PwC NEWS RELEASE: BC mining companies are riding the wave of strong demand and high commodities prices: PwC report

Revenues and earnings reached near record highs in 2010

VANCOUVER, May 10, 2011 — 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 billion 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 steel production.

Other findings from the report include:

  • Total revenues from copper increased from $1.2 billion in 2009 to $1.4 billion 2010.
  • 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 previous year.
  • Molybdenum prices increased 42% over 2009 and resulted in revenues of $255 million.
  • 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 43 years.


1.The $3.7 billion total includes gains on asset disposals of $0.8 billion.
2.All dollar amounts are shown in Canadian dollars unless noted otherwise.
Video interviews with some of the BC mining industry’s leading senior executives are available on the PwC web site at:

For more information or to download a full copy of the 2010 report visit:

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