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

British Columbia is reveling in a mining boom without parallel in more than three decades, according to a report by PricewaterhouseCoopers.

Powered by higher metals and coal prices, reflecting the strong demand for commodities, and an increase in the number of producing mines, the province posted an increase of C$790 million or 29 percent in net revenues to C$3.5 billion in 2004, generating total net earnings of C$871 million - the highest annual earnings since the accounting firm started its annual survey in 1968.

Net income for 2004 was, in fact, greater than the previous eight years combined.

Capital expenditures up 85 percent

Other highlights from the survey of 18 mines that are either operating or about to start operations are, one smelter, eight mines in the active permitting stage, eight mines in reclamation and six exploration properties showed:

• Direct employment in British Columbia mining totaled 6,442 in 2004.

• After-tax return on shareholders' investment rose from 10.9 percent in 2003 to 29.4 percent in 2004.

• Cash flow from operations soared by 91 percent from C$598 million in 2003 to C$1.14 billion last year.

• Based on the Pricewaterhouse-Coopers' survey, exploration and development spending jumped from C$15 million to C$73 million, although the British Columbia government has estimated the increase for the total industry was 136 percent to C$130 million.

• Total capital expenditures were up 85 percent to C$270 million.

• New capital raised posted a 558 percent gain to C$283 million.

Net mining revenues up 6 percent

The breakdown by commodities showed: Shipments of metallurgical coal increase by 10 percent to 22.8 million metric tons, while net mining revenues were up 6 percent to C$990 million; net revenues from copper concentrate climbed 55 percent to C$718 million; molybdenum (used mostly in the manufacture of high quality steel) recorded a 209 percent hike in net mining revenues to C$398 million; net revenues from zinc and zinc concentrate were up 115 percent to C$530 million, despite a drop of 28,000 metric tons in shipments; net gold mining revenues were off 4 percent at C$309 million, but silver grew by 28 percent to C$270 million.

John Bowles, PricewaterhouseCoopers' mining practice leader in British Columbia, described 2004 as a "great year," reflecting strong metal and coal prices driven by demand in China and elsewhere.

Coal, which accounted for 30 percent of total revenues, enjoyed strong worldwide demand and prices and the outlook for 2005 is "staggering" with average prices for metallurgical coal rocketing from US$50 per metric ton in 2004 to US$125 by April 1, he said.

Michael Cinnamond, co-author of the study, said the increases in base metal and coal prices were "so significant in 2004 they have more than offset any negative impact of the strengthening Canadian dollar."

Further bolstering the revival of mining, the British Columbia government has adopted a strategy since 2001 of offering incentives to promote new investment and slashing red-tape.