Alisha's Economics Blogs!

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Alisha's Economics Blogs!
JAN 23, 2010
Gold and Copper Mines in B.C.

Economics Blog #4
By: Alisha Tupchong

Gold and Copper Mines in B.C.

Summary of the Event

Taseko Mines Ltd.’s $800-million copper-gold Prosperity project was environmentally approved of by the British Columbia provincial government during the week prior to January 15, 2010. The Prosperity project, which pumps out copper and gold from the earth, is scheduled for construction this summer as it joins Copper Mountain Mining Corp.’s similar $440-million project. The demand for mining industries has increased recently, as there is more money to be made now than before. Copper is a metal highly demanded by China because it used widely in manufacturing. Back in the 1990s, the price of copper was less than $1 (U.S.) per pound; now, copper is around $3.40 a pound. While environmental controversy and poor relations with first nations communities have slowed development in the past, companies like Taseko Mines Ltd., who now have environmental approval by the provincial government, will be able to carry out their mining activities as demanded. The price of gold is also looking strong, according to the Energy and Mining Minister, breaking $1100 (U.S. per ounce). Now, all there is left to wait for is the approval of the federal government in the next several months.

I added the following comment to her blog:

Bill Layton said...
Hello Alisha,

I appreciate your economic viewpoint on minerals and strategic choices, but where do you account for the environmental impacts of mines like "Prosperity", and the effects they will have on those who live (and have lived) next to them?

I have been following this mine for some time, and created a simple blog to follow the issue: http://prosperity-mine-vs-fish-lake.blogspot.com/

I am amazed at how little the "outside world" cares about what this mine will do to the land, the lakes it is set to destroy, and the aboriginal people who have made use of both for at least 7500 years. It's all stock promotion and strategy, and the "indians" can go to hell because they are hypocritical anyways.

Any thoughts? and when Taseko has not had to make any accounting for how it will care for and repair the land, and ensure the toxic acid mine waste does not reach groundwater or streams, after the mine is finished, who accounts for those costs? What's a hundred million dollars when your tailings pond leaks, the dam breaks, and your downstream fisheries are "impacted"? Who accounts for the cumulative impact on an already threatened salmon population? Who accounts for the risk? And what about already-established rights and title of aboriginal people, especially here where the Xeni Gwet'in people have shown in court they hold title to this land?

January 24, 2010 11:00 AM

Google Alert - taseko mines, prosperity mine

Here is some of the latest news

Google Blogs Alert for: taseko mines, prosperity mine

B.C. government approves controversial Prosperity gold-copper mine ... By Metals Place B.C. government approves controversial Prosperity gold-copper mine project. Taseko Mines Ltd's ambitious $800-million Prosperity gold-copper project cleared a major hurdle Thursday with the awarding of a provincial environmental ... Metals News - Metals Place - http://metalsplace.com/news/

Alisha's Economics Blogs!: Gold and Copper Mines in B.C. By Alisha Tupchong Taseko Mines Ltd.'s $800-million copper-gold Prosperity project was environmentally approved of by the British Columbia provincial government during the week prior to January 15, 2010. The Prosperity project, which pumps out copper and gold from the earth, is scheduled for construction this summer as it joins Copper Mountain Mining Corp.'s similar $440-million project. The demand for mining industries has increased recently, as there is more money to be made now than ... Alisha's Economics Blogs! - http://limabeansandcoconuts.blogspot.com/

Google Web Alert for: taseko mines, prosperity mine

Mineweb - Taseko Mines receives environmental approval for ... Taseko Mines receives environmental approval for Prosperity gold-copper mine. Shares in the Canadian miner jumped 18% on the news ...

TASEKO MINES LTD - T.TKO , NYSE TGB Mining Company Database TASEKO MINES LTD - T.TKO , NYSE TGB ... Prosperity Provincial EA review due to be complete in October and EA Approvals Federal ...

Taseko project receives environmental OK | Mining & Extraction ... After clearing a key environmental permitting hurdle, Taseko Mines Ltd. is ... assessment certificate for Taseko's proposed Prosperity Mine last week. ...

Taseko Announces a New 7.7 Million Oz Gold and 3.6 Billion Lb ... 2 /CNW/ - Taseko Mines Limited (TSX: TKO; NYSE Amex: TGB) (Taseko or the Company ) ... Prosperity now has the largest gold/copper reserve base of any mining ...

PROSPERITY PROJECT ENVIROMENTAL APPROVAL - TASEKO MINES LIMITED ... Taseko Mines announced that the company received the environmental assessment certificate for its proposed Prosperity Gold- Copper Project from the BC ...

