Vol. 149, No. 18 — May 2, 2015

Regulations Amending the Metal Mining Effluent Regulations

Statutory authority

Fisheries Act

Sponsoring department

Department of the Environment

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues: The Red Chris open pit copper-gold mine in northern British Columbia is owned and operated by the Red Chris Development Company Ltd. (RCDC), a subsidiary of Imperial Metals Corporation.

RCDC began operating the mine in February 2015 using a tailings storage facility (TSF) that will not infill any fish-frequented water bodies. By fall 2016, the capacity of the TSF will be exceeded and RCDC is planning to expand it. This expansion would infill a portion of Trail Creek that is frequented by fish. The TSF, including the proposed expansion into Trail Creek, was subject to a federal environmental assessment which concluded that “taking into account the implementation of the proposed mitigation measures, the project is not likely to cause significant adverse environmental effects.” However, a natural, fish-frequented water body can only be used for the disposal of mine waste if the Metal Mining Effluent Regulations (MMER) are amended to add that water body to Schedule 2 of the Regulations.

Following a tailings dam failure at the Mount Polley Mine in British Columbia in August 2014, RCDC, the Tahltan Nation and the Government of British Columbia agreed to the conduct of an independent technical review of the proposed tailings dams at the Red Chris Mine. This review concluded that the design of the proposed dams is feasible and that they will be stable if constructed properly. The review also made several recommendations that are being implemented. The Mount Polley Mine is owned and operated by the Mount Polley Mining Corporation, which, like RCDC, is a subsidiary of Imperial Metals Corporation.

Description: The proposed Regulations Amending the Metal Mining Effluent Regulations (the proposed Amendments) would add a portion of Trail Creek to Schedule 2 of the MMER, allowing the use of this portion of Trail Creek for the disposal of tailings from the Red Chris Mine. In accordance with section 27.1 of the MMER, RCDC would be required to implement a fish habitat compensation plan to offset the loss of fish habitat in the portion of Trail Creek added to Schedule 2. RCDC has developed a proposed fish habitat compensation plan that was reviewed by Fisheries and Oceans Canada (DFO) and Environment Canada. This plan would have to be approved by the Minister before any deposit of a deleterious substance into the portion of Trail Creek added to Schedule 2.

Cost-benefit statement: The proposed Amendments would enable the operation of the mine as planned, which is expected to bring positive economic benefits to society and local communities, including local First Nations, while minimizing environmental impacts.

Given the loss of fish habitat that would result from the disposal of tailings into Trail Creek, RCDC would have to compensate for that loss by creating or enhancing fish habitat elsewhere.

Environmental benefits are anticipated due to the development and implementation of a fish habitat compensation plan, which is expected to create 8 781 m2 of fish habitat, while the proposed Amendments would result in the loss of 1 905 m2 of fish habitat.

The total cost associated with the development of the fish habitat compensation plan attributed to the proposed Amendments is $184,000 in capital costs plus $15,400 in monitoring and maintenance costs. RCDC would also have to submit a letter of credit ensuring that funds are in place in case the company would fail to address all elements of the fish habitat compensation plan.

There are no incremental costs to the Government of Canada.

“One-for-One” Rule and small business lens: The “One-for-One” Rule does not apply to the proposed Amendments, which do not place any incremental administrative burden on business. The small business lens also does not apply to the proposed Amendments as it does not increase the administrative or compliance costs of small businesses.

Domestic and international coordination and cooperation: Federal departments, including Environment Canada and Fisheries and Oceans Canada, cooperated and collaborated in the development of the proposed Amendments and will do so for their implementation.

Consultation sessions on the proposed Amendments were conducted in four local communities and in Ottawa. The proposed Amendments are supported by industry and are generally supported by the leadership of the Tahltan Nation. Certain participants, including some members of the Tahltan Nation, are opposed to the proposed Amendments and expressed concerns about the impacts on fish habitat. Some participants expressed specific concerns about the proposed TSF, the potential impacts on downstream water quality and local wildlife, and risks of a tailings dam failure.

