This article came from the Fraser Institue website: http://www.fraserinstitute.org/
I first learned of the Windy Craggy copper-cobalt deposit when I was a student working towards my degree in Geology. Geddes Resources Ltd. was exploring the property and the president of Geddes (my father) showed me some surface samples. The massive sulphides in the samples indicated that Windy Craggy was one of the most important mineral finds in North America.
Windy Craggy is in the Tatshenshini Area of Northwestern British Columbia, about an hour west of Whitehorse by helicopter. The area is isolated with no ready surface access, and no permanent residents. It is not prime hunting and fishing territory. In fact, the only person working a trapline in the area at the time it was explored was a man named Yurg Hoffer, who had emigrated from Switzerland. His trapline extended along the west side of the Haines Road from about the Yukon Border to the Alaska border near Haines—a distance of about 40 miles. The scenery in the area is typical of the Rocky Mountains which extend northwest through Alaska, and south through the western United States and into Mexico.
My first visit to Windy Craggy was as part of an exploration team several years after I graduated. I spent much of the next 10 years working in the area, including in the Yukon and BC. For four of these years I was exploration manager for Geddes Resources.
In that time, Geddes spent a total of about $50 million on exploration. However, neither the company, nor its investors, nor BC workers, nor Canadians in general will ever benefit from the work done to discover and delineate the massive copper reserve or any of the other ore bodies that most certainly exist in the area. Instead, these reserves are today part of a 5 million hectare United Nations World Heritage Site—by far the largest World Heritage Site in North America.
The excluded mineral deposits in the Tatshenshini area are among the largest known in the world. The Ministry of Energy, Mines and Petroleum Resources placed a value of $15 billion on metal contained in the Windy Craggy deposit. Geddes Re-sources’ estimate was $8.5 billion. (These figures are based on the probable and proven reserves without taking into consideration the extensions and indicated reserves of Windy Craggy).
The economic contribution of the mine would have been immense. The Commission on Resources and Environment of British Columbia indicated that initial capital investment would have been $550 million, plus an annual average expenditure of $150 million. Employment would have included 500 direct jobs plus another 1,500 indirect jobs. Some estimates gave the mine a minimum life of 50 years. Geddes estimated the gross direct taxes to federal and provincial coffers at almost $1.3 billion. The Ministry’s estimate was even higher—$1.6 billion. All those billions of dollars were tied to Windy Craggy alone. Many millions of acres remain unexplored.
What happened next? Premier Harcourt’s government introduced project review legislation and this, of course, introduced elements of uncertainty into Geddes’ plans for Windy Craggy and every other mining project in British Columbia.
Initially, the review process was to be completed in just a few months. In fact, it ran for years and was never completed. My initial perception of how long the process would take was based on what the government termed the “one window” approach. This was supposed to streamline the permitting process. However, the process was not streamlined at all. Instead, we learned that Geddes Resources would have to meet US environmental standards as well as Canadian federal and BC provincial standards.
The lack of readily available government data proved to be another obstacle. In order to obtain what was considered basic information needed to complete the reviews, I ended up installing and personally managing the first weather, seismic, and river gauge stations in the region. Topographic maps were not available, as the region was classified as unsurveyed, and many times, at the company’s expense, my geologic talents were drawn upon to count goats, moose, and wolves many miles away from the deposit itself.
During this period the company’s capital was tied up and our investors were at a great disadvantage. In addition, the review process took a major portion of executive time and added hundreds of thousands of dollars in costs for lawyers, experts, support staff and travel.
Many submissions were delivered to the governments. However, the press soon reported that Sheila Copps, in consultation with US Vice-President Al Gore, had endorsed the creation of a massive World Heritage Site.
When this announcement was made, it was beyond my comprehension that the BC, US, and Canadian governments really wanted to close to any development an area the size of Vancouver Island. Moreover, they did so without any public discussions or hearings, without parliamentary debate, and with only minimal last minute discussions with First Nations.
What happened to Windy Craggy is indicative of a trend against the mining and investment industries in North America—a trend that is also producing some unpleasant consequences.
