Workshop on Assessing Liabilities and Funding Options

1

Workshop on Assessing Liabilities and Funding Options

November 2-3, 2005Embassy West Hotel and

Conference CentreOttawa, Ontario

Objectives• To present and discuss approaches for

assessing liability and funding options at orphaned/ abandoned mines, and share relevant experiences and examples

• To develop a better understanding of the issues

• To explore different approaches to dealing with the issues; and

• Identify areas for further work by NOAMI.

Agenda

Day 1 - Morning

8:45 – 10:30 Case StudiesGiant MineBritannia MineKam Kotia Mine

10:30 – 10:45 Break

10:45 – 12:15 Panel on Technical Site Assessment

12:15 1:15 Lunch

Agenda

Day 1 - Afternoon

1:15 – 2:15 Panel on Accounting and Reportingon Liabilities

2:15 – 2:30 Break

2:30 – 4:45 Perspectives on AssessingCommunity and Health Impacts

5:00 - 6:30 Informal Reception

AgendaDay 2

8:30 – 10:30 Presentation and Discussion on Funding Options Paper

10:30 – 10:45 Break

10:45 – 13:00 Panel on Funding Options

13:00 – 14:00 Lunch

14:00 – 16:00 Roll-up Discussion and Next Steps

16:00 - 16:15 Closing Remarks

1

NOAMI Conference November 2005

Challenges and best practices related to assessing liabilities and funding options

Giant Mine Remediation Project

W. S. MitchellManager Giant Mine Remediation Project

60

Giant Mine Location

CON MINE

Original Giant Mine “A” Shaft (1945)

Background

§ Giant Mine is over 50 years old§ The Mine was established in 1948 on federal

land; in 1970 administration of the land was transferred to the Commissioner

§ Site within the Yellowknife City limits§ Approximately 237,000 tonnes of highly toxic

arsenic trioxide dust is stored underground and there is arsenic contamination on surface

§ Underground storage is located near or under Ingraham Trail, adjacent to mill/roaster

§ City holds an existing lease on former Town site, but is not responsible for environmental liabilities that existed prior to it obtaining its lease in 2000

Background§ 1999 - Royal Oak Mines forced into receivership

§ Indian and Northern Affairs Canada (INAC) entered into an agreement with Miramar to provide ongoing care and maintenance of Giant Mine –agreement also allowed Miramar to operate mine on reduced scale

§ Miramar indemnified for existing condition of mine

§ Agreement allowed INAC and Technical Advisor to:

Assess liabilities and develop options with public input for the management of the underground arsenic trioxide

Technical AdvisorTechnical Advisornn Competitive contracting process: SRK Consulting Competitive contracting process: SRK Consulting

retained, with retained, with SenesSenes Consulting, Lakefield Research and Consulting, Lakefield Research and HG Engineering on the teamHG Engineering on the team

nn Main objectives of Technical Advisor:Main objectives of Technical Advisor:nn provide broadprovide broad--based, neutral, technical advice on based, neutral, technical advice on

identification of preferred, longidentification of preferred, long--term arsenic trioxide term arsenic trioxide management planmanagement plan

nn identify and recommend, with rationale, preferred identify and recommend, with rationale, preferred management management option(soption(s) to DIAND) to DIAND

nn assist DIANDassist DIAND in assessment of liabilitiesin assessment of liabilitiesnn assist DIAND with workshops and public consultationsassist DIAND with workshops and public consultationsnn assist DIAND in Risk Assessment assist DIAND in Risk Assessment -- Canadian Risk Canadian Risk

Management Standard CSAManagement Standard CSA--Q850Q850

2

Assessing LiabilitiesLiabilities arising from legacy of mining activity at Giant Mine ØSurface• Buildings with severe arsenic contamination, asbestos

insulation

• Decaying mine infrastructure

• Tailings impoundments, sludge settling and polishing ponds

• Contaminated surficial materials (arsenic and hydrocarbon)

• Miscellaneous junk piles

• Underground mine openings

ØUnderground• 237,000 tonnes toxic arsenic trioxide dust stored in sealed

rock chambers

Giant Mine Surface Elements2002 Air Photograph

N

Arsenic trioxide dust in storage underground is enclosed completely in rock – all access drifts sealed by thick cement bulkheads

“ C” Headframe

2000

S

1000

S

0 N

1000

N

“ B” ShaftVentilation Intake

UBCPortal

5000

6000

250 LEVEL

425 LEVEL

100 LEVEL

5500575 LEVEL

C212

C10

C9 #15

#14

#12

#11

B230

B234

B208

B233

B235

B236

B214

B213

B212

Arsenic Chambers Long Section: 10 chambers & 5 stopes

Independent Peer Review Panel

• To provide INAC with expert, independent peer review of management alternatives for the arsenic trioxide currently stored underground at the Giant Mine, beginning with a review of the Draft Final Report entitled "Arsenic Trioxide Management Alternatives - Giant Mine" by SRK Consulting Inc.

