Mines ask Victoria to plug into northwest

Paul Luke
The Province
September 18, 2005

Megawatts needed to tap wealth

Metal czar Carl Zuber has a high-tension problem that keeps him from being the happiest man in B.C.'s mining industry.

The company Zuber chairs, bcMetals Corp., has just received environmental approval from the province to build the Red Chris mine, a copper-gold project 450 kilometres north of Smithers.

Zuber is finding customers for the concentrates Red Chris will produce and nailing down financing for the $228-million project.

But Zuber's financial and regulatory successes will come to nothing unless the province strings a transmission line as far as 335 km into the northwest.

Without 37.5 megawatts of juice from that line, Red Chris, which would employ 250, won't see the light of day -- no matter how many bankers want to finance it.

"We just need the power," Zuber says. "The rest is business."

Goaded by decent metal prices, bcMetals and other companies are puncturing northwest B.C. like a Swiss cheese in a rush to unearth ore bodies. And when they do find something, electricity-hungry miners are queuing up to press the B.C. government to build a transmission line along Highway 37 to Iskut or Dease Lake.

Some $2.1 billion of potential mining investment in the area hinges on the line being extended from Meziadin Junction, where it currently stops, according to the newly formed Northwest Powerline Coalition.

Dan Jepson, executive director of the B.C. & Yukon Chamber of Mines, says the northwest region's mineral wealth could go untapped because the largest projects can't generate enough power with diesel generators.

"Our members feel the most important thing the government can look at right now is providing power up the Highway 37 corridor," Jepson said.

Bill Bennett, provincial minister of state for mining, sympathizes with the industry's plea. The province has yet to decide whether to extend power to the northwest.

But it is considering issues such as line size and projected demand, Bennett says. Also to be resolved is the issue of whether industry should share in costs.

"We're not going to see new mines up there, I don't think, without power being taken up," Bennett says.

First Nations in the area are less sympathetic.

Curtis Rattray, chairman of the Tahltan Central Council in Dease Lake, says the Tahltan expect to be directly engaged in determining the shape of any power line.

The Tahltan, wary of the social and economic impact of a line, argue a land-use plan for the area is essential.

"A power line would determine the pace and feasibility of resource development in our traditional territory in lieu of a land-use plan," Rattray said.

"There's a requirement for a land-use plan prior to a transmission line being put in place."

The pricetag of a line will depend on how much power it packs.

Studies done for B.C. Transmission Corp. estimate a 138 kilovolt (kV) line would cost $185 million, a 230 kV line $375 million and a 287 kV version $368 million.

- - -

A RED-HOT ZONE FOR MINERAL EXPLORATION

- The northwest accounted for $55 million of the $130 million spent on exploration in B.C. last year, according to B.C. ministry of energy and mines.

- Forty-one firms were seeking minerals in the area last year.

- Vancouver-based NovaGold Resources alone is spending a whopping $40 million on exploring its copper-gold-silver property at Galore Creek -- dwarfing the $29 million spent on exploration across the entire province in 2001.

- Other active sites in the region are Fortune Minerals' Mount Klappan coal project, Hard Creek Nickel's Turnagain nickel project and Copper Fox Metals' Schaft Creek project.

- Mining is a $4.5-billion industry in B.C. that supports 6,442 direct jobs.

Preparation for a line would eat up two years and construction, depending on the option, three or four years.

A fourth option would reduce the four-year requirement by building the infrastructure for a 287-kV line, firing it up at 138-kV and later boosting it to 287 kV.

Vancouver-based NovaGold Resources is by far the largest player in the northwest region. Carl Gagnier, executive vice-president at NovaGold Canada, says his company is spending about $40 million this year to explore its Galore Creek gold-silver-copper property 150 km northeast of Stewart.

That investment, which is fuelling an army of 10 drilling rigs and 170 people at the camp, is said to make Galore Creek North America's biggest exploration program this year. A mine at Galore Creek would cost an estimated $1 billion US to build and employ about 500 people once it's operating, possibly by 2010.

A mine of Galore Creek's scale would consume an enormous 80 megawatts of electricity, making diesel-generated power out of the question, Gagnier says.

"We have to connect to the B.C. grid in order to make the project viable," Gagnier says. "If the grid is extended up Highway 37 to Iskut it makes it much easier to connect."

Donald McInnes, head of Vancouver-based Western Keltic Mines, says a power line makes sense for the northwest and the rest of B.C. Northern mines buy goods and services from around the province and employ people from all regions, McInnes says.

Western Keltic, which owns the Kutcho Creek project 100 km east of Dease Lake, could generate its own power -- though a provincial line to Dease Lake would trim its operating costs, McInnes says.

"If a power line is built now, the mines that might be built in that area may not happen in this copper cycle," he says.

"But it will happen in the next one."

pluke@png.canwest.com

© The Vancouver Province 2005

Posted by Arthur Caldicott on 18 Sep 2005