BC's mining sector sees revenue decline as coal prices slip
The mining sector in British Columbia saw gross revenue fall slightly to $11.4 billion in 2019 from $12.4 billion in 2018, according to a recent report from PwC Canada. While gold and silver prices rose, most other metals and minerals mined in the province suffered price drops, including metallurgical coal.
Though the year started strong, the price of industrial metals and minerals fell because of expectations of a coming global recession. The Covid-19 pandemic has led to further price declines, while gold prices have risen as investors flock to the “safe harbour” commodity in uncertain times.
Metallurgical coal, one of the most important commodities in BC, dropped from an average US$182/tonne in 2018 to US$164/tonne in 2019, with revenues declining from $5.8 billion (2018) to $4.9 billion (2019). Copper fell from US$2.96/lb (2018) to US$2.72/lb (2019), though revenues rose by $100 million to $2.1 billion in 2019 due to higher volume of shipments.
The average gold price, on the other hand, increased to US$1,394/oz in 2019 compared to US$1,269/oz in 2018. Gold revenue in BC rose from $843 million in 2018 to $1.2 billion in 2019.
According to PwC, metallurgical coal and zinc prices are projected to continue falling in price in 2020, while copper will rise slightly. Gold and silver prices will continue their upward trend.
Though the BC mining sector saw slightly lower revenues in 2019, its total payments to government rose to $1.1 billion from $953 million in 2018. This was driven by higher mineral taxes, as well as levies and payments related to employment.
The number of direct jobs at the companies surveyed was 11,784, down slightly from 11,930 in 2018.
ESG goals
The pandemic has brought heightened attention to issues such as health and safety and community engagement. Communities and sector leaders are also focusing more on environmental, social, and governance (ESG) issues in general. BC mining companies have, fortunately, been proactive at improving their ESG performance in recent years, according to the PwC report.
Strong ESG practices, such as health and safety standards, have even allowed BC mines to continue operating during the pandemic.
The BC mining sector has the opportunity to build on its ESG strength to maintain the social license needed to continue operations and attract capital, says the consulting firm. This will entail embedding ESG into planning and management, accurately measuring and disclosing results, and collaborating with government, academia, and communities.
“The environmental, social, and governance work that has already been established in BC has the potential to create an internationally-recognized 'Made in BC' label. High environmental standards, strong relationships with communities, and the unwavering commitment to health and safety, will help BC mining companies succeed in uncertainty,” said Mark Patterson, BC mining leader, PwC Canada.
