The Canadian province of British Columbia has signed an agreement to share mining tax revenue with aboriginal groups in the Kamloops area.

Minister of State for Mining Randy Hawes said the agreement to share royalties from New Gold‘s New Afton mine has been made with the Stk’emlupsemc of the Secwepemc Nation (SSN).

The deal will see C$28m of mining royalties flow to the SSN over the expected 12-year life of the mine after it starts production in 2012.

New Gold is also planning to employ hundreds of SSN members at the site.

The deal was welcomed by the mining industry, which hopes it will improve relations between miners and First Nations people and make native Indian groups receptive to mining activities on or near their lands, reports Reuters.

Hawes said the government will sign its second agreement with the McLeod Lake Indian band on the Mount Milligan gold-copper project owned by Terrane Metals.