EDITORIAL PAGE — A hollow victory?

The recent ribbon-cutting ceremony at the Eskay Creek gold-silver mine north of Stewart marks the first mine opening in British Columbia in five years.

Premier Michael Harcourt, Mines Minister Anne Edwards and Transportation Minister Jackie Pemenp were all on hand, patting each other on the back for a job well done.

Pemenp’s attendance was more than a little ironic, considering that his government backed out of an agreement to build a portion of the 60-km road that provides access to the mine. This backtracking raised eyebrows, as the government itself stands to benefit when it sells the timber rights to the rich cut-blocks that are now accessible by the road (a road that — surprise, surprise — had to be built to forestry standards).

No doubt, the politicians in attendance were attempting to demonstrate that the province is “open for business,” and that a mine can still still be permitted there.

In reality, however, Harcourt’s government deserves minimal credit for the achievement. The most important contributions came from various prospectors and geologists, and, more recently, engineers and operating personnel. Collectively, they succeeded in exploring and developing a project situated within a rugged and remote portion of the province. And moreover, given the richness of the deposit, most of the credit can be laid at Mother Nature’s feet.

At a gross value exceeding $1,600 per ton, and reserves exceeding 1 million tons, there was little question that a mine would be constructed.

The tragedy is that there is no mill at the site; nor is there one nearby. Not only does this limit the number of high-paying resource jobs at the property (and the taxes that such jobs would generate); it limits the mine’s life span.

With ore being shipped directly to smelters in either Quebec or Japan, only the exceptional mineralization can make the cutoff grade of 0.40 oz. gold-equivalent.

Homestake Mining, which controls the property, can hardly be blamed for making a business decision based on the best economic option.

It reportedly opted for direct shipping over milling because the capital costs would be lower. But it also wanted to avoid potential permitting delays and the risk associated with building and operating a plant that would process Eskay Creek’s metallurgically complex ores. Today, at least 15% — and often as much as 25% — of a new mine’s capital costs are related to environmental and permitting requirements. This means that new mines must have a higher grade, or more tonnage, than most of the projects that were brought on stream decades ago.

We can only wonder what route Homestake would have taken had British Columbia’s permitting requirements been more streamlined and reasonable. Perhaps construction of a mill would have been more likely had the B.C. government been less ambivalent about resource development and more openly supportive of mining.

Mining is still a cornerstone of B.C.’s economy. But its current status is largely the result of past efforts. Politicians should not forget that most of the mines currently operating in the province are scheduled to close by the end of this century.