In a four-part series that began in issue 1101 (November 30-December 6), Business in Vancouver takes a closer look at Vancouver-based Taseko Mines’ proposed Prosperity project. The company says the $800 million mine would stimulate significant economic activity in a depressed part of the province, but the federal government rejected the project citing environmental concerns. In this third instalment in the series, BIV focuses on the economic benefits of the project and mining’s current and historic influence.
After a long shift at Gibraltar, some of the mine’s young engineers gather at the Boston Pizza in Williams Lake for a drink and a few laughs.
Soon, more workers filter in from the local mines and mills, and the quiet eatery turns into a boisterous gathering place.
But mention the word “prosperity” and the laughter fizzles.
It’s not entirely because Ottawa rejected in November Taseko Mines’ (TSX:TKO) proposal to build the $800 million Prosperity copper-gold mine west of town. It’s the overall economy of the Williams Lake region: it hasn’t known prosperity in years.
In a final plea to the federal environmental review panel in May, Mayor Kerry Cook outlined just how poor the region’s economy is.
“The people, all of our people, our youth and our grandchildren, we need this, we need this hope,” Cook said. “Our future depends on it.”
In 2009, Cook said, Williams Lake lost a third of its workforce, which meant a loss of $1 million per week to the local economy.
Unemployment rose to 12% from 6.5%, consumer bankruptcies were up 70%, vacancy rates climbed 700% and there was a 500% to 600% increase in the number of families using the local food bank.
Hard times in Williams Lake were largely the result of the downturn in the forestry sector, which has long been the backbone of the Cariboo-Chilcotin economy.
These days, empty storefronts along the town’s (population 10,744) main drag are the norm.
Walter Cobb, president of the Williams Lake & District Chamber of Commerce, said the town’s two nearby mines – Taseko’s Gibraltar and Imperial Metals’ (TSX:III) Mount Polley – keep the town on life support while the local mills flounder.
Prosperity, he said, would have been a panacea.
“That basically would have helped us weather the storm during the downturn.”
But the federal government’s decision to reject the mine means it’s not likely to be built any time soon.
And there aren’t any other major projects on the books.
“We didn’t see anything that could fill the gap as quickly as this mine could have.”
So what would the mine have done for the economy?
According to an economic impact report prepared by the Centre for Spatial Economics, which drafts reports for the provincial and federal governments, Prosperity would inject $1.7 billion and $3.4 billion into the federal and provincial governments, respectively, over a 20-year mine life.
The project would employ 700 people during a two-year construction phase, and support 400 jobs once the mine was in production.
It would generate an estimated $6.9 billion increase in consumer spending in B.C. over its lifetime.
That means the disposable income of each household in the province would increase $1,400 on average over the life of the mine.
As well, residential investment expenditures would increase $743 million, machinery and equipment investment would climb $1.1 billion and some 50,000-person years of employment would be added to the provincial economy.
But the First Nations say Prosperity offers no benefits for them.
“There’s no reason to conclude, in [Tsilhqot’in National Government’s] view, that the economic benefits of the mine project will reach … the Tsilhqot’in Nation in any real way, and certainly not on a scale that could compensate for the loss,” said Sean Nixon, on behalf of the Tsilhqot’in, during the final day of hearings in May.
According to the most recent statistical data from Indian and Northern Affairs Canada, four bands near Prosperity have a combined population of approximately 1,000.
In 2001, the unemployment rate in those communities ranged between 31% and 46.7%.
In his speech, Nixon pointed out that despite 17 years of work and $100 million of investment, Taseko had yet to offer concrete programs or policies to increase aboriginal employment.
When asked if Taseko had laid out an employment plan for area aboriginals, vice-president of corporate affairs Brian Battison said it hadn’t, although the project was eligible for a revenue sharing agreement between First Nations and the provincial government.
“We were prepared to try and to deliver everything we could possibly deliver … but what you need is people who are willing,” Battison said.
Sandra Harwood, mayor of Fort St. James, believes concrete agreements with First Nations are essential to any mine proposal.
