Copper trade beckons B.C. west — About $1 billion in B.C. copper

British Columbia has a long history of trade with Japan, which today is the province’s second largest trading partner and which purchases almost 30% of the province’s total exports in terms of value.

The British Columbia mining industry is a major contributor to the overall trade picture with Japan. In 1990, B.C.’s mineral exports to Japan were valued at more than $1.5 billion. About $1 billion of that total was derived from metals shipped in ores and concentrates, primarily copper. The remainder came from coal.

The development of the copper industry in the mid-1960s can be traced to the rapid re-industrialization of Japan in the post-Second World War period. The growth of Japan’s custom copper smelting industry throughout this period created a huge demand for copper concentrates and led to the development or expansion of copper production across the Pacific Rim. Today’s prominent world copper producers, including British Columbia, were all developed primarily to serve the Japanese demand for custom concentrates. In British Columbia, many of the mines developed during this period were financed

on the strength of long-term sales agreements with vari-

ous Japanese smelters. The Japanese also provided some debt and equity financing.

As a result of the development of the Pacific Rim copper market, British Columbia’s copper concentrate output has increased from just under 15,000 tonnes in 1960 to almost 350,000 tonnes in 1990. The aforementioned factors demonstrate that Japan remains the leading market for the province’s copper concentrates. However, rapid economic growth in the Pacific Rim has also created markets in other countries.

Probably the oldest non-ferrous mineral trade between British Columbia and Japan occurred from 1937 to 1941 with the export of copper concentrate to Sumitomo Metal Mining from the Phoenix Copper mine near Greenwood. Exports from the mine resumed in 1962.

Another of the first mining business relationships between Canada and Japan began more than 30 years ago in 1960 with the signing of a long-term contract with the Benson Lake copper mine on Vancouver Island. This contract helped set the stage for the mutually beneficial trade relationship in copper concentrate between the two countries. In fact, copper concentrates have been purchased from most of the copper mines in British Columbia by Japanese smelting companies.

Japan also became involved with financing and investment in the province’s copper mines during the 1960s and early 1970s. For example, Sumitomo reached an investment, financing and concentrate purchasing agreement with the Bethlehem Copper mine in 1961. When the mine began production in 1962, the concentrates were exported exclusively to Sumitomo. Sumitomo, along with Mitsubishi Ltd., also provided mill financing for the development of the Granisle mine near Smithers in 1964.

Other copper mines that developed to fuel Japan’s re-emergence during this period included Craigmont, Brenda, Island Copper, Gibraltar, Similkameen, Bell Copper, Lornex and Valley Copper.

Turning for a moment to molybdenum, Japan and the Endako mine signed a 5-year sales contract in 1965 which was the first long-term contract for importing molybdenum from Canada. This contract was instrumental in obtaining the financing for Endako’s startup. The mine has been supplying molybdenum to Japan continually since then.

The anticipated growth in demand for copper, and the fact that base metal resources in Japan are nearing exhaustion, will require further development in mines and facilities outside Japan if future world production is to increase. Recently, the Goldstream mine was able to reopen because of financing secured through Nippon Mining and Sumitomo Corp. Other joint ventures in B.C. projects of equity participation in expansion of Canadian facilities should be encouraged.

Another of the province’s mineral exports, coal, was first discovered in 1835 at the northern end of Vancouver Island. At the time, coal was the primary source of fuel for ships, and development of the coal reserves was a response to this demand. Production began from the Crowsnest field in 1898, and demand for Kootenay area coal developed with construction of the railroads in Western Canada.

However, the coal industry in British Columbia declined after the 1930s because of the development of hydro-electric power, the availability of alternate fuels for transportation and home heating, and the lack of heavy industry in the province to provide a steady demand for coal. By the late 1950s, the B.C. coal industry faced virtual extinction.

It was the demand for metallurgical coal to feed the Japanese steel industry which sparked a resurgence of coal mining in the mid-1960s. This demand not only boosted the industry in the southeast, but also led to the development of the immense reserves in the northeast. The latter project included the Quintette and Bullmoose coal mines, the town site of Tumbler Ridge, railway additions, port facilities and major highway upgrading.

Today, more than 30% of total provincial solid mineral revenue is derived from coal sales. The value of coal production in the province has risen from around $6 million in the mid-1960s to $1 billion in 1990. More than 50% of British Columbia’s coal production is exported to Japan. Most of this coal is metallurgical coal for Japan’s steel industry. In fact, British Columbia supplies 20% of total Japanese imports of metallurgical coal. From a recent edition of Mineral Market Update, a publication of the British Columbia Ministry of Energy, Mines and Petroleum Resources.