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Controversial mining company hires recently retired B.C. politician

by Greg Klein | September 26, 2013

Former British Columbia cabinet minister Blair Lekstrom has joined HD Mining International, a company that plans to staff underground operations at its proposed Murray River coal mine exclusively with Chinese workers. A Canadian Press story published by the Vancouver Sun on September 25 cited an August 22 letter from HD Mining that confirmed the hire.

Last May the company defeated a court challenge by two unions against its use of Canada’s temporary foreign workers program to import Mandarin-speaking underground staff. The company argued that no Canadians were qualified to do the work. The unions presented evidence that HD Mining was offering pay rates below Canadian standards, the company rejected qualified Canadians and many of the job ads posted in Canada made Mandarin a language requirement.

Controversial mining company hires newly retired B.C. politician

Former BC MLA
Blair Lekstrom

Critics also expressed strong concerns about job safety, pointing to the Chinese mining industry’s notoriously high death rate. As Bloomberg reported in April, “China’s history of mining incidents includes the world’s worst safety record at its coal mines, which saw 1,973 people killed in accidents in 2011 and 2,433 the year before that, according to the State Administration of Work Safety.”

HD Mining is held 55% by Huiyong Holdings, a coal mining company in China, 40% by Canadian Dehua International Mines Group and 5% by an unnamed party.

Penggui Yan, chairperson of both HD Mining and Huiyong Holdings, was formerly a Chinese government official and manager of the state-owned mining company Shenhua Group, the Globe and Mail reported in February. Canadian Dehua has proposed at least three more Chinese-staffed coal mines for the same northeastern B.C. region.

The BC Liberal government strongly supported HD Mining’s plan and knew about a similar scheme by Naishun Liu, Canadian Dehua’s Chinese-born founder and chairperson, at least as far back as 2007.

Last November Vancouver Province columnist Michael Smyth revealed that “the main point person for the Chinese mining companies in B.C. is Jody Shimkus, a former assistant deputy minister of mining in the Liberal government.”

Smyth reported she left her government job in January 2012 to join HD Mining: “Under conflict-of-interest rules, senior managers face work restrictions for one year after they leave government. Senior managers can’t take a job with a company they dealt with in government, and can’t lobby or make representations on behalf of a company to the ministry where they formerly worked, the rules say.”

Smyth quoted Shimkus, “I never dealt with HD in government and I haven’t lobbied for them.”

Smyth added that “she also said she didn’t know about the one-year work restrictions when she signed on as HD’s vice-president of environmental and regulatory affairs.”

She told Smyth, “I don’t know what ‘make representations’ means. All I’ve done is help them through the environmental permitting process.”

Lekstrom, first elected to his northeastern B.C. riding in 2001, retired prior to last May’s B.C. provincial election. He held cabinet positions for Transportation and Infrastructure from March 2011 to September 2012, and Energy, Mines and Petroleum Resources from January 2009 to June 2010. He held the latter ministry when the province banned mining in southeastern B.C.’s Flathead Valley following pressure by American environmentalists and politicians.

HD Mining originally stated it would import between 400 and 480 Chinese workers at a time on two-year visas to staff Murray River’s underground operations up to 2025. In January, following widespread criticism, the company said it would “transition” 10% of the underground jobs to Canadians each year. The question remains of how many of those jobs will go to imported miners who become Canadian citizens.

Speaking to in May, United Steelworkers western Canada director Stephen Hunt said, “If you look at the debacle with HD Mining, no one even thought of employing first nations people.”

In an April article about Chinese-owned and staffed mines in Tibet, the Economist stated, “Managers at big state-owned firms are usually Han Chinese, who in turn tend to regard their own ethnic kin as easier to control and communicate with than Tibetans.”

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