Restoration costs expected to be hundreds of millions of dollars
Imperial Metal’s $15-million property and business interruption insurance coverage is likely to fall short of the cleanup cost of the collapse of its mine waste dam at Mount Polley last week.
The company also has $10 million in third-party liability insurance, triggered if a party other than the company is responsible for damage.
While Imperial Metals says it is too early to provide a cleanup cost, the collapse of the mine waste dam in 1998 of the Los Frailes lead-zinc mine near Seville, Spain, cost hundreds of millions of dollars.
Imperial Metals vice-president of corporate affairs Steve Robertson said Saturday he would be guessing at a cleanup at cost at Mount Polley. The company has, however, vowed to do all it could to “make right” the effects of the dam collapse.
“I don’t know if it’s nowhere near (enough insurance) — it would we way too early to tell,” Robertson said in an interview. A BMO Nesbitt Burns Inc. analysis pegged the cost to the company at $200 million. That does not include legal damages that could double that amount.
Notice of a class-action lawsuit was filed against Imperial Metals Thursday on behalf of investors who bought shares in the corporation after Aug. 15, 2011.
“We were retained by an investor who suffered a significant loss in her portfolio,” said Michael Robb, a partner at Siskinds LLP, the Ontario firm that filed the action.
“There was a report that raised some questions about that tailings pond and there were some government reports that raised questions as well. The company has to advise its investors about all of its material risks. It needs to disclose those to investors,” Robb said. “There are other cases where mining companies that have been sued by investors where environmental events have happened at their properties.”
The Mount Polley mine is Imperial Metals main cash contributor, accounting for 83 per cent of the company’s 2014 earnings per share.
Richard Holmes — a 38-year Likely resident and consultant fisheries biologist who does work for the Soda Creek Indian Band — is worried the cost of the cleanup could overwhelm the company.
Holmes said a full cleanup should include removing the sludge deposited in Quesnel Lake, and fully restoring Hazeltine Creek and Polley Lake, something he believes could cost hundreds of millions of dollars.
For the rest of this article, click here: http://www.vancouversun.com/news/Imperial+Metals+insurance+likely+enough+collapse+cleanup/10105163/story.html