Investigation: Canadian Mining Interests Using Questionable Financial Methods While Southeast Alaska Watersheds At Risk

Southeast Alaska’s river systems have always been at risk from mining operations just across the Canadian border in British Columbia. An Environmental Investigation Agency report reiterates that there are threats for those salmon-running watersheds via Canadian mining interests’ questionable financial methods with the country’s government agencies. First, here’s a summary of the study by EIA:

Ponzi Scheme-like Tactics Found at the Core of Canadian Mining Operations; Alaska-Canada Transboundary Watersheds at Stake 

Washington D.C. – A vital ecological area shared by British Columbia (B.C.) and Southeast Alaska faces escalating pressure from Canadian gold mining exploration companies propelled by the obscure, Ponzi scheme-like “Prospect Generator Model (PGM).” The latest investigation titled Bad Prospects, by the Environmental Investigation Agency (EIA) uncovers a web-like network of more than 450 Canadian companies currently linked through the PGM, focused on claims staking and mining exploration across a transboundary watershed region known to the mining industry as the “Golden Triangle.” These “prospect generators” are mining not gold as much as “mining” retail investors and uniquely Canadian tax benefits. 

The EIA estimates that 20% of all B.C. mining claims in the province are located in this transboundary watershed region. Over 80% of these B.C. claims are within five kilometers of a river or stream, about 18% of claims are on top of glaciers, and over 100 B.C. mining projects are in some phase of exploration, proposal or operation in this region. These mining companies rely on a continuous stream of funds from smaller investors to pay handsome executive salaries, dig hundreds of kilometers of holes, build infrastructure such as roads, bridges, and camps along fragile ecosystems like retreating glaciers and wild salmon habitat, and establish joint ventures and option agreements with other companies. Mining-friendly laws like the colonial B.C. Mineral Tenure Act and incentivizing tax policies in Canada and B.C., like Flow-through Shares and the Mineral Exploration Tax Credit, have yielded C$500 million in forgone taxes annually and make this salmon-rich region a particularly attractive place for mining executives and major investors to deploy this financial approach as part of a new speculative gold rush. 

The hope of retail investors is that one of these prospects will one day become a highly profitable mine, meaning large financial returns. However, according to the Association for Mineral Exploration, only one in 10,000 claims becomes an operational mine, which means average investors, Canadian taxpayers, Indigenous peoples, rural residents, and U.S. communities and economies downstream are left shouldering the financial and environmental risks and costs of the Prospect Generator Model and B.C. gold mine exploration. Meanwhile, a small cohort of distant mine owners and major investors get rich while carrying almost no risk. Such imbalance distorts the risk-to-reward ratio and raises questions about the long-term financial sustainability for investors and the social responsibility of mining enterprises. For ten years, Alaska Tribes, municipalities, commercial fishermen, lawmakers, and tens of thousands of U.S. and Canadian citizens have expressed concern about Canada’s industrialization and pollution of shared wild salmon rivers. Two large-scale B.C. mines with tailings dams currently operate and one abandoned B.C. mine has been polluting for over 65 years in the region. Alaska Senator Lisa Murkowski recently wrote to President Biden urging the U.S. to not support any mine in Canada until the calls of Alaska Tribes and communities for international watershed protections are addressed. 

“The prospect generator model in the transboundary region serves to move risk that should be private onto the public, and public taxpayer funds into private hands,” said CT Harry, EIA Senior Ocean Policy Analyst. 

Given the myriad adverse social and environmental impacts perpetuated by the PGM and the lack of benefits to all but a few, Canada’s incentivization of new gold exploration projects with big tax breaks for mine proponents in the Alaska-B.C. transboundary region signals a lack of international collaboration and action on major climate and environmental issues. 

There is growing consensus that global gold stocks are more than adequate, with over 90% of newly mined gold used for jewelry or bullion, not renewable energy production. Moreover, irreversible impacts to Indigenous communities and this biodiversity hotspot are increasing and researchers predict thousands of kilometers of new wild salmon habitat will emerge here this century as glaciers melt — if they are not first dug up for mine exploration and development. In light of these challenges, it is imperative to revise or terminate British Columbia and Canadian policies that foster PGM-driven exploration and to enforce regulatory changes that prioritize Indigenous rights and environmental protection. 

Read the full report and recommendations. 

There’s also a explanatory video you can watch here.

