MAC: Mines and Communities

Proposal to reopen old B.C. mine causes Canada-U.S. friction

Published by MAC on 2005-06-27

Proposal to reopen old B.C. mine causes Canada-U.S. friction

Associated Press

27 June 2005

Ottowa - A proposal to reopen an old mine in the Taku watershed, shared by Alaska and British Columbia, is causing more friction over the management of Canada-U.S. waters.

Controversy over the Tulsequah Chief mining project has striking parallels with the Manitoba-North Dakota quarrel over the Devils Lake water diversion, which Canada says would contaminate Lake Winnipeg.

Canada has been crying foul because Washington is refusing to refer the Devils Lake project for study by the International Joint Commission, set up to manage boundary waters.

But in the case of the proposed Tulsequah Chief project, in the northwestern corner of British Columbia, it's the Canadians who have refused to endorse an IJC review.

Redfern Resources of Vancouver wants to reopen the Tulsequah Chief mine, which has been closed since 1957, to produce zinc, lead, gold and silver.

Its proposal would require a 99-mile road through the Taku watershed.

Environmentalist Robert Kennedy Jr. has said the Tulsequah proposal will have "profound negative impacts (on an) incredibly valuable, pristine wild salmon watershed."

The Taku River Tlingit First Nation has fought the project all the way to the Supreme Court of Canada, but has not succeeded in blocking it.

Alaskans say the Tulsequah operation would threaten the state's multi-million-dollar salmon fishery downstream from the mine.

"We're very concerned," Alaska state Sen. Kim Elton, D-Juneau, said in an interview. "Transboundary issues have a forum, and that forum ought to be used," he said, referring to the IJC.

"When you have an international group that is charged with working through these kinds of issues, it's the first place you go."

Environmentalists say the Tulsequah mine is already leaking an estimated 16.5 tons of heavy metals into the river annually.

Terry Chandler, president of Redfern, didn't dispute that estimate.

"The actual concentrations are quite low, and so are the flow rates, but if you multiply anything over a long period of time you come up with an impressive number," said Chandler.

"Everyone wants it cleaned up, but it really isn't a major problem in the grand scheme of things."

The company is under an Environment Canada order to clean up the site, but he said there is no feasible way to do so right now because it is so remote, and there is currently no power supply at the site.

He said the capital requirements of a cleanup are beyond the company's resources at present, but if it gains approval for the new project the cleanup will be completed.

Critics say the Redfern proposal calls for a new tailings pond in the flood plain of the Tulsequah River, and predict the contamination will get worse.

David MacKinnon, of the Transboundary Watershed Alliance, says the proposed new road would cross 69 fish-bearing streams and permanently open the region to industrial development.

He said the environmental assessment conducted by Environment Canada has been flawed and secretive.

The full assessment has not yet been completed, but Fisheries Canada has already concluded the mine will not damage wild salmon habitat.

"Fundamentally, with respect to effluent, the proposal here will put a much-improved effluent management system in place," said Sue Farlinger, a spokeswoman for Fisheries Canada.

There have been questions about whether Redfern has the financial capacity to complete the project, but Chandler is optimistic.

"There are plenty of examples in Canada of companies that started small and became big."

Tulsequah can't meet federal discharge orders

By Graeme McElheran, Yukon News

20 June 2005

The Tulsequah Chief mine remains closed for the summer, but its environmental footprint continues to grow.

Each year, more than 13 tonnes of heavy metals spill into the Taku River watershed from the minesite near Atlin, British Columbia, according to the Transboundary Watershed Alliance.

"This is a documented violation of the (federal) Fisheries Act for 13 years," said David MacKinnon, executive director of the environmental lobby group.

For 10 years, Ottawa has been pressing Redfern Resources Ltd. to clean up the zinc, copper, lead, cadmium and arsenic that continues to leach into the salmon-bearing watershed, MacKinnon said Friday.

