Richard Gleeson
Northern News Services

NNSL (Feb 10/99) - If Royal Oak Resources' financial problems end with a collapse of the company, taxpayers could be on the hook for the $300 million cleanup of Giant Mine.

That was the bad news delivered by a federal and a territorial official invited to the city's priorities, policies and budget committee meeting Monday.

The closest thing to good news delivered at the briefing, arranged at the request of Coun. Kevin O'Reilly, was that the most costly part of the cleanup will fall on the shoulders of the federal government, and as a result be shared by all Canadian taxpayers.

"We expect the company to live up to those responsibilities (to clean up the property)," DIAND official David Nutter told the committee. "But in the event that Royal Oak or some successor company was to be declared bankrupt, then responsibility for arsenic stabilization would fall to the government."

The territorial government has responsibility for the surface cleanup, estimated at $2 million, said Nutter. The estimated $250 million tab for the cleanup of an estimated 270,000 tonnes of arsenic dust stored in underground vaults would fall to the federal government.

Territorial official Emery Paquin said clean-up estimates for four mines in and around the city -- Giant, Con and Treminco's Ptarmigan and Tom mines -- totalling about $20 million, not including the arsenic trioxide problem -- were on the low side.

Under its water licence for the mine, Royal Oak has been required to put up a $400,000 security deposit for the cleanup of the property.

"Was it always envisioned (the cleanup) would cost the government $250 million?" asked Coun. Bob Brooks.

"It's a situation reflecting a different time, a different mindset," said Nutter. "In years past ... companies have not been required to post a bond for the full cost of the cleanup. In recent years that has changed."

Nutter offered as an example, BHP, which was required to put up a deposit for the full cost of the cleanup of its Ekati mine.

If it continues as operator of the property, Giant is required under the terms of its water licence to increase the deposit to $7 million over the next five years.

The underground storage of arsenic, said Nutter, was also based on outdated thinking. He added that the two assumptions used to justify it, that there was limited groundwater flow in the area of the storage vaults and that permafrost would naturally re-establish itself, have proven incorrect.

"Of late, given the financial status of the company, we've developed an emergency response plan," Nutter said.

"We're looking at the worst-case scenario, if the property were to be abandoned by the company and there would be nobody on site."

The emergency plan provides for the containment of the arsenic by pumping water out to keep the water table artificially low. That is about the only measure taken to deal with arsenic since the mine started storing it underground in the 1940s.

Until the arsenic is either removed or somehow isolated from the water table, the pumps must continue working. If the pumps shut down, said Nutter, "the mine would flood within half a year and expose the arsenic in the stopes to groundwater, which would pick it up and move it outside and eventually into the lake."