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Will KGHM sell its Ajax mine property near Kamloops?

The Polish-based company announced on May 13 it would be selling it smaller mines outside of the European country.
ajax file pic

Reuters in Europe reported on Thursday (May 13) that KGHM plans to sell its smaller mines outside Poland, including the Carlota copper mine in the United States.

Whether this means KGHM will sell its Ajax mine property south of Kamloops remains to be seen. KTW has left messages with KGHM’s Ajax superintendent Michal Wypych and with Abacus Mining and Exploration Corp. president and CEO Paul Anderson and is awaiting return calls.

Ajax is owned by Poland-based KGHM (80 per cent) and Vancouver-based Abacus Mining and Exploration Corp. (20 per cent), 

“We decided that the smaller mines do not fit in our portfolio. It seems that now is an ideal time to sell,” Pawel Gruza, KGHM’’s vice-president in charge of foreign assets, said in a news conference, as reported by Reuters.

The company plans to reinvest the proceeds in its domestic operations in Poland.

KGHM, among the world’s largest copper and silver producers, has mining operations in Europe, North America and South America. With over 38 million tonnes of copper ore resources worldwide, is one of the world’s biggest copper and silver producers. The Polish government owns 32 per cent of KGHM.

Although the Ajax mine application wad rejected by the provincial government in 2017 and the federal government in 2018, KGHM and Abacus were, as of late last year, in the process or working on a new application and opened an office on Victoria Street in downtown Kamloops after hiring Wypych.

In a Sept. 1, 2020, newsletter from Abacus to investors, Anderson said that as the Ajax superintendent, Wypych’s duties would initially be focused on First Nations, community and governmental engagement in order to advance the project toward resubmitting the application to government.

The proposed open-pit copper and gold mine requires approval from both the provincial and federal governments to proceed. However, the provincial NDP government rejected the application in December 2017, while the federal Liberal government did likewise in the spring of 2018.

At the time, provincial Environment Minister George Heyman and Mines Minister Michelle Mungall said the open-pit mine would have significant adverse effects not outweighed by potential benefits. These included impacts to Indigenous heritage and traditional land uses, and to human health, air quality and grasslands eco-systems.

Upon the initial rejection, KGHM and Abacus had the option of appealing the decision at the Supreme Court level, but the companies did not do that.

Ajax split many Kamloops residents, some whom passionately opposed and others adamantly in support of the project.

Local First Nations were and remain opposed to the proposed mine, with the Stk’emlupsemc Te Secwépemc Nation, which represents the Tk’emlups and Skeetchestn First Nations, citing the project’s impacts on Jacko Lake, which it considers an important cultural heritage site.

In 2017, Kamloops council voted to oppose Ajax. Despite the stance, the city had reached an agreement in principle with KHGM with respect to a community benefits agreement, in which Kamloops was to receive $3.8 million annually from the company if Ajax was approved.

The money — which would have amounted to $87 million over the projected 23-year life of the mine — was meant to be used for items including an independent monitoring program, a local health-care program, affordable housing offset, community and social services funding, to offset taxes for heavy industry and cover road maintenance.