Huge subsidies to Japanese mining
firms in northeastern coal sellout

By MAURICE RUSH

‘The deal announced Monday
by premier Bill Bennett for the ex-
port of massive quantities of nor-
theastern B.C. coal to Japan is
béirlg hailed by the provincial
government and big business as
one of the largest single export
contracts ever negotiated in Can-
ada. What itis, in reality, is one of
the biggest sellouts of B.C. re-
sources in history.

-And what’s more, judging
from the few details made public
so far, it also constitutes one of
the biggest subsidies of public
funds ever paid to private de-
velopers in Canada’s history. We
are not only giving away a vital
and important resource; we are
paying for the privilege in huge
sums of government money for

| which the taxpayers will pick up

the bill. It’s Christmas once again
for the big mining corporations
and Japanese steel monopolies as
we make them one of the biggest
gifts in history.

One would imagine that in a
deal of this proportion the B.C.
public would be informed of the
details, but they are not. The deal
was negotiated in the board
rooms of the giant mining com-
panies, Japanese steel monop-
olies and in the backrooms of the
B.C. legislature. They have re-
leased only the skimpiest details
to the public. What we know
about it so far is the following:

An agreement was entered into
between two Canadian mining
conglomerates, Teck Corp., and
Denison Mines Ltd., with a Jap-

pon Kokan of Tokyo to export
_7.25 million metric tonnes a year
for the next 15 years of high-grade
metallurgical coal from the Su-
kunka area in northeastern B.C.
Both the federal and provincial
governments are to undertake

anese consortium headed by Nip- |

Subsidies estimated at $500 mil- .
lion by the province and $300 mil-_

lion by Ottawa. Other estimates
put the total subsidy at over $1
billion.

The subsidies are to provide the
infrastructure for the project: a
new port facility to be built at

Prince Rupert, anew railroad line

into the coal fields and upgrading
of the CN line to Rupert, high-
ways, and even the establishment
of a brand new town at Tumbler
Ridge. For all of this the projected
costs are very vague. Who will
pay for the 1,000 rail cars to haul
the coal? How much will the new

“ townsite cost and who will pro-

vide the social services and ameni-
ties which the workers will need?

According to B.C. industry
minister Don Phillips, B.C. will
receive $870 million in income

from sales, property and coal’

taxes over 15 years. To get that, in
excess of $1 billion dollars and
probably much more during the
15-year life of the agreement will
be spent. In short, the deal is a
large subsidy to the participants
from the two levels of govern-
ment. The Japanese steel monop-
olies will get the coal at the low
royalty of $1.85 a tonne. Com-
pare that with the $9 a tonne
charged by the Alberta govern-
ment. ;

The subsidy will be many times
larger than that in the East Koote-
nay coal deals. At present every
tonne of coal shipped from
southeastern B.C. is subsidized to
thetune of $10to $15 atonne. Ac-
coprding to Vancouver Sun col-
umnist Marjorie Nichols, the sub-
sidy for northeastern coal will bea
whopping $105 to $120 a tonne if
calculated on the basis of an $800
million subsidy. How’s that for a
deal just to provide coal for Jap-
an’s steel mills so that we can later
buy back steel at high prices?

The main beneficiaries of the
giveaway are giant Canadian and
Japanese resource companies.
The two major Canadian com-

panies are Denison Mines and
Teck Corporation.

Denison, headed by Stephen
Roman, controls at least 10 mines
in Canada and is based in coal,
copper and uranium. It is involv-
ed in northeast coal through
Quintette Coal Ltd. in which it
has a controlling interest. How-
ever Denison also has influential

partners in Quintette.
Broken down, here is how

and nickel to copper and mer-
cury. It also controls the Afton
copper mine in the Kamloops
area.

The terms of this deal could
well be the precedent for other big
deals in the future. It has been
known for some time that the ma-
jor economic strategy of the pro-
vincial government is to step up
the export of coal and hydro-elec-
tric resources. It has already em-

are watching the present deal with
hungry eyes, hoping that it will set
a precedent for future deals to ex-
port B.C. coal at huge profits to
themselves.

