Chris-Miller-Tulsequah-Chief-Mine-6

British Columbia’s multimillion-dollar mining problem

The true cost of cleaning up mine pollution in B.C. is growing, an investigation by The Globe and Mail and The Narwhal has found. If disaster strikes, taxpayers could be stuck with covering the costs

When John Morris Sr. is asked where the sacred sites on the Taku River are, his answer comes easily. “This whole place is sacred,” the 84-year-old Elder says. In the spring, all five species of North American salmon fight the current to spawn. In the summer, bright orange salmon berries speckle the landscape. 

Morris Sr., a member of the Douglas Indian Association in southeast Alaska, said his grandparents, aunt, uncle and parents always reminded him that everything they needed was provided by the land there. 

The river and its tributaries meander throughout the territories of the Tlingit and the Tahltan peoples, and flow over the international border between British Columbia and Alaska. But for the past 67 years a small, oozing sore has leached untreated heavy metals into the waterways. The abandoned Tulsequah Chief mine in B.C. sits on the Tulsequah River about 10 kilometres upstream from its confluence with the Taku River. Cominco, now part of Teck Resources Ltd., opened the copper, lead and zinc mine in 1951. Cominco closed it six years later. Several companies took the mine over in the intervening years, but none was successful at restarting production.

Morris Sr. first saw the bright orange fluid, known as acid rock drainage, flowing out of a pipe when he was on a hunting trip in the late 1990s. There is no doubt this area is contaminated, he remembers thinking. Numerous water sampling programs have pointed to elevated levels of metals in the Tulsequah River. 

John Morris Sr., an Elder with the Douglas Island Indian Association, stands on Sandy Beach in Juneau, Alaska. He's wearing jeans, a leather jacket and wide-brimmed hat.
John Morris Sr., an Elder with the Douglas Island Indian Association, grew up fishing and hunting on the Taku River with his family. Photo: Chris Miller
Acid mine drainage runs through a culvert from the Tulsequah Chief mine, which has been polluting the Tulsequah River since the mine closed in the 50’s. Video: Chris Miller

The B.C. government permitted the site to remain in a state of “care and maintenance” after it stopped producing as it waited for various companies to restart the mine. None stepped up. For years environmental groups, Indigenous communities and the Alaskan government have called on B.C. to start a proper cleanup.

The mine’s last owner, Chieftain Metals Inc., collapsed with high debts. In 2022, the project was declared dead after lengthy receivership proceedings. The reclamation bill is estimated at $72 million with $1 million a year in monitoring costs. 


Though it no longer owns Tulsequah Chief, Teck said it has voluntarily supported the province and Taku River Tlingit First Nation’s interim reclamation and remediation work by contributing more than $3 million since 2021. Still, the B.C. government has less than one per cent of the security for reclamation and monitoring costs in hand.

Tulsequah Chief is one of several ugly remnants overshadowing a new era of mining aimed at building a low-carbon economy. The industry is looking to a future built on critical minerals needed for batteries, particularly for electric vehicles, but the legacy of past investment booms and a shortfall in the money set aside to deal with cleanup remains. 

Over several months, The Narwhal and The Globe and Mail have scoured publicly available records, reviewed financial data and interviewed experts about B.C.'s mine reclamation plan and found that in practice, the province was short $753 million of the estimated cleanup cost in its last financial year and some of the best-capitalized companies have not yet paid for future reclamation costs. 

A new interim government policy and push to collect money for clean-up costs could significantly close the gap in the coming months. Still, environmentalists, economists, Indigenous leaders and even mining industry players say the policy is falling short. They raise concerns that not enough is being collected, estimates for cleanup are too low and better incentives are needed for continuing remediation. In addition, there is a lack of protection if there’s a disaster, or as in the case of Tulsequah Chief, companies go bankrupt. 

For the last 67 years, the abandoned Tulsequah Chief mine has leaved untreated heavy metals into the surrounding waterways. The bright orange fluid is known as acid rock drainage. Video: Chris Miller

To address this, mining reform advocates are calling for the interim policy to be formalized as enforceable regulations. Mining policy researchers and communities downstream from mines said the regulations should include a better process for more accurately estimating the future costs of cleanup and a shared pool of funds to protect taxpayers from covering costs when disaster strikes. 

Without enough funds set aside for cleanup, B.C. taxpayers will continue to be at risk.

