No silver linings evident in B.C. mining cloud

Plagued with uncertainty over its future, the British Columbia mining industry is urging the provincial government to demonstrate that it is interested in reviving the ailing sector.

Government attitude is largely responsible for the current decline in exploration and for the fact that Vancouver-based companies are being lured to invest in other jurisdictions, says Gary Livingstone, president of the province’s Mining Association.

“Unless we reverse the feeling of uncertainty in the investment climate, the future of mining in B.C. is in question,” Livingstone warns. “We need to deal with major issues like taxation, regulations and land use in order to turn this industry around.”

Each summer, Price Waterhouse surveys the province’s major mines and compiles a financial report. According to this years’s report, the industry posted a loss of $119 million in 1992, its third consecutive year of substantial losses after taxes.

Mining expenditures declined by $544 million to $2.6 billion in 1992. Contributing to the drop were lengthy closures at several coal mines and an absence of mine openings. Direct employment fell 16% to 10,576 from 12,587 in 1991, marking a 10-year low.

Exploration and development expenditures hit at an all-time low of $29 million. And the report states that a 55% decline in claim-staking in 1992 “depicts the impact of current disincentives to exploration in the province.” Livingstone stresses that exploration spending plummeted 49% last year, compared with a decline of only 12% in the rest of Canada. He adds that the 1993 forecast points to a probable 18% drop, compared with an 8% decrease in other provinces.

“Without exploration now, our industry will not prosper in the coming years,” Livingstone says. “We must work now to encourage more exploration investment.” His warning is echoed by several industry executives who caution that plummeting investment will result in lost jobs and lost opportunities for developing associated technologies in the future.

“The most intimidating factor here is uncertainty,” says Westmin President Walter Segsworth. “We don’t know where we can explore and this government’s legislative program is strangling the industry.”

The exodus of mining companies to other jurisdictions is followed by that of companies which supply mining-related services and products, according to Penny Omnes, vice-chairman of the Mining Suppliers, Contractors and Consultants Association. Omnes is also vice-president of marketing for B.C. Bearings and says the company is now doing business in Chile, where other mine suppliers have also set up shop.

Uncertainty over land use is another key concern. The industry charges that the government “ran roughshod” over the decision-making process when it announced in June that the Windy Craggy copper-gold deposit would be expropriated in favor of a 1-million-hectare provincial park. Despite the gloomy outlook, mining companies are willing to work with government to change things for the better, Livingstone says. Concerns include land access, mineral tenure, compensation for expropriated lands, mine development review processes, environmental policies and taxation. A glimmer of hope is provided by the government’s plan to set up a task force on mining, to begin this fall. “We hope this signals that government attitudes to mining are changing,” Livingstone says.