B.C.'s mines are being offered a reprieve in hydro payments, announced Energy and Mines Minister Bill Bennett Friday.
The reprieve will be offered for a five-year term and companies can choose to defer up to 75 per cent of hydro payments for a maximum of 24 months, Bennett said during a press conference held at Peterson Contracting in Williams Lake.
In attendance were mining officials, members of the Williams Lake and District Chamber of Commerce and local government officials.
"We met with the Mining Association of B.C. and companies who asked if we could do anything to help with lowering operating costs," Bennet said, noting he decided to make the announcement in Williams Lake because the community understands mining and its impact on the local economy.
Bennett said his ministry went with the hydro plan because if government was going to help, it couldn't offer a subsidy to mines or on the back of taxpayers.
Mining companies that take advantage of the reprieve will have to pay an interest rate of about eight per cent on the deferred amounts, which is the rate BC Hydro charges on accounts over 30 days.
Companies with relatively lower levels of debt will have to pay 12 per cent.
"My understanding from the information we've received from the mines is the vast majority will qualify for the lower rate," Bennett said.
Presently there are eight metal mines and five coal mines in operation in B.C, directly employing 7,500 people.
It is estimated hydro makes up 10 to 15 per cent of their total operating costs.
"It's our second cost after wages," said Imperial Metals chief metals engineer of Mount Polley's operating budget.
Cariboo-Chilcotin MLA Donna Barnett described the reprieve as a "hand up, not a hand out," for the region's communities.
"I've had many calls to my office from people complaining that it's a subsidy," she said. "If people aren't working the entire community is impacted."
Unifor national representative Jon Hawkins whose union represents 500 workers at Gibraltar Mine welcomed the news because it will help keep people employed.
"The Cariboo has endured hard economic times, but it's resilient," Hawkins said.
Unifor Local 3018 president Ken Lewins likened hydro costs at Gibraltar Mine to a "good chunk of change."
"Everything up there is electricity driven," he said.
With commodity prices continuing to decline as they have for the past six years, prices are at a point that they threaten mines, said Gibraltar's general manager Richard Tremblay.
"This announcement is welcome and timely," he said as he thanked Bennett.
Mining employees many families in the Cariboo, said Scott Peterson, operation superintendent at Peterson Contracting.
"When the mines are running we have 300 people from our company employed offering support services," he said.
The announcement is good news for workers at Mount Polley Mine said United Steelworkers Local 1-425 president Paul French.
"This will take the pressure off employees who are living in nervousness every day," French said.
Hopefully markets will return, but in the meantime it is important the government, companies and employees work together, said Mining Association of B.C. president Karina Brino.
"The downturn has been going on for a couple of years and significant layoffs have already taken place," she said. "Industry's ability to work with BC Hydro is an important measure."
Every company that chooses to participate in the program will be required to enter into a formal agreement with BC Hydro.
Bennett said those agreements will not be made public, but the government will report out regularly on the program as the five years unfold.