TORONTO (Reuters) - The exploration rush to Canada's resource-rich North is fueled by the promise of huge rewards, but miners also face big risks if they fail to carefully consider aboriginal participation in projects.
There is a high cost for developers who don't balance the needs of commerce with the region's communities, delegates at the annual Prospectors & Developers Association of Canada conference in Toronto were told.
They range from delays to protests and court challenges.
"It's become more important because of the flurry of activity," said Hans Matthews, president of the Canadian Aboriginal Minerals Association.
"A lot of companies are not fully knowledgeable on how aboriginal peoples use the land ... Just because of the sudden flurry of mining exploration, companies don't necessarily take the time to (consult)" with native Indian or Inuit communities.
Platinex Inc. is proof that problems can be catastrophic. The junior explorer has claimed it will go under unless it gets access to its Big Trout Lake property in Ontario's far north.
In an ongoing legal tussle, the Kitchenuhmaykoosib Inninuwug First Nation has won a temporary injunction stopping Platinex from drilling, said Kate Kempton, a lawyer representing the aboriginal group.
The two sides will square off in court again next month to determine if the injunction will extend until a trial begins, which could be years away, she said.
NO FREE LUNCH
Miners can take a page from the growing number of companies that work effectively with aboriginals, said Matthews.
Teck Cominco Ltd., the world's biggest zinc producer, said its Red Dog mine in Alaska represents "the granddaddy of aboriginal participation."
Teck has set lofty goals, such as hiring as many people it can from native Alaskan development company NANA Regional Corp., which owns the land. It also arranges scheduling around hunting season, shuts roads during caribou migration, and spends C$1.5 million annually on training workers.
"If you're going to be accepted in the region, you need to provide benefits. It's that simple, there really is no such thing as a free lunch," said Jim Kulas, who oversees environmental and public affairs at the Red Dog mine.
"The more benefits you provide, the more you're going to be accepted."
Robin Goad considers himself lucky that his company, Fortune Minerals Ltd., is dealing with a native band that has already negotiated several deals with diamond miners for such projects as Diavik and Ekati.
"The Tlicho have a very good understanding about our capacity ... and that our project is very different from the diamond projects," he told Reuters on the sidelines of the conference.
"The stakes, in terms of the revenues, are much different. So the benefits that we're talking about doing together are manageable from our perspective."
Goad's company expects to start production at its gold-cobalt-bismuth Nico property, about 160 km (100 miles) north of Yellowknife, the capital of the Northwest Territories, in 2010.
"It's a lot better than it was 10 or 15 years ago," Matthews said of corporate sensitivity to aboriginal needs. "Mind you, we have a lot more players nowadays ... there's (still) a long way to go."