Fresh off the wire

Mining company Taseko Mines maintains that Prosperity Mine is inevitable.....

Google News Alert for: taseko mines, prosperity mine

IRW-Press: Taseko Mines Ltd.: Taseko Receives Provincial Approval To Proceed ...
OfficialWire (press release)
Taseko will host a conference call for analysts and investors to
discuss the Prosperity Project on Tuesday, January 19, 2010. Details
will follow later ...
See all stories on this topic
(AMM) Taseko project receives environmental OK
Metalbulletin.com (subscription)
After clearing a key environmental permitting hurdle, Taseko Mines
Ltd. is moving forward with relevant permitting on its Prosperity
gold-copper project in ...
See all stories on this topic
Silver Investing News
Mining to Bounce Back in BC
Silver Investing News
... and Taseko Mines' Prosperity copper-gold project near Williams
Lake. Thirty new mine development projects were submitted for
government approval in 2009 ...
See all stories on this topic

Google Blogs Alert for: taseko mines, prosperity mine

Taseko Mines – The Best Is Yet To Come « Grandich's Blog
By Peter Grandich
Taseko Mines – The Best Is Yet To Come. Posted by Peter Grandich at
10:06 AM on Wednesday, January 20th, 2010. Originally recommended on
4/29/09 at $1.40, TGB eventually became a client of mine but remained
in the model portfolio because it ... First and foremost, the news on
Prosperity is extremely bullish. Unless something changes in the 11th
hour, the ability to build a mine at Prosperity is truly a company
maker (not that they didn't have one already in Gibraltar) and ...
Grandich's Blog - http://grandich.agoracom.com/
Taseko Mines – The Best Is Yet To Come - Gold Speculator
By RssFeed
First and foremost, the news on Prosperity is extremely bullish.
Unless something changes in the 11th hour, the ability to build a mine
at Prosperity is truly a company maker (not that they didn't have one
already in Gibraltar) and lots ...
Gold Speculator - http://www.gold-speculator.com/
Official Conference Opening – Hon. Randy Hawes Presentation | The Core
By admin
At New Afton and Copper Mountain, mine construction is underway as we
anticipate what will be British Columbia's next major metal mine. And
just last week, Taseko Mines Limited received a provincial
environmental assessment certificate ...
The Core - http://blog.amebc.ca/
How Bad is The Record?: Even After This Campbell Pushed Ahead
By Gary E
Williams Lake, November 12, 2009 – A team of mining experts reviewing
Taseko Mines Ltd.'s proposed Prosperity Gold-Copper Mine Project has
concluded that the information provided to date "does not permit a
reasoned evaluation of ...
How Bad is The Record? - http://howbadtherecord.blogspot.com/

--
Sent from my mobile device

A Brief Explanation of Acid Mine Drainage

I've been reading up on acid mine drainage, the thing that will pose the greatest danger to the environment, should Prosperity go ahead.

The rocks that contain the metals Taseko wants also contain chemicals called sulphides. The  plan is to pile waste rock in the tailings pond... you know, where Teztan Biny or Fish Lake is today. The problem with waste rock is that you are taking a massive chunk of bedrock and breaking it into little pieces and bringing it to the surface. Now, instead of having a little bit of rock exposed you have a massive amount of surface, all of which is exposed to air, water and microbes.

I made a little graph of how surface increases as you break something down into smaller pieces...

To quote the Wikipedia entry:

After being exposed to air and water, oxidation of metal sulfides (often pyrite, which is iron-sulfide) within the surrounding rock and overburden generates acidity. Colonies of bacteria and archaea greatly accelerate the decomposition of metal ions, although the reactions also occur in an abiotic environment. 

These microbes, called extremophiles for their ability to survive in harsh conditions, occur naturally in the rock, but limited water and oxygen supplies usually keep their numbers low. Special extremophiles known as acidophiles especially favor the low pH levels of abandoned mines. In particular, Acidithiobacillus ferrooxidans is a key contributor to pyrite oxidation.

In other words, mine tailings are a Pandora's box full of toxic chemical stew. Like nuclear waste (though not radioactive), they will create this toxic stew for centuries. So when critics complain that the environmental effects of a mine last well past the mine's life, this is why.

Mining companies like Taseko don't really address this issue because it would suggest they aren't actually in complete control of the environment they propose to create. And they aren't...

