A dam failure that sent billions of gallons of mine waste flowing down a British Columbia creek threatens to put a chill on new mining projects across Canada.
The Aug. 4 accident at Imperial Metals Corp. (III)’s Mount Polley copper-and-gold mine led the local district authority to declare a state of emergency amid concerns about drinking water and the fate of millions of migrating salmon. Provincial government officials are at the mine, about 400 kilometers (248 miles) northeast of Vancouver, and are testing local rivers and lakes for contamination.
The dam breach has been stabilized and the waste isn’t acidic, Vancouver-based Imperial said in a statement the day after the accident. The company is trying to investigate the spill and mitigate its effects, it said yesterday.
Whatever the cause or final outcome of the accident, it’s already bad news for the mining industry, which accounts for about a fifth of Canada’s exports. Mines trying to obtain permits in British Columbia will now be scrutinized much more closely, Adam Low, an analyst at Raymond James Financial Inc., said in an interview.
“This will, I think, cause everyone in government across the country to re-examine policies,” Bill Bennett, the province’s minister of energy and mining, told reporters Aug. 6.
Bennett, who has ordered Imperial Metals to stem the pollution still flowing from its breached dam, said he’s “losing sleep” over the potential for a similar accident at any of about 20 mines currently operating in British Columbia.
Mount Polley isn’t unusual in taking waste from ore processing — known in the industry as mine tailings — and storing it in a pond or lake. Nor was this week’s accident the first of its kind: The failure of a tailings dam at a Boliden AB mine in Spain in 1998 caused huge environmental damage.
Pretium Project
Tailings management was already a focus for regulators. Vancouver-based Taseko Mines Ltd. (TKO) had its proposed New Prosperity copper and gold mine in British Columbia rejected by the federal government in February over concerns about its impact on a lake. Taseko said at the time it disagreed with the decision. No one at the company was immediately available for comment about the implications of the Mount Polley accident.
Pretium Resources Inc. (PVG) is evaluating its Brucejack gold-and-silver project in the northwest of the province, which would cost $663.5 million to build. While Pretium expects greater regulatory scrutiny of its tailings plan, it doesn’t expect that to delay Brucejack, Chief Development Officer Joe Ovsenek said yesterday.
The Vancouver-based company plans to put half the project’s tailings underground and the rest in a lake, which, unlike Mount Polley, won’t have a dam, he said.
Test Results
Imperial dropped 4.2 percent to C$9.71 in Toronto trading yesterday. The shares have plunged 42 percent this week, wiping about C$530 million ($484 million) off the company’s market value.
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