Closing the gap in cleanup costs amid a push for critical minerals

The federal government is staking its plans for the future economy on big bets on mass electrification and the supply chains that will feed a decades-long shift to renewable energy and electric vehicles in the race to net zero. Critical minerals production is the foundation of that strategy. Global demand for such materials surged to US$320 billion in 2022, doubling during the previous five years.

B.C. does not intend to be left out. Its mining industry is banking on being a major supplier of the ingredients pulled from the earth for batteries used in transport and energy production and storage, such as copper, lithium and molybdenum, to name a few. According to the Mining Association of British Columbia, mining companies are now proposing 16 critical minerals mines, representing capital investments of $36.5 billion. If they all proceed, the mines could dump $10.9 billion in tax revenues into government coffers.

A mine project can’t just focus on the profits, however. It also has to plan for cleaning up the site after production ends. The polluter-pays principle is enshrined in the Canadian Environmental Protection Act. It means people and companies that disturb the environment must pay for cleanup and any other costs to society.

A row of abandoned, wooden structures stands at the Tulsequah Chief mine site. Mountains are in the background.
Several structures remain at the Tulsequah Chief mine camp along the banks of the Tulsequah River in British Columbia. The mine is one of several ugly remnants overshadowing a new era of mining aimed at building a low-carbon economy. Photo: Chris Miller

How much, when and in what form mining companies are required to pay differs from province to province. Generally, mining companies must give provincial governments a financial security to cover some of the cost of reclaiming a site. This is known as bonding and is meant to protect taxpayers if a company can’t or won’t reclaim a site. 

Compared with B.C., other provinces and jurisdictions have varying levels of stringency with security demands. Quebec requires hard financial securities to be put up in full and upfront to guard against a potential bankruptcy while a mine is still in operation. In Ontario, companies that can pass a corporate financial test can self-assure against reclamation cost, but in practice that rarely happens. Instead, almost all provide full security when they file their closure plans. 

Meanwhile, B.C. has no industry-funded pool of money set aside to deal with cleanup of mines that no longer have solvent owners, unlike what’s required for the oil and gas industry.

The province is playing catch-up to address the historical and growing costs of mine cleanup. Some companies have long since gone belly up, leaving taxpayers with millions of dollars in environmental liabilities. Others remain profitable, including some of the largest players in the province, such as Teck and Swiss commodities giant Glencore PLC, and they are still paying for the future remediation of past or currently producing mines.


In its most recent annual report, B.C.’s chief inspector of mines reported that it had collected $3.7 billion of an estimated total liability of $4.1 billion in 2022-23. It describes this as a shortfall of about $400 million. But that’s because costs are estimated and some companies have overpaid. Stripping out those overpayments, the difference as of March 31, 2023, was closer to $753 million. 

Over the past five years, the difference between the government’s coffers and what mining companies owe has shrunk. Last year, the overall gap shrank by $353 million. 

But a closer look at the report data shows that some mines are still millions of dollars short of securing their estimated cleanup costs, exposing taxpayers to potential costs. And, because the government’s current approach allows some mines to count minerals in the ground toward their security, the gap may never be completely closed.

Aerial view of the Tulsequah River, at left, flowing southeast toward the confluence with the Taku River, in British Columbia, Canada. Green trees cover the landscape and snow covered mountains are in the background.
The Tulsequah River flowing southeast toward the confluence with the Taku River. Numerous water sampling programs have pinpointed to elevated levels of metals in the Tulsequah River. Photo: Chris Miller

Uncertainty and risk in B.C.’s new mining policy

David Chambers, founder and president of the Montana-based Center for Science in Public Participation, said B.C. is behind most other jurisdictions as it tries to collect the full cost of mining liabilities. Chambers, who has more than 40 years of experience in mineral exploration and development, formed the non-profit corporation to provide technical assistance on mining and water quality to public interest groups and tribal governments.

“It's pretty accepted here in the U.S. … that you have to have a 100-per-cent coverage for your financial assurance when the mining starts,” Chambers said. B.C.’s new policy changes are a step in the right direction but still carry some risk, he said.

In B.C., the financial security can be in the form of cash, letters of credit, surety bonds, guaranteed investment certificates or cash equivalents. It’s returned once the mine is restored to a “safe and environmentally sound state.”  

Mineral reserves can also sometimes count toward financial security. The government describes this as an incentive for exploration. Mines that have been operating for more than five years and that have a lifespan exceeding 10 years can use up to 10 per cent of the value of their reserves toward a quarter of their security. 