• Role subsequently expanded to include review of integrated underground and surface Giant Mine Remediation Plan

• Review by GNWT• Review by expert federal departments

– Environment Canada– Fisheries– Health Canada

• Community Alliance kept informed of progress on Remediation Plan

Addressing Liabilities - Giant Mine Remediation Plan:Integrated arsenic trioxide dust management Project Description and Abandonment and Restoration plan

3

§ There is no possibility of previous owners cleaning up the site

§ Different Jurisdictions

§ Difficult to apportion responsibilities and liabilities between governments

§ Expectation to proceed with remediation

§ Integrated remediation plan for surface and underground

Funding Options

DIAND Jurisdiction§ Administration of mines

and minerals§ Administrative control of

beds of bodies of water§ Water management

GNWT Jurisdiction§ Administration and control

of Commissioners land§ Mine inspections and mine

safety§ Highway§ Public health

Jurisdictional Responsibilities Canada and GNWT

Cooperation Agreement Fundamentals

§ Acknowledge different legislative and administrative responsibilities for the Giant Mine site

§ No transfer of responsibility

§ Liability allocation set aside

§ Agree to be co-proponents of remediation plan

§ Recognition that remediation of Giant Mine is a priority for the public

§ Agree to cost share

§ The Agreement covers the Giant Mine remediation project only. It does not set a precedent for other mines on Commissioner's Land

Cooperation Agreement -Main Components

§ Care and Maintenance

• Interim joint office and cost share between GNWT and DIAND

§ Remediation Plan (integrated surface and underground)

§ Administration of Project

§ Financial Cost-Share

Remediation Plan§ Parties agree to finalize a remediation

plan including surface and subsurface components for submission to regulatory agencies

§ Plan will include former Town Site

§ Parties agree that in situ freezing of arsenic trioxide dust is the preferred option for addressing the underground arsenic trioxide at the site

§ Parties agree to cooperate in all aspects of regulatory filings and environmental assessment

§ Remediate surface of the site to GNWT Industrial Standards

Mine Site Integrated Remediation Estimated Costs

§ Costs over next 3 years including the Care and Maintenance ~ $30M§ Currently estimated cost of

remediation $280 - $330 million - 1/3 surface ($100m) and 2/3 Underground ($200m)

4

Financial Cost-Share

§ GNWT to contribute $23m over 10 years towards care and maintenance and remediation of surface only

§ Canada acknowledges long term responsibility of arsenic trioxide dust stored underground

§ GNWT to provide right of access and possession by appropriate land tenure instrument at no cost to Canada

§ GNWT will contribute up to $250,000 annually towards the cost of the interim office

§ GNWT will make best efforts to provide other in-kind services

Next steps :

§Finalize Remediation Plan and IPRP review report

§Regulatory Board Review ( 2 years)• Additional public input• Possible Full Environmental Assessment

Giant Mine Remediation Project

Diane WalshAdministrativeCoordinator

Bill MitchellProject Manager

Mark LiskowichHead, Technical andEnvironmental Services

Manny LimProject Specialist

Alex GlowachProject Specialist

Mark CronkEngineer PWGSC

Rosanna MassimiEnvironmental Scientist

For more detailed information:http://giant.gc.ca

Ben NordahnMining Technical

Specialist

1

Britannia MineRemediation Project

Assessment of Costs and Liabilitiesat Beginning of Project and at Current Time

Barry Azevedo, PEng. MASc.Britannia Mine Remediation ProjectCrown Contaminated Sites BranchBC Ministry of Agriculture & Lands

Ho

we

So

und Britannia Creek

MillBuilding

BritanniaBeach Mineral Creek

Jane

Cre

ek

4100Portal

Jane BasinGlory Hole& Open Pit Complex

M i n e r a l R i d g e

2200Portal

Furry CreekWorkings

1 km

• 1905 – mine begins production

• 1920s – largest producing copper mine in Commonwealth; metal recovery from mine drainage

• 1970 – Pollution Control Act becomes effective

• 1973 – mine owners ordered to obtain permit (lime treatment)

• 1974 – mine closes; mine owner ordered to maintain metal recovery system

• 1979 – mine sold to real estate developer

BriefHistory

• 1981 –works not being maintained; initiation of period of studies and monitoring to characterise impact and define liability (EC, DFO, BCMEM, BCMOE)

• 1997 – EC and BCMOE jointly fund pilot plant testing and conceptual design of HDS lime treatment of mine water

• 1997 – Contaminated Sites Regulation becomes effective

• 2001 – $30M settlement with historical mine operators; initiation of remediation

• 2003 – Agreement with current land owner

• 2005 – Award of WTPcontract

4100 L

2700L

4100 Portal

4100 Plug

Mineral Creek

Britannia Creek

Maximum

Allowable

Mine

Flooding

Limit

HoweSound

Britannia Beach Townsite

Hom

esta

ke

Blu

ff

Vic

tori

a

3D Cutaway of Mine from Southwest

Jane Basin

Fai

rvie

w

Jane

2200 Portal

B r i t a n n i a C r e e k

Howe Sound

contaminatedsediments

4100 portal acidic metal drainage

contaminatedfill and groundwater

2200 portal acidicmetal drainage

Mill

metal sulphideore body

contaminated wasterock and groundwater

Post-Mining Conditions

2

Project Management Structure (~1999)

