updated 2/18/2010 6:18:12 PM ET 2010-02-18T23:18:12

Leaders from Montana and British Columbia signed an agreement Thursday banning mining and drilling in a valley along the U.S.-Canadian border north of Glacier National Park.

Gov. Brian Schweitzer and Premier Gordon Campbell finalized the deal at a signing ceremony in Vancouver, British Columbia. Schweitzer called it the result of "quiet diplomacy."

"We have a shared responsibility in the Flathead. We share an opportunity and today we share a destiny," he said.

The agreement, which was years in the making, was announced last week.

The deal halts ongoing exploration and prohibits future development of coal, oil and gas in much of the Flathead River Basin, which sprawls across some 9,000 square miles and straddles the U.S.-Canadian border. With vast tracts of forests and grand mountain peaks, it's home to grizzly bears and wolves.

"It is indeed a monumental day," said Kathryn Tenesse, chair of the council for the Ktunaxa Nation, which has used the Flathead for hunting, fishing and other activities.

The Association of Mineral Exploration British Columbia, though, said the ban on mineral development will hurt the province's economy and is the result of "political demands from certain American interests primarily from the state of Montana," the group said.

The agreement allows for logging to continue and outlines several strategies for cooperating on wildlife management and adapting to climate change, pursuing low-carbon development and reducing environmental degradation.

Compensation will be sought for companies with existing mineral leases in the area.

"Obviously we'll make sure they're not punished for this," Campbell said.

Rights to 218,000 acres
Energy companies have rights to at least 218,000 acres on the Montana side of the border, but drilling has been on hold there under a 1986 federal court order.

Schweitzer said he's working with Montana's congressional delegation on legislation to buy out existing leases.

Efforts to stop mining in the region date to the 1980s, when a U.S.-Canada joint commission rejected an open pit coal mine in the valley because of potential environmental damage.

Another coal mine was proposed in recent years. Oil and gas companies also have been eyeing the area. And in December, Max Resource Corp. said it had extracted samples of high-grade gold from a ridge about 10 miles north of Glacier.

A 2003 British Columbia land-use plan for the area set mining as a high priority and said other uses, such as wildlife habitat and recreation, "will not preclude ... approval of mining activities."

Glacier, in Montana, and Waterton International Park in Canada were designated as a World Heritage site in 1995 because of their outstanding scenery and abundant wildlife.

In January, a team of U.N. scientists recommended a moratorium on mining in the valley.

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