October 21, 2008

OREphaned Mines

The dirty and dangerous legacy of abandoned mines

by Ramsey Hart

The Dominion - http://www.dominionpaper.ca

OTTAWA, ONTARIO–Mining has enjoyed a long history in Canada, and has contributed to the growth of many towns and cities across the country. Proponents of the industry, such as the Mining Association of Canada, celebrate its role in “opening up the remote parts of Canada,” and generating “great wealth for the people of Canada.”

Mining’s legacy can also be characterized by the privatization and concentration of the bulk of the benefits of mineral development while the public has paid and continues to pay the long-term costs. This tendency is clearly demonstrated by the industry’s dirty and dangerous legacy of more than 10,000 abandoned mine sites across the country.

Abandoned mines are those no longer in operation; which have not been adequately rehabilitated in order to protect human health and the environment; and for which the mine operator responsible cannot be determined, no longer exists or is unwilling to undertake the necessary clean-up actions. Abandoned mines pose a variety of risks including safety risks associated with old infrastructure such as pits, shafts and buildings, and risks of environmental contamination from mine wastes, chemicals and fuel left on site.

While all Canadian jurisdictions currently have requirements for mine-site rehabilitation upon closure, this was not the case during much of industry’s history. Until the second half of the 20th century, most mine operators simply walked away from their sites once the valuable minerals were extracted. Mine abandonment is not, however, the historic issue government and industry tend to portray: It continues to be a problem due to bankruptcies and inadequate financial guarantees. If a mining company goes bankrupt, the risks and liabilities of the abandoned mine are inevitably passed back to the provincial or federal governments. The liabilities from abandoned mines are not insignificant and are conservatively estimated to be over $200 million in Quebec, over $500 million in Ontario and $555 million in the northern territories.

The Mt. Nansen mine, located 80 km north of Whitehorse in the traditional territory of the Little Salmon Carmacks First Nation, is in many ways typical of the problems with abandoned mines found across the country. The precious metal deposit at Mt. Nansen was explored and mined intermittently from 1943 until 1988. Starting in 1994, BYG Resources undertook additional exploration and developed a feasibility study to mine 650,000 tonnes of gold and silver bearing ore over a four-year period.

Initial production and profits were good for BYG, with monthly operating profits of $7–800,000. It wasn’t long until problems began, however, including a drop in the amount of gold and silver BYG was able to recover from the ore.

To add to BYG's problems, the company's environmental practices were coming under fire. The Yukon government’s website on the mine states that within the first two years of operation, “Serious environmental concerns included problems with tailings dam construction and operation, and discharges from water treatment plant repeatedly failing toxicity test.” The water-quality issues resulted in 16 official notices to the company to address the problems.

BYG’s failure to address its water-quality problems resulted in the government water inspector issuing a compliance or stop-operations directive in February 1999. Following this directive BYG ceased operations. A short time later the mine went into receivership after operating for a total of 26 months. By August 1999, the Federal Government had taken control of the site, though it has since been devolved to the territory.

A 2005 report by EDI Environmental Dynamics on the environmental effects of the mine notes that toxic metals continue to be dispersed from the site and pose a long-term risk to wildlife and those who consume plants, animals or fish from the area. A number of safety concerns were also noted, including open mine shafts, buildings and equipment that remained on the site.

In order to address the immediate environmental problems the Canadian government spent over $5.4 million on the site between 1999 and 2001. This did not include long-term stabilization and reclamation of the site. The Yukon government in collaboration with the federal government and the Little Salmon Carmacks First Nation is still developing a final rehabilitation plan.

Some improvements have been made, including the treatment of water from the tailings pond that once contained high levels of cyanide and metals, which can now, according to the requirements of BYG’s original water permit, be discharged from the site. Annual costs for maintaining the water monitoring system and other onsite infrastructure is roughly $500,000 per year. BYG's security deposit of $445,000 cannot cover even a single year of this ongoing monitoring and maintenance. Total costs for rehabilitating the site could reach $23 million.

The people behind the Mt. Nansen mine continue to operate in the mining industry. Two of the principal players from BYG, Graham Dixon and Robert Chaffee, are also principals in Yukon-Nevada Gold Corp (YNG), a company that had partial ownership of the Mt. Nansen mine. The federal government was forced to go to the Yukon Supreme court in 2007 to prevent YNG from "reclaiming" assets it says it was owed due to its relationship with BYG.

Looking at YNG’s website, one might assume the company has little in common with BYG's legacy: YNG boasts a prestigious award for mine reclamation. This award contrasts, however, with a recent order for YNG to shut down operations at their Nevada gold mine for failing to reduce mercury emissions and for misleading regulators as to the extent of the mine’s emissions.

The mining industry has recognized that abandoned mines pose a serious PR problem and liability that threatens their social license to operate. To address the issue, provincial and national mining associations have called for more to be done to clean up the messes their members have left scattered across the country. For example, the industry has supported a national initiative focusing on abandoned mines – the National Orphaned and Abandoned Mines Initiative (NOAMI) that includes government, First Nation and environmental organizations. NOAMI hosts workshops, facilitates research on the issues and is pushing for a national inventory of abandoned mines.

When it comes to paying for the reclamation of abandoned mines, however, industry is much less willing to participate voluntarily. While some companies and industry associations have undertaken “Good Samaritan” rehabilitation of sites they don’t have a legal obligation to address, these contributions are small compared to the overall need. For example, at Ontario’s signature abandoned mine site, the Kam Kotia mine near Timmins, the provincial government will likely spend upwards of $60 million on rehabilitation. Through a special initiative the Ontario Mining Association contributed half a million from its members.

National industry watchdog group MiningWatch Canada has been pushing for an industry-wide levy to be put on mining profits that would help fund rehabilitation where no responsible company can be found. MiningWatch would also like to see much more aggressive efforts to pursue those wholly or partially responsible for the industry’s dirty and dangerous legacy.

As a relatively recent mine to be abandoned, the Mt. Nansen situation calls into question the claims of industry and governments that modern mining laws are adequate to prevent more mines from being abandoned. In the case of Mt. Nansen, two years of “development” will cost Yukoners and Canadians over $23 million. Whether or not the rehabilitation of the site will mean the local community of Little Salmon/Carmacks can begin to safely use the land and its renewable resources of plants, fish and game remains to be seen.

Ramsey Hart is an ecologist and is wondering where to plant his garlic now that he has moved from rural NB to Ottawa to take on the position of Canada Program Coordinator with MiningWatch Canada.

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