Does regulation delay mines? A timeline and economic benefit audit of British Columbia mines

Of the 27 mines in this study, only 14 are in production (as of April 2024) or have produced in the past. The remaining 13 mines have never operated. Three of these mines will not operate in the near future as their certificates expired. A certificate can expire if a mine does not substantially start its operations—a threshold set on a case-by-case basis by the provincial government (BC EAO 2021a)—by a certain date, typically 5 years after a certificate is granted, or up to 10 with a one-time, 5-year extension (BC EAO 2016).

Among the 13 mines that have never operated, three were approved since 2018 and were projected to have opened by 2022: Red Mountain Underground Gold and Burnco Aggregate in 2018 and Blackwater Gold in 2019. The remaining 10 mines were granted a certificate by the provincial or federal government before 2018, with the oldest mine, Tulsequah Chief, receiving a certificate in 2002 (to open a new mine at the site of the old Tulsequah Chief mine, which was built in the 1950s, operated for several years, and abandoned). There are several reasons why these 13 mines have never operated (Table 1, see also Table S5). The most common reason is economic, namely changing market conditions and commodity prices. Two mines cited regulations as a contributing factor to their delay: Blackwater Gold faced delays in receiving a permit; and Murray River Coal cited regulatory delays alongside other factors including needing test samples, waiting for better market conditions, controversy over plans to hire foreign workers, and delayed financing (Table S5). There does not appear to be a correlation between commodities produced by each mine and their failure to operate (Table 1).

Among mines that have operated at some point during their lifetime, delays in construction or opening are common. Only half of the 14 mines that have operated or are currently operating opened on time (Table 2). We were unable to determine the reason for four mines’ delayed start based on our search of media articles and corporate statements. Two of the seven mines were delayed due to economic issues like financing or technical issues (Table 2 and Table S6). One mine was delayed by a regulatory factor: the approved Red Chris project was subject to a series of court challenges beginning in 2006. Federal courts ultimately concluded that the government failed to adequately assess the project. As with the mines that have never operated, there does not appear to be a correlation between commodities produced and if a mine opened.

In Canada, for a mineral to be designated critical, it must have a supply chain that is threatened, and have a “reasonable chance of the mineral being produced by Canada” (Natural Resources Canada 2024a). The Canadian government also says minerals deemed critical must meet one of the following additional criteria: “be essential to Canada’s economic or national security”, be required for the national transition to a sustainable low-carbon and digital economy” and/or “position Canada as a sustainable and strategic partner within global supply chains” (Natural Resources Canada 2024a). Thirty-four critical minerals currently meet these criteria (Natural Resources Canada 2024b). As the definition itself suggests, not all minerals on the list are essential to the energy transition, they can also include ones important for national defense and other industrial uses (see Simandl 2023).

Nine mines in our dataset were approved to produce one or more minerals on the critical mineral list, including copper, molybdenum, and/or zinc. Only four of these mines have operated, all four copper-producing. Two opened on schedule. Regulatory factors were a source of delay for one of the two delayed mines, Red Chris; Mt Milligan was delayed by non-regulatory factors (Table 2). Only two of these copper mines are currently operational (the other two have temporarily closed). The other five mines producing minerals on Canada’s critical mineral list have never operated (see Table 1). None publicly cited regulations as a factor in their non-operation.

Both mines that have and have never operated can temporarily close by entering into Care and Maintenance (C&M), a project phase in which mines temporarily cease construction or production, leading to layoffs for most employees and a halt to economic activity (and with it, tax revenue). Mines typically enter C&M due to changing market conditions, especially with declining commodity prices. There is no limit for how long or how many times a mine can enter C&M. Eleven of the 27 mines assessed have entered this phase, spending an average of 9 years and 66% of their lifespans in this phase (see Table 3). As of April 2024, eight mines are currently in C&M, five of which have never operated (see Table 3). Among these eight, all but Murray River Coal are substantially started, meaning their certificates will never expire, even while they remain non-operational. Murray River’s certificate is set to expire in October 2025 after the province granted a 5-year extension to its certificate deadline in 2020. Looking at the relationship between commodity produced and mines that enter C&M, five produce coal, four gold, and four copper (Table 3, note some mines produce more than one commodity, i.e., copper and gold). Mines that produce gold and/or copper appear to spend the most time in C&M.

Four mines have operated and were projected to be closed by 2023: Willow Creek, Wolverine, Kemess South and Huckleberry Copper and Gold. None has closed. Huckleberry and Kemess South entered C&M before their projected closure dates due to a price drop in copper and a depletion of deposits respectively. Huckleberry entered C&M in 2016, five years before its anticipated closure date of 2021, while Kemess South entered this phase in 2011, two years before it was supposed to close in 2013. Either of these mines could reopen anytime. The remaining two mines, Willow Creek and Wolverine, are still operating past their anticipated closure dates of 2013 and 2016. Both have spent time in C&M: eight years and two years respectively. Three other mines (Tulsequah Chief, Hermann and Roman) were supposed to be closed by 2023, but never operated.

