With virtually no access to venture capital, the strength, resiliency and experience of the prospecting, mineral exploration and development industry in British Columbia was put to the test last year. However, the industry is well acquainted with the cyclical nature of the business, and many AME BC members have taken this opportunity to prepare for the next upswing in the markets.
Despite some of the doom and gloom headlines, things are looking up when put into a proper perspective. Although British Columbia’s exploration expenditures were estimated to be down to $476 million in 2013, from the record high of $680 million in 2012, it is still the second-highest number on record. In fact, B.C. attracted more than 20 per cent of the exploration spending in Canada in 2013 compared to just six per cent in 2001. On top of that, we expect to see continued strong demand from Asia for our copper, gold and steel-making coal.
At the moment, most of the expenditures – around 98 per cent – are occurring at advanced coal and copper-gold projects, and not in grassroots exploration projects. Yet to discover rare and valuable new deposits, which may eventually lead to the opening of new major projects like Thompson Creek’s $1.5-billion Mt. Milligan mine that opened last year, sustained investment in grassroots exploration is required. The good news is that British Columbia is still highly prospective given that the province has tremendous mineral and coal development potential, is vastly underexplored, and has proven infrastructure and expertise in mine construction and production.
Moreover, the provincial government is committed to supporting the industry. The tax regime in British Columbia, for instance, remains among the most competitive in North America. Our industry benefits from incentives such as the Mining Exploration Tax Credit and the Mining Flow-Through Share Credit. And as announced by Premier Christy Clark at AME BC’s Roundup 2014 conference, the B.C. mining flow-through share tax credit will be extended to December 31, 2014. We also applaud the provincial government’s decision in 2013 to exempt some low-impact exploration activities from requiring a Mines Act permit amendment. The efforts to improve the permitting process, particularly the move to multi-year and multi-area-based exploration permits, have also been well received by the industry.
Building positive relationships with First Nations is also important to successful exploration and development. Today, British Columbia is a model for how industry, government and First Nations are working together to address challenges, create business ventures and sign economic development agreements that provide significant benefits to all parties. AME BC recently showcased the province’s leadership at our Roundup 2014 conference, which attracted more than 6,600 participants from 37 countries. We released AME BC’s Aboriginal Engagement Guidebook, a critical reference for mineral explorers aiming to develop the province’s mineral wealth in cooperation with First Nations. We also hosted First Nation and industry leaders in the Gathering Place Aboriginal Pavilion and held an enlightening engagement forum.
In late February, Canada’s Environment Minister Leona Aglukkaq announced the federal government’s decision not to proceed with the approval of the New Prosperity copper-gold mine project near Williams Lake. AME BC is disappointed with this outcome, and we expressed our concern that not all of the facts and science regarding the proposed tailings storage facility were taken into consideration. AME BC reaffirms that environmental assessment decisions should be science-based, and we look forward to a re-evaluation of the process and scientific facts related to this matter.
But this decision does not reflect the exploration and development industry in the province as a whole. We are fortunate in B.C. to have a government that supports the advancement of the industry. The roughly 300 exploration and 30 mining projects in more than 50 communities across B.C. are proof of that, as are the almost 1,000 exploration and junior mining companies headquartered throughout the province.
The industry will be further buoyed in 2014 by the opening of B.C.’s next major copper-gold mine, Red Chris, owned by Imperial Metals. The 287-kilovolt Northwest Transmission Line, which will serve Red Chris and other future mines in the northwest, will significantly reduce the region’s reliance on diesel-generated power. As market conditions improve, British Columbia is in a strong position to attract further investment in exploration and development.
Gavin C. Dirom is the president and CEO of AME BC, which will host Roundup 2015, January 26-29, 2015, at Canada Place in Vancouver Convention Centre East.
Back to magazine home page | Next article