optimistic about the prospects for exploration and
mining in the province in 2011. He said that they are “excellent, although they depend on the usual factors, especially the harmonious interactions of the
provincial and federal governments and First Nations.”