Jul 30, 2010

‘Prosperity’ Mine


So there I was in Durham near Newcastle, enjoying a pint in a very historic and charming little pub called the Dun Cow (where do the Brits come up with these names). I was looking at some old photos of hard working folks coming out of the mines and couldn’t help but think of B.C.’s own Prosperity mine.

Prosperity is not a coal deposit. It is gold and copper that the owners want to extract.  But like all mines it raises a number of serious issues, including the destruction of Fish Lake and the disregard of First Nation interests in the area. The Canadian Environmental Assessment panel that reviewed the project concluded it would do serious environmental and social harm. The question has thus become, especially for the philistines running this province: don’t the economic benefits of the mine outweigh these albeit nasty, but unavoidable environmental costs.

That might be a compelling argument if there were large and unambiguously positive net benefits that could be expected from the mine going ahead. But because of the way we price electricity in this province the mine in fact would impose a huge loss on BC Hydro, and ultimately you, me and every other electricity user in the province. There is no evidence to suggest the benefits of the mine would outweigh this cost.

The mine owners (and sadly their boosters in government) protest that it would pay the same rate every other industrial user of electricity pays. That, however, is the problem. BC Hydro’s industrial rate  averages less than $40 per megawatt hour. The cost of the new electricity supply BC Hydro would have to acquire to meet the mine’s power requirements would be at least $90 per megawatt hour, possibly over $100. So BC Hydro would lose at least $50 per megawatt hour on each of the 700,000 megawatt hours of electricity the mine would consume each year.

The arithmetic is simple. BC Hydro would lose, effectively subsidize the mine, at least $35 million per year.

To be sure there would be jobs, though where the workers would come from and what alternative opportunities they would have — in other words what the benefit would be to British Columbians — is not at all clear. Equally unclear is what the tax benefits would amount to. Mining Watch suggests, based on the experience of other mines, not very much.

So here is the thing that made me want to cry in my pint (though the ale was too good to let that happen). The mine would destroy a lake. It is fiercely opposed by the First Nation in whose territory it would be developed. It was found to have serious adverse impacts by a federally appointed environmental review panel. And it would impose a loss of at least $35 million per year on BC Hydro and therefore all ratepayers.

Here is an immodest proposal. Instead of promoting the mine the government should tell BC Hydro to give the Williams Lake region $35 million per year to invest in sustainable economic development. BC Hydro and all of us would be no worse off than we would be with the mine. The region would get a local economic stimulus that could be focussed on the needs of the community. And a lake wouldn’t have to be destroyed.

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