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Gold/Mining/Energy : Rock Resources -- Ignore unavailable to you. Want to Upgrade?

To: Chad Barrett who wrote (668)	1/20/1999 12:06:00 PM
From: kidl	Read Replies (1) \| Respond to of 1996

Wednesday, January 20, 1999 B. C. ranks 'dead last' with mining companies Several sites closing By JOHN SCHREINER With files from MARNIE TAYLOR The Financial Post With British Columbia's operating mines beginning to fall like tenpins, the B.C. government's Job Protection Commission is scrambling for cost-cutting solutions to keep mines open. The commission is expected to be pulled into negotiations to keep open Highland Valley Copper after the giant mine announced Monday that depressed copper prices will bring an indefinite closing on May 15, putting 1,046 people out of work. David Johnston, Highland Valley's president, said the company is turning to the commission in search of alternatives to suspending production. As well, Mr. Johnston told a news conference that the company has agreed to a union call for a review of operations by a neutral third party. The commission is currently trying to find ways to keep Endako Mines Ltd. at Fraser Lake operating after that molybdenum producer, which is processing a nine-year ore stockpile, had announced a Feb. 5 shutdown, affecting 190 people. "We're not completely dead here," said Alan Morrish, the mine's vice-president and general manager. "I'm hoping that negotiations with the commission will be resolved in the next week." Last summer, the commission was able to prevent a shutdown of the Mount Polley copper-gold mine and the Huckleberry copper mine, both operated by Imperial Metals Corp. The commission worked out a two-year plan for both mines that involves reductions in power costs, deferrals of local and provincial taxes, wage rollbacks, and supplier discounts. This is the template for Endako and likely Highland Valley. Other mines in trouble include: Boliden Ltd.'s Gibraltar copper mine at Williams Lake is set to close at the end of February after a management group attempting a buyout failed to raise the financing. Some 273 people are affected. The province had tried to keep this low-grade mine running by offering what it called "competitively priced" power. Dan Miller, B.C. Mines Minister, said Boliden told him "it doesn't make sense to continue production when world copper prices are as low as they are." The mine's cash production costs have been around 90c (US) at a time when copper is selling for 65c (US). Boliden's polymetallic mine at Myra Falls on Vancouver Island has suspended production and is using the downtime to development work at the mine, which is expected to reopen when metal prices improve. Homestake Canada Ltd.'s Snip gold mine in northwestern B.C., which produced 100,000 oz. of gold last year, is scheduled to close in midyear as it runs out of reserves. About 180 work there. Teck Mining Corp.'s Bullmoose coal mine at Tumbler Ridge will lay off 91 people permanently on April 1, about 20% of the current workforce, because the mine's annual coal sales are dropping by a quarter. The coal mines in southeastern B.C. operated by Teck and Fording Coal Ltd. have been taking periodic downtime and will have to absorb $10 (US) per tonne reduction in the contracted coal prices with Japanese steel mills, to $41 (US) in April. "That is putting their margins on a razor-thin edge," said Lorne Grasley, the economist for the Mining Association of B.C. Royal Oak Mines Ltd.'s Kemess gold-copper mine in northern B.C. has been in commercial production since last October. While the mine is reported to have teething troubles, its economics are robust enough to sustain low metal prices. However, Royal Oak itself has defaulted on its debt and is trying to restructure that debt by mid-February. What also worries the mining industry is that mineral exploration in B.C. is almost dormant. "We're not replacing the mines that are closing," Mr. Grasley said. "Nobody is spending money in this province." Laura Jones, director of environmental studies for the Fraser Institute, who does a periodic survey of the attitudes of North American mining companies, found that B.C. ranked "dead last" in North America in her most recent survey in December. The biggest disincentive mineral exploration in B.C. is uncertainty over native land claims and the province's aggressive creation of parks and protected areas. She said that Mr. Miller, the Mines Minister, chastising her for spreading a negative image of B.C. "We're not telling the people in the industry anything they don't know," she said.

To: Chad Barrett who wrote (668)	1/20/1999 1:03:00 PM
From: the Chief	Read Replies (1) \| Respond to of 1996

The flip side of this is that the government might fear backlash from "voters" if they end up paying massive amounts of compensation. The public might take the large settlements as a kick in the head, all because of the government's stupidity in turning the land into parkland without considering the consequences!? It was stated early in the expropriation process that the settlement value could be upwards of 300 million!! Since that time they have doled out $166mm to RYO and $7mm to another company. The estimated full payout is now $100mm for the remaining claims, so I don't see this as a surprise to the BC residents. The most important thing to remember is that mining is not going to come back to BC unless they treat people fairly...and that equates to "jobs..jobs..jobs"!! the Chief