Taseko Mining Ltd. faces a serious threat when the Supreme Court of Canada ruled Tsilhqot’in people to be entitled to the land of the proposed tribal park, which included Taseko’s mining site at New Prosperity. This new regulation would hinder Taseko’s development tremendously.
Unable to predict this critical regulatory trend, Taseko now has to deal with this 1.1 billion dollar investment sitting around idle. Tsilhqot’in people’s adamant opposition against gold-copper mining pushed Taseko toward nowhere but the cliff that leads to huge financial loss. Such corporate failure is closely linked to its incapability of identifying possible change in external factor and business’s constraint before making the investment. Had Taseko acknowledged the unwillingness and dismissal of their First Nations partners regarding the project, Taseko might have made a different decision.
This situation that Taseko now awkwardly finds itself in also exemplifies the uncertainty that managerial accounting cannot foresee: the New Prosperity project was portrayed as the expected “game changer,” as highlighted in the Taseko Fact Sheet 2012. The said “growth potential” and expected production now seem nothing but ironic. Not only that, this “one of the largest gold-copper porphyries in the world” is now an inventory that is not generating any profit. Without a decent amount of cash flow, Taseko will encounter operation problems that eventually can lead to more deadly consequences.
The solutions to fix this catastrophe are hard to execute because of the multitudes of challenges Taseko faces: First Nations are unlikely to compromise their hard-won rights, and there are also environmental issues that Taseko hasn’t dealt with in the federal level. The solution in the short run, I think, is to measure the value of doing what is allowed on the land; if it is profitable, then Taseko should make use of the land first while negotiating with the external parties.
Fish Lake Fightback in Court
Image taken from here.
Work Cited
Bush, Murray. “Fish Lake Fightback in Court | Vancouver Media Co-op.” Vancouver Media Co-op. N.p., n.d. Web. 3 Oct. 2014. <http://vancouver.mediacoop.ca/photo/fish-lake-fight-back-court/9174>.
Pynn, Larry. “Tsilhqot’in set to declare site of New Prosperity mine a tribal park.” www.vancouversun.com. N.p., n.d. Web. 3 Oct. 2014. <http://www.vancouversun.com/news/metro/Unilateral+park+declared+Tsilhqot+includes+Prosperity+mine/10192766/story.html>.
“Taseko Fact Sheet.” Taseko Mines Ltd.. N.p., n.d. Web. 3 Oct. 2014. <http://www.tasekomines.com/i/media/mce/factsheet/Taseko_Fact_Sheet.pdf>.