Source: The Canadian Press

Profits in British Columbia’s mining industry remain at historically high levels despite the effects of a global recession and lower commodity prices, according to a new report.

The report, released Wednesday by PricewaterhouseCoopers, says B.C.’s mines earned $2.3 billion for 2009. This was down 28% from $3.2 billion in 2008 but was close to the profits seen in 2007, which at the time was a record.

The industry weathered the global economic downturn better than most,” stated Michael Cinnamond, leader of the advisory firm’s B.C. mining practice and co-author of the report.

“Even so, the mines in B.C. were faced with lower shipments and weaker prices across the board last year due to a drop in overall economic activity just about everywhere. Coal, which dominates B.C.’s mining sector, experienced a 24% decline in volumes shipped and prices fell by almost half.”

According to the report, total metals and coal shipments from B.C. mines dropped 21% to 21.3 million tonnes in 2009, but overall employment stayed at 2008 levels.

Shipments of metallurgical coal fell to 16.9 million tonnes in 2009 from 22.3 million tonnes in 2008, while coal prices dropped dramatically to US$157 a tonne from $260 a tonne.

Copper concentrates, the second most important contributor to revenues, brought in $1.2 billion in 2009, up 3%, even as the average price of copper fell 26% to US$2.35 a pound and shipments fell 14% to 730,000 tonnes.

Zinc revenues dropped 20% to $587 million, while a 12% rise in the average gold price pushed gold revenues up by 34% to $309 million. Silver sales also grew in 2009, up 6% to $288 million.

And average prices for molybdenum, a metal used in stainless steel, plunged 61%, pushing moly revenues down 49% to $241 million.

The report also polled 34 CEOs of B.C.-based mining companies in late April and found that 61% believed their businesses have returned to normal, while 50% were actively pursuing new properties, acquisitions or mergers.

The mining industry contributed $5.7 billion to the provincial economy in 2009.

Vancouver is headquarters to many of Canada’s largest miners, including coal, zinc and copper giant Teck Resources (TSX:TCK.B), international gold producer Goldcorp (TSX:G) and a host of other base metals and gold producers.