“I don’t see any other way it can be done,” Harwood said.
Her town (population 1,355) will soon be home to a new mine.
On the same day Ottawa rejected Prosperity, it green-lighted Thompson Creek Metals’ (TSX:TCM) $915 million Mount Milligan copper-gold project near Fort St. James.
Terrane Metals, a Thompson Creek subsidiary, adopted the Association for Mineral Exploration BC’s 10 principles for sustainable relationships with First Nations during Mount Milligan’s development.
Terrane provided $1.5 million to the Nak’azdli First Nation and McLeod Lake Indian Band in project-related contributions.
The company also partnered with post-secondary institutions to create a three-week environmental training program for First Nations and has provided employment to aboriginals to assist with project operations.
On top of that, the province has signed revenue-sharing agreements with several First Nations for both Mount Milligan and New Gold’s (TSX:NGD) New Afton projects.
Since Mount Milligan was approved, Harwood said Fort St. James is barely recognizable.
“I’ve never seen this community blossom the way it has,” Harwood said.
Not only are all the motels in town packed, but Fort St. James also has plans to build a 100-home subdivision and has interest from five hotel groups for new developments.
The story is the same in Princeton (population 2,600) where the Copper Mountain mine is being built.
Mayor Randy McLean said the mine has brought hundreds of new workers to town.
“It’s like night and day … I think there’s only two hotels right now that offer rooms for people passing through.”
McLean added that the town is awash in development opportunities.
Yet the boom times a mine can create shouldn’t be any surprise for people who know the province’s history.
In addition to the gold rush that drew tens of thousands of prospectors to B.C. in the early 1900s, many of the province’s lasting settlements owe their existence to mining.
“The best example is the whole southeast of British Columbia … that area of British Columbia only came to be settled in the 1880s and 1890s because of one of the major mining booms in North America,” explained Jean Barman, a University of British Columbia professor with expertise in B.C. and aboriginal history.
She said towns such as Rossland, Nelson and Trail were founded on mining.
Yet in the Williams Lake area, forestry was the main economic driver, and although it was good for the town it did little for aboriginals.
In April, Alexis Creek Band Chief Percy Guichon told Prosperity’s federal review panel that his people had once relied on a local mill for employment.
When it burned to the ground and the community was left without a viable alternative it slid into poverty.
“To this day … we have not seen any true benefits for the Tsi Del Del people as a whole derived from the extraction of resources,” Guichon told the panel.
When asked if the Tsilhqot’in people were completely opposed to resource industries, Xeni Gwet’in Chief Marilyn Baptiste wouldn’t say.
“I would be cautious with answering outright because anything I say could be twisted,” Baptiste said.
To the east of Baptiste’s community, Williams Lake is hungry for another mine to put smiles on its residents’ faces and revive its resource-based economy.
But even though the mining industry has a long history of driving B.C.’s economy, the negative impact it’s had on First Nations could be what’s holding back progress.
The memory of being cut out of B.C.’s historic boom times is still very much a part of the aboriginal mindset, Barman said, and those stories are passed down to today’s generation.
“Aboriginal people were completely without a voice … they were never allowed to even be bit players in any of this,” Barman said. “It’s still going on to a large extent, and that’s the problem.”
Next week: Business in Vancouver focuses on how the decision to reject Prosperity will affect the company, the industry and the province’s resource permitting process.
1,000 – the approximate population of the Xeni Gwet’in, Tl’etinqox-t’in, Stone and Alexis Creek bands
31% to 46.7% – the unemployment rate in those communities in 2001
$6.9 billion – B.C. increase in consumer spending over life of mine
$3.4 billion – provincial revenue from the project over life of mine
$743 million – residential investment expenditures as a result of the mine
700 – the number of construction jobs Prosperity would create
400 – the number of full-time jobs the mine would support
1/3 – the portion of Williams Lake’s workforce lost in 2009
12% – Williams Lake’s unemployment rate in 2009
70% – the increase in bankruptcies in 2009
500% to 600% – the increase in the number of Williams Lake families who used the food bank in 2009