Revenues and earnings reached near record highs in 2010
VANCOUVER, May 10 /CNW/ - According to a new report from PwC, British Columbia's mining companies have rebounded from the global
economic slowdown, turning in near-record results for revenues, net
income and cash flows during 2010. Overall the industry's aggregate
pre-tax net earnings were $3.7 billion1 in 2010, up by 65% from $2.3 billion in 2009.
"The 2010 financial performance of the BC mining sector was outstanding,
driven by strong coal and metals prices and a lot of hard-working
people in the industry," said Michael Cinnamond, leader of PwC's BC
mining industry practice and co-author of the report. "The PwC report
shows that just about every aspect of the BC Mining sector has done
better than expected. Many of the positive trends we saw last year have
continued into the first quarter of 2011."
Gross mining revenues increased 13% to $7.9 billion in 2010, approaching
the historic high of $8.4 billion in 2008. The Canadian dollar
strengthened in 2010, creating an estimated aggregate negative impact
of $856 million on gross revenues, excluding the impact of any hedging.
Cash flow from operations increased by 32% to $2.9 billion in 2010,
reflecting the increased net revenues generated in the year. Capital
expenditures increased by 120% to $1,252 million in 2010.
Coal remained the most significant contributor to net revenues in 2010,
generating approximately 51% of total mining revenues for BC. Coal
shipments increased by 32% to 22.3 million tonnes in 2010, and coal
prices increases by 15% to an average of US$181/tonne. Respondents
attributed the increased demand and prices to a significant increase in
Other findings from the report include:
Total revenues from copper increased from $1.2 billion in 2009 to $1.4
Stronger demand and increased prices for zinc and zinc concentrates
drove revenues from these products up by 29% to $755 million in 2010
Revenues from silver increased 44% to $416 million in 2010 over the
Molybdenum prices increased 42% over 2009 and resulted in revenues of
Shipments of lead and lead concentrates were down 4% in 2010, but a 24%
price increase pushed lead revenues up 13% to $157 million in 2010.
Turnaround year for partnerships and infrastructure
Last year BC implemented two new major tax revenue sharing agreements
for new mine developments with First Nations―the first in
Canada―providing a roadmap for future partnerships with the mining
industry and First Nations. Agreements such as these help to reconcile
Aboriginal rights and title, establish new relationships based on
trust, mutual respect and recognition plus provide new economic
opportunities for First Nations.
"New mining projects are necessary for the long term viability of BC's
mining industry. We are encouraged to see three new major metals mines
in the construction phase and a pipeline of projects ready to go," said
Erfan Kazemi, Senior Manager at PwC and co-author of the report. "This
is a level of activity not seen in BC in over a decade."
Another reason for excitement in BC's mining sector is the firm
commitment by both federal and provincial governments to build the
Highway 37 Northwest Transmission Line, after many years of
consultations and lobbying by industry. This $404 million, 335 km long
electrification project will open up substantial mineral development
potential, attract new capital investment and bring low-cost, clean
power to a number of existing communities.
Cinnamond added: "Mining is and must continue to be an integral part of
the BC economy. This latest PwC report shows the industry has that
potential, with new mines soon to come on stream, increased foreign
investment and exploration, a new model for partnerships with First
Nations and commitments to build the Highway 37 transmission line. The
stars are aligning for significant industry growth―commodity prices are
high and demand is strong. However, there is still much work to be done
by BC's mining industry and the federal and provincial governments to
realize this potential. It's time to seize the day."
PwC's 2010 survey summarizes the year-over-year financial information of
42 participants with operations in BC: 17 operating metal and coal
mines; 1 smelter operation, 12 operations in the permitted or active
permitting stage, eight advanced exploration stage properties and four
mines in the reclamation stage.
PwC has been compiling this annual survey of the BC mining industry for
1. The $3.7 billion total includes gains on asset disposals of $0.8
2. All dollar amounts are shown in Canadian dollars unless noted
Video interviews with some of the BC mining industry's leading senior
executives are available on the PwC web site at: www.pwc.com/ca/bcminingsurvey.
For more information or to download a full copy of the 2010 report
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