Canada was the top destination for exploration funds last year. Nevertheless, the repercussions of low investments in the 1990s and early 2000s are being felt in a limited number of major projects slated to come into production in the next few years. British Columbia, where a number of near-term copper projects are coming online, is one of the bright spots.
Mining companies increased their investments in exploration in British Columbia, Canada, by 47 percent in 2012, according to the latest estimates from the Ministry of Energy, Mines and Natural Gas. That number should increase again, with copper miners accounting for the lion's share. In 2012, the industry spent an estimated C$680 million on exploration in British Columbia, up from $462 million. According to The Mining Association of Canada's annual Facts & Figures 2012 report, of 31 mining projects and their total planned capital investments, copper and copper-related projects in BC accounted for at least 14 of them, or at least $19 billion of a total $29 billion. The planned projects could help reverse the trend of declining shipments of copper concentrate from British Columbia mines. From 2007 to 2011, copper concentrates shipments declined to 668,000 tons from 816,000 tons, according to PricewaterhouseCoopers' data, amid the global financial crisis, lower prices and falling production from aging mines. Looking further back, at the industry as a whole, not only did exploration expenditures more than halve between 1997 and 2002, but the number of major deposit discoveries dropped off substantially since the late 1980s and early 1990s, UBS said in a 2008 report. The fall in exploration success was, among other reasons, due to: declining metals prices; environmental legislation raising the prospect of legacy liabilities in traditional mining areas; land ownership issues; and high geopolitical risks. In addition, copper grades on average declined by 2 percent per year in the preceding 10 years. Still, BC accounted for over 30 percent of Canada's copper production in 2011 and according to Natural Resources Canada, BC had 64 percent of Canada's proven and probable mineable copper reserves as of December 2010.