A leading credit rating agency’s financial downgrading of Imperial Metals Corp. is sending alarm signals through B.C. and Alaska groups concerned about the future of mines operated by the company.

Moody’s Investor Service has reassessed Imperial Metals’ “probability of default rating,” with financial analysts stating the company is at imminent risk of not being able to pay its debts. The company’s rating is “judged to be speculative, of poor standing, subject to very high default risk and may be in default on some, but not all, of their long-term debt obligations,” according to the service.

Imperial Metals, based in Vancouver, owns the Mount Polley Mine near Williams Lake — the site of the 2014 tailings pond collapse — and the Red Chris Mine, a large open-pit mine near the border of Alaska which uses the same tailings pond infrastructure as Mount Polley.

Operations at a third site owned by Imperial — the Huckleberry Mine, near Houston B.C. — have been on hold since last year because of low copper prices, according to the company website.

The company has seen its stock price plummet over the last year and recently completed a new debt financing plan after lenders granted a waiver to avoid default, according to Bloomberg News. The major shareholder is oilsands tycoon and Calgary Flames co-owner Murray Edwards, who previously helped arrange $150-million in loans for the company.

When asked about its financial situation, a company representative referred DeSmog Canada to an Imperial Metals annual report.

Communities and Taxpayers Left Holding the Bag for Bankrupt Mines

Alaskan and director of Salmon Beyond Borders said Imperial Metals’ shaky finances underline the need for binding protections for everyone living downstream from mines in transboundary watersheds.

“We know (B.C.) needs much greater financial-bonding legislation, so to find out that this company is in a dire financial position is just super troubling. We know there is no money available to reclaim the Red Chris Mine, so if the company goes bankrupt, it would be very, very troubling,” Hardcastle said in an interview.

“We need a robust financial assurances mechanism in these shared watersheds.”

ICYMI: In Photos: The Canadian Mining Boom You’ve Never Seen Before

The 2015 annual report of B.C.’s Chief Inspector of Mines (the most recent year available) shows that, like other mining companies in B.C., Imperial Metal bonds do not cover estimated liabilities.

The total bond for Mount Polley was $23.6 million, but the liability estimate is $35.3 million, for a shortfall of $11.7 million.

And that liability estimate should probably be much higher, said Ugo Lapointe, Canadian coordinator of MiningWatch Canada.

The Huckleberry bond was $37 million and the liability estimate $59 million, for a shortfall of $22 million. Red Chris posted a bond of $12 million with a liability estimate of $18 million, meaning a shortfall of at least $6 million.

So Imperial Metals has $73 million in bonding for a total reclamation estimate of at least $103 million, Lapointe said.

B.C.’s Underfunded Mines Represents Over $1 Billion Taxpayer Liability

Last year, B.C.’s Auditor General Carol Bellringer, who, in a report, slammed the B.C. government for failing to adequately monitor mines, said the fund that is supposed to cover reclamation costs is short more than $1 billion.

Another 2016 report by independent economist Robyn Allan found B.C.’s out-of-date mining regulations allow companies to chronically underfund mine remediation and disaster costs, ultimately leaving the burden to taxpayers. Allan estimates B.C. mines represent an underfunded liability of $1.5 billion.

There are over 84 abandoned contaminated industrial sites in B.C., mostly from mining, that will cost an estimated $508 million to remediate, according to the Crown Contaminated Sites Program. Responsibility for these sites falls to the province because the owners and operators of the projects “no longer exist,” according to the B.C. government.

Between 2014 and 2016 the cost of contaminated sites in B.C. rose 83.4 per cent. The spectre of financially unstable mining companies adds to the growing concern that B.C.’s mining boom along the Alaska border is occurring without regard for long-term cleanup and remediation costs.

Imperial Metals remains responsible for continuing cleanup and remediation around Mount Polley, where 24 million cubic metres of contaminated sludge and mine waste swept into lakes and rivers after the collapse of a 40-metre high tailings dam.

The Red Chris mine, which opened in late 2014 and has a 25-year lifespan, has a tailings impoundment seven times the capacity of Mount Polley.

Locals Fear Repeat of Tulsequah Chief Debacle

But Alaskans can already point to a glaring example of how badly things can go wrong when mine reclamation activities aren’t adequately funded.

The Tulsequah Chief Mine, on the Canadian side of the border, has been leaking acid mine drainage into a tributary of the salmon-rich Taku River for 60 years. After two company bankruptcies and frequent promises to clean up the mess, little has happened.

Chris Zimmer of Rivers Without Borders has a sinking feeling that, if Imperial Metals gets into deep financial problems, Red Chris could be a repeat of the Tulsequah Chief.

“We saw this happen at the Tulsequah Chief where we ended up with an abandoned mine pouring acid mine drainage into the river for 60 years. That was exactly the same process,” he said.

The fears are that either the company could go bankrupt and walk away from the mess at Red Chris or, if they are short of money, they will start cutting corners, Zimmer said.

“The government needs to step in and keep a very good eye on this site and what the company is doing,” he said.

Jacinda Mack, coordinator of First Nations Women Advocating Responsible Mining and a member of the Xat’sull First Nation, is already keeping a wary eye on Imperial Metals’ finances.

“I am very concerned with this new information about Imperial Metals,” Mack told DeSmog Canada.

“Will Imperial Metals walk away from their Mount Polley Mine and abandon their responsibilities to clean up and treat the pollution from the ongoing disaster — such as what happened with owners at the Tulsequah Chief?”

“They haven’t been very forthcoming at all about this financial situation…It is really frustrating when they are ignoring things like the lake colour changing and algal blooms that never happened before,” she said.