Steering CommitteeProvince-Environment Canada (co-chairs)

BC Ministry of Energy and Mines,BC Ministry of Finance

Legal CounselBC Ministry of Attorney General

Technical Advisory CommitteeProvince (chair), Environment Canada,

BC Ministry of Energy and Mines,BC Ministry of Environment,

Squamish Lilllooet Regional District, Environmental Mining Council of BC

later:Contracted Project Manager,

Britannia Beach Historical Society,land developer,

Natural Resources Canada,Squamish First Nation

Provincial Goals• Environmental goal

– to reduce pollution from Mine into Howe Sound

• Financial goal– Minimize cost to taxpayers by maximizing opportunity for cost

recovery through:• legal means• landowner contributions / development revenues• infrastructure grant

• Development goal– Optimize development capability of land (subject to costs)

• Operational goal– Long term operation of remedial works by party other than

Province

mine safety?

Britannia C

reek

3D Cutaway of Mine with Remedial Actions

Jane Basin

WTP

Fan Remediation

2200 Plug (UBC 2001)

4100 Plug

Mine InflowDiversions

$ 680,000 Annual O&M - Fan

$ 1,770,000 Annual O&M - WTP

$ -Legal

$ -Administration

$ -Project Management

$ -Mine Safety

$ -Mine Inflow Diversions

$ -AA Remediation

$ 15,000,000 Marine Remediation

$ 1,375,000 JB Road Upgrade

$ 10,600,000 Fan Remediation

$ 11,569,964 WTP Capital

2001 Estimated Costs

Nominal Total Costover 20 years

= $99.3M

NPV Total Costover 20 years

= $75.9M

• Persons responsible for remediation of a contaminated site include: a current owner/operator, and a previous owner/operator.

• A responsible person is absolutely, retroactively, and joint & severally liable

• 1998 assessment of corporate history identified several existing companies that were successors to the historical mine owners and operators

BC Environmental Protection Act (formerly Waste Management Act) and the

Contaminated Sites Regulation (1997)

Britannia Mine andReclamation Corp.

current site owners: BBPL, BBHS, Makin, Tanac, BCR, BC Crown

parties indemnified by Province: ARCO, BP/Dome, Canzinco, Intalco, Alcoa, Alumax, Howmet, Pechiney

Britannia BayProperties Ltd. BC

20012003

Britannia Mine Successorship of

Corporate Ownership

3

white space

BC MOE(EMA Regulator)

Historical PotentialResponsible Parties

(Arco, Alcoa,Ivaco, others)

Province of BC(Remediator)

Copper BeachEstates Ltd.

(Property Owner)

Other PRPs(Museum, BCR,

MoT)

Remediation – 2001 Relationship of Relevant Parties

historical owner agreement- to Province: $30M- from Province: indemnification- settlement preferable to legalbattle

CBEL memorandum of agreement- to Province: $5M, Jane Basin Road construction, 50% of site development profits, annual property surcharges, and limited property (total est. value of $30.9M)- to CBEL: indemnification, noobjection to development

infrastructurefund (Canada,BC, SLRD,CBEL)- to Province$15 million

Britannia Beach community- ongoing public meetings

- website, feedback- progress reports

Remediation Plan

WTP feasibility design (AMEC)

Mine Hydrogeology – mine drainage investigations (SRK and KC)

Contaminated SitesInvestigation –remediation plan (URS)

mine drainage flowand quality

groundwater flowand quality

Drainage diversionsand equalizationthrough minestorage

Plant final design,procurement, andconstruction (EPCOR)

Soil and Groundwater Remediation works

Flood Risk Assessment (WMC)

sitinginformation

Project Management (Golder)

EM/RA (EVS-Golder)

blank

BC MOE(EMA Regulator)

Historical PotentialResponsible Parties

(Arco, Alcoa,Ivaco, others)

BC MAL Province of BC(Remediator)

Britannia BayProperties Ltd.