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The policy assumes that there is mineral wealth that can be dug out if needed, but that isn’t always the case. Allowing companies to use reserves as security is risky because demand for minerals and commodity prices fluctuate, Chambers, a geophysicist, said.

Counting minerals in the ground is an example of what’s called a “soft” assurance, since its ultimate value is somewhat uncertain. “Hard” financial assurances, such as cash in hand or trusts, don’t fluctuate and are readily available. Quebec, for example, requires hard financial assurances from mining companies. The Initiative for Responsible Mining Assurance, a global coalition of mining companies, labour unions, nongovernmental organizations and businesses buying minerals, has published international standards recommending closure funds be reliable and readily liquid. 

“What if the mine's reserves don't prove to be as viable or economic as you hoped? What if you can't find another owner for the mine in the event that that owner goes bankrupt? What if a commodity price downturn undermines the business case for the recovery of those reserves?” asked economist Jason Dion, senior research director at the Canadian Climate Institute.

The B.C. government’s policy of accepting soft assurances leaves taxpayers exposed, especially if a severe commodity-price downturn triggered a wave of abandonment, Dion said.

Today, amid the desire to become key suppliers of critical minerals, small mining companies are struggling to attract investment as prices for commodities have tumbled, prompting them to call for Ottawa to fund projects directly.

In B.C. there are five bankrupt or inactive companies that did not provide enough financial assurances to clean up their sites before going out of business, according to the most recent chief inspector’s report. These companies left an unpaid cleanup bill of about $80 million. 

And some historical projects will require maintenance in perpetuity. The closed Britannia Mine, near Squamish, B.C., cost taxpayers approximately $46 million to remediate and requires a water treatment plant that costs $3 million a year to operate. It was described as one of the “most contaminated areas in North America” and water treatment is expected to be needed forever.

Today in B.C., cleanup costs are estimated by mining companies and provided to the government. There are government standards and an Excel document to standardize the process. The province also adds a 15 per cent top-up to the industry estimate. The province said it is currently updating this process.

Guy Archibald, the Executive Director of the Southeast Alaska Indigenous Transboundary Commission, stands outside his home in Juneau, Alaska.
Guy Archibald, the executive director of the Southeast Alaska Indigenous Transboundary Commission, at home in Juneau, Alaska. He has worked on transboundary mining issues between Alaska and British Columbia to create more stringent mining regulation in Canada to protect the downstream Alaskan communities. Photo: Chris Miller / The Narwhal

But the government and industry drastically underestimate the true cost and timeline of mine cleanups, says Guy Archibald, executive director for the Southeast Alaska Indigenous Transboundary Commission. The organization represents 15 sovereign tribal nations in Southeast Alaska. Archibald is an analytical environmental chemist who has worked for more than two decades helping industry control and monitor discharge and pollution. 

The current approach is “completely inadequate” and does not protect British Columbians from financial and environmental costs, Archibald said. The province needs to take a more precautionary approach and better assess the growing risks of major mines, especially for projects that will require water treatment for hundreds of years or more, he said.

For specialists working in reclamation, the growing cleanup costs of the abandoned Giant Mine and Faro Mine in the Yukon loom as a warning. Giant Mine, abandoned in 2005, is now expected to cost federal taxpayers more than $4 billion for remediation. Faro Mine, abandoned in 1998, could cost an estimated $2 billion for cleanup and continuing maintenance.

B.C.’s biggest mining liability gets a new owner  

For Teck, Canada’s largest mining company, 2023 was a pivotal year. After a lengthy saga, which included fending off a hostile takeover bid from Glencore and Teck shareholders voting down a plan to split off its B.C. metallurgical coal business, the company struck a US$8.9 billion deal in November to sell that business, Elk Valley Resources. The buyers: Glencore, Japan’s Nippon Steel Corp. and South Korean steelmaker POSCO. 

These mines are the biggest liability on the books for the province at $1.9 billion. Teck currently has provided $1.5 billion and plans to have the full amount in place by March, as required by the government, said company spokesman Chris Stannell. The bonding Teck has set aside for the Elk Valley coal operations will be transferred to the new owners, Stannell said. Glencore said it has committed to keeping up with the rehabilitation and closure work. 

Meanwhile, as of the most recent chief inspector’s report, Glencore had provided just a small fraction of the reclamation securities for two of its five B.C. mines, leaving a future cleanup bill of more than $8.6 million. Glencore will provide what it owes to the province by the end of March 2024, company spokesperson Charles Watenphul said in an e-mail.

