In November of 2010, the Canadian government rejected an $800 million copper-gold project of Taseko Mines, called “Prosperity” in my home province of B.C. Although the federal government ultimately cited environmental concerns in declining the license to operate, relations between the company and the First Nations communities in the areas around the mine really hit rock bottom during a federal environmental review process for the project.
Taseko’s “Prosperity” mine had potential to generate significant economic wealth for the Williams Lake region of BC, an area hard-hit by other economic factors and desperately in need of jobs. However critical stakeholders, such as the First Nations in the area of the proposed mine believed their communities would not benefit from the mine in their territory and actively opposed the project during the environmental review.
Interestingly, on the same day the Canadian government rejected the Taseko Mines Prosperity project, it approved a $915 million copper-gold project (“Mount Milligan”) in a different area of the province. In speaking about its decision, the federal government indicated that the Mount Milligan project (Prosperity mine rejected, Mt. Milligan approved) had designed appropriate mitigation measures and minimized environmental impacts and that as a result, was likely to cause significant adverse environmental effects.
In further contrast to how Taseko Mines managed key stakeholders such as the First Nations communities in the area around their proposed mine, Thompson Creek Metals (Mount Milligan copper-gold project) reached out to First Nations communities in a meaningful way, and adopted Principles for Sustainable Relationships with First Nations, a framework developed by the Association for Mineral Exploration BC.
The Mount Milligan project had First Nations support in the form of a revenue-sharing agreement between the province and the McLeod Lake Indian Band – only the second such deal in the province. Further, Thompson Creek Metals partnered with post-secondary institutions to create an environmental training employment program for First Nations – allowing them to participate in project operations.
Although neither mine is without opposition, nor serious environmental and local concerns, it is an interesting contrast of the employment of two very different stakeholder strategies. It is also a powerful narrative about the power of relationship building for economic prosperity, and recognizing stakeholder dynamics as a critical component in a company’s social license to operate.
What is the cost of developing a solid CSR program that incorporates social and environmental responsibility concerns into the cost of business? In this tale of two mines, the path chosen made all the difference.
Disclosure: Taseko Mines and Thompson Creek Metals are not clients of Hill & Knowlton.