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Sacred Headwaters region in BC. The area is important to the Tahltan Nation because the headwaters of three important salmon rivers – the Stikine, Skeena and Nass – are there.

The B.C. government has devised a unique solution to head off conflict between a First Nations community and the developers of a proposed a coal mine, using its Crown corporation BC Rail to buy and hold coal licences during talks with the Tahltan Nation on managing the resource.

The province is paying $18.3-million to buy 61 licences from Fortune Minerals Ltd. and POSCO Canada Ltd. in a region dubbed the Sacred Headwaters in northwest British Columbia. The area is important to the Tahltan Nation because the headwaters of three important salmon rivers – the Stikine, Skeena and Nass – are there.

The companies will be able to buy back the assets at their original price if they reach an agreement with the Tahltan in the next 10 years.

Anthracite coal deposits that the companies want to mine are in an area within the Sacred Headwaters called the Klappan, which has been identified as having significant cultural significance to the First Nations community.

The situation has raised tensions between First Nations and developers. In recent years, First Nations critics of the coal proposal have blocked Fortune Minerals from proceeding with work on the deposits.

Energy and Mines Minister Bill Bennett said the Tahltan Nation now have a veto over development of those 61 coal licences, which he described as a "beautiful" solution to an otherwise inevitable conflict.

Speaking to reporters at the legislature in Victoria, Mr. Bennett said he has been involved in the file for a decade and had originally been working toward finding a way to get the coal out of the ground. However, he said it became apparent to him that this one potential coal mine would come at too high a price and was getting in the way of other rich developments in the Tahltan's traditional territories.

"I think it's nearly a perfect resolution to a very difficult circumstance," he said. "They are faced with a huge amount of potential development," he said, reciting a string of potential mine projects.

"It worries them. They live in an area that until recently wasn't on the [electricity] grid, they live a traditional lifestyle and they have indicated to me it's all happening too fast."

Mr. Bennett defended the use of taxpayers' dollars to reach a resolution, saying he fully expected the companies would sue the Crown if they could not open a mine and develop their coal licences.

In a statement, the Tahltan Central Council welcomed the plan, with council president Chad Day saying it will provide abundant time to reach an agreement.

"This latest news gives us years – rather than weeks or months – to develop a sustainable long-term management plan and agreement for an area that is so important to Tahltan people," said the statement.

"Using our government-to-government relationship with the province, we can now work with our people to make sure the Klappan is properly managed and protected for our children and our children's children."

The statement noted that community members may still see a small amount of activity in the area as Fortune Minerals finishes restoration work from previous exploration efforts.

B.C. NDP mines critic Norm Macdonald said the project has always been "contentious," so the approach announced Monday, at least, allows it to be paused rather than killed. "I don't know how else one would more forward," he said in an interview.

"It can only move forward if people in the region support it. I don't think that's the case right now," he said. "Until you get to a place where people have confidence in it, there are going to be challenges," he said.

Mr. Macdonald said his party would take time to review the proposal and raise relevant issues as they become clear from that review.

The province essentially will hold the coal licences in trust, while working with the Tahltan on a government-to-government discussion of how to manage development in the region.

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