...continued from Part 1

Today in B.C., cleanup costs are estimated by mining companies and provided to the government. There are government standards and an Excel document to standardize the process. The province also adds a 15 per cent top-up to the industry estimate. The province said it is currently updating this process.

But the government and industry drastically underestimate the true cost and timeline of mine cleanups, says Guy Archibald, executive director for the Southeast Alaska Indigenous Transboundary Commission. The organization represents 15 sovereign tribal nations in Southeast Alaska. Archibald is an analytical environmental chemist who has worked for more than two decades helping industry control and monitor discharge and pollution.

The current approach is “completely inadequate” and does not protect British Columbians from financial and environmental costs, Archibald said. The province needs to take a more precautionary approach and better assess the growing risks of major mines, especially for projects that will require water treatment for hundreds of years or more, he said.

For specialists working in reclamation, the growing cleanup costs of the abandoned Giant Mine and Faro Mine in the Yukon loom as a warning. Giant Mine, abandoned in 2005, is now expected to cost federal taxpayers more than $4 billion for remediation. Faro Mine, abandoned in 1998, could cost an estimated $2 billion for cleanup and continuing maintenance.

B.C.’s biggest mining liability gets a new owner
For Teck, Canada’s largest mining company, 2023 was a pivotal year. After a lengthy saga, which included fending off a hostile takeover bid from Glencore and Teck shareholders voting down a plan to split off its B.C. metallurgical coal business, the company struck a US$8.9 billion deal in November to sell that business, Elk Valley Resources. The buyers: Glencore, Japan’s Nippon Steel Corp. and South Korean steelmaker POSCO.

These mines are the biggest liability on the books for the province at $1.9 billion. Teck currently has provided $1.5 billion and plans to have the full amount in place by March, as required by the government, said company spokesman Chris Stannell. The bonding Teck has set aside for the Elk Valley coal operations will be transferred to the new owners, Stannell said. Glencore said it has committed to keeping up with the rehabilitation and closure work.

Meanwhile, as of the most recent chief inspector’s report, Glencore had provided just a small fraction of the reclamation securities for two of its five B.C. mines, leaving a future cleanup bill of more than $8.6 million. Glencore will provide what it owes to the province by the end of March 2024, company spokesperson Charles Watenphul said in an e-mail.

Five mines face possible penalties for falling behind on their reclamation securities, according to the Ministry of Energy, Mines and Low Carbon Innovation. The ministry would not disclose which mines, but said the information would be posted on the B.C. Mines Information website once a final decision is made.

The current interim policy doesn’t have enough teeth behind it, said Allen Edzerza, a Tahltan Elder formerly with the BC First Nations Energy and Mining Council. According to the Mines Act, the chief permitting officer has a lot of discretionary power in how securities are collected. Edzerza wants to see clear laws to ensure mining companies are providing hard financial assurances toward the cost of reclamation. “If you want to be enforceable, if you want clarity, put it in legislation.”

Warnings of a growing liability

B.C. has faced criticism in the past for the big gap between the estimated cleanup costs of mines and the financial securities held by the province. In 1984, it held just $10 million in securities and the gap kept widening. By 2016, the B.C. auditor general warned that the cost of reclamation for major mines was more than $2.1 billion and the province held less than half that amount. Taxpayers were at risk for a $1.2 billion liability.

The new interim policy aims to help close the gap. It requires new mines and those with less than five years of production left to pay in full for the damage caused for the next five years. The estimated liability of a mine is reassessed every five years.

That schedule allows cost estimates to better reflect changes to costs over time and allows companies the flexibility to adjust their cleanup plans, the mines ministry said.

The mines department said it is confident the current financial instruments allow the government access to the reclamation security if required. Collecting beyond the first five years would create a negative incentive for mines to plan for an “artificially short” life span, it said. For example, if a project comes forward with a 30-year plan, the department does not want to penalize it for planning for a longer mine life.

“For many years, companies have been let off the hook,” Mines Minister Josie Osborne said in an interview. “It is a decades-old problem here in British Columbia, and our government is working hard to take action and change this.”

The province has made progress toward closing the liability gap, said Rangi Jeerakathil, a partner at law firm MLT Aikins. Jeerakathil specializes in environmental, energy and Aboriginal law, as well as corporate social responsibility.

“In B.C., I think, the approach that they're taking probably makes sense,” Jeerakathil said. He described the securities system as a balancing act between forcing companies to tie up too much capital that could otherwise be used to expand the business and create jobs, and protecting the environment as well as taxpayers who could be left on the hook for cleanup.

