Sunday 4th December 2016

Resource Clips


Posts tagged ‘new prosperity’

Defining a problem

October 15th, 2012

Canada continues to expand its interpretation of environmental issues

by Greg Klein

Next Page 1 | 2

Amnesty International has not only joined the campaign against a Canadian mining proposal. It’s been granted “interested party” status by a federal environmental review panel. So has a nationalist group, the Council of Canadians. The news suggests that Canada has expanded its definition of “environmental” issues even further than the cultural and spiritual matters, and native rights and potential rights, that it has previously considered.

Canada continues to expand its interpretation of environmental issues

That’s the result of legislation passed last June. At the time environmentalists were critical, saying the new law would weaken the review process for resource proposals. But this announcement from a Canadian Environmental Assessment Agency review panel seems to suggest otherwise.

The three-member panel was appointed by the CEAA to review the $1.1-billion New Prosperity Gold-Copper Project proposed by Taseko Mines TSX:TKO for south-central British Columbia. On October 12 the panel announced its selection of interested parties from the groups and individuals who applied for the distinction. Although the panel will also hear from the public, “only those persons with interested party status will be permitted to participate in all aspects of the review during the public hearing phase,” the announcement stated.

An international human rights organization and a Canadian nationalist group made the cut. According to the panel they’re directly affected by the project, or have relevant information or expertise. The panel’s announcement stated that “the explicit definition of ‘interested party’ and the requirement for the panel to determine whether a person qualifies as an interested party are new” under last June’s legislation. To define interested parties, “the panel has followed a liberal and generous approach.”

Next Page 1 | 2

Week in review

October 5th, 2012

A mining and exploration retrospect for September 29 to October 5, 2012

by Greg Klein

So much for the environmental review

Monday’s news from British Columbia indicates another level of uncertainty has hit the province’s mining sector. Two B.C. cabinet ministers refused an environmental assessment certificate for Pacific Booker Minerals TSXV:BKM, even though the company passed a provincial environmental review. As a result, the half-billion-dollar Morrison copper-gold-molybdenum proposal has been put on hold.

A new development at the provincial level, it does have similarities to a federal decision to reject Taseko Mines’ TSX:TKO Prosperity gold-copper mine proposal for B.C. A November 2010 report from the Canadian Environmental Assessment Authority convinced the federal government to reject the $800-million proposal. The three-member CEAA panel found few significant adverse environmental effects but emphasized significant adverse effects on established native rights, potential rights, potential title, tradition and culture.

Mining and exploration week in review

Now B.C. has taken a comparable approach, although the supposedly “environmental” arguments come from politicians, not the people who conducted the environmental review. In fact the provincial review repeatedly stated that, with successful implementation of mitigation measures and conditions, the Morrison mine is “not likely to have significant adverse effects.”

Nevertheless Derek Sturko, who’s both executive director of B.C.’s Environmental Assessment Office and an associate deputy minister of the environment, seemed to reject his own department’s 270-page report. He suggested instead that the government take a “risk/benefit approach.” Sturko also emphasized strong native opposition and a “moderate to strong prima facie case for aboriginal title.” On that basis, two cabinet ministers representing mining and the environment nixed the proposal.

The decision might be related to the pre-election BC Liberal government’s prevaricating but currently negative stance towards the proposed Northern Gateway pipeline. But the province’s decision, like the federal decision regarding Taseko, also raises the question of whether native rights are handled according to the principle of law or appeasement.

Taseko submitted a revised $1.1-billion New Prosperity proposal to the feds on September 20. On Tuesday Business in Vancouver cited analysts, for some reason speaking anonymously, who said Taseko’s $300-million revision remains viable despite a drop in copper prices. But “with a large question mark as to whether the federal government will approve the project on a second go-round, they’re currently ascribing no value to the project in their target stock prices for the company,” BIV reported.

On Tuesday Pacific Booker Director Erik Tornquist told ResourceClips his company is reviewing its options.

Confiscation without compensation

If miners haven’t given up on B.C., it might be a case of the devil they know. Wednesday’s announcement that the Bolivian government would not provide compensation for nationalizing the Malku Khota Project followed months of uncertainty for South American Silver TSX:SAC. Since 2007, the company had spent over $16 million building a resource of 158 million ounces silver and 1,184 tonnes indium with lead, zinc and copper credits.

