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Vol. 19, No. 8 Week of February 23, 2014
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News: Premier orders review of BC EA process

Province generally ranks favorably in comparison with similar regulatory regimes among Canada, U.S. jurisdictions in Far North

Rose Ragsdale

For Mining News

British Columbia Premier Christy Clark ordered a review of the Canadian province’s environmental assessment process in January, saying the current system has become too cumbersome.

Clark provided few details when she announced the initiative at the Mineral Exploration Roundup in Vancouver Jan. 27. She said environmental reviews of major projects are crucial, and while the current process is rigorous and transparent, the B.C. environmental assessment office can “do better.”

“In my view, it is better to do the hard and rigorous work at the front end and get it right, than to endure decades of questions and debate and acrimony about why and how it was done,” Clark said.

Due to recent streamlining and regulatory initiatives, Clark said thegovernment has exceeded its BC Jobs Plan goal for permitting turnaround times. Notices of Work permit applications are now processed in 55 days on average, a considerable reduction from an average of 110 days in 2011, demonstrating government’s commitment to an efficient and barrier-free permitting process.

However, Clark told reporters that she believes the existing system for environmental assessments has gotten less predictable and more inefficient.

“My view is if a project is environmentally unsustainable and the wrong project, we should say no. If it’s a project that is environmentally sound, we should say yes,” she said.

“But I think over the years, the environmental assessment process has gotten so long, so difficult and so complex, that communities, proponents can’t get a yes, can’t get a no.”

Clark also said she believes getting an efficient approval or rejection would be best for economic development in B.C.

A key aim of the mandate from Clark is to cut the timeline for environmental assessments in the province, according to B.C. Environment Minister Mary Polak.

“We have been told by industry that permitting is taking too long,” a ministry spokesman told Mining News Feb. 12.

But surveys of the environmental assessment processes of the other jurisdictions situated north of the 60th parallel in Canada and the United States suggest that B.C.’s EA process may be no worse and in some instances, arguably, better than others.

While mines typically require many years to get from ore discovery to production, mine projects in British Columbia that have initiated production in recent years benefitted from relatively expeditious permitting. These include the New Afton gold mine and the Mount Milligan copper-gold-silver mine.

For New Afton, located 10 kilometers west of Kamloops, B.C., no environmental assessment was required by the B.C. government for the underground operation, and it took about 9.5 months for operator New Gold Inc. to obtain a Mines Act Permit, from Jan. 18, 2007 when the company’s application was received, to Oct. 30, 2007 when the permit was issued. Operations began at New Afton in 2012, with first concentrate shipped in July 2012.

For Mt. Milligan, located 155 kilometers (96 miles) northwest of Prince George, B.C., former operator Terrane Metals Corp. entered the pre-application EA process on Oct. 13, 2006 and B.C. regulators received the application from Terrane Sept. 3, 2008. Approval of the project was granted on March 16, 2009, and a Mines Act permit was issued in September 2009.

The following year in July, Terrane was acquired, along with the C$917 million, 15-year mine life Mt. Milligan project, by Toronto-based Thompson Creek Metals Co. Inc., formerly Blue Pearl Mining Co., for about C$700 million.

Operations began at Mt Milligan in August 2013, with first concentrate shipped from the mine on Sept. 24, 2013.

British Columbia currently has more than 20 major mines and expansions moving through the environmental assessment and permitting process.

Improvement needed in B.C. regime

Still, many in British Columbia’s mining industry say the province’s current regulatory regime, especially its EA processes, could be much better.

“… for BC to reach its true potential, it is clear that further improvements in permitting and a consistent, fair and science-based approach to environmental assessments are required,” Association of Mining Exploration British Columbia President and CEO Gavin Dirom, M.Sc., P. Ag., said in a recent letter to the association’s membership. “This message was reflected in December as part of AME BC’s participation in a business coalition that urged the federal government to undertake a balanced review of the New Prosperity copper-gold project. The B.C. Supreme Court also reinforced this message on Dec. 10 when it ruled that the B.C. government’s rejection of the proposed Morrison copper-gold-molybdenum mine ‘failed to comport with the requirements of procedural fairness.’

