B.C. is leading the country in new mining projects as the entire Canadian industry enjoys a boom based on high commodity prices, say provincial government officials, producers and explorers After years of struggling to keep its industry afloat, B.C. now accounts for 25 of 52 Canadian mine projects that are seeking development and environmental approvals.

This year, B.C. is expected to exceed the record of $265 million worth of exploration expenditures, set in 2006, which was a 20-per-cent increase over 2005. The expenditures covered 617 exploration projects.

The results were revealed prior to the recent Mineral Exploration Roundup 2007 conference in Vancouver, which attracted approximately 5,000 delegates from across the country.

Conference attendees say B.C. heads a national industry that is riding a rare "super cycle" of high commodity prices spanning all mineral types.

Tom Schroeter, the B.C. government's top geologist, says producers operating in the province could complete $9.5 billion worth of capital spending on 50 mine projects in the province over the next four years.

"Those (figures) will change as time goes along," says Schroeter. "But for now, (the projected $9.5-billion investment) is just a ballpark figure that indicates how robust we could be."

Gordon Peeling, president and CEO of the Mining Association of Canada (MAC), which represents metal, diamond and oilsands producers, says B.C. operators are "catching up" to the rest of the Canadian industry after a decade of declining investment.

"The actual growth in B.C. is interesting to see - and quite extraordinary," says Peeling. "But you have to understand that, for about 10 years, British Columbia was basically off-limits for the mining industry because of (provincial) government policy as it supports the industry and the mines."

The rest of the Canadian industry is also recovering, says Peeling.

"The bulk of the last 10 years has been a difficult period," he says. "We've seen major declines of prices. But over the last two or three years, certainly the last two, we've seen a major recovery in markets and prices, driven by Chinese demand.

"It's had a huge factor on the market and we're seeing some of the highest prices we've ever seen for some commodities."

But Peeling says the 25 new mines forecast for B.C. will be slow to open because the federal assessment process, which is largely environmental in scope, does not have the capacity to review so many projects.

"So we've been pressing the federal government to deal with this issue and put more (financial) resources in place so we can get mining projects through the assessment phase more quickly," he says.

Producers are also pushing Ottawa to integrate and harmonize its review processes with its provincial counterparts.

However, environmentalists have countered that review processes should take longer because projects are increasingly complex.

"We don't need to lower our standards, but we just need to make the system work more efficiently," says Peeling. "And, since this is a cyclical business, we want to hit the market at the right time."

Still, Peeling and Tony Andrews, executive director of the Toronto-based Prospectors and Developers Association of Canada (PDAC), are predicting commodity prices will remain high for several more years.

"It's quite unprecedented, because as you know, this is a cyclical industry," says Andrews about the national boom. "In the past, when we've had cycles, certain commodities have been strong and others have not. The unprecedented part about this one is: Every commodity is up."

In 2006, there was $1.2 billion worth of mining investment in Canada, says Andrews. He expects that figure to increase by $150-$200 million more this year. Globally, investment has climbed to US$5.5 billion from under US$2 billion in 1999-2000.

While B.C. is challenging Ontario for bragging rights as Canada's most active mining province, other regions are also enjoying good times.

"Alberta hasn't been a big jurisdiction for mining per se, unless you want to call the oilsands mining," says Andrews. "It's the biggest mining operation in the world."

Saskatchewan is also a strong contender with potash, uranium and gold mining, he adds. The province is also rich in kimberlites, the mineral forms that bear diamonds.

"They're fortunate to have some great geology," says Andrews, adding the demand for potash and uranium is only going to increase.

Nationally, continued investment in "grassroots," or earliest-stage, exploration will be the key to long-term growth, Andrews says.

As a result, PDAC is lobbying Ottawa to extend a flow-through-share program that grants tax breaks to investors who buy shares in exploration companies that are spending dollars in Canada. The three-year federal program is due to expire in March.

B.C. government geologist Schroeter says grassroots spending should account for 20-24 per cent of total industry expenditures, but has only been at the 12- to 14-per-cent level in the past two years. Activity is ramping up now because companies have modernized mineral-reserve estimates on properties that were discovered in the 1960s and 1980s, but sat idle because of low commodity prices and political uncertainty.

As a result, he predicts this year's overall investment in B.C. will be "much better" than last year, when projects were delayed because of labour shortages, the slow return of lab results, and a lack of available equipment that prompted some producers to purchase their own drills.

MAC president Peeling says it will be difficult for companies to lure some Canadian mine workers home because they pay much lower personal income taxes in other parts of the world.

(Monte Stewart can be reached at monte@businessedge.ca)