Mt Polley: The Cost of Moving Forward – by Jack Caldwell (I Think – August 6, 2014)

Jack Caldwell, P.E. has a B.Sc. in Civil Engineering, an M.Sc. (Eng.) in Geotechnical Engineering and a post-graduate law degree. He has over 35 years engineering experience on mining, civil, geotechnical and site remediation projects. He has worked on numerous projects throughout southern Africa, Europe, Canada and the United States.

In one of the many article I read on the Mt Polley tailings failure was an estimate of what it will cost to get the mine going again. A figure of $50 million was quoted as the cost to pick up all the tailings and return them to the tailings facility. I imagine that figure is based on five million cubic meters of tailings at about $10 a cubic meter to pick up. Here is why I suspect the figure is grossly low.

In conventional civil or mining earthworks $10 a cubic meter would be generous. But the material to be picked up is still a near-fluid. It will slosh around in the truck and spill out through the opening in the truck bed. Also the bottom of the creek now covered with tailings is by no means uniform. It is probably rough and rugged and teaspoons will be required to pry the tailings out of every nook and cranny. So let us double the cost of picking up the tailings and taking them back to the facility.

While it will not be easy to pick up the tailings strewn along the creek, it may be impossible to get back the tailings in the lake. Do you dredge the lake? Of course you can dredge, but then you will pick up a lot of clean bottom sediment along with the tailing. Inevitably they will have to consider placing a subaqueous cover on top of the tailings in the lake. This was done off the coast of Los Angeles to cover PCB sediment on the ocean floor, so it could be done in BC. But at what cost? Say another $100 million.

Next the tailings facility breach has to be repaired so that the returned tailings will stay there. That means plugging the breach. I am not sure I would let a workman go near those steep slopes that subtend the failure zone. Plus how you clear the area to make a good foundation is not obvious. So let us add another $50 million just to close the breached zone and make it possible to put returning tailings back where they came from.

I cannot believe the regulators will let them continue operating the current tailings facility for future ongoing mining produced tailings. Its history is tainted. Thus a new tailings facility will be required before mining can recommence. I see no obvious areas big enough to repeat the current tailings facility. But let us assume there is one. A new facility cannot be a centerline embankment. It will have to be a downstream earth and rockfill dam with filters and drains and bells & whistles. I guess that adds another $100 million.

In practice, the public outcry over building yet another hydraulic fill dam like the one that has just failed, will perforce, force consideration of filter press tailings disposal. That involved putting the tailings through a filter press in order to squeeze out the water. The end product is then more or less a solid that may be stacked and not be susceptible to flow. I would guess filter pressing would add yet another $100 million to our list of costs to reopen the mine.

When the Padcal tailings facility in the Philippines failed it filled in a local water reservoir that produced electricity. The reservoir can no longer produce electricity and the power authorities are suing the mine for the loss of power generating capacity. No loss of power generating capacity is involved in this instance, but it is not unreasonable to imagine that tour operators, fishermen, water users, and others will sue for loss of use or diminished use of the waters affected by the failure. Let us add $100 million in lawyers fees alone, net alone awards the courts may make.

Let us not forget the cost to investors of the loss of share value.

I have by now lost count of the number of $100 million items needed to reopen the mine and restore the environment. But however you add it up, it will not be cheap and could be a billion dollars in a short time.

And these costs pertain only to Imperial Metals. The cost to other mining aspirants of delayed projects, additional tailings facility features, and so on is, in a sense, incalculable. As one private correspondent said to me today: “This sets mining in Canada back for at least ten years.” Another private correspondent said: “Nobody will permit a new mine in BC for at least ten years.”

In South Africa after the failure of the Merriespruit tailings facility, the regulators demanded and nowdays get quarterly reports from registered professional engineers on the status of each and every tailings facility. Replicating that in BC will add about $100,000to $500,000 at least to each BC mine’s annual operating budget. The number grow so fast, my head spins.

We hope these are pessimistic conclusions. But I am not sure what to do to turn them optimistic. If you have ideas let us know.

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