(Property Developer)

Other PRPs(Museum, BCR,

MoT)

Remediation – 2003 Relationship of Relevant Parties

historical owner agreement- to Province: $30 million- from Province: indemnification

BBPL agreement- 440 acres of land needed for remediation- 8996 acres of mineral claims- 32.9 acres for highway RoW- environmental levy on development- timber and access rights- estimated value of $5M- to BBPL: no objection to development, limited environmental liability

2001 2003

Britannia Beach community- ongoing public meetings

- website, feedback- progress reports

blank

provincial contribution- projected cost of $99.3M - private contributions of $35M- province commitment =$64.3M

WTP ProcurementA Public-Private Partnership

• Decision to proceed with WTP procurement through a P3 in late 2003– risk transfer, cost effective, DBFO 20 year contract

• RFEI, RFP processes in 2004• EPCOR awarded contract in late 2004

– design (Stantec), construction (LSI), finance and operation (EPCOR)– performance-based monthly payments for repayment of capital,

operating, financing, and profit costs (must meet permit criteria)– no payments until plant is operational– $27M NPV ($60M nominal) contract vs traditional projected cost of

$39M NPV ($70M)– hydroelectric plant to provide 30% of electric needs– WTP design capacity of 1,050 m3/hour (based on mine storage)

WTP Under Construction- Commissioning October 21, 2005- Full operation in early November

Contaminated Soil Disposalinto East Bluff Glory Hole

4100 Portal and Aditunder Rehabilitation

Contaminated GroundwaterPumping Well Pipe Array

$ 200,000 $ 680,000 Annual O&M - Fan

$ 1,212,000 $ 1,770,000 Annual O&M - WTP

$ 701,105 $ -Legal

$ 1,885,161 $ -Administration

$ 4,506,514 $ -Project Management

$ 800,000 $ -Mine Safety

$ 423,620 $ -Mine Inflow Diversions

$ 2,000,000 $ -AA Remediation

$ -$ 15,000,000 Marine Remediation

$ 541,909 $ 1,375,000 JB Road Upgrade

$ 6,966,366 $ 10,600,000 Fan Remediation

$ 26,031,000 $ 11,569,964 WTP Capital

20052001Comparison of Estimated Costs

4

2001 Cost Estimates Compared to 2005 Cost Estimates

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

WTP C

apital

Fan R

emed

iation

JB Roa

d Upg

rade

Marine

Remed

iation

AA Remed

iation

Mine In

flow Dive

rsions

Genera

l Mine

Safety

Projec

t Man

agem

ent

Adminis

tration Le

gal

Annua

l O&M - W

TP

Annua

l O&M - F

an

Unconsidered Costs in 2001 Budget

• WTP Capital: feasibility assessment, flood assessment, site demolition, residential development, access road, sludge filter plant,wtp site remediation, outfall location, building architecture, water supply, profit

• Fan Remediation: contaminated soil excavation and disposal

• AA Remediation: investigation and remediation

• Mine Inflow Diversions: East Bluff diversion

• Mine Safety: open raises, 4100 wye, ore bin, mine manager

• Project Management: project management, owner’s engineer, construction management

• Administration: staff salaries and expenses

• Legal

Dismissed Costs in 2005 Budget

• WTP Capital: Jane Basin sludge disposal cell study and construction,

• Marine Remediation ($15 million!!!)

Outstanding Liabilities

• Five large abandoned water reservoir dams on Britannia Creek• Jane Basin Rock Block (20,000,000 m3)• Loss of hydraulic continuity between mine ore body and 4100 portal (mine

drainage exits at another location into Britannia Creek or Furry Creek• Excessive WTP bypasses despite mine storage (weather dependent)• 3250 overflow into Mineral Creek despite mine storage (weather and mine

working collapses)• Open portals, raises, derelict structures, fall hazards• Marine sediment contamination• Upland waste rock dumps at mine portals – undefined remediation (RA)• Outfall location instability• Adjacent residential growth

Summary• indemnification to historical mine operators has resulted

in provincial taxpayer covering additional substantial remediation costs of $64.3M (nominal)

• the project is on budget as set in 2001 ($99.3M, nominal)• the project is on budget due to some early conservative

assumptions, and cost effective WTP procurement• there are substantial outstanding liabilities which may

impact budget• the WTP is ahead of schedule, with no over-budget risk

on contract items

Barry Azevedo, PEng. MASc.Managing Engineer, Britannia Mine Remediation Project

Crown Contaminated Sites Branch, BC Ministry of Agriculture & Lands 10470-152nd Street, Surrey BC V3R 0Y3

tel:(604) 582-5309 cel: (604) 612-8536 fax:(604) 584-9751email: [email protected]: www.britanniamine.ca

Estimated Total Inflows to Mine (including flows that reported to 2200 level)

0

200

400

600

800

1000

1200

1977

Jan

01

1978

Jan

01

1979

Jan

01

1980

Jan

01

1980

Dec

31

1981

Dec

31

1982

Dec

31

1983

Dec

31

1984

Dec

30

1985

Dec

30

1986

Dec

30

1987

Dec

30

1988

Dec

29

1989

Dec

29

1990

Dec

29

1991

Dec

29

1992

Dec

28

1993

Dec

28

1994

Dec

28

1995

Dec

28

1996

Dec

27

1997

Dec

27

1998

Dec

27

1999

Dec

27

2000

Dec

26

2001

Dec

26

Month

Min

e In

flo

w (

L/s

)

-500

0

500

1000

1500

2000

2500

3000

3500

4000

4500

SW

E (

mm

)