To begin with, the unique mineral deposits in the Tatshenshini area—among the largest known in the world—are now part of a World Heritage Site under the control of bureaucrats appointed by a UN agency. This “taking” without fair process and without good reason has led mining company managers, who are responsible to their shareholders, to shift the bulk of their exploration planning and budgets out of BC. This has resulted in much of Canada’s exploration and mining expertise finding its way abroad—to areas as far away as the former Soviet Union, Latin America, China, and sub-Saharan Africa. Some exploration continues, of course, by companies with BC government-assisted financing or by companies with large operations, such as smelters, which obviously cannot be moved. Many companies also maintain a minimal presence in B.C. in the hope that someday an electorate more receptive to mineral exploration, responsible policies, and employment will return a like-minded government to power.
Mining companies cannot shut down existing programs overnight, but the number of jobs in mining in British Columbia will certainly continue to decline as reserves are depleted and new mines are not developed to replace them. In contrast, spending on exploration in the Yukon has exploded as exploration expenditures have fallen in BC.
There has been an unprecedented demand for Canadian exploration and mining expertise overseas in jurisdictions which have managed to have both ongoing exploration programs and tough environmental rules. These areas are already marketing the minerals discovered and produced using Canadian expertise and capital. Offshore producers are filling the void left by a declining Canadian mining industry and are meeting the world demand for metals.
What have Canadians gained from the establishment of this World Heritage Site? Very little. The world now has an immense park one hour by helicopter from Whitehorse. But don’t go to the airport in Whitehorse and expect to be able to charter a flight to see or visit it. You have to apply for a permit to fly into the area.
On the other hand, what have we lost from the establishment of this World Heritage Site? We have lost access to a major coastal mineral terrain which extends North and South through Alaska. The loss of this area most certainly will have long term implications for Canada’s competitive position as a supplier of resources in the world market.
The mining industry is both expected, and indeed required, to open its books and offer full disclosure to the public in the form of discussions, reporting, research, and hearings prior to receiving permission to open a mine. In creating the new mega World Heritage Site, the governments involved acted behind closed doors, held no open hearings, and requested no submissions from the general public. Such action does not generate investor confidence in BC’s mining industry, nor are citizens afforded the opportunity to understand the benefits and detriments of such government action, nor given an opportunity to provide their input.
More than one such major Canadian resource and a possible deep water Canadian port that we will need in the years ahead is now under the jurisdiction of a committee appointed by UNESCO—a committee that does not necessarily have Canadian participation. There was no Canadian representative on the committee in 1994 when this unnecessary expropriation took place.
I am well aware that there have been instances of irresponsibility involving the mining industry and the environment over the decades. Some of this was out of ignorance. Some was out of greed. But it was not out of malice; people in the mining industry bear no malice towards Mother nature. Everyone has learned a great deal over the years. All one has to do is look around the province. In many areas mining coexists with other land uses.
We can always hope that at some point the public and the politicians will reverse their decision and allow the unique mineral wealth of the Tatshen-shini region to be developed responsibly and in the best interests of everyone. What is unique about the Tatshenshini region is its tremendous mineral wealth.
The Tatshenshini World Heritage Site is bi-national; it sits mainly in Canada, but includes portions of Alaska to the north and south. The site was proposed by the BC premier’s office, and was endorsed by the Prime Minister’s office. The American park was established with the concurrence of the executive branch of the US federal government. In other words, almost no locally elected officials on either side of the border were involved in the creation of the massive UN protectorate. World Heritage Sites undoubtedly have a place. But prior to their designation, there is a place for public hearings so that all parties and interest groups can be heard and make a difference.
The total area of British Columbia is approximately 95 million hectares. All the mines ever developed in British Columbia total less that one-tenth of one percent of the this total land mass. In other words, you could tuck all the land disturbed by mining into a corner of the greater Vancouver area.
Provincial and national parks, on the other hand, total about 6 percent of the province. Without new exploration and access to land, our mining industry will languish. Mining itself represents only about 5 percent of the province’s economic activity, but without mining and the encouragement to develop new and large mines, all industries that support it, such as transportation, utilities, banking, and the service sectors ranging from catering to equipment manufacturing and sales, will suffer immensely.
It is time that mining antagonists realized that miners today are not despoilers of resources, but rather, the facilitaors of responsible natural resource management and the creators of wealth.