There are many questions that need answers, such as why B.C. is not requiring Imperial Metals to pay the full cost of the Mount Polley cleanup, Mack said.

“What is B.C. going to do to ensure Imperial Metals meets health and safety requirements and their commitment to clean up Mount Polley Mine?” Mack asked.

Hardcastle is also pushing for more oversight of the transboundary mines, which are among the largest in North America.

“We need to know how we can prevent these mines from getting so far along before there are more protections in place,” she said

Alaska Politicians Pushing for Input on Transboundary Mines

The concerns are echoed by Alaska’s congressional delegation and a letter sent to U.S. Secretary of State Rex Tillerson, signed by Alaska Governor Bill Walker, Lt. Governor Byron Mallott, Senator Lisa Murkowski, Senator Dan Sullivan and Congressman Don Young, says U.S. economic interests could be threatened by B.C. transboundary mining and “inadequate financial mechanisms to assure long term management of toxic wastes and redress for damages from potential releases.”

The letter emphasizes concerns about the development of large-scale hard rock mine proposals and operations in B.C. “and their potential catastrophic effects on Alaska’s communities and habitats surrounding the transboundary rivers.”

The Alaskan politicians want the State Department to push Canada for more input on transboundary mine proposals, development of a database to track cumulative effects on water quality and a decision on whether the issue should be referred to the International Joint Commission.

Mallott and Alaska tribal representatives met with B.C. officials in early November and are planning to go to Ottawa next year to hold further talks on transboundary watersheds, Mallott said in an emailed statement. He will also go to Washington in January to meet with State Department officials.

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Two fish-bearing creeks will be used for 2.3 billion tonnes of toxic tailings from the proposed Kerr-Sulphurets-Mitchell (KSM) mine in northwest B.C., wiping out habitat for several populations of small Dolly Varden fish.

Seabridge Gold Inc. has been given federal government approval to use upper tributaries of the North Treaty and South Teigen Creeks, which flow into the Nass and Bell-Irving rivers, for tailings from the planned gold, copper and molybdenum mine 65 kilometres northwest of Stewart and 30 kilometres from the Alaska border.

Once in operation, KSM is set to become the largest open pit mine in North America. Construction is set to begin in 2017.

While the company has pledged to compensate for the loss with development of additional fish habitat in nearby streams and will relocate about 30,000 fish from the affected creeks, Alaskans say they were not consulted, despite a recently-signed Memorandum of Understanding between B.C. and Alaska.

There are also growing concerns on the Alaskan side of the border that Canada is making a habit of allowing fish-bearing streams to be used for tailings.

“This just underscores our frustration about really being shut out of the process,” said Heather Hardcastle of Juneau-based Salmon Beyond Borders, pointing out that fish do not abide by national boundaries.

Seabridge plans to build 23-kilometre tunnels to take the mining waste to the approved watersheds on the Canadian side of the border but the closest watershed is the Unuk River, one of Alaska’s premier salmon rivers.

Rendering of the KSM mine showing the tailings management area. Image: Rivers Without Borders

Chris Zimmer of Rivers Without Borders emphasized that what happens to salmon and steelhead trout in the Bell-Irving and Nass rivers affects Alaska fishermen.

“Tailings are the most toxic of materials and they would be draining into world-class salmon and steelhead rivers,” he said.

Hardcastle and Zimmer question why the Canadian government is handing out amendments to the Metal Mining Effluent Regulations (MMER) to allow fish habitat to be used for tailings.

“These MMER amendments have become almost a de facto process. The extraordinary has become the normal way of doing business,” Zimmer said.

“It seems like this is becoming the standard in Canada and B.C., to authorise the filling-in of fish-bearing water bodies with toxic tailings in perpetuity. We saw the same authority granted at Red Chris last year.”

Red Chris, another B.C. mine close to the Alaska border, is owned by Imperial Metals, the same company that owns the Mount Polley mine, where the tailings dam collapsed in 2014 sending 25 million cubic metres of sludge and tailings flooding into the Quesnel watershed.

After the Mount Polley disaster an expert engineering panel recommended that B.C. move to dry stack tailings, a system of pressing about 85 per cent of the moisture from tailings and then stacking them in a pile.

However, companies say it is too expensive to move to dry stacking and the KSM mine will have a 239-metre earthen dam — one of the highest tailings pond dams in the world — holding back two billion tonnes of tailings.

“Just the fact that they are able to build these massive tailings facilities is really maddening,” Hardcastle said.

Toxic tailings must be treated forever and that is a long time, Zimmer said.

“It’s not as if acid mine drainage stops in 200 years. It’s not as if it becomes magically non-toxic and what bank account is then going to exist to deal with the problems? It’s almost like having radioactive waste dumps,” he said.

Environment and Climate Change Canada media spokesman Mark Johnson said in an emailed response to questions from DeSmog Canada that depositing of “deleterious substances in waters frequented by fish” requires the proponent to come up with a fish habitat compensation plan.

At the KSM site, compensation for the loss of 10.6 hectares of fish habitat will be creation of 18.2 hectares of fish habitat and relocation of the fish.

“Seabridge has developed a fish salvage strategy to ensure that the fish are relocated to suitable water bodies within the Teigen and Treaty creeks watersheds as well as other mitigation measures to monitor the plan,” Johnson wrote.

Mine owners must test the run-off as it is required “that mine effluent not be acutely lethal to fish,” he said.

Since the regulations came into force in 2002, permission has been given for 27 bodies of fish-bearing water, associated with 12 mines, to be used to store tailings, Johnson said.

“The KSM project will be the 13th mine to have an authorized tailings impoundment area in a fish-frequented water body,” he said.

