COMMENTARY
by Samson Hartland
The downward trend in global mineral pricing has been the main cause of recent mine closures and suspension of activities in Yukon. This has led to recent discussions on security bonding, which is the money collected by Yukon government through both the water license and quartz mining licence, and is intended to cover the costs of cleanup for a mine.
When a proponent applies for a mine licence, they develop and submit a detailed reclamation and closure plan before a shovel ever hits the ground. This ensures that the public is never at risk of having to pay for the cost of remediating a site.
The closure plan is also reviewed and updated every two years to review any changes that may have occurred at the mine since initial environmental assessment and permit issuance. In this way, the amount of security collected by Yukon government from the miner is adequate to cover the entire environmental liability.
The money collected is essentially an insurance fund, held in case a proponent does not honour the closure plan as filed with the Yukon government. A proponent is responsible for the complete life of a project including closure and remediation, and when remediation occurs as outlined under their closure plan, the government returns the security to the proponent as stages of the work are completed.
The total amount being held today by Yukon government is $76,198,887.50 for 11 projects throughout Yukon, with the lion’s share being held for Capstone’s Minto mine at $53,627,572.
We’ve come a long way to get to the modern permitting and regulatory regimes we have today, as the posting of security for mine cleanups did not exist from the time of the Klondike Gold Rush. More recently, the responsibility for mining in Yukon has improved through devolution.
Historic liabilities that existed prior to devolution are referred to as Type II mine sites, some of which have been purchased (along with their environmental cleanup liabilities) by mining companies from the federal government. This includes projects such Alexco Resources for United Keno Hill, Golden Predator for Brewery Creek, Capstone for Minto, and Ketza River. In the case of Ketza River Mine, this historic liability was returned to the Canadian government with $3,885,021 collected to date for security.
Since devolution, Yukon government has undertaken the initiative of collecting security on new projects, and a great example of a modern project under the new regime is the Sa Dena Hes site, in Ross River traditional territory. A proponent acquired the property during depressed metal prices, which kept the mine in temporary closure. In 2013, there was a security review with the proponent and an updated closure plan was agreed to with $25 million having been collected to date by Yukon government for security.
As each season comes to an end, the company will walk through with the Yukon government and the affected Yukon First Nation governments to review the closure plan and determine the security work completed and what amount of funds is to be returned to the proponent, if any.
As we all know, the Wolverine mine in Yukon has been a popular topic in the news lately. In this case, the proponent was on a payment schedule with Yukon government for security and ended up shuttering prior to honouring its obligations. Upwards of $7 million was collected on a remediation which would cost $10 million in today’s dollars.
The silver lining is that there are multiple proponents who are interested in the property and its assets, and whoever ends up inheriting the site would also inherit the associated liabilities. In other words, whoever is next in line will inherit the security obligations, not the Yukon taxpayer.
The Yukon government is currently undertaking a mine licensing improvement initiative, which part of its work is to better coordinate the security collected between the Yukon Water Board and Yukon government.
Modern resource development has come a long way since the days of the Klondike Gold Rush, and more recently, devolution. Mining companies conduct extensive research in partnership with organizations such as with Yukon College’s Centre for Northern Innovation in Mining, the Yukon Research Centre and the National Research Council. Research has led and continues to lead to the ability to remediate sites to levels that were not imagined even 20 years ago.
The Government of Canada, Yukon First Nations, and Yukon government have developed modern and robust permitting and regulatory regimes, which reflect the most modern scientific reclamation techniques, combined with monitoring and security bonding, to ensure that the land that is developed respects the environment and returns the land as close as possible to its original condition. Yukoners expect and deserve nothing less.
Samson Hartland is the executive director of the Yukon Chamber of Mines.