Mine Inflows

Design Capacity

Hydraulic Capacity

SWE

Estimated Total Inflows to Mine

5

No. of Days of untreated pipe discharge per event

0

5

10

15

20

25

30

35

40

45

50

1977

Jan

01

1978

Jan

01

1979

Jan

01

1980

Jan

01

1981

Jan

01

1982

Jan

01

1983

Jan

01

1984

Jan

01

1985

Jan

01

1986

Jan

01

1987

Jan

01

1988

Jan

01

1989

Jan

01

1990

Jan

01

1991

Jan

01

1992

Jan

01

1993

Jan

01

1994

Jan

01

1995

Jan

01

1996

Jan

01

1997

Jan

01

1998

Jan

01

1999

Jan

01

2000

Jan

01

2001

Jan

01

2002

Jan

01

Date

No

. of D

ays

of u

ntr

eate

d d

isch

arg

e p

er e

ven

t (co

ntr

olle

d a

nd

u

nco

ntr

olle

d)

Projected Number of Days of Untreated Discharge per Event Utilizing Last 25

years of Hydrology Data

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Date

50

40

30

20

10

0

Num

be

r of D

ays

of U

ntr

ea

ted

Disc

ha

rge

Ball Diamond18.7%

East Mill Slope1.0%

Sedimentation Pond(Waste Rock)

0.4%

West Mill Slope3.7%

Sedimentation Pond (Launder Sediment)

6.1%

Settling Pond12.2%

Concentrate Pile18.7%

Museum 4.7%

Mill Settling Pond6.2%

Mill area E of Hwy11.4%

Product Building0.3%

Concentrate Wharf Tailings

6.7%

Concentrate Building9.3%

Subsurface Deposits56%

Surface Deposits43%

Mill Building<1%

Loading Sources to Howe Sound

Britannia Fan Area Remediation OptionsBritannia Fan Area Remediation Options

South Alluvial Fan (Mill):Copper and Zinc: up to 90 kg/day each

North Alluvial Fan:Copper and Zinc: up to 5 kg/day each

Estimated Daily Metals Loading

Mine Workings Total:Copper and Zinc around300 kg/day each

4100 Level

Groundwater flow

Mine water flow

From 2200 Levelvia Britannia Creek – UBC 2001

Howe Sound

Bedrock

Alluvium and Fill

Contaminated sediments (tailings)

2200 Level Waste Dump

blank

Permit Level Development Table

100%100%100%100%96HRLC50

8.5-109.5upper pH

6.56.5lower pH

30103025-7525TSS

(mg/L)

0.010.0020.0010.01-0.100.00010.050.01Cd (mg/L),

0.40.40.20.1-1.00.110.2Mn (mg/L),

110.50.5-1.00.10.50.2Al (mg/L),

0.200.50.0310.2-1.00.019-0.0950.30.15Zn (mg/L),

0.10.30.010.3-1.00.05-0.30.50.01Fe (mg/L),

0.10.40.020.60.05-0.30.002-0.010.20.05Cu (mg/L),

(total)(diss)(total)(diss)(diss)(total)(total)(diss)

permitpermitdesigndesign(total)PCOcriteria

WTPWTPMMERMiningambient1999permit

parameter

Jane Basin

Upper Jane Creek

Pipe(s)Weir/flowcapture structure

East Bluff Diversion

Lower Jane Creek

6

Settling Pond andNortheast Fan Piles

Sedimentation Pond

Concentrater Pile

East Mill Slope

Summary of Fan Area Remedial Work

Contaminated StormwaterCollection System

Groundwater PumpingSystem

Existing Deep Outfall

Stormwater Sewer to Deep Outfall

Ore Bin

Jane Basin Access Road

• INSERT JB ROAD MAP

Jane Basin Access Road Plan

WTP Location & Access Road

Upper Bridge

Lower Bridge

Highway 99 AccessNew Road Section

11

Mineral Development & Lands Branch, MNDM 59

The Rehabilitation of The Rehabilitation of OntarioOntario’’s Kam Kotia Mine:s Kam Kotia Mine:

An Abandoned Acid An Abandoned Acid Generating Tailings SiteGenerating Tailings Site

Christopher D. HamblinChristopher D. Hamblin

Project ManagerProject Manager

Abandoned Mines Rehabilitation FundAbandoned Mines Rehabilitation Fund

Ministry of Northern Development & MinesMinistry of Northern Development & Mines

Mineral Development & Lands Branch, MNDM

WHAT IS KAM KOTIA?WHAT IS KAM KOTIA?

l Kam Kotia is a former Cu/Zn mine near Timmins, Ontario

l There are about 6 million tonnes of unmanaged acid generating tailings covering more than 500 ha

l Environmental impacts are locally significant– acidic leachate– dusting– aesthetics– physical safety


MINING HISTORYMINING HISTORY

l Principle exploration 1926-1928, exploration shaft

l Mining * 1943-1944 - 169,000 tonnes open pitl Mining 1961-1972 - 5,840,000 tonnes, mainly

undergroundl Production 6.6 MT @ 1.1% Cu, 1.17% Zn,

0.10 oz/Ag

* Mining in 1943-1944 carried out on behalf of Wartime Metals Corporation, a Federal Government Agency. Cu sold to Metals Reserve Company. Washington, which paid operating costs and royalty.


