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Taseko Mine's proposed Prosperity Project would require draining Fish Lake, located 125 kilometres southwest of Williams Lake in the traditional territories of the Xeni Gwet'in First Nation.

Xeni Gwet'in First Nation

Stephen Harper has the summer to decide whether hundreds of new jobs created by a proposed $800-million copper-gold mine in the struggling British Columbia Interior outweigh the significant negative environmental impacts, including the destruction of a fishing lake.

A federal review panel ruled late Friday that the Prosperity copper-gold mine would have "significant adverse environmental effects" on several factors, including fish, fish habitat, grizzly bears and first nations' use of the land for traditional purposes.

But the open-pit mine, which would use the lake to store waste tailings from the copper and gold processing, has already been approved by the B.C. government. While the B.C. assessment foresaw harm to the environment, it concluded that was outweighed by a predicted $5-billion economic injection over the 20-year life of the mine and $600-million of revenue for various governments.

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The federal environmental review, which held 30 days of public hearings this spring, didn't have a mandate to assess economic benefits, so the question is left to Mr. Harper, backed by Environment Minister Jim Prentice.

Hanging in the balance is the economic future of an area of the province ravaged by the mountain pine beetle, which has gutted the once-prosperous forestry business. B.C. is on the cusp of a potential mining boom, sparked by rising commodity prices, and the government sees the industry as a major salve for rural regions.

The heart of the controversy - beyond opposition from local first nations - is Fish Lake and Little Fish Lake, home to 90,000 rainbow trout, which would be destroyed and replaced by an artificial lake proposed by project backer Taseko Mines Ltd. But the new lake would support only 20,000 trout and the review panel was skeptical the new ecosystem would work.

Bill Bennett, B.C.'s Mining Minister and a former fishing guide, will push Ottawa to give the green light to the mine, located about 250 kilometres north of Vancouver.

"I'm not rape and pillage. I'm a life-long conservationist," Mr. Bennett said in an interview. "If this was what some people have said it is, an environmental travesty, I wouldn't support it either."

A final answer will come by early September, as cabinet has 10 weeks to make a decision, a spokeswoman for the review panel said.

"We frankly would like to see this project happen," Mr. Bennett said. "I'll be discussing this with my federal counterparts to whatever extent they're willing to talk to me about it."

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Richard Walker, a spokesman for Natural Resources Minister Christian Paradis, said the Canadian Environmental Assessment Agency is independent and he did not comment on what the government will do.

It will be a difficult decision for Ottawa: Two years ago, after a joint provincial-federal review ruled against a similar mine in B.C., the project was quashed.

The $190-million proposal wanted to expand the existing Kemess copper-gold mine in northern B.C., and, in that case a lake would also have been destroyed to store mine tailings. After the joint review, which weighed the economy and the environment, said no, the provincial and federal governments agreed with the decision.

"I'm not aware of any project being approved by the federal government in the face of a panel finding significant adverse environment effects," said Jay Nelson, a lawyer for the Tsilhqot'in National Government, representing first nations in the region.

Chief Joe Alphonse of the Anaham Indian Band said the panel report points to an ultimate victory for his people.

"Today, we are rejoicing," he said. "The independent panel's conclusions give us some faith in the process, that it was the right decision to participate in the federal assessment. This is also a message to industry that companies need to show respect to first nations when they try to start projects on aboriginal land."

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Local opinion in the sparsely populated region is divided. The mine is located southwest of Williams Lake, a city of about 11,000, and Mayor Kerry Cook on Friday afternoon called it a "very important project" she wants to see proceed.

Taseko Mines, a small Vancouver company, has already spent more than $100-million on the project. Stock of Taseko had tripled from last summer through this April, buoyed by prospects of approval and higher copper prices, but has fallen since. The plunge accelerated this week and is now down about a third from its recent peak, as investors grew wary of an adverse decision from Ottawa.

Taseko has said building the mine would create about 375 construction jobs, and operating it about the same number. All of them would be high-paying, Mr. Bennett noted. There would be another estimated 600 indirect jobs, spun off in the community, Taseko has said.

In a joint statement late Friday, numerous business groups in B.C. said the project is needed for jobs and to improve the economy.

"Any major mine has significant environment effects," said Pierre Gratton, president of the Mining Association of B.C. "We need some strong economic anchors in different regions of the province, especially given the downturn in forestry."

As of late Friday, Taseko officials had not returned calls for comment, nor put out a press release regarding the federal panel's 296-page report.

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