Troilus Gold brings potential funding from ECAs to $1.3 billion
The company has signed an additional LOI with Export Development Canada worth $300 million.
While far from perfect, the BC Conservative Party appears to have the best policies for mining and energy ahead of the provincial election on Oct. 19, an AOTH analysis has found.
Leader John Rustad, a former BC Liberal Cabinet minister before the renamed BC United Party threw their lot in with the BC Conservatives to avoid re-electing the NDP through vote splitting, is in a dead heat against David Eby of the BC New Democratic Party.
The BC Green Party is polling a distant third.
According to the Mining Association of BC, the province’s mineral exploration and mining sector contributes CAD$7.3 billion to GDP. Critical minerals including nickel and copper could grow that amount significantly, reads a Sept. 24 media statement by the organization.
“With 17 world-leading critical minerals projects on the horizon, BC can make a meaningful contribution to climate action and deliver immense and lasting economic benefits, including $36 billion in immediate investment, 302,000 person-years of employment, $23 billion in labour income, and nearly $11 billion in tax revenues to support essential public services. The long-term economic impact of operating these mines over several decades could be enormous, reaching nearly $800 billion,” said President and CEO Michael Goehring.
He added: “The provincial election presents a pivotal moment for British Columbia’s political parties to champion the essential role of BC’s mining sector in the future of our province.”
Goehring said MABC is pleased to see both parties committing to streamline the permitting process for critical minerals, and that “By unlocking the potential of critical minerals, we can attract the private investment necessary to fuel economic growth and secure well-paying jobs for decades to come. But this will only be possible if we act now to accelerate mine permitting and approval processes.”
He said MABC will be there to ensure whatever party forms government follows through on their promises. More on that below.
Mining is the largest export industrial contributor to the provincial GDP at $18 billion in 2022. Forestry contributed $13.3 billion, oil and gas $9.5 billion, and agriculture $2.1 billion.
Nearly 85% of mining sector value in BC comes from the sale of coal and copper.
Rustad of the BC Conservatives was first to announce his party’s mining platform during a campaign stop in Kimberley.
He criticized the length of permitting, noting it takes 12-15 years to secure approval for a mine compared to five years in Chile and under two in Sweden. “The convoluted process makes BC uncompetitive, driving jobs and investment elsewhere,” states a press release.
The party would simplify permitting, cut redundant regulations, invest in rural infrastructure, and foster strong indigenous partnerships for what Rustad calls “economic reconciliation”.
He told reporters he plans to fast-track approvals for 16 mines, unlocking $11 billion in revenues that would go to the government, and $22 billion in wages and benefits annually. He did not cite a source for these figures.
If successful, the BCCP plan would effectively wipe out the provincial deficit, now estimated at $9 billion.
Rustad promised a “one project, one permit” approach, pledged to spark investment by reviewing taxes, and encourage exploration and mineral processing.
Let’s break down a couple of these items.
In 2020 the federal Liberal government passed Bill C-69. The legislation broadened the scope of the environmental assessment process and added more consultation with the public and particularly indigenous groups.
Tough but fair resource regulation is necessary and expected. Unfortunately, Bill C-69 did nothing to assuage the industry’s concerns that the environmental assessment process is hampering investment.
The act also inserted subjective criteria including “social impact” and “gender implications” into the evaluation process of major energy projects. According to the Fraser Institute, in 2022, investment in the oil and gas sector dropped to $29 billion, from $76B in 2014. In a survey of the investment attractiveness of 15 energy-producing provinces and US states, no provinces were in the top five.
While Rustad’s plan to streamline permitting is laudable, it’s unclear how new rules would co-exist under C-69, a federal law. Another of Rustad’s policies, “you build it, you clean it,” refers to holding mining companies responsible for remediation costs at closure. Perhaps Rustad isn’t aware, or neglected to mention, that miners are already required to post reclamation security/bonds with the province, which covers the cost of reclaiming a site if a mining company defaults on its obligation to do so or is unable to pay its debts.
