Spring 2011 - The Association for Mineral Exploration British Columbia

The 1980s alternated between optimism
and grim pessimism. The decade
began on a high note as reflected in
then-president Mustard’s report to the
Chamber’s 69th annual meeting in January
1981. Optimism had returned to the
industry after the turbulent decade of
the 1970s, he said, and exciting times lay
ahead for the country with its unlimited
potential for energy development and its
enormous bounty in natural resources.
“With a value of over $32 billion [in
1980], mineral output in Canada is at
an all-time high. Metals were responsible
for $9.7 billion in production, an
increase of nearly 22 per cent over 1979.
British Columbia retained its position as
the third-largest producer of minerals in
Canada, after Alberta and Ontario, with
a value of $2.93 billion, compared with
$2.95 billion in 1979, and the metals and
coal sectors held their own with values
of $1.41 billion and $467 million, respectively.
In the Yukon Territory mineral
values increased from $299 million to
$303 million.”
In prospecting and exploration, 1980
had been by far the most energetic in the
Chamber’s history. In British Columbia,
$108 million had been spent in exploration,
up from $60 million in 1979, and
$81 million was spent on metals and $27
million on coal exploration. The equivalent
figures for Yukon were $36 million
and $3 million, respectively, for a total of
$39 million, against $27 million in 1979.
“So in real dollar terms, exploration
efforts had resumed the upward growth
that had been terminated in the early
1970s by disastrous government policies,”
said Mustard. Mineral claims recorded in
Yukon in 1980 – at 10,892 – were similar
to 1979, but in British Columbia the number
of mineral claim units recorded rose
from 55,000 in 1979 to 72,621 in 1980.
But what a difference two years made.
By 1983, the industry had wiped the
smile off its face. Early that year Cathro
reported grimly:
“It would be nice to be able to say that
1982, my first year as president . . . was a
good year for our industry. It wasn’t, of
course. In fact, it came close to being an
unmitigated disaster on both the economic
and political fronts.
“On the economic front, many sectors
of our industry encountered the worst
business conditions experienced since the
1930s. In part, this was due to the severity
of the recession. But it was also due to
the fact that the business cycles of all of
the industrialized areas of the world have
become synchronized. The first became
apparent in 1973/74 when the simultaneous
booms in the industrialized world
resulted in shortages and the appearance
of spectacular prosperity for producers of
mine products. In some cases, apparent
shortages were exacerbated by production
problems, fears regarding possible
cartel action, inventory accumulation by
consumers, and speculation.
“Inevitably, the aftermath was equally
spectacular. Consumption began to
decline as all major economies weakened
Passing of the torch: Past president Bob Cathro and
incoming president Don Rotherham at the first Roundup, 1984.
simultaneously, and in many cases demand
collapsed as customers began to live on
inventories. In most cases, the result was
varying degrees of price weakness, a steep
drop in shipments, and a massive transfer
of inventories from consumers to producers
and commodity exchange warehouses.
The impact on the Canadian mining
industry’s financial strength and profitability
was, of course, profound. And
in terms of the industry’s basic health, it
is important to recognize that inflation
made a mockery of financial statements
prepared in the traditional way, and that
real earnings were nowhere close to the
figures being reported.”
Cathro went on to tell his audience at
the Chamber’s annual general meeting
that, except for a substitution of names,
what he had said so far was an exact quotation
from the presidential address to
the annual meeting of the Mining Association
of Canada in February 1976 by
Alfred Powis, then-president of Noranda
Mines Limited.
“His words,” said Cathro, “are as
timely today as they were then, which is
a vivid example of how poorly the Canadian
mining industry has fared in the
intervening seven years. Aside from brief
price rallies in several metals, notably
gold, silver, uranium and the ferroalloys
molybdenum and tungsten, this period
was marked by decreasing profitability
within a shrinking Canadian industry.
Although 1982 was a sudden and severe
shock after a relatively prosperous 1981,
it generally followed a downward trend
that began 10 to 15 years earlier. Viewed
in this wider historical perspective, 1982
was only the worst shock yet in an ongoing
series of bad tremors.”
Cathro said every indicator of industry
activity declined sharply during
1982, following a severe drop in metal
Photograph: AME BC Archives SPRING 2011 31