The company claimed the support of 43 out of 46 land-owning indigenous groups. SAC blamed illegal artisanal miners and activists from outside the region for intense opposition from the three dissident communities.

But last May, the company said, Mining Minister Mario Virreira signed an agreement with the 43 supportive groups stating that the government will not reverse the mining concession and that the company should continue exploration.

Protests turned violent in June, with one death and several injuries. Later that month seven people were taken hostage, including three drill contractors, two SAC employees, a government prosecutor and a police officer. The final three hostages were released unharmed after 11 days, when the government decreed that it would nationalize Malku Khota.

Reuters quoted a confident-sounding Vice-President Alvaro Garcia saying, “If we have to invest $500 million or $700 million or even $1 billion for a large-scale project at Malku Khota, which benefits Bolivia, the state is prepared and has the capacity to do that.”

At the time he added that government might pay compensation of $2 million or $3 million. Then came Wednesday’s decree. In an Agence France-Presse dispatch printed in the Globe and Mail, Virreira stated, “The nation has no financial obligation to South American Silver.”

By press time South American hadn’t responded. In an August 2 statement Greg Johnson, then the company’s president/CEO, said the company is prepared to go to international arbitration.

But, as Financial Times correspondent Andres Schipani pointed out, “Getting fair compensation, or any for that matter, from Bolivia has proved tricky since 2007. A year after [President Evo] Morales took office, the Andean country pulled out of the World Bank body that conducts arbitration between businesses and governments …”

Schipani noted other troubled nationalizations in Bolivia, including the Colquiri tin mine taken from Glencore in June. The government rationalized the move by saying it could then end disputes between independent and unionized miners. But the conflict flared up again with more violent clashes which shut down operations. On September 14 Reuters quoted Hector Cordova, president of the state-owned mining company, who said, “We’re losing more than $250,000 per day through lost production and this has been going on for two weeks. That means an accumulated loss of almost $4 million.”

Last Sunday the government said it solved the dispute by dividing the mine’s richest vein between the rival groups.

Friends and foes in the Kyrgyz Republic

On Friday three Kyrgyzstan MPs faced criminal charges while political unrest focused on Centerra Gold’s TSX:CG Kumtor Gold Mine. Prosecutors say the three attempted to overthrow the government by leading a mob that stormed the parliament building on Wednesday, Reuters reported. The incident grew out of a protest demanding that Kumtor be nationalized.

Violence has turfed previous Kyrgyzstan governments in 2005 and 2010. Last June a motion to nationalize Kumtor failed to pass parliament but MPs did pass a motion to consider increasing the country’s 33% stake in the Centerra subsidiary that owns the mine, as well as redefining the concession and boosting taxes.

But reassuring news came on Monday when Kyrgyzstan’s new president Zhantoro Satybaldiyev declared, “Kumtor will not be nationalized.” He told Reuters, “Problems will be resolved. I asked [the Kumtor venture] to keep up its output.” He added, “The way they extract gold, it’s really a state-of-the-art job. To be honest, I am jealous of their skills.”

The news agency pointed out, however, that the government had cancelled a televised auction of mining licences on August 28 after protesters stormed the TV studio.

Kumtor produced 583,156 gold ounces in 2011 at $482 an ounce. But in August the company blamed its $54.6-million Q2 loss largely on Kumtor’s “abnormal mining costs.”

Last September Kyrgyzstan ordered Stans Energy Corp TSXV:HRE to suspend drilling at its Kutessay II REE Deposit. According to the company, the government wanted “a firm proposal for the gratuitous transfer of a percentage of ownership” of a company subsidiary to the state. The stop-work order ended as the company met with Satybaldiyev and Economic Minister Temir Sariev.

In a statement issued Monday, Stans quoted Sariev saying, “Our state does not have the necessary financial and technical resources for the development of deposits and we have, so far, no such specialists. Development of the mining industry of our country at this stage is only possible by attracting investment. And the investors will come to our country when they will be confident in the safety of their financial investments.”

South Africa: A tragic outcome from a positive move?

Another striking miner was killed in South Africa Thursday night. On Friday Anglo-American Platinum fired 12,000 strikers. A Reuters dispatch in the Globe and Mail stated, “When rival Impala Platinum fired 17,000 workers in January to squash a union turf war, it led to a six-week stoppage in which three people were killed, the company lost 80,000 ounces in output and platinum prices jumped 21%.”