Seabridge looked at 14 alternatives for managing the tailings of which four were potentially feasible, and the creek plan was assessed as the best, Johnson wrote.

Brent Murphy, Seabridge vice-president of environmental affairs, said there will be no significant downstream effects from using the creeks for tailings.

“And there will absolutely not be any effect on the Nass,” he said.

In addition to the assessment by the federal government there has been a public comment period and extensive consultation with indigenous groups and the Department of Fisheries and Oceans, Murphy said.

“It’s a very rigorous, step-by-step process. These things are not decided willy-nilly,” he said.

However, others, such as Fred Olsen Jr. of the United Tribal Transboundary Working Group, believe that poisoning lakes and rivers for the sake of the mining industry shows remarkable cynicism.

“This is not the world I was promised,” he said.

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Acid mine drainage from the Tulsequah Chief mine in northwest B.C. has worried and infuriated Southeast Alaskans for almost six decades and concerns have again peaked with a new analysis that claims a study of runoff — that found the drainage would not affect fish — was flawed.

The mine, situated beside the Tulsequah River, the largest tributary to the Taku, one of Alaska’s premium salmon rivers, was closed by Cominco in 1957 without reclamation or clean-up of acid mine drainage.

The mine was bought by Redfern Corp. but numerous government warnings and reclamation orders were ignored and Redfern filed for bankruptcy in 2009. The mine was then bought in 2010 by Toronto-based Chieftain Metals Inc., which accepted environmental liabilities as part of the purchase price.

Hopes that the drainage problems would be addressed were short-lived and an interim water treatment plant that operated for only six months was closed in June 2012 because of costs and technical issues.

The only consolation for those worried about the effect of toxic runoff on salmon, was a study, ordered by the province and conducted for Chieftain in 2013, that concluded that, although significant levels of copper and zinc were found downstream from the mine, the drainage posed a low risk to fish in the Tulsequah River and that the discharge did not affect the Taku River as Tulsequah water was diluted by a factor of six when mixed with Taku waters.

“Chieftain Metals is of the opinion that the extent of aquatic environmental risk is very low for the majority of the year and low to moderate during the winter and spring thaw,” Chieftain Metals CEO Victor Wyprysky wrote in a 2013 letter to the provincial Ministry of Environment.

However, that study is now being questioned by a new analysis, conducted for Rivers Without Borders, that has found problems with the way information was collected.

“Consequently, the conclusion of low risk to aquatic life from Tulsequah Chief mine acid mine drainage is unreliable,” says the report by fisheries biologist Sarah O’Neal.

Chris Zimmer of Rivers Without Borders, one of the many Alaskan organizations, tribes and politicians that have been watching the recent proliferation of B.C. mines close to the Alaskan border with trepidation, said the Chieftain study is fundamentally flawed and cannot be used to delay clean-up of the polluting mine any longer.

In a question-and-answer interview with the Juneau Empire, Bennett said: “I said I’m going to try to fix it, so I’m going to try to fix it. It’s a horribly difficult and complex issue for B.C., because the scientists on both sides of the border say there isn’t any environmental harm from what’s going into the Tulsequah River. We have limited resources.”

DeSmog Canada received no response to numerous phone calls and emails to both the B.C. Ministry of Energy and Mines and Chieftain Metals.

In November, B.C. and Alaska signed a memorandum of understanding to strengthen cross-border consultation on major mine developments and to develop a joint water monitoring program for transboundary waters.

The Tulsequah Chief should be one of the first issues addressed and, as it seems unlikely that Chieftain has the wherewithal or financial resources to clear up the problem, it is up to B.C. and the Canadian federal government to step in, especially as questions are again being raised about damage from the runoff, Zimmer said.

“It’s time to seal up this festering sore. If Chieftain can’t do it, then B.C. needs to step up. Alaskans concerned about B.C. mining across the transboundary region see the Tulsequah Chief as a test case of how B.C. will deal with other mines,” Zimmer said.

“So far, B.C. is failing the test and Alaskans have real reason for worry. If B.C. can’t deal with this relatively small mine, how will it deal with massive mines like KSM?”

“Chieftain and B.C. have both a legal and moral responsibility to clean this up,” Zimmer said, pointing to Energy and Mines Minister Bill Bennett who, while he was visiting Alaska last year, initially pledged to clean up the mess and then backtracked, pointing to the Chieftain study.

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 10 mines close to the Alaska/B.C. transboundary region in various stages of applications, planning and development.

This week a delegation of tribal leaders, commercial fishing groups and conservation organizations from Alaska was in Ottawa looking for help from federal politicians in giving Alaska a bigger say in mine development in shared waters.

The group, who will also meet with Bruce Heyman, U.S. ambassador to Canada, wants the issue referred to the International Joint Commission, which was created under the 1909 Boundary Waters Treaty, to deal with disputes in shared waters.

“We wanted to get our request in the radar before Prime Minister Trudeau and President Obama meet here in Ottawa later this month as part of the North American summit,” Heather Hardcastle, from Salmon Beyond Borders, told DeSmog Canada.

Currently Alaska, as the downstream neighbour, takes all the risks associated with mines in B.C., she said.

“It is increasingly clear that it will take our two countries working together to decide how to manage our globally significant share of this iconic region,” Hardcastle added.

Years of trying to get the B.C. government to address concerns have produced nothing but nice words and vague promises, said Frederick Otilius Olsen Jr., chairman of the United Tribal Transboundary Mining Work Group, representing 15 Southeast Alaska Tribes.

“We seem to be getting nowhere,” Olsen, a member of the delegation to Ottawa, said.

“Facts, reports and studies keep emerging — the latest from B.C.’s Auditor General — that indicate the situation is even worse than we feared. We need federal help and an international solution to this international problem.”

