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B.C. pays off miner for loss in protected Flathead River area

The B.C. government has paid off a bankrupt junior coal mining company for the loss of its claims in the protected Flathead River Valley.

Bill Bennett, the mines minister, approved the $9.8-million settlement to compensate for the money that Cline Mining Corp. spent developing its claims. The minister said on Thursday the bigger mining industry players had avoided the region because it was long known to be environmentally sensitive.

"I really didn't believe there would ever be a mine permitted there. I don't think any government in B.C. would have done that," Mr. Bennett said.

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Green Party MLA Andrew Weaver said the settlement highlights the need for B.C. to reform the law that allows companies to stake mineral claims on Crown land online, without regard for environmental values or First Nations land claims.

"The staking process is absurd: Give me $25 and I can make a stake online in some pristine area and then maybe get compensated," Mr. Weaver said in an interview on Thursday. A better process, he said, would allow government to vet applications before a stake is approved. "We need mining, but it can't be done with a Wild West mentality."

Cline Mining filed a $500-million civil claim against the B.C. government after the province, under international pressure, agreed to protect the wilderness valley, which ties into a protected area in Montana. An agreement was signed on the eve of Vancouver's 2010 Winter Olympics and was passed into law under the Flathead Watershed Area Conservation Act.

Mr. Bennett said he advocated for protection of the "spectacular" Flathead in the southeast corner of the province, but said it was not an easy decision. "It's the most difficult thing I've done in the mining area, to actually recommend that we not allow mining."

But with pressure from U.S. President Barack Obama and environmentalists on both sides of the border – the Flathead River flows south into the protected area in Montana – he saw little chance of any mine winning approval. That was confirmed when he consulted with Teck Resources Ltd., the province's biggest coal producer, and learned it had decided to avoid the region.

It is not the first time the mining-friendly B.C. Liberal government has had to shell out to industry for its conservation efforts. In 2011, the province paid Boss Power Corp. a settlement of $30-million because it banned uranium mining in 2008, just three days after the firm filed an exploration application for an area in the mountains east of Kelowna.

Mr. Bennett said the staking system is not at fault. "You can't do any work until you get a permit. We have to do a good job in the permitting phase."

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Cline Mining would have spent millions drilling only after getting the required permits, and Mr. Bennett said he believes the owners genuinely thought they could build a coal mine despite the widespread opposition.

An environmentalist who spearheaded the protection of the valley called the compensation reasonable, noting that conservation groups paid the provincial government $10-million to help defray costs.

"The Cline claim being resolved is another positive step forward," said Harvey Locke, an adviser to the Yellowstone to Yukon Conservation Initiative. "Cline staked their claim at a time when it was not off-limits to staking. ... I'm not appalled that they get their money back."

Mr. Locke said potentially significant coal seams in the valley remain open to mining. Ottawa has said it will not sell federal land parcels known as the Dominion Coal Blocks, but Mr. Locke said the 2010 promise has yet to be enshrined in legislation. "That's the next thing that needs to happen."

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