Prince Albert diamond mine no closer to reality
After four years, talks between province, James Smith Cree Nation appear stalled
Investors in a proposed diamond mine east of Prince Albert are growing increasingly frustrated as environmental consultations between the provincial government and the nearby James Smith Cree Nation appear to have stalled.
The federal government approved Star Diamond Corp.’s plan to build the mine in the Fort à la Corne forest in 2014. More than four years after receiving the company ’s final environmental impact statement, the province has yet to give its blessing.
That is likely because a fresh round of talks with James Smith Cree Nation, launched last winter and originally expected to last six months, appear to have reached an impasse over various concerns, including access to land and natural resource royalties.
“There will be no mine until our interests are satisfied. The way things stand, everyone else gets wealthy while we get the consequences,” said Winston Mclean, a James Smith band member and consultant working on the talks.
Star Diamond’s environmental impact statement is “hopelessly flawed,” and the First Nation has had little success negotiating an impact benefit agreement with the company to address issues such as jobs, training, environmental impacts and land access, Mclean said.
Moreover, the provincial government has not displayed any willingness to share a portion of the billions of dollars in resource royalties the twin open-pit mine is expected to generate over its lifespan should it be approved, he added.
“It’s kind of like the Trans Mountain situation — the government consults, but then doesn’t really listen,” he said, referring to a federal court’s controversial decision to halt construction on the federal government’s newly acquired $4.5-billion proposed pipeline expansion.
Mclean described the situation as “unfortunate.” Some of the project’s investors share that sentiment, albeit for different reasons.
Thomas Griffith, one of several who outlined their concerns to the Saskatoon Starphoenix, suggested that the environmental approval process — thought to be the longest in provincial history — undercuts Saskatchewan’s reputation as a mining-friendly province.
“Diamond mining is the least caustic and the least impactful to the environment of all mining types out there … This project should have been approved in four to six months,” said Griffith, who is based in Chicago and claims to own a sizable stake in the company.
“The province of Saskatchewan is kind of holding people’s future in the palm of their hands. It’s one thing to take a year; it’s one thing to take two years; but investors have now been patient … for over four years as we’ve traipsed through the environmental process,” he added.
Ken Macneill, the company’s longtime chief executive, was unavailable for an interview. In a prepared statement, Star Diamond said it understands the provincial Ministry of Environment has made “significant progress” on its duty to consult obligations.
“Once consultations with potentially impacted communities are completed, all pertinent information will be reviewed before a decision is made under The Environmental Assessment Act,” the company’s statement said.
The provincial government declined a request to interview Environment Minister Dustin Duncan.
In a prepared statement, the ministry’s environmental assessment director, Brady Pollock, noted there is no “legislated timeline” for the environmental approval process, but said a decision on the mine proposal is “expected in the near future.”
“A government working group has been consulting directly with James Smith Cree Nation to develop a range of accommodations that would address adverse impacts to treaty rights and traditional uses that may result from the project,” Pollock said.
Those accommodations are understood to include reserving a swath of the forest for band members’ use, a guaranteed role in wildlife management, $25,000 from the company to cover the cost of travel to other parts of the forest and $50,000 annually for culture support.
Star Diamond — formerly known as Shore Gold Inc. — has been working to build the mine since the mid-1990s. The project is expected to cost $1.4 billion to build and return more than $6 billion in taxes and royalties to the province over its 34-year lifespan.
In June 2017, Rio Tinto Exploration Canada Ltd. — a subsidiary of one of the world’s largest mining firms — signed an option agreement under which it can choose to acquire up to a 60 per cent stake in the project for around $75 million.
Rio Tinto announced last week that it had begun extracting bulk samples from one of the property ’s kimberlite deposits. Around the same time, Star Diamond’s share price shot up above $0.30, its highest price since the Rio Tinto deal was announced.
It remains unclear what caused the company’s share price to run, but diamond industry analyst Paul Zimnisky said the number of investors adding $20 million to $30 million to Star Diamond’s market cap suggests it is “probably anticipation of some kind of headline.”
Griffith, meanwhile, wondered why the province issued exploration permits for the land — which he believes to be among the most valuable properties in the country, given how many kimberlite deposits it contains — and then take four years to decide if a mine can be built.
“What message are you sending to investors?”