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High-level international action is needed to ensure that southeast Alaskan rivers and fisheries are protected from B.C. mines along the B.C./Alaska border, say Alaska’s federal representatives.

Concerns about the environmental safety of mines in the transboundary region have escalated since the province’s auditor general issued a scathing report earlier this month on B.C.’s mining practices and Alaska’s Congressional Delegation is now pushing for Secretary of State John Kerry to step in.

“We write to express our continuing concerns about the development of several hardrock mines in British Columbia and their potential effects on water quality in the transboundary rivers that flow from Canada into Southeast Alaska,” says a letter to Kerry from the congressional delegation, made up of Senator Lisa Murkowski, Senator Dan Sullivan and Congressman Don Young, all of whom are Republicans.

The group points out that, like most Alaskans, they support responsible mining.

“But Alaskans need to have every confidence that mining activity in Canada is carried out just as safely as it is in our state. Yet, today, that confidence does not exist,” says the letter.

There is a history of Canadian acid mine waste affecting Southeast Alaska, says the letter, referring to the Tulsequah Chief Mine that has been leaking acid waste into the Taku River for decades.

“As Canada continues to consider and approve new mines in B.C. and Yukon, the risk of additional impacts has increased,” says the letter.

“Water quality is an extremely important issue for Alaskans. Accordingly we ask that you and other officials from the Department of State raise these concerns with the governments of Canada and British Columbia.”

The letter points out that the report by Auditor General Carol Bellringer concludes that B.C.’s monitoring and inspection of mines are inadequate to protect from significant environmental risks and there are major gaps in resources, planning and tools.

The delegation wants Kerry to look at whether a referral of the issue to the International Joint Commission would be the best way to determine whether Canadian mines are following best practices in their treatment of waste water and acid-producing mine tailings, especially in light of “the scientific reviews of the causes of the Mount Polley tailing disposal dam failure.”

The Mount Polley dam disaster saw 25-million cubic metres of tailings, sludge and mining waste flood pristine drinking water near Williams Lake, B.C.

Under the 1909 U.S.-Canada Boundary Waters Treaty, either nation can call for an International Joint Commission to be appointed to adjudicate water disputes.

“If problems do occur, either nation can seek damages against the other for provable economic impacts, provided there is sufficient evidence of damage,” the letter points out.

“Should there be an impact to the transboundary waters that flow from Canada to Alaska, our state’s fisheries, tourism and native peoples could all be hurt.”

About 10 mines are in various stages of exploration and permitting on the B.C. side of the border and an approval that particularly alarmed Alaskans was the Red Chris Mine in the Iskut/Stikine watersheds, which opened in 2015 and is owned by Imperial Metals, the same company that owns Mount Polley.

No response has yet been received from Kerry, but a spokesman for Kerry’s office told DeSmog Canada last year that they did not anticipate a referral to the International Joint Commission at that time and instead wanted to encourage cooperation between B.C. and Alaska.

Last November Alaska Governor Bill Walker and B.C. Premier Christy Clark signed a non-binding memorandum of understanding to establish a bilateral working group on the protection of transboundary waters, but critics say that is not sufficiently rigorous to ensure mine safety.

The letter from the congressional delegation is also asking that B.C. officials consider the cumulative effects of mining during review and approval processes and that there should be a more formal consultation process with U.S. agencies.

There should also be support for Environment Canada’s water quality study looking at the impact of mining on transboundary waters and funding for water quality testing on the U.S. side of the border to establish baseline data “so that the U.S. can file for damages in the event of mining-related damage from Canadian mines,” the group suggested.

Heather Hardcastle, campaign director for Salmon Beyond Borders said the letter is a powerful statement that underscores that Alaskans, regardless of political party, want Kerry to step in.

“The danger we’re facing here in Alaska is real and was reconfirmed by the recent B.C. auditor general’s warning,” Hardcastle said.

“We urge Secretary Kerry to stand up for American jobs and seek IJC involvement in this matter so Americans have a say in the protection of our resources shared by the U.S. and Canada.”

Almost 20,000 letters requesting the commission’s involvement have been delivered to Kerry, Hardcastle said.

Frederick Olsen Jr., chair of the United Tribal Transboundary Mining Work Group, agreed an IJC review would help with a long-term approach to the protection of transboundary waters.

“Secretary Kerry has a lot on his plate. He has big fish to fry in our crazy world, but we need him to look over at us. We want to prevent fish from frying in our waters due to B.C.’s mine waste,” Olsen said.

Image: Conrad Beaudin/Salmon Beyond Borders

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Water quality in a tributary of one of Southeast Alaska’s prime salmon rivers will improve once a new mine opens on the B.C. side of the border according to spokesmen for Seabridge Gold Inc, the Toronto-based company planning to open the Kerr-Sulpherets-Mitchell (KSM) mine.

The copper, gold and molybdenum mine, 65 kilometres northwest of Stewart and 30 kilometres from the Alaska border, received federal and provincial environmental assessment approvals last year and the company is now seeking a joint venture partner for the $5.4-billion project.

But the prospect of a massive mine close to a tributary that runs into the Unuk River has alarmed Alaskan fishing, First Nations and environmental groups who say the risk is unacceptable and are pushing for transboundary mining issues to be referred to the International Joint Commission.

“The long term risks of KSM far outweigh any short-term improvements to water quality the mine may create,” Chris Zimmer, Rivers Without Borders Alaska campaign director, said.

The KSM tailings pond, with a massive 239-metre tailings dam, will be built in the Bell Irving/Nass watershed in B.C., but the mine operation will be close to Sulpherets Creek which runs into the Unuk River.

