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Vol. 16, No. 4 Week of January 23, 2011
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News: First Nations: Respect before prosperity

Ottawa’s denial of Taseko mine proposal underscores importance of securing local support, early dialogue and formal agreements

Shane Lasley

Mining News

Ottawa’s rejection of Taseko Mines Ltd.’s C$1-billion proposal to build a mine at the Prosperity copper-gold project has highlighted the importance of having the support of the local indigenous people when permitting a mine.

“In the 21st century, it is extremely difficult, if not impossible, for industrial projects to proceed if local communities and indigenous peoples have deep concerns,” said Dan Jepsen, former president and CEO of the Association for Mineral Exploration British Columbia.

Jepsen and former Chief of the Tahltan Nation Jerry Asp are founders of the C3 Alliance Corp., a consulting firm focused on creating relationships between indigenous peoples, businesses and governments.

While the individuality of mineral deposits and local communities precludes any template for garnering support for a mining proposal, early and honest dialogue builds trust and understanding between a hopeful mine builder and the people who will be most affected by the development.

Building on this engagement, formal agreements can be struck that provide an increased level of certainty for both the mining company and the local community.

“Participation Agreements can be an important step for First Nations to enjoy the self-sustaining, healthy and enterprising economies we once had,” says Asp, the 2011 recipient of the Prospectors & Developers Association of Canada’s Skookum Jim Award for Aboriginal achievement in the mineral industry.

Feds reject Prosperity

First Nations groups from across British Columbia spoke out in opposition to Taseko’s mine proposal for Prosperity, located about 125 kilometers, or about 77 miles, southwest of Williams Lake. The aboriginal groups cited the planned use of Fish Lake as a tailings pond as their primary concern.

When the federal government commissioned an independent review of Taseko’s plan for Prosperity, many of the local First Nations testified against the project.

Federal officials decided, among other things, that the proposal would result in significant adverse effects on “the current use of lands and resources for traditional purposes by First Nations and on cultural heritage, and on certain potential or established aboriginal rights or title.”

BC Assembly of First Nations Regional Chief Jody Wilson-Raybould said, “I am happy the federal government took the necessary time to review the conclusions of the report of the Federal Review Panel and accepted its findings. Today, we must remember that First Nations are not, on principle, opposed to mining or economic development but not when the negative impacts far outweigh the potential gain. As everyone knows, many elders, youth and community members attended the public meetings of the panel, and many of them formally presented to the panel their deep concerns about the proposed mine. Their voices were heard and their way of life protected.”

Prosperity had previously received regulatory approval from British Columbia, which said the economic benefits of mining the 13.3 million ounces of gold and 5.3 billion pounds of copper offset any negative impacts of Taseko’s proposal. It is estimated that the proposed mine would provide some 2,000 direct and indirect jobs and around C$5 billion in economic benefits over its initial 20 year mine-life.

Grand Chief Stewart Phillip, president of the Union of BC Indian Chiefs said, “The frenzied, high-powered sales pitch of short-term economic gains must be weighed against the significant and long-lasting socio-environmental impacts such large-scale proposals will have on our grandchildren.”

Responding to the federal decision, Taseko President and CEO Russell Hallbauer wrote, “Opponents of Prosperity say they are not against mining, only this particular proposal. They say they are not against job creation and economic opportunity; their only concern is that it be done with the highest environmental integrity. On this point, we agree. If all of us work together, as we are willing to do, with cooperation and common purpose, a path forward is possible.”

Though Fish Lake was a primary point of opposition, the unwillingness of the local First Nations to work with Taseko hinges heavily on their perception that the mining company did not respect the community.

“Fish Lake is part of the issue but a huge, huge part of the issue is you have to work with First Nations people in today’s day and age, and if you’re not willing to do that, so be it. You’ve got a tough lesson,” Tsilhqot’in National Government tribal chair Joe Alphonse told the Williams Lake Tribune. “I’ve said this since Day 1: ‘We’re not against development, but if you’re going to come at us with such disrespect, don’t expect to be operating in the Chilcotin. That’s our region, that’s our homeland and we’re there to protect and ensure that proper government and development is going to happen.’ There will be development at some point in time and that development has to be done with respect for the environment, respect for us as a people and we’ll move forward. Right now, that’s not the case, and that will never be the case with Taseko Mines.”

Early engagement at Galore

The strong local opposition and rejection of Taseko’s mine proposal for Prosperity has raised concerns about other large mining projects hoping to gain regulatory approval, including the huge Galore Creek copper-gold project in northern British Columbia that is being advanced by NovaGold Resources Inc. and Teck Resources Ltd.

