$2-million price tag for Cantung mine
Mine closure, decommissioning comes at a cost of $1.8 million
Northern News Services
Thursday, January 14, 2016
The shutdown and decommissioning of the Cantung mine site at the edge of Nahanni National Park will cost the federal government $1.8 million by the end of March.
The abandoned Cantung Mine will be decommissioned at a cost of $1.8 million to the federal government. - NNSL file photo
That price tag follows the mine's abandonment by North American Tungsten Corporation Ltd. The mine was handed over to the federal government on Nov. 18 at the request of the Northwest Territories government.
Indigenous and Northern Affairs Canada spokesperson Valérie Haché stated in an e-mail the funds would come out of the department's budget.
"On behalf of the Government of Canada, the department has committed $1.8 million for care and maintenance of the Cantung mine site until March 31," she stated.
"A large portion of this amount includes one-time costs associated with the decommissioning of the mine."
Under the Canadian Environmental Protection Act's code of practice for metal mines, decommissioning involves the complete removal of underground or in-pit infrastructure and equipment as well as on-site facilities. Any equipment left behind needs to be inspected and remediated.
Under the Mackenzie Valley Land and Water Board's requirements, North American Tungsten Corporation Ltd. originally posted an $11-million security for the eventual cleanup of Cantung. That amount was increased to $30 million in mid-2015 after the company applied for creditor protection.
However, the Mackenzie Valley Land and Water Board never received the additional security.
"There is no evidence before the Board that additional security had been filed when the record in this proceeding was closed," states a written decision from the board dated Dec. 29.
When the GNWT returned Cantung to the federal government on Nov. 18, last year, a backgrounder sent out by senior cabinet communications adviser Andrew Livingstone said the territory would also be transferring their rights to the funds held as security, although no timeline was provided for that.
However, during an interview with News/North, deputy minister of lands Mark Warren said North American Tungsten posted another property, Mactung, as collateral for Cantung.
"When the Cantung mine was being developed under the auspice of our (Mackenzie Valley) Land and Water board, the security that was posted against the reclamations was the Mactung property," he said.
The Department of Lands did not immediately return calls for comment.
Haché said securities could cover care and maintenance activities of the mine.
"While the Government of Canada and the Government of the Northwest Territories worked together to establish administrative functions as part of the devolution process, including the transfer of securities as required, this is the first time that these provisions have been enacted," she said
"The securities for Cantung Mine are complex, and discussions on the issue are ongoing."
Water licence pending
During a Dec. 29 meeting of the Mackenzie Valley Land and Water Board, the board signed off on an eight-year renewal of Cantung Mine's water licence.
The approval is pending a signature from Indigenous and Northern Affairs Minister Carolyn Bennett.
In a document outlining the reasons for its decision to renew the licence, the board agreed with the positions of the GNWT and Indigenous and Northern Affairs Canada that a licence renewal will positively reflect on the future of the site.
"In these circumstances, it appears to the board that the renewal of the licence will ensure the continuation of the status quo during which time a solution could be found," the decision states.
"If the licence is not renewed, that opportunity is lost immediately."
North American Tungsten Corporation Ltd. had originally applied for the water licence on April 21, with the mine's existing licence set to expire Jan. 29 of this year.
Approval also hinges on mine operations meeting 96 conditions, among them that North American Tungsten Corporation Ltd. submit a revised interim closure and reclamation plan to the board, design and implement an aquatic effects monitoring program as well as post a security deposit totalling $31 million.
The eight-year term for the renewal was a compromise between the 10-year term supported by North American Tungsten, Environment Canada and the territorial Department of Environment and Natural Resources, and the five-year term sought by the Nahanni Butte Dene Band as well as Dehcho First Nations.
Future prospects uncertain
When asked about the future of the mine, Haché said next steps have yet to be determined.
"The Government of Canada and the Government of the Northwest Territories are working together to explore a variety of options for the mine site," she stated.
Those options include assessing the site in order to properly determine remediation, that is to say, to take action to in a contaminated site to "prevent, minimize or mitigate damage to human health or the environment," according to a glossary from the federal government.
It also includes evaluating prospects for a new mine operator.
Under the Devolution Act, the mine is now classified as a new site requiring remediation, making the federal government responsible for overseeing the remediation process.