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Agreement Compensates Companies As Part Of Protecting Flathead Headwaters From Mining
Posted on Friday, February 25, 2011 (PST)

Another chapter has unfolded in the running effort to ban mining in the Canadian headwaters of the Flathead River basin, with Montana Gov. Brian Schweitzer announcing this month a deal that will compensate two mining companies for investments they’ve already made in the drainage.

 

The Nature Conservancy of Canada and the Nature Conservancy of Montana have agreed to split the costs of compensating the Cline Mining Co. and Max Resource group for about $10 million in “sunk costs,” Schweitzer told reporters at Flathead Valley Community College.

 

“This is all they will be paid for ... they have agreed with the province of British Columbia that is all they will be compensated for,” Schweitzer said of the mining companies.

 

The announcement came just four days shy of the one-year mark of Schweitzer and British Columbia Premier Gordon Campbell announcing a memorandum of understanding that would among other things prohibit mining in the Canadian drainage that feeds Montana’s North Fork Flathead River. That arrangement came after 30 years of Montana efforts to prevent a series of mining projects that posed water pollution risks in Montana’s Flathead basin and impacts to transboundary wildlife populations.

 

“This is a great day for the people in both the Montana and Canadian Flathead,” Schweitzer said. “This has been a long time coming and this announcement finally seals the deal. I have to thank Premier Campbell who has done the heavy lifting. Years ago he gave me his personal commitment to work with us to protect the Flathead, and he has stuck to it through thick and thin.”

 

For provincial officials, Schweitzer said, the hitch in the agreement was providing some measure of compensation to the mining companies that had been authorized to proceed with exploration and early development on mines that had yet to be permitted. Originally, those costs were estimated to be as high as $17 million, but most recently are expected to be around $9.4 million, Schweitzer said.

 

“This is a debt that is owed,” said Schweitzer, who characterized it as a good deal, considering that the BC provincial government has essentially forfeited somewhere in the range of $5 billion to $7 billion in royalties had Cline’s coal mine and Max Resource’s gold mine gone into production.

 

He also noted that the Nature Conservancy was involvement was crucial, considering that Congress and various federal agencies would not come up with the money.

 

Montana Sens. Max Baucus and Jon Tester made successful efforts to terminate mining claims in Montana’s North drainage, but Schweitzer emphasized that mining on U.S. Forest Service and state lands west of the North Fork River were really not an issue in the memorandum of understanding. That’s because a judge ruled in 1988 that mining leases for those lands that were issued illegally, and all the leases would have expired by 1994 even without the ruling.

 

“No one since 1988 has proposed any development there,” Schweitzer said.

The governor credited Gary Doer, Canada’s U.S. ambassador, with spurring along the Nature Conservancy solution.

 

Kat Inhoff, Montana state director for the Nature Conservancy, described the deal as a “top-drawer priority” for the organization, largely because the transboundary North Fork is one of the few intact ecosystems remaining in the lower 48 states. The North Fork River is unimpeded by dams, the drainage is rustic and undeveloped, and it is home to the full suite of predators and other wildlife that existed there a century ago.

 

“You don’t have many of these opportunities in a lifetime,” said Inhoff, who anticipates the organization’s fundraising campaign to get underway immediately.

 

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