Background

Metal Mining Effluent Regulations (MMER)

The MMER came into force on December 6, 2002, under the Fisheries Act, and in 2012 applied to 117 mines across Canada. The MMER impose limits on releases of arsenic, copper, cyanide, lead, nickel, zinc, radium-226 and total suspended solids, and prohibit the discharge of effluent that is acutely lethal to fish.

The MMER include provisions to allow the use of natural, fish-frequented water bodies for mine waste disposal because at some sites the disposal of mine waste in such water bodies may be the preferred disposal option for pollution prevention and reduction of long-term environmental risk. The use of a water body frequented by fish for mine waste disposal can only be authorized through an amendment to the MMER, which adds that water body to Schedule 2 of the Regulations.

In the case where a fish-frequented water body has been added to Schedule 2, section 27.1 of the MMER requires the development and implementation of a fish habitat compensation plan that has to be approved by the Minister of the Environment before the deposit of a deleterious substance into a tailings impoundment area. The objective of this requirement is to help ensure that offsets are provided for losses of fish habitat that occur as a result of the use of natural, fish-frequented water bodies for mine waste disposal. The fish habitat compensation plan must be approved before deposit of mine waste into the water body can begin. The MMER also require the mining company to submit an irrevocable letter of credit to ensure that adequate funding is available to implement all elements of the fish habitat compensation plan.

Any effluent discharged from a mine waste disposal area established in a water body listed in Schedule 2 (a tailings impoundment area as set out in the Regulations) must meet the effluent discharge limits specified in Schedule 4 of the MMER to help ensure the protection of downstream ecosystems. In addition, the MMER require that environmental effects monitoring must be conducted downstream from the effluent discharge point to determine if there are any effects on fish, fish habitat, or the use of fisheries resources.

The Red Chris Mine

The Red Chris Mine is located approximately 18 km southeast of the community of Iskut and 80 km south of Dease Lake in northern British Columbia (see Figure 1). The Red Chris Mine is located within the traditional territory of the Tahltan Nation.

The mine is located within the watersheds of Quarry Creek and Trail Creek, which are tributaries of the Klappan and Iskut rivers, respectively. Both of these rivers are tributaries of the Stikine River, one of the largest rivers in northwestern British Columbia.

The mine, which produces copper and gold, began operations in February 2015. It is designed to process 30 000 tonnes of ore per day and is expected to operate for at least 28 years. The mine produces a copper-gold concentrate, which is shipped by truck to a port facility in Stewart, British Columbia, for transport to offshore smelting facilities.

RCDC estimates that the deposit contains an ore reserve of about 2.1 billion pounds of copper and 1.3 million ounces of gold. A financial analysis of the mine as reported by RCDC has forecast a net present value (after tax) for the project of $423 million (using a 5% discount rate and subject to the metal prices for copper, gold and silver as well as the exchange rate on the Canadian dollar). (see footnote 1) This represents an internal rate of return of 15.7%.

The Red Chris Mine is expected to benefit Canadians, including local communities and the region, in the form of employment, business, and training opportunities. RCDC states that the mine is expected to employ about 270 people through the operational life of the mine (28 years). The company estimates that over 20% of the current employees are Aboriginal.

The mine includes (see Figure 1)

The mine also includes site access roads, power transmission lines, an explosives factory and magazine, water management infrastructure, ancillary mine infrastructure, and associated activities.

Figure 1: Red Chris Mine

Map - Detailed information can be found in the surrounding text.

Tailings management for the Red Chris Mine

The Red Chris Mine is expected to produce at least 300 million tonnes of tailings over the life of the mine. To manage these tailings on a long-term basis, RCDC plans to construct and operate a TSF located east of and almost 400 m downslope from the ore milling facility. The planned TSF is in a Y-shaped valley and straddles the watershed divide between Quarry Creek to the north and Trail Creek to the south. All water from the mine would be managed within this facility, and most of the water would be recycled for use in the ore milling process. Excess water would be treated as necessary to meet the MMER and provincial permit requirements and would be released into Quarry Creek downstream from the TSF.