Five mines face possible penalties for falling behind on their reclamation securities, according to the Ministry of Energy, Mines and Low Carbon Innovation. The ministry would not disclose which mines, but said the information would be posted on the B.C. Mines Information website once a final decision is made.

The current interim policy doesn’t have enough teeth behind it, said Allen Edzerza, a Tahltan Elder formerly with the BC First Nations Energy and Mining Council. According to the Mines Act, the chief permitting officer has a lot of discretionary power in how securities are collected. Edzerza wants to see clear laws to ensure mining companies are providing hard financial assurances toward the cost of reclamation. “If you want to be enforceable, if you want clarity, put it in legislation.”

Tahltan Elder, Allen Edzerza, poses for a photo and leans over a railing at the Vancouver Convention Centre. He's wearing a dark sweater.
Allen Edzerza, Tahltan Elder formerly with The First Nations Energy and Mining Council, believes there should be more stringent legislation to ensure there is enough money set aside to clean up after mines. Photo: Jimmy Jeong / The Narwhal

Warnings of a growing liability 

B.C. has faced criticism in the past for the big gap between the estimated cleanup costs of mines and the financial securities held by the province. In 1984, it held just $10 million in securities and the gap kept widening. By 2016, the B.C. auditor general warned that the cost of reclamation for major mines was more than $2.1 billion and the province held less than half that amount. Taxpayers were at risk for a $1.2 billion liability.  

The new interim policy aims to help close the gap. It requires new mines and those with less than five years of production left to pay in full for the damage caused for the next five years. The estimated liability of a mine is reassessed every five years.  

That schedule allows cost estimates to better reflect changes to costs over time and allows companies the flexibility to adjust their cleanup plans, the mines ministry said.

The mines department said it is confident the current financial instruments allow the government access to the reclamation security if required. Collecting beyond the first five years would create a negative incentive for mines to plan for an “artificially short” life span, it said. For example, if a project comes forward with a 30-year plan, the department does not want to penalize it for planning for a longer mine life.

“For many years, companies have been let off the hook,” Mines Minister Josie Osborne said in an interview. “It is a decades-old problem here in British Columbia, and our government is working hard to take action and change this.” 

Minister Josie Osborne stands at First Street dock in Tofino, B.C., Tla-o-qui-aht territory
Josie Osborne, B.C. minister of energy, mines and low carbon innovation, says the province is working towards closing the liability gap, which has been a decades-old problem. Photo: Melissa Renwick / The Narwhal

The province has made progress toward closing the liability gap, said Rangi Jeerakathil, a partner at law firm MLT Aikins. Jeerakathil specializes in environmental, energy and Aboriginal law, as well as corporate social responsibility. 

“In B.C., I think, the approach that they're taking probably makes sense,” Jeerakathil said. He described the securities system as a balancing act between forcing companies to tie up too much capital that could otherwise be used to expand the business and create jobs, and protecting the environment as well as taxpayers who could be left on the hook for cleanup.

Incentivize better designs and ongoing reclamation

While the legacy of current coal projects in the Elk Valley is debated, there are proposals for new mines in the region. NWP Coal’s Crown Mountain project is undergoing federal and provincial assessments and hosting community open houses for feedback. Its goal is to start building by 2026. 

The province’s new approach to fully bonding for the first and last five years of a mine covers the riskiest times for a project, NWP Coal project director David Baines said. At the start, a mine has its highest capital costs and lowest cash generation. Nearer to closure, production will slow down and so will revenues.

Tying up a lot of money at once just in case all the mines in B.C. go bankrupt at once doesn't make sense to Baines. Instead, he’d like to see more tools to encourage progressive reclamation — cleaning up while mines are still active — and better designs. 

Crown Mountain is still seeking permits and hasn’t put down a reclamation security or estimated the cost of cleanup yet. Baines said his philosophy is to try and reduce the impact as much as possible during the planning of the mine. It’s a practice of “designing your mine so that chemicals and materials don't leach out of the rocks,” Baines said. 

After a mine shuts down, it could need water treatment to ensure any mined materials left behind don’t pollute the waterways. Exactly how to operate and finance water treatment that could be needed for more than 100 years is a continuing discussion in the mining industry. It all feels “like a paper game”, Baines said. “No one knows what it's really going to cost, what those reserves are worth or what inflation is going to do.”  

Ultimately, if a company can’t afford reclamation then a project should not go forward, he said. 