One disturbing aspect of the crisis is that a generous pay hike in a poor country can cause so much controversy. In last month’s “Lonmin settlement,” the platinum producer raised miners’ wages between 11% and 22%. Nic Borain, described as “an independent political analyst,” told Reuters, “Amplats had been giving signals that it was going to hold the line after Lonmin had folded—but it’s a huge gamble. Someone had to take it on the chin or this would have kept on unravelling and spread through the economy. It’s difficult to know whether this causes the unrest to spread or whether it takes some of the sting out of it. It could go either way.”

Looking back at last week

September 21st, 2012

A round-up of exploration and mining news for September 15 to 21, 2012

By Greg Klein

Next Page 1 | 2

The elephant in B.C. boardrooms
On Thursday the long, long process of advancing Taseko Mines’ TSX:TKO $1.1-billion New Prosperity Gold-Copper Project crept forward—or, according to the company, reached a “major milestone”—when Taseko formally filed its Environmental Impact Statement to the Canadian Environmental Assessment Authority. A three-member panel will review the submission and conduct public hearings over the next year.

Although the project passed a British Columbia environmental review, a federal panel rejected it in November 2010, condemning a plan to convert Fish Lake into a tailings dump. Taseko then came up with a $300-million plan to preserve the 118-hectare lake by positioning the tailings two kilometres north.

In a Vancouver Sun op-ed on Friday, Taseko President/CEO Russell Hallbauer sells the project’s economic benefits. But no one in the industry seems willing to speak openly about the previous CEAA decision, which often used subjective and non-environmental reasoning to pan the proposal. The report described Fish Lake as “a place of spiritual power and healing” for the Tsilhqot’in native band, concluding that the mine would have “a significant adverse effect” on established native rights, potential rights, potential title, and traditional and cultural uses.

The controversy highlights the uncertainty resource companies face in B.C. In September 2011 Stewart Phillip, president of the Union of B.C. Indian Chiefs, stated Taseko’s plan “will trigger a province-wide and nation-wide backlash that will severely jeopardize relationships between First Nations and the mining industry for years to come.”

Read more about New Prosperity here, here and here.

Young miners make more than Harvard grads
“Harvard University’s graduates are earning less than those from the South Dakota School of Mines and Technology,” Bloomberg reported on Tuesday. The story adds, “Demand for mining-school graduates is exceptional in the U.S., where the unemployment rate for 20- to 24-year-olds with bachelor’s degrees was 11.8% in July.” The U.S. will need some 78,000 additional mining personnel by 2019 to replace retirees, while Australia will need 1,700 mine engineers, 3,000 geoscientists and 36,000 others by 2015, the report states.

A round-up of exploration and mining news

Last March Aurizon Mines TSX:ARZ President/CEO George Paspalas told ResourceClips, “Recruiting new employees is, I believe, one of the biggest issues facing the industry globally. A lot of development and operational plans hinge on the human resource, not the resource in the ground. There’s a lot of very experienced people coming up to retirement. There’s a gap where people didn’t go into the industry when metal prices were depressed in the mid- and late-1990s. That’s the age group from about 35 or 40 years to about 50 years. The industry was depressed, and the dot-com boom was on, so people wanted to get into the sexy stuff.”

Lack of expertise can subject projects to delays and disappointments. Bloomberg quotes Robin Adams, a managing consultant with research company CRU, who attributes setbacks to “haste, inexperience, lack of properly done mining studies [which reflect] the fact that mining is missing a generation. They are learning though, so that problem is going to go away in a few years.”

Honoured and pleased, despite the misunderstanding
For a few days this week Belo Sun Mining’s TSX:BSX stock hit enough turbulence to induce airsickness. The cause, according to President/CEO Mark Eaton, was a misunderstanding about what Brazilian public prosecutors mean by an “investigation.” As he suggested to the Globe and Mail, it’s more of a routine inquiry. Even if someone just wants to build “a cow shed, the federal prosecutor has to open an ‘investigation’,” Eaton told the G&M.

But when news reports stated that a federal prosecutor was “investigating” the company’s Volta Grande Gold Project, the misunderstanding almost sank a $50-million private placement.

Belo Sun opened at $1.50 on Monday, and that afternoon the company announced a bought deal of 35.72 million shares at $1.40. The stock closed that day at $1.54.