Rustad’s promise to encourage exploration and mineral processing, on the other hand, is very interesting. The press release says the BCCP “will reverse the NDP’s unprecedented March 2024 cabinet orders which make exploration effectively impossible in certain parts of BC.”
Specifically, the cabinet orders refer to Banks Island, an island south of Prince Rupert on Hecate Strait, and a part of Vancouver Island that is traditional territory of the Ehattesaht First Nation.
From the provincial government website:
On March 7, 2024, orders were made under the Environment and Land Use Act to establish a five-year moratorium on certain mining activities within the Ehattesaht Hay-na Mining Deferral Area and the Lax K’naga Sts’ool Mining Deferral Area, as well as an indefinite pause on the registration of new mineral and placer claims in those areas.
The moratorium restricts existing tenure and permit holders from engaging in mining activities, with exceptions allowed for reclamation, monitoring, protection, control, or treatment efforts.
Business in Vancouver reported that The Association of Mineral exploration (AME) raised concerns about the moratoria, and recommended that prospectors and mineral exploration companies with claims or permits in the affected areas be compensated.
Regarding the release of the Conservative Party and the NDP’s mining platforms, AME executive director Keerit Jutlaemphasized the importance of greenfield exploration and warned that without a focus on such exploration, the foundation of BC’s critical minerals future could be undermined. He took issue with a perceived lack of exploration support in the NDP’s plan, per INN:
“The BC NDP’s mining platform, while commendable, falls short by not explicitly supporting the indispensable role of mineral exploration,” he said. “We urge all political parties to integrate a comprehensive approach to mining that includes robust exploration initiatives to support a thriving mining sector in BC.”
Economists have pointed to critical minerals used in key emerging technologies as a bright spot in BC’s natural resource sector.
BC holds reserves of more than half of the minerals Canada has deemed critical, including copper, molybdenum, magnesium and zinc, all of which are currently mined in the province. Notably, the province produces 50 percent of the nation’s annual copper output and accounts for 100 percent of its molybdenum mining. (Investing News Network, Oct. 1, 2024)
“We’re going to look for every opportunity possible to add value to those minerals. We want to make sure there are options to build additional smelting or other activities to make sure we have more finalized products leaving this province,” said Rustad.
Mainstream media skipped over this part, probably not knowing what it means, but to us at AOTH it’s an acknowledgement of the lack of mineral processing/ refining facilities in BC.
The Golden Triangle district of northwestern British Columbia is an excellent place to shore up new copper supply and to build smelting and refining capacity.
“53 per cent of the exploration spending in B.C. in 2020 went to the northwest of the province, home of the Golden Triangle exploration and mining district around Stewart B.C.” — Gordon Clarke, director of the B.C. Mineral Development office.
British Columbia produces just over half the nation’s copper compared to 29% in Ontario and just 6.5% in Quebec. The only copper processing facilities in Canada are the Horne smelter located in Rouyn-Noranda, Quebec, and the CCR refinery in Montreal.
All the copper mined from British Columbian operations is shipped to Asia.
While there has been talk of building a refinery in BC for decades, so far the political will hasn’t been there. The smelter’s ore feed could not only be derived from the gant Kerr-Sulphurets-Mitchell (KSM) deposit being developed by Seabridge Mining, but all of the neighboring deposits, including Red Chris, Schaft Creek, Galore Creek, Newmont’s Tatogga, and no doubt from the many deposits waiting to be discovered. Elsewhere in BC, Teck’s partially owned Highland Valley, Gibralter and Copper Mountain could potentially supply feedstock for a BC copper smelter/hydromet. And the Yukon has a lot of copper, Carmacks and Casino for example.
The key to this plan, wild as it may seem, is the smelter must have the ability to process copper and gold. Well it just so happens that Teck Resources, part-owner of Highland Valley, Galore Creek and Schaft Creek, has the technology to do it.