“The open pits and waste rock piles are located in (the Unuk) watershed,” Heather Hardcastle of Salmon Beyond Borders said.

“They’re essentially using the Unuk, all the way up to the border as a mixing zone.”

However, Brent Murphy, Seabridge Gold vice president environmental affairs, in an interview with DeSmog Canada, said water quality in the creek is already bad because of natural erosion of copper, iron and zinc deposits.

“The acidity will basically eat your boots off,” he said.

Federal and provincial regulators agree there will not be any impact in Alaska from the mine, Murphy said.

“The operation of the KSM water management system will, in fact, improve the overall water quality,” he said, pointing to company photos of discoloured creek water.

“We will treat the water that comes into contact with the mine site and improve the water running into Sulphurets Creek and ultimately the Unuk River,” Murphy said.

But Alaskan groups say the photos are misleading and point to a 2014 report by Skeena Wild Conservation Trust that concluded KSM would release metals into the Unuk watershed that would exceed levels known to have serious impacts on salmon.

“I am especially concerned when people make statements to the effect that they can improve natural systems. Seems the height of hubris,” said Guy Archibald, Southeast Alaska Conservation Council, Inside Passage waterkeeper coordinator.

“There is more complexity in a mud puddle than science will ever understand and a massive intervention such as the KSM mine will no doubt have massive unforeseen negative consequences.”

Following the 2014 collapse of the Mount Polley tailings pond dam there has been increased concern about earthen tailings dams and the expert panel looking into the disaster recommended that mining companies should adopt best available technologies and consider dry stacking tailings when possible.

However, Peter Williams, Seabridge vice-president of technical services said location is the paramount concern when choosing how to dispose of tailings and, after considering dry stacking, it was decided the KSM site was ideal for wet tailings, with a lined tailings pond to ensure no discharge into the environment.

“We have put it into a valley and most of the walls are valley walls, so they are very strong,” he said.

“It makes this location very safe.”

The u-shaped valley will have gently-sloping dams at either end, constructed of sand from the tailings, Murphy said.

That is very different from the Mount Polley dam which consisted of a steeply-sloping ring dyke constructed of locally-sourced till material, he said.

“Most importantly, after treatment, water from the proposed KSM facility will be discharged on an annual basis, preventing the build-up of any water within the facility as occurred at Mount Polley where there was no treatment of water for discharge,” he said.

Zimmer, who emphasized that Alaskan groups are concerned about the effect of the mine on any rivers, whether Canadian or Alaskan, said one of the major worries is what happens over time.

“What happens after 250 years? What if the water treatment fails or doesn’t work as proposed — Seabridge has no contingency plans for this,” he said.

Williams said there should be no concerns after closure as, after the tailings are topped and revegetated, there will be minimal water flow.

During the six-and-a-half-year review process, Seabridge held numerous meetings with Alaskan groups and regulators, including a public meeting in Ketchikan, Murphy said.

There was also a detailed assessment by independent federal regulators so there was no need for a panel review — as requested by Alaskans — because it would duplicate work already done, Murphy said.

Neither would a referral to the International Joint Commission be the correct process, Murphy believes.

“In our opinion [the IJC] is a political dispute resolution process and we are continuing to support efforts of the B.C. and Alaska governments who are working on increasing cooperation between the two governments on transboundary projects and we encourage them to work towards a memorandum of understanding,” he said.

But Zimmer said most of the meetings were open only to agency and company officials and many questions remain — such as lack of funds to deal with major accidents or proof that Seabridge can treat water for selenium.

“The arrogance demonstrated by Seabridge’s blind faith in their engineering in the face of the forces of Mother Nature and time, is the same arrogance that resulted in the Titanic, Three Mile Island, Chernobyl and Mount Polley,” he said.

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There are a few unarguable truths about mine tailings, the pulverized rock, water and sludge left over from mineral extraction — mining is a messy business, the leftovers have to be dealt with forever and it’s impossible to guarantee against another tailings dam failure such as the Mount Polley catastrophe.

In B.C., there are 98 tailings storage facilities at 60 metal and coal mines, of which 31 are operating or under construction and the remaining 67 are at mines that are either permanently or temporarily closed

That means communities throughout B.C. and Alaska are looking nervously at nearby tailings ponds, which sometimes more closely resemble lakes, stretching over several square kilometres, with the toxic waste held back by earth and rock-filled dams. The water is usually recycled through the plant when the mine is operating, but, after the mine closes, water, toxins and finely ground rock must continue to be contained or treated.

It’s the realization that tailings have to be treated in perpetuity that worries many of those living downstream, especially as the Mount Polley breach happened only 17 years after the dam was constructed.

“The concept of forever boggles people minds. In one thousand years is the bank account still going to be there? These people are going to be dead,” said Chris Zimmer of Rivers Without Borders.

“There are time-bombs up there without a plan to deal with them. Are they going to be able to build a mine that’s going to keep its integrity forever?"

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It raises the question of whether there should be any mining in an area that is vital to five species of salmon and sustains the livelihoods of so many Alaskans, said Heather Hardcastle, a Juneau fisherman and coordinator of Salmon Beyond Borders.

“This is why this region of the world is so globally significant and why we care so much,” said Hardcastle, who is among those pushing for the issue to be referred to the International Joint Commission.

Two B.C. Tailings Dams Expected to Fail Every Decade: Expert Panel

The unease is heightened by the expert panel report on the Mount Polley dam failure, which concluded that, without significant changes to current mining practices, two tailings dams could be expected to fail in B.C. every 10 years.

Karina Brino, Mining Association of B.C CEO, said the association is aiming for a zero failure rate with members committed to implementing the panel’s recommendations for best practices.