Construction of the north tailings dam in the Quarry Creek valley is complete and tailings disposal into this portion of the TSF has begun. The portion of Quarry Creek that will be impacted by the TSF is not frequented by fish.

By fall 2016, the capacity of the TSF will be exceeded and RCDC is planning to expand it. This expansion would infill a portion of Trail Creek that is frequented by fish. The TSF, including the proposed expansion into Trail Creek, was subject to a federal environmental assessment that concluded that “taking into account the implementation of the proposed mitigation measures, the project is not likely to cause significant adverse environmental effects.” However, a natural, fish-frequented water body can only be used for the disposal of mine waste if the MMER are amended to add that water body to Schedule 2 of the Regulations.

Gold is not being recovered on-site, and as a result, no cyanide is being used in ore processing and no cyanide will be present in the TSF. Some of the tailings produced will have the potential to oxidize and thereby release acid and metals, unless they are managed in a manner that prevents exposure to both oxygen and water. RCDC plans to manage these tailings by keeping them saturated with water within the TSF, thereby preventing exposure to oxygen and preventing the oxidation reaction.

Environmental assessment of the Red Chris Project

The Red Chris Project was subject to environmental assessments (EAs) under both federal and provincial legislation. The provincial EA considered the full scope of the mine, as proposed by RCDC, and was completed in 2005. The provincial and federal EAs were coordinated through a single cooperative process. The BC Environmental Assessment Office led this process as well as all consultations, including consultations with the Tahltan Nation. All federal government departments involved (the Canadian Environmental Assessment Agency, Natural Resources Canada, Fisheries and Oceans Canada, Environment Canada and Health Canada) were fully engaged in this cooperative process.

The federal EA was conducted as a screening EA under the Canadian Environmental Assessment Act (2003). The project as defined in the federal EA was narrower than the provincial EA and focused primarily on the proposed TSF and associated activities, as well as the proposed explosives factory and magazine. The federal EA, completed in 2006, concluded that “taking into account the implementation of the proposed mitigation measures, the project is not likely to cause significant adverse environmental effects.”

The federal EA was subsequently subject to a legal challenge on the grounds that it should have been conducted as a comprehensive study rather than a screening. The case ultimately went to the Supreme Court of Canada. In January 2010, the Supreme Court issued a decision which concluded that the federal EA of the Red Chris Mine Project should have been conducted as a comprehensive study rather than a screening on the basis that the project as described by the proponent included components listed on the Comprehensive Study List. Nonetheless, the judge who wrote the unanimous decision stated that “I can see no justification in requiring Red Chris to repeat the environmental assessment process when there was no challenge to the substantive decisions made by the [responsible authorities].” (see footnote 2)

On the basis of this decision, the project moved into the regulatory and permitting phase, both federally and provincially. Provincial permits needed for the mine to become operational have been issued, including a permit for effluent discharges from the north tailings dam. The province has not yet issued any permits for the construction of the south tailings dam in the Trail Creek valley, or for the operation of the TSF in the Trail Creek valley.

As part of the environmental impact statement prepared by RCDC, which was the basis for the federal and provincial EAs, alternatives for tailings disposal were considered. RCDC concluded that the use of a portion of Trail Creek for tailings disposal is the preferred option. Alternatives were taken into account in the federal EA in the context of potential means of mitigating the impacts of the project on fish and fish habitat.

Environment Canada recognizes that RCDC was faced with a number of challenges in determining an appropriate location for a TSF, specifically, the amount of tailings to be produced over the life of the mine, the topography of the site and the occurrence of fish-frequented water bodies within both Trail Creek and Quarry Creek. Given these challenges, Environment Canada concludes that it is unlikely that a viable alternative for tailings disposal could be identified and implemented that would not impact fishfrequented water bodies. Therefore, Environment Canada accepts RCDC’s conclusion that the preferred option is to establish a TSF in the headwaters of Quarry Creek and Trail Creek.

