Recovery of Cariboo mining industry to help counteract effects of wildfires

“The mining industry fared reasonably well in 2017. Higher prices for some metals, in particular gold and copper, stimulated mineral exploration and increased overall output at the region’s mines,” explained Stan Mitchell, CPA, CA, partner at KPMG LLP in Prince George.

“The Bonanza Ledge gold mine east of Quesnel reopened in 2017 after being shuttered for two years, creating about 90 direct jobs and spin-off employment at local businesses.”

The Gibraltar and Mount Milligan mines are also expected to continue production, as the price of commodities are expected to continue to improve. After some downtime in the summer of 2017 and winter of 2018, Mount Milligan was able to resume operations at near full capacity in March, ahead of schedule, due to an earlier-than-expected thaw. These ongoing mining activities should help offset current stalled operations at Mount Polley, where unionised employees have recently gone on strike as the two sides renegotiate their labour agreement that expired at the end of 2017.

According to the report, last summer’s wildfires had a definite impact on our region’s economy. Employment in the region’s goods sector dipped to 22 200, a decline of 9.8% from 2016. The disaster kept loggers out of the woods for a significant part of the summer and dampened other forestry-related activities, resulting in layoffs in the forestry and logging industries. The construction industry also contracted by 700 jobs due to a slowing of commercial construction activity, a slowing of major project development, and temporary layoffs at the Site C project in Northeast B.C. that affected some of the Cariboo’s mobile workers.

“Unfortunately, the Cariboo also had a reduction of 200 jobs in its primary manufacturing industry of wood products,” added Mitchell.

“A decline in lumber demand from the US, dwindling stocks of mountain pine beetle-killed woods, and temporary mill shutdowns and lower inventories during the wildfires reduced lumber shipments and spurred layoffs.”

While the region’s overall employment increased, this job gain should be interpreted with caution, as much of it was in response to emergency wildfire support. The Cariboo’s service sector reached 58 000 jobs in 2017, an 8.5% increase from 2016. The largest gains were in health care and social assistance, which included support for individuals and families. Trade employment grew steadily through the latter half of 2017, ending the year with 14 400 jobs, and some of this gain could be attributed to higher consumer spending generated by purchases to support pilots, firefighters, volunteers, and displaced people.

“Looking ahead to the rest of 2018, our forestry industry will continue to face challenges from the softwood lumber dispute with the US, and the management of our region’s timber supply, particularly in respect of the pine beetle epidemic. However, record lumber prices are expected to continue this year and plans to further diversify into new markets may mitigate some of the anticipated losses,” continued Mitchell.

“Activity in the mining industry, on the other hand, is expected to continue to thrive, with commodity prices remaining high. Additionally, the construction industry may see some pick-up in the upcoming years, as work is scheduled to commence in 2019 for a CAN$800 million resort in Valemount, as well as work arising from the Site C Project, and pipeline and LNG related projects.”

Read the article online at: https://www.globalminingreview.com/finance-business/18062018/recovery-of-cariboo-mining-industry-to-help-counteract-effects-of-wildfires/