The long anticipated Report of the Federal Review Panel (the "Report") on Taseko Mines Ltd.'s proposed Prosperity Gold-Copper Mine Project (the "Project") was released last week, concluding that the Project would result in significant adverse environmental effects, but falling short of recommending that the federal cabinet reject the Project.
Project Background
The proposed Project would include an open pit mine, 125km of new transmission lines, an onsite mill, a new site access road and fish compensation works – a man-made lake to be called Prosperity Lake. The works would be located 125km southwest of Williams Lake, B.C., within the undeveloped Teztan Yeqox (Fish Creek) watershed.
The Project was referred by Fisheries and Oceans Canada to the Minister of Environment (the "Minister") under the Canadian Environmental Assessment Act for a panel review, which commenced in early 2009. A key issue for Fisheries and Oceans Canada was the Project's proposed use of lakes within the Teztan Yeqox watershed as storage areas for tailings and waste rock. The British Columbia Environmental Assessment Office undertook a separate but coordinated review, finding that the significant adverse environmental effect of the Project on fish and fish habitat was justified in the circumstances. The federal review panel (the "Review Panel") conducted 30 days of public hearings in ten communities impacted by the Project, including the Tsilhqot'in and Secwepemc First Nations, who both expressed opposition to the Project.
Conclusions of the Review Panel
The Review Panel concluded that the Project would result in significant adverse environmental effects in four key areas: (i) fish and fish habitat; (ii) navigation; (iii) current and traditional uses of land and resources by First Nations; and (iv) existing and potential Aboriginal rights and title. However, the Review Panel made no explicit recommendations to the federal cabinet to approve or reject the Project.
The Project would result in the destruction of approximately 90,000 rainbow trout in the Teztan Yeqox watershed. Taseko's proposed mitigation measure – the creation of Prosperity Lake – would provide habitat for 20,000 rainbow trout. The Review Panel was not satisfied that the fish in Prosperity Lake would be safe for consumption. The Report also states that the Review Panel received no information regarding the potential for success in creating a self-sustaining ecosystem centred around the proposed lake.
With respect to effects on navigation, Transport Canada expressed concerns that Prosperity Lake would not fully mitigate the loss of fishing and recreation facilities at Fish Lake.
The Review Panel concluded that the Project site is currently used by local First Nations for hunting and fishing, as well as ceremonial and spiritual activities. The Review Panel found that Taseko could not mitigate impacts on the cultural significance and spiritual value of the area. Further, the Project is within an area identified in Tsilhqot'in Nation v. British Columbia, 2007 BCSC 1700, in which the Tsilhqot'in First Nation has an established Aboriginal right to hunt and trap. The Review Panel found that Taseko offered no specific compensation to offset the loss to the Tsilhqot'in of these rights.
A further concern to the Review Panel was the impact of the Project on the local grizzly bear population. Grizzlies are currently classified as a threatened species under the Species at Risk Act. Though Taseko proposed mitigation measures such as a policy of non-lethal approaches to resolving bear incidents, the Review Panel concluded these mitigation measures would not reduce the continued fragmentation of grizzly habitat.
The Review Panel did not reach a conclusion on the economic benefits of the Project, as its Terms of Reference limited it to considering only the socio-economic effects of the changes the Project would make on the environment. However, the Review Panel did note that Taseko estimated the Project would generate 275 jobs per year in its construction and operation phases and 600 indirect jobs during its 20 year operating life. Taskeo further indicated that the Project would include $200 million in spending in the local economy over the course of the Project and estimated that government revenues generated from the Project would be $30 million per year.
Project Approval
The federal cabinet has 60 days from the release of the Report to determine whether to issue the applicable approvals for the Project. Cabinet's decision, and the manner in which it weighs environmental, Aboriginal and economic interests, will be of interest to all mining companies operating in Canada.
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