NDP leader David Eby followed Rustad’s mining proposals a short time later while campaigning in Terrace.
“Northwest BC has the critical minerals that are in high demand worldwide, giving us a huge advantage in the global movement to a clean economy,” Eby said. “Our plan will get mining projects moving that grow BC’s economy, create good jobs across the Northwest, and benefit communities directly.”
The party would implement guaranteed permit review timelines for priority critical minerals projects, as well as improving highway infrastructure and building out the electricity grid.
He pointed to the Resource Benefits Alliance representing 21 local governments, giving members $250 million over five years for infrastructure.
Matching Rustad’s permitting promise, Eby said he would direct the civil service to treat each mine as requiring a single approval process rather than multiple (again, no mention of Bill C-69 — Rick).
He cited statistics that BC’s mining workforce has grown by 10%, that mineral production has doubled and that there has been a 70% increase in produced values since the NDP formed government in 2017.
The latter is easy to refute, thanks to some fact-checking by Northern Beat. First, the claim that mineral production value has increased 70% since 2017.
In 2017, the sector was valued at $9.9 billion, and in 2023 it was $15.9B. The $6B difference is an increase of 60%. But this had nothing to do with the NDP, and everything to do with coal.
While coal shipments per tonne decreased annually during the six-year period, the price of coal rocketed higher. How much higher was coal sector revenue? Not coincidentally, over $6 billion.
“The increase in mining sector value between 2017 and 2023 was entirely due to the dramatic increase in metallurgical (coking) coal price,” Northern Beat concludes.
As mentioned, 85% of mining sector value in BC comes from the sale of coal and copper. It’s also worth stating that between 2017 and 2023, copper production (along with coal) dropped from 289,025 tonnes to 266,540t. Copper revenue did not change significantly.
Because coal prices have since dropped, and production has not increased, it’s reasonable to assume that coal revenue will fall substantially in 2024 and 2025.
Revenue from copper did increase between 2020 and 2022, reaching nearly $3.4 billion in 2021, but has returned to pre-pandemic levels of approximately $2.5 billion per year in 2023, states Northern Beat.
Now let’s fact-check the NDP’s claim that “Mining is a foundational part of British Columbia’s economy and the BC NDP is supporting it to grow.”
Is the party really helping mining to grow? The numbers don’t lie.
According to Northern Beat, the number of operating mines in BC has decreased under the NDP, from 16 in 2017 to 14 in 2024.
The last new mine to be built in BC was Brucejack, a high-grade underground gold mine that began operations in 2017.
Artemis Gold’s Blackwater gold-silver mine in north-central BC was permitted in 2023 but has yet to pour its first gold bar. The company is aiming for the end of Q4.
Northern Beat hints at the lack of new mines when it states, Although B.C. has a robust mining sector, this is primarily due to the continued viability and profitability of legacy coal and copper projects. Coal and copper dominate in both production and revenue, making up more than 85 per cent. These mines have been in production for many decades.
The BC forestry industry is no longer the backbone of the economy.
According to BIV, in 2022 metallurgical coal and natural gas were both more valuable export commodities than lumber, and the number of people employed by forestry has been steadily declining thanks to closures of sawmills and pulp & paper mills.
Central 1 Economics says in the early 2000s, logging and wood manufacturing made up about 5% of GDP and employed 90,000 people. As of this time last year, the industry employed less than 50,000 and accounted for just 2% of GDP.
Projections are for an even smaller industry a decade from now.
The industry’s decline has a lot to do with the Mountain Pine Beetle. In 2005 the annual allowable cut (AAC) was boosted to 86 million cubic meters to allow companies to salvage dead and dying beetle-kill pine. Now, with most of that wood used up, the AAC has fallen to 62 million cubic meters. Nearly half of the 111 sawmills running in 2005 have shuttered, leaving just 64 remaining. By 2035, analysts say the AAC will be down to just 38 million cubic meters and the number of sawmills reduced to 47.
