Mining g in BC Key Issues and Trends *** Presentation to the BC Construction Roundtable
October 2008
The Mining Association of BC
• Represents major producers of coal coal, metals and industrial minerals in BC and two smelters smelters. • Committed to environmental protection – Recentl tly ad doptted da new env ironmenttall polilicy
• Mining has the best safety record of any C heavy industry in BC
The Industry
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• ••
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As the gateway to the Pacific, B.C. is home to over 800 mining companies and is a global centre of mining and mineral exploration expertise Gross revenues of $8+ billion in B.C., with over 100,000 emp ployees y (direct and indirect)) in primarily y rural areas
One of the highest paying industries in B.C., now averaging over $100,000 including benefits Currently, 10 coal Currently coal, 10 metal metal, 36 industrial mineral mines mines
and 2 metal smelters safely operate in B.C.
BC Coal Deposits
5
Huge Wealth in Coal in BC
• Estimated 20 billion tonnes of coal reserves • Production comes from three regions in the province
B. C. Hydrocarbon Reserves & Resources
Coal 95.2 %
Metallurgical is mined at five open pit mines in the
southeast East Kootenay
Coalfields Metallurgical & PCI coal is mined in NEBC
Thermal coal is mined at the underground mine in the Comox Coalfield on V Vancouver IIslland; d Potential for Met on Island
Oil 0.5%
Gas 4.3%
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The BC Mining Opportunity
• Approximately 30 major new projects in “pipeline”
• Record exploration levels & high commodity prices BC (metal, coal, industrial minerals)
• Need for 15,,000 emp ployyees • Gateway to the Pacific • Counter the negative economic impacts of the pine beetle • Opportunity for BC mining sector to emerge as major, global player
Current Economic Downturn • Long-term Long term outlook for mining still positive positive
• Banks risk averse making it harder for small companies to raise money – May affect exploration and delay/slow down some projects
• Most commodity prices still relatively h lth despitite some declilines healthy,
Key Challenges • Infrastructure • Rising Ri i energy costs t and d climate li t acti tion • Professional development, skills and trades training and recruitment • First Nations – consultation & accommodation – resource revenue sharing
• Complex project review process
Infrastructure
• Infrastructure keyy enabler. • Premier Campbell’s announcement on Highway 37 good news for northern BC • MABC Stud St dy evalluates t economiic potenti t tiall of proposed power – – – –
10,700 jobs Potential for $15 billion in capital investment Improved access to clean electricity sources More than $300 million in annual tax revenues to government
North-western British Columbia key projjectts
Climate Change & Energy Costs
• • •
Mining is energy-intensive, global price taker BC’s historical advantage has been cheap electricity – can we sustain this? Good working relationship with government on climate action and we are doing our part. – Investments in energy conservation and best available technology to reduce GHGs where feasible to – Fuel and equipment switching – Best Practice Guidance on effective energy management systems
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Need to work together to ensure industry remains economically competitive titi and d can grow – Cap & trade presents much uncertainty – Global market competitor and price taker – Alternatives to carbon based fuel typically yp yre q
quires increased electricity
– Need to balance government’s desire for domestic value-added with energy-intensive nature of value-added activities
HR Challenges
• Canada’s mining sector, which is growing at twice the rate (~4%))of the econom y,has forecast a shortfall of 92,000 workers in the next decade
• In British Columbia’s mineral exploration & mining sector up sector, p to 40% of the workforce orkforce will ill retire o over er the next 10 years • The p projected j labour (not incl. construction demands):
9 7,400 job openings over 5 years, or 15,000 over 10 years 9 1,480 1 480 job openings per year to 2012 (based on replacement needs and growth in the sector)
• RioTinto Alcan’s planned smelter modernization project would add 2000 construction jobs
BC HR Task Force Mission •
BC Mineral Exploration and Mining Labour Shortage Task Force formed to:
– address education education, recruitment and training challenges
challenges – address current and potential critical shortage of skilled labour and professionals in the B.C. mining and mineral exploration industry – plan and develop an industry-wide human resource and labour force strategy that can be implemented by: • career information and employment service providers • by by educational institutions and other training providers • Government • Industry – complement efforts of others – Develop training and education for K-12, Trades, entry-Level / support, professionals, Aboriginals, women & Immigrants
Task Force Participants
Canadian Aboriginal Minerals Association
EG
Entrée Gold Inc.
