VANCOUVER Aug 8 A massive waste spill at a gold
and copper mine in British Columbia could delay, or even derail,
other energy and mining projects planned in the famously "green"
West Coast Canadian province.
The breach of a dam holding back a huge pond of tailings, or
waste materials, at Imperial Metals Corp's Mount Polley
mine in the province's Interior region sent billions of gallons
of gray sludge containing metals and minerals coursing into
waterways early this week. On Tuesday, the miner's stock plunged
40 percent in reaction.
The disastrous spill comes as a raft of government and
industry-backed resource developments already face increased
scrutiny from aboriginal groups and environmentalists, who worry
that their risks may outweigh their rewards.
It also comes after a recent Supreme Court of Canada ruling
on land titles, which is likely to give aboriginal groups more
influence over developments in huge swathes of the province.
Besides Imperial Metal's own upcoming Red Chris copper-gold
mine project, Enbridge Inc and Kinder Morgan Energy
Partners are both planning major pipeline projects to move crude
from Alberta's oil sands to the Pacific Coast. There are also
major hydroelectric and liquefied natural gas (LNG) developments
in the works.
"Clearly the existing regulations and legal framework were
not sufficient to prevent this disaster, so how can we be
assured that other major projects proposed for British Columbia
will not produce similar results?" asked Dave Porter, chief
executive of the B.C. First Nations Energy and Mining Council.
"The disaster at the Mount Polley mine will have an effect
on the conversation with respect to Site C (hydroelectric dam),
the proposed LNG projects and oil pipelines."
The cause of the dam breach is still being investigated by
government authorities and Imperial Metals. The company said in
a statement it was working to limit negative impact on the
environment and community.
British Columbia Premier Christy Clark said the
Toronto-listed company would be responsible for all clean-up
"The company has multimillion dollars in bonds, sitting with
the Ministry of Environment now," she told reporters, referring
to funds held by the province for reclamation costs.
"In addition to that, the company needs to provide a
clean-up plan and there's pretty strict deadline to getting
Fish and other aquatic life are not expected to be overly
harmed by the spill, based on early water quality samples taken
at several locations, British Columbia's environment ministry
said in a statement. Still, residents have been told not to
drink or bathe in the water, and fishing has been banned in
Developing mines and an LNG industry are key planks in
Premier Clark's economic platform, and the provincial government
has been expected to rake in billions in revenues over the
coming decades from natural resource projects.
For already controversial projects such as Enbridge's C$7.9
billion ($7.2 billion) Northern Gateway oil pipeline, the Mount
Polley spill will likely add fuel to arguments that any risk of
a breach is simply not worth the potential reward.
"We're trying to take a level-headed approach to it, but I
think our membership is in a big uproar and I don't blame them,"
said Willie Sellars, a councillor with the Williams Lake Indian
Band, which is one of two aboriginal communities located near
the Mount Polley mine.
"We were made to believe it was never going to happen and it
did, so we are taking a step back and we're trying to assess the
situation and how we move forward."
The most immediate casualty of the disaster could be
Imperial Metals' own Red Chris project in northwest British
Columbia. The open-pit copper-gold mine is under construction
had been expected to start production by year-end.
The company has not yet changed its timetable for the
project, but analysts say it could be financially and
operationally difficult for it to manage both the massive
clean-up at Mount Polley and the start-up of a new mine.
The spill has also come at a time when the global mining
industry is struggling with weak metal prices as well as
difficulties securing financing and a general lack of investor
"It all really depends on the outcome of the investigation,"
said Grant Moenting, an analyst at Paradigm Capital in Toronto.
"What was the cause, will they be on the hook for all the
clean-up, what are the costs?"
Shares in Imperial, whose top investor is billionaire
Canadian oilman N. Murray Edwards, were up 61 Canadian cents at
C$10.03 on the Toronto Stock Exchange on Friday.
(Reporting by Julie Gordon; Editing by Amran Abocar and Peter