Neither the Conservatives nor the NDP appear to offer solutions.
Rustad, a former forestry critic, says he will remove layers of permitting required by industry for forestry projects and create policy around using all parts of trees to reduce waste. (CBC News)
After years of protests in BC around the protection of old growth forest, David Eby says he is committed to protecting old growth. He also wants to phase out the use of Round Up pesticides in BC forests. (CBC News)
The United Steelworkers union, which supports the NDP, says more immediate actions is needed:
“We have been sounding the alarm for months, the forestry industry is still in crisis after nearly two decades of neglect from John Rustad’s previous BC Liberal government. While the platform offers promising solutions, the urgency of the situation cannot be overstated,” said Scott Lunny, USW director for Western Canada.
“Restricting log exports, stabilizing fibre supply, striving for more jobs per cubic metre of timber harvest and tying the trees to mills that employ British Columbians is the right direction, but will mean little if not swiftly backed by real action. The industry is hemorrhaging jobs and families and communities need to see changes on the ground – not just in policy.”
All three parties (even the Greens) recognize the need to build more energy infrastructure faster. The way they would go about it though is drastically different.
John Rustad was booted from the BC Liberal Party in 2022 over comments he made on social media casting doubt on climate change. Rustad is the only leader in favor of nuclear energy, and if the BCCP forms government, he has promised to banish the carbon tax and low carbon fuel emissions standard.
More on nuclear vs Site C vs LNG in a minute.
David Eby has said he would scrap the carbon tax if the federal government decides to drop it as a requirement. If elected, the NDP wants to double the number of EV charging stations across the province by 2030. The party is promising to plant 300 million trees per year to mitigate the impacts of climate change. (CBC News)
BC Greens’ leader Sonia Furstenau has said she would keep the carbon tax and increase it for companies creating the most pollution. The Greens’ plan also focuses on the protection of local ecosystems and ending fossil fuel subsidies. No new permits for fracking, pipelines or LNG would be granted and gas production would be phased out. The party would kill the Prince Rupert Gas Transmission pipeline, designed to feed natural gas from northeastern BC to the Ksi Lisims LNG project.
Public funding for BC Hydro that supports LNG projects would be stopped.
Instead of LNG, the Green Party, no surprise, would invest in renewable energy including solar. According to Global News, the Greens have promised to invest $20 million a year into small-scale solar projects aiming to have them feed 15% of the grid by 2035. The party also says it will subsidize electric heat pumps for low-income households and set sales targets for electric medium and heavy-duty vehicles.
The Conservative Party has said they would “consider all power sources” in a quest for energy independence, including nuclear. They would power northwestern BC with new gas- and wood-waste-fueled power plants, conduct a business case analysis for geothermal power, and explore wind and solar “when the economics make sense.”
Rustad has said he would amend the province’s Clean Energy Act to allow for nuclear power. The plan is to launch a review of small modular reactors to build BC’s first nuclear plant by 2025.
(In New Brunswick, the provincial government is working with two private-sector companies, ARC Clean Technologies and Moltex Energy, to progress small modular nuclear reactor (SMR) technology in the Maritime province. Unlike conventional nuclear reactors, under Moltex’s design, SSR reactors do not need expensive containment structures. They are also safer, because they do not contain harmful gaseous by-products like caesium-137 and iodine-131, which escaped during the Chernobyl accident. Instead, the reactors contain non-volatile salts, which cannot leave the reactor.)
Rustad and Eby clash over what they see as BC’s energy future.
“We are going to need additional energy in BC. It is a simple fact. We do not have enough to meet the demands we have and certainly, the demands going forward,” Rustad said in the Global News story.
He’s right. Earlier this year, advocacy group, Energy Futures Initiative (EFI), said that BC’s electrical system is not ready to handle the ever-increasing demand for power, as the province sets ambitious targets for the shift from fossil-fueled transportation and energy generation.