A federal inspector gave the company until the end of June to stop the pollution, he added.

A 2002 letter from David Anderson - then federal Environment minister - obtained by The News notes the requirement for Redfern "to take all reasonable measures consistent with safety and the conservation of fish and fish habitat to prevent the deposit of a deleterious substance (acid rock drainage) to the Tulsequah River and/or to counteract, mitigate or remedy any adverse effects that result or may reasonably be expected to result therefrom."

But despite Redfern's best efforts, metals will continue to leach from the mine post-June, said company president Terry Chandler.

"I don't expect it to obtain full compliance," Chandler said Thursday from Vancouver.

"I have a crew on site right now. We've been working since early April. We are completing a passive treatment installation on the lower-most level of the mine.

"Based on the work we did over the last year with the pilot plant we're anticipating that we'll achieve or receive significant reductions in the metals that are released."

But full compliance with federal orders is impossible without installing a costly, high-density sludge system that Redfern can't afford, said Chandler.

Furthermore, the system would require "elements that are currently unavailable," like a year-round source of power, a disposal site and an access road, he said.

"I'm doing everything I can do," said Chandler, whose company spent about $300,000 last year on the pilot plant, and expects to spend $450,000 on a "passive treatment system" by the end of June.

"It's expensive to have an environmental liability that you didn't create," he said.

"Maybe you should ask the environmental organizations why they are opposing a mine which would solve the problem."

The Tulsequah mine originally operated in the 1950s and was a major source of several base and precious metals.

The site has been leaching toxins into the Taku River watershed since it shut down in 1957.

As a subsidiary of Vancouver-based Redcorp Ventures Ltd., Redfern bought 100 per cent of the Tulsequah mine, roughly 100 kilometres south of Atlin, in the 1980s.

Debate on the mine's merits has raged between industrialists and environmentalists since the BC government approved a re-start in 2002.

The federal department of Fisheries and Oceans has yet to approve the project, having postponed its April deadline for a decision in the wake of public opposition.

In May, Redfern "curtailed" the Tulsequah project.

The company announced, "additional work will be required in order to develop a financeable project."

"We did a feasibility update, and the costs had gone up dramatically, both for capital and for operating," said Chandler.

"As metal prices have gone up, that has translated into an effect on materials. Steel prices have gone up. Lime. Re-agents. Everything."

As a result, the company needs more ore.

"We're looking for the ore bodies," said Chandler.

"The ore bodies contain copper, zinc, lead, gold and silver. It's poly-metallic, so we have a mix of minerals, which contain those metals.

"It's a very common kind of ore body, and Canada has many of them across the country."

At this point, Redfern is looking for a joint-venture partner to help finance a restart.

"I've had offers for financing, but it's not attractive to us at our current share price," said Chandler.

Redfern's stock was trading at 12 cents on Friday.

"With a surge in activity in commodities, in oil and gas and metals, skilled labour is getting harder and scarcer, and rates are going up," said Chandler.

"There's a lot of exploration going on, but there has also been a lot of increased production in existing mines. There's more activity going on.

"We're getting to the state of a potential shortage of skilled labour. That has driven unit costs up."

However, Chandler was confident exploration at the mine would start up by the end of the summer.

"It's not our preferred path," he said.

"We hoped that the feasibility study would be positive, and we would be coming up here to finalizing it and going through the financing process. But I guess we have to step back a bit and do some more things before we get there."

The best way to deal with the mine's pollution is to have the mine running so that resources are available to handle the waste, added Chandler.

But MacKinnon questioned Redfern's credibility.

"They have been trumpeting this project for years and made economic promises to the local community of Atlin that clearly don't hold water," said MacKinnon.

"(We're) concerned that liability for the toxic mess at the Tulsequah Chief site is going to get dumped on Canadian taxpayers.

"There's a long tradition in the North where mining projects and all of their jobs and money promises disappear and leave the taxpayer holding the bag."

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