ANNUAL REPORT REVIEW — B.C. mining profitable but exploration waning

Although British Columbia’s mining industry reported its second consecutive year of profitablity in 1995, the future health of the industry remains in doubt.

In its annual report titled The Mining Industry in British Columbia, consulting firm Price Waterhouse reports that industry earnings totalled $511 million in 1995 — up by some $320 million from the previous year.

The improved results are chiefly due to higher copper prices and a corresponding increase in copper output.

However, Michael Smith, author of the report, cautions that these figures should be viewed in the context of the past 10 years, during which time the industry suffered an overall loss of $228 million.

He goes on to warn that without more exploration and development, the industry will have difficulty sustaining itself.

Spending on exploration and development dropped to $38 million in 1995 from $46 million in 1994. Primary exploration expenditures remain at a historically low level of about $10 million.

Gary Livingstone, president of the Mining Association of British Columbia, reiterates Smith’s concerns about the lack of exploration activity, given that the time span from the discovery of a deposit to production can be up to 10 years.

He says the average reserve life of the province’s base metal mines is estimated at only 10 years.

Livingstone adds that mining is the second-biggest revenue-generating resource industry in British Columbia and, as such, is a vital component of the social and economic structure of the province.

The Price Waterhouse report estimates that the mining industry’s expenditures amounted to $3.6 billion in 1995; of that amount, $351 million represents capital expenditures.

The industry paid out $524 million to government in earnings and production-based taxes, up from the $391 million in 1994.

Direct employment at British Columbia mines resulted in 9,738 jobs, up 5% from 1994. If indirect employment is included, the figure increases considerably, to about 30,000.

Livingstone says government and political attitudes towards mining must become more positive in order to attract investment.

He said the industry needs to address several key issues, including: land use; creating a competitive taxation environment; a streamlined regulatory regime and mine development review process; as well as native land claims.