Selwyn Chihong proposes deal with Kaska Nation

The company behind a lead-zinc mining project on the border of Yukon and the Northwest Territories has released its proposed participation agreement with the Kaska Nation.

The company behind a lead-zinc mining project on the border of Yukon and the Northwest Territories has released its proposed participation agreement with the Kaska Nation.

Selwyn Chihong Mining Ltd. hopes the Selwyn mine in Howard’s Pass will enter production in 2022 and operate for at least 11 years.

Citizens of the Ross River Dena Council and the Liard First Nation will vote on the agreement with Selwyn Chihong on Feb. 8, 2016. The vote was originally scheduled for Nov. 30, but has been postponed to avoid conflict with the upcoming Ross River Dena Council election. Sixty per cent plus one of the votes must be in favour of the agreement for it to pass.

The agreement includes a payment plan, training and employment opportunities, and environmental commitments for the five Kaska First Nations.

Until the mine goes into production, the Kaska would receive fixed bonus payments at different points during the permitting process. Once the mine is in operation, the First Nations would continue to receive fixed annual payments until Selwyn Chihong has paid off the cost of building the mine.

After that, the Kaska would receive a percentage of the mine’s monthly profits. Those payments would be divided among the five First Nations according to the Kaska Collaboration Agreement, which sets out guidelines for sharing the benefits of resource development among the communities.

The Ross River Dena Council would receive 40 per cent of the payments, the Liard First Nation would receive 30 per cent, and the Kwadacha Nation, Dease River First Nation and Daylu Dena Council would receive 10 per cent each. Under the agreement, Selwyn-Chihong and the Kaska Nation would set up several joint-venture companies to oversee parts of the operation. One of those companies would manage the transportation of mine concentrate from Watson Lake to the port at Stewart, B.C. Another would manage the camp, including lodging and catering.

A third would invest in the development of a liquefied natural gas plant that would provide power to the project.

Maurice Albert, vice-president of external affairs for Selwyn-Chihong, said the LNG plant will likely supply all of the mine’s electricity. He said the company wants to help develop an LNG facility in Fort Nelson and transport the fuel from there.

“The plan would be sufficient to supply our operation as well as a couple of other interested parties,” Albert said, adding that other mining operations in the area may purchase excess LNG from the plant. He refused to give more details about the plan.

Aside from the joint-venture companies, Kaska-owned businesses will be given priority to work on the Selwyn project.

Albert explained that for contracts under $150,000, qualified Kaska businesses will be awarded contracts directly, or may be asked to bid on contracts if there is competition from other Kaska companies.

For contracts over $150,000, Kaska-owned businesses can negotiate agreements with Selwyn Chihong through an open-book process. If they reach an agreement, they will be awarded the contract. If not, the contract will go to public tender.

Albert said he doesn’t believe it will be more difficult for Kaska companies to win the larger contracts.

“It’s just going to be a different process, simply because there’s going to be more money involved,” he said. “The Kaska will still have a competitive advantage in those larger contracts.”

Selwyn Chihong has also committed to giving Kaska members advance notice of job opportunities. Albert said there will be many positions for heavy equipment operators, rock truck drivers, mechanics, mill workers and camp employees. 

He said Selwyn Chihong will keep a database of potential Kaska employees and their skills, and may contact people directly about jobs they’re qualified for. But he expects the project will “very, very quickly… tap out the Kaska labour force.”

The mine will likely require 750 full-time employees during operation. After the Kaska have been offered positions, Albert said, the company will prioritize workers from the Sahtu and Dehcho First Nations in the Northwest Territories, followed by other workers from the two territories.

The agreement would also see the creation of an Environmental & Land Stewardship Centre in Ross River, funded by Selwyn Chihong. The centre would help the Kaska monitor water, fish habitat and wildlife.

The company would also help the Kaska establish a Lands and Resources Department, and would make payments to a trust fund to allow the First Nations to perform their own environmental studies. 

Albert said the company has worked with the Kaska for over a year to come up with this agreement.

“Basically, what we have right now is an alignment of our joint interests,” he said. “And our negotiations have been successful in finding solutions to all of the issues that have been raised.”

Contact Maura Forrest at

maura.forrest@yukon-news.com

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