“It was no surprise then that the importance of having robust and timely permitting and environmental assessment processes were also key findings from two member surveys AME BC conducted this fall: one on the state of human resources in the mineral exploration and development sector and another focused on ranking AME BC's top policy recommendations to government for 2014,” he added.

Dirom also said having the right policies and implementing them successfully over time will create an even more attractive business and investment climate in the province.

The AME BC view echoed comments of individual company executives reported in the 2012-2013 Fraser Institute Annual Survey of Mining Companies. The annual Fraser Institute survey is sent to about 4,100 exploration, development, and other mining-related companies worldwide.

Among comments from last year’s survey respondents about British Columbia’s policies:

“I think that Canada and B.C. in general have a lot more potential for being the highest-rated jurisdictions for mineral exploration, but politics (for the purpose of getting elected or re-elected) gets in the way of making the right policies in exchange for votes,” said a vice president of an exploration company.

“Dealing with the Ministry of Mines in B.C. via a phone call. Always polite. Always willing to go the extra mile to answer the question,” said a senior manager of another exploration company.

“Both exploration and development permit wait times are unacceptable as they can range from three months to two years in some cases. Recently, a permit application that had been sitting without release for referral to First Nations for three months was resolved, but only with the intervention of the government minister. There is no consistency between how local offices deal with referrals and no consistency with how they are issued. There is a general lack of communication and commitment from B.C. government employees to service the public, although there are notable exceptions,” an exploration company manager said.

Of the 96 countries and jurisdictions ranked in the survey, British Columbia placed No. 30 in the survey’s Policy Potential Index and No. 34 on the Mineral Potential Index, assuming current regulations and land restrictions.

However, when considering mineral potential assuming no land restrictions in place and industry employing best practice, the province climbed to No. 19.

British Columbia placed even lower, near the middle of the pack at No. 49, when respondents considered “uncertainty concerning the administration, interpretation, and enforcement of existing regulations.”

Mixed reviews from industry

Canada’s average policy potential index score improved slightly in

2012/2013, but for the first time since 2006/2007, a Canadian jurisdiction did not rank first in the survey. The highest ranked Canadian jurisdiction was Alberta, which remained in third place.

In general, the mining industry has mixed views of Canadian mining policies.

“Canadian mining regulations and legislation are generally easy to operate under,” said the president of a producer company with more than US$50 million.

However, the manager of a consulting company said, “Canadian projects [are] taking years to wind through regulatory processes in which every opinion has the same validity regardless of how poorly informed. I am not sure that any province is immune from this nonsense.”

“Constant back and forth in Canada [with] First Nations trying to prove negative impacts of mining in order to get contractual financial and other commitments from mining companies. We need to find our way to a regulatory and cultural regime where First Nations can focus on holding companies to responsible behavior and opportunities for mutually beneficial business relationships – not percentages of projects (this includes a transparent and reliable approach to determining whether a First Nation should share in the royalty paid on minerals, not negotiating an additional financial payment),” according to a vice president of a producer company with more than US$50 million.

Another manager of a producer company with more than US$50 million said, “Canada’s federal/provincial regulatory duplicity, primarily EAs [Environmental Assessments], lends itself to detracting investment opportunities.

A company president of an exploration company said, “Re-affirm that the province has real ownership and control of its land and mineral resources. Mining companies are not sure who really owns the resources, therefore, mineral claims or titles are becoming meaningless.”

Said an exploration company president: “I believe the federal courts have put provincial governments in Canada in a near impossible situation by imposing the ‘duty to consult’ requirements on the provinces without ensuring that the additional rights given or up held (depending on the perspective) for First Nations people are balanced by giving the provinces an adequate mechanism to deal with how this affects their mining community (which is a provincial jurisdiction). It is an off-loading and imposition of a responsibility without the authority to balance exploration’s basic requirements of land access.”

A cut above

By comparison, other North of 60 jurisdictions have varying track records when it comes to environmental assessments and permitting for mine projects.

