Editorial: Pacific Booker snookered

The unfolding of the global mining boom over the past decade has pushed the industry right to the edge in ways both technical and political. Moreover, we’ve all seen the sharp truth that there are inevitable limits to all expansions, despite investors’ unrealistic, rah-rah demand for perpetual growth.

BHP Billiton, now the world’s largest-ever mining company with a US$110-billion market cap, showed there are limits to how big a mining company can get when it was blocked in its last few proposed acquisitions of majors such as Rio Tinto and Potash Corporation of Saskatchewan by government regulators.

Barrick Gold, with its latest CEO-turfing revelations of soaring costs and delays in its globe-spanning development pipeline, has found by trial and error that the upper limit for the size of a gold producer is around 8 million oz. gold a year.

In South Africa’s grandest old mines, petering-out gold and platinum grades show that all the low-hanging fruit in the country was picked clean years ago — and only more hard toil for less reward lies ahead.

Today’s operating experiences by miners such as BHP Billiton and Rio Tinto at the world’s largest copper mine, the aging and ever-deepening Escondida mine in Chile, mark the maximum size of a viable open-pit copper mine.

In the Andes, the fate of doomed junior mineral developers such as Manhattan Minerals, Greystar Minerals and Ascendant Copper over the decade have shown that there are limits to just how much poor, local populations are willing to see their farmland or other sensitive ground sacrificed to an open pit dug by foreigners.

The major tax hikes slapped on top-shelf miners in a pro-mining, free-market country such Australia again reveals there are limits to the profits the general population is willing to see made by corporations and individual entrepreneurs.

At a smaller scale, the provincial government-orchestrated chasing away of miners and mineral explorers from places in southern Quebec shows there is a new limit being placed on the proximity of mines to treasured cottage country, even in the most mining-friendly of jurisdictions.

And with this latest denial by the B.C. government of a key permit for Pacific Booker Minerals’ Morrison copper-gold-moly project northeast of Smithers, B.C., we’re seeing another example of a growing trend on the West Coast: ultra low-grade copper-gold projects that are technically viable and profitable at current metal prices, but deemed “not worth the hassle” by governments weighing the projects’ benefits with their strains on local First Nations and ecosystems.

In the case of Pacific Booker (the details of which are on the opposite page), the project is profitable on paper, but the resource is a pretty slim 238 million tonnes grading 0.37% copper and 0.18 gram gold per tonne — apparently low enough to make a government planner cringe.

The case echoes the B.C. government’s 2007 refusal of Northgate Minerals’ Kemess North open-pit, low-grade copper-gold project, which was strongly opposed by local First Nations, despite the obvious mining jobs boon and provincial tax windfall.

Next in line for similar permit refusals is Taseko Mines’ dead-man walking New Prosperity copper-gold project, which has garnered some of the most vociferous opposition by locals in recent years in B.C., and is just a day’s drive away for all the anti-mining activists in Vancouver who would be more than willing to head up en masse for on-site protests.

(As an example of how well Taseko plays with others, the company threatened to contact all its suppliers and launch an advertisers’ boycott of this paper if we ran our straight-news story about its permitting problems at New Prosperity, which appeared in last week’s issue.)

Another such doomed project over the longer term is the proposed Pebble copper-gold mine in Alaska, which faces widespread opposition by fishers and environmentalists of all stripes, both local and from the lower 48, as any planned mega-mine would likely wreak havoc on the rich local fish stocks, among other effects.