The cost to clean up the Mount Nansen mine site, pictured, continues to grow. A Yukon Supreme Court Justice said he has “little faith” taxpayers will only be on the hook for $150 million given previous “gross underestimation” of costs. (Submitted/Government of Canada)

Ballooning cost of Mount Nansen cleanup should be ‘wake-up call’ for the Yukon, judge says

Canada has spent $40 million on remediating the mine site, estimates $110 million more needed

The cost of remediating the Mount Nansen mine site near Carmacks has ballooned to $40 million so far, with the federal government estimating an additional $110 million is needed to complete the clean-up.

A Yukon judge, however, said he has “little faith” taxpayers will only be on the hook for $150 million given previous “gross underestimation” of costs, and that the case should serve as a “wake-up call” to the Yukon.

The figures were among the details contained in a document outlining Yukon Supreme Court Justice Ron Veale’s reasons for granting a partial sealing order related to a purchase of mine assets.

The reasons are dated Feb. 25 but were only posted online this month.

The document is the latest in a legal saga that began in 1999, when the Yukon territorial court convicted BYG Natural Resources Inc., then the owner of the mine, of “three blatant breaches of its water licence,” Veale wrote. He noted the judge at the time “described these actions as ‘raping and pillaging’ with a complete disregard for the legal requirements.”

BYG abandoned the site the same year and went on to declare bankruptcy in 2004. As the mine was abandoned before devolution, that left Canada responsible for covering the cost of the cleanup.

“…(As) the liability for future mining disasters will be the obligation of the Government of Yukon, this case should serve as a wake-up call for the administrators of the Yukon Waters Act,” Veale wrote.

Financial services company PricewaterhouseCoopers (PwC) was appointed as the interim receiver and receiver manager for BYG.

The original cost of remediation was estimated to be between $4 to $8 million before nearly tripling to $23 million by 2007. That figure has only grown since then.

Veale’s reasons were related to decisions he made in 2019, after PwC applied for an order approving the sale of assets to Alexco Environmental Group Inc. and JDS Energy & Mining Inc., and an order sealing some associated documents.

The sealing order means those documents will not be accessible to the public unless another judge orders them to be unsealed.

A copy of the documents, however, in which “particularly sensitive portions and financial information details” are redacted, is still publicly available.

“Canadian and Yukon taxpayers must be kept abreast of the tremendous cost and the decades of remediation work required for the BYG mining disaster,” Veale wrote.

Contact Jackie Hong at jackie.hong@yukon-news.com

miningYukon

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