URANIUM MINING IN ATLANTIC CANADA: PROTESTS VERSUS PROFIT

UNCLAS SECTION 01 OF 03 HALIFAX 000036 SIPDIS STATE FOR WHA/CAN AND EB/ESC/IEC USDOE FOR IA (DEUTSCH) E.O. 12958: N/A TAGS: EMIN ENRG ETRD PGOV PHUM CA SUBJECT: URANIUM MINING IN ATLANTIC CANADA: PROTESTS VERSUS PROFIT REF: A. 07 OTTAWA 001201; B. HALIFAX 0013 HALIFAX 00000036 001.2 OF 003 -------------- SUMMARY -------------- ¶1. Considering there is a vociferous and devoted anti-uranium lobby in Canada's Atlantic Provinces, it appears unlikely that the region will be joining the world uranium club any time soon. There are identified commercial quantities of uranium in three of the four provinces that could be developed to meet growing global demand for fuel for nuclear power plants. However, mining companies have run up against government bans and hostile citizen groups which could keep the uranium in the ground. Although this is not the stated policy of any of the governments involved, politicians are faced with weighing the cost of either saying no to the anti-uranium forces or to the companies that want to invest millions in their jurisdictions. END SUMMARY -------------- -------------- OVERVIEW: URANIUM MINING (OR THE LACK OF) IN ATLANTIC CANADA -------------- -------------- ¶2. Skyrocketing prices and increasing global demand for clean energy sources have sparked much interest in Atlantic Canada's uranium deposits. Except for Prince Edward Island which has only trace amounts of uranium, there are known commercial quantities in the other Atlantic Provinces: Newfoundland-Labrador, Nova Scotia and New Brunswick. The full size of these deposits is still being determined, but several companies are keen to start planning for development. At present there is no mining underway in the region. If the anti-uranium forces get their way, there never will be. ¶3. Environmentalists, conservationists and a slew of community and farming groups in each of the provinces have mounted vocal protest campaigns against mining companies and business leaders who want to realize the economic potential from the resource. Coming down in the middle in the debate are the respective provincial governments and one newly-established aboriginal government. So far the politicians have walked a fine line between the two sides: acknowledging the concerns of the anti-mining forces, while at the same time endorsing the industry's assertions that modern technology has lessened the potential environmental and health impacts of uranium mining. While the debate shares these commonalities across the region, the situation in each province is unique and has forced each government to come up with its own strategy for dealing with the issues. -------------- -------------- NEWFOUNDLAND-LABRADOR - STYMIED BY A NEW REGIONAL GOVERNMENT -------------- -------------- ¶4. The Labrador region of the province holds the most promise of any potential uranium development in Atlantic Canada. Since 2005 Aurora, a private company owned by Vancouver and St. John's interests, has been exploring in what is known as the Central Mineral Belt of Labrador, part of the newly designated Inuit territory of Nunatsiavut. (Detailed information about the location and Aurora's activities is available on the company's web site www.aurora-energy.ca). In 2006 the company identified a substantial amount of uranium at two locations on the Belt, Michelin and Jacques Lake. The company followed up those discoveries with another drilling program in 2007 which saw four additional satellite deposits identified. Aurora estimates that the combined deposits contain 133 million pounds of uranium, making the area one of the largest deposits outside Saskatchewan, the province where all of Canada's active uranium mines are currently located (Ref A). ¶5. Aurora's original development plan called for the company to begin the regulatory process by the end of 2007 with an expected start-up date in 2014. However, after a spirited backlash from the Inuit community, the company postponed filing its plan in order to provide residents more information on how it would deal with the problem of drilling waste. But before they could provide the information, the issue ended up with the Members of the Territorial Assembly, who were forced to act to stop a growing rift between those wanting a ban on uranium activities and those wanting to see the multi-million dollar economic benefits accrue to the region from mining the ore. The Assembly failed to resolve the issue. On April 8 the members voted eight to seven in favor of implementing a three-year moratorium on uranium mining in the territory, but in consideration of the exploration activities already underway, the moratorium only targets development, not exploration. ¶6. The Nunatsiavut government officials plan to use the HALIFAX 00000036 002.2 OF 003 moratorium to develop expertise on how to evaluate the impact of such a large scale project. According to our local contacts, however, the Assembly could revisit the issue before the end of the moratorium, especially given the narrow margin of the vote. Aurora is pledging to work collaboratively with government and community leaders on