Issues

RCDC plans to use a fish-frequented portion of Trail Creek for the disposal of tailings from the Red Chris Mine, beginning in the fall of 2016. However, a natural, fish-frequented water body can only be used for the disposal of mine waste if the MMER are amended to add that water body to Schedule 2 of the Regulations.

Objectives

The objective of the proposed Amendments is to allow RCDC to utilize a portion of Trail Creek for disposal of tailings from the Red Chris Mine.

Description

The proposed Amendments

The proposed Amendments would add a portion of Trail Creek to Schedule 2 of the MMER. Trail Creek is a natural water body frequented by fish. The proposed Amendments would allow disposal of tailings from the Red Chris Mine into this portion of Trail Creek. In accordance with section 27.1 of the MMER, RCDC would be required to implement a fish habitat compensation plan to offset the loss of fish habitat in the portion of Trail Creek added to Schedule 2. RCDC would not be able to deposit tailings into this portion of Trail Creek until such time as the fish habitat compensation plan is approved by the Minister of the Environment.

It is expected that the infilling of this water body with tailings would begin in the fall of 2016. All effluent from the TSF would be subject to the requirements of the MMER, including the effluent discharge limits specified in Schedule 4 of the Regulations.

The proposed Amendments would come into force on the day on which they are registered.

Proposed fish habitat compensation plan

The development and implementation of a fish habitat compensation plan is required in accordance with section 27.1 of the MMER, to offset the loss of fish habitat that would occur as a result of the use of a portion of Trail Creek for tailings disposal. It is also one of the mitigation measures identified in the screening report for the federal EA.

The proposed use of a portion of Trail Creek for tailings disposal would result in the direct loss of 1 905 m2 of habitat, including 194 m2 of spawning habitat. This portion of Trail Creek is habitat for rainbow trout.

To offset this loss of fish habitat, RCDC has prepared a fish habitat compensation plan that proposes to create new fish habitat and increase the productive capacity of fish habitat in the Snapper Creek watershed. (see footnote 3)

Snapper Creek is a small stream that empties into Kinaskan Lake, about 30 km southwest of the Red Chris Mine. Kinaskan Lake is used for recreational and subsistence fishing, and there is a provincial park at the south end of the lake where Snapper Creek empties into the lake.

About 2 km upstream of Kinaskan Lake, Snapper Creek is crossed by provincial Highway 37. This crossing currently consists of two steel culverts under the highway, and on the downstream side of the highway the culverts are perched, meaning that there is a drop from the culverts into the stream below the culverts. Due to the vertical drop and the hydraulic gradient, the crossing at this location is considered a barrier to the upstream passage of fish species residing within the Snapper Creek watershed. No fish have been captured for at least 2 km upstream of the culverts within Snapper Creek. Further upstream (>6 km) there are some isolated remnant populations of rainbow trout in Snapper Creek.

The culverts also limit high water flow events downstream from the crossing, as water pools on the upstream side. As a result, the downstream movement of wood debris and sediment, which are important habitat components, has been reduced. These factors have led to lower habitat quality in the portion of Snapper Creek downstream of the highway to Kinaskan Lake.

Thus, the current culverts for the crossing of Highway 37 over Snapper Creek are having impacts on fish and fish habitat both upstream and downstream of the crossing.

To increase the productive capacity of fish habitat in the Snapper Creek watershed, RCDC is proposing to replace the current culverts with a clear span bridge over Snapper Creek. As discussed further in the “Consultation” section (below), this proposed fish habitat compensation measure reflects input from the Tahltan Nation and is supported by the Tahltan Nation.

RCDC has worked with the British Columbia Ministry of Transportation and Infrastructure in identifying the replacement of these culverts as a fish habitat compensation measure, and the two parties will work together in the design and construction of the bridge, which will be funded by RCDC.

The installation of a clear span bridge will allow fish to move from Kinaskan Lake and the downstream portion of Snapper Creek to portions upstream of the crossing.

