On February 5, Minister of Energy and Mines for British Columbia Bill Bennett announced a plan to help keep thousands of British Columbia’s metal and coal mines workers on the job by allowing mining companies to temporarily defer a portion of their hydro bills — supporting families and communities during the current slowdown in the sector due to low commodity prices.
“Rural communities across British Columbia depend on the high-paying jobs that their mines provide residents,” said Bennett. “We are in the midst of a challenging time for the sector and this will provide some temporary support to help the mines stay open as long as possible, hopefully until commodity prices bounce back.”
Under the five-year term of the program, which will be delivered by BC Hydro, companies operating metal and coal mines in British Columbia will be able to defer a portion of their BC Hydro electricity payments. The amount any mine will be allowed to defer is capped at the equivalent of up to 75% of its electricity costs over two years of the program. As commodity prices recover, the mines will repay the amounts deferred, plus interest.
Low copper and coal prices have put operations at a number of British Columbia mines at risk and some have already been forced to reduce production and employee levels. There are currently eight metal mines and five coal mines operating in the province, employing approximately 7,500 workers. These metal and coal mines generate hundreds of millions of dollars in economic spin-offs in local communities.
While this program can’t guarantee mines won’t eventually go into temporary care and maintenance, it will help mines stay open for as long as possible.
“This offers immediate and meaningful relief to mining companies facing significant power costs during a steep economic downturn,” said Mining Association of British Columbia President Karina Brino. “This is an important measure that will help keep mines open and support an industry that provides more than 30,000 direct and indirect jobs for people in this province.”
Mines will be encouraged to borrow funds from other sources, if they can, before deferring a portion of their power bills. Companies with relatively lower levels of debt will pay an interest rate of 12%. Others will be charged the interest rate that BC Hydro currently charges to accounts over 30 days — prime plus 5%, or about 8% annually.
“It’s been 12 years since we reopened the Gibraltar mine and we now employ more than 600 people who live here in the Cariboo Region — largely in Williams Lake, Quesnel and 100 Mile House,” said Gibraltar mine general manager Richard Tremblay. “We are invested in our employees and these communities. Gibraltar spends roughly $1 million every day to operate, most of which goes directly into the local economy and this flexibility from government will help us continue to operate.”
Each company that chooses to participate in the program will be required to enter into a formal agreement with BC Hydro.