III.T Top Canada court rules in favor of Imperial mine
Thu Jan 21, 2010 12:44pm ESTStocks
Imperial Metals Corp
III.TO
$16.50
+1.07+6.93%12:19pm PST
* Supreme Court rules that Red Chris project may proceed
* Court clarifies that this decision is an exception
* Shares of Imperial Metals up 5 pct at midday (Adds analyst comment, share price move)
By David Ljunggren and Euan Rocha
OTTAWA/TORONTO, Jan 21 (Reuters) - Canada's Supreme Court ruled on Thursday that an Imperial Metals (III.TO) copper and gold project in British Columbia can go ahead, even though a full federal environmental assessment was never carried out.
But the court made it clear that its decision on Imperial's Red Chris project was an exception. It said that, in future, major projects would need comprehensive environmental assessments by both federal and provincial authorities, where required.
Although the victory bodes well for Red Chris, the ruling could mean that many other mining, energy and infrastructure projects will now face additional hurdles.
"This (ruling) is just going to add time to permit bigger projects, given that projects would have to be reviewed both provincially and federally," said Haywood Securities analyst Chris Thompson.
"What this tells me is that there is going to be a big duplication of work, which I think is actually relatively inefficient," Thompson said.
The ruling is a partial defeat for MiningWatch Canada, an environmental watchdog group that said the federal government should conduct its own full environmental assessment in all such cases. For Red Chris, Ottawa carried out a smaller assessment process known as a screening.
"I can see no justification in requiring Red Chris to repeat the environmental assessment process," wrote Justice Marshall Rothstein in the court's unanimous decision.
In a statement, Imperial Metals said the Supreme Court's decision would not affect development of Red Chris and the project would proceed on schedule.
Shares of Imperial Metals, which were halted early in the day, were up more than 7 percent at C$16.57 at midday on Thursday on the Toronto Stock Exchange.
Rothstein noted MiningWatch had appealed the overall assessment process, rather than the specific conclusions of the federal and provincial governments' assessments of Red Chris.
MiningWatch said it views the court's ruling as a victory.
"This landmark decision confirms that the government can no longer shirk the environmental protection duties that Parliament has assigned to it," said Lara Tessaro, a lawyer who represented MiningWatch.
Red Chris, a project in northwestern British Columbia that Imperial acquired in 2007, should produce 1.8 billion pounds of copper and 1.2 million ounces of gold over a 25-year mine life, according to a 2004 study, although the company has said additional drilling suggests the deposit is much larger.
The company's shares have risen more than 150 percent since November, helped by drilling of deeper-level mineralization in the hopes of eventually adding an underground mine to the current open-pit plan.
Imperial Metals received the go-ahead from the British Columbia government after a provincial environmental assessment and then approached the federal government. Ottawa initially said it would have to carry out its own full assessment but in December 2004 decided it would go ahead with the less demanding screening process.
The Federal Court of Appeal said the federal government -- referred to in the ruling as the Responsible Authority (RA) -- had the right to limit the environmental assessment process as it saw fit. The Supreme Court disagreed.
"I am of the opinion that the approach of the Federal Court of Appeal and that advocated by Red Chris and the government cannot be sustained," Rothstein said.
"A close reading of the relevant provisions of the Canadian Environmental Assessment Act leads to the conclusion that it is not within the discretion of the RA to conduct only a screening when a proposed project is listed (for review)."
If a project met the criteria for a full environmental review, "a comprehensive study is mandatory," he added. (Additional reporting by Cameron French; editing by Peter Galloway and Rob Wilson)
