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 final instalment, BIV focuses on the project’s future and how the federal decision will affect the industry and the province’s resource permitting process.
While driving back from Quesnel last summer, Williams Lake Mayor Kerry Cook stopped at a gas station on the Soda Creek reserve.
When she entered the store to pay for her gas, Cook noticed a peculiar sign beside the cash register: “We support the Prosperity mine.”
It sounds like a contradiction of the aboriginal attitude toward Taseko’s proposed project.
After all, First Nations, most notably the Tsilhqot’in National Government, were its most vocal opponents.
But, according to Cook, the tiny gas station sign symbolizes the complex relationships in B.C.’s central interior, a point that was largely forgotten amid the clamour of voices for and against Prosperity.
“That’s the perspective that’s missing in some of the bigger media,” Cook said. “When you’re talking to people one-on-one it’s very well known we need those opportunities. There are outstanding land-use and title issues that are definitely in the way of moving forward, [but] I am hopeful that we’ll be able to get people … back to the table talking.”
That’s why she and nine delegates from the region travelled to Ottawa recently to ask the federal government what needs to be done for the project to be reconsidered.
What was supposed to be a half hour meeting with a few federal ministers turned into a discussion that lasted more than an hour and carried into a second meeting.
“It was clear that there were gaps in some of the information they received,” Cook said.
Walter Cobb, president of the Williams Lake & District Chamber of Commerce, agreed.
“They were very misinformed on not only what this project would do but the impacts it would have,” Cobb said.
And that, industry experts say, is the biggest problem with the permitting process for mines in Canada today.
“Ottawa’s ability to determine our destiny or growth is disproportionate to the amount of jurisdiction they should have,” explained Pierre Gratton, president and CEO of the Mining Association of BC. “They’re so far from here they seem, frankly, out of touch.”
Gavin Dirom, president and CEO of the Association for Mineral Exploration BC, believes Ottawa’s decision to reject Prosperity is a legacy of Canada’s complex permitting process.
“The decision shed light on a process that’s flawed … so let’s take this moment now to … make a change,” Dirom said.
But in the wake of the Prosperity decision an even bigger problem has emerged.
Although industry experts, environmentalists and First Nations agree the permitting process is deeply flawed, they don’t agree on what those flaws are.
Opponents to mining projects say the provincial process caters to the industry, pointing to the fact that no proposal handed to Victoria has ever been rejected.
During Prosperity’s federal review, Bruce Stadfeld, legal counsel for the Canoe Creek Indian Band, said the provincial process is not transparent, not credible, has no meaningful First Nations component and has an inflexible timeline.
“A colleague of mine describes it as getting on the Canada Line: once you’re on you’re assured of your destination and businesses know that,” Stadfeld said.
“That’s why they opt in, but it shows First Nations that it’s not a credible process because it has no flexibility.”
Critics have called Ottawa’s decision to reject Prosperity a blow to the provincial process, but Taseko’s vice-president corporate affairs Brian Battison disagrees.
“Why wouldn’t it be a blow to the federal process? … The findings of the panel and the province were very, very similar, it’s what the federal politicians did with it after the process concluded that is the most telling,” Battison said.
He added that both processes used the same information, the same terms of reference and, largely, reached the same environmental conclusions.
The difference is that Victoria, in light of Prosperity’s economic benefits, approved the project while former federal environment minister Jim Prentice did not.
Dirom said the federal decision-making process is not as transparent as B.C.’s because, apart from Prosperity’s environmental effects, the public doesn’t know how the federal government factored socio-economic considerations into their decision.
He added that the 10-month time difference between the provincial and federal decisions isn’t “consistent” for business, and Ottawa should allow the province to grant its own mining permits similar to the Yukon.
Meanwhile, the Prosperity decision, which highlighted B.C.’s First Nations and permitting troubles, has sent a negative message to the global investment community at a time when commodity prices are trading at record highs and mining companies are snapping up projects the world over.
“Bad reputations stay with you for a long time, and it takes a lot to change people’s views,” Gratton said, pointing to the B.C. government’s decision to create a park and halt the development of the Windy Craggy mine in the 1990s.
“People in the investor community still talk about Windy Craggy 15 years later … there’s still doubts out there, and a ‘yes’ decision for Prosperity would have shattered those doubts.”
According to a recent Fraser Institute survey, B.C. ranked 26th out of the 51 best mining regions worldwide.
That’s up from 38th earlier in the year, but Alberta, Quebec, Yukon and Saskatchewan ranked first, third, fourth and fifth, respectively.
In regard to environmental regulations and land-claim issues B.C. ranked 44th and 46th out of 51.
“Impact to the investment community? No doubt there will be an impact. … People are going to reassess their decisions to invest,” Dirom said.
But both he and Gratton agree that B.C.’s mining “renaissance” will continue despite the decision to reject Prosperity, pointing to new mines such as Mount Milligan and Copper Mountain.
Yet the relationship between industry and First Nations and different aboriginal communities is so fractious that even if a mine is approved there’s no guarantee the opposition will stop.
The logging road to Prosperity still bears evidence of a blockade that was under construction prior to the federal decision.
In November, members of the Nak’azdli Band blockaded Terrane Metals’ Mount Milligan mine near Fort St. James, less than two weeks after Ottawa approved that project.
According to B.C. Supreme Court documents, the barricade blocked companies such as Duz Cho Logging from accessing the mine site.
Duz Cho is a logging company owned and operated by the McLeod Lake Indian Band, which has supported the mine.
Meantime, Taseko said it has no plans to give up on Prosperity.
The federal decision rejected the mine “as proposed,” meaning the company can table a new plan.
Dirom and Gratton both believe Prosperity will one day become a mine, saying it’s too valuable to be ignored.
Franco-Nevada Corp. (TSX:FNV), which had previously agreed to invest $350 million in Prosperity, is also bullish on the project and said its funding remains committed once Prosperity is permitted.
“It’s a vote of confidence in us,” Battison said. “It’s a vote of confidence in the deposit.”
Xenti Gwet’in Chief Marilyn Baptiste said she was “sad” to hear Taseko plans to pursue the project.
“A proposal of that magnitude in that type of an area where it’s wetlands … can not be acceptable,” Baptiste said.
None of the other Tsilhqot’in chiefs could be reached to provide their views.
Mayor Cook believes she might be the person to broker peace between Taseko and First Nations, but it won’t be easy.
“I’m hopeful that with a ‘no’ decision it sends a strong message that we need to do things differently, not only from an environmental perspective, but I think it speaks to a lot of things,” Cook said.
In the meantime, Taseko will await direction from Ottawa.
Without federal approval, Prosperity will not live up to its name, and its riches will remain buried.
At press time, there were an estimated 3.6 billion pounds of copper and 7.7 million ounces of gold in the ground.