Mountain Province expects no delayMountain Province expects no delay
2006-10-06 15:42 ET - Street Wire
by Will Purcell
Mountain Province Diamonds Inc. does not think a judicial review of the permitting process will materially delay the Gahcho Kue project. The company believes De Beers Canada Inc. had good reason to apply for a hearing, after the Mackenzie Valley Environmental Impact Review board (MVEIRB) decided to conduct a comprehensive environmental impact review, rather than a less intensive environmental assessment. Some work is now on hold until after the hearing, which will not come until November or December. There is increasing concern the wait will delay the permitting process. The request is well worth the uncertainty, says Patrick Evans, president of Mountain Province.
The potential delay
Mr. Evans said De Beers anticipated getting the required permits in 2008, and the work was running ahead of that schedule. As a result, the partners do not anticipate the dispute with the MVEIRB will have a material impact on the timing of the permitting.
MVEIRB spokesman, Martin Haefele, said the board would be able to work quickly once a decision is made, but it was unable to set up a panel or complete the terms of reference until then. The ultimate ruling could complicate matters further. Mr. Evans acknowledged the judicial review process was outside their control, but he thinks there will be no delay to the start of construction, currently planned for 2009.
The request
Mr. Haefele said a panel review would realistically take a few more months than the environmental assessment, and that seems a minor addition to a process that can consume up to two years. In fact, the potential delays created by waiting for a judicial review might eat up any time saving obtained from a favourable decision, but time is not the only issue at play.
Mr. Evans said De Beers had two major concerns with the board's decision to take Gahcho Kue through an environmental impact review. De Beers and Mountain Province believe the MVEIRB short-circuited the required process by not completing an environmental assessment and the partners do not want to allow any opponents to come back in later years and dispute the validity of the Gahcho Kue operating permits. "The first and primary reason on insisting on an environmental assessment is to ensure your permits are water tight."
The second reason De Beers wanted an environmental assessment was to identify all the relevant issues and therefore limit the scope of the inquiry. "Once the issues have been identified through an environmental assessment, it is a finite process," Mr. Evans added.
De Beers and Mountain Province worry that if the issues remain undefined, an objector can introduce any issue at any point throughout the review. "In 12 months time, one could raise an issue that has never come up before and it would have to be considered in depth." As a result, De Beers wants to ensure the environmental process is finite.
The MVEIRB said it decided to refer Gahcho Kue to a panel review after hearing from a wide spectrum of residents. From that, the board concluded the proposed mine was "likely to be cause of significant public concern." Mr. Evans said he would be surprised if there was not significant public concern over the development of any 20-year mine, but he does not believe the concerns are materially different from those that cropped up with Ekati, Diavik and Snap Lake. Those three projects received slightly less intensive environmental assessments.
Instead, Mr. Evans believes the issue revolves around access to federal funds that would allow participants to take part in the review process. There is more federal cash available during a panel impact review than during an environmental assessment, and Mr. Evans thinks that was a factor in the decision. Residents in remote communities would have to pay their way to Yellowknife to attend environmental assessment hearings, but the government would cover transportation costs for residents to attend an environmental impact review hearing.
Mr. Evans said if the MVEIRB follows the environmental assessment process as De Beers wants it to, and the board then decides to proceed with a full panel impact review, the partners would have no objection. "It would be a complete process then, and more importantly, a finite process."
Mountain Province was unchanged at $3.88 Thursday on 33,000 shares.