Problems plague B.C.’s mining industry

Premier Michael Harcourt concluded British Columbia’s annual Mining Week by releasing “commitment statements” from the province’s Advisory Council on Mining.

The government-sponsored council is represented by industry, unions and environmental and citizens’ groups, as well as local and provincial governments.

Harcourt said the statements recognize that:

* the province’s mining industry is facing strong global competition; * sound resource management is essential;

* skilled labor is key to the industry’s success;

* workers’ rights should be respected;

* mining opportunities for First Nations Indians should be encouraged; and * community needs should be addressed.

Walter Segsworth, president of Westmin Resources and chairman of the British Columbia Mining Association, said he hopes the statements can be translated into concrete action. He expressed his concern for the low level of exploration spending in the province.

Segsworth’s concern is shared by Price Waterhouse, which recently released its annual review of mining in British Columbia. The accounting firm confirmed that primary exploration spending was “seriously depressed,” at about $10 million, in 1994.

Although this sum represents an increase of $1 million over the previous year, 1993 was the least active period since Price Waterhouse began conducting its annual surveys in 1968.

The report notes that uncertainty over land use in the province must be resolved before exploration can be expected to show a sustained resurgence. The uncertainty stems from unresolved native land claims, as well as land use reforms under the Commission on Resources and Environment (CORE).

The original purpose of the land use plan was to double the amount of parkland to 12% from 6% of the province’s land mass. The plan, which was established in 1994, not only designated protected areas where no industrial activity is permitted; it also designated areas where industrial activity must be constrained. As a result, instead of 12% of the land being protected, about 30% of the land base is essentially off limits.

Gary Livingstone, president and chief executive officer of the Mining Association of British Columbia, said insufficient attention was devoted to the needs and requirements of the mining industry during the CORE process, adding that the industry, unfairly, tends to get lumped in with forestry in such considerations.

Although mining is not prohibited, per se, in the areas where constraints are placed upon industry, Livingstone pointed out that it is ludicrous to expect anyone to go and explore for what the government terms a “low-impact” mine.

Price Waterhouse also singled out what it regards as two disincentives to resource spending: the British Columbia government’s expropriation of mining claims (in particular, Geddes Resources’ Windy Craggy deposit) and the cancellation of Alcan Aluminum’s Kemano power project. The firm adds that the government’s extended delay in providing compensation for the expropriations is making matters even worse.

On a positive note, British Columbia mines benefitted, last year, from a lower Canadian dollar and increases in the price of copper.

Earnings in 1994 totalled $192 million, compared with a loss of $14 million in 1993, while cash flow from operations leapt to $521 million from $296 million.