Red tape threatens to strangle BC mining industry.
By Scott Simpson, Canwest News Service
September 4, 2009
canada.com
VANCOUVER - British Columbia's mining industry is at a crucial point in its history.
No new mines have opened in the province since 1996 and in a matter of months, two of the province's biggest are going to shut down for good.
With commodity prices up sharply after last fall's global economic meltdown, this appears a promising time to bring new mines into production. Yet in spite of the opportunity, many of B.C.'s brightest mine prospects are mired in red tape.
Earlier this year, the Fraser Institute in its annual survey of the sentiments of international mining companies, ranked B.C. in the bottom third of global mining jurisdictions that have ``room to improve.''
One mineral exploration company executive quoted in the Fraser survey said: ``British Columbia (has) lengthy and convoluted permitting; confusing jurisdictional conflicting agendas (between ministries); (and) deliberate and vindictive use of bureaucracy to inhibit access (by self-serving civil servants).''
Not everyone has a similar story to report, but several senior mining executives interviewed for this story agreed that the best way for B.C. to prove it's a good jurisdiction is to get mining projects into production.
The province has more than two dozen potential new mines in various stages of development and regulatory scrutiny and of those, five are considered ``senior'' projects with proven in-ground resources that need only government assent in one form or another to proceed.
If at least two of them don't open before the aging Kemess mine, owned by Northgate Minerals, and Huckleberry mine, owned by Imperial Metals, are spent, B.C. will experience a net 94-million-pound decline in annual copper production.
The top five projects, Red Chris, Mount Milligan, Prosperity, New Afton and Copper Mountain, are scattered around the province and could provide employment for workers displaced by looming closures at Kemess and Huckleberry, and even spark a surge of new long-term employment if they all succeed.
``We are talking about billions of dollars in capital investment that will start to be spent,'' Pierre Gratton, president and CEO of the Mining Association of B.C., said in an interview.
``We are in a terrible recession right now and the province is broke. What better time to have this happen? We are talking hundreds and hundreds of jobs in two different parts of the province.
``And all of these projects are being brought forward by B.C.-based companies. The province ought to want to foster homegrown companies.''
For some of the top five, government deliberations about their merits have been interminable.
Despite 16 years' effort and $100 million invested in the project, Taseko Mine's Prosperity copper-gold project on the Chilcotin Plateau west of Williams Lake is mired in an aboriginal rights dispute that threatens to chase hundreds of millions of dollars of investment right out of the province.
``We are an operating mining company with an operating mine (Gibraltar) and a significant local presence in Williams Lake and the Cariboo Chilcotin,'' Taseko vice-president Brian Battison said in an interview.
``This company is bringing forward a new opportunity, Prosperity. It's an $800-million capital investment, 700 construction jobs for two years to build it, 500 people working in direct jobs. Every year we will spend $200 million for a total spend of $5 billion over the 20-plus operating years of the mine.
``If we can't make it through to the finish line to build this . . . then very few others are ever going to try in the future.''
But even a veteran B.C. mine operator like Jim O'Rourke needs equal measures of guts, money and government support to bring Copper Mountain into production.
O'Rourke, who ran the former Similko copper mine at the Copper Mountain site, as well as Huckleberry and three other mines, has the money via a partnership with Japan's Mitsubishi Materials, which describes itself as one of the world's largest diversified materials companies.
He has the guts: Copper Mountain ordered heavy equipment for the mine in February 2008, 18 months before Mitsubishi signed a deal to finance the project.
Now he needs the government to step up and provide the permits needed to allow mining operations to commence.
``We'd like to start pouring concrete next month and get all of the foundations in place before winter and shut the project down for December, January and February, and then get in there in the spring and start erecting steel and installing the equipment.''
Meanwhile, proponents of the Mount Milligan copper-gold project, north of Prince George, have approval from B.C.'s environmental assessment office, but that's not enough.
There is a virtually identical federal assessment process to wade through, and Milligan's owners, Terrane Metals, are hoping for a favourable federal decision later this year.
``There are lots of agencies (involved in the review) on the federal side,'' Terrane president and CEO Rob Pease said.
``We inherited little bits of legislation from here and there, and all these different agencies are trying to meet their own rules and regulations, and it's not coordinated to any degree. You are left with a relatively unaccountable and unco-ordinated process that a proponent has to go through.
``It is what it is.''
Even approval of both governments wasn't enough to get Red Chris moving ahead.
Imperial Metals thought this northwest B.C. project had a green light to proceed until environmental group Mining Watch took the federal government to court because Ottawa chose to accept B.C.'s full-blown review rather than launch a duplicate federal process.
Ottawa's decision is now before the Supreme Court of Canada. If the court supports the federal argument that the project has been appropriately dealt with, Imperial can proceed with an updated feasibility study of the cost of the project.
If the court decides Red Chris must be subject to a full review under the Canadian Environmental Assessment Agency, the project could be delayed for a couple of years, or more.
Mining Watch's case will go before the Supreme Court in October.
``It's kind of like you have the permit, but you can't really do anything with it while it's under appeal,'' Imperial president and director Brian Kynoch said.
``We probably won't hear a decision until the new year.
``It is a bit weird to have to get two separate environmental approvals,'' Kynoch said. ``I don't know how many times I've heard (politicians) talk about harmonization of the process, but it's not that way.''
B.C. Minister of State for Mining Randy Hawes said he's sympathetic to the plight of mine proponents, and notes that the province is taking a number of steps to speed development of new mines.
``First and foremost we need harmonization of the environmental review process. We've got a very solid B.C. environmental assessment process and then the feds do a total duplication - and ours have time limits on it while theirs does not,'' Hawes said.
``I know it's very frustrating for the mining community,'' he said, nothing that provincial mines ministers across the country have expressed the same frustration.
The minister noted that the province recognizes the need to accommodate first nations, which may have a territorial interest in an area where a mine is proposed.
``We are prepared to talk about revenue-sharing with the aboriginal community. We want the prospective mines to go out to aboriginal communities to talk about jobs and training and some of the social issues. The province will talk to them about revenue sharing . . . at no cost to the mining community.
``If we don't have revenue-sharing then frankly, we get 100 per cent of the revenue, but no mines.'' |