(NUT)(NUT)

((NITNIT))

((SUTSUT))

Mineral Development & Lands Branch, MNDM Mineral Development & Lands Branch, MNDM

22


HYDROLOGYHYDROLOGY

l North and East seeps, with a pH of 2-3, drain NUT, east half of NIT and north half of plant site to the Kamiskotia River in the north.

l South seep drains SUT, south half of NIT and plant site to Little Kamiskotia River in the south, which had a pH 0f 3.5 to 4 prior to rehabilitation beginning on the site.



• The total rehabilitation of the abandoned Kam Kotia Mine site is to be conducted as a proposed five-phase program.

• This rehabilitation plan was developed during fiscal 2000/01, and predicted a total rehabilitation cost of more than $41 million.

• The cost estimates were as follows, including a 30% contingency:

• Phase “A”: $4.985 million• Phase “B”: $3.285 million• Phase “C”: $8.190 million• Phase “D”: $3.372 million• Phase “E”: $11.766 million• Effluent treatment for 50 years: $9.698 million

BACKGROUND


• In the fall of 2000, a funding commitment for $9.0 million was made to conduct Phases “A” and “B”.

• This money was to come from the $20 million available during the last two years of the original 4-year Abandoned Mines Rehabilitation Fund.

PHASES “A” AND “B”


• Phase “A” involved the construction of a Lime Addition Treatment Plant, as well as all of its required infrastructure, and the construction of a new NUT impoundment dam structure.

• The combined cost of these Phase “A” bids was $9.85 million, and the work was completed by July 2002.

• Realized that the combined costs of Phases “A” and “B” would approach $14 million.

PHASE “A”

33




• Phase “B” involved the relocation of the SUT tailings to within the new NUT impoundment area.

• Upon completion of the work, more than 340,000 m3

of SUT tailings had been relocated and buffered with Envirolime, at a cost of $3.4 million.

• Phase “B” work was completed by mid-March 2003.

PHASE “B”

44


• The bid prices for the Phase “B” work resulted in a cost overrun of $142,991.26 over the total amount available for Phases “A” and “B”.

• Savings were attained by having the contractor reduce the total area of clearing and grubbing required and by cancelling the seeding of the SUT area after the removal of the tailings.

• Although seeding was not done, agricultural lime was still spread over the peat/soil surface to buffer residual acidity.

• The final cost of Phases “A” and “B” was 4,111.88 below the expenditure cap.

PHASE “B”




• Phase “C” involved the relocation of the NUT tailings to within the new NUT impoundment area.

• Upon completion of the work, more than 611,000 m3 of NUT tailings had been relocated and buffered with Envirolime, at a cost of $6.9 million.

• The Phase “C” work was completed by late-March, 2004.

PHASE “C"


55


However…..

…. in abandoned mine rehabilitation,like any construction project, .…

Things donThings don’’t always go t always go exactly as planned!exactly as planned!


• Timmins received two years of anomalously high precipitation.

• The NUT Impoundment Area filled with 500,000 to 700,000 m3 of water at a pH of about 2.8, and containing very high acidity and metals.

• In order not to delay the project, a decision was made to stack the NUT tailings in the impoundment area during Phase “C”.

Contaminated NUT Area Water


• Efforts were made to conduct the “in-situ” treatment of the NUT “Pond” during the winter of 2003/04.

• 706 tonnes of lime were added to the Pond, followed by over 2,000 tonnes of caustic (e.g. NaOH).

• Managed to raise the pH sufficiently to allow the discharge of the contaminated water for ~ 3 hours.

• Eventually ceased the treatment after having spent $1.8 million.




• A contract was awarded earlier this year to conduct the treatment and discharge of the contaminated NUT water and to place the stacked NUT tailings into their proper location.

• The work is currently being conducted.

• The treatment method is based on the recommendations of a consultant that studied the various ways to deal with this water, and involves neutralization with caustic and filtering of the resulting sludge using geotextile bags.

• The final cost of this contract will be over $9.0 million.


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NIT Area Cover

• The NIT area “dry” cover was to have been built as part of Phase “E”.

• In order for the KKM rehabilitation work to continue, the first two layers of that cover – the capillary break – were constructed during the winter of 2004/05, at a cost of $3.4 million.


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Miscellaneous Rehabilitation

• The first partnership project between MNDM and the OMA (the Ontario Mining Association) was conducted on the Kam Kotia Mine site during the fall of 2003.

• The project involved the vegetation of the NUT impoundment dam structures, which had been deleted as a cost saving measure during Phase “A”.

• The project cost of $276,000 was shared equally between the two partners.


Rehabilitation Yet To Be Done ...

• Complete the NIT cover – this work is expected to cost more than $10 million, so it will have to be conducted during two separate fiscal years.

• Collect the remainder of the unimpounded tailings.