Here’s some reaction, starting with Salmon Beyond Borders:

Investigation reveals highly speculative financial model fuels gold mining boom at headwaters of Canadian/Alaskan Taku, Stikine, and Unuk Rivers

Environmental Investigation Agency deep dive reveals British Columbia, Canada companies are mining investors and tax benefits more than gold — while everyday Americans and Canadians shoulder the financial and environmental risks

JUNEAU, ALASKA —  The Environmental Investigation Agency (EIA) has released a new report  showing that Canadian mining companies use a highly speculative economic model to fuel gold mine staking and exploration at the headwaters of the Taku, Stikine, and Unuk, the transboundary rivers flowing from British Columbia (B.C.) into Southeast Alaska. This activity is harmful to land and people on both sides of the border, threatening water quality, wild salmon habitat, and ways of life. 

The report shows that this Canadian modern-day gold rush enriches the distant owners and major investors of mining companies while passing on the financial and environmental risks to Indigenous peoples, rural residents, average investors, Canadian taxpayers, and U.S. communities and economies downstream.

“Frankly, we were shocked at what this report revealed,” said Salmon Beyond Borders Advisor Heather Hardcastle. “The EIA investigation shows that the B.C. and Canadian governments, while avoiding international collaboration for shared salmon rivers, are instead working hand-in-glove with Canadian mining companies. It’s incredibly dismaying to see how cozy this relationship is, when Alaskans have no say in the process, nothing to gain, and everything to lose.”

In response to the report’s findings, Salmon Beyond Borders calls on President Joe Biden to listen to Senator Lisa Murkowski and immediately ban U.S. funding for any mine in Canada until conditions are met. Murkowski’s recent request of Biden was prompted by Biden’s March 2023 speech to Canadian parliamentarians indicating that U.S. dollars will fund Canadian mining companies and mines in Canada. 

“This report reveals that, shockingly, B.C. and Canada are financially supporting more than 100 Canadian mine projects, or potential mines, along our transboundary wild salmon rivers. Meanwhile, Indigenous nations and communities downstream are shouldering the ecological, social, and economic consequences,” said Salmon Beyond Borders Director Breanna Walker. “Senator Murkowski rightly pointed out to President Joe Biden that it’s time for the U.S. to tell Canada that we will not fund any mines in Canada until B.C. and Canada clean up their act and meet us at a table to work together.”

The conditions under which U.S. funding for mines in Canada could potentially resume are: First, Canada cleans up its Tulsequah Chief mine, which has been abandoned and polluting international waters for more than 65 years. Second, Canada, the U.S. government, Indigenous nations, and communities together establish an international framework for preventing and resolving disputes in these transboundary waters, most likely under the International Joint Commission and the Boundary Waters Treaty of 1909. 

What’s at Stake

The Taku, Stikine, and Unuk rivers flow from their glaciated headwaters in British Columbia, Canada, over the political border, spilling out into the rich, protected waters of Southeast Alaska’s Inside Passage. For thousands of years, the Taku, Stikine, and Unuk have been corridors of culture and commerce, home to all five species of wild Alaska salmon. Now, they are divided by a political border that, upstream in Canada, allows virtually unlimited staking and vast industrial development. In contrast, downstream in the United States, the rivers and their watersheds are largely protected. 

Two large-scale B.C. mines with tailings dams currently operate in the region. The investigation showed:

• More than 100 B.C. mine projects are in some phase of exploration, proposal, or operation in the transboundary region. 
• Over 80% of B.C. mine claims in the region are within 3.1 miles (5 km) of a river or stream; 
• 18% of B.C. mine claims are currently covered by glaciers; 
• More than 450 mining companies are linked to transboundary mine exploration and development; 
• Most of these companies generate no revenue; 
• Canadians are shelling out half a billion dollars annually to mine executives and major investors.

The Environmental Investigation Agency is the same nonprofit that released the highly influential Pebble Tapes in 2020. 

Salmon Beyond Borders is a campaign of SalmonState.

Read EIA’s report.

Read EIA’s press release.

Please contact mc@salmonstate.org for a media kit with still images and b-roll.

Salmon Beyond Borders is an Alaska-based campaign working with fishermen, business owners, community leaders, and concerned citizens, alongside Tribes and First Nations on both sides of the Alaska-B.C. border, to defend and sustain our transboundary wild salmon rivers, jobs, and way of life. 

We’ll update with any additional statements.