Energy and Mines

Government takes action to keep mine workers on the job

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Energy and Mines

Government takes action to keep mine workers on the job

Media Contacts
Suntanu Dalal
Media Relations
Ministry of Energy and Mines
250 952-0628
(flickr.com)
Media Contacts
Suntanu Dalal
Media Relations
Ministry of Energy and Mines
250 952-0628

Backgrounders

Government moves to help protect thousands of mining jobs

The province’s metal and coal mines generate hundreds of millions of dollars in economic spin-offs in local communities, including expenditures by suppliers and mine employees. For example, it is estimated that Gibraltar spends about $100 million annually in the B.C. Interior.

The threat of closures is being caused by the drop in copper and metallurgical coal prices. Reduced economic growth in Asia, particularly China, has reduced demand for copper and steelmaking coal which has had a significant effect on prices. Copper prices have fallen to US$2.10/lb in December 2015 from a high of nearly US$4.00/lb in early 2012. In the same period, metallurgical coal has dropped from US$220/tonne to under US$90/tonne.

Electricity makes up 10% to 15% of total costs for metal mines. Power costs are less significant for metallurgical coal, at about 5% of total costs.

There are eight metal and five coal mines currently operating in B.C. These mines directly employ more than 7,500 workers.

List of the metal and coal mines in B.C.: https://news.gov.bc.ca/files/Rate_Relief_BCHydro.pdf

This measure is intended to assist operating mining companies while commodity prices remain low.

The amount any mine will be allowed to defer is capped at the maximum accumulated deferral rate, equivalent to up to 75% of electricity costs over two years of the program. As commodity prices recover, the mines will pay a surcharge up to 75% above the standard rate to pay back the amounts deferred, plus interest.

Similar programs have been used in British Columbia before. The Economic Development Electricity Rate Discount Act and the Critical Industries Act were implemented during the 1980s as a response to BC Hydro having surplus power and to support industry as it emerged from a recession. And, in 1997, the government of the day implemented the Power for Jobs Development Act to provide specific industries with a preferential development power rate based on available surplus power.

In each of these cases the programs provided a direct subsidy to industry and the taxpayers assumed the bulk of the risk.

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