Chinese executives from the mining venture Selwyn-Chihong are still learning how to do business in the Yukon.
During an evening of congratulatory glad-handing and gift giving at the Yukon Transportation Museum on September 29, the Chinese were caught empty handed when it was their turn at the podium.
“Mr. Chi was going to present a gift to Selwyn but apparently he booked it on Air Canada tonight, not Air North,” said Harvey Brooks, an assistant deputy minister with the Economic Development Department, who hosted the event.
“So it’s still en route.”
David Chi, a vice-chairman with Selwyn-Chihong, thanked the Yukon government for helping the Beijing-owned Chihong invest $100 million into Selwyn’s search for lead and zinc along the border with the Northwest Territories.
And Premier Dennis Fentie, with his ministers Jim Kenyon and Patrick Rouble, returned the good wishes, praising the Yukon’s second major investment by Chinese state-owned companies in recent years.
But not everybody was celebrating.
And the First Nation prayers, art and dance that were part of the dinner and ceremony were only symbolic.
A political spat between the mining company and the leaders of the Liard First Nation is threatening to derail the project over jobs.
“Ultimately, that’s what we need,” said Harlan Meade, the president of Selwyn-Chihong, speaking to reporters outside the event.
“We need access to the workforce. We’re going to need a substantial workforce, which means we’re going to need Ross River and Liard First Nations.”
Liard McMillan, the chief of the Liard First Nation, has blocked Selwyn from sending emissaries into Watson Lake to scout for employees.
But Selwyn-Chihong isn’t afraid to circumvent McMillan’s hardball tactics.
“If chief and council want to block our negotiations, our view is we’ll work with the community,” said Meade.
McMillan made it clear such actions would not go unpunished.
“To have the company circumvent the elected leadership and approach our members and elders directly and back them into the corner to serve their own means and purposes, we simply won’t allow that,” said McMillan, who did not attend last week’s meet-and-greet.
“For our members to be there completely without technical support or legal counsel of any type in my mind is unethical and unheard of,” he said.
McMillan threatened to bring the company to court for failing to consult with the First Nation while developing on its traditional territory.
“Selwyn is walking on a slippery slope in terms of its refusing to deal with Liard First Nation’s concerns and issues,” he said.
Selwyn-Chihong isn’t buying any of McMillan’s bluster.
“Are we concerned? No,” said Meade.
“One day these issues will be resolved,” he said.
“There’s lots of politics around it. We will overcome that and work at the community level.”
Selwyn, which partnered with Chihong last December, has been exploring for ore east of Ross River for five years.
It won approval for underground exploration from regulators this summer. It hopes to dig up at least 200,000 tonnes of rock, 30 tonnes of which will be sent labs for testing. If they find commercially viable grades, production could begin in 2014, according to the company’s project overview.
But the company is not having much luck with the people it needs to dig the ore.
Liard First Nation has been trying to get Selwyn-Chihong to pay for consultants and lawyers it would need to negotiate a jobs agreement.
“Not having that fair process agreed to and funded by the mining community is very frustrating from our community’s perspective,” said McMillan.
Selwyn-Chihong has given enough money, said Meade.
“We’ve already given them substantial amounts of money – I can’t tell you what it is – as has the federal government,” he said. “And yet there’s no agreement to show for it.”
McMillan wasn’t able to provide the amount of money received from Selwyn-Chihong or Ottawa by press time.
However, he did say the $100,000 the First Nation receives from the Department of Indian and Northern Affairs for regulatory affairs is barely enough to staff an office.
“Certainly, with the amount of proposed oil-and-gas and pipeline work in our community, it’s overwhelming,” he said.
When it does come to talking agreements, there’s a gap in business standards.
“(The Liard First Nation) seem to want to piecemeal the process – do this piece and that piece later on in the project,” said Meade.
“That’s very frustrating to us because we think they’re missing an opportunity here.”
There are at least 10 members of the Liard First Nation already working with Selwyn-Chihong, he said.
Selwyn-Chihong hasn’t had much luck hiring Liard First Nation companies in the last few years either – souring an already acrimonious relationship.
“We have given contracts to groups that have a strategic arrangement with Liard First Nation,” said Meade.
“It’s unfortunate, but their bids were not competitive.”
The company has so far spent $75 million on the project, but Meade couldn’t say how much has gone to First Nation contracts in total.
“I’m not certain of the number,” he said.
Asked to name a single local business that has a deal with Selwyn, Meade mentioned Whitehorse-based Alkan Air.
“There’s a whole host of suppliers here in Whitehorse,” he said.
The chief of the Ross River First Nation, Jack Caesar, attended the celebrations last week in Whitehorse.
McMillan believes Ross River is being conned into working with Selwyn.
“They seem to be taking a bit more of a complacent or a conciliatory position,” he said.
“It may be based on a lack of understanding some of the potential risks or pitfalls to this project.”
McMillan criticized YESAB’s approval of Selwyn-Chihong’s underground permit after the First Nation hired its own environmental consultant, Bill Slater, to review the approval.
“Ross didn’t have the benefit of the technical report that we had done,” said McMillan.
Slater is concerned the approval is too lenient, since it’s hedged on the company performing future studies of water flow at the underground site, as well as discharge sites near Don Creek.
In the YESAB approval document, concerns raised by Liard First Nation lead to changes in the conditions.
But Ross River made no comments or aired any concerns during the regulatory process.
“This application is the tip of the iceberg and will likely set the tone for all zinc-lead development,” said McMillan.
Contact James Munson at