Muskowekwan First Nation inks tripartite accord with Encanto, government

VANCOUVER (miningweekly.com) – The Muskowekwan First Nation of Saskatchewan has signed an agreement with junior project developer Encanto Potash, as well as the provincial and federal governments, that will pave the way for the construction of Encanto's proposed potash mine on the reserve located northeast of Regina.

The milestone pact is expected to lead to the first-ever First Nations Commercial and Industrial Development Act (FNCIDA) legislation that applies existing provincial rules to significant projects on First Nations-owned reserve lands.

The tripartite agreement was signed by Muskowekwan First Nation Chief Reginald Bellerose, the Minister of Indigenous and Northern Affairs Carolyn Bennett on behalf of the Canadian federal government and the Provincial Minister for the Economy Bill Boyd on behalf of the Saskatchewan provincial government.

Encanto president Stavros Daskos says the agreement represents another critical piece in the process towards the eventual development of the first potash mine on First Nation land in Canada and the first to complete the FNCIDA process for such a major project.

“We have been breaking entirely new ground and not only moving to ensure that we ourselves are a significant resource player in Canada for generations to come, but paving the way for other First Nations to achieve self-source revenues and a self-dictated future full of promise,” Bellerose said in a statement.

According to the FNCIDA website, the process enables a First Nation that has decided to pursue a large-scale commercial or industrial on-reserve project to request the federal government to develop regulations applying to a specific project on a specific piece of reserve land.

FNCIDA works by essentially reproducing the provincial rules and regulations that apply to similar large-scale commercial or industrial projects off reserves and applying them to a specific on-reserve project. This approach, called 'incorporation by reference', ensures that both on- and off-reserve projects are subject to similar regulatory regimes. It increases the certainty for investors, developers and the public while limiting costs.

This case-by-case approach means that the unique needs and circumstances of each project can be respected, as can the Government of Canada's unique relationship with, and responsibilities toward First Nations.

Agreements between the federal government, individual First Nations and the provincial government will be developed to enable the province to carry out the monitoring and enforcement of FNCIDA regulations for particular projects.

In practice, this means that projects regulated under FNCIDA are required to meet similar standards as those that apply in the rest of the province and it gives investors and developers certainty by ensuring that they are dealing with regulations and regulators that are well known and understood.

Encanto has been exploring the possibility of a potash mine in southern Saskatchewan for years. It signed a joint venture agreement with Muskowekwan First Nation in 2010.

The TSX-V-listed project developer turned the global potash market on its head in January, when it announced that it had struck a definitive 20-year offtake agreement with an India-based farmers’ co-op for a minimum of five-million tonnes a year, cutting out the middle man and selling directly to farmers. Encanto’s latest agreement adds to the existing two-million-tonne-a-year, 20-year agreement with India’s largest trading company, Minerals and Metals Trading Company.