BC Breaks Records

The annual PricewaterhouseCoopers (PwC) 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 to record-breaking earnings of $1.8 billion, surpassing last year’s figure by $507 million.

Net mining income for B.C. in 2006 was $2.3 billion, the highest annual earnings 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% to $2 billion last year from $1.13 billion in 2005, due primarily to the 83% growth in the average price of copper.

Zinc revenues also increased significantly, climbing to $1.2 billion in 2006 from $528 million in 2005. 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, to $371 million from $213 million. Silver shipments were up by 12%.

Lead prices and shipments also grew in 2006, with the average price up to 58 per lb. from 44 per lb., along with a 28% increase in shipments. The combination drove net lead mining revenues up 57%, to $137 million from $87 million.

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

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%, to $2.3 billion from $1.6 billion. Total capital expenditures increased by 49%.

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

PricewaterhouseCoopers has conducted an annual survey of the B.C. 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 10 advanced exploration stage properties.