The U.S. oil multinationals
have moved into the B.C. coal
picture in a big way because they
see coal as assuming greater im-
portance in the race for world en-
ergy supplies. B.C. coal is a rich
prize. It ranks with the world’s

-- No deal of such consequences should

_be allowed until there is a full debate in
the legislature and all the facts disclos-
ed to the public. . . The NDP should de-
mand that the deal be stopped. And if
the government refuses there should
be a provincial election in which re-
source development would be a major

issue.

MAURICE RUSH ... Com-
munist Party provincial.
leader.

Quintette looks: 38.25 percent
owned by Denison; 17.5 percent
owned by Tokyo Boeki; 17.5 per-
cent owned by Mitsui Mining;
16.75 percent owned by Imperial
Oil; 10 percent owned by two
French firms, Cogema and Char-
bonnages de France.

The Japanese firms get it both
ways. They will profit with Deni-
son on the sale of the coal, and
they will get cheap subsidized coal
for their steel plants in Japan.

Teck Corporation is headed by
the Right Honorable D. R. Mich-
ener, former governor-general of
Canada, who is chairman of the
board.. Former Liberal minister
Robert Andras is another senior
official. Teck controls at least 15
major mining operations in Can-
ada, from Newfoundland to B.C.
including everything from zinc

barked on a 10-year $18 billion
program to dam every major
waterway to ensure large scale ex-
ports of hydro to the U.S.

The Socred government lifted
the freeze on coal leases in Feb-
ruary, 1979 and since then the
major U.S. oil companies have
moved in and have cornered all
potential coal fields through six-
year leases. By the end of 1979
Gulf Oil received 401 leases and
had applications in for 492 more.
Shell had been issued 38 leases
and had 26 pending; Esso had one
issued and had 86 pending, and
British Petroleum had 35 issued
and had applications for 37 more.

There is hardly a coal bearing area _

left in B.C. which has not already
been grabbed up through these
leases granted by the provincial
government. The oil companies

Carbon Creek

Prince George

Peace River

Anzac Spur

B.C. Railway iine

best, being low in sulphur con-
tent, which is important in these
days of acid rain, and it has low
ash content, excellent coking
quality for steelmaking and high
value as thermal coal.

At a.time when the provincial
government finds it necessary to
cut back on teachers’ pensions, to
boost rates to the public on car in-
surance, hydro and natural gas,
to shift increasing burdens on
homeowners.and municipal gov-
ernments and school boards, it
spends hundreds of millions of
dollars to subsidize the export of
B.C. coal to Japan.

Apart from all its other nega-
tive features, the development be-
ing undertaken in northern B.C.
threatens massive pollution of the
environment and rides rough-
shod over the interests of Native
peoples in the region who have
owe ignored in the present

The rich coal resources of nor-
theastern B.C., taken together
with the natural gas and forest re-
sources in the region, could be uti-
lized to develop large-scale manu-

_ facturing and processing indust-

ries, including a modern steel
mill

The hundreds of millions of
dollars poured into the area by
Victoria and Ottawa could be the
means of opening up an era of ge-
nuine expansion of the B.C.
economy to create thousands of
new permanent jobs.

A joint federal-provincial pro-
gram which would place the re-
sources of the area under public
ownership and formation of a
Crown corporation to undertake
developments to process those re-
sources would be much more in
the interests of Canada and B.C.
than the present sellout deal.

This coal deal with Japan
should be scrapped. No deal of
such consequences should be al-
lowed until there has been a full

session of the legislature to con-

sider the terms of the deal.

The NDP, which formerly
spoke out against the coal deal
when it was first suggested,
should now demand that it be
stopped. And if the government
refuses, they should demand a
provincial election in which re-
source development would be a
major issue.

PACIFIC TRIBUNE—JAN. 30, 1981—Page 3