• Conduct Phase “D”, which involves the construction of the “moist” cover over the NUT impoundment area.

• Conduct the remainder of Phase “E”, which will include the rehabilitation of the open pit and all of the physical hazards on the site, such as the shaft and the thin crown pillar.


The final cost for the rehabilitation of the Kam Kotia The final cost for the rehabilitation of the Kam Kotia Mine site is now expected to be in the range ofMine site is now expected to be in the range of……....

$55 million$55 million


Recommendations

(aka – What would I have done differently?)

If you are planning on undertaking an abandoned mine rehabilitation project of a similar size and scope:

1. Try to diversify your funding sources by involving other governments, agencies or partnerships:

• MNDM was unsuccessful when it approached the Federal government for assistance.

• The OMA partnered with MNDM on the revegetation of the NUT impoundment dams.

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Recommendations (cont’d)

2. Build a “contingency” allowance into your bids so that you can deal with the unforeseen – a 50% cost increase is not unusual:

• The latest RFT for the treatment and discharge of the contaminated NUT water had a contingency allowance of $250,000 built into the bid forms.

• The bidders each show what their mark-up percentage will be on that contingency allowance.

• The cost of that contingency [e.g. contingency + (contingency x mark-up)] becomes part of the contractor’s total bid price.


3. Once you start a rehabilitation project it’s hard to “back off”. Be prepared to stay the course:

• The five-phased approach at Kam Kotia was supposed to have allowed MNDM to end or pause the project after any phase, with no loss of the benefits already achieved.

• In reality, discontinuing rehabilitation on an environmental project like Kam Kotia will probably draw the negative attention of the environmental regulators, environmental NGOs, and/or the public.




4. Be prepared to “think outside of the box”.

5. Expect the unexpected.

6. We live in Canada! Weather will probably have a negative impact on your project at some point!!

7. Have fun with your projects. Remember that you are making things better.

1

Top Down Process for Top Down Process for Mine Closure PlanningMine Closure Planning

Daryl HockleySRK Consulting Inc.Nov. 2, 2005

Top Down ProcessTop Down Process1. Identify all possible closure methods2. Identify factors by which methods will be

evaluated3. Try to evaluate methods using available

information only4. Make decisions where results are clear5. Initiate investigations only where not clear6. Re-evaluate & stop when decisions are clear

14 Waste Rock piles250 M tonnes600 hectares

Absetzerhalde150 M tonnes

Nordhalde 60 M tonnes

pH 2.7SO4 10,000 mg/L

Ronneburg District Ronneburg District –– East GermanyEast Germany 1. Identify possible methods

n “Representative options”:– Perpetual water treatment (only)– Cover waste rock in place– Relocate waste rock to pit

2. Identify evaluation factors 2. Identify evaluation factors n Cost

– Capital costs– Long-term water treatment costs

n Risk– Human and ecological– Radiological to workers

n Acceptance– Regulations and commitments– Local public

n Cost estimates based on conceptual designs only

n Human health risk assessments based on available data and comparison to other cases

n Assessed acceptance based on review of regulations, effect on land values, and feedback from public meetings

3. Use available information (only) 3. Use available information (only) to evaluate optionsto evaluate options

2

0 1 2 3 4 5

Absetzerhalde

Nordhalde

Kegelhalde Paitzdorf

Kegelhalde Reust

Halde Beerwalde

Halde Drosen

Halde 4

Halde 370

Halde 381/Schurf 12/13

Halde 377

Halde Korbussen

Schutzdamm

Treat Water Cover Relocate to Pit

4. Make decisions when results 4. Make decisions when results are clearare clear 5. Investigate only the uncertainties 5. Investigate only the uncertainties

that prevent decisionsthat prevent decisions

0 100 200 300 400 500 600 700 800Transverse lenght (m)

0

20

40

60

80

100

120

140

Rel

ativ

ehe

ight

(m)

XPY

0.9900.9800.9700.9600.9500.9400.9300.9200.9100.9000.8900.8800.8700.8600.850

Pyrite Fraction and Oxidation Rate

0,15 kg Py/m3⋅year

Mid-February

0 100 200 300 400 500 600 700 800Transverse lenght (m)

0

20

40

60

80

100

120

140

Rel

ativ

ehe

ight

(m)

XOAIR

0.2100.1950.1800.1650.1500.1350.1200.1050.0900.0750.0600.0450.0300.0150.000

Oxygen Concentration and Flux

2,0 kg/m2⋅year

Mid-February

0 100 200 300 400 500 600 700 800Transverse Lenght (m)

0

20

40

60

80

100

120

140

Rel

ativ

ehe

ight

(m)

T1817161514131211109876543

Temperature and Gas Velocity

0,3 m/day

Mid-February

6. Re6. Re--evaluate and stop investigations evaluate and stop investigations when decision is clearwhen decision is clear

