Cline Mining Corporation Sues B.C. Over Flathead Mining Ban

By Beacon Staff

Cline Mining Corporation has filed a lawsuit against the province of British Columbia seeking $500 million to compensate for revenues it says it lost because of a mining ban in the Canadian Flathead Valley.

Conservationists on both sides of the border are pointing to the litigation as a reminder of how much more work needs to be done in protecting the Flathead and addressing mining laws.

Toronto-based Cline filed the civil claim on May 28 in the Supreme Court of British Columbia. Cline claims its rights under coal licenses and coal license applications on three properties were “expropriated, taken or injuriously affected” by the B.C. government’s passing of the Flathead Watershed Area Conservation Act, which prohibits mining in the Canadian Flathead.

“Cline is also seeking compensation including, but not limited to, the loss of the value of the licenses and applications for licenses for these properties, estimated at in excess of $500 million on a net present value basis over the expected lives of the mines,” the company said in a news release.

In February 2010, B.C. Premier Gordon Campbell and Montana Gov. Brian Schweitzer signed a Memorandum of Understanding (MOU) to halt mining and drilling in the Flathead Valley. Efforts to stop resource development in the Flathead date back decades.

On Thursday, Schweitzer said the Cline lawsuit has no effect on the agreement with British Columbia.

“The State of Montana isn’t a party to this lawsuit,” the governor said in a statement. “Our agreement with the Province of British Columbia to protect the North Fork of the Flathead River remains in full effect. This is a separate legal matter that will be sorted out in Canadian courts.”

The B.C. Ministry of Energy and Mines has been negotiating with mining companies to compensate them for losses stemming from the ban. The ministry released a statement on May 29 acknowledging it isn’t close to reaching a deal with Cline.

“There are 10 mineral tenure holders in the Flathead Watershed Area and we’ve settled with six of them for a total of $4.9 million,” the B.C. Ministry of Energy and Mines said in the statement. “We are far apart on negotiations with Cline, which is one of the tenure holders, and have been trying to come to a reasonable settlement.”

“There are cases where government makes decisions to balance development with environmental values and land and resource management initiatives,” the statement continued. “The establishment of the Flathead Watershed Area Act is one of these decisions.”

The Canadian Flathead is the source of headwaters feeding into Montana’s North Fork Flathead River drainage. The three Flathead coal properties cited in the lawsuit are Lodgepole, Sage Creek and Cabin Creek.

Canadian conservation groups released a statement saying the lawsuit “highlights the urgent need for Mineral Tenure Act reform in B.C.” Sierra Club BC and Wildsight said the litigation “follows a $30 million settlement the B.C. government paid to Boss Energy in October for an undeveloped uranium deposit near Kelowna, after B.C. banned uranium mining.”

“B.C.’s outdated Mineral Tenure Act puts the provincial government and taxpayers on the hook for financial compensation,” Sierra Club BC spokesperson Sarah Cox said. “It creates strife and conflict around the province.”

Michael Jamison of the National Parks Conservation Association’s Glacier Field Office called the lawsuit a “disappointing reminder that the 30-year dispute over the trans-boundary Flathead still hasn’t been resolved.”

Even with the 2010 MOU, Jamison noted that only British Columbia has legislated the ban into law. Montana Sens. Max Baucus and Jon Tester introduced the North Fork Watershed Protection Act of 2011 but the legislation has failed to gain traction in Congress.

“We made a promise in the MOU to protect the watershed: BC did legislate it, Montana did not,” Jamison said. “It’s just one more reminder that we need to finish the job. I think a lot of people declared victory. This is a reminder that there’s work to be done.”

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