Record-breaking year for BC mining

Vancouver – The annual PricewaterhouseCoopers survey of the mining industry in British Columbia laid out in numbers the resurgence of mining in the province, where high metal prices buoyed by increased shipments led it to surpass last years record breaking earnings of $1.8 billion by $507 million.

Net mining income for BC in 2006 was $2.3 billion, the highest annual earnings ever recorded in the 39-year history of the PWC survey. Revenue growth came from all directions, with the strongest contributions from copper, zinc, silver, and lead.

Net mining revenues from copper concentrates increased by a staggering 76%, from $1.13 billion in 2005 to $2 billion last year, due primarily to the 83% growth in the average price of copper.

Zinc revenues also increased significantly, climbing from $528 million in 2005 to $1.2 billion in 2006. A 137% leap in the average price of zinc was a major factor, but so was a 19% boost in zinc shipments.

A 58% rise in the average price of silver drove a 74% jump in net silver revenues, from $213 million to $371 million. Silver shipments were up by 12%.

Lead prices and shipments also grew in 2006, with the average price up to $0.58 per lb. from $0.44 per lb., along with a 28% increase in shipments. The combination drove net lead mining revenues up 57%, from $87 million to $137 million.

Other indicators were also up, including employment figures and shareholder returns. The average number of people employed by BC mining notched upwards to 7,345 in 2006 compared to 7,071 in 2005. After-tax returns on shareholder investments saw an increase from 54.1% in 2005 to 64.8% in 2006.

Global price increases on essential mining supplies such as steel, fuel, and tires, as well as the increasing costs of hiring and retaining experienced mining personnel, tempered growth to some extent. Supplies and other costs of production increased by 46%, from $1.6 billion to $2.3 billion. Total capital expenditures increased by 49%.

Dividends paid almost doubled, reflecting the significant cash flows presently streaming through many BC mining companies. Dividends distributed in 2006 totaled $1.1 billion, up from only $642 million paid out in the previous year.

PricewaterhouseCoopers has conducted an annual survey of the BC mining industry since 1968. The level of participation in the survey is high, with 42 participants contributing to the 2006 report, including 17 operating metal and coal mines, one smelter, six operations in the permitted or active permitting stage, eight mines in the reclamation stage, and ten advanced exploration stage properties.