EDITORIAL B.C. might be ready for a smelter now

There will be big things happening in British Columbia’s mining industry for the rest of this century, big enough to warrant raising the old question of whether the West Coast needs a copper smelter. A new wave of major mines will be coming on stream and the advantages of locating a smelter on the West Coast are compelling. But the arguments against construction of a copper smelter are also forceful. As Cominco’s Robert Hallbauer has said, smelters do not make money. They are, in fact, as often a liability as an asset.

Smelters are not cheap, either. With a capital cost of at least half a billion dollars, investors demand a high degree of probability that concentrates will be available on attractive terms.

And does the world really need more smelting capacity? Today there is a surplus of concentrates, but that may have less to do with a shortage of smelting capacity than it does with an increase in mine capacity. Chile’s Escondida, for example, has started to churn out 310,000 tonnes of concentrates a year while output from Portugal and Indonesia is increasing.

A number of new smelters are already in the works. Chile is studying the possibility of adding smelter capacity. Mitsubishi’s Texas City complex in Texas, the most advanced, is preparing to handle concentrates from Escondi-da. As well, Outokumpu and Metallgesellschaft are planning new facilities in Portugal and Indonesia respectively.

But even considering those problems, the concept of a British Columbia smelter-refinery complex is an appealing one. For decades the province has shipped its concentrates to Japan for the value-added smelting and refining to take place. If there is any sort of industrial development policy in this country, it should support the idea of adding value here to our natural mineral wealth.

What’s more, Japan itself is not planning to increase smelting capacity. A strong yen and pressure on Japan from the General Agreement on Trade and Tariffs to cut its 7% duty on refined copper could push smelting terms up con-siderably.

With big deposits like Placer Dome’s Kerr and Mt. Milligan waiting to come on stream and others like Windy Craggy and those in the Galore Creek area of northwestern British Columbia in the wings, a new generation of copper mines will be coming into production in the next decade. Will it be necessary to continue shipping the metal offshore for processing? British Columbia is getting a second chance to keep those jobs and those profits in Canada.

The idea for a West Coast copper smelter surfaces every few years and, as copper prices fluctuate, the idea subsides a short while later. At least it did in the past. The latest flurry of discussions arose from a recent report by mining consultant Roger Taylor, funded by the provincial and federal governments, and from a paper given by Harold Halvorson during British Columbia’s recent Mining Week.

Both Taylor and Halvorson say the idea of a copper smelter in British Columbia has merit and should be pursued, and that is good advice. British Columbia has long been one of the world’s great copper producers: a well-documented case for building a smelter or for sticking with concentrate shipments out of the country is justified by that fact alone. Whether further research finds that the status quo is sufficient and that a smelter is too expensive, too environmentally risky, or whether it finds that a smelter in British Columbia could be profitable, the subject should be revisited in detail now, before a second chance slips by.