But no one controls nature, Brino warned.

“I don’t think anyone can say this will never, ever happen again. It would be irresponsible to say that, because these are man-made structures that may be affected by natural causes,” she said.

Mining experts say that, with proper management, the ponds are safe.

“Different accidents happen, but is a plane safe? There are more accidents with planes than tailings dams. It depends on how you maintain them,” said University of B.C. mining professor Marcello Veiga.

Reclamation is a long-term commitment and communities need to be reassured that there are systems in place to look after the facilities, he said

It’s a claim met with skepticism by those battling for better safeguards for watersheds and an international assessment of the new-age gold rush on the B.C./Alaska border.

“Proposed Canadian mining and energy development on several headwaters within this region pose a major threat to fisheries and local communities downstream,” says a letter from Irene Dundas, Ketchikan Indian Community council member and former president.

“Our concern about Canada’s rush to develop this extraordinary region is compounded by recent legislative initiatives that have weakened Canadian environmental assessment standards and oversight.”

Mine Inspections Have Dropped Dramatically

According to the Chief Inspector of Mines annual reports, the number of mine inspections dropped dramatically from 2,021 in 2001 to 1,496 in 2002, after the B.C. Liberals came to power. The low was 494 in 2011 and in 2013, the latest figure available, there were 904 inspections. Mount Polley had 14 inspections, the highest of all mines.

First Nations land is ground zero for many of the dams and a June report by the B.C. First Nations Energy and Mining Council, which looked at 35 tailings ponds in northern B.C., found that 8,678 kilometres of streams, rivers and lakes, 33 First Nations communities and 208 cities and settlements would be in the path of contaminants if those dams failed.

Copper, a common contaminant in acid rock drainage, is acutely toxic to salmon and the First Nations Mining Council is calling for protection of river, lake and wetland ecosystems from industrial activities, protection for rivers with high numbers of migratory fish and better funding for problems that might arise after a mine closes.

Red Chris, KSM Mines to Use Tailings Ponds Despite Expert Recommendation

However, in northwest B.C., the two newest mines, Red Chris and KSM, are both close to important salmon rivers that flow into Southeast Alaska and both will use tailings ponds — despite a recommendation after the Mount Polley disaster that companies look at other methods, such as dry stack tailings, a method that involves filtering out water and piling dry tailings.

Several other mine proposals in the province’s northwest also specify the use of tailings ponds. The exception is the recently approved Silvertip project, owned by JDS Silver, which will use dry stacking and underground storage, despite the extra expense.

Red Chris, owned by Imperial Metals, which also owns Mount Polley, is close to the Iskut River, in the Stikine watershed. In June, Red Chris was handed its final operating permit by the province, following an evaluation of the tailings dam.

The dam is different from Mount Polley and has no lacustrine clay layer in the foundation – something that was instrumental in the Mount Polley breach — said Energy and Mines Ministry spokesman David Haslam.

“The Red Chris tailings storage facility has been the subject of three independent reviews done to assess seepage and design considerations,” he said

The province has been assured that Red Chris and its consultants have done extensive reviews of the site’s hydrogeology and made the necessary adjustments, Haslam said.

B.C.'s Push for New Transboundary Mines 'Astonishing'

But the decision to approve the Red Chris tailings pond has horrified Alaskan groups, who call the decision ill-conceived.

It is reckless for B.C. to permit a new mine with the same type of tailings technology that failed so catastrophically at Mount Polley, said a statement from Salmon Beyond Borders and the United Tribal Transboundary Mining Work Group.

“It’s astonishing to me how B.C. is dead set on getting these transboundary mines operating at all costs — even when their own experts say that current mining technology will fail,” said Rob Sanderson Jr., co-chair of the United Tribal Transboundary Mining Work Group.

Seabridge Gold’s KSM mine, which will stash its tailings behind a 239-metre high dam, making it among the highest in the world, is located in the Unuk River watershed, which drains into Alaska’s Misty Fjords National Monument.

Each mine has to be looked at individually and, for some, water management of tailings continues to be sound technology, Brino said.

“Dry stack is not new technology. It has been around for a long time and it’s more appropriate for dry climates and small operations because a lot of material needs to be hauled to the site,” she said.

“B.C. has a very wet climate and most are very large tailings facilities,” she said.

One of two mines operating in Southeast Alaska, Greens Creek, an underground silver and gold mine, uses dry-stacking and Pretium’s Brucejack, an underground mine in the Unuk watershed, recently approved by the province, plans to backfill waste underground or in lakes.

The province is moving to a requirement to have all mines with tailings ponds establish Independent Tailings Dam Review Boards, something Red Chris already has in place and a requirement that will apply to KSM, Haslam said.

Some additional requirements will not apply to those two mines as they have already received environmental assessment certificates, but, any changes to the Health, Safety and Reclamation Code for Mines, following a review this summer, will also apply to Red Chris and KSM, Haslam said,

No Compensation for Downstream Losses in Case of Tailings Dam Failure

Hardcastle, looking at the risks Southeast Alaska is facing, wants B.C. to take on more of the onus with an adequate bonding mechanism.

“There’s currently no mechanism for compensation for downstream losses when pollution occurs,” she said.

Security deposits the province requires from companies to ensure reclamation have gone from $10 million in 1984 to more than $791 million by the end of 2013, according to the Chief Inspector of Mines annual report.

The province currently holds $12 million in reclamation securities for Red Chris and $19 million for Mount Polley. The securities, which will be returned only when the sites are reclaimed, may change over the life of the mining operations.

However, the securities do not include cleaning up after disasters. Imperial Metals, which last year estimated the cleanup costs for Mount Polley at $67.4 million, is raising $100 million through debentures to cover the mop-up .

