In September 2011, British Columbia Premier Christy Clark laid out an agenda to spur job creation in the province. As part of her plan, she promised 17 new or expanded mines in BC by 2015. However, a recent decision to refuse an environmental permit to Pacific Booker Minerals’ (TSXV:BKM,AMEX:PBM) Morrison copper-gold-molybdenum project has raised questions about whether BC’s environmental standards are becoming stricter when it comes to approving new mines.
The refusal is only the second time in BC history that a project has been denied through the environmental assessment process. The other occurrence was the Kemess copper-gold project in 2007.
“No, I don’t think so,” said the province’s environment minister, Terry Lake, in a December 19 phone interview. “It’s important to understand that the environmental assessment is made by both the mining and environment ministries. In the Morrison case, both of us agreed that this was the correct decision.”
“As a government, we’re strong proponents of resource development,” he added. “But we have to make sure we do it in a way that the people of BC can be proud.”
In an October 1 press release, the environment ministry highlighted the main reasons for the Morrison decision; these include the potential for the mine to impact a genetically unique sockeye salmon population in nearby Morrison Lake and concerns over the project’s effect on the lake’s water quality.
“It’s a large mine near a shallow lake,” said Lake. “We just don’t have enough information on how the lake turns over. That’s important, because the lake is needed to diffuse the effluent from the mine. These were risk factors that we thought were just too high.”
Pacific Booker “not giving up”
“The refusal was based on a ‘what if,’” said Erik Tornquist, executive vice president, COO and executive director at Pacific Booker, in a December 19 phone interview. “The [provincial] Environmental Assessment Office report and the recommendations of the executive director’s report determined that the project would have no significant effects, but the permit was still refused.”
Tornquist believes there is more to the refusal of Pacific Booker’s project. “We feel that this was a political decision related to the debate over the Northern Gateway pipeline,” he said.
He also pointed to other problems with the province’s environmental assessment process that he feels could put a chill on resource development. “There are simply too many people involved,” he said. “The company must hire professionals, plus the government has over 30 people reviewing projects. Plus there is just no adherence to timelines.”
Tornquist said his project spent three years in the environmental assessment process, starting in 2009, though Pacific Booker started the pre-application phase back in 2003. He said the company has invested about $10 million in the effort.
As for the future of the Morrison project, Tornquist said he’ll keep pushing ahead. “We’re not giving up,” he said. “We’re going to continue to try to get it approved.”
Delays, costs a concern for miners
Avanti is currently seeking approval for its Kitsault molybdenum project. So far, the company has spent about $15 million on the environmental assessment. “That’s for everything from baseline studies to the preparation of the report to First Nations and public consultation,” said Nelsen in a December 19 phone interview.
Nelsen shares Tornquist’s concern about timelines. “The time frame has been unpredictable,” he said. “We submitted our application to the province on December 22, 2011, and here we are a year later in what is supposed to be a 180-day process. It has been forced into suspension a couple of times and there are no real consequences.”
One issue he feels the province must address is the government’s lack of understanding of the mining business. Nelsen thinks that’s partly a result of qualified bureaucrats finding greener pastures elsewhere. “A good regulator who really knows what they’re doing will be quickly snapped up by the private sector, where they can make a lot more money,” he said.
So does the process give miners any additional tangible benefits other than the required approval? According to Nelsen, completing it puts a company in good stead when seeking financing. “If you’ve gone through the BC permitting process, you’ll be in much better standing with international lenders,” he said. “It definitely helps you meet the equator principles [a set of standards used to determine a project’s social and environmental risk].”
Environment minister seeks to establish a “gold standard”
For his part, Lake said he seeks to transform BC’s environmental assessment process into a blueprint for other jurisdictions to follow. “When I took on this file, I made it my goal to improve the process and make it a gold standard that’s recognized around the world,” he said.
One way he seeks to do that is to eliminate duplication between the province’s process and the federal government’s. “We are strong proponents of a one project, one approach strategy,” he said. “There are always some differences between us and the federal government, but they are willing partners in helping combine the reviews. We have a very good working relationship.”
He also said the province is making steady progress toward Clark’s goal. “We’re more than halfway there,” said Lake.
His message to resource investors? “If you want to operate in an environment where sustainability is the top priority, under a good, rigorous regime with a highly skilled workforce, then you should invest in BC,” he said.
Securities Disclosure: I, Chad Fraser, hold no positions in any of the companies mentioned in this article.
Editorial Disclosure: Pacific Booker Minerals and Avanti Mining are clients of the Investing News Network. This article was not solicited in exchange for paid advertising.