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British Columbia edges toward recovery Mining revenues slide in 2002, but profits higher; major player resume exploration Gary Park Petroleum News Calgary Correspondent
British Columbia’s more industry-friendly government has raised hopes of a turnaround in the mining sector after a decade of decline, but jobs and growth are still wavering.
In its annual report released May 14, PricewaterhouseCoopers said that although average salaries and benefits climbed almost C$9,000 to C$90,000 last year, total employment fell to 6,729 from 7,630.
Of the mining companies surveyed, gross revenues decreased by C$200 million to C$3.53 billion, net revenues dipped by C$100 million to C$2.5 billion, but profits rose to C$107 million from C$61 million.
A major blemish has been the stunning comeback of the Canadian dollar, which is up 15 percent this year at 73 cents (U.S.) and is being forecast by some analysts to surge past 80 cents by mid-2004.
For every 1 cent increase against the U.S. dollar, the currency of world commodity trading, the British Columbia mining industry stands to lose C$22 million in revenue.
Stepped up exploration However, the province — having delivered tax and land use policy changes — is getting its first taste in years of stepped up exploration for gold and base metals, dominated by the return of Toronto-based Noranda for the first time in 8 years to the Kerr-Sulphside gold-copper property in a deal with Seabridge Gold.
The Mining Association of British Columbia is also encouraged by exploration plans for the area around Barrick Gold’s Eskay Creek mine, one of the province’s richest deposits, as part of the government’s forecast of a hike in spending this year to C$60 million-C$80 million from last year’s paltry C$40 million.
Barrick, Heritage Minerals, Rimfire Minerals, Roca Mines and Teck Cominco are all exploring in the region.
John Bowles, a mining practice leader with PricewaterhouseCoopers, told a news conference that British Columbia has not had a new mine opening since Northgate Exploration’s gold-copper mine at Kemess in 1999.
Meanwhile, there have been sic mine closures over the four years and “we expect more to come over the next 10 years,” he said.
Gary Livingstone, president of the mining association, said that unless exploration spending grows to C$150 million-C$200 million a year the industry faces further decline.
Even so, he said the fall in revenues last year was “not dramatic and that’s the important point. It’s gradual, but it’s constant, and that’s what is troubling.”
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