Global News reported EFI saying that BC could become “at risk” for power generation as early as 2026. In fact the province last year was forced to import a record amount of power, some 10,000 gigawatt-hours, the equivalent of two Site C dams worth.
Rustad says if elected premier, he will reverse what he calls the NDP’s “radical” electric vehicle and heat pump goals.
(The NDP has passed legislation requiring all new vehicles sold in BC to be zero emission by 2035. The party has also proposed plans to shutter the province’s last gas-fueled power plant and bar the installation of stand-alone gas home heating systems, both by 2030, per Global News)
“We need to be realistic about what we create in terms of those demands,” Rustad said.
“Today, for example, with the NDP government’s approach to saying they want every household to have a heat pump or that everyone needs to have an electric vehicle, we do not have the electrical generation to be able to do this.”
The NDP counters that BC Hydro is already legally required to be energy-independent, says electricity rate hikes have been below inflation for six years, and that natural gas will still be permitted for home heating. The party argues nuclear power is five to 10 times more expensive than renewable alternatives like solar and wind.
The Conservatives rightly say that solar and wind are incapable of providing base-load power like nuclear and hydro.
The numbers provided by Global News back up the Conservatives’ claims that BC is not generating enough power:
Earlier this year, BC Hydro issued the first in a series of calls for new private wind and solar power producers, with the goal of adding 40 to 200 megawatts to the grid by 2028.
The Crown corporation estimates it will need another 3,000 gigawatt hours of electricity annually to feed the growing need for electricity.
An earlier Global BC television interview had the program manager for Clean Energy Canada, Evan Pivnick, saying that Site C will only add about 9% to the electricity BC Hydro generates currently. Moreover, he said that BC Hydro is already predicting that we need “at least another Site C and a half before 2030 to meet demand, and there’s a good reason to think that even that might be underestimating just how much power demand could grow.”
At this point there should be a collective gasp. The first Site C is costing $16 billion, and it isn’t yet generating power. The reservoir is currently filling and the turbines won’t spin until 2025. Now BC Hydro is saying we need another 1.5 Site Cs before the end of the decade. @ $16B each, and that’s a conservative estimate, given how much inflation has bumped up construction costs, we are talking at least another $24B, to generate only another 1,800 megawatts of power — a pittance, really.
When Site C is completed, it will flood 128 kilometres of the Peace River and its tributaries, putting Indigenous burial grounds, traditional hunting and fishing areas, habitat for more than 100 species vulnerable to extinction and some of Canada’s richest farmland under up to 50 metres of water. — The Narwhal, June 28, 2022
We’re flooding perfectly good farmland (around 6,500 hectares) so the Lower Mainland has enough electricity to drive EVs. That isn’t green, and neither is the plan to develop a liquefied natural gas industry in northern BC.
If, instead of wasting $16 billion on Site C, the politicians would wake up to nuclear power, for that same $16B they could have 80,000 megawatts — the equivalent of 266 small nuclear reactor plants each generating 300MW, or roughly 66 Site C dams.
On Oct. 9, an article in The Globe and Mail said a review of the provincial election campaign by Clean Energy Canada — a clean-energy think tank — shows that the BC Conservatives would introduce policies to spur LNG that are much more aggressive than those being followed by the current NDP government.
The article says this would be at the expense of the environment, given that Rustad has said if his party wins the election he intends to discard the province’s climate-action policies, which are guided by a plan to decrease emissions.
Mark Zacharias, executive director at Clean Energy Canada, was quoted saying that if a future BC Conservative government were to rescind CleanBC and its policies, that would clear the way for LNG Canada’s Phase 2 and Ksi Lisims to focus on natural gas-driven technology for liquefaction.
AOTH has come out more than once against an LNG industry in British Columbia.
BC taxpayers will cough up $5.3 billion worth of tax breaks for a liquefied natural gas (LNG) plant and pipeline called LNG Canada — four more major LNG projects are proposed —all connected by pipelines, to ship natural gas fracked from BC gas fields to customers in Asia.
