Yukon encourages new business, tackles high costs of mining

The Yukon government hopes to announce a new energy policy this fall aimed at tackling some of the high costs the mining sector faces during mine development and operation.

The move, the territory’s Economic Development Minister John Devries says, is one plank in a growing platform of economic incentives offered by the Yukon in a bid to move more mining dollars into Canada’s North. The high profile campaign is also directed at convincing an international mining community that this is a government interested in working with resource companies in an era when many provincial governments are slamming doors.

“It’s an industrial energy policy,” says Devries, adding the Yukon government is not only seeking new investment but is battling a negative image which resource companies have of Canada. Devries says his ministry is sending out a message that “some place in Canada” is still interested in mine development and resource exploitation.

The Yukon minister says his ministry is sensitive to the fact that a major drawback to resource exploitation in the Yukon is the high cost of energy, particularly diesel fuel. A new energy strategy would “come up with an acceptable industrial rate,” he says, for power users requiring more than five megawatts.

Such a strategy would attempt not only to give companies power at acceptable costs and look at power line planning and construction, but give companies assurance that their required power needs for long-term development and operation can be met.

The industrial energy policy will follow on the heels of a government policy announced earlier this year which was directed at encouraging smaller projects. “This was geared at smaller mining projects five megawatts or less where government would assist with 50% of the costs or less for power lines or a generator. Part of the focus is to get the user off diesel and on to hydro or some more environmentally friendly source,” Devries says. In order to meet the greater needs of future project developments, he says, his government is looking at alternative energy sources, with greater potential hydro site development a possibility.

(The implications of such a policy are significant for many companies in that it will not only increase the viability of operations, but increase the life of mines which are able to lower their operating cost.)

In addition, the Yukon is gunning to locate new major claims and rolling out the red carpet for prospectors involved in grassroots exploration. “There hasn’t been a major find here in 10 or 15 years,” Devries says. Yet the Yukon has more than 483,000 sq. km of land, more than half the total area of British Columbia, of virtually untapped mineral potential.

Currently, the Yukon government is participating in a $9- million federal program (70% of financing comes from the federal government, and the other 30% coming from the Yukon) under its 5-year Mineral Development Agreement. A portion of the funding is being used to look at regional geological mapping throughout the Yukon.

Some six areas are being mapped under this agreement, Devries says, although he did not have details available on the areas. When the maps are completed (five areas are being done at scale of 1:50,000, the other at 1:250,000), they are being offered for sale.

The Yukon Mining Incentives Program is proving popular with the exploration sector. A $10,000 grubstake is offered to prospectors, says Devries, adding that “we have 20 to 25 in the field.” The individuals qualifying for the grants compete on a points system and the successful individuals may be independent prospectors, or employed by a company. “Some of the companies may hire one of the individuals (to prospect),” says the minister. While that program attempts to get individuals out in the field to locate potential deposits, a second phase of the program is geared to provide funding for some enhanced target evaluation. Additional $20,000 funding, says Devries, pays for “back-pack drilling” and assessments, so that a prospector has enough information to promote the claims to a junior or major. Devries says his government is concerned that the Windy Craggy project in Northern British Columbia, and to some degree the recent clash with environmentalists at Clayoquot Sound, is sending a message to the international mining community that Canada is not interested in mining. Also, there is wrangling over impending native land claim issues in many parts of Canada.

In the Yukon, many of these concerns do not exist. The Yukon is further ahead in negotiating land claims than are provinces such as British Columbia, and has either identified claim areas or has settled claims.

Devries says the government is hopeful, in the next budget year, of providing a mines facilitator, a government-appointed representative, who would work with industry to deal with any land claim or environmental problems. Companies interested in a claim will have the option of going to the facilitator for advice on how not to get tangled in bureaucratic red tape or to gain insight into the concerns of native people in whose areas they may be interested, but with whose culture they are not familiar. The facilitator will work closely with natives and government departments.

The environmental regime in the Yukon can be daunting since it is within the jurisdiction of the federal government, says Devries. A facilitator will also be familiar with the process and become involved with ensuring the process moves forward as expediently as possible.

Ideally, says Devries, his government wants more authority for environmental matters transferred to the local level, a situation for which his government is striving. This would place more responsibility for vetting mining projects in the hands of local government.

Devries favors a “round table” approach which would see all-party interests expressed in environmental matters and dealt with before or as projects proceed.

While the Yukon is actively soliciting increased mining activity, it is evident that the native population will play a strong role in resource development. As well as having lands that can be worked, the Yukon government has established First Nations training programs.

Generally, says Devries, the skill level of all sectors of the population is high in the resource sector. “We have a highly skilled work force,” he says, adding it tallies about 15,000 of which one-third is government. Devries says the Yukon government decided to kick-start a campaign to bring in new dollars following the recent closure of the mining operations of Curragh (TSE), which represented 18% of the total Yukon economy. “We realized we had to diversify,” he says, adding that currently the placer gold industry is buoying the local economy rather than hard-rock mining.

— The author is a freelance writer who resides in Vancouver.