No rebound in sight for B.C. mining sector

Copper hit particularly hard in 2015 as five-year slide continues

The five-year slump in commodity prices does not appear to be ending anytime soon, says Karina Briño, the president of the Mining Association of B.C., in an aunnual industry survey authored by PwC
 
“What I think we are seeing now is an actual correction,” said Briño. “Prices aren’t coming up the way they did in 2009. There is no significant rebound in sight.”
 
A total of seven mines were temporarily shuttered over the course of 2015, and one more in early 2016. Briño said those mine suspensions impacted about 20 per cent of the B.C. mining industry’s workforce. She expects the cost cutting measures undertaken by most mining companies to continue for the next 12 to 18 months.
 
Copper, B.C.’s second-largest commodity by revenues, was hit particularly hard in 2015, as the price averaged US$2.50 a pound, compared to US$3.12 in 2014. In early 2011, copper traded at a record-high US$4.60 a pound.
 
The low prices of many metals and minerals, including coal and gold, have led to reduced revenues and margins, which in turn has meant lower overall spending and investment across the sector. In sum, the revenues reported by the 27 companeis with operating mines in B.C. totalled $7.7 billion in 2015, down from $8.2 billion in 2014.
 
Capital expenditures were down to $1.2 billion from $1.5 billion in 2014. It was a particularly difficult year for junior companies, which rely heavily on investment to explore and develop new mines, because of the difficulty in raising capital.
 
There are bright spots, the report noted. While some mining companies have been cutting spending and curtailing operations to weather the current price environment, others continue to raise money and advance projects. Those include the Brucejack Project by Pretium Resources, currently in construction approximately 65 km north of Stewart. Brucejack, slated to begin production in 2017, is expected to employ about 500 people for 18 years.

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