How Co-Ownership Built a Strong Relationship Between an Indigenous Community and a Mining Company

This article is part of our series on responsible mining solutions. The push for clean energy is fueled by a growing demand for minerals, but conventional mining has a track record of harmful social and environmental impacts. Here is another potential solution to that problem.

It’s estimated that 54 percent of transition mineral projects around the world are located on or near the lands of Indigenous peoples. That means working with Indigenous nations — and obtaining free, prior and informed consent to explore a mineral deposit — is paramount to the clean energy transition.

If we want a cleaner energy grid — and things like electric vehicles, solar power and battery storage — we need minerals like copper, lithium and nickel.

The pursuit of one good, however, must not compromise another. The push for renewable energy should not come at the expense of the rights and freedoms of Indigenous peoples.

The mining industry is awakening to the fact that it needs the consent, cooperation, and collaboration of the Indigenous nations on whose lands they operate to extract and process minerals, even when federal or state regulations are not in place.

Legacy mining issues include human rights abuses and environmental disasters, along with corruption, elaborate tax evasion schemes and suing countries in international court, so communities are understandably cautious when considering a mining project. One potential solution to managing the mining industry and Indigenous nation relations is through co-ownership. 

What is co-ownership?

Co-ownership provides an equity stake in the company, as well as a seat at the executive table. That way a community is not just aware of company decisions that affect them, they can actually influence those decisions. Communities not only share the profits of the project, they also contribute funds and risk losses.

In mining, this is very rare. Only a handful of projects have some semblance of co-ownership. The environmentally disruptive nature of mining projects, immense start-up capital required, volatile nature of mineral markets, and often decades-long permitting processes are some of the factors that prevent communities from engaging in co-ownership with mining companies.

But in renewable energy projects, co-ownership models are more common. Solar and wind projects are much less disruptive to the natural environment than mining is. And they require less start-up capital and permitting, contributing to a more easily accessible and attractive investment opportunity for local communities.

In Canada, over half of the renewable energy projects launched between 2010 and 2020 on Indigenous territories were wholly or partially Indigenous-owned.

The case of Skeena Resources and the Tahltan Central Government

Skeena Resources is exploring a gold-silver mine at Eskay Creek, which sits on Tahltan land in Northwestern Canada. As conversations and the relationship between the two parties grew, the Tahltan Central Government eventually made a $5 million CAD ($3.71 million USD) equity investment in Skeena Resources in 2021. This co-ownership agreement is one of the first of its kind in mining.

“Skeena’s leadership recognizes that communities have to benefit from these projects, or there is no reason to support them,” said Allen Edzerza, Tahltan Elder. 

Edzerza sits on the Tahltan Elders Council and has led negotiations with Canadian governments and industry. He spoke to TriplePundit as a community leader, not in any official capacity representing the Tahltan Government.

“I’ve visited the Skeena mine,” Edzerza said. “I’ve looked at how they plan to deal with acid rock and tailings, and all of that seems like a strong plan. They’ve worked with us to protect some lands, and they’ve hired Tahltan into senior positions in their company. One would hope that this relationship will continue to evolve and build trust with each other.”

The Skeena project is still in exploration but will move into production in the coming years.

“The Tahltan have a piece of equity in the company now, but we fully expect that’s not the end of the road or the total sum,” said Justin Himmelright, senior vice president of external affairs at Skeena Resources. “That was the exploration stage, and now we’re moving into a producing mine model, and those discussions are going to continue.”

Coordinating with the Tahltan, “has been tremendously helpful in streamlining and taking a lot of the friction out of all of our regulatory submissions,” Himmelright said.

The benefits of working so closely with the Tahltan go beyond just the regulatory streamlining.

“There's an inherent value that I don't think you can quite put a finger on, but it's the relationships,” Himmelright said. “It’s the ability to work closely with people around common goals and to share aspirations with each other. Trust and respect build fantastic productive relationships when it comes to advancing projects and initiatives together.”

While recapping a seven-year relationship in a few paragraphs misses the nuance involved, whenever there were disagreements between Skeena and the Tahltan, their common goals allowed them to overcome those differences.

“Just like any relationship where the parties involved have trust and respect for each other, you have the capacity and the desire to sit down and have honest conversations to achieve some kind of reasonable outcome that works for both parties,” Himmelright said.

“When you get a mining company coming in like this, it's like a marriage,” Edzerza said with a smile. “You’re going to be together for a long time — maybe 20, 30 or 40 years. You have to learn how to dance together. You have to learn how to talk to each other in a respectful way and say, ‘Hey, I have a problem. Let’s figure this out.’ And that goes both ways.”

Replicating the co-ownership model 

While Skeena is by no means a small company, its current market capitalization is $1.26 billion CAD ($933 million USD), in the mining world it is relatively small. That, in part, allows the company the flexibility and freedom to pursue this type of innovative collaboration with the Tahltan — something that might be more difficult for larger companies to do.

The Tahltan will look to build on the agreement with Skeena when they enter negotiations with some of the mining giants beginning to show interest in the territory.

“There are over 100 exploration companies on our territory,” Edzerza said. “The Skeena project is large, but it’s small compared to the other ones like Seabridge’s KSM project or the Galore Creek project. Those are monster-type mines.”

The Skeena mine at Eskay Creek has measured and indicated reserves totaling about 4 million ounces of gold, and 100 million ounces of silver. The KSM project boasts about 100 million ounces of gold, 400 million ounces of silver and 20 billion pounds of copper. 

The Galore Creek project is smaller than KSM, but is a split-ownership undertaking between Newmont and Teck, two of the mining industry’s top heavyweights.

“What's happening in our territory is the big boys are taking over all the projects,” Edzerza said. “But it's going to come down to how sustainable their projects are for us to provide consent. And it's going to require them to recognize our jurisdiction and authority. We own the minerals, not the province, and not the guys who stake the claim.”

While it remains to be seen how the negotiations with the “big boys” will progress, for Skeena, the decision to enter co-ownership was pretty straightforward.

“When they approached us to say are you willing and interested to go down this somewhat experimental and new path, unequivocally and very quickly, our answer was yes,” Himmelright said. “Number one, it’s the right thing to do … This community feels the effects of the project the most, so they should be front and center in any decision-making that affects them … And if you’re looking for the dollars and cents support for this, you only have to look at the trend of Indigenous participation in every industry in Canada to understand very quickly that we are moving into a UNDRIP world.”

UNDRIP, the United Nations Declaration on the Rights of Indigenous Peoples, assures and protects the sovereignty of Indigenous communities, their land, their resources and their right to self-determination.

“It is making a wise investment today to achieve a standard that might not be the norm now, but it is going to serve you well as the regulatory and Indigenous rights landscape evolves in Canada,” Himmelright said.

Skeena demonstrates the kind of relationship that is possible with Indigenous communities as the world’s demand for transition minerals ramps up. The hope is that more agreements can be founded on the mutual respect, trust and ownership seen in the Skeena-Tahltan relationship.

“Indigenous governments are capable of balancing the economic benefits of a project versus the potential consequences to the environment,” Himmelright said. “If you want to get right down to the heart of what UNDRIP is, it’s about being respectful for nations to make decisions for themselves.”

Whether to host mining projects on their land is a decision that each Indigenous government will have to make for itself. How they structure those agreements is also up to their choosing, but a co-ownership model could represent the more just and equitable option that Indigenous governments are looking for.

“If you ask me what the priority was for Indigenous peoples, I'd say the re-establishment of our sovereign nation,” Edzerza said. “We own the lands and the resources, and we have the jurisdiction and authority to make our own plans and resource decisions.”