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B.C. taxpayers on the hook for $1.2 billion in mine cleanup costs: chief inspector report

Companies can operate mines in the province without any assurance they can cover the full costs of reclamation activities and a new annual report — which finds liabilities have grown to $2.8 billion — is emboldening calls for regulatory reform

British Columbians are still on the hook for more than $1 billion in clean-up costs for the province’s mines, according to a new report from B.C.’s Chief Inspector of Mines. The recently released 2018 annual report says the province has secured $1.6 billion in bonds from mining companies to cover land reclamation costs but estimates the total cost of reclamation is $2.8 billion. 

If a mining company goes bankrupt, taxpayers are left to deal with abandoned mines or contaminated sites like the Mount Washington copper mine on Vancouver Island, abandoned by Japanese investors in the 1960s after three years of operation.

Criticism of B.C.’s antiquated mining laws has heightened in recent years, especially following the collapse of a tailings pond at the Mount Polley mine, which sent 24 billion litres of contaminated wastewater into the local environment, including Quesnel Lake, important habitat for sockeye salmon and a source of drinking water. The B.C. public shouldered $40 million in cleanup costs for the disaster and no charges or financial penalties were levied against Mount Polley owner and operator Imperial Metals.

No ‘hard commitment’ to cleanup

The chief inspector’s new report adds all the more urgency to discussions taking place in the provincial government around mining reform, said Allen Edzerza, a member of the B.C. First Nations Energy and Mining Council and a citizen of the Tahltan Nation.

“Each of these mines requires a closure plan be developed as part of the initial process to get permitted and licenced,” Edzerza told The Narwhal. “You should have cash, you should have bonds, you should have insurance. If they want to create a fund and have some public money involved, that’s their decision. The point is it should be a hard commitment.”

The council has previously called for reforms to mining laws to recognize Indigenous title and land rights, to better include First Nations in the licencing process and to align with B.C.’s new legislation to enshrine the United Nations Declaration on the Rights of Indigenous Peoples.

Economist Jason Dion, who contributed to the council’s recent report on financial assurance and mines, said there is some cause for celebration in the chief inspector’s report. The province’s reclamation bonds increased by $400 million between 2016 and 2018, Dion pointed out. “That’s an awful lot of money,” he said.

The total liabilities from B.C.’s mines have increased from $2.1 billion in 2014 to $2.8 billion, according to the report, while the gap between funds secured in reclamation bonds and the estimated amount of money the province would have to pay for clean-up dropped from $1.6 billion to $1.2 billion. 

Dion said it’s more challenging to procure financial assurance for existing mines, noting B.C. should create more stringent regulations for future mines. 

Quebec introduced reforms to require full financial assurance and “the sky has not fallen,” he said.

Heim Tsolum River

Caroline Heim from the Tsolum River Restoration Society walks along the banks of the Tsolum River, where fish populations were decimated for years due to pollution from an abandoned copper mine on Vancouver Island. Photo: Taylor Roades / The Narwhal

B.C. considers mining reforms

In May 2019 a coalition of 30 groups released a report calling for 69 specific reforms to B.C.’s mining laws, including a requirement that mining companies provide security for

100 per cent of independently verified cleanup and reclamation cost estimates before operations begin. The group also recommended estimated reclamation costs and securities be publicly disclosed and the province require companies to carry private insurance to cover unplanned events, such as a tailings spill. 

The province is currently considering reforms to B.C.’s mining laws but, according to a government intentions paper, reforms will not address growing reclamation liabilities. New legislation is expected at some point in 2020. 

In a previous interview with The Narwhal, Calvin Sandborn, legal director of the University of Victoria’s Environmental Law Centre, said B.C. needs better assurances from prospective mining companies that they will assume responsibility for the environmental impact of their operations.

“You need to have a guarantee that, when the mine closes up, it’s not going to leave the long-term problems that we’ve seen all over the province,” Sandborn said. “The history of mining in B.C. has been that companies come in and get the quick profit and just leave the cost to the taxpayers.” 

“When are they going to ensure the polluter pays rather than taxpayers picking up the tab?”

Colin Arisman Tulsequah Chief Tulsequah River

A wastewater pond at the abandoned Tulsequah Chief mine where contaminants have been leaking into a tributary of the salmon-rich Taku River for 60 years. The Narwhal visited the site of the mine in the summer of 2019. Photo: Colin Arisman / The Narwhal

Tougher rules, better mines?

While reforms could decrease mining activity, Dion said it would likely be because tougher requirements would weed out environmentally risky projects proposed by companies that can’t bear the cost of their own risks.

Edzerza believes strengthening mining regulations would increase public confidence in the industry.

“First Nations have never said they don’t support mining. They really do want to have responsible mining goals, and ones that recognize the environment is not to be compromised,” he said.

‘When are they going to ensure the polluter pays?’: proposed B.C. mining reforms don’t go far enough

 

The First Nations Energy and Mining Council’s most recent report suggests First Nations should demand full financial assurances from companies wanting to mine in Indigenous territories, through the negotiation of impact and benefits agreements. 

Edzerza said he has growing confidence in First Nations’ ability to assert self-governance after watching how Wet’suwet’en hereditary chiefs are asserting sovereignty over their lands.

The hereditary chiefs opposed to the Coastal GasLink pipeline are now working with the provincial and federal governments to draft an expedited rights and title agreement, he pointed out.

“The Wet’suwet’en are leading the charge right now, taking the government on.” 

B.C. First Nations should require full clean-up costs up-front for mines: new study

 

The Ministry of Energy, Mines and Petroleum Resources did not respond to a request for comment by publication time.

The NDP government’s 2020 budget forecasts revenue from mineral tax and fees will decline 29 per cent over 2020 and 2021, due to predictions that coal prices will fall while production costs rise.

Dion said part of the reason the province doesn’t require full remediation costs from companies is because it sees some financial security in the mines themselves, which could be re-sold. 

“Falling commodity prices don’t help with the risk of that unsecured portion of remediation,” he said.

Update March 9, 2020 at 10:42 a.m. PST: This article was updated to clarify that the total liabilities from B.C.’s mines have increased from $2.1 billion to $2.8 billion between 2014 and 2018 and not 2016 and 2018 as may have been inferred.

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