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Environmental review panel puts Northgate Mineral mine project on hold

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by Jim Stirling

Mining companies with promising projects in British Columbia are taking a hard second look at their proposals in the wake of a decision by a joint British Columbia and Canadian government environmental review panel.

Mining

Mining companies with promising projects in British Columbia are taking a hard second look at their proposals in the wake of a decision by a joint B.C. and Canadian government environmental review panel.

The panel recommended Northgate Mineral Corp.’s Kemess North project not proceed in its current form.

In its summary, the panel says the economic and social benefits of the project are outweighed by risks of adverse environmental, social and cultural issues, some of which might not become apparent for many years.

Northgate was proposing a $200 million investment in a gold and copper mine north of its existing mine, about 425 kilometres northwest of Prince George.

Kemess North would extend the life of the existing operation by at least a decade, saving 350 existing mine jobs and the $60 million annually the operation pumps into the northern B.C. economy.

The most contentious part of Northgate’s proposal is the use of Duncan Lake to store mine waste. Northgate says the six kilometre long lake is the best environmental and economically feasible option: $200 million compared with $1 billion for the next best scenario.

The review panel agreed Northgate’s proposed mitigation measures were unlikely to cause significant environmental problems.

But the Kemess North plan raised the ire of four First Nations groups.

They were concerned about the loss of Duncan Lake and its spiritual values. The review panel was clearly swayed by the natives’ position.

“If you’re going to do a project, I think you should probably cut a deal with the First Nations before you get involved in the rest...”

Ken Stowe

Ken Stowe, Northgate’s president and CEO told a mining forum in Denver, Colorado, that the review panel’s findings were both unfortunate and illogical.

He said that it sends a clear message to companies operating in B.C. and perhaps the rest of Canada.

“If you’re going to do a project, I think you should probably cut a deal with the First Nations before you get involved in the rest... Otherwise, don’t waste your time,” Stowe said.

The Association for Mineral Exploration in B.C. is concerned that the panel’s nixing of Kemess North sends a negative signal to international investors about B.C.’s mining-friendly status.

“The mineral exploration sector remains hopeful that the company, the community and First Nations can come to an agreement that will enable this important project to move forward so B.C. can let the international investment community know that it’s truly open for business,” said Dan Jepsen, the association’s president and CEO in a statement.

As for Northgate, its plans are on hold pending a review of the panel’s findings by the B.C. and federal governments. In the meantime — however long that might turn out to be — Northgate does not intend investing more shareholders money into further exploration of the Kemess North area.

The joint environmental review panel’s conclusion puts the B.C. government in an awkward situation.

It has been actively and successfully encouraging investment in mining exploration in the province and in 2006, investment was valued at $265 million, up 800 per cent from 2001.

The government sees mining picking up the economic slack with the predicted decline in future timber supplies in the interior caused by the mountain pine beetle epidemic.

There are many proposals in B.C. at one stage or another in the complex pipeline leading to mine creation.

Taseko Mines Prosperity project has parallels with Northgate’s Kemess North. Taseko recently received an engineering study indicating its proposed open pit gold and copper mine, 125 kilometres southwest of Williams Lake, is both economically and technically feasible.

The $800 million venture would create 550 direct jobs, 1,280 indirect ones for 22 years of expected mine life.

The Prosperity project also involves the use of a lake: Fishpot Lake.

It has yet to undergo provincial and federal environmental assessment reviews.

Construction is underway at the $2 billion Galore Creek gold/copper mine southwest of Dease Lake. It is owned and operated by partners NovaGold and Teck Cominco. The project has the blessing of the Tahltan Nation.

However, some factions of the same group along with others put at least a temporary halt to the plans of Shell Canada and its proposal for coal bed methane extraction in the nearby Klappan area.

Some other notable projects on the books include Ruby Creek’s $300 million molybdenum mine near Atlin; Blue Pearl Mining Ltd.’s Davidson Project near Smithers; Imperial Metal’s Red Chris project in northwest B.C. and Terrane Metals Corp.’s Mt. Milligan copper and gold property in north central B.C.

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