Coverage for the collapse of a mine waste dam in British Columbia will likely fall short to cover the cleanup costs, says one area resident – a message brokers need to drive home to their mining clients.
Owners of the Mount Polley dam, Imperial Metals has a $15-million property and business interruption insurance coverage, along with a $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 he would be guessing at a cleanup cost at Mount Polley. The company has, however, vowed to do all it could to “make right” the effects of the dam collapse that occurred last week.
“I don’t know if it’s nowhere near (enough insurance) — it would we way too early to tell,” Robertson said in an interview with the Vancouver Sun.
Likely, B.C. resident Richard Holmes — a consultant fisheries biologist who does work for the Soda Creek Indian Band — is worried the cost of the cleanup could overwhelm the company. (continued.)
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A BMO Nesbitt Burns Inc. analysis pegged the cost to the company at $200-million, not including legal damages that could double that amount.
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.
The cleanup is important because the creek is home to rainbow trout and Coho salmon that spawn there, said Holmes. The mouth of the creek is also a rearing area for sockeye and Chinook salmon, he said.
“I think mining companies should be concerned all over the world that this does get cleaned up properly. It’s a black-eye on the mining industry everywhere, especially in a western country like Canada where they tout the highest standards possible,” Holmes told reporters. “Today, we are looking like a third-world country.”
Environment Minister Mary Polak has stressed that British Columbia has a polluter-pay model.
“(Imperial Metals) have significant assets and I, as yet, have not heard any concern from them with respect to affording the long-term costs of this,” said Polak.
Responding to the release last Friday of a warning letter from the engineering firm that designed Mount Polley’s dam and storage facility, Imperial Metals said there was nothing unusual about the letter.
At the end of its contract in 2011, Knight Piesold sent a letter to Imperial Mines and the B.C. Inspector of Mines that stated the dam and storage area was getting large and it was “extremely important” it be monitored and constructed properly.
Robertson said Saturday there was no disagreement about the dam when Knight Piesold left the project. (continued.)
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“I don’t think that’s anything out of the ordinary that they would make sure they establish (they) were only responsible for things up to this point — now it’s somebody else’s issue and provide lots of caveats and warnings in there,” said Robertson.
The collapse of a 300-metre section of the rock and earth dam spewed 10 million cubic metres of water and finely ground rock containing potentially-toxic metals and chemicals into Polley Lake, Hazeltine Creek and Quesnel Lake.
The force of the mixture of water and mine waste from the storage facility scoured a large channel along Hazeltine Creek, also depositing trees and other debris in Quesnel Lake.
