Taseko Mines (TSX:TKO) is willing to pay $300 million to save a remote B.C. lake so it can build its next mine, but Ottawa will get the final say.
Last week, the Vancouver-based mining company submitted a revised mine plan for its $800 million Prosperity copper-gold project, which would be located in a remote corner of B.C.’s Cariboo country.
Ottawa rejected the mine plan in November, citing concerns over the proposed destruction of Fish Lake and its accompanying watershed.
The new plan spares Fish Lake, a body of water that regional First Nations say has supplied them with food since time immemorial.
The lake, which is one-quarter the size of Stanley Park, became a lightning rod for controversy last year when it was revealed that Taseko would drain the lake to store non-acid-generating rock from Prosperity’s pit (see “Chasing Prosperity” – issue 1101, November 30-December 6, 2010).
According to the latest plan, the company has moved the rock storage area away from the current lake site to a location east of the pit.
Brian Battison, Taseko’s vice-president, corporate affairs, said the tailings pond would also be moved to accommodate the lake, shifting its location two kilometres to the south.
Despite the move, Taseko said it would still have to drain neighbouring Little Fish Lake to make way for the tailings pond.
Battison also said the company no longer plans to build Prosperity Lake, which was originally intended to replace Fish Lake.
“Since Fish Lake is preserved, there is no need to build a replacement lake,” he said.
The design changes are expected to cost an additional $300 million, putting the project’s total cost at approximately $1.1 billion.
The new plan has been submitted to the provincial and federal governments.
Battison doesn’t believe the design changes will affect the company’s provincial environmental permit, which was granted in early 2010.
But the federally governed Canadian Environmental Assessment Agency is a different story.
Ottawa now has to decide if the project requires a second full-blown environmental review with a hearing panel or if the changes can be assessed separately.
The agency confirmed with Business in Vancouver that it had received the new plans, but couldn’t say when it was likely to make a decision on the project.
Battison hopes the revised plan will require only an environmental “screening,” meaning the company wouldn’t need to wade through another multi-year assessment process that has already cost it more than $100 million.
“If they say we’re going to have to do a panel review, it’s unlikely that we would advance the project,” Battison said.
Williams Lake, the closest community to the mine, welcomed news that Taseko is again proceeding with the project.
“There’s an opportunity here to learn from the past,” Mayor Kerry Cook said in a statement.
“I hope that the project can move forward in such a way that addresses the concerns raised during the environmental assessment process.”
First Nations groups who originally opposed the project couldn’t be reached by press time, but in January the Tsilhqot’in National Government issued a statement expressing “deep disappointment” that the company planned to pursue a revised submission to Ottawa.
“We had hoped that the ruling to reject the Prosperity mine proposal would serve as a catalyst for reform and a new relationship between governments, the mining industry and First Nations,” Chief Joe Alphonse said. “This continues to be our hope despite this attempt to revive this dead project and the unproductive conflict that it has generated since the beginning.”
At press time, Taseko’s stock was up 5% to $6.15.
Vancouver
CEO: Russ Hallbauer
Employees: 350
Market cap: $1.1b
P/E ratio: 10.10
EPS: $0.65
Sources: Stockwatch, TSX, Globe Investor