Incentivize better designs and ongoing reclamation

While the legacy of current coal projects in the Elk Valley is debated, there are proposals for new mines in the region. NWP Coal’s Crown Mountain project is undergoing federal and provincial assessments and hosting community open houses for feedback. Its goal is to start building by 2026.

The province’s new approach to fully bonding for the first and last five years of a mine covers the riskiest times for a project, NWP Coal project director David Baines said. At the start, a mine has its highest capital costs and lowest cash generation. Nearer to closure, production will slow down and so will revenues.

Tying up a lot of money at once just in case all the mines in B.C. go bankrupt at once doesn't make sense to Baines. Instead, he’d like to see more tools to encourage progressive reclamation — cleaning up while mines are still active — and better designs.

Crown Mountain is still seeking permits and hasn’t put down a reclamation security or estimated the cost of cleanup yet. Baines said his philosophy is to try and reduce the impact as much as possible during the planning of the mine. It’s a practice of “designing your mine so that chemicals and materials don't leach out of the rocks,” Baines said.

After a mine shuts down, it could need water treatment to ensure any mined materials left behind don’t pollute the waterways. Exactly how to operate and finance water treatment that could be needed for more than 100 years is a continuing discussion in the mining industry. It all feels “like a paper game”, Baines said. “No one knows what it's really going to cost, what those reserves are worth or what inflation is going to do.”

Ultimately, if a company can’t afford reclamation then a project should not go forward, he said.

No protections from disaster
The idea that a lot of money could be needed all at once doesn’t feel far off to Archibald. He points to the 2014 Mount Polley disaster in which a tailings dam collapsed and sent a torrent of water and waste into the local watershed. The B.C. public paid $40 million in cleanup costs while no charges or financial penalties were brought against owner Imperial Metals Corp. The mine is back in operation today.

Beyond catastrophic failures, extreme weather from climate change presents new problems for major infrastructure. The lack of a contingency fund is a major gap in current policy, say mining reform advocates.

Archibald, Dion and others are calling for a shared pool of funds that all mine operators pay into to help cover costs that aren’t in closure plans, sudden closures and catastrophic events. Archibald imagines something similar to the Oil Spill Liability Trust Fund that was created in the U.S. after the Exxon Valdez spill that cost billions in cleanup costs. The fund comes from a fee on imported and domestic oil.

B.C. has its own template used in its energy industry. The province’s Orphan Site Reclamation Fund is a pool of money funded through levies on oil and gas permit holders for cleaning up wells and other facilities that no longer have viable owners.

“It's not really even realistic to think that a single mining company could provide assurance against the cost of a worst-case environmental disaster,” Dion said. He hopes that the B.C. government takes a hard look during phase two of its public interest bonding strategy. During the next year, the government plans to review financial assurance mechanisms for planned and unplanned cleanup costs for all types of industrial projects.

When asked about creating a specific shared pool for the mining industry, Minister Osborne pointed to existing “strong environmental legislation” and said the government plans to continue monitoring the interim policy for improvement.

The province’s mining industry is an enthusiastic supporter of the government’s policy, saying it is stringent and should give taxpayers comfort that they won’t be left on the hook for cleanup and reclamation. It will encourage long-term stewardship that will help support future development of critical minerals, said Michael Goehring, CEO of the Mining Association of British Columbia.

“That's good for industry to have the certainty, and I think it's good for British Columbians,” he said.

But the policy hasn’t eliminated concerns for everyone. The area around the Taku is also known by a different name to prospectors and miners: The Golden Triangle. It’s a region renowned for its promise of gold, silver and copper deposits.

Just downstream from the Tulsequah Chief mine, on the west bank of the river, Canagold Resources Ltd. is seeking permits to start construction on its New Polaris gold mine. Canagold will file its plans for mine closure in its detailed project description in the coming weeks. It will include the bonding plans as required in the B.C. policy, as well as details of its consultation with the First Nations, said Canagold CEO Catalin Kilofliski. He described his company’s relationship with the Indigenous community in the region as collaborative and transparent.

The New Polaris project is different from Tulsequah Chief on the other side of the river, partly because there will be no acid drainage, he said. “The project does not resemble anything at the other project, due to natural reasons. And any historical legacy existing on our project will be dealt with and be an integral part of project planning all the way to closure and reclamation,” Kilofliski said.

Still, Elder John Morris Sr. wrote in a recent op-ed that he finds it “almost unbelievable” the government would entertain an application for another mine while the legacy of the old one has not been fully dealt with. “The Taku will continue to feed people for thousands of years into the future, if we just keep it clean and flowing freely.”

He worries about the future of the watershed as it continues to tempt prospectors. He acknowledges there is demand for cellphones and minerals. It’s not about butting heads with industry, he said, it’s just about putting aside enough money to clean up.

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