Mining companies regularly apply for more time to substantially start their mines. In our dataset, twelve mines applied for an extension of the deadline of their project certificate. An extension was granted by the province in all but one of these cases; the lone rejection, to the Burnco Aggregate Mine, was because the mine’s proponent applied too close to the original certificate’s deadline. Eight of the twelve mines that applied for a certificate extension have never operated.

Production levels are a reasonable proxy for mines’ financial performance. Mines’ production levels are related to the number of people they employ, the profit they make, and the indirect or spinoff economic activity they generate. Lower production suggests fewer jobs, less spinoff or indirect economic activity, and scarcer tax revenue. Of the 27 mines in our dataset, we were able to compare 24 mines’ forecasts to actuals (Table 4 and Table S1). On average, these 24 mines produced 23% of what they predicted (−77% in Table 4). When we exclude mines that have not operated, the 11 operating mines with sufficient data produced 51% less than predicted in their EAs (−49%). There does not appear to be a correlation between commodity produced and lower than expected production levels.

Mining companies operating in BC are not required to report employment at their mines, and rarely do so on a voluntary basis. We were therefore only able to audit employment predictions for 17 of the 27 mines (Table 4 and Table S2). On average, these 17 mines produced only 12% of the predicted jobs (−88% in Table 4). When we exclude mines that have not operated, the 4 operating mines with sufficient employment data employed 53% fewer workers than predicted in their EAs (−47%). Half of the mines that have operated employ or have employed unionized labour (BC LRB 2024; Table S4). Five mines currently have collective agreements in place, while one mine, Kemess South, had such an agreement from 2002 until it entered C&M in 2018. Wolverine had a collective agreement in place from 2016 to 2021 but did not renegotiate the agreement once it expired. The proponent (or the parent company of the proponent) of a mine appears to be correlated with unionization; if the employees at Company X mine are not unionized, the employees at another Company X mine are also not unionized. This pattern holds in all cases except the mines operated by Teck Resources, some of which are unionized and some not.

Tax revenue data were the most challenging to obtain. There are a few reasons for this. Until the passage of the federal 2014 Extractive Sector Transparency Measures Act (ESTMA) requiring annual tax revenue reports for mines and other extractive projects, mining companies were not required to publicly disclose their annual tax payments. Additionally, mining companies often own several mines and only report taxes in aggregate. And, finally, in some cases mining projects do not include projected tax revenues in EA applications, or projections are aggregated (e.g., they include personal income tax), making predictions impossible to audit. We were therefore only able to audit tax predictions for 14 of the 27 operational mines (Table 4 and Table S3). On average, these 14 mines produced 0% of the predicted taxes (−100% in Table 4). These results are skewed by the number of non-operational mines, though, which by their non-operation, are delivering none of their forecasted tax revenues. Only one of these mines with enough data to compare has operated: Brucejack mine has delivered seven % of annual projected taxes (−93% in Table 4).

The narrative from the mining sector is that regulatory barriers are inhibiting mines’ timely opening and economic performance. The MABC (2024, 5) argues that “lengthy timelines for mine permitting and authorizations continue to slow project development and are a barrier to investment” and that “permitting and authorization” constitute an obstacle to “unlocking BC’s critical minerals opportunity”. Positions such as these suggest economic benefits are at risk due to regulatory barriers. The federal government echoes this mining industry position in its Critical Minerals Strategy, stating “Although responsible regulations are vital, complex regulatory and permitting processes can hinder the economic competitiveness of the sector and increase investment risk for proponents” (Natural Resources Canada 2022, 24).

It is true that mines in BC are often delayed. Our timeline audit shows that 13 out of the 27 mines BC approved through its EA process between 1995 and 2022 have never gone into production, despite having begun construction in several cases. While it is the case that delays can happen pre-EA (Orenstein 2023), in the planning phase that is outside the scope of this study, our research shows that once the EA is initiated, regulatory delays (e.g., waiting for a permit) were a factor for only two of these non-operational mines, and in one case, Murray River, were just one factor out of many, the rest of which were economic. Of the 14 mines that have operated, half were delayed in opening. Only one of these delays, Red Chris, involved regulatory factors: Mining Watch challenged the government’s approval of the mine in court. For both non-operational and delayed mines, the most prominent publicly stated reasons for non-operation and delay are economic factors such as commodity prices and market conditions. In terms of critical minerals, nine mines were approved to produce critical minerals, of which five have never operated. None listed regulations as a reason for failing to open. Our research also reveals that mining companies frequently receive extensions to their project certificates, to have more time to start mine construction. Forty-four % of the mines in our dataset applied for an extension of their project certificate’s deadline; three-quarters of these mines have not yet begun operating. Companies’ frequent applications to extend the deadline for the start of their projects after they receive EA approval suggests mining projects are not by and large restricted and slowed by government checks and balances.

