PwC’s 47th annual British Columbia Mining Survey outlines the financial results of BC’s mining industry in 2014.
BC’s mining industry continues to prove its resilience and demonstrate its commitment to sustainability and stakeholder engagement amid a number of challenges presented in the past year. Lower commodity prices remain the primary threat to profitability in the industry. The steady and continuous drop in the price of many metals and minerals has led to reduced revenues and margins, which in turn has meant lower overall spending and investment across the sector.
A handful of mines were put on care and maintenance in 2014, as companies cope with the current price slump. Some capital projects were also delayed, as companies decided to hold off on advancement until prices start to recover.
This drop in activity is evident in the financial results of companies in our 2014 survey of BC mining companies. Gross revenues fell to $8.2 billion in 2014, compared to $8.5 billion in 2013. Net income before taxes came in at $288 million, down considerably from $1.4 billion in 2013, amid a drop in prices for key metals produced in the province, particularly coal. Spending also fell as companies continued to hunker down and weather the ongoing market volatility. Capital expenditures, for example, fell to $1.5 billion, compared to $1.8 billion in 2013.
Mining is a cyclical business. Miners know this better than most and many are taking appropriate measures to try to maintain profitability, while at the same time ensuring their operations are sustainable for the long-term, for when commodity prices do eventually recover.
Read more: Proving Resilient: the Mining Industry in British Columbia in 2014 (PwC)