RIVERS WITHOUT BORDERS

Posted In: Reports

Recommendations Regarding Bonding Requirements for the Tulsequah

Prepared by TWA Staff

The Tulsequah Chief Mine has several current water quality problems and many potential environmental impacts associated with existing mine workings and proposed plans to re-open the mine. It is critical that the Province of British Columbia and the Government of Canada adequately calculate a bond amount that will protect the public interest. It is critical that the Province provide a rough calculation of the bonding requirements at this point in the project review so that the full economic costs of the project can be evaluated. There is no use in going forward with a Mine Certification if the necessary bond amount exceeds RedCorp’s ability to pay it. Thus, this is a strategic issue that must be finished before the decision on whether or not to issue a Mine Certification can be rendered.

These comments are a brief overview of the issues and are intended to assist the Province with the process of calculating a bond amount adequate to cover all probable and foreseeable costs for clean up of existing contamination and acid mine drainage and closure and long-term monitoring at the Tulsequah Chief mine site. Much more in-depth analysis will need to be done if the mine receives a Certificate. The main resource used in this analysis is written by Jim Kuipers of the Center for Science in Public Participation in April 2000. The Hard Rock Bonding Report is available on their website www.csp2.org. We are willing to assist the governments of Canada by providing names of unbiased technical experts that are leaders in the field of mine bond calculations.

Public lands through out Canada and the Western United States have been ravaged by hard rock mining, trading off short-term economic prosperity for the terrible cost of polluted water and air. Lands once teeming with fish and wildlife are replaced with unsightly waste rock dumps, tailings piles, mined pits, and tunnels into mountainsides, which all too commonly leach acid mine drainage for thousands of years. Mining companies too often walk away from the pollution they’ve created, without restoring or “reclaiming” the land they’ve damaged, forcing taxpayers to pick up the tab for the clean-up. While these sights are alarming, historic and even present day mining operations have another less obvious, but far more ominous legacy -air and water pollution that threatens human health. Despite progress by the mining industry to reduce their impacts at modern mines, many waters remain dangerously polluted from active, inactive and abandoned mine runoff. This situation currently exists at the Tulsequah Chief Mine.

Reclamation bonding is meant to serve as an “insurance policy” against pollution problems. It is a cache of money that mining companies are required to put down before beginning work, and which can be used for clean-up down the road. But the system is badly in need of reform. Today’s major hard rock mining operations in western Canada and the U.S. typically range in disturbance area from 100 acres to more than 10,000 acres. At the same time reclamation costs, which vary significantly from mine site to mine site, range from less than $1,000 per acre to more than $30,000 per acre. The higher cost per acre occurs at mine properties that are in remote locations and have acid mine drainage.

One of the primary factors affecting reclamation and closure costs is the presence of acid mine drainage at many of the mine sites, requiring costly mitigation of related environmental impacts. At many mines the presence of acid mine drainage is either underestimated or ignored until it becomes evident, at which time the costs often exceed the operators financial resources, leading to bankruptcy or abandonment of the site in many cases. Clearly the Tulsequah Chief mine is both remote and has rampant uncontrolled acid mine drainage, thus bonding calculations should use a value per acre towards the higher end of the cost range. Future modifications to the reclamation plan either required by the agencies, or required as a result of failure of the proposed plans, would result in a need to re-evaluate costs.

Principles of Reclamation and Closure Bonding

The following provisions should be included as requirements for the Tulsequah Chief Mine reclamation and closure plans, and specific performance standards should be adopted to guide their administration: topsoil salvage and replacement; recontouring; revegetation; slope stability; stream protection; air and water resources protection; geochemical and acid mine drainage considerations; public health and safety; wildlife habitat restoration; and aesthetic impacts, including visual impacts.

1. Bonds shall be required as a part of the operating permit for the purpose of assuring completion of the reclamation and closure plan, and other requirements of any laws and rules and any permit conditions.

2. Provincial and federal agencies shall determine and set the amount of financial assurance; derive their estimate from only verifiable sources; include consideration of all costs in determining bond amounts; include adequate funding for interim reclamation and closure operations; include indirect and overhead costs; and base the cost of reclamation over the project life.

3. The following forms of financial assurance shall only be accepted: (i) cash; (ii) surety bonds; (iii) letters of credit; and limited forms of other financial assurance mechanisms that are readily liquid and can be assumed as cash in the event reclamation and closure by the agencies becomes necessary. No type or variety of corporate guarantee or self-bonding shall be accepted as financial assurance.

4. Regulatory agencies shall conduct at least yearly on-site inspections of existing and new mining operations and more frequently as necessary to ensure compliance with the terms of the operating permit and the approved reclamation and closure plan.

5. Regulatory agencies should review the bond amount at least every five years, and more frequently as conditions warrant, and adjust the bond amount as necessary to reflect actual current conditions and reclamation and closure requirements.

6. Regulatory agencies should establish closure and post-closure performance criteria to ensure compliance with applicable Provincial and federal water and air quality standards.

7. The regulatory agencies shall cause the bond to be forfeited if: reclamation and closure is not performed as permitted; reclamation and closure activities are not initiated and completed as required; if the surety refuses or fails to perform the work; and in the event the mine operator is unable to maintain the financial surety.

8. Regulatory agencies should establish the formation and means to support an emergency response and reclamation action.

9. Full and unrestricted public participation should be provided in the process of establishing reclamation and closure plans and bond amounts, and as a part of bond release.

Regulatory agencies have erred in the past by allowing the mine operator to estimate their own bonding costs, especially where the estimate is based on the potential of the government completing the reclamation. Regulatory agencies should not depend on RedCorp’s calculation of the bond amount. They must conduct their own calculations, open to public scrutiny, using assumptions that are defendable, appropriate to the individual mine site and based on experience at other similar mine sites. In the event the government is required to perform cleanup, an increase of costs above that estimated by the operator from 50% to more than 500% might be expected to occur.