Society owns the nation’s resources, those buried in its soil and the ones sitting smack dab on top of it in plain view.
Which is why land planning is so important.
It allows a government—elected by a majority of the people—to determine what’s the best use of the land.
Sometimes we forget this simple principle.
For example, there is much bawling and gnashing of teeth about mineral claims staked in the Peel Watershed.
But, as a tightly researched study by national co-ordinator of Mining Watch Joan Kuyek reminds us, a mineral claim is not ownership of property.
A claim simply provides access to Crown-owned minerals.
Sometimes granting access to those minerals is in the Crown’s interests. And sometimes it is not.
Miners, environmentalists … indeed, everyone in society would do well to remember these simple facts. Because there’s a lot of bluster around mining claims in the Yukon these days.
Such claims exist solely at the pleasure of the Crown.
A company that has staked ground does not own anything until the mineral it seeks has been pulled from the ground.
And, at that point, the public is still entitled to receive fair compensation for the resource. That is, the minerals are subject to royalty or resource rent.
And, though a company might possess mining claims, those claims do not guarantee it the right to mine the ground in Canada.
Again, it’s the Crown that determines whether a deposit is worth mining or not.
“It is the responsibility of government to weigh the societal benefit of different uses of the land,” Kuyek noted in her 31-page report, which was tabled in the house by the Yukon NDP on Wednesday.
“It does this, not for itself, but for future generations.”
And that’s important to remember when it comes to the Peel River Watershed—what is the best use of the land for future generations?
The public seems to favour protecting the wilderness.
In the last round of public consultations, 437 public letters were sent to the Peel Watershed Planning Commission. Of those, 95 per cent supported protection of a significant portion of the watershed.
Unfortunately, that’s at odds with the commission’s draft plan, which allows all-season road access to develop mining claims at the heart of the Peel.
Miners seem to be the only ones demanding access to the mineral resources.
But is destroying that world-class wilderness for low-grade coal, iron, uranium and lead-zinc the best use of the land?
This is the question the Yukon must answer.
Five mining companies hold the majority of the claims in the region.
According to their securities commission filings, they’ve spent a total of $38,979,900 exploring the region between 2005 and 2008.
Cash Minerals, which has a focus on uranium development, spent the lion’s share in the Peel—$27 million.
Kuyek could not pin down how much of this money stayed in the territory, though she noted only one company had an office in the Yukon and all five were registered Outside.
And a couple of them are probably going to go out of business.
The Fraser Institute, in its 2008-09 Survey of Mining Companies, predicts 30 per cent of junior exploration companies are going to be wiped out in the current economic depression.
In March, Pricewaterhousecoopers reported the market capitalization of the top 100 junior mining companies fell to $4.1 billion in November from $20.2 billion in July, 2007.
“Investors fled this high-risk sector,” said the Pricewaterhousecoopers report.
And this is the sector the Yukon would have to rely on to explore the Peel.
Even if a single property were proven to have enough minerals to justify building a mine, there are several things that work against such a development, notes Kuyek’s report.
First, there’s no road or rail infrastructure, and it’s too expensive to build. Building a rail line from Carmacks to the region would cost an estimated $4.6 billion. Government would be tapped to help fund it.
Second, water flow in the region is low, and access to water for industry may be a serious problem, especially in the winter.
Third, there is currently no power available in the watershed, and building supply would either be cost prohibitive or, in the case of a proposed coal-fired generator scheme, an environmental nightmare.
Fourth, the quality of the region’s iron ore isn’t all that great—it isn’t the type highly desired by steel producers, which makes it less valuable in an area that’s expensive to mine.
Fifth, the skilled workers needed for such developments are in short supply, and, when found, they come at a premium price, which drives up costs, making fringe developments less profitable.
And, last, wildly fluctuating metal prices will hamper any development.
“World metal prices must be sufficient enough that the value of the ore mined covers the cost of mine development, operation, closure/reclamation and a reasonable expectation of profit,” notes the Peel Watershed Planning Commission.
Such prices are unlikely in the current economic climate.
So, given all this, does society want to risk destroying one of the continent’s last grand ecosystems to allow more prospecting for resource deposits way out in the boonies of the boonies?
The answer, of course, is no. And most of the public understands this.
It’s the pick-and-shovel lobby that doesn’t. It’s either fixated on an unrealistic future or it’s determined to mine government.
And government should probably pay up.
It should buy out the existing stakeholders, who pumped $38 million into exploring the region.
“Although some compensation should be paid for the investments of mining companies in these potential mineral projects, this should be limited to their reasonable actual costs for exploration of the property,” notes Kuyek.
“Compensation needs to be fair and be considered within the wider public good, including land-use planning needs, protection of the environment and the creation of a sustainable economy.”
But we aren’t doing them a favour.
“They don’t own the minerals, the public does,” notes Kuyek. “And the public can decide what happens to them.”
There is precedence for such a payment.
In 1993, BC bought out claims in the Tatshenshini River from Royal Oak Mines for $166 million, notes Kuyek’s report.
There was a lot of fallout from that deal, it said.
Most miners don’t even recognize the huge payout, says Kuyek’s report.
“The battle has become a miner’s myth.
“It is clear that the size of the compensation package wasÂ not the issue; the issue was the perception of the junior mining industry that their rights are sacrosanct.”
But they’re not.
The Crown owns the land, and the underground wealth.
It can determine what is in the public’s best interest.
Given the economics of mining in the Peel, that’s clearly preservation.