How can the Toxic Stew leave the tailings pond? Easy, it can:

• leak through the dam holding it back
• the dam can break (see this link for a list of dam breaks List of Tailings Dam Breaks)
• enter the groundwater through cracks in the rock

Mine tailings are forever, and turning Teztan Biny into a tailings pond means perching a toxic stew directly 

above what is for all intents and purposes a pristine watershed critical to a broad spectrum of people, animals and ecosystems.

Campbells Rubber Stamp Decision On Fish Lake Denounced By Whites And Natives Alike

Campbells Rubber Stamp Decision On Fish Lake Denounced By Whites And Natives Alike

Tsilhqot'in National Government denounces "rubber stamp" of approval from BCEAO for Taseko Mines project Monday Jan 18, 2010
	January 18, 2010, Williams Lake -- The Tsilhqot'in National Government denouced the BC Environmental Assessment Office (BCEAO) decision to grant an evnironmental assessment certificate (EA) to Taseko Mines Ltd. for a proposed massive mine at Teztan Biny (Fish Lake), an area where the Tsilhqot'in Nation holds proven Aboriginal hunting and trapping rights.

http://howbadtherecord.blogspot.com/2010/01/campbells-rubber-stamp-decision-on-fish.html

“I find it ironic that the province claims it has done „due diligence‟ in terms of consulting with First Nations,” stated Chief Ivor Myers, Yunesit‟in (Stone) First Nation. “The Province rejected all of our efforts to meet with them to set up a consultation process that would work for our people and our communities. Despite government and company efforts to put a positive spin on this, we do not agree with the proposal. Investors should be aware that this project is not a done deal.”

The above blog entry has a good article on how Campbell's government has never listened to the concerns of the Xeni Gwet'in or other neighbouring bands about Taseko Mines' Prosperity Mine proposal.

Bill

Zemanta helped me add links & pictures to this email. It can do it for you too.

"Intrusive Rentier"

I was reading a "Review of the Proposed Prosperity Project..." by MiningWatch and came across the term, "Intrusive Rentier". I had to look it up and find out what it meant.

The report said:

Mining projects are notorious for the creation of an “Intrusive Rentier” syndrome in the communities and regions where they are located. This term is used by Polèse & Shearmur (2006)1 to describe an observed effect in regions dominated by a small number of highly capitalized (and high wage) employers.

href="http://www.mwatch.koumbit.org/sites/miningwatch.ca/files/Social%20Impacts%20Review%20Executive%20Summary.pdf">

I'm glad someone is thinking of these things. The MiningWatch report also waded into the fact that the "Economic Benefits" analysis provided by Taseko is very one-sided and confusing, and does not include any attempt at true cost-benefit analysis. Everyone knows these things up front, but the lust by a few to make a killing trumps the need for many to look beyond a few years.

The report states:

It is pretty clear that, at least for the first few years, low income renters in the region will be faced with a vacancy rate of less than zero, escalating rents and over‐crowding. Most of these will be single parent women and Aboriginal people, but the pressure will extend to low wage earners across the region.
Eventually more accommodation will be built, and trailer parks hastily thrown up ( with all the regulatory hassles that entails) but that will take years, and after 2012, when the mine starts to wind down, the owners of those units will once again face a dramatic drop in market value.

So What's an Intrusive Rentier?

According to a report from the Centre - Urbanisation Culture Société, Intrusive Rentier refers to a syndrome where where a large employer bids up salary and benefit expectations to the detriment oflocal entrepreneurship. In the case of the Prosperity Mine, it refers to the effects of a single employer paying very high wages to a small group of employees, but enough to skew standards of living and social inequities.

If you live in the South Cariboo and have tried to buy land, you may have noticed another version of this syndrome, but in this case the Intrusive Rentiers are those from the coast that have pushed real estate prices beyond the locals' reach.

You may have also seen this if you live in a sawmill town (while the mills are doing well, unlike right now...), and noticed how one group in town is prosperous and another is almost equally UNprosperous.

Intrusive Rentier's Syndrome. Now you know!

The Straight goods: Say goodbye to Fish lake,forever!

Google Blogs Alert for: Tsilhqot'in National Government

The Straight goods: Say goodbye to Fish lake,forever! By Grant G ... is on traditional First Nations lands(Tsilhqot`in) and they are opposed to this project, the chief doesn`t believe mankind has the ability to make a replacement lake, his words are "Only the creator can do that" the goes onto say " . ... In 2002 Federal fisheries on orders from the government of the day made changes to the fisheries act Section 36 of the act(Metal,mining,effluent regulations), the changes were almost a carte blanche permission to use lakes as dumps, ... The Straight goods - http://powellriverpersuader.blogspot.com/