Taseko Mine's Minor Victory Won't Lead to New Prosperity
Taseko Mines may have won a battle for its proposed New Prosperity mine in British Columbia, but it's still going to lose the war.
A recent Supreme Court ruling delineated for the first time that Canada's aboriginal people have specific title to defined areas which gives them significant say in how the land can be developed, or whether it can be developed at all. As has been seen elsewhere around the world, indigenous populations are wielding significant clout when it comes to miners wanting to build or expand projects on the ancestral lands.
Barrick Gold was forced to put its plans on hold for a huge gold mine at Pascua-Lama in Chile because of opposition from local populations; Goldcorp has faced an off-again, on-again situation at its Chilean El Morro gold project because of similar protests; and Cliffs Natural Resources has seen the flame die out for its Ring of Fire chromite project in Ontario due in part to First Nation opposition.
Yet Taseko cheered the court's ruling because it set definitive boundaries on where aboriginal title exists and it proclaimed "New Prosperity is the only proposed mine in BC that people know for sure is not in an area of aboriginal title."
But don't think that paves the way for the miner to get the green light on construction. There remain significant hurdles and substantial opposition to the project on numerous other fronts that will likely still doom its viability.
For one, Canada's environmental authorities still maintain steadfast opposition to it going forward. Regardless that their objection was shown to be flawed and their decision based on incorrect data, a publicly shamed bureaucrat remains a formidable opponent and Taseko saw its appeal rejected on the same grounds it was originally rebuffed. The agency used someone else's mitigation plans, not Taseko's, in coming to its decision that a tailings pond, or a place where the detritus of the mined is stored, would wreak environmental havoc because of seepage despite Taseko specifically calling for the installation of a liner that would mitigate such an occurrence. No matter, the regulatory body ignored that point and essentially cut-and-pasted its rejection again.
Yet even if Taseko was to prevail in a court over the bizarre actions of the government agency, there were other equally prominent problems with Taseko's plans that on their own spell death for its passage. The Little Fish Lake body of water would be obliterated by the creation of the tailings pond -- with or without a liner -- and the local grizzly bear population would be substantially harmed by the mine's operation. The miner may actually be able to clear a few of the tick marks on the long list of objections to the New Prosperity mine, but there are others that carry equal weight that remain that suggest Taseko is waging an uphill battle.
And even if New Prosperity lies outside of any aboriginal borders, it doesn't mean the project has their support. The tribal chairman of the Tsilhqot'in nation was quoted as saying, "I think Taseko has a very twisted view of things. I think it's very, very irresponsible."
Just because Taseko Mines won in court, doesn't mean it's winning in the court of public opinion. It can spin the decision as it sees fit, and its shares may have jumped 10% since the decision was handed down late last month, but those gains will likely evaporate as it becomes apparent there will be no new riches coming from New Prosperity. There's an animus against this project already built in and right or wrong it doesn't look like the miner can overcome them.
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The article Taseko Mine's Minor Victory Won't Lead to New Prosperity originally appeared on Fool.com.Rich Duprey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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