Denied: Ottawa Rejects Taseko’s New Prosperity Mine

Federal Environmental Minister Leona Aglukkaq broke the news on Wednesday, saying that the mine is likely to result in “significant adverse environmental effects that cannot be mitigated,” and adding that the government ruled that those effects would not be justified.

Ottawa’s latest ruling marks the second rejection for the company, which resubmitted its proposal for the $1.5-billion mine last fall.

The development of the New Prosperity mine saw strong support from the BC government, including BC Mines Minister Bill Bennett, who commented on Wednesday that the news is disappointing.

“This is a wonderful opportunity for the region, for the province, with literally hundreds of jobs at stake,” Bennett noted, though he said he accepts and understands the federal government’s ruling; however, he still disagrees with the panel’s conclusion that the mine would have adverse environmental effects, The Globe and Mail reported.

Naysayers of the mine, on the other hand, are celebrating the mine’s second rejection.

The Tsilhqot’in Nation hopes that the latest ruling will now be “the end of a costly, pointless battle that has dragged on since at least 1995, when Taseko Mines Ltd. was first told by the federal Department of Fisheries and Oceans not to waste any further time or money pursuing this unacceptable project.”

Chief Joe Alphonse, tribal chair for the Tsilhqot’in National Government said, “[w]e are celebrating this decision to reject once again this terrible project, which threatened our pristine waters, fish and Aboriginal rights.”

He continued, “[w]e commend the federal government for not bowing to industry lobbying and instead respecting the science and the independent process which came to the conclusion that this project would have devastating impacts on the environment and our Nation’s ability to practice our rights in a sacred spiritual site. These impacts could not be mitigated.”

What about Taseko?

Following the decision from Ottawa, Taseko’s share price took a tumble, falling by just under 6 percent. But that doesn’t mean that the company has been turned off of the project.

If the company’s Twitter account is to be believed, it seems that Taseko is not taking “no” for an answer. “New Prosperity Mine project not dead,” the company posted.

On the same note, Brian Battison, vice president of corporate affairs at Taseko, was adamant in his comments to The Vancouver Sun that the government’s decision is not the end of the road for the project.

“We fundamentally disagree with the decision made by the Government of Canada and we would say that this is not the end,” Battison said. “Saying no to a project of this magnitude and importance to B.C. is not an acceptable conclusion. This project is just too important.”

CEO and President Russell Hallbauer also voiced his disappointment at the project’s rejection, adding, “[a]t the invitation of the federal government in 2010, Taseko committed $300 million to address the concerns from the first panel review and submitted a new proposal. After a second lengthy and costly federal review, the federal government has once again stood in the way of the development of an important project to British Columbia.”

Taseko plans to move ahead with the federal judicial review that it initiated in December, challenging certain panel findings and the panel’s failure to comply with principles of procedural fairness.

Even so, Desjardins Securities analyst Jackie Przybylowski told clients that “[g]iven the expected continued strong opposition to the project from some First Nations and NGO groups, we remain skeptical that the project will be approved in the foreseeable future.”

Przybylowski added that the company now has the choice of either submitting yet another revised proposal, or looking for an alternative project that could fill its pipeline, the Financial Post reported.

Securities Disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned.