While myopic observers continue to wring their hands over sagging metal and mineral prices, which they believe portend the next bust cycle for the province’s mining industry, I’m reminded of a B.C. mining sector axiom: think long term.
Case in point: Mount Milligan.
Last month, Denver-based Thompson Creek Metals (TSX:TCM) announced it had processed the first feed material through its concentrator at the newly built Mount Milligan copper and gold mine near Mackenzie.
For those that aren’t up on all the latest hard-rock gossip in B.C., this represents one of the most significant events in recent provincial mining history: the phased startup of the first new major metal mine built in B.C. in more than a decade.
The project will create 350 family-supporting jobs once commercial production begins later this year, plus many additional spinoff benefits for the local economy.
Development at Imperial Metals’ (TSX:III) Red Chris project near Dease Lake is on Mount Milligan’s heels.
Despite ongoing commodity market fluctuations, B.C.’s mining sector, year after year, continues to produce billions of dollars in wealth for residents across this province. This in spite of exploration, consultation, permitting and construction cycles that for a single project can last multiple decades.
In spite of these nausea-
inducing timelines, the sector continues to thrive – a feat that’s nothing short of remarkable.
A great example of this is Tumbler Ridge.
As this newspaper reported last month (“Lower coal prices delay reopening of northern B.C.’s Quintette mine – BIV issue 1242; August 13-19), the northeast B.C. town continues to welcome new investment despite lower coal prices.
While steel-making coal giants Teck Resources (TSX:TCK.B) and Walter Energy (TSX:WLT) have delayed and curtailed projects in the area respectively, London-based mining giant Anglo American PLC (LSE:AAL.L) has announced plans to expand its Roman coal mine near Tumbler Ridge, while HD Mining International explores its own $300 million coal venture nearby.
Simply put, the time horizons associated with the mining industry stretch over many years and so should our expectations of the industry – Rome wasn’t built in a day.
This sentiment was highlighted at last month’s gathering of provincial and federal energy and mines ministers in Yellowknife.
During the conference, the ministers released the 2013 edition of the Mining Sector Performance Report, which provides analysis into the Canadian mining sector’s economic, environmental and social performance between 1998 and 2012.
The report, which was severely underreported nationally, provides an interesting set of data that shows how the industry has evolved over a 14-year period.
Key highlights include:
The mining sector directly employed 330,000 workers nationally in 2012 (32,625 in B.C.);
The sector accounted for $62.5 billion in nominal GDP (3.9% of total Canadian GDP) in 2011;
The industry contributed $16.7 billion to Canada’s trade balance in 2012, including $89.5 billion in merchandise exports (20.9% of the total value of exports);
Canadian mining accounted for $58.5 billion in foreign direct investment in 2012 (9.2% of all foreign direct investment in Canada); and
The industry is a leading employer of aboriginal people, employing approximately 10,300 in 2012.
Drilling deeper into the report’s statistics showed the industry’s economic performance in B.C. increased substantially over the 14-year period.
Between 1998 and 2012, the value of mineral production in B.C. jumped $5.4 billion to $8.3 billion – a 187% increase over 14 years.
The value of B.C. coal and metal exports more than doubled during the same period to $5.67 billion and $4.97 billion respectively in 2012.
Investment in the province’s exploration sector has also gone through the roof, increasing more than 800% to $746.5 million in 2012 from $75.8 million in 1998.
Royalties and mining taxes in B.C. increased 548% to $357.7 million in 2011-12 compared with 2002-03.
Other statistics reveal that the number of agreements signed between mining companies and aboriginal communities across Canada totalled 297 between 1998 and 2012 compared with 38 before 1998.
On the environmental front, the report showed that while waste tailings management and energy consumption showed little improvement nationally between 1998 and 2012, improved performance was recorded in overall industry water quality, air emissions and GHG emissions.
In 2011 the mining sector emitted 46.3 million tonnes of GHGs nationally, representing a 14.5% decline compared with 1998 emissions.
Is the industry’s environmental record perfect? No.
Is there room for improvement? Yes.
Will every mining project proposed in B.C. go ahead? Not a chance.
Ultimately, global markets and social rhythms determine the feasibility of mining projects in British Columbia, but the statistics reveal an industry that is growing, continues to produce immense wealth and is increasingly responsible.
Sometimes you just have to think long term. •