That should make all Alaskans feel insecure about corporate promises, said Zimmer, who has seen companies walk away after going bankrupt.

Photo: Cariboo Regional District

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Promises of a closer relationship between B.C. and Alaska and more consultation on B.C. mine applications are a good start, but, so far, Southeast Alaska has no more guarantees that those mines will not pollute salmon-bearing rivers than before this week’s visit by B.C.’s Energy and Mines Minister Bill Bennett, say Alaskan fishing and conservation groups.

Bennett, accompanied by senior civil servants from the ministries of Energy and Mines and Environment, took a conciliatory tone as he met with state officials, policy-makers and critics of what is seen as an aggressive push by B.C. to develop mines in the transboundary area, close to vitally important salmon rivers such as the Unuk, Taku and Stikine.

“I understand why people feel so strongly about protecting what they have,” Bennett said in a Juneau news conference with Alaska Lt. Governor Byron Mallott.

“There’s a way of life here that has tremendous value and the people here don’t want to lose it. I get that,” he said.

But promises of a strengthened dialogue and more opportunities to comment on mine applications fall far short of a growing chorus of Alaskan demands that the issue be referred to the International Joint Commission, formed under the Boundary Waters Treaty, which forbids either country from polluting transboundary waters.

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It was a step forward to have such a high-level meeting, said Chris Zimmer of Rivers Without Borders, but it is an international issue that demands international attention.

“Increased involvement in the B.C permitting process is not a bad thing, but it is not a solution on its own. In other words, we stand firm for the need of an international solution under the Boundary Waters Treaty,” Zimmer said.

Both sides agreed the status quo cannot continue, but the question is how to move forward, Zimmer said.

“How do we move from words to real, concrete action to protect Alaska’s interests?”

Bennett did not rule out the possibility of going to the International Joint Commission, but felt it was premature and the commission should be brought in only if the province and state could not work it out between themselves, said Heather Hardcastle of Salmon Beyond Borders, a coalition of fishing, tribal, tourism and community organizations.

There was also no agreement on the question of how Alaskans would be compensated if there was an upstream spill.

“We are saying we are taking on the lion’s share of the risk and we are not receiving the benefits and there is nothing in place right now, Minister Bennett told us, to deal with liability,” Hardcastle said at a news conference following a meeting with Bennett.

“That’s just unacceptable to us that there’s nothing to compensate us for the lack of our livelihood.”

Financial assurances that Alaskans would be compensated if B.C. mining damages fisheries and water quality are needed prior to projects receiving permits, Hardcastle said.

Dale Kelley, Alaska Trollers Association executive director, said the universal theme was how to ensure no harm befalls Alaska’s fisheries.

“It was quite disturbing to hear the minister say there really is no remedy,” she said.

Both federal governments need to be involved in compensation discussions as a spill would mean a disaster on a scale that could not be handled by the state and provincial governments, Kelley said.

During the visit, Bennett agreed that B.C. should fix leakage from the Tulsequah Chief Mine, that, through a tributary, flows into the Taku River.

Decades of failed promises to fix the leakage have been a thorn in the side of many Alaskans, even though it is not known whether the mine drainage is hurting fish.

After touring the Taku River by helicopter Monday, Bennett told reporters it should be fixed.

“I think B.C is going to have to find a way to rectify it sooner than later and I think it is a most legitimate criticism of us by those folks in Alaska who don’t like it,” he said.

The Tulsequah Chief, now owned by Chieftain Metals Corp, was closed by Cominco in 1957 without acid mine drainage cleanup or site reclamation and despite numerous B.C orders, subsequent owners failed to clean up the mess. The mine was bought by Chieftain in 2010 when the company accepted the environmental liabilities and installed an interim water treatment plant.

“It’s clearly a black eye for Canada,” Zimmer said.

Solutions now, if Chieftain does not reopen the mine and get a grip on the drainage problems, are for B.C. to close down the mine properly — something likely to cost multi-millions of dollars — or to spend $4-million a year to treat the waste in perpetuity, Zimmer said.

“We are looking for very specific action to back these words up.”

Photo: Minister of Energy and Mines Bill Bennett. Credit: Province of British Columbia.

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Long-held perceptions of Canada as a country with strict environmental standards and B.C. as a province that values natural beauty are taking a near-fatal beating in Southeast Alaska, where many now regard Canadians as bad neighbours who are unilaterally making decisions that could threaten the region’s two major economic drivers.

Fishing and tourism — each billion-dollar industries — are the lifeblood of Southeast Alaska, where glaciers sweep down into rivers home to five species of wild salmon and massive snow-covered peaks tower over fertile wetlands.

Tourism accounts for 10,900 jobs in the Alaska Panhandle and salmon fishing employs 7,300 people.

Air and water are the only ways into communities such as Juneau, the state capital, and almost seven million hectares, or three-quarters of Southeast Alaska, are within the Tongass National Forest, where industrial activity is limited.

But, upstream, in northwest B.C., there is a new-style gold rush with an unprecedented number of applications for open-pit gold and copper mines, some made viable by construction of the Northwest Transmission Line and all requiring road access.

Alaskan politicians, tribes, fishing organizations and environmental groups have come together in a rare show of unity to condemn B.C.’s push to approve mines close to major transboundary salmon rivers, such as the Stikine, Taku and Unuk, which run from B.C. into Alaska. Tensions are running so high the groups are asking the International Joint Commission, designed to resolve Canada/U.S. water problems, to step in.

Canada is increasingly viewed as a “bad actor,” whose record — most recently illustrated by the Mount Polley mine tailings dam collapse — shows that the province’s environmental regulations and oversight is not strong enough to protect downstream communities.

