Vancouver – The Federal government has decided to block Taseko Mines (TKO-T) from developing an open pit mine at its Prosperity project in Central British Columbia, citing “concerns about significant adverse environmental effects,” in a decision that overrules the provincial government’s support for the $815-million project.
At a hastily convened news conference late in the day on Tuesday Jim Prentice, the Federal Minister for the Environment, announced the Prosperity project “as proposed” cannot be granted federal authorizations. He said he agreed with a federal review panel’s conclusion that the proposed mine would destroy a nearby lake.
“[The report] was scathing in its comments about the impact on the environment,” Prentice said. “It was, I would say, probably the most condemning report that I’ve seen.”
Plans for Prosperity included draining Teztan Biny, or Fish Lake, because shallow body of water sits right on the edge of the planned pit; keeping the lake in place would not be possible without significant risk to pit stability. Taseko had proposed building a new lake to compensate for the loss and promised to make the new lake healthier than Teztan Biny, which is quite acidic because of the adjacent deposit.
Local native groups were fiercely opposed to the mine and said Teztan Biny was critical to their culture.
Taseko shares had been climbing slow but surely over recent weeks in anticipation the federal government would side with the provincial government and approve the mine. Before the news came out Taseko was trading within 75¢ of its 52-week high, at $6.55. Immediately after the news its share price dropped 25% in after-market trading in the United States.
Talking to Reuters, Wellington West analyst Steve Parsons downgraded his Taseko target to $4.85.
Prosperity would have been produced 3.6 billion lbs. copper and 7.7 million oz. gold over a 33-year mine life. Plans called for an open pit operation churning through 70,000 tonnes of ore daily and able to produce a pound of copper for 59¢, net of gold credits.
Taseko expected to need $815 million to build the mine. It would have employed 700 people during the construction phase and 500 during operations.
The provincial government granted its approval to the project in January. The provincial environmental review panel had, like the federal review panel, concluded the mine would cause significant adverse environmental effects. But the provincial government decided to authorize the project regardless, arguing the significant economic benefits of a new mine in a region that has been hit hard by the downturn in forestry outweighed the environmental losses.
The Northern Miner will expand on this story as it develops.
This is disappointing. The federal government does not understand the provincial requirements and/or the actual effects on the environment. I am very interested in viewing this report that was completed by the technical review panel. I hope it is technically based and not politically based.