Yukon Territory, situated directly to the north of British Columbia, is considered one of the most mining-friendly jurisdictions in Canada’s North.

The territory earned high marks in the 2012-2013 Fraser Institute mining survey. Yukon placed No. 8 in the survey’s PPI ranking and No. 7 when ranked according to current mineral potential, assuming current regulations and land use restrictions.

In recent years, Yukon regulators have approved the startup of three mines and are close to permitting a fourth operation.

The first of these modern mining operations, Minto Mine, commenced commercial production Oct. 1, 2007, after a 4-month commissioning period. However, the environmental assessment process for the copper-gold project pre-dates devolution in Yukon Territory, which occurred in 2003.

The Minto claims had been actively explored since 1970 by various operators, before Minto Exploration Ltd., guided the project the federal regulatory process in the late 1990s. Minto was assessed under Environmental Assessment and Review Process Guidelines Order (EARPGO the predecessor of CEAA). MintoEx submitted its application on Aug. 18, 1993, and the water license was issued in April 1998.

Sherwood Copper, now Capstone Mining Corp., acquired the fully permitted Minto project in 2005 and began production about two years later.

The Bellekeno silver mine, by contrast, traveled a much shorter path to production. Operator Alexco Resource Corp. submitted its application to the Yukon Enviro-Socioeconomic Assessment Board in February 2009, and was issued a quartz mining license in November 2009, and a Water License in August 2010.

The territory’s EA and permitting process, today, is lauded as one of the best in the Far North by industry.

“Yukon: The bands (are) working with the miners to help grow the economy,” an investor relations manager for an exploration company told the Fraser Institute.

Observed an industry consultant: “Yukon has “good mineral endowment and government just seems to work like one would hope it would.”

Changes in the wind

Next door to the east in Northwest Territories and farther east in Nunavut Territory, the environmental assessment and permitting processes – still managed by federal and federal-territorial joint regulatory boards and departments – have been criticized for being uncertain and expensive as well as too lengthy.

Commenting on the regulatory climate in Northwest Territories, one exploration company manager told the Fraser Institute: “(It’s) too hard to get exploration permits on a predictable schedule and without excessive and overly expensive early-stage community consultation.

About Nunavut, a vice president of an exploration company said this: “Nunavut is a territory that is in many ways in conflict. It wants investment and then creates a bureaucracy and commercial environment that is strongly negative towards any investment.

Changes, however, are underway, especially in Northwest Territories where devolution – scheduled to be implemented in April – will see management and decision-making functions of the regulatory process transferred to the territorial government.

The Mackenzie Valley Environmental Impact Review Board released an external report in October 2011 that found typical environmental assessments in Northwest Territories, on average, were becoming longer and more detailed and may have surpassed the original expectations of the comprehensive land claims agreements and the legislation for the middle stage between preliminary screening and environmental impact review.

The report, commissioned by the Review Board and prepared by Stantec Consulting Ltd. of Yellowknife, NWT, compared to environmental assessment processes in Canada. The consultant concluded that EIA processes across Canada are not directly comparable and the assessments reviewed during the study each have unique attributes. However, it noted that the environmental assessment process in the Mackenzie Valley is one of the lengthier processes in Canada.

Stantec examined the timeliness of each phase of the administrative tribunal’s assessment process and compared its recent reviews of DeBeers Canada Inc.’s Snap Lake Diamond Mine and Tamerlane Ventures Inc.’s Pine Point Pilot Project with comparable EAs for recent mine development projects in Nunavut, Yukon Territory, British Columbia, Saskatchewan and Newfoundland.

“With the exception of the Galore Creek project in British Columbia, which had significant proponent-caused delay during the scoping phase, the ‘EA start-up to issuance of TOR’ and the ‘EIS conformity to EA determination’ phases’ were longest for those projects assessed in the Mackenzie Valley,” Stantec wrote in the report.

“We have been asking for reform to the Mackenzie Valley Resource Management Act for at least the past seven years, and timelines were ever present in our ask,” said Tom Hoefer, executive director of the NWT & Nunavut Chamber of Mines.

