Mine in B.C. short on cash

Tulsequah Chief developer says environmentalists have influenced the public

Posted: Wednesday, June 14, 2000

The president of the company that wants to reopen the Tulsequah Chief multi-metal mine in British Columbia acknowledges he's having trouble raising money for the $100 million project.

But Terry Chandler of Vancouver-based Redfern Resources Ltd. said Tuesday that part of the problem is a campaign by environmentalists to convince the public -- including potential investors -- that the project endangers natural resources on both sides of the border.

Chandler said lobbying by environmentalists also explains why Alaska and U.S. officials are applying an unusual amount of pressure to get additional review of the mining operation, which would take place 40 miles northeast of Juneau, just across the border.

A variety of American officials, from the State Department, the Bureau of Indian Affairs, the Alaska Department of Fish and Game and several other federal and state agencies, are involved in talks with their Canadian counterparts in Vancouver this week.

British Columbia officials have essentially approved the mine project and a 100-mile access road through the wilderness south of Atlin. They continue to review specific technical issues as Redfern works toward road construction next year and actual mining operations in 2002. The plan is to extract zinc, silver, copper, lead and gold for 10 years.

But the administrations of Clinton and Alaska Gov. Tony Knowles want a joint planning process that ensures environmental protection of the Taku River watershed, a particularly rich salmon producer for Southeast Alaska. Federal officials have said the plan for disposing of acidic waste rock in a floodplain would probably prevent the project from getting necessary permits if it were located in the U.S.

Chandler says almost every conceivable environmental question was addressed by Canadian regulators over a period of several years.

For now, the company is moving forward. After completing a study of grizzly bear habitat along the proposed road alignment, Redfern would be ready for construction of the access route next spring, Chandler said.

But there is now a question of whether enough capital will be raised to break ground then, he acknowledged.

``The environmental groups are extremely proficient at working with the media,'' he said. ``I hate to give these guys some credit, but they are effective.''

On Tuesday, Alan Young of the Environmental Mining Council of British Columbia said that in Internet postings stock analysts have commented unfavorably on Redfern's viability, given what Young described as an insufficient ore body at Tulsequah Chief to justify the expense of extraction.

Chandler didn't say how much money has been raised to date, and he conceded that low metal prices might also be dissuading investors.

But the media spin is clear, he said. For example, he said he was ``a little perturbed'' by a report Tuesday in the Toronto newspaper Globe and Mail.

The article said the U.S.-Alaska delegation ``is demanding a halt to all work'' on Tulsequah Chief, with the threat of an unprecedented ``unilateral referral'' of the dispute to the International Joint Commission, a U.S.-Canada agency that oversees boundary water issues. The article didn't attribute those comments to any official by name, and Chandler said he was told by a Canadian source that it wasn't true.

Rob Bosworth, deputy commissioner of the Alaska Department of Fish and Game, said no ultimatum was issued during the first day of closed-door talks Monday.

``We simply reiterated the position we've held all along on this matter,'' Bosworth said Tuesday. ``We really aren't asking any more than the standards we would apply to our own mine development in Alaska.''

Members of the Canadian delegation could not be reached for comment. JoAnn McGachie, spokeswoman for the Environmental Assessment Office in British Columbia, said she was told the talks have been ``very positive.''

Still, the Knowles administration considers it ``imperative'' to have a Taku River watershed plan in place before Canadian officials make any ``irrevocable commitment'' to Tulsequah Chief, Bosworth said. Asked what would happen if the Canadians ultimately don't agree, he said: ``We haven't answered that question yet.''

Talks were continuing today and were expected to conclude Thursday.

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