The Yukon Environmental and Socioeconomic Assessment Act has unduly complicated the permitting process for the mining industry, casting the future of the territory’s mineral wealth into doubt.
In its annual report, released last week, the Yukon Minerals Advisery Board said the new assessment process, fully implemented in November 2005, could have fulfilled its potential and streamlined the permitting process for mining exploration.
But “inefficient co-ordination” between the assessment board and Yukon government permitting agencies has resulted in an overlap of regulation and a doubling of wait times for mining companies trying to compete in a hot market.
“This situation is unacceptable and is in stark contrast with clear and unequivocal promises made by government during the consultation for the YESAA,” said the report.
Implementation of the process “was not accompanied by adequate and effective senior oversight and direction of the whole assessment and regulatory process,” it said.
“We accept that the government is working diligently to adjust to the new permitting reality in the Yukon.
“However, there is much more required than the normal ‘debugging’ of a new process.”
Under the new assessment process, the board makes recommendations to decisions bodies, such as Yukon government departments and agencies, which issue permits.
Since implementation of the new assessment process, the department of Energy, Mines and Resources has taken almost the same amount of time to issue permits as the assessment board has taken to conduct environmental assessments, said the report.
If the Yukon doesn’t get its act together fast, it could be left out of the current global mining boom fueled by robust Asian economies, particularly China’s, it said.
“Yukon is indeed at a crossroads with respect to this competition.
“Failure to present a regime that provides for regulatory certainty, and timely project permitting will almost certainly lead to a diminished ability for Yukon to participate in the current prosperity of the worldwide mining industry.”
The board recommended creation of an independent “regulatory competitiveness advisery force” managed by the minerals board chair and the Resources deputy minister, to achieve efficiency and reduce permitting timelines.
The government already employs several “project champions” as part of its “integrated resource management” approach, to lobby departments and politicians on behalf of industry players.
The project champions should stay, and in addition the advisery force should review the entire permitting process to identify “inconsistencies” by the end of the summer.
By the end of 2006, the advisery force should “identify measure to improve efficiencies” between government, the assessment board and the Yukon Water Board, “focusing on integration of functions and avoiding or eliminating duplication of process.”
The government is open to talking about ways to improve the assessment process, said Resources deputy minister Angus Robertson.
“The minister and the department has endorsed the concept of a regulatory competitive advisery force, as described in the recommendations,” Robertson said in a released statement.
“We’re looking forward to implementing the fact-finding part of the task force, to ascertain and ground truths, and to fix them up as best we can and as quickly as we can.”
The report also highlights the Fentie government’s achievements in assisting the mining sector.
There’s “broad government support for all aspects of the business,” and its new reclamation policy framework provides certainty to industry.
The new authorization for the Yukon’s placer miners was developed in a “unique process” involving federal, territorial and First Nations governments.
And the Yukon government has made “solid progress” on Type II minesites such as Keno Hill, where Alexco Resource Corp took over operations and maintenance earlier this year.
Exploration expenditures in the Yukon increased by 141 per cent between 2004 and 2005, from $22 million to $53 million, the report said, quoting “government sources.”
Seventy per cent of the 2005 funds were spent exploring for base metals, while 20 per cent went to precious metals and the 10 per cent went to gemstones and coal.
“There were 69 exploration projects underway in the Yukon in 2005 and over 80,000 metres of drilling were completed,” said the report.
“Approximately 400 to 450 people were directly employed in mineral exploration and development in the Yukon.”
Still, 2005 investment in the Yukon represented only four per cent of total investment in Canada.
And the Yukon risks losing even that small niche.
“Within the mining community the Yukon has previously been considered a costly, potentially difficult jurisdiction for investors due to the complexity and uncertainty of obtaining the requisite permits and licences to advance a mineral discovery to development and production in a timely manner,” said minerals board chair Clynt Nauman, who doubles as Alexco’s president and CEO.
“With implementation of YESAA the Yukon government still has the tools to change this perception,” Nauman said in the report’s foreword.
“The board again stresses the importance of the government acting expeditiously to rectify the current problems.”
The report also highlights the lack of local training programs as a contributing factor to the mining sector’s labour shortage.
“With existing projects getting closer to construction and production, many jobs will be created,” said Nauman.
“At this time the Yukon is poorly prepared to meet this demand.”
The Yukon mining sector also currently lacks “unfettered access” to a deepwater port, he said.
A report on a potential Yukon-Alaska railway link and another report on Yukon access to deepwater ports in Skagway are expected by the end of June.