The toxic tailing pond left behind when the Faro lead-zinc mine went bankrupt in 1998 is being cleaned up with federal money.
Removing the acidic mess is costing Ottawa more than $11 million every year — not a lot of money for the feds, but bigger than the entire budgets of some Yukon departments.
When Ottawa handed the Yukon responsibility for mining in 2003, however, the Faro example was relegated to history.
Any new mine, and any new mess its owners might leave behind afterwards, is our problem now.
With Vancouver’s Sherwood Copper pushing its Minto copper-gold mine into production this summer, some are questioning if we’re prepared for the environmental and financial risks.
While the department of Energy, Mines and Resources says we are — and has a new reclamation and closure policy in place — critics are far less certain.
When Minto goes online this summer it will set many “firsts,” says Robert Holmes, the director of mineral resources at the department of Mines.
While there was a mill at the Minto property before Ottawa handed over mining to the Yukon, the mine will go into production under the Yukon’s watch.
That means we’re likely on the hook, he says.
“If we make bad decisions, Canada can argue they’re no longer liable for reclamation costs,” says Holmes. “That’s another reason to be very careful.”
Minto will also be the first production mine located on a First Nation’s category-A land — in this case, land owned by Selkirk First Nation.
In 2006, the government signed a memorandum of understanding with Selkirk, committing it to help the First Nation with the positive and negative effects of the mine, and to share any profits.
Selkirk will not be on the hook for any cleanup, says Holmes.
And if all goes to plan, Yukon taxpayers won’t be either, thanks to the recently introduced mine reclamation and closure policy.
The policy requires mining companies to create a reclamation and closure plan for their projects, which are then reviewed and approved by the government.
It specifies that rolling security deposits must be provided by a mining company, to pay for a mine’s reclamation and closure, says Holmes.
“It’s adjusted throughout the development, operation and closure phases of the mine,” he says.
But many jurisdictions in Canada and the United States do things differently.
Before a mine opens, provinces like Ontario require mining companies to provide massive bonds that are large enough to cover any anticipated costs of reclaiming and closing the operation.
The Yukon will instead inspect mines periodically, and adjust how much security they must hold for the government.
The idea is to encourage mining companies to clean up as they go, says Holmes.
With upfront security bonds, “there’s not the same incentive to be doing progressive reclamation,” he says.
“Our philosophy has always been to not be too prescriptive — to tell companies what we want the performance to be and leave it up to them to come up with ways to do that,” says Holmes.
“We just want to be reasonable about it. Give us ideas, we’ll review them.”
The progressive approach allows a mining company to be “more creative,” he adds.
Sherwood Copper has submitted its reclamation and closure plan with his department, and it is currently being reviewed, says Holmes.
And Sherwood has already given the Yukon about $650,000 in security, to cover the costs of cleaning up the site if it were to close.
That amount is from an older review and will soon go up, says Holmes.
The project is currently slated to be in production for about six years, he adds, though exploration work now underway could extend that lifespan.
But mining critics do not share Holmes’ confidence the rolling-security approach will protect taxpayers.
“We advocate very, very strongly for full reclamation bonding, up front,” says Joan Kuyek, director of Mining Watch Canada.
Many of the environmental impacts created by a mine can’t be cleaned during production, she says.
“The problem with encouraging as-you-go cleanup is that, as the mine comes towards the end of its life, it’s less likely to want to put money into cleaning up, and it’s going to have the biggest part of its mess,” explains Kuyek.
Mines in the territory are more marginal than in southern Canada — meaning dips in commodity prices can have large impacts on whether a mine in the Yukon stays in business or doesn’t, says Kuyek.
If a mine closes, “then there’s a real issue about what you’re going to do. The biggest cleanup is at the end when the mine has no revenue,” she says.
“The concern is if you don’t have full reclamation bonding up front, the company will be encouraged to walk if things get a little tight.”
And while the policy itself “reads as good as anything in Canada,” it isn’t backed up in the Yukon.
“The problem in the Yukon is that it’s all in policy,” says Kuyek. “You don’t have a lot enshrined in licences required for the mine, in order to ascertain that they’re going to pay a full reclamation for the mine up-front.”