First Nations
• Relations with First Nations critical challenge in mine development in BC • First Nations Mining Summit (Prince George) – Action plan from FN – Demands for policy reforms • Free entry • Environmental Assessment • Resource Revenue sharing – Potential for industry/FN MOU • Mining industry must build on our success with FN, gthen relationship ps while focusing g on Pursue and streng acceptable solutions
Comp plex projject review process
While a BC / Canada EA Cooperation Agreement (2004) exists, there remains a dis-jointed federal/provincial mine approval process under the C Canadian di E Environmental i t lA Assessmentt A Actt (CEAA) and d th the BC Environmental Assessment Act (BCEAA).
Specific issues include: – lack of federal/provincial timeline harmonization (including delays in initial project scoping and actual review process) – lack of legislated timelines under the Canadian Environmental Assessment Act (CEAA) – lack of clear policies or guidelines regarding Aboriginal accommodation d ti and d consultltation ti – limited capacity of the federal responsible authorities (RAs) to review large volume of new projects in a timely manner – dissatisfaction with the joint federal-provincial panel review process
Environmental Assessment E Examples l – No N E Easy Route
R Red Chris – B.C. started pre-assessment process on November 26, 2003 and completed the EA on August 25, 2005 – Canada made a CEAA decision on May 2, 2006 – Federal decision successfully challenged in 2007 by NGO Mining Watch Watch, successfully appealed by federal government – Mining Watch seeking leave to appeal further Kemess North – B.C. B C started t t d the th pre-assessmentt process O Octob t ber 30 30, 2003 – The Canada/B.C. joint review panel process made 32 recommendations in September of 2007 – Project denied Galore Creek – Pilot project (federal and provincial harmonization) – B.C. started the pre-assessment process on February 27, 2004 and completed the EA on February 16, 2007 – Federal decision made June 4, 2007 – Project halted due to engineering and cost considerations
The Upside -Possible Possible Scenarios
Growth Forecast Scenarios New Mines
New Employees
No Growth
0
0
Capital $ Billi Billions 0
Low Growth
3
1500
$0.7
Medium M di Growth High Growth
7
3000
$1 61 $1.61
10
7000
$2 3 $2.3
The Mining Construction Potential
• Pre-Environmental Assessment Application Projects – 16 Projects – $3.9 billion in investment – 13,880 construction jobs – 9,287 9 287 permanentt jjob bs • Projjects Mining g under review byy the EAO – 5 projects – $1.1 billion in investment – 2,275 2 275 construction jobs – 5,235 permanent jobs • Source: BC Environmental Assessment Office, Project Summary Reports, as of October 15, 2008
Some Advanced New P j Projects
Project
Location
Commodities
Anticipated St t Start-up
New Afton
Kamloops
Copper, Gold, Silver
Ready for development
Ruby Creek Moly
Atlin
Molybdenum
Ready for development
Willow Creek
Tumbler Ridge
Met Coal
Ready for development
Eagle Rock Quarry
Port Alberni
Crushed Rock
Ready for Development
Copper Mountain
Princeton
Copper, Silver, Gold
In permit process
Galore Creek
Iskut
Copper, Silver Copper Silver, Gold
EA done, done In care & maintenance
Red Chris
Iskut
Copper, Gold
EA done, in permiting
Tulsequah Chief
Atlin
Copper, Zinc, Gold, Silver, Lead
Pending clarification
Projects in E i Environmental lA Assessment
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Cariboo Gold, Wells/Barkerville Davidson Project, Smithers Harp per Creek,, Vavenbyy Kerr-Sulphurets-Mitchell, Stewart Kutcho Creek Creek, Iskut Morrison Project, Smithers Mt. Milligan, Mackenzie P Prosperity, it Willi Williams L Lak ke Schaft Creek, Telegraph Creek Sustut Copper, Smithers Gething Coal, Hudson Hope
• • • • • • • • • • •
Hermann Project, Chetwynd Horizon, Tumbler Ridge Lodgepole, Fernie Mount Klappan Coal, Coal Iskut Roman Coal, Tumber Ridge Wapiti Coal, Tumbler Ridge C b Cogburn M Magnesium, i H Hope Giscome Quarry, Prince George Sechelt Carbonate, Sechelt Bear River Gravel, Stewart Hills Bar Aggreg gg gate,, Yale
What’s next: • Mining Industry working with government on new Minister of Mines Advisory Council to
to develop mining action plan.
– Council already delivering results (e.g. Highway 37 and dR Resource Revenue Sh Shariing)) – Work on other areas continues
• Provincial election
