By Nia Williams
CALGARY, Alberta (Reuters) - Canadian energy regulators recommended approval of an oil sands mine proposed by Teck Resources Ltd <TECKb.TO> in northern Alberta, saying economic benefits would outweigh "significant" adverse effects on the environment and indigenous communities.
In a decision released late on Thursday, a joint provincial and federal review panel found the 260,000 barrel per day Frontier mining project, to be situated 110 kilometers (68 miles) north of the oil sands hub of Fort McMurray, would be in the public interest.
Alberta's oil sands contain the vast majority of Canada's crude reserves, which are the world's third-largest, but the province is struggling with declining capital spending and delays in building new export pipelines.
Oil sands development has slowed in recent years, with companies reluctant to plough cash into expensive new mega-projects. Teck has yet to make a final decision on whether to proceed with Frontier and it still needs approval from the provincial and federal governments.
Factors affecting the decision include the review panel report, the outcome of the regulatory process expected in the first quarter of 2020 and market conditions, Teck spokesman Chris Stannell said in a statement.
The panel said the project is expected to create 7,000 construction jobs and up to 2,500 operation jobs during its 41-year lifespan, and contribute more than C$70 billion ($53.12 billion) to federal, provincial and municipal coffers.
Despite "significant adverse project and cumulative effects on certain environmental components and indigenous communities ... we consider these effects to be justified and that the Frontier project is in the public interest," the review panel said.
The project is expected to affect a range of habitats including wetlands and old-growth forests, and species including lynx, caribou and bison, the report said. It will also likely affect the rights and culture of indigenous groups who use the area.
In deciding whether to approve the project the Alberta and Canadian governments will take into account the panel's report, which was heavily criticized by environmentalists.
"It is truly unbelievable that Canada's energy regulator would approve the largest tar sands mine in history. Obviously when the Canadian government passed a motion declaring a climate emergency, it forgot to pass it on to its regulators," said Greenpeace Climate and Energy campaigner Mike Hudema.
(Reporting by Nia Williams; Editing by Richard Chang)