Profit at B.C. mining companies dropped in 2012, according to PwC’s 2012 BC Mining Industry Survey released yesterday to coincide with B.C.’s Mining Week.
Survey respondents indicated that aggregate pre-tax net earnings fell 51% to $1.8 billion down from $3.7 billion the year before. Cash flow from operations decreased to $2.2 billion in 2012 as compared with $4 billion in 2011.
Gross mining revenues were reported as $9.2 billion in 2012. That is down 7% from $9.9 billion in 2011, when the price of copper reached a new high and coal was near its peak. Commodity prices slid as a result of slower global economic growth and a deepening debt crisis in Europe.
New capital raised plummeted 97% from $3.27 billion in 2011 to $94 million in 2012.
“B.C.’s mining industry faced significant headwinds in 2012, including lower commodity prices as a result of global market jitters and a range of rising costs – labour, raw materials and energy,” said Michael Cinnamond, who co-wrote the report and is leader of PwC’s mining practice.
“Lower capital expenditures, revenues and a drop in operating cash flows resulted.”
The prices of BC’s two largest revenue-generating commodities, coal and copper, slid, causing a drop in aggregate B.C. mining revenues and profit.
Not all news was bad, however.
In terms of employment in the B.C. mining industry, staff figures increased to 10,419 in 2012, an increase of 12% from 9,310 in 2011. Average salary and benefits increased to $121,900 from $115,700 the previous year.
Attracting and retaining skilled labour to mining operations in B.C. remains a challenge, according to the report.
“The industry has developed a number of education and training programs to attract workers, in particular from underrepresented segments of the population,” said Cinnamond.
“The hiring of temporary foreign workers was a hot topic in BC’s mining sector in 2012 and is expected to remain in the spotlight in the industry, and across all sectors in Canada.”
