Flathead Valley ban deals another blow to British Columbia’s mining reputation, says AME BC CEO

Industry experts believe the provincial government circumvented its own expropriation rules when it kicked miners out of Flathead Valley last year.

A decision that forced miners out of southeast B.C.’s Flathead Valley last year continues to reflect poorly on the industry, experts say. The Association of Mineral Exploration BC (AME BC) said last month that it was “appalled by the lack of due process” the government showed in compensating mining companies that had invested millions in the region prior to transforming it into a de facto park.

Gavin Dirom, president and CEO of AME BC, believes the provincial government circumvented its own expropriation rules when it announced a memorandum of understanding (MOU) with the State of Montana to protect the Flathead from mining projects.

“It’s disappointing to see a lack of due process and transparency,” Dirom said. “This is a political decision and that goes against the public land-use plan.”

The decision to protect the valley, which is often referred to as the Serengeti of North America for its large mammal populations, sent several mining companies reeling last year. Vancouver-based Eastfield Resources (TSX-V:ETF), MAX Resource Corp. (TSX-V:MXR) and Cline Mining (TSX:CMK) had projects in the area.

AME BC has said the estimated value of “sunk costs” in payments made to government in the region was approximately $17 million. The organization also believes the area holds some $7 billion worth of undeveloped resources.

“Receiving a fraction of sunk costs is like winning the lottery jackpot, having the lottery corporation change its rules and only refunding the cost of the lottery ticket to you,” AME BC chair Mona Forster said in a release.

Dirom said the government had little or no dialogue with miners before the decision was made, and is similar to a 2008 ban on uranium mining in the province.

Both decisions, Dirom believes, reflect poorly on B.C.’s ability to attract mining investment.

“It hinders us from being a great jurisdiction,” Dirom said.

Earlier this month, the Fraser Institute released its annual survey of the best mining jurisdictions around the world.

B.C. ranked 36th out of 79 regions thanks to ongoing concerns about the security of land tenure in the province.

Fred McMahon, the study’s co-author, said decisions like the Flathead continue to scare miners away.