Orange liquid or acid mine drainage leaks from an opening to the Tulsequah Chief mine, in British Columbia.
The Tulsequah Chief mine has been polluting acid mine drainage into the Tulsequah River since the mine closed in 1957. Photo: Chris Miller

No protections from disaster

The idea that a lot of money could be needed all at once doesn’t feel far off to Archibald. He points to the 2014 Mount Polley disaster in which a tailings dam collapsed and sent a torrent of water and waste into the local watershed. The B.C. public paid $40 million in cleanup costs while no charges or financial penalties were brought against owner Imperial Metals Corp. The mine is back in operation today.

Beyond catastrophic failures, extreme weather from climate change presents new problems for major infrastructure. The lack of a contingency fund is a major gap in current policy, say mining reform advocates.

Archibald, Dion and others are calling for a shared pool of funds that all mine operators pay into to help cover costs that aren’t in closure plans, sudden closures and catastrophic events. Archibald imagines something similar to the Oil Spill Liability Trust Fund that was created in the U.S. after the Exxon Valdez spill that cost billions in cleanup costs. The fund comes from a fee on imported and domestic oil.

B.C. has its own template used in its energy industry. The province’s Orphan Site Reclamation Fund is a pool of money funded through levies on oil and gas permit holders for cleaning up wells and other facilities that no longer have viable owners.

“It's not really even realistic to think that a single mining company could provide assurance against the cost of a worst-case environmental disaster,” Dion said. He hopes that the B.C. government takes a hard look during phase two of its public interest bonding strategy. During the next year, the government plans to review financial assurance mechanisms for planned and unplanned cleanup costs for all types of industrial projects.

When asked about creating a specific shared pool for the mining industry, Minister Osborne pointed to existing “strong environmental legislation” and said the government plans to continue monitoring the interim policy for improvement. 

The province’s mining industry is an enthusiastic supporter of the government’s policy, saying it is stringent and should give taxpayers comfort that they won’t be left on the hook for cleanup and reclamation. It will encourage long-term stewardship that will help support future development of critical minerals, said Michael Goehring, CEO of the Mining Association of British Columbia.

“That's good for industry to have the certainty, and I think it's good for British Columbians,” he said.

The Tulsequah River, and the greater Taku River watershed, sprawls through the wilderness of west coast of North America. The Taku has all five species of pacific salmon. Video: Chris Miller

But the policy hasn’t eliminated concerns for everyone. The area around the Taku is also known by a different name to prospectors and miners: The Golden Triangle. It’s a region renowned for its promise of gold, silver and copper deposits.

Just downstream from the Tulsequah Chief mine, on the west bank of the river, Canagold Resources Ltd. is seeking permits to start construction on its New Polaris gold mine. Canagold will file its plans for mine closure in its detailed project description in the coming weeks. It will include the bonding plans as required in the B.C. policy, as well as details of its consultation with the First Nations, said Canagold CEO Catalin Kilofliski. He described his company’s relationship with the Indigenous community in the region as collaborative and transparent.

John Morris Sr., an Elder with the Douglas tribe of the Taku River Tlingit, is shocked there could be another mine on the Taku River when the Tulsequah Chief mine still hasn't been cleaned up. Photo: Chris Miller / The Narwhal

The New Polaris project is different from Tulsequah Chief on the other side of the river, partly because there will be no acid drainage, he said. “The project does not resemble anything at the other project, due to natural reasons. And any historical legacy existing on our project will be dealt with and be an integral part of project planning all the way to closure and reclamation,” Kilofliski said. 

Still, Elder John Morris Sr. wrote in a recent op-ed that he finds it “almost unbelievable” the government would entertain an application for another mine while the legacy of the old one has not been fully dealt with. “The Taku will continue to feed people for thousands of years into the future, if we just keep it clean and flowing freely.”

He worries about the future of the watershed as it continues to tempt prospectors. He acknowledges there is demand for cellphones and minerals. It’s not about butting heads with industry, he said, it’s just about putting aside enough money to clean up.  

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We’ve got big plans for 2024
Seeking out climate solutions, big and small. Investigating the influence of oil and gas lobbyists. Holding leaders accountable for protecting the natural world.

The Narwhal’s reporting team is busy unearthing important environmental stories you won’t read about anywhere else in Canada. And we’ll publish it all without corporate backers, ads or a paywall.

How? Because of the support of a tiny fraction of readers like you who make our independent, investigative journalism free for all to read.

Will you join more than 6,000 members helping us pull off critical reporting this year?

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