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Financial gains are continuing to roll in for Teck Resources shareholders, with the third quarter financial report showing profits of $1.3 billion, despite dropping prices for copper and zinc and higher than expected costs at the Vancouver-based company’s Trail smelter because of forest fire smoke.
But, buried deeper in the financial report is a troublesome cloud in the otherwise relatively clear financial sky.
Teck Coal has received notice from Canadian federal prosecutors of potential charges under the Fisheries Act in connection with discharges of selenium and calcite from coal mines in the Elk Valley, says the release accompanying the report.
“If federal charges are laid, potential penalties may include fines as well as orders with respect to operational matters. It is not possible at this time to fully assess the viability of Teck Coal Ltd.’s potential defenses to any charges or to estimate the potential financial impact on TCL of any conviction. Nonetheless, that impact may be material,” it says.
Teck spokesman Chris Stannell said in an e-mailed response to questions from The Narwhal that the company cannot comment further on the potential pending legal matter and the company has been transparent about the “water quality challenges” in the Elk Valley.
“We recognize that action is required to protect and improve water quality,” he said.
Few details of the potential charges are known, with the Public Prosecution Service of Canada — the agency responsible for charges under the Fisheries Act — saying it does not discuss cases it may be reviewing.
Environment and Climate Change Canada media spokeswoman Samantha Bayard was marginally more forthcoming.
“ECCC enforcement officers are currently conducting an investigation into an alleged violation of the pollution prevention provisions of the Fisheries Act by Teck Coal Ltd. As the matter is currently under investigation, ECCC cannot provide further comment at this time,” she said in an e-mailed statement.
A provincial Environment Ministry spokesman said “the province is in contact with federal authorities and cooperating with their efforts.”
Teck’s previous Fisheries Act violations
Teck, the world’s second largest exporter of steel-making coal, is no stranger to fines levied by the federal and provincial governments for persistent problems with selenium and other pollutants leaching into waterways from Teck’s five metallurgical coal mines in the Elk Valley.
Last year, Teck Resources pleaded guilty to three violations of the federal Fisheries Act for polluting a tributary of the Elk River and was ordered to pay $1,425,000 into the federal Environmental Damages Fund to help restore Elk Valley fish habitat.
The fine was levied after Teck’s $600-million Line Creek water treatment plant, designed to address selenium pollution, unintentionally released a more bioavailable form of selenium in 2014, killing fish in the watershed.
Teck was also hit last year with $78,100 in provincial fines for failing to comply with an effluent discharge permit for its Line Creek coal mine operation. The fines, which related to inadequate wash bays resulting in oil being discharged into a pond, were initially assessed at $90,400, but were reduced after Teck lobbied for a reduction.
Pollution crossing Canada-U.S. border
Selenium and other substances, such as nitrates, sulphates and cadmium, leach into the Elk and Fording Rivers in B.C., then into the Koocanusa Reservoir, which straddles the border, and then into the Kootenai River in the U.S. before curling back into Canada at Creston.
Teck’s five metallurgical coal mines are all upstream of the transboundary Koocanusa Reservoir. Graphic: Carol Linnitt / The Narwhal
The pollution has created tension between Canadian and U.S. representatives on the International Joint Commission, the body tasked with protecting the quality of water flowing across the border and infuriated U.S. fishing guides and recreational fishers, who say they are seeing deformities in fish.
Small amounts of selenium are needed by humans, but larger amounts can cause problems ranging from stomach upsets to nerve damage and cirrhosis of the liver. Studies show that, in fish, selenium can cause defects such as missing gill plates, curvature of the spine and reproductive failure.
Selenium pollution could continue for centuries as it leaches from coal mine waste rock, and, so far, the fines amount to pocket change for a company such as Teck, said Lars Sander-Green, spokesman for the conservation group Wildsight.
“They have not had a significant impact on Teck and they are not going to change what Teck is doing on the ground,” he said.
Sander-Green does not yet know how further charges would be framed, although Wildsight is aware Environment Canada did an investigation from 2012 to 2014 and found significant problems at that time, he said.
Selenium pollution expected to increase
Although Teck is promising to construct water treatment facilities throughout the watershed and is developing a new form of water treatment, an October report to the region’s Environmental Monitoring Committee, made up of representatives from the province, Teck and Ktunaxa Nation Council, show the pollution is likely to get worse in the immediate future.
“They are predicting that selenium levels are likely to increase for about four more years, at which point they are hoping that their water treatment plants will be working and will reduce some of the pollutant levels. However, those water treatment plants are really a short-term Band-aid on a long-term pollution problem that is going to be around for thousands of years,” Sander-Green said.
With possible federal charges on the horizon, one recurring question is how the provincial government can continue to issue permits for an industry that is known to be polluting waterways and which is not meeting the requirements of the 2014 Elk River Water Management Plan, developed by Teck and approved by the province.
“Right now Teck has come out and said they won’t be able to meet their commitment under the plan and will be releasing more pollutants than are allowed under the plan. (Teck) is in the process of revising that plan and all signs point to the province accepting those provisions,” Sander-Green said.
“But I would certainly hope that the province is going to stand a lot stronger and say ‘if you can’t meet your conditions, you can’t get any more permits,’” he said.
In the struggle to figure out how to deal with selenium pollution, the province has taken the view that if the industry is allowed to expand and make money, technology will solve the problem, Sander-Green said.
“Now we are finding out that isn’t happening and we have dug ourselves even deeper into the hole,” he said.
Elk Valley mines expanded despite selenium concerns
The former Liberal government granted four mine extension permits to Teck in 2014, even though the water quality problems were well known. There are currently three applications for new coal mines in the Elk Valley from three additional companies in the initial stages of provincial review.
Teck Resources was a top donor to the BC Liberal party, donating $1.5 million between 2008 and 2017. The company also donated $60,000 to the province’s NDP in the same period.
A provincial Environment Ministry spokesman said the Water Quality Plan sets targets for safe levels of selenium, nitrate, cadmium and sulphate and the ministry is monitoring and enforcing compliance with the permits.
“Teck is developing and implementing advanced technology to treat selenium to the levels necessary to meet the targets set for the Elk River drainage and Koocanusa Reservoir and avoid local effects on aquatic life,” he said.
Teck spokesperson Chris Stannell said the Elk Valley Water Quality Plan is the most extensive water management program of its kind ever developed and the company is planning to spend $900 million implementing the plan over the next five years.
“This work includes construction of water treatment facilities throughout the watershed — one of which is operating and a second is under construction — in addition to carrying out extensive monitoring and studies in the region,” he said.
A new form of water treatment, known as saturated rock fill, has been developed as part of the company’s research program and has the potential to replace or augment traditional treatment technology, Stannell said.
“Teck is committed to taking the steps necessary, now and for the long term, to achieve the objectives of the Elk Valley Water Quality Plan,” he said.
Over the years, the selenium pollution problem has also put a spotlight on the gap between reclamation bonds the province demands from mining companies and the real costs.
Teck has put up about $500 million in reclamation bonds for the Elk Valley coal mines, which is about $900 million short of the estimated reclamation cost for polluting the Elk River system.
The Ministry of Energy, Mines and Petroleum Resources is reviewing its mine reclamation security policies after a stinging 2016 report by Auditor General Carol Bellringer concluded that financial security deposits demanded by the provincial government will not cover reclamation costs if a company defaults on its obligations.
Bellringer estimated that the fund is short more than $1.2 billion. That shortfall is estimated to have increased to $1.6 billion in 2016.
The auditor general also noted the selenium pollution puts Canada at risk of violating the Boundary Waters Treaty of 1909.
Bellringer said the environment ministry has monitored the dramatic increases in selenium levels in the Elk Valley for 20 years, but, with a lack of regulatory oversight, has taken no substantive action to solve the problem and has not publicly disclosed the risks of continuing to issue permits for coal mines in the Elk Valley.
“As selenium accumulates up the food chain, it can affect the development and survival of birds and fish and may also pose health risks to humans,” Bellringer wrote.
