Owner of Acid-leaking Tulsequah Chief Mine Goes into Receivership

Cleanup of the troubled Tulsequah Chief mine in northwest B.C., which has leaked acidic water into nearby streams and rivers for more than six decades, is again in limbo following an announcement by the owner, Toronto-based Chieftain Metals Inc., that the company is in receivership.

Chieftain, in a statement, said the accounting firm Grant Thornton “was appointed through court order as the receiver of all the assets, undertakings and properties of Chieftain.” The majority of company directors have resigned.

The court order came after a demand by West Face Capitol for repayment of a $26-million loan.

Chieftain’s properties include 65 mineral claims, but the company’s principal focus was development of the Tulsequah Chief, which it bought in 2010. At that time, Chieftain accepted responsibility for the long overdue environmental cleanup, but an interim water treatment plant operated for only six months and was closed in 2012 because of costs and technical issues.

The mine is situated beside the Tulsequah River, the largest tributary to the Taku, one of Alaska’s most important salmon rivers, and the continuing acid mine drainage has infuriated Southeast Alaskans who point to the pollution as a major reason not to trust B.C.’s rules and oversight of mines being developed along the B.C./Alaska border.

Chris Zimmer of Rivers Without Borders said the Tulsequah Chief is a poster child for downstream concerns at a time of growing demands from Southeast Alaskans for Alaska and the U.S. State Department to work together to obtain guarantees that B.C.’s mining development won’t harm water quality, fisheries or livelihoods downstream in Alaska.

“If B.C. can’t ensure that the Tulsequah Chief is cleaned up, why should Alaskans have any trust that much larger mines like KSM won’t pollute our waters?” asked Zimmer, who is demanding that the B.C. government step in and clean up the site, rather than relying on mining companies to clean up the site.

The KSM mine, about 35 kilometres from the Alaska border, which will tap into one of the largest gold and copper deposits in the world, is one of about a dozen B.C. mines in the transboundary areas in various stages of application, planning and development.

Last year, Energy and Mines Minister Bill Bennett flew over the Tulsequah Chief mine site and promised that the mess would be cleaned up. However, he then appeared to backtrack, saying scientists did not believe the acid mine drainage was causing any environmental harm.

That is a claim disputed by many of the Southeast Alaskan organizations, tribes and politicians anxiously watching the proliferation of B.C. mines near salmon rivers flowing into Southeast Alaska and there are growing demands for the U.S. federal government to step in and refer the issue of transboundary mines to the International Joint Commission.

“The size of the watersheds and valuable fisheries at risk and the growing evidence that neither B.C. nor its mining industry can be trusted, clearly shows Alaska cannot go it alone with B.C.,” Zimmer said.

“We need the help of the U.S. federal government and the authority of the Boundary Waters Treaty to ensure that B.C. and its mining industry pay for the true costs of mining rather than risking fisheries and water quality downstream,” he said.

The Tulsequah Chief was closed by Cominco in 1957 without any cleanup or reclamation of the site. It was bought by Redfern Corp. in 1992, but numerous government warnings and reclamation orders were ignored and Redfern filed for bankruptcy in 2009.

“Since the mining companies have been unable to halt the acid mine drainage, it’s time for B.C. to honour the promises made by Minister Bill Bennett last August and clean up this mess,” Zimmer said.

Energy and Mines Ministry spokesmen could not be contacted by time of publication.