EDITORIAL PAGE — We all sink or swim

When Price Waterhouse talks mining, people listen. For the past 24 years, the firm has summarized the financial results and economic impacts of British Columbia’s mining industry, and its annual report has gained a reputation as a carefully compiled and reliable statistical record used widely by government and industry.

This year, the report underscores the message the industry has been trying to hammer home in recent years; that unless changes are made, mining in British Columbia will be non-existent by the end of this decade. And it does not pull any punches to place some of the blame for this alarming decline on government policies which brought about a high total taxation burden, ever-changing and confusing regulatory measures, and uncertainty regarding mineral tenure, the right to mine, and access to land. Because of these policies, industry associations predict mining companies may still be based here, but the actual mines and resultant economic benefits will largely be in other areas of the world.

The report lists 21 producing mines in the province turning out such commodities as coal, lead, zinc, copper, gold and silver. Industry sources forecast that 16-18 of these mines face closure by the end of the decade, with few if any new mines to replace the lost production. This development will affect all British Columbia residents through reduced exports, employment and government revenues.

Earlier this year, Cominco President Bob Hallbauer delivered the same message to business executives at a luncheon sponsored by the Vancouver Board of Trade. And he made it clear the decline wouldn’t just affect small communities such as Stewart, Cassiar, Houston or Sparwood.

Vancouver would feel the impact too, Hallbauer warned, noting that the city’s Yellow Pages list 200 mining companies, 35 mining consultants, 17 mining contractors, 59 mining equipment and supply firms, and 21 mining engineering firms.

Hallbauer then tracked where $3.4 billion in revenue received by mining companies went in 1990, after pointing out that barely a trickle went to shareholders as return on investment, or to mining companies as profits. The biggest share — some $800 million — went to mining industry employees. The second largest expenditure was $738 million in freight charges, which includes $641 million spent by the coal industry alone. The big beneficiaries here are B.C. Rail, the Prince Rupert coal port, the CP and CN rail lines, and the Roberts Bank and Neptune coal ports in Vancouver.

Hallbauer said the Vancouver business community benefits when the mining industry buys material, supplies and machinery to the tune of about $2 billion each year. And he cited a $30 million-plus legal bill for the Quintette/Japanese steel mill arbitration over coal prices for the benefit of lawyers not already aware of mining’s large spin-off effect to their profession.

All this paints a picture of an industry struggling to remain viable in a time of increased global competition. Mining operations in the province had a total loss after writedowns of $485 million in 1991, which follows a loss after writedowns of more than $1 billion in 1990.

In recent years, the industry has been working harder to improve the efficiency and cost effectiveness of its operations. But there are limits to what it can accomplish on its own.

The time has come for government to make the necessary changes to attract exploration and development which will replace those mines scheduled to close by the end of this century.