RCDC states that this would result in a gain of 8 781 m2 of fish habitat, including 1 213 m2 of spawning habitat, in the 2 km portion of Snapper Creek upstream of the Highway 37 crossing. This would offset the direct loss of 1 905 m2 of habitat that would occur as a result of adding a portion of Trail Creek to Schedule 2 of the MMER.

RCDC would not be able to deposit tailings into Trail Creek until the fish habitat compensation plan is approved by Environment Canada. Environment Canada and Fisheries and Oceans Canada officials agree in principle with the proposed fish habitat compensation plan; however, the plan would have to be approved by the Minister of the Environment.

It should be noted that RCDC has also developed a fish habitat compensation plan under subsection 35(2) of the Fisheries Act to compensate for the loss of 8 449 m2 of fish habitat in Trail Creek downstream from the proposed TSF that would occur as a result of reductions in water flow in the creek. (see footnote 4) This plan, also associated with the culvert replacement in Snapper Creek, would result in the gain of 33 891 m 2 of fish habitat in Snapper Creek. This habitat gain would be upstream of the 2 km portion covered in the fish habitat compensation plan associated with the proposed Amendments. RCDC has not quantified potential benefits of the culvert replacement on fish habitat downstream from the highway crossing, either in the lower portion of Snapper Creek or in Kinaskan Lake.

Regulatory and non-regulatory options considered

As part of the environmental impact statement for the Red Chris Project prepared by RCDC, alternatives for the disposal of tailings were considered. (see footnote 5) The federal EA also considered alternatives for tailings disposal in the context of alternatives considered to mitigate potential impacts of the project on fish habitat.

Environment Canada notes that the first version of Environment Canada’s Guidelines for the Assessment of Alternatives for Mine Waste Disposal was released in 2008, two years after the federal EA of the Red Chris Project was completed. Thus, the assessment of alternatives conducted by RCDC met the standards that existed at the time that the federal EA was completed, but was not as comprehensive as would be required under the current Environment Canada guidelines.

Based on the information in the environmental impact assessment and the screening report for the federal EA, it was concluded that the establishment of a TSF in a portion of Trail Creek is the preferred alternative.

Alternative technologies for tailings management and disposal

Environment Canada notes that the alternatives assessment conducted by RCDC focused on different locations for the establishment of a TSF. This is consistent with the approach taken in all assessments of alternatives considered by Environment Canada.

In addition to considering different locations for the establishment of a TSF, some proponents also consider alternative technologies for tailings management and disposal. In Canada, tailings are most commonly managed as slurry, meaning that tailings solids are mixed with water from the ore milling process. The proposed tailings slurry for Red Chris would be about 35% tailings solids. A TSF for tailings slurry allows for the management of water from all sources on the mine site and facilitates the recycling of water for use in the ore milling process without the need for an additional facility to store large volumes of water.

There are three main alternatives to tailings slurry: thickened tailings, paste tailings and dry stack tailings. In each case, water is removed from the tailings prior to disposal in the TSF so that the proportion of tailings solids increases from about 45%–70% tailings solids for thickened tailings to more than 80% solids for dry stack tailings.

The assessment of alternatives conducted by RCDC did not consider any potential alternative technologies for tailings management and disposal. However, regardless of the technology used, RCDC would still need to identify an appropriate location for a TSF large enough to be able to accommodate the estimated 300 million tonnes of tailings that would be produced over the life of the mine. Generally, TSFs for thickened and paste tailings are comparable in size to TSFs for tailings slurry for mines of comparable size, while TSFs for dry stack tailings may take up somewhat less space.

Given the amount of tailings to be produced, the topography of the Red Chris Mine site and the presence of fish-frequented water bodies, Environment Canada is of the view that it is unlikely that a viable TSF could be developed as a non-regulatory option, regardless of the technology used for tailings management and disposal.

Regulatory options for tailings disposal

Regulatory options involve the disposal of tailings in a manner that would result in direct impacts (see footnote 6) on one or more natural, fish-frequented water bodies, and would therefore require the water bodies to be added to Schedule 2 of the MMER for the option to be implemented as proposed. Options for the disposal of tailings from the Red Chris Mine are illustrated in Figure 2.