It is surprising that almost half the mines approved since 1995 have yet to operate. Although the average total financial cost of an environmental assessment in BC is unknown, the BC EAO charges $250,000 total in fees at three different stages of the EA process, with the largest fee, $150,000, coming at the EA application stage (BC EAO 2021b). Beyond the fees from the EAO, proponents hire consultants to conduct the actual EAs. This adds further costs for mining companies, ranging from thousands to millions of dollars each year. Teck Resources, for example, spent $904 CAD million in 2022 on consulting and contractors across its mining operations around the world (Teck 2023). EA costs are not only borne by proponents; taxpayers foot the bill for BC EAO operations, for which the 2024/25 budget is over $16 million (BC MECC 2023). EAs also involve additional costs, including the time of Indigenous people, scientists, and members of the public who participate in consultation and hearings, which can include reading hundreds of pages of assessment materials.

The mining sector and the government both predict billions of dollars in revenue from critical mineral mining over the coming decades. MABC projects the aggregated economic impact in terms of output, GDP, job creation, and tax revenue from 16 potential critical mineral mines (of which two are extensions of already-existing mines and 14 are new) in BC, claiming that if all mines are approved, they will generate an aggregate of $24.8 billion in GDP over the next 24 years (Mansfield Consulting 2023). The numbers generated in the report made headlines in Canadian news as an indication of what MABC president and CEO calls a “generational opportunity” (Pawson 2024), a claim the federal government echoes (Natural Resources Canada 2022, 1). These projections and economic forecasts made in mines’ EAs are persuasive for regulators. Jobs in particular are regularly cited in the EA documents and are central to project approvals.

Our economic benefit audit raises questions about these projections. While hampered by lack of data (accessing only 55 out of 81 data points), our results show underperformance across all three indicators—mines are producing only 23% of output and 12% of employment than predicted. The limited tax data suggest under-delivery to state coffers by almost 100%. Due to lack of transparency with operational mines, the above data are skewed towards non-operational mines, for which it is easier to obtain data—when the mine hasn’t opened, the production, employment and taxes are zero, or close to it. When we exclude the non-operational mines from our calculations, the picture changes, with mines producing 51% less of output, 53% less employment, and seven % of tax revenue.

These findings are consistent with other studies that suggest proponents are over-promising to their advantage in the approval process, both in Canada (Joseph et al. 2020; Gunton et al. 2021) and globally (Meyersfield 2017). Studies of coal mining in northeast BC, specifically, have found mines generated less tax and employment than predicted, while generating benefits for shareholders far from the mines (Collard et al. 2023; see also Gunton 2003). This distributional injustice—unmaterialized local benefit alongside benefits for investors who live far from the site of extraction—can drive local opposition to mines (MacPhail et al. 2022).

The lack of publicly available data on actual mine performance is another significant weakness with the regulatory system, suggesting a lack of transparency about whether benefits materialize and who receives them. Governments do not require companies to report on economic benefits they derive from extracting public resources, and companies are not held accountable for their predictions, although those predictions are persuasive in the regulatory approval process. Without access to this data, neither regulators, Indigenous nations, local communities nor the public at large can assess the economic impacts of current projects. Perhaps even more crucially, this constrains regulators, Indigenous nations, local communities and the public’s ability to evaluate proposed projects (Collard et al. 2023). Accurate and accessible data on economic performance is a cornerstone of sound planning. Transparent reporting on economic benefits is particularly crucial in the current moment of enthusiasm concerning critical mineral mining. Yet none of the recent revisions to EA in BC or federally implement this change, and neither governments’ critical mineral strategies advocate such a requirement.

Our research also disputes the MABC’s assumption that the 16 critical mineral mines in its study will be consistently operational over time, generating economic benefits without disruption. BC mines’ frequent temporary closures tell a different economic story—a story of boom and bust that should be front and centre in EA projections of economic benefits, but is not. Over 40% of BC mines approved since 1995 have entered care and maintenance (C&M), or temporary closure, spending an average of 9 years closed. Entering into C&M has significant socio-economic and ecological consequences. Economically, closures cut off tax revenues, but even more immediately consequentially, workers are laid off. These job losses “ripple out” beyond workers directly employed on mine sites. Workers in supporting industries are also laid off, as well as workers whose jobs involve goods and service provision. Dallaire-Fortier (2024) estimates that for every job lost by a mine closure, as many as 10 other jobs are lost. These job losses are particularly hard-hitting in remote and/or “mono-industry” communities (Keeling and Sandlos 2017; Rodon et al. 2022; Dallaire-Fortier 2024). Even if mine closure is temporary, mining’s boom-bust dynamic leads to numerous adverse social impacts, including family stress, violence towards women, addiction issues, and burdens on health and social services (Shandro et al. 2011).