Shell’s LNG Canada includes two processing trains, with room to add two more. The first two trains would have capacity for 6.5 million tonnes of LNG per annum, with four trains producing 26Mtpa.
The estimated cost is $42 billion, making it the largest private sector investment in Canadian history.
The NDP says the LNG Canada project will bring in CAD$22 billion to BC’s coffers over 40 years.
We’re told US$10 million worth of gas per day will flow through the pipeline. That’s US$3.65B a year. Over 40 years, US$146.3B. The Site C dam is already costing CAD$16B, then add CAD$5.3B in tax breaks for the LNG project.
This is a terrible deal for British Columbians. Subtract a minimum $21.3B from $22B and we barely break even. And that’s just the financial side, the environmental side is an even bigger loser. We don’t get the electricity, instead we get polluted water and air, and we get dead killer whales and other dead cetaceans from all the extra tanker traffic.
The Globe and Mail article says the Institute for Energy Economics and Financial Analysis envisages a looming supply glut of LNG, making the economic case for LNG Canada and the other projects questionable.
Sam Reynolds, a research lead at IEEFA, said it’s a myth that Japan needs more LNG, noting that Japan already sells one-third of its imported LNG. Producing LNG in BC is more expensive compared to other jurisdictions, Reynolds cautions.
We’ve presented all the facts, now it’s time to choose.
The Conservatives and the NDP are both right to prioritize critical minerals including copper and nickel, and to shorten the permitting process which is far too long and involves duplication with the federal government (Bill C-69).
The Conservatives though go further than the NDP by expanding mining where the NDP prohibited it (Banks Island and Vancouver Island). They also recognize the importance of greenfields exploration and need for more “value-added” mineral products” for exports — opening the door to a discussion about a much-needed refinery in BC.
The NDP’s record on mining speaks for itself. There are less mines now compared to when they took power in 2017 — despite massive deficits predicted for copper, silver, graphite and other minerals. Can we trust David Eby when he says the NDP will provide guaranteed permit review timelines for priority critical minerals projects? Or will the party succumb to the interests of anti-mining groups?
It’s great to see John Rustad include nuclear as one of the options for increasing BC’s power supply. For years we have supported nuclear power, especially small nuclear reactors, over boondoggles like Site C and LNG Canada. Unfortunately he is alone on this stance. The NDP says nuclear is too expensive — completely wrong when SMRs are put up against the huge capital costs of Site C and LNG Canada.
It’s also disappointing to see John Rustad embrace liquefied natural gas — the most polluting form of energy, even worse than coal, when the emissions from fracking, transmission and liquefaction are considered.
The environmental and economic costs of an LNG industry in BC are simply not worth the revenue it will supposedly generate.
The Green Party in my opinion is right to oppose LNG, but has lost a major opportunity in failing to support nuclear power. Not only is nuclear suitable for baseload power — unlike solar and wind that the Greens so enthusiastically embrace — it is emissions-free. Time to toss out the anti-nuclear Green policy of the 1970s and consider modern nuclear power that is the most cost-effective and environmentally friendly form of electricity generation, in a province that is going to need it.
And here’s another disconnect with the Green Party. Its platform is heavy on renewable energy and vehicle electrification, but light on mining. Rather than encouraging more mining in BC, the Green platform appears to reluctantly put up with it. The party would “reform” the mining sector by putting up more road blocks — i.e., “Enhance oversight of the mining industry through a robust inspection and audit process” and designate areas off-limits to mining. The farthest it goes in favor of mining is “Engaging in a conversation about the future of critical minerals in BC.” Those same critical minerals that are needed to build electric cars and solar farms.
So who has the best policies for preparing British Columbia for a future requiring more power, and opening up the province to more mining, thereby producing the minerals needed to run and electrify the new economy?
Ahead of the Herd newsletter, aheadoftheherd.com, hereafter known as AOTH.
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