“In the NWT, Bill C15, The NWT Devolution Act is currently in report phase. It’s an omnibus bill and contains a major regulatory improvement initiative to amend the Mackenzie Valley Resource Management Act. As currently proposed, it would legislate about two years for an environmental assessment and two years for an environmental impact review. So (it would be) somewhat consistent with the rest of the north and Canada, if passed into law,” Hoefer told Mining News.

“There have been no timelines legislated in NWT or NU, until the Nunavut Project Planning and Assessment Act (NUPPAA) was passed into law this past year, and provides for about two years. I’m not certain that it is law yet, but close,” Hoefer said. “We also worked closely with the government to create the Nunavut Planning and Project Assessment Act. … It’s not law yet, so no projects currently in play are affected. However, in all fairness, the boards themselves have started to become more efficient, and I believe if asked, they would say that they are now ready to meet those timelines.”

Federal intrusion hurts

To the west lies Alaska, the only U.S. jurisdiction situated “North of 60” and thus offering mining challenges comparable to those faced by mining companies operating in northern British Columbia.

In recent years, the state has had about a half-dozen operating mines and a dozen others teetering on the brink of development, including two giant advanced-stage ventures, the Pebble copper-gold-molybdenum project in southwestern Alaska and the Donlin gold project in western Alaska.

The two mines that succeeded in gaining operating permits in Alaska are Pogo gold mine in Interior Alaska and the Kensington gold mine near Juneau.

An underground cut-and-fill operation using gravity, flotation, and cyanide leaching processes to recover gold, the Pogo mine is operated by Sumitomo Metal Mining Pogo LLC. An environmental impact statement process for Pogo was triggered by an application for an NPDES water discharge permit.  The U.S. Environmental Protection Agency started the EIS process with public notice in August 2000 and published the final EIS in September 2003.  EPA then issued the NPDES (National Pollutant Discharge

Elimination System) water discharge permit in March 2004. Pogo’s permits from state regulators were issued in December 2003, and mine production began in 2006.

Pogo took about three years for the EIS and another six months to get the NPDES permit issued, but there was an NPDES permit appeal filed (which was later withdrawn after negotiation) during this six-month period, said Jack DiMarchi, CPG, Large Mine Project Manager for the Alaska Department of Natural Resources.

The Kensington Gold Mine is an underground long-hole stoping and drift-and-fill operation using flotation processes to recover gold. Operated by Coeur Alaska Inc., a subsidiary of Coeur d’Alene Mines Corp, Kensington was originally permitted in 2005.

“I have always said that it takes about three years to permit a “normal sized” large mine in Alaska,” said Ed Fogels, deputy commissioner of the Alaska Department of Natural Resources. “This doesn’t include appeals and litigation—the Kensington project took about three years for the EIS and permitting, but another year or so for the court challenge (to the U.S. Supreme Court). Also, Kensington had a number of false starts (they changed their plans several times) on permitting, dating back probably almost 20 years before finally getting their permits.

“Really big mine projects like Pebble will likely take longer than three years for the EIS and permitting process.  The schedule for all these projects is primarily driven by the federal EIS process,” Fogels added.

Alaska regulators are generally praised by the industry for its EA process and permitting regime.

The state was ranked 19th out of 96 jurisdictions worldwide on the 2012-2013 Fraser survey’s Policy Potential Index. Yukon placed No. 8 in the survey’s PPI ranking and No. 6 when ranked according to current mineral potential, assuming current regulations and land use restrictions.

Among the few individual comments about Alaska that the survey reported from respondents:

“Supportive government, particularly in the central district where areas are specifically designated for mineral resource development. Permit process is a known quantity. Despite opposition in Southwest

Alaska toward one project, the central district is the best place to have a project for certainty, exploration potential and geo-political risk,” observed the president of an exploration company.

Another exploration company president said the Alaska Land Claims Act unequivocally identifies Native interest.

And lastly: “There needs to be a classification just for the ‘United States.’ While Alaska has great potential and the state government is welcoming, the federal government exerts incredible control over Alaska and thus it’s difficult to rate it high, given the federal intrusion,” said a vice president of a producer company with more than US$50 million.



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