Option 1 (preferred option)

Option 1 is to establish a Y-shaped TSF located within the headwaters portions of the Quarry Creek and Trail Creek watersheds (see Figures 1 and 2). It would require the construction of three dams:

Based on the current mine plan, the maximum dam height would be 120 m.

Figure 2: Options for tailings disposal for the Red Chris Mine

Map - Detailed information can be found in the surrounding text.

The Option 1 site would be closer to the ore milling facility than that of Option 2, resulting in shorter pumping distances for tailings and for water pumped from the TSF back to the mill for re-use in the ore milling process, referred to as “reclaim water.” RCDC intends to direct surface drainage and seepage from the waste rock disposal area and ore milling facility to the TSF to facilitate the treatment, as necessary, of these effluents before they are released to the environment. During mine operations, water pumped from the open pit would also be directed to the TSF. The closer proximity of the Option 1 site to the ore processing facility, open pit and waste rock disposal area, as well as the topography of the site, will make it much easier to direct surface drainage and seepage into the TSF for Option 1 than it would for Option 2, since all of this water can be directed to the TSF by gravity, with no need for pumping.

According to RCDC’s plans, water from the TSF, referred to as “reclaim water,” would be pumped back to the ore milling facility for re-use in the ore milling process. Such re-use of water from the TSF in the ore milling process significantly reduces the amount of fresh water that must be taken from nearby sources for use in the ore milling process, and is a practice that Environment Canada recommends. (see footnote 7)

Surplus water from the TSF would be treated as necessary and deposited into Quarry Creek downstream from the TSF. RCDC does not propose any direct deposits of effluent into Trail Creek.

It is important to note that, following the completion of the federal and provincial EAs and the 2010 decision of the Supreme Court of Canada, concerns were raised by the Tahltan Nation and the Government of British Columbia about the potential for seepage of groundwater from the proposed TSF (Option 1) to impact water quality downstream from the TSF, particularly in Trail Creek and Kluea Lake. In response to these concerns, RCDC has undertaken additional work to better understand the potential for seepage and develop mitigation measures to prevent or minimize any impacts on downstream water quality. In particular, RCDC, in consultation with the Tahltan Nation and the Government of British Columbia, hired an independent consultant to review existing information on the hydrogeological conditions in the project area. The report of this consultant, provided to RCDC, the Tahltan Nation, the Government of British Columbia and Environment Canada in November 2012, made recommendations for work that should be undertaken to address information gaps identified by the consultant. The consultant also reviewed and commented on mitigation measures that had been proposed by RCDC to manage seepage.

RCDC accepted the recommendations of the consultant and in 2013 initiated work to respond to the consultant’s recommendations. Analysis and interpretation of information collected in response to the consultant’s report is in progress. RCDC is continuing to work with the Tahltan Nation, the Government of British Columbia and Environment Canada to implement the recommendations and develop mitigation measures. The Government of British Columbia has not yet issued permits for the construction and operation of the portion of the TSF to be located in the Trail Creek valley, pending further progress on this work.

Option 1 would result in direct impacts on a portion of Trail Creek that is fish-frequented, and would also result in direct impacts on headwater portions of Quarry Creek, upstream of the fish-frequented portion of Quarry Creek. Option 2 would not result in any direct impact on Trail Creek since tailings containment would be entirely within the Quarry Creek watershed.

RCDC identified Option 1 as the preferred option because

During the federal EA, consideration was given to whether the south dam of Option 1 could be relocated about 1 800 m upstream (north) in the Trail Creek watershed in order to avoid direct impacts on fish-frequented portions of Trail Creek.