Come Tuesday morning, however, it opened at $1.40 and plummeted to $1.27, before closing at $1.37. That evening the company tried to clear things up: “The federal Public Prosecutor Office in the state of Pará opens an investigation proceeding for each and every environmental licensing process in the state. The investigation proceeding regarding the project does not imply any irregularity or particular concern regarding the environmental licensing process for the project.”

About 28 minutes later, the company cancelled the private placement.

By Wednesday the stock opened a bit higher at $1.40. That afternoon the company re-announced the private placement on the previous terms, including a share price of $1.40. The share closed the day at $1.39.

In his Tuesday statement, Eaton said he was “honoured and pleased with the participation and interest of the Public Prosecutor Office.” Should all go well, Volta Grande will begin its feasibility study in Q1 2013.

Next Page 1 | 2

BC’s New Prosperity Inches Forward

November 7th, 2011

Taseko’s Federal Review Could Take A Year

By Greg Klein

Read Part I of the New Prosperity story.

Read Part II of the New Prosperity story.

November 7 was the deadline, yet supporters and opponents alike were kept on tenterhooks as the Canadian Environmental Assessment Agency waited until late afternoon Pacific Time to release its New Prosperity decision. Now both sides face up to a year of further uncertainty while the controversial gold-copper mine proposed by Taseko Mines Ltd TSX:TKO for south-central BC works its way through another review.

This marks the third review since the process started in 1993 and the second since November 2010, when a CEAA panel’s report prompted the federal cabinet to reject Taseko’s last proposal, which was called Prosperity. The review largely focused on 118-hectare Fish Lake, which Taseko initially planned for a tailings dump. Taseko’s revised proposal, New Prosperity, moves the tailings two kilometres upstream.

Taseko's Federal Review Could Take A Year

Supporters say the $1.1-billion open-pit mine would bring 71,000 direct and indirect jobs, $4.3 billion in federal taxes, $5.52 billion in provincial taxes and a big chunk of the provincial mineral tax for aboriginals.

“That’s the value of mining, and it’s sure exemplified in this project,” says Brian Battison, Taseko’s VP of Corporate Affairs. “If there’s a time when these opportunities are needed, it’s now.”

Opponents talk of environmental damage, cultural threats and even a nation-wide breakdown of relations between natives and the mining industry. They say the new proposal still threatens Fish Lake.

“Obviously [the lake is] critically important,” Union of B.C. Indian Chiefs president Stewart Phillip tells ResourceClips.com. “I’ve been involved in indigenous issues for 37 years or thereabouts, and I’ve never witnessed an issue or project that has attracted such widespread opposition. It’s not just aboriginal opposition—there’s environmental, conservation, human rights, multi-faith community, the general public.”

The last CEAA panel described Fish Lake as “a place of spiritual power and healing for the Tsilhqot’in.” In a media release from the 3,101-member Tsilhqot’in Nation, Chief Joe Alphonse called on the CEAA to re-appoint the same three panel members.

Although the CEAA report found few significant adverse effects besides the Fish Creek watershed, it did focus strongly on issues like established rights, potential rights and potential title, stating that these issues were part of its terms of reference. The new panel’s environmental guidelines and terms of reference haven’t been announced yet. “Both of those documents will be made available for public comment prior to being finalized,” the agency states.

I’ve been involved in indigenous issues for 37 years or thereabouts, and I’ve never witnessed an issue or project that has attracted such widespread opposition —Stewart Phillip

In a letter to the Northern Miner, Taseko President/CEO Russell Hallbauer pointed out that “New Prosperity is located on Crown Land owned by the people of BC.” He also stated that Taseko had paid nearly $1 million to local native bands “to assist them with capacity issues. We spent a further $750,000 to identify any archaeological sites in the immediate mine-site area, an amount far in excess of what was required of us under the law but which we agreed to do at their request and to demonstrate our efforts to be responsive to their interests.”

Tsilhqot’in leaders have told ResourceClips.com that they refuse to talk with Taseko.

Phillip says he stands by his September UBCIC statement that approval of New Prosperity “will trigger a province-wide and nation-wide backlash that will severely jeopardize relationships between First Nations and the mining industry for years to come.” Phillip reiterated the UBCIC’s support for the Tsilhqot’in but declined to be specific about his group’s plans.

One day prior to the CEAA announcement, hundreds of marchers, drawing people from Occupy Vancouver and including masked protestors, paraded through downtown Vancouver to denounce “mining on native land.”

Read Part I of the New Prosperity story.

Read Part II of the New Prosperity story.