“It’s the new wild west,” said Heather Hardcastle, a commercial fisherman and co-ordinator of Salmon Beyond Borders, pointing out that, even though Alaska has nothing to gain and everything to lose, Alaskans are being denied meaningful input into mine decisions.

10 Advanced Mining Projects in Northwestern B.C.

The new mines include Imperial Metals’ Red Chris, a copper and gold mine operated by the same company that owns Mount Polley, and Seabridge Gold’s massive KSM (Kerr-Sulpherets-Mitchell) mine, 30 kilometres from the U.S border and Misty Fjords National Monument, which will open up mining of the largest undeveloped gold reserve in the world. KSM has provincial and federal environmental assessment approval and is waiting for permits.

According to B.C.’s Ministry of Energy and Mines there are 10 advanced projects in the northwest corner of B.C. and numerous others in exploration phases.

Graphic: Salmon Beyond Borders

They include Kitsault (under construction), Silvertip (provincial permit granted in June), Tulsequah Chief (construction started, but project delayed), Brucejack (Mines Act permit application under review), Kutcho and Schaft Creek (both in the environmental assessment pre-application stage).

In comparison, there are only five operating mines in Alaska, of which two are in Southeast Alaska and one of which uses dry stack tailings, the method of dealing with acid-generating mine waste favoured by the expert panel that investigated the Mount Polley dam collapse.

The Canadian system appears to aim “to get to yes fast,” without consideration of other values when it comes to resource extraction, said Jev Shelton, a commercial fisherman and former member of the Pacific Salmon Commission, the joint Canadian/U.S. regulatory body designed to protect salmon stocks.

“It is certainly triggering a fair bit of anger,” Shelton said.

B.C. Moving 'Full Speed Ahead'

The pace and scale of development is huge, said Chris Zimmer of Rivers Without Borders.

“B.C. is going full speed ahead without any brakes. It looks as if they’re trying to move as fast as they can before Alaska puts up hurdles.”

There is growing indignation that B.C. is not listening to Alaskan concerns and that additional input, promised in May after Energy and Mines Minister Bill Bennett met with Alaska’s Lieutenant Governor Byron Mallott, amounts to little more than window-dressing.

“We were a bit stunned by Bill Bennett giving us the table scraps and saying Alaska can come in at the final stages of permitting — they’re saying we will involve you when the final decision has been made to build the mine,” Zimmer said.

Alaskan Concerns Ignored

Gillnetter and fisheries consultant Lindsey Bloom agrees that Alaskan questions are being ignored.

“Since I started working on this issue, the disregard of Canadian officials towards us is concerning,” she said.

While Mallott and Bennett were meeting in B.C., a group of Alaskan tribal leaders, fishing industry representatives and environmental advocates met with high-level provincial government staff.

However, it was an exercise in frustration because of the lack of answers or acknowledgement of downstream concerns, according to several people who attended the meeting.

“We tried to explain we don’t want more say in the permitting process, we want something to put us on an equal footing with B.C.,” Hardcastle said.

B.C. government staff appeared to think their task was to explain the process instead of listening to concerns and suggestions, said several members of the Alaskan delegation.

Mallott, who is leading an Alaskan transboundary waters working group, said in an interview with DeSmog Canada, that, during their meeting, Bennett was amenable to the notion of more Alaskan involvement and he has been invited to Alaska to continue the conversation.

Staff who have looked at B.C.’s technical permitting and assessment of mines believe the rules in B.C. and Alaska are generally equivalent, said Mallott.

“But there are significant differences. Whether the entire range of environmental assessment and permitting is robust enough to protect both B.C. and U.S. and Alaskan interests is still something we all need to be made more comfortable with,” he said.

“We would want Alaskan officials at the table when decisions are made in such areas of permitting that it is possible that catastrophic events could take place.”

Mount Polley Tailings Dam Collapse Stokes Fears Downstream

The pace of development and the cumulative impacts of the mines in B.C. are alarming, but it is the failures that haunt Alaskans.

The image of 24-million cubic metres of mine tailings and waste water sweeping down from the Mount Polley tailings dam is etched into memories, but there are others such as the constant irritant of the ongoing acid drainage from the Tulsequah Chief mine.

“It underlines the Canadian government’s lack of commitment to what happens in the river,” said commercial fisherman Len (Pete) Peterson.

The copper and gold mine, near the confluence of the Tulsequah and Taku Rivers, has been leaking acid since Cominco stopped mining in 1957. Since 1989, there have been numerous remediation and pollution abatement orders from the B.C. government, but the leakage continues.

Earlier this year the province gave Chieftain Metals Corp., the latest owner, permission to re-open the mine and the company is currently trying to obtain financing. However, hurdles include opposition from the Taku River Tlingit First Nation. In an attempt to circumvent the problem, the company is proposing a barging system, instead of an access road, but that is likely to be a problem for Alaskan gillnetters.

At Johnny Mountain, close to the Iskut River, operations ceased in 1993 and the company attempted to burn and bury equipment. Although there has been some soil remediation, what threat remains of acid rock drainage from the underground operation is unclear.

“They shoved (the equipment) into the mountain and blew it up,” said miner Joe Bradley, who recently flew over the area.

The test of B.C.’s process is how it is carried out and the “real world” results, Zimmer said.

“Alaska understands the B.C. process. Where has it gotten us? Mount Polley disaster, Tulsequah Chief and five decades of acid mine drainage, renewed talk of Taku River barging, a total lack of involvement on the evaluation of the Red Chris mine, a denial of Alaska’s request for a KSM panel review,” Zimmer said.

Photo: Chris Zimmer

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