assessing the impact of a development program, which could go a long way in addressing the concerns of the anti-mining side. For its part, the Newfoundland-Labrador provincial government is not getting involved in the issue other than to endorse the Nunatsiavut assembly's right to enact the ban under the terms of its establishment in 2005. They also stress that the current federal and provincial regulatory regimes (which would still apply to any development plan) are stringent enough to ensure that any drilling project will get a full environmental assessment. -------------- -------------- NOVA SCOTIA - UNDER PRESSURE TO SCRAP A 25-YEAR BAN -------------- -------------- ¶7. The province of Nova Scotia has had a moratorium on uranium exploration and mining since 1982, when a small but influential protest group convinced the government of the day to stop a company from mining in a location in central Nova Scotia. Subsequently, world uranium prices slumped and the issue remained dormant until 2005 when a new local company called Tripple Uranium Resources (www.capellaresources.com) started prospecting on acreage near the abandoned site. Despite having the word "Uranium" in its name, the company (a subsidiary of Vancouver-based Capella Resources) asserts that it is not looking for uranium at all, but iron ore, copper and gold. In fact, the company readily acknowledges that under the terms of the 1982 ban, it will have to stop its exploration work if it encounters any mineral deposits exceeding 100 parts per million of uranium. ¶8. Coincident with the resurrected interest in uranium was the revival of the anti-uranium protestors who are now asking the question of what will happen to the ban if Tripple hits a large amount of uranium. The protestors allege that Tripple is already pressuring the provincial government to lift the ban in anticipation of finding commercial quantities of uranium. The government has made no secret that senior officials have met with Tripple representatives, but as one of our senior government contacts told us officials are always willing to meet with any company interested in developing the province's mineral resources. For now the government's policy is an expressed desire that both sides engage in an informed debate on the issue; however, an all-party committee of the provincial legislature recommended that the government maintain the ban. The committee recommendation reinforces the lobbyists' position that the government should enshrine the ban in legislation. Currently it is contained in a cabinet decision which mining opponents assert could be easily be rescinded. -------------- -------------- New Brunswick - Demands for a Ban in a Nuke-Friendly Province -------------- -------------- ¶9. Tripple Uranium is also one of the companies involved in uranium exploration in New Brunswick, along with CVRD-Inco. The two companies are in competing prospecting activities in southern New Brunswick. Both are keeping the results of their respective exploration programs secret for proprietary reasons, but the anti-uranium forces in that province have already started pushing the provincial government for a ban on further exploration and future development. That appears unlikely given the province already has signed exploration agreements with the companies involved. Furthermore, New Brunswick has the region's only nuclear power station and is actively considering building another one (Ref B). Nonetheless, the government is attempting to respond to the opposition forces by holding public information sessions beginning in June. That announcement on May 8 did little to placate the lobbyists who have already condemned the province for deciding to hold the sessions after various exploration programs are already underway. -------------- COMMENT - OH THE POLITICS OF IT ALL -------------- ¶10. In the end it will no doubt be politics, not exploration results, which will determine the speed of development of the region's uranium resources. As our senior Nova Scotia government contact commented, there is a certain political timidness in governments even talking about these issues, and for good reason. Any government leader who comes down on the wrong side of the issue could expect to pay a heavy political HALIFAX 00000036 003.2 OF 003 price at the ballot box. On the other side, companies have already invested millions of dollars in exploration work so far and will want to do more than just look at prospecting results. Also, the governments are cognizant of how barriers to uranium development might be perceived in the mining industry as a whole, given that there is growing demand for the region's other minerals. ¶11. For the immediate future, areas to watch will be: how Aurora fares in its consultative work with the Nunatsiavut Assembly in Newfoundland-Labrador and if that will result in another vote on a ban; whether there are any moves to make Nova Scotia's ban permanent; and in New Brunswick, how the government fares in its upcoming information sessions. As these events unfold, they should shed some light on when Atlantic Canada might be joining the world uranium club, if at all. END COMMENT FOSTER