The screening report for the federal EA notes that further north in the Trail Creek valley, upstream of the fish-frequented portion of the creek, the valley is wider. As a result, if the TSF were only to extend downstream to this point, a longer tailings dam would be required, increasing costs and risks associated with a potential failure of the dam. (see footnote 8) To have the same tailings storage capacity, RCDC would need to either make the tailings dams higher, which would further increase the risk associated with the dams, or extend the TSF further downstream in the Quarry Creek valley. Since the Quarry Creek valley is wider further downstream, this would result in a longer dam in the Quarry Creek valley, thus increasing the risk associated with that dam. In addition, moving the tailings dam downstream in Quarry Creek would likely result in direct impacts on the fish-frequented portion of Quarry Creek.

It should be noted that the location of the south dam, as currently proposed by RCDC, is about 800 m upstream (north) of the dam originally considered for Option 1. The location of the north dam has also been shifted to the north (see Figure 2). This change has reduced the direct impact of the TSF on fish-frequented portions of Trail Creek, but has not led to any direct impact of the TSF on fish-frequented portions of Quarry Creek. This new location for the south dam does not pose the same risks as if it had been moved far enough North to avoid any direct impacts on the fish-frequented portion of Trail Creek. This is because the proposed location of the dam is in a narrow point in the valley, so the dam would be shorter than if it were constructed at the more northerly location.

The screening report for the federal EA also noted that moving the location of the south dam within the Trail Creek watershed would not mitigate the impacts of the TSF on water flows in Trail Creek downstream of the TSF.

The screening report concluded that “moving the south dam to avoid effects to ‘waters frequented by fish’ does not achieve a net benefit in terms of reducing effects to fish and fish habitat.”

Option 2

Option 2 is to establish a TSF located within the Quarry Creek valley. It would require the construction of two dams:

This would create a TSF in upper Quarry Creek approximately 4 km in length and approximately 6 km from the ore milling facility. Option 2 would require higher dams than Option 1. Based on the current mine plan, the maximum dam height would be 200 m.

Although not specifically addressed by RCDC in the environmental impact statement, a comparison of the figure prepared by RCDC to illustrate Options 1 and 2, and information provided in the 2012 fish habitat compensation plan indicates that Option 2 would directly impact a fish-frequented portion of Quarry Creek. Thus, Option 2 is also considered a regulatory option, since it could only be implemented if the MMER were amended to add the fish-frequented portion of Quarry Creek to Schedule 2 of the Regulations.

Option 2 would be further from the ore milling facility than Option 1, resulting in greater pumping distances for tailings and reclaimed process water. In addition, due to the topography of the site, Option 2 would require pumping on an ongoing basis to direct surface drainage and seepage from the open pit, waste rock disposal area and ore milling facility into the TSF, including during the closure and post-closure periods when other pumping operations would cease. This would be technically challenging compared to Option 1, since, as described above, no pumping would be required for Option 1 due to the site topography.

Consequently, it is likely that, during the closure and postclosure periods, surface drainage and seepage from the waste rock disposal area and the ore milling facility would be directed towards Trail Creek rather than the TSF, using gravity rather than long-term pumping. This would result in potentially greater water quality impacts on Trail Creek for Option 2 compared to Option 1.

Option 2 would result in direct impacts on more of Quarry Creek than Option 1. Compared to Option 1, Option 2 would have less impact on Trail Creek as a result of reductions in flow, but would result in downstream reductions in flow in Quarry Creek.

Non-regulatory options for tailings disposal

Non-regulatory options would involve the disposal of tailings in a manner that would not directly impact a natural, fish-frequented water body. RCDC identified one potential tailing disposal option that would represent a non-regulatory option.

Option 3

Option 3 would involve the establishment of a TSF in the valley of a headwater tributary to Quarry Creek located approximately 6 km to the northeast of the proposed open pit and ore milling facility (see Figure 2).

This Option would be smaller in area than Options 1 and 2 and would not provide sufficient capacity for all of the tailings that would be generated during the life of the mine. On this basis, RCDC concluded that Option 3 would not be feasible.

