BC mining sector resiliently navigated challenging 2020 - PwC report
(Kitco News) - In its recently released report titled "BC Mine 2020: A new agenda for transformation and sustainable growth", PwC Canada pointed out that BC miners successfully navigated a difficult period in 2020, with companies quickly adapting their operations during the COVID-19 pandemic.
PwC said that while commodity prices fell in the wake of the initial shock of the COVID-19 pandemic and many BC miners curtailed their operations at the start of the crisis, conditions quickly improved. Mining companies were able to work successfully with governments and health officials to adapt their mine sites so they could continue operating.
PwC noted that there are signs of optimism for 2021 as prices for many commodities began to recover in anticipation of an eventual global economic rebound, with gold showing particular strength during much of the year.
Despite the optimistic outlook for many mining companies, BC miners reported a mixed financial picture for 2020 as overall revenues fell from 2019, the report found.
Of those who participated in PwC's BC Mining Survey, their gross mining revenues totaled $9.5 billion, compared to $11.4 billion in 2019 and $12.4 billion in 2018 (CAD).
This was due, in large part, to lower prices and sales for metallurgical coal combined with production curtailments due to the pandemic. Higher prices for gold, silver and copper in the second half of the year helped offset the declines to some extent, PwC explained.
"The BC mining sector resiliently navigated a challenging 2020, with companies quickly adapting their operations during the COVID-19 pandemic," said Mark Patterson, BC Mining Leader, PwC Canada. "Although overall revenues fell from 2019, BC miners are looking ahead with optimism. At this pivotal moment, they have a unique opportunity to further accelerate change, transformation and progress on critical priorities, like ESG."
The outlook for metals and minerals has continued to improve this year, with spot prices for key BC metals and minerals as of March 31, 2021, either up from or in line with their 2020 averages. The 2021 consensus forecast for metals and minerals also suggests a positive outlook compared to 2020, the report found.Despite lower revenues, BC miners continued to invest in 2020, with capital expenditures in line with 2019 spending of $1.6 billion. The industry continues to be a significant source of employment and creator of jobs in British Columbia. In 2020, there were 11,738 direct jobs at the companies that participated in this year’s survey, PwC noted.