It’s been two weeks since the breach at the tailings pond for Imperial Metals’ (TSX:III) Mount Polley copper-gold mine, and already the repercussions for other mining operations are trickling in. On the heels of the BC government’s announcement that it will be investigating the spill, nearly 100 other mining companies across the province have been ordered to conduct independent, third-party reviews of their permitted tailings impoundments.
According to a Vancouver Sun report, an independent panel of experts in the field of geotechnical engineering will make recommendations to the BC government on roughly 60 tailings sites, including inactive mines. “These inspections would need to be completed within 90 days,” the news outlet notes.
As Mining Weekly states, “under the Health, Safety and Reclamation Code for Mines in British Columbia, the deadline for a normal yearly dam safety inspection would have been March 31, 2015 and would not have required an independent third-party review.”
The accelerated review is geared at rebuilding public confidence and trust in the industry, which was understandably shaken following the breach — it poured 10 million cubic meters of waste water and 4.5 million cubic meters of silt into salmon-bearing lakes and rivers. As mentioned, other efforts include BC Energy and Mines Minister Bill Bennett’s appointment of a three-member panel to conduct an independent investigation into the dam failure. Beyond just determining the cause of the failure, the panel will also look into provincial standards, design and maintenance of the dam as well as the inspection regime. Recommendations from the panel are expected by the end of January 2015.
As Karina Brino, president of the Mining Association of BC, commented to The Vancouver Sun, “[t]he messages we have been delivering since the incident of Aug. 4 support the measures being announced. It is important for us to understand the cause of the breach and adopt any necessary measures to ensure this does not happen again.”
But current miners aren’t the only ones feeing the repercussions of the Mount Polley breach. Pacific Booker Minerals (TSX:BKM), which has been waiting on the BC government’s reconsideration of the $2.5-billion Morrison project, recently received notice from Environment Minister Mary Polak that the mine proposal will face further delays.
An information bulletin posted by the Environmental Assessment Office states that the minister has suspended the assessment of the project “pending the outcome of the Independent Expert Engineering Investigation and Review Panel in relation to the tailings dam breach at the Mt. Polley mine.”
For investors unfamiliar with Pacific Booker’s plight, the company’s proposal for the Morrison mine, an open-pit operation 65 kilometers north of Smithers, was first rejected by the former ministers of energy and mines and the environment in 2012. The company then sued the province over the decision and won the right for the proposal to be reconsidered. Last December, BC’s Supreme Court overturned the province’s rejection, ruling that the company hadn’t been given ample opportunity to respond to concerns raised in an environmental assessment process that would have otherwise had a favorable outcome for the company. Pacific Booker is now at a standstill due to the suspension from Polak.
Also of note…
While no other companies awaiting permits or environmental approval have mentioned disruptions to their timelines, perhaps it is something that investors should file away as a possibility. With the BC government focusing its efforts on regaining public confidence in the mining sector, it is possible stricter guidelines will be put in place when it comes to environmental approvals. That means the process for environmental approval could conceivably take longer than expected, causing more delays in the future.
Securities Disclosure: I, Vivien Diniz, hold no direct investment interest in any company mentioned in this article.
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