Decision: Relocate to pit

In situ measures unlikely to improve water quality

Refinements since 1994Refinements since 1994• North American mine closure

– More transparency– Broader consultation– Particularly when publicly funded

• Use of workshops at key points in project– Technical workshops – identification of options– Stakeholder workshops – evaluation factors– Joint workshops – decision making and

identification of critical uncertainties

25 Abandoned Yukon Mines 199625 Abandoned Yukon Mines 1996--9898 Arctic Gold & Silver, Yukon, 1998Arctic Gold & Silver, Yukon, 1998--9999

3

Giant Mine Arsenic Trioxide 2001Giant Mine Arsenic Trioxide 2001--0303 ColomacColomac Mine, NWT, 2001Mine, NWT, 2001--20042004

Island Copper Mine, BC, 2002Island Copper Mine, BC, 2002--20042004 Faro Mine, Yukon, 2003Faro Mine, Yukon, 2003--PresentPresent

San Manuel Mine, Arizona, 2001San Manuel Mine, Arizona, 2001--0404 FlinFlin FlonFlon Metallurgical Complex, 2005Metallurgical Complex, 2005

4

Red Dog Mine, Alaska, 2004Red Dog Mine, Alaska, 2004--PresentPresent ConclusionsConclusions• Mine closure is about making decisions• The top down process applies a decision

analysis framework:– Transparent and replicable– Defensible choices– Effective management of technical inputs

1

SEFRSIGNIFICANT ENGINEERING FAILURE RISK

John Brodie, P. Eng.Faro Mine Closure Project Technical Manager

Brodie Consulting Ltd.

SEFRPURPOSE1. Identify issues not captured in standard

approach to contaminated sites2. Aid in setting priorities for remediation3. Identify need for monitoring & interim

mitigative strategiesFocus on critical components of abandoned

mines

SEFR

RISK = PROBABILITY x CONSEQUENCE• 4 Steps

– Identification of potential failures– Assessment of probability of failure– Estimation of consequences– Conversion of probability and consequences

into numeric values to obtain risk rating

SEFR

• Step 1 – Identification of potential failures– Focus on major concerns– Avoid developing closure solutions– “what could happen without proper closure

work”

SEFR

• Identification of potential failures– Dams– Spillways and diversions– Bulkheads– Crown pillars– Waste dump slopes

SEFR

• Step 2 - Assessment of probability of failure– Semi-quantitative assessment (data is often

insufficient)– Conservative opinion of qualified professionals who

have working knowledge of the site (sites)– Common issue is dams and spillways

• 5 main failure modes– Piping, static or seismic slope failure, hydraulic failure, overtop

2

SEFR – Probability of Failure

Piping Failure

Static Slope Failure

Siesmic Slope Failure

Hydrologic Failure

Other Failures FAILURE

SITE 1 in : 1 in : 1 in : 1 in : 1 in : COMMENTSGIANT MINE

NW tailings 833 1000 1000 1001:20 event (2001 precip) nearly filled pond, no spillway

N-C-S tailings 347 200 475 100water accum. In North pond could cause dam failure

Polishing pond 347 200 100 50no spillway, dam founded on tailings, failure leads to sludges in mine

Crown Pillars 1000short term stability believed to be OK, long term is ?able

SEFR – Risk Rating

PROBABILITY Rank

very high > 1:10 10high 1:100 - 1:10 9moderate 1:500 - 1:100 5

low 1:1000 - 1:500 2

very low <1:1000 1

SEFR

Step 3 - Estimation of consequences• 3 areas of impact

– Fatality– Environmental impact– Remediation cost

• Other areas – legal, private or First Nations land

SEFR

Consequence Rating

FATALITIES ENVIRONMENTAL REMEDIATION Rankvery high more than one fatality irreversible impacts > $10 million 10high one fatality reversible impacts $2.5 - $10 million 9

moderate irreversible injury Imminent impacts offsite$0.5 - $2.5 million 5

low hospital treatment low site impact $100,000 - $0.5 million 2very low no medical treatment no percieved impact <$100,000 1

SEFR

FATALITYENVIRON

MENTREMEDIATION

SITEGIANT MINENW tailings very low high highN-C-S tailings very low mod highPolishing pond very low mod highCrown Pillars very low high very high

Step 4 – Numeric Risk RatingMultiply Probability Rank x Consequence

RankTABLE 4 RISK MATRIX

ConsequenceProbability very low low moderate high very high

very high 10 20 50 90 100

high 9 18 45 81 90moderate 5 10 25 45 50

low 2 4 10 18 20

very low 1 2 5 9 10

3

SEFR

PROBABILITY OF FAILURE RISK

Probability Description Rating Consequence Description Rank SCOREDESCRIPTIVE

RANKINGSITEGIANT MINE

N-C-S tailings 1:100 high 9 high high 9 81 highremediation

CONSEQUENCE

SEFR

• Use the risk ranking to:– Capture risks not commonly part of

contaminated site assessment– Aid in identifying which sites should be

remediated first– Identify need for monitoring and pre-

reclamation mitigation efforts

Documents

Workshop on Assessing Liabilities and Funding Options