Low metal prices squeezing Highland Valley mine

With reserves of 632.9 million tonnes averaging 0.414% copper and 0.0068% molybdenum yet to be mined, the huge Highland Valley copper mine near this interior community has about 15 more years to look forward to. But during a recent tour, company officials warned that any of several factors the price of copper, the value of the Canadian dollar, or government taxes and levies could turn the remaining ore into waste rock.

The message was conveyed to a group of cabinet ministers, their assistants and local mayors who visited the site. Guests included Mines Minister Anne Edwards, Environment Minister John Cashore, Transportation Minister Art Charbonneau and other members of the provincial government.

At todays (copper) price . . . we are losing money, Highland Valley Copper President Poul Hansen told the delegation. Since your administration took office in 1991, our front-end taxes and levies have increased our annual costs by over $3 million dollars. And we have already been promised B.C. Hydro increases a form of tax of over $1 million in each of the next two years. We are price-takers and cant pass on costs to the customers. Other mines are closing down because of world economics. This can also happen to us.

Highland Valley Copper is a partnership among three major mining companies. Cominco (TSE) has a 50% interest, Rio Algom (TSE) holds 33.6% and the remainder is held 13.9% by Teck (TSE) and 2.5% by Highmont Mining. In terms of tonnage mined and milled, the 130,000-tonne-per-day mine is one of the largest copper operations in the world. Last year, it produced 422,340 tonnes of copper concentrates containing 377 million pounds of copper and four million pounds of molybdenum. Sales for 1992 were $373.9 million. The open-pit operation features a computerized truck dispatch system and electronically operated conveyor system. The mill has five grinding lines, and the main control room features the latest in computer technology. The operation employs 1,160 people, most of whom reside in Kamloops, Logan Lake or other nearby communities. Salary and benefit costs totaled $82 million last year, roughly 37% of total operating costs.

David MacPhail, general mine manager, said the operation creates wealth to the tune of about $350 million per year. In this valley, each square mile we have disturbed produces $16 million dollars each year and the potential remaining is another $5.3 billion to Canadians and the economy of B.C. MacPhail also stressed that Highland Valley copper is making temporary use of the land and is restoring it to a condition probably better than it was before.

Later in the day, government officials joined mine employees in planting wild roses in one of the reclaimed areas. At the end of 1992, about 250 hectares of tailings ponds and dams had been revegetated in the Highmont and Bethlehem areas. About 200 hectares of waste dumps and 300 hectares of roads, plant sites and rights-of-way were also revegetated. Most of the areas are seeded with both grasses and legumes, with native species of shrubs and trees used in areas suitable for wildlife.

Mine employees say more wildlife is observed on the minesite than when mining began in the valley 24 years ago. Efforts to enhance fish habitats are reported to be a success and a recent feedlot study showed no adverse effect on cattle grazing on reclaimed areas where heavy metal uptake (especially molybdenum) has occurred in the vegetation.

Government officials appeared to be impressed by the mines fluid recovery building commissioned last year. The facility enables personnel to separate the used gear oil, hydraulic oil, other waste oil and anti-freeze so it can be reprocessed for reuse.

Both Cashore and Edwards called Highland Valley Coppers environmental standards exemplary and noted that the operation was recently presented with a provincial mine reclamation award for outstanding work and research. But the day was not all sweetness and light. During a question-and-answer period after the tour, mine employees questioned the cabinet ministers about the Windy Craggy decision and Bill 32, a controversial new environmental assessment act (later put on hold).

Windy Craggy represented my best hope of getting a job in this province after this mine shuts down, said heavy-duty mechanic Terry Steinthorson, adding that a fair number of Highland Valley employees expect to lose their jobs in the next few years.

The Windy Craggy issue and the overall future of mining were key concerns of mine employees, many of whom seemed embarrassed when Richard Boyce, president of local 7619 of the United Steelworkers of America, used the occasion to launch a tirade against Royal Oak Mines Chairman Margaret Witte specifically, and capitalism in general.

Thats not how most of us feel, Steinthorsen said. Ken Georgetti (head of the British Columbia Federation of Labor) should have consulted with laid-off coal miners in southeastern B.C., those laid off at Princeton and at Westmins H-W mine, and the people that will be out of work in Port Hardy when that mine closes. Jobs and unemployment are the key issues, and government and labor leaders are not listening.