This Option would require the construction of two dams:

Option 3 would not have any direct impacts on Quarry Creek or Trail Creek, but it would have potential impacts on water quality in both creeks. This Option would potentially impact water quantity and quality in Quarry Creek, since it would eliminate flows into Quarry Creek from this headwaters area, and effluent from the TSF would be discharged into Quarry Creek.

As with Option 2, the topography of the site is such that, for Option 3, pumping would be required on an ongoing basis to direct surface drainage and seepage from the waste rock disposal area and ore milling facility into the TSF, including during the closure and post-closure periods. To avoid the need for such pumping during the closure and post-closure periods it is likely that, as with Option 2, surface drainage and seepage from the waste rock disposal area and the ore milling facility would be directed towards Trail Creek using gravity, resulting in potentially greater water quality impacts on Trail Creek than for Option 1.

RCDC states that Option 3 would also require more long-term care and maintenance in the post-closure periods, compared to Options 1 and 2, which is discouraged by the provincial regulators responsible for mine closure legislation.

Environment Canada notes that, in considering the potential impacts of Options 1, 2 and 3 on water quality, RCDC did not take into account potential impacts on water quality due to seepage from the TSF. If RCDC had taken seepage into account, it is possible that impacts on water quality due to seepage would have been identified as a potential concern in Trail Creek and Quarry Creek for Option 2, since the main dam would be in the Quarry Creek watershed, and the second dam would be on the drainage divide between Quarry Creek and Trail Creek. It is also possible that such potential impacts would have been identified for Ealue Lake and Quarry Creek for Option 3, since the main dam would be in the Quarry Creek watershed, and the second dam would be on the drainage divide between Quarry Creek and Ealue Lake.

Table 1: Summary of regulatory and non-regulatory options considered for tailings disposal

Regulatory Options Non-Regulatory Option
Option 1 Option 2 Option 3
Water body that would be added to Schedule 2: a portion of Trail Creek
  • Three dams to be constructed (maximum height of 120 m).
  • Direct impacts on Trail Creek, including impacts on a fish-frequented portion of Trail Creek.
  • Also direct impacts on portion of Quarry Creek that is not fish-frequented.
  • Shorter pumping distance for tailings and reclaim water compared to Options 2 and 3.
  • Topography allows effluent from the ore processing facility, open pit and waste rock disposal area to be directed to the TSF using gravity.
  • Potential impacts on water quality in Quarry Creek due to discharge of effluent from the TSF.
  • Potential impacts on water quality in Trail Creek and Kluea Lake due to seepage from the TSF.
Water body that would be added to Schedule 2: a portion of Quarry Creek
  • Two dams to be constructed (maximum height of 200 m).
  • Direct impacts on Quarry Creek, including impacts on a fish-frequented portion of Quarry Creek.
  • Greater pumping distances for tailings and reclaim water compared to Option 1.
  • Potential impacts on water quality in Quarry Creek due to discharge of effluent from the TSF.
  • Potentially greater impacts on water quality in Trail Creek (compared to Option 1) since effluent from the ore processing facility, open pit and waste rock disposal area would likely be directed to Trail Creek in the closure and post-closure periods to avoid the need for long-term pumping to the TSF.
No water body would be added to Schedule 2
  • Two dams to be constructed.
  • No direct impacts on Quarry Creek or Trail Creek.
  • Greater pumping distances for tailings and reclaim water compared to Option 1.
  • Potential impacts on water quality in Quarry Creek due to discharge of effluent from the TSF.
  • Potentially greater impacts on water quality in Trail Creek (compared to Option 1) since effluent from the ore processing facility, open pit and waste rock disposal area would likely be directed to Trail Creek in the closure and post-closure periods to avoid the need for long-term pumping to the TSF.
  • Insufficient storage capacity for the tailings that would be produced over the life of the mine.
  • RCDC determined that this option was not feasible due to the insufficient storage capacity.
Cost estimate: $249 million (see footnote 9) for the construction, operation and closure of the TSF Cost estimate: $267 million (see footnote 10) for the construction, operation and closure of the TSF Cost estimate not available.

Benefits and costs

Analytical framework

The proposed Red Chris Mine, including the