Tuesday, July 06, 2010

How much damage is a mine worth? (Not a rhetorical question)

How much environmental damage is justified as a trade-off for the jobs and revenue from a big new open-pit mine?
The proposed Prosperity gold and copper mine about 125 kilometres southwest of Williams Lake would mean about 375 jobs and $20 million a year in revenue for the provincial government. Good news.
And it would require turning a lake into a tailings dump and have "significant adverse environmental effects on fish and fish habitat, navigation, on the current use of lands and resources for traditional purposes by First Nations," according to a federal environmental review. Aboriginal rights and a grizzly population might be at risk. Bad news.
So what's your decision - approve the mine, or reject it?
Prime Minister Stephen Harper and the federal cabinet will face that question in the next few months.
It's a pivotal moment for B.C. And the Prosperity file is an illustration of how poorly the current approval process serves the public interest.
There's a bit of irony in all this. The mining industry has worked hard to improve its image. Too hard, perhaps. It's painted a soft-focus picture of deer grazing amidst the pines on a former mine site. That's what people now expect.
Really, mines almost always mean environmental damage. (So do the communities we live in and airplanes.)
Unless you're prepared to say B.C. is off limits to new mines, the issue should be balance. What's the public benefit - jobs, government revenue, opportunities for new businesses - and what are the costs?
Taseko Mines has been in the approval process since 1995 and has spent about $100 million to get this far. It wants to dig a big open-pit mine over 20 years, then let it fill up with water. A trout lake would be turned into a tailings dump, to be replaced ultimately by a new man-made lake. There would be a mill, roads and a 125-kilometre power line cut through the forest.
Taseko figures it can take $3 billion worth of gold and copper out of the mine over 20 years and produce a 40-per-cent pretax return. The public, which owns the minerals, gets $400 million. (That's one of the places where the process breaks down.)
The B.C. government's environmental assessment process was completed late last year; in January, Environment Minister Barry Penner and then-mines minister Blair Lekstrom said the project should go ahead.
But he federal review rejected some of the key conclusions of the provincial assessment, especially around First Nations' rights. (The governments have been talking about creating a single process; this project raises questions about what standards would be in place - Ottawa's, or the apparently more relaxed provincial rules.)
One missing element is a chance to adjust the deal to get the best deal for the public.
Taseko could build a tailings pond instead of destroying the lakes, for example, though that would add to the $800-million project cost.
Or the company could attempt to address First Nations' concerns through economic measures.
Taseko maintains the federal cabinet will approve the project.
But the company's shareholders appear less confident. The stock plummeted after the federal panel report; it's still down about 20 per. The value of the company has dropped by about $165 million.
The concern doesn't just reflect the uncertainty around federal government approval. First Nations have promised to fight the mine in the courts. The federal environmental assessment report gives them useful ammunition.
There is no easy response to this kind of proposal. The region is facing tough economic times for decades, in part because of the pine beetle disaster. The jobs would be welcome.
And the mining industry will likely say B.C. is a bad place to invest if approval isn't granted.
Two elements are missing from this process: Greater transparency in the way politicians make the final decisions and more opportunities for negotiated steps to balance the costs and benefits.
Footnote: Here's an indication of the uncertainty around the assessment. The CBC report was headlined "Panel sees BC mine as environmental threat." The Vancouver Sun said "Federal panel remains neutral on proposed Prosperity mine." And the Globe and Mail headline was "Environmental review puts future of BC copper-gold mine in doubt."


Norman Farrell said...

Here's where public distrust of government and its cozy relationship with extractive industries comes into play.

Who trusts the federal or the provincial governments when resource exploitation is involved? BP is demonstrating now the priority placed by industry. Will they sacrifice the eco-system to maximize profits? Of course.

Anonymous said...

Yes, how much are jobs worth. In Quebec they want to continue to mine asbestos because it provides jobs to the community, nevermind the health risks.

Kim said...

There is a good article on this in the Tyee today. Apparently the economic benefits to the people of BC are vastly overestimated. Not taken into account is the cost to taxpayers on the $50 per MWh BC Hydro will lose to the mine, estimated at $35 million over the life of the mine. Plus they vastly overestimated how much the company will pay out in taxes, income and property. I have to conclude that you are overly trusting Paul.