North of 60 Mining News - The mining newspaper for Alaska and Canada's North

British Columbia's mining sector continued its five-year recovery trend last year and is on the brink of an Asia-fueled boom, according to an annual British Columbia mining study conducted by PricewaterhouseCoopers.

An increase in coal, copper, silver, gold and lead prices helped to push total industry net income up 166 percent in 2003, reported the study, which was released in May.

The Mining Industry in British Columbia - 2003, an annual survey and assessment of the mining industry's overall performance, summarized the 2003 year-over-year financial information of British Columbia's 13 producing mines and one smelter. It reported that the industry had a net income of C$285 million compared with C$107 million in 2002.

Gross mining revenues were up by 3.5 percent to C$3.65 billion in 2003 over the 2002 figure of C$3.53 billion. Coal was the biggest player last year, accounting for 36 percent or $964 million of the British Columbia mining industry's net revenues of $2.7 billion.

PricewaterhouseCoopers survey results found that cash flow from operations in 2003 was C$598 million, an increase of C$31 million or 5 percent from the C$567 million cash flow from operations in 2002. And last year's return on shareholder investment was 10.9 percent as compared to 4.1 percent reported in 2002.

Tempered by stronger Canadian dollar

"Although 2003 was generally a positive year for the B.C. mining industry, the benefits of higher metals prices were tempered somewhat by the stronger Canadian dollar," said Michael Cinnamond, senior manager for PricewaterhouseCoopers' British Columbia mining practice. "The global industry prices its products in U.S. dollars, so a 1 cent change in the value of the Canadian dollar translates to a shift in gross revenues for B.C. producers of C$26 million."

"The province's mining industry seems to be finding its feet after some tough years - higher metals prices are certainly helping and may lead to the re-opening of some existing mines. Exploration expenditures, a must for long-term sustainability, were up last year and reached C$55 million province-wide and are expected to be in the C$100 million range in 2004," said John Bowles, PricewaterhouseCoopers' British Columbia mining practice leader.

Exploration spending has been on the rise every year since 1999. If it breaks the C$100 million mark this year it will be the first time since 1996. Between 1980 and 1990, when 23 mines opened in the province, an average C$162 million was spent on exploration in the province each year, he said.

Provincial minister of state for mining Pat Bell told the Globe and Mail that it is important to move quickly to find and develop new mineral deposits while demand from China and India is at its peak.

"We're sitting on a 15-year window of opportunity that many of us may never see again," he was quoted as saying.