The Mining Industry in British Columbia

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British Columbia’s mining industry faced significant headwinds in 2013 continuing the slide from a peak in 2011. While total shipments were higher in 2013 than 2012, revenues and earnings were down.

Investment in B.C.’s mining industry remain depressed as prices for its key commodities such as coal, copper, zinc and moly remained soft. Producers hunkered down to minimize costs as they were hit with increased electricity rates, commodity market volatility, a skilled labour shortage and the additional costs of B.C.’s return to a PST and GST system last year.

The PwC survey found aggregate gross mining revenues were $8.5 billion in 2013, down 7 % from 2012, largely due to continued global economic uncertainty and a resulting drop in prices of B.C.’s two largest revenue generating commodities, coal and copper. Aggregate pre-tax net earnings fell 22% to $1.4 billion from the prior year.

Cash flow from operations increased to $2.6 billion in 2013, up 15 % from 2012. Not surprisingly, companies cut back on capital expenditures to conserve cash, with these falling 35 % to $1.8 billion in 2013.

There were 10,720 people directly employed in B.C.’s mining industry in 2013, an increase of 3% over the previous year. The survey respondents reported a drop in average salaries paid, from $98,200 in 2012 down to $91,900, before benefits.

Outlook

In spite of some financial challenges over the last couple of years, B.C.’s mining sector continues to move forward. Since 2011, the Copper Mountain, New Afton, and Mount Milligan mines in B.C. have come into production. The province has a number of new mines under construction and the new Red Chris and Roman mines should open in 2014.

Industry analysts are forecasting the prices of most precious and non-precious metals produced in B.C. to see a moderate recovery over the next 12 to 18 months. Growth expectations for China, India and Brazil are expected to continue fuelling the demand for metals and put upward pressure on prices. The U.S. economy continues to recover, and parts of Europe are showing signs of strengthening. All of these factors should help to increase the demand for products from B.C’s mines.

B.C. and other Canadian mining companies should benefit from a sustained lower Canadian dollar as the commodities sold are priced in U.S. dollars, and many production costs such as labour and energy are incurred in Canadian dollars.

About the survey

This year’s survey had 37 participants: 21 operating metal and coal mines (including 1 smelter); 14 in the developmental stage; and two exploration properties.

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Previous Editions

92.8 KB Stay the course: The mining industry in British Columbia 2012 — Summary of highlights (92.8 KB)
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92.8 KB Stay the course: The mining industry in British Columbia 2012 — Appendices (116 KB)
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92.8 KB The mining industry in British Columbia 2011 (1.82 MB)
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92.8 KB The mining industry in BC — 2011 Appendices (154 KB)
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92.8 KB The mining industry in British Columbia 2010 (1.48 MB)
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92.8 KB The mining industry in BC — 2010 Appendices (539 KB)
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