British Columbia

Uranium mine lawsuit costs B.C. $30M

The B.C. government has agreed to pay a mining company more than $30 million after it halted a uranium mining proposal near Kelowna in 2008 — and the NDP mining critic is blaming Liberal incompetence and interferance for the costly settlement.

The B.C. government has agreed to pay a mining company more than $30 million after it halted a uranium mining proposal near Kelowna in 2008 — and the NDP mining critic is blaming Liberal incompetence and interference for the costly settlement.

NDP energy critic John Horgan says the government was forced to settle with the company after Kevin Krueger, who was minister of state for mining at the time, issued a ban on uranium mining shortly after Boss Energy filed for permits for its Blizzard deposit.

"It was Mr. Krueger that made the announcement of a moratorium well before there were any policy foundations for that," said Horgan.

The Blizzard uranium project is located 49 kilometres southeast of Kelowna. (Boss Power Corp.)

"It was just out of the blue. He had no backing to make that statement and it cost the people of British Columbia 30 million bucks to cover up his incompetence."

The 2008 amendments to the Mineral Tenure Act issued by Krueger created a ban on uranium exploration and mining in B.C. Krueger said at the time the decision supported the commitment of B.C.'s energy plan not to develop nuclear power.

A year later the ministry directed the Chief Inspector of Mines to halt all work on existing claims.

Court documents show the government acted against the advice of the Ministry of the Attorney General, which noted Boss Power had a Notice of Work that the mines inspector was legally obliged to consider.

Government ignored its own legal advice

After the ban was announced the Boss Power Corp. announced it was suing the government for the ban, and for misfeasance in public office for refusing to issue permits for the site.

"We uncovered evidence that the province interfered with the autonomy of the chief inspector of mines, whose job it was to review our permits," said Rogers.

"The Province has admitted in court filings ... that certain senior officials in the former Ministry of Energy Mines and Petroleum Resources did in fact unlawfully interfere with the statutory authority of the Chief Inspector of Mines by ordering him not to consider the Boss Power Corp. application for permits and that approval for the work was not to be granted," said a statement issued by Boss in January.

NDP Energy Critic John Horgan believes that call came from upper levels of the government.

"The Government of B.C. has admitted that two of their employees deliberately disregarded their obligations and I can't imagine public servants doing that unless they were being pressured by their political masters."

Last minute settlement

The case appeared to be heading for a month-long trial in B.C. Supreme Court set to begin this week.

But then instead of fighting in court, at the last minute the province announced it had reached a negotiated settlement with the company on Wednesday.

Boss CEO Randy Rogers told CBC the offer came literally on the courthouse steps.

"The settlement came an hour and a half before we were to start leading our evidence in the court case, so it literally settled on the courthouse steps," he said.

Energy and Mines Minister Rich Coleman confirmed the last-minute deal.

"We've been watching it through and there was a settlement made on the courthouse steps rather than going to trial," said Coleman on Friday.

According to the statement issued by the government, the province will pay Boss Energy $30 million for the mineral rights to the Blizzard uranium deposit, plus legal costs.

The company says the uranium would have been mined with an open pit, similar to a gravel operation.

"Basically a gravel pit environment. Very easy to mine, very quick to mine," said Rogers

Last month Premier Christy Clark has promised to open up eight new mines in B.C. by 2015 as part of her job creation strategy.

Canada produces about one-third of the world's uranium, which is used in nuclear power plants to produce electricity.

A 2009 study found the drinking water in several small communities in B.C.'s Okanagan Valley have several times the allowable limit of uranium.