B.C. carbon tax helps pay for remote mine to switch from diesel to hydro

An open-pit copper and gold mine in remote northern B.C. is switching from diesel to hydro to power some of its operations, funded in part by carbon tax revenue from industry. 

The project at the Mount Milligan Mine, 155 kilometres north of Prince George, recently received $440,000 from the province’s CleanBC Program for Industry, which allocates funds to projects that reduce greenhouse gas emissions. The project, which will cost a total of $1.34 million, is one of 13 that received grants totalling $12.5 million in the first round of funding.

The Mount Milligan project will reduce air pollution and cut greenhouse gas emissions by 48,000 tonnes of carbon dioxide equivalent over the next 10 years, according to a government news release. However, according to the company’s 2020 technical report, the mine will close in 2028.

Nikki Skuce, director of Northern Confluence, an initiative that aims to improve land use decisions in B.C., said the hydro initiative could set an example for other mines in the province. “Hopefully more mines will do the same and new mines will factor low-carbon solutions in at the front end,” she wrote in an email. 

Skuce said the CleanBC program helps B.C. address a growing desire by consumers and companies for mines to have higher environmental standards. Minerals and metals are used in a variety of sustainable products — from electric vehicles to solar panels — and major companies like BMW and Microsoft are starting to acknowledge the need to source sustainable raw materials.      

“Interestingly, as we move toward a more low-carbon future, there will be an increase in demand for minerals and metals,” she wrote. “But shifting to low-carbon solutions requires more responsible mining, which also means protecting watersheds and communities from tailings dam risks, ensuring the polluter pays and requiring community consent.”

Mount Milligan one of 13 projects aiming to reduce industrial emissions

Toronto-based Centerra Gold acquired the Mount Milligan Mine in 2016 when it purchased former owner Thompson Creek Metals. In 2017, the mine’s water sources — surface water run-off and a creek — started drying up. 

The company got permission from the B.C. Environmental Assessment Office to access alternative water sources, including groundwater wells, two creeks and a lake. These sources are farther from the mine site, so the company had to install pumping stations and a water pipeline. This infrastructure has been powered by diesel ever since. In the company’s application to the Environmental Assessment Office to install hydro infrastructure, it estimated it would burn 900,000 litres of diesel in 2019.   

The provincial investment supports the installation of a 4.8-kilometre overhead transmission line to tie the water infrastructure into the mine’s existing connection to the BC Hydro grid. 

The Ministry of Environment and Climate Change Strategy told The Narwhal in an emailed statement that industry carbon tax contributed $46 million to the $56-million 2019 annual budget for the CleanBC Program for Industry. The program is getting a boost this year — B.C.’s 2020 budget nearly doubled the funding capacity to $105 million. 

The program has two arms: the CleanBC Industrial Incentive Program, which offers financial incentives to companies that reduce their greenhouse gas emissions, and the CleanBC Industry Fund, which finances greenhouse gas emissions reduction projects such as the one at Mount Milligan. 

Other projects supported by the CleanBC Industry Fund include a zero-emissions employee shuttle at a coal mine, a retrofit at a natural gas facility that eliminates methane venting and natural gas reduction projects at a pair of sawmills. 

“Our government is building a better future for people throughout B.C. by investing in new projects that will reduce emissions and support clean development opportunities for industry,” Environment Minister George Heyman said in a statement. “We recognize the importance of working together with businesses to reach our CleanBC targets and build a stronger, more innovative economy where people in communities across the province thrive.”

Hydro project will likely come online within three years

Centerra did not reply to multiple interview requests and the Ministry of Environment and Climate Change Strategy said it didn’t know when the Mount Milligan hydro infrastructure would come online. 

“Generally, all projects included in this year’s funding round will be completed over the next two to three years or earlier,” spokesperson David Karn wrote in an email.

Because the Mount Milligan Mine will close in 2028, even if the company gets the hydro project up and running by the end of 2021, it would only have a lifespan of six years. 

Responsible mining will play a role in a low-carbon future

Within commuting distance from the towns of Fort St. James and Mackenzie, the Mount Milligan Mine has been a boon to the local economy since starting construction in 2010. As of fall 2019, it employed 680 people — 65 per cent of whom are locals.

The mine has been recognized by the British Columbia Technical and Research Committee on Reclamation for its fish habitat mitigation and compensation plan and partnerships with local First Nations, though those relationships have been strained. The Nak’azdli Whut’en First Nation chose not to participate in the project’s environmental assessment because it felt the provincial process did not adequately represent its interests. 

After construction began, the nation highlighted its concerns with the company and its mining operations in numerous letters to the Environmental Assessment Office. Notably, it expressed frustrations around environmental impact and lack of transparency. 

“When a sewage spill occurred in the winter of 2011 and a diesel spill in the summer of 2011, Nak’azdli was not advised of it by the committee, the proponent or B.C., and we were not included in the clean-up plan,” the nation wrote in a letter dated 2012. “Rather, we found out about the spills on our own.”

After the mine’s inauspicious beginnings, the Nak’azdli Whut’en First Nation has since entered into an agreement with Centerra Gold and is now involved in monitoring environmental impacts. 

A spokesperson for the nation told The Narwhal the community had yet to review the hydro project and therefore could not comment.