Highland Valley falls victim to low metals prices

The Highland Valley copper mine in the Kamloops region of British Columbia is the latest casualty of poor commodity prices.

The major decline in world copper prices over the past 18 months has forced the mine to incur significant losses, says David Johnston, president and general manager of Highland Valley Copper. In the fourth quarter of 1998 alone, the mine lost $8 million, and further losses are forecast for the current year.

The mine, a large-tonnage, open-pit, low-grade operation, has reserves of 417 million tonnes grading 0.42% copper and 0.0087% molybdenum.

Highland Valley has been processing 125,000 tonnes of ore daily. In 1998, the mine produced 170,000 tonnes of copper in concentrates, representing 1.5% of global demand. At its zenith, about 250,000 tonnes of ore and waste were mined each day.

Substantial improvements in production costs resulted from investments in the plant and equipment over the past two years. However, these were not sufficient to offset rising world inventories and the consequent decline of the value of copper. In an attempt to prolong the mine’s life, the provincial government, in conjunction with Highland Valley Copper, went so far as to sign a memorandum of understanding aimed at developing a copper refinery on site. At the time, B.C. Premier Glen Clark said he hoped the refinery would “underpin a major revival in the province’s mining industry, similar to what occurred in the 1960s and early 1970s.”

The indefinite suspension of mine operations, scheduled for May, now places the refinery project in doubt. The mine is expected to remain closed until copper prices improve.

Highland Valley employs 1,046 people and is said to contribute $100 million annually to the local economy. The mine is half-owned by Cominco Ltd. (CLT-V), with Rio Algom (ROM-T) holding 33.6%. The remainder is held by Teck (TEK-T), with 11.4%, and Highmont Mining, with 5%.