B.C.'s mining industry posted a record profit of $3.2 billion in 2008, an 88-per cent increase from the previous year driven largely by high-priced coal, a report released Tuesday shows.

Gross revenues rose 25 per cent to $8.4 billion and cash flow from operations increased 78 per cent to $3.4 billion year-over-year, the PricewaterhouseCoopers report shows.

The pre-tax profit growth was driven by higher coal and some other commodity prices before the economic meltdown hit later in the year, it says.

"The performance of the B.C. mining industry amidst a crashing economy in the later part of 2008 was nothing short of outstanding", said Michael Cinnamond, a partner in PwC's mining practice and co-author of the report.

Coal represented 86 per cent of total product shipments in 2008. Prices of coal were up 225 per cent in 2008 to US$261 per tonne compared to the year before.

Prices now are down considerably, to about US$125 per tonne range, "but still high compared to historical averages," the report says.

Copper revenues, the second largest contributor to revenues last year, fell 29 per cent $1.19 billion, while zinc fell 40 per cent to $736 million in 2008. Both commodities saw their prices fall as a result of the weakening global economy.

However, gold revenues rose 13 per cent to $231 million in 2008 thanks to higher prices. Gold is often considered a safe investment in troubled economic times.

Silver revenues rose 10 per cent to $272 million year-over-year.

$6.1B contribution to economy

The 2008 survey includes financial information from 40 mining firms in various stages of development and production.

The report also shows B.C.'s mining industry contributed $6.1 billion in expenditures to the economy, including payroll and benefits of $858 million.

The average salary and benefits package increased by 11 per cent to $112,800, and employment rose two per cent to 7,607 compared to 2007.

However, Cinnamond notes times have changed as a result of the recession.

Companies have been laying off staff and cutting operations to reflect slowing demand.

In a poll of 33 B.C.-based mining company CEOs last month, PricewaterhouseCoopers found 27 per cent of respondents said they are conserving cash, 39 per cent have implemented either moderate or major spending cuts and "12 per cent are just hanging on."

However, about 15 per cent said they are "actively seeking acquisitions and looking to grow."