The mining industry in British Columbia recorded its highest net revenue since 2012 last year, according to a PwC Canada report released May 16, and this has led the industry to feel cautiously optimistic about the future.
In 2016, net mining revenue was $7.3 billion, up 16% from $6.3 billion in 2015; the increase was due to both an increase in gross revenue and a decrease in costs for refining, freight and smelting. Gross mining revenue jumped almost 13% between 2015 and 2016, growing from $7.7 billion to $8.7 billion.
Mark Platt, PwC Canada’s B.C. mining leader and partner, said last year was still challenging because of volatility in global metal and mineral prices, but this seems to be changing.
“Since the end of 2016, we’ve seen an upward trend in prices of the commodities that are key to B.C.’s mining results,” Platt said.
“B.C. mining companies continued to work hard to keep their costs under control.”
The prices of coal and copper in particular gained strength near the end of 2016 and into 2017.
The number of jobs supported by B.C.’s mining sector grew in 2016, reaching 9,329 from 9,221 a year earlier, driven in part by Conuma Coal’s acquisition last fall of three metallurgical coal mines in northern B.C. from Walter Energy. Two of those mines have since been reopened and a third is set to be restarted this summer.
Other big projects in the works included Pretium Resources’ Brucejack Mine, which is expected to start commercial production this year. Seabridge announced promising reserve and resource estimates for its KSM project last year and is now looking for investors.
Commodity price volatility still remains a challenge for the sector, as does attracting more investment, both short- and long-term, and keeping costs down. But the future is promising, PwC said in the report.
“B.C. is already seen across Canada and around the world as an attractive place to invest and do business in mining,” the report said. “We expect B.C.’s reputation to remain strong in the years to come.”
PwC compiled the report by surveying 28 mining companies in B.C., including Teck Resources (TSX:TCK.B), Copper Mountain Mining (TSX:CUM), Imperial Metals (TSX:III), New Gold (TSX:NGD) and Taseko Mines (TSX:TKO). Of all companies surveyed, 14 are currently operating mines, nine are at the permitting or assessment stage and three are conducting exploration. One is in smelter operation and one is conducting maintenance.