Feds won’t pay for mine clean-up, new policy says

The federal government doesn’t intend to get stuck with the tab for cleaning up after mines in Nunavut.

That’s the gist of the “Mine Site Reclamation Policy for Nunavut” released this week by the department of Indian and Northern Affairs Canada.

“A number of liabilities have fallen to government across the North due to lack of policies,” said Rick Meyers of the federal government’s Mineral Resources Directorate.

Designed to provide “certainty, consistency and clarity” on mining companies’ responsibilities in reclamation, the policy’s message to the industry is simple and blunt: mining companies must have a good plan and set aside plenty of money to bring the environment back to its natural state after operations cease.

Meyers said the release of the policy wasn’t timed to coincide with the closures of the Polaris and Nanisivik mines.

But it will apply to all present and future mines in Nunavut, including Polaris and Nanisivik.

And it will give Ottawa more leverage to make sure mining companies provide the money needed for reclamation efforts.

Meyers said the new policy is intended to provide a framework for mine clean-ups. Quicker to issue than law, he said it should be more flexible and easier to fine-tune.

He added that the Nunavut Water Board supports the policy’s principles and the stiffer financial obligations it imposes on mining companies.

The policy says DIAND should be the financial coordinator of all clean-up arrangements for mines where water and land use and clean-up are involved. Instead of two financial commitments, companies will make one that will cover both land and water reclamation.

“The Water Board’s responsibility relates specifically to water. There are also land issues we need to make sure are covered. That’s why we need to make sure there’s 100 per cent to cover the whole works,” Meyers said.

In the case of the Nanisivik mine, whose water license for reclamation is under review by the Nunavut Water Board, it could mean CanZinco Ltd., the company that owns the mine, will have to produce more money so the mining site can be fully reclaimed.

In the future, the policy will mean mining companies will have to provide ironclad financial guarantees beforehand for all the money needed for reclaiming mining sites.

Meyers said it could encourage companies to operate more cleanly, as well.

The policy also elaborates what kind of contingency plans should be in place and what, for example, should happen in the case of a temporary closure of a mine or a mining company’s bankruptcy.

“The issue of what happens when the operations of existing mines become insolvent poses a distinct and unique challenge,” the policy says.

What generally happens during a bankruptcy is that creditors make deals to get a portion of their money back or reduce their debt so the company can be sold.

However, the policy says the Crown — that is, the federal government — won’t reduce the amount of money that’s earmarked for reclamation even when a mining company faces financial problems.

“The Crown will not compromise or assume environmental liability to facilitate the resale of the mine for the benefit of creditors,” the policy says.

In the case of mine clean-ups, the policy is quite clear: “the polluter pays” — not the federal government.

Now that the policy spells this out, Meyers said mining companies should know exactly what they’re getting into when they plan on starting up in Nunavut.

“Mining companies are fully cognizant of the need to manage environmentally sound operations, and they have reputations at stake so they obviously need to ensure they’re in compliance. They also want to know what the rules are before they invest in a mining operation.” Meyers said.