Thursday, August 8, 2013

The BC Mining Industry post election

One huge Achilles heel in BC for the NDP if they had won government was going to be the mining industry.   The NDP history with the industry when they were in government between 1972-75 and 1991-2001 was "challenging" to say the least.  

The assumed election of NDP the this year had already cooled numerous plans in the mining sector.  When I talked with contacts in the mineral exploration field, many of they were talking about putting their BC based claims into a holding pattern and putting their money into claims elsewhere such as Yukon, Quebec, Montana, Mexico or even Ghana.   I have talked with a couple of them in the last few weeks and they plan on ramping up work on their BC claims next year.   The timing of the election meant that there was little scope to return to BC for the summer field season this year if the decision had already been made to go elsewhere.

We will not know till late January, but I suspect we will see the first drop in mineral exploration expenditures in BC since economic crisis of 2008/09.   I should add my contacts tend to be people working on very early stage exploration.  Most of the exploration expenditures are from advanced projects or existing mines looking for more ore bodies close at hand.   This sort of work I suspect had less of a drop that the grass roots or early stage work.

I do think there was a slow down among companies with advanced projects that could begin construction in the next five years.   It is with the re-election of the Liberals that there is more movement forward on plans to open mines.  I suspect we will see five metal mines going from the proposed stage to the start of construction in the next five years.   We are likely to see a fairly dramatic increase in revenues from mining in BC over the next decade.

Many of the proposed mines in a more advanced stages of planning often seem to have significant opposition go them.

Ajax mine near Kamloops has the Stop Ajax group.
New Prosperity in the Chilcotin did not manage to make it through the last Federal assessment is back with a new plan which has continued opposition.
Raven Underground Coal Project on Vancouver Island has very strong opposition.

But how far will the opposition be able to go to stop them with the Liberals in power again?  I think the hope of many of the opposition groups was that the NDP would win and stop the projects, but when you look at the locations of the above three projects, the NDP specifically did not do well in the areas where these projects are located.  

In Kamloops South Thompson rookie Liberal MLA Todd Stone was elected by a wider margin than four term BC Liberal MLA and cabinet minister Kevin Krueger was in 2009.  The NDP had the benefit of no Green running this time but they did not get the Green vote it seems.

In Comox Valley the Liberals gained votes over 2009 while the NDP vote went down.   The biggest gains were for the Greens.   Comox Valley Coal Watch seems to be strong and vocal but had no impact on the election it seems.

The election results not only give the mining industry a confidence to invest in BC, the Liberals can see that the groups opposing the mines can not mount an effective campaign to impact the results of the election.   The message the Liberals should be taking home from the election is that the public in areas near proposed mines are willing to vote for a government in favour of more new mines.
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