Ecologically, mines’ temporary closure prolongs environmental impact by delaying reclamation. Of the four operating mines projected to close by 2023—Willow Creek, Wolverine, Kemess South and Huckleberry Copper and Gold, all of which have spent time in C&M—none has closed and been remediated. One of these mines, Kemess South, has even achieved its production goals, but remains in care and maintenance, unremediated. This leads some scholars and commentators to refer to C&M as a regulatory “loophole” for deferring or avoiding cleanup costs (Pepper et al. 2021; Singleton-Polster 2021; Gotlieb 2023). These sites sit idle but remain highly disturbed and often polluted, unavailable as habitat for endangered species, and potentially contaminating water and wild food supplies, which can also mean delaying Indigenous and treaty rights to harvesting and hunting (Keeling and Sandlos 2017; Singleton-Polster 2021). Singleton-Polster (2021, 56) describes this loophole as “slow closure” spinning off what Rob Nixon (2011) calls “slow violence”: a gradual, attritional violence that while less spectacular and immediately catastrophic than a large-scale disaster, is no less potent in its damage (also see Sandlos and Keeling 2016).

Meanwhile, as mines wait in the wings to be built, or sit half constructed or idle but unremediated, other extractive activities often proliferate on the landscape. Over the average nine years mines have spent in C&M, significant land use changes can occur, contributing to cumulative environmental impacts. The roads and infrastructure built to service mines are known to have extractive industry growth-inducing effects—e.g., the power and roads to service a mine induce new forest companies to extend into a new area (Johnson et al. 2020). This is especially an issue for mines that begin construction (including potentially building this growth-inducing infrastructure), receive a substantially started designation, but never operate. Under previous EA Acts in BC, once a substantially started designation is achieved, mines’ certificates never expire, enabling what can be thought of as “slow opening”. This is an ecological concern because as years or even decades pass, social, economic, and ecological conditions may become significantly different than when the government issued the approval, in particular given potential cumulative effects from the expansion of other extractive industries (sometimes due to the growth-inducing effects of mine infrastructure) and often fast-moving impacts from climate change, such as wildfires, droughts and floods. BC’s new EA Act (2018) does enable the government to withdraw a mining company’s certificate if the mine fails to open after 20 years, even if the mine has a substantially started designation. Although a lot can still change in 20 years, the revision suggests the government is aware of the problems with mining companies sitting on a certificate that never expires, able to begin construction or operation decades after approval. These ecological issues with “slow closure” and “slow opening” are especially concerning in the context of new critical mineral mines, given that many of the most promising battery mineral sites overlap with the habitats of several highly endangered species, and with many poorly protected or unprotected ecological regions (Lawley et al. 2022).

The present study suggests that the current government and corporate push to streamline mine permitting and approval to fast-track critical mineral mines is misguided. This is not because the current approval process works well to mitigate mines’ adverse effects and should be preserved as it is. Studies show EA in BC and Canada is not adequately identifying and mitigating adverse effects—neither social (Dempsey et al. 2023) nor ecological (Murray et al. 2018; Collard et al. 2020; Doebeli et al. 2021; Collison et al. 2022; Muir 2022; Cameron and Kennedy 2023). Our research points to further problems with the regulatory system. First, the ecological impacts of mines are extending in time, partly because of “slow closures” made possible under the C&M loophole and “slow openings” made possible by permits that last for twenty years or longer. In a moment of climate change and rapidly changing, increasingly industrialized landscapes, these slow openings constrain the ability to plan, be responsive and adapt to this changing environment. Second, a lack of publicly available data inhibits regulators and the public's ability to assess whether predicted economic benefits, which powerfully sway regulatory decisions, are actually realized. In many cases, this means that Indigenous nations and BC citizens do not know how many economic benefits are being delivered for the use of resources and the damage mining causes to ecosystems, in some cases in violation of Indigenous rights (e.g., Muir and Booth 2012). Third, the data we do have show systemic over-promising of economic benefits in the EA process. As a result, the study suggests the BC EA process is regularly leading to approval of economically unviable mines. This is more than just an economic concern. Economic benefits are arguably the primary if not only justification for mines’ approvals, even when projects are predicted to have significant adverse impacts, making inflated economic projections also a serious ecological concern. Rather than focusing on delays or red tape supposedly slowing mine approvals, our study suggests policy-makers should focus on urgently addressing these three regulatory problems if Canada and BC are to realize this “generational opportunity” in ways that account for rapidly changing ecosystems under climate change and ensure economic benefits are equitable and truly generational.