NovaGold President Rick Van Nieuwenhuyse said there are fundamental differences between how Taseko and NovaGold approached First Nations engagement and permitting of the large copper-gold projects.

“Taseko chose to do a ‘Panel Review’ for its environmental assessment process rather than a ‘Comprehensive Review.’ The panel review process requires the proponent (company) to submit an environmental assessment document to an expert panel selected by the government. It is generally intended for ‘non-controversial’ projects. The process specifically does not require engagement with local stakeholders,” Van Nieuwenhuyse said. “More importantly, Taseko did not have the support of local First Nations groups. The local Tsilhqot’in National Government opposed the mine and refused a revenue-sharing deal with the province of B.C.”

NovaGold, which has successfully navigated the sometimes turbulent waters of community engagement at Galore Creek as well as its Donlin Creek Gold Project in Alaska, has said early and respectful communication with local resident is key to the long-term success of a mining project.

“Land title negotiations, as you all know, are very complicated, with a lot of emotions and centuries of struggle that are involved in the process. In Canada and Alaska, many of these negotiations are still not complete, but, regardless of the status of the paperwork, it was clear to our team that the aboriginal groups were here first, and we are working and living on their land,” NovaGold Resources Inc. Communications Director Rhylin Bailie told attendees of The Canadian Institute’s November conference of Mine Feasibility and Project Implementation.

NovaGold said its first course of action when it decided to purchase Galore Creek in 2003 was to meet with the Tahltan people, the First Nations group that has called this portion of northwest British Columbia home since “time immemorial.”

“When we first wanted to work on the Galore Creek deposit our first conversation was with the Tahltan leaders,” Bailie explained.

“You must talk to the community leaders from Day 1, but it is not enough to just talk – you must have a real desire to engage with your local partners,” she added.

Bailie explained that by listening to concerns and traditional knowledge the Tahltan stakeholders brought to the table, NovaGold and Teck made modifications to the project design. One such enhancement was to build a pipeline to transport concentrates from the mine. This change not only addressed the Tahltan concerns about noise and dust created by truck transport, but also improved the economics of moving the concentrates.

“So I think being open to the input and recognizing there are many different ways of looking at a project will lead to efficiencies and a better project design,” she said.

Coming to an agreement

When NovaGold optioned Galore Creek in 2003, it faced a Tahltan Nation who had a track record of being strong negotiators. Under the leadership of Asp, the First Nations group had previously negotiated two mining impact and benefits agreements – the first for the Golden Bear mine and the second for the Eskay Creek mine.

NovaGold spent two years in negotiations with the Tahltan before hammering out the details of the Galore Creek Mine Participation Agreement, a document that governs the ongoing relationship of both parties in respect of developing the Galore Creek project.

Highlights of the agreement include:

Recognition of the Tahltan’s traditional rights, title and interests to the project area as well as NovaGold’s rights to explore and develop mineral resources in the Galore Creek Valley.

Mutual cooperation for completing an efficient and effective Environmental Review and Permitting Process and commitment to mitigate adverse environmental impacts caused by the mine.

Establishment of measures and procedures that will fully engage the Tahltan in all aspects of environmental protection.

Maximize training and employment of Tahltan members throughout the mine life and create processes for ongoing dialogue regarding advancement.

Ensure access for Tahltan businesses to maximize business opportunities for the supply of goods and services throughout the mine life and during mine closure.

Financial contributions by NovaGold to the Tahltan Heritage Trust Fund which will be used to mitigate any adverse social and cultural impacts of mine development. During mine operations, Trust Fund payments are guaranteed to be no less than C$1 million annually. Upon reaching certain agreed financial targets, and subject to positive mine operating cash flow, the trust will receive the greater of C$1 million or a 0.5 percent to 1 percent net smelter royalty each year.

Tahltan’s assurances to investors and support for the project as NovaGold arranges financing during the year ahead. The agreement will remain in effect throughout the life of the Galore Creek project and will be binding on any future operator of the mine.

“This agreement establishes a high standard against which all proposed resource development projects in Tahltan Territory will be measured,” Tahltan Central Council Chair Curtis Rattray said on signing the pact.

The agreement has formed the basis of a strengthened bond between the Tahltan and NovaGold.

“This relationship has grown over the years, and through the ups and downs of the industry, the Tahltan have been our most ardent supporter,” Van Nieuwenhuyse explained. “With our participation agreement with the Tahltan Nation in hand and their full support for the project, we do not expect to have the issues that Taseko did as we move forward with permitting.”

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