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Vol. 12, No. 43 Week of October 28, 2007
Providing coverage of Alaska and Northwest Canada's mineral industry

MINING NEWS: B.C., Yukon power lines win key approvals

Western Canadian governments want to improve quality of life for rural residents and spur mine development in remote areas

Rose Ragsdale

For Mining News

Two of Canada’s westernmost governments are moving forward with power transmission projects aimed at bringing lower cost energy and jobs to rural residents while spurring mine development in remote areas.

British Columbia and Yukon Territory announced progress in October on separate public-private partnerships pursuing the power projects.

B.C. government said Oct. 1 it would pursue the Northwest Transmission Line project, a C$400-million extension of B.C.’s electrical grid into the remote northwest region of the province between Skeena Substation near Terrace and Bob Quinn Lake.

As part of the project, a new substation will be built near Bob Quinn Lake, and upgrades will be made to Skeena substation.

Galore Creek Partnership, the company that is building the Galore Creek mine in northwest B.C. will contribute C$158 million toward the cost of the 287-kilovolt, 208-mile line — which will provide conventional electricity to diesel-dependent remote communities, support future mine development projects and open up a new part of the province to the development of independent power projects.

A giant step for B.C., industry

B.C. Premier Gordon Campbell called the plan a giant step toward opening up one of the province’s last frontiers.

“The northwestern part of our province is incredibly large, incredibly rich in resources, and incredibly beautiful. But it’s remote,” Campbell said in an announcement.

The contribution by Galore Creek’s developer is revenue-neutral to the company, which already has an environmental assessment certificate to build a 138 kV link to the grid in support of its C$2-billion copper-gold project in the Northwest.

Instead, it will contribute the C$158 million toward the cost of the higher-capacity NTL. The balance will be funded by B.C. Hydro ratepayers.

Campbell lauded the efforts of the Tahltan First Nation and Galore Creek to forge a positive business relationship that enabled the mine project to get under way and also create economic opportunities for the first nation.

Mining companies also cheered the move.

Dan Jepsen, president and CEO of the Association for Mineral Exploration British Columbia, said the availability of electricity should boost mineral exploration in the region.

According to a BC Geological Survey database, 935 documented mineral occurrences have been identified in the region that could benefit by the power grid extension. Of those, 67 are categorized as a “resource”– implying a potential mine.

Advanced mineral exploration/mining projects in the area include Galore Creek (NovaGold Resources Inc.), Red Chris (Imperial Metals Corp.), Mount Klappan (Fortune Minerals Ltd.), Schaft Creek (Copper Fox Metals Inc.), and Kutcho Creek (Western Keltic Mines Inc.).

These mining projects could potentially account for more than C$3.5 billion in investment, creating about 3,700 construction jobs and more than 2,000 direct mining jobs when the mines go into production.

Yukon approves new transmission line

Yukon Energy Corp., meanwhile, formally approved construction of a C$27.8 million, 61-mile transmission line between Carmacks and Pelly Crossing and an C$8.8 million spur line to the newly opened Minto mine in central Yukon.

The project is also the first phase of a plan to connect the territory’s northern and southern power grids.

“While the total price tag is higher than originally estimated, the economics are still there to make this a viable project for Yukon Energy and for ratepayers,” said Yukon Energy President David Morrison.

Since the Faro Mine closed in 1998, the Yukon has been unable to sell power to industrial customers. This burdened the territory’s rural residents with high-cost energy and Yukon Energy with a surplus of hydro energy.

Morrison said the transmission line gives Yukon Energy a firm customer in the Minto Mine for its surplus hydroelectric power and will allow Pelly Crossing residents to switch from diesel to hydro for their electricity needs.

The Yukon government is investing up to $10 million towards the infrastructure cost of building stage one of the transmission line. This is the first of two stages of a plan to connect Yukon’s northern and southern power grids.

First Nation to help build power line

Yukon Premier Dennis Fentie praised the plan and the participation of the Northern Tutchone First Nation in the project. Yukon Energy awarded a $17.3 million construction contract to a joint venture partnership of Northern Tutchone, Valard Construction and Arctic Power to build the transmission line. The JV also won a right-of-way clearing contract valued at about $3.4 million.

The project approval is subject to the Northern Tutchone First Nation signing a project agreement as well as regulatory approvals.

The next major step in the project requires completion of the Yukon Environmental and Socio-Economic Assessment Board’s final screening report.

Yukon Energy anticipates work to begin late this year, with construction startup in the spring. The transmission line should be operating by late 2008, the company said.



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