The document summarizes issues around Taseko Mines' proposed New Prosperity gold-copper mine in British Columbia. It would be an large mine providing significant economic benefits but faces opposition from some First Nations groups. It was previously rejected due to environmental concerns but Taseko has revised the plan at a higher cost. However, the Tsilhqot'in National Government remains opposed, leaving the $1.1 billion proposal in limbo.

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Prosperity For Whom?
Taseko’s BC Mine Hangs in the Balance
~ By Greg Klein - October 31 2011
“The message is simple,” the Vancouver Sun quoted Grand Chief Edward John of B.C.’s In February 2010, after years of protests from environmentalists in Canada and the US,
First Nations Summit last August. “If you’re going to develop a mine or oil and gas, you the BC government banned mining in the Flathead Valley in the province’s southeast-
need to ensure First Nations people are involved.” ern corner. About 10% of the region had already been staked. One of the companies
effectively expropriated was Max Resource TSX:MXR, which had spent $750,000 on
That’s been the guiding principle of resource development in British Columbia for sev- its Crowsnest gold project. “The reason to kick them out was arbitrary,” Minardi says.
eral years now. But a proposal by Taseko Mines Ltd TSX:TKO shows how the extraordi- As a result the industry now fears “the possibility that official land use plans will be
nary rights—and additional potential rights—of a few thousand aboriginals might block overturned without due consultation.”
a project that could provide jobs for themselves and many thousands of others.
In March 2009, the BC government banned uranium and thorium exploration “even
Taseko’s gold-copper mine proposed for south-central BC is back before the Canadian though Canada is the world’s largest exporter of uranium and has the most stringent
Environmental Assessment Authority. On October 19, BC aboriginal leaders held an regulations and safeguards,” Minardi says. “Metals and minerals do not occur in isola-
Ottawa press conference calling on the federal government to reject the New Prosperity tion,” he adds, “so a ban on uranium could affect other types of mining, like rare earths.”
project without even studying it. One year earlier, native concerns prompted the feds
to reject Taseko’s earlier Prosperity proposal. Now the CEAA has until November 7 to Once again, on October 21, the uranium ban hit the fan. The Vancouver Sun reported
decide whether to accept the company’s revised plan as is, allowing the proposal to that Boss Power Corp TSX:CA received a $30-million out-of-court settlement, consider-
move further into the permitting stage for construction, or spend up to 12 months on ably more than its estimated sunk costs of $4 million to $5 million. Court documents
another study. Taseko has spent over $110 million on the project, which first entered the show the BC government admitted that its deputy minister of mines ordered his chief
environmental review process in 1993. inspector to ignore the company’s application for an exploration permit, an order that
contradicted advice from the attorney-general’s department. The ban on uranium mining
A November 2010 CEAA study killed the previous proposal. The report’s conclusions came three days later.
expressed relatively little concern about the environmental impact but had surprisingly
much to say about aboriginal rights, potential rights and spirituality. The three-person A week after reporting the Boss payout, the province’s media learned that BC Hydro,
CEAA panel’s mandate did not include making recommendations, but its report never- the Crown electrical utility, has an undisclosed $2.2 billion in deferred debt, an amount
theless persuaded Canada’s Minister of the Environment, then Jim Prentice, to reject expected to hit $5 billion by 2017. Richard Stout, spokesperson for the Association of
the proposal. Major Power Customers of BC, said the problem exacerbates concerns about future
rate increases that could hinder large-scale industrial development.
Now Taseko is back with a $300-million alteration, bringing the adjusted cost to $1.1 bil-
lion. The extra expense is the cost of preserving Fish Lake, a 118-hectare body of water The Prosperity project, Minardi says, creates further uncertainty. The proposal passed
that was originally considered for a tailings dump. That was a primary focus of CEAA the BC environmental assessment only to be rejected at the federal level, largely
concern. Rising metal prices, Taseko says, now make it possible to relocate the tailings because it would destroy the 118-hectare Fish Lake. The region’s aboriginal groups had
two kilometres away, saving the lake and, the company hopes, the mine. turned down a revenue-sharing plan (see below). “The lack of aboriginal treaties is a big
problem with [its concomitant] lack of clarity.” Minardi declares. He doesn’t, however,
New Prosperity would be one of Canada’s largest gold-copper mines, an open-pit proj- see any solution.
ect with a measured and indicated resource estimated at 5.3 billion pounds copper and
13.3 million ounces gold, including proven and probable reserves of 2.4 billion pounds Mining Association President/CEO Karina Briño says BC’s mining outlook has improved
copper and 7.7 million ounces gold. Its 2007 feasibility study projects a 20-year mine during the last year, emphasizing that the province’s revenue-sharing program for
life producing an annual average 300,000 ounces gold and 130 million pounds copper aboriginals is “a policy that’s making a difference.” She adds, however, that miners
for the first five years. would like “one environmental assessment process that meets the requirements of both
federal and provincial levels of government.”
Its economic impact would be massive, according to a Taseko-commissioned report
by the Centre for Spatial Economics—71,000 direct and indirect jobs, $4.3 billion in She emphasizes, “We need more clarity in the scope of the assessment and the
federal taxes, $5.52 billion in provincial taxes, an $11-billion increase in Real GDP and a requirements expected of proponents.”
5,400-person increase in BC’s population.
The provincial government extended the revenue-sharing policy from forestry to mining
To emphasize the industry’s importance overall, on October 25 the Mining Association in August 2010, with two agreements that will transfer nearly one-third of the provincial
of BC released a report commissioned from PricewaterhouseCoopers. It says the min- mineral tax royalty from two mines to local aboriginals.
ing sector spent $5.2 billion in BC last year for a total output of $8.9 billion, attributing
for each dollar spent $1.73 in direct, indirect and induced total impact. Taxes paid by One of the deals concerns Thompson Creek Metals’ TSX:TCM Mount Milligan Copper-
this sector in 2010 were $449.2 million at the federal level, $414.8 million provincial and Gold Mine. The McLeod Lake Indian Band will get $35 million to $40 million over the
$74.6 million municipal, with an additional $364 million in royalties and land taxes. The mine’s 15-year life. The band’s population is currently estimated at 491.
industry provided 45,703 jobs direct, indirect and induced. The report also notes that
BC has “the world’s largest concentration of exploration firms and mining professionals.” Provincial revenue from New Gold’s Inc TSX:NGD New Afton Copper-Gold Mine will
bring the Tk’emlups and Skeetchestn Indian Bands, currently estimated to have a com-
For all that, BC ranks surprisingly low as a mining-friendly location. The Fraser Institute’s bined population of about 1,500 people, about $30 million over 12 years.
2010-2011 survey rates the province 36th out of 79 jurisdictions internationally. That’s
a slight improvement over 2009-2010, but the score still lags behind the three previous As the deal was announced, Black Press quoted Tk’emlups Chief Shane Gottfriedson
annual studies. as saying his band expected more money to come. “While this agreement is specifically
for the mine tax for the New Afton mine located on our territory, we look forward to a
“We’ve studied British Columbia since the 1990s, and things have improved a lot,” more comprehensive agreement on all revenues generated by such projects.”
says Fraser Institute spokesperson Jean-Francois Minardi. “But the mining community
believes there are still problems. There seems to be a lack of trust in the government. But the Tsilhqot’in National Government, representing five bands totalling about 3,100
The main reason is the uncertainty, the sudden policy changes, especially with recent people, steadfastly spurns any such benefits from the New Prosperity proposal. They
decisions concerning uranium, the Prosperity mine and Flathead.” won’t even talk to Taseko. And so the $1.1-billion proposal remains at an impasse.
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