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Winnipeg Free Press - PRINT EDITION

Surprise bill for mine cleanup

May cost province up to $18 million

By: Larry Kusch

Posted: 10/6/2012 1:00 AM | Comments: 0

The province is facing an $18-million bill to clean up an abandoned northern mine that, until recently, was barely on its radar.

The Selinger government is not naming the mine while it negotiates a settlement with its owner. A government official would only reveal the site was a "base metal" (copper or zinc) mine, located in the north, that had been abandoned for "a number of years."

John Fox, assistant deputy minister of the Innovation, Energy and Mines Department, said the company's claim the province was partially responsible for the mine's cleanup caught the government by surprise.

"This is a site we were aware of, but we previously did not believe we had any liability associated with the site," he said.

"We commissioned some independent engineering work to be done. We've got some legal people looking at the historic files all in preparation for future discussions with the company on what our share of liability would be," Fox said Wednesday.

The unanticipated liability came to light with the release last Friday of the government's final audited statements for 2011-12. They indicated Innovation, Energy and Mines had overspent its budget by more than 30 per cent. The biggest chunk of the over-budgeted costs came from having to reflect the potential mine cleanup on the department's books.

"We had to book it, we haven't spent it and we believe that that number ($18 million) would be a max," Fox said of the province's potential liability.

Ed Huebert, executive vice-president of the Mining Association of Manitoba, would not speculate on the location of the mine in question. But he said it may predate legislation in the early 1990s that put the onus on mine operators for site cleanup.

"All the existing operators, they've fully booked all their liabilities," Huebert said. "In fact, it's an obligation under the Mines and Minerals Act. They all have to have mine-closure plans. It's a cost of doing business."

Fox said the abandoned mine is not part of a group of 31 'high hazard' sites targeted for cleanup several years ago. So far, 19 of those sites have been rehabilitated under the Orphan and Abandoned Mine Site Program, launched in 2009.

Fox also said the site in question poses no immediate environmental hazard. The company that owns the old mine is "managing it in accordance with the environmental approvals," he said.

At issue is the management of a tailings pond. The company wishes to do a final cleanup of the site in place of treating water in perpetuity, Fox said.

The potential for an $18-million mine-cleanup bill wasn't the only unexpected charge on the Innovation, Energy and Mines Department books last year.

The department had estimated its expenses at $87.6 million, but wound up spending $115.5 million.

larry.kusch@freepress.mb.ca

Republished from the Winnipeg Free Press print edition October 6, 2012 A3

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