July 11, 2017 1:02 pm
Updated: July 11, 2017 4:28 pm

B.C. lumber, mining industries hit by wildfires; could lead to higher prices

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Wildfires in British Columbia are taking a toll on the province’s resource sector, as blazes forced lumber and mining companies to shut down or cut back on operations Tuesday and damaged parts of the provincial hydro utility’s electricity grid.

While no deaths or serious injuries have been reported, provincial officials said mid-Monday that about 38,000 hectares were scorched, while 14,000 people had been forced to evacuate their homes.

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READ MORE: B.C. wildfire status Tuesday: Williams Lake remains under evacuation alert

The fires are set to tighten the supply of wood products and raise prices as they disrupt timber operations during the year’s peak building season, analysts said Tuesday.

Wood prices can rise as high as 6 per cent if operations remain shut for weeks but the higher cost, a small part of construction budgets, will be absorbed by builders and is unlikely to affect home buyers, Bank of Montreal analyst Ketan Mamtora said.

Major forestry companies

West Fraser Timber Co. said it has temporarily suspended operations at its 100 Mile House, Williams Lake and Chasm locations, which account for an annual production capacity of 800 million board feet of lumber and 270 million square feet of plywood.

“The health and safety of all our West Fraser families is of paramount importance,” said the company, in a statement. “Extraordinary efforts by our highly professional and dedicated employees have helped safeguard our affected assets to date.”

The company said it is uncertain how long its operations will be put on hold.

Norbord Inc., the world’s largest producer of oriented strand board, has closed its 100 Mile House mill that has an annual production capacity of 440 million square feet.

“At this time, Norbord is assessing the impact to its production schedule,” said the company in a statement. “All mill employees have been safely evacuated and no injuries have been reported.

Vernon, B.C.-based special forestry products company Tolko Industries Ltd. said on its Facebook page that its Soda Creek and Lakeview mills would not operate Tuesday, adding that its employees and contractors are working with B.C. Wildfire Service to assist in firefighting efforts.

READ MORE: Video shows terrifying drive to escape B.C. wildfire

Major mining companies

EnGold Mines Ltd. said that “heavy smoke, closed roads and intermittent power outages have made continued operations unsafe and unworkable” at its Lac La Hache property, where it has shut down all exploration activity.

Imperial Metals Corp. said it has significantly reduced its mining operations while reassigning some workers to maintain its mill operations. “Should critical supplies such as fuel not be available due to road closures, the mine may be forced to suspend operations,” added Imperial in a statement.

Taseko Mines Ltd. has kept the mine it runs near some of the wildfires running at capacity, despite some of its employees being impacted by evacuations.

Hydro outages and a functioning pipeline

Meanwhile, many residential and industrial locations have been hit with power outages, and provincial utility BC Hydro announced that over 170 power poles and 29 transformers had so far been damaged in the wildfires, with both of those numbers expected to increase.

Heavy amounts of smoke and continuing fires in the Williams Lake and the 100 Mile House areas have prevented crews from being able to restore power to about 7,000 customers.

Environment Canada today issued air quality advisories related to the wildfires as far away as Alberta, including in Hinton, Rocky Mountain House, Whitecourt, Spruce Grove and Jasper National Park.

One thing all the disruption hasn’t slowed is Kinder Morgan’s Trans Mountain pipeline, which according to the company remains operational as it undertakes precautionary safety measures.

Kinder Morgan’s pipeline, which runs through the central part of British Columbia where wildfires are currently most active, brings over 300,000 barrels of crude oil and refined fuels from Alberta to British Columbia every day.

— With files from Reuters

© 2017 Global News, a division of Corus Entertainment Inc.

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