Closure of Huckleberry Mine to impact regional district’s tax base

Huckleberry Mine announced earlier this year that it would be shutting down all operations by Aug. 31, 2016.

Flavio NienowLakes District News


Huckleberry Mine announced earlier this year that it would be shutting down all operations by Aug. 31, 2016.

Since it isn’t clear what will happen after operations at Huckleberry shut down, the Regional District of Bulkley-Nechako (RDBN) is preparing for three possible scenarios that could have a significant impact on the RDBN’s property tax base.

In the first scenario, Huckleberry is put on care and maintenance, which would  allow for a reasonably quick restart in the event that metal prices improve. This scenario would have little impact on property assessments.

The second scenario involves the permanent closure of the mine. In this scenario, property assessments are reduced by approximately half.

The third scenario involves the demolition of the mine. This would be a final decision that would not allow a reversal. Therefore, the assets would be written down to land value only. In this scenario, the impact on the RDBN’s converted property assessments is $5.8 million, which represents 1.06 per cent of the total. This would be equal to about a $55,000 reduction in taxes.

Steve Robertson, a spokesperson for Huckleberry Mine, told Lakes District News that Huckleberry remains on track with the plan that was announced at the beginning of the year.

“The operation will continue to process stockpiled material until the end of August, at which time the mine will enter a care and maintenance phase,” he said.

According to a report prepared by Hans Berndorf, former Financial Administrator for the RDBN, the usual pattern for mines in similar situations is that they are put on care and maintenance for a year or two, followed by permanent closure if metal prices do not improve over that time.

“Permanent closure may be eventually followed by demolition, but this is a last resort that usually takes a number of years to finalize,” says the report.

After Huckleberry’s announcement earlier this year, Robertson said management would keep trying to find a way to keep operations going, and that it would be dependent on an increase in the value of copper.

Huckleberry Mine is an open pit copper mine located 88 km from Houston. The mine suspended its pit operations in January 2016 as declining world demand saw copper prices plummet. Approximately 100 workers were laid off in January and another 160 workers will lose their jobs when the mine shuts down in August 2016.

Imperial holds 50 per cent interest in Huckleberry Mines Ltd., owner/operator of the mine. The remaining 50 per cent is held by the Japan Group, comprised of Mitsubishi Materials Corporation, Dowa Mining Co. Ltd. and Furukawa Co.