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Gold/Mining/Energy : Rock Resources -- Ignore unavailable to you. Want to Upgrade?

To: 1king who wrote (587)	1/12/1999 11:07:00 AM
From: the Chief	Respond to of 1996

Expansion of parks leaves maze of claims The Vancouver Sun Larry Pynn Vancouver Sun Behind the political hoopla and scenic photos that have accompanied the launch of a massive increase in protected areas in B.C. lies a knot of mineral claims and timber tenures that could take years and cost hundreds of millions of dollars to untie. These claims and tenures existed on Crown land before the province created more than four million hectares of new parkland, starting in 1991, as part of a provincial policy to conserve 12 per cent of the B.C. land base by 2000. The province is committed to compensating forest companies that lost significant amounts of timber and to buying out at least 300 mineral claims inside the boundaries of 34 parks. Each claim consists of a maximum 20 25-hectare units. Compensation regulations for the 80 holders of these 300 claims under the Mining Rights Amendment Act are expected to be announced soon in Victoria. In scores of other cases where mineral claims are near the edge of parks, these areas are being temporarily deleted from the park for as long as the claim remains valid, raising the possibilities that mining activity could occur alongside recreational park use or that the holders of the claims could for all practical purposes be precluded from developing them. The euphoric tone of public announcements unveiling pristine areas has given way to the practical realities facing government bureaucrats struggling to unravel the legal ramifications. "The enthusiasm overtakes the moment," said Denis Lieutard, director of the province's mineral titles branch in Victoria. "Now the bills have to be paid." The Forest Act provides for compensation where parks gobble up more than five per cent of a tree farm licence or forest licence, as well as compensation for infrastructure such as bridges that can no longer be used. Bruce McRae, assistant deputy minister of forest industry projects, said forestry costs associated with the province's 12-per-cent park policy are estimated at a total of $150 million across the province, most of that on Vancouver Island. Rather than dole out cash for lost infrastructure or timber, however, the government is trying to compensate forest companies with alternative harvesting areas. "It's not as simple as writing a cheque," McRae said. "There's a lot of evaluation, appraisal and consultation." Bruce McKnight, executive-director of the B.C. and Yukon Chamber of Mines, said in Vancouver that the cost of settling outstanding mineral claims in parks is expensive but should total less than $100 million. The government would neither provide its own estimate nor reject the chamber's figure. "The mining industry wasn't very happy with the 12 per cent, but we went along with it because we had a gun to our head," McKnight said. "I believe that the cost of lost opportunities and investment is 10 times the cost of buying out people." Under the pending new regulations, he expects compensation to be determined according to market values of the claims at the time each park was created -- the price influenced by world demand for minerals as well as the prospects for each property. Some of the compensation claims date back to the 1970s, but most are the result of new parks created under B.C.'s protected areas strategy in the past few years. The bulk of outstanding mineral claims are located in Tatshenshini-Alsek park in northwest B.C., Kokanee Glacier and Goat Range in the Kootenays, Tweedsmuir in west-central B.C., the Stein Valley near Lytton, Strathcona on Vancouver Island, and Granby near Grand Forks. Sabine Jessen, executive-director of the B.C. branch of the Canadian Parks and Wilderness Association, said she would be concerned about claims for compensation where there are no apparent mineral resources. She also has trouble with the concept of the province having to pay for its own resources. "It should only be for operating mines," she said of the compensation issue. "Anything in the exploration stage, the mining community must recognize government still has a role in setting policy and making final decisions." In the largest settlement to date, the province agreed in 1995 to pay Royal Oak Mines and related companies $166 million in loans, subsidies, and other financial assistance for the loss of the Windy Craggy copper deposit resulting from the creation of the 958,000-hectare Tatshenshini-Alsek park. Holders of numerous other claims in that park are still awaiting compensation. "Royal Oak was the most expensive and the highest profile," McKnight said. "But there's lots of them around, and Royal Oak is only one of them." However, he also agreed that during creation of the new protected areas, special consideration was given to allowing continued mining and logging access on existing roads that flow through parks. "There are definitely cases where they have allowed access through parks to get to land on the other side," he said. The 80 holders of the 300 outstanding mineral claims are expected to receive anywhere from several thousand to several hundred thousand dollars apiece in compensation from the province. The new compensation regulations are expected to propose that both the government and claim owner provide their own evaluation. Where a settlement cannot be negotiated, the final price would be determined through arbitration. But the formula won't help the holders of mining claims on park borders whom the province is not compensating because the claims can still be worked. McKnight said these properties could be rendered virtually useless because of potential problems with access to the property and because investors won't want to pump money into developing a mine so close to a park. "The phenomenon is called the green shadow effect," he said. Graeme McLaren, manager of the mines ministry's environment and land-use branch, agreed that many such claims could lie dormant indefinitely due to the sensitivity of developing a mine that overlaps a park boundary. "If you're a small company or prospector and want to interest a large company in investing in a property with this cloud over its head . . . you won't get any investor interest," he said. "Investors shy away from a public controversy."