FOR IMMEDIATE RELEASE
June 27, 2012
Chris Zimmer, 907/586-2166
-Chieftain Metals Faces Rising Costs; Financing, Permitting and Access Problems-
-Non-Compliance with Permit and Cleanup Orders Threatens Water Quality and Salmon-
LINK to Chieftain Metals letter to Environment Canada dated June 6, 2012. See additional resources below.
(JUNEAU) Chieftain Metals announced on June 6 its intent to close the Interim Water Treatment Plant installed at the Tulsequah Chief site in November 2011 to address chronic acid mine drainage and heavy metals pollution. The company will now be violating its discharge permit.
“Chieftain’s halt to pollution control is another broken promise and more evidence this mine is simply not viable from an economic, environmental or logistical perspective,” said Chris Zimmer of Rivers Without Borders. “Closure of the water treatment plant is a failure by Chieftain to meet its legally mandated environmental responsibilities, threatens water quality and wild salmon in the Taku, and demonstrates Chieftain has been unable to interest investors in the mine.”
Chieftain’s June 6 letter to Environment Canada references increasing costs, “significant” safety concerns, unanticipated technical challenges, and the need for Chieftain to undertake a “comprehensive review” of the project’s design, economics and construction processes. This letter comes on the heels of other setbacks for the company, including:
- Chieftain’s financial results as of March 31, 2012 indicate decreasing cash resources;
- Lack of financing for road and mine development;
- Delays in releasing an updated feasibility study;
- Delays in permitting for the amended access road route; and
- Major concerns from the Taku River Tlingit First Nation and Atlin residents.
“The inability of Chieftain, and its predecessor Redfern, to develop this mine and its history of environmental, financial and technical problems clearly demonstrates the mine simply is not viable. Chieftain says it needs more time to fix the problems and obtain financing. But more time won’t help; the Tulsequah Chief is simply a bad idea,” said Zimmer.
The Tulsequah Chief proposal has created controversy since Redfern Resources announced plans to develop it in the early 1990s. Downstream stakeholders such as Alaskan fishermen, Alaska state agencies and legislators, and US federal agencies have expressed major concerns about threats to water quality and wild salmon. The Taku River Tlingit First Nation and Atlin residents have strong concerns related to the access road. The project has also suffered from financial problems such as bankruptcies, overly optimistic financial analysis and predictions, increasing costs and a lack of investors.
The project was originally owned by Cominco which abandoned the operation in the 1950s without conducting any site remediation. Redfern bought the Tulsequah Chief site and announced development plans in the early 1990s. Despite numerous cleanup orders, Redfern did little to address the pollution problem, characterized as “acutely lethal” by Environment Canada. Acid mine drainage and heavy metals continued flowing into the Tulsequah and Taku Rivers unabated. Redfern declared bankruptcy in March 2009. Chieftain Metals was incorporated in November 2009 to buy the project out of the bankruptcy and purchased the Tulsequah Chief site in September 2010. In November 2011, Chieftain installed an Interim Water Treatment Plant to treat the pollution but the plant has not worked as expected.
“We are now back to the situation of pollution flowing into the river and the mining company unable to clean it up. Chieftain says mine development is a long-term solution to the pollution problem, but cleaning up mine pollution by initiating more mining makes no sense. Cooperative work between governments is now needed to permanently address the pollution problems,” said Zimmer.
Chronology of Tulsequah Clean Up Orders
Chieftain Metals Waste Discharge Permit
Risk Analysis of the Chieftain Metals Tulsequah Chief Mine Proposal
Briefing document – Chieftain Metals and the Tulsequah Chief Project
Press Release by the Taku River Tlingit: Taku River Tlingit Urge Caution on Tulsequah Chief Project
BC Environmental Assessment Office project information – Tulsequah Chief Project