Rejection of Taseko Mines' New Prosperity Is the Same Old Song

After the public shaming Taseko Mines (NYSEMKT: TGB  ) delivered to Canada's environmental authorities last November, it's not surprising the regulators did a copy-paste job in once again rejecting the miner's New Prosperity gold and copper project in British Columbia.

As I said at the time, an embarrassed bureaucrat is still a dangerous animal, and from the looks of its press release it seems the environmental agency didn't even bother to reconsider the problems with their reasoning Taseko brought to light, but rather chose to circle the wagons around their previous erroneous report and declare once more that New Prosperity would "cause significant adverse environmental effects that cannot be mitigated."

Source: facebook.com/TasekoMines.

The Canadian Environmental Assessment Agency infamously made the bonehead move to reject the mine not on Taseko's proven mitigation plans, but rather from those submitted by a separate agency that were known to be unworkable. Instead of the tailings pond liner Takeso suggested be installed to prevent seepage, a design that is effectively being used by Thompson Creek Metals  (NYSE: TC  )  at its Mount Milligan copper and gold project, the agency ignored that and agreed with Natural Resources Canada that damage would occur from a tailings pond that had no liner. Well, duh. That's why Taseko proposed including one.

The miner highlighted the discrepancy and turned over to the CEAA documentation of its error but was then enraged when the environmental agency said it wouldn't make public its review of the missteps. So Taseko published them itself on its own site.

Again, it's a cathartic move, but hardly one conducive to endearing itself to those with veto power over the project. So yesterday, when the CEAA handed down its ruling, essentially ignoring everything Taseko pointed out and simply reiterating its support for the previous rejection, I don't think anyone was really surprised.

Yet as I've also noted in the past, while the tailings pond problems were one of the reasons the agency rejected the miner's application it wasn't the only one. There were also significant concerns about the obliteration of Little Fish Lake by the creation of the storage site, the impact on the cultural and religious practices of local First Nations who use the area, and the effects the project would have on grizzly bears. The storage facility was but one hurdle to overcome.

First Nations and indigenous tribes globally have been able to gain for themselves supremacy in many of the deliberations miners are facing as they seek to construct new mines or expand existing ones. Cliffs Natural Resources (NYSE: CLF  ) is facing a similar circumstance in Ontario over its Ring of Fire chromite project, as the First Nation tribes there were not enamored of the miner's plan to build a road across their ancestral lands. Projects that Barrick Gold (NYSE: ABX  ) and Codelco were developing in Chile have run aground over local opposition, as have those proposed by Goldcorp in Mexico, and Rio Tinto in Arizona.

Certainly Taseko Mines won't be letting this matter rest, but after reporting earnings recently that showed a substantial widening of losses from $9 million to $34.8 million as production costs increased while still facing a weak market for copper, it's a setback nonetheless and suggests the miner will be the poorer because of it.

New found wealth opportunity
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.


Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2858531, ~/Articles/ArticleHandler.aspx, 12/19/2014 10:52:12 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement