The Yukon government is requiring a greater financial security stake for the Minto Mine.
The company responsible for the mine missed the April 5 deadline to pay its security deposit, which represents the estimated cost of cleaning up the mine after its closure.
In response to the missing deposit, the Yukon government is amending the mine’s license to limit risk until the money comes through.
About $32 million in security was not paid, acknowledged Minister of Energy, Mines and Resources John Streicker in the Yukon legislature on April 13.
“They weren’t able to meet that deadline, so what happens now is that we have amended their quartz mining licence, and we have placed the operations under an additional set of restricted operating conditions,” Streicker said.
“They have, under these operating conditions, up until September 1. They are required to not increase site liability. They are required to manage their contaminated water, which is the most critical issue that is on-site, and they are required to report to us every two weeks.”
The government published their financial security determination for the site in January after its assessment of closure-related risk and liabilities for the mine.
It states that the government requires $104 million in security inclusive of the $72 million it already holds.
The most recent version of Minto’s quartz mining license states that $99 million of the total security was to be paid by April 5. A further $4 million is required 30 days before the mine commences activities in support of the Ridgetop mining area at the site and about $629,000 is required before work in support of the Minto North underground operations begins.
All major mines in the Yukon must provide the government with this financial security, which is reassessed every two years.
Streicker told the legislature that Minto has been working closely with the government’s compliance monitoring teams. He said the options going forward are that the mine generate the security or find ways to reduce liabilities — if they don’t the mine won’t be able to operate.
The minister said that some back and forth between the government regulators and the mining company regarding the security amount is to be expected and the mine can find ways to reduce liability between now and September 1.
Streicker said water treatment at the mine is probably the most significant issue that led to the increased security requirement.
In light of water treatment issues NDP leader Kate White expressed concern about the situation at Minto and compared it to the water left behind at the disused Wolverine Mine that became so highly alkaline it couldn’t be treated.
She drew from an April 12 ministerial statement about Wolverine, noting that its parent company fell behind on furnishing security as well.
Streicker said there are differences between the situation with Wolverine and what is going on with Minto — Minto is still in operation while Wolverine had already gone into temporary closure when payments were missed.
He said one of the purposes of the amended quartz mining license now in place for Minto is the close contact with the government and additional inspections that it allows. Streicker added that both the government and the mine have been looking at snow surveys and recognize the additional risk posed by this spring’s freshet.
Lewis Rifkind, a mining analyst working for the Yukon Conservation Society, said the situation with Minto is far from identical to what went on with the Wolverine mine but there are echoes of it.
Wolverine shut down operations less than three years after opening after its parent company hit financial troubles leaving the Yukon government responsible for the costly care and maintenance of the contaminated mine site.
Noting that the $32 million shortfall in Minto’s security is a huge chunk of change by anyone’s standard, Rifkind said that all parties would have been better off now if the contingencies that the money will cover had been anticipated earlier. He said it is important that the mine keeps operating in order to cover the costs of the securities and avoid a situation like Wolverine.
Rifkind said the discussion around the securities issue seems like negotiation between equals rather than with a regulatory body. He said the haggling over the security doesn’t seem appropriate given the potential environmental harms that are at stake.
He said overall, environmental protection is key and the government is right in seeking a larger security.
Minto Metals Corp did not respond to the Yukon News’ request for comment in time for deadline.
Contact Jim Elliot at jim.elliot@yukon-news.com