The Mining Association of Canada (MAC) has expressed its “extreme” disappointment in the federal government's decision to designate diversified miner Teck Resources’ Castle coal project under the Impact Assessment Act (IAA).

The project will extend Teck’s existing Fording River steelmaking coal operation, in British Columbia, maintaining the production capacity of 10-million tonnes a year.

"We are very disheartened by the federal government's decision on the Castle project given the expansion fell well below the threshold to being subject to the IAA," said MAC CEO Pierre Gratton.

"This decision certainly has the potential to lead to longer timelines at a time of unprecedented global economic uncertainty."

The association argues that the Castle project is already undergoing a rigorous provincial environmental review process with the BC Environmental Assessment Office, which it says is “fully able” to contend with any relevant issues.

"It seems clear that this decision was political in nature as there are many projects across the country with equal or more significant impacts that are not subject to the IAA," continued Gratton.

"This is a case of the government succumbing to pressure from political interest groups while also placating the US government's EPA and the state of Montana,” he added.

The project will be developed 30 km north of Elkford and 130 km north of the Canada-US border.

The Confederated Salish and Kootenai Tribes and the Kootenai Tribe of Idaho in May wrote to Canada’s Minister of Environment and Climate Change, Jonathan Wilkinson, urging the federal government to undertake a comprehensive environmental assessment of the project at the federal level.

Indigenous groups are concerned that selenium from Teck’s coal mining operations is poisoning fish in the rivers.

The Minister on Wednesday designated the project under IAA, stating that the project might cause adverse effects to areas of federal jurisdiction, including to transboundary environments, in particular to fish and fish habitat.

Meanwhile, the MAC further pointed out that the federal government's decision to designate the Castle project under the IAA came only weeks after the new strategic assessment on climate change was released.

"While MAC was supportive and actively engaged in all stages of the review of the federal assessment processes that led to the new IAA, this support was contingent on it being implemented well," said Gratton.

"It is unfortunate that the past month has now given our industry reason to question whether it will be implemented in a fair and efficient manner. One of the government's loudest messages during the debate on Bill C-69 was that it would create more certainty for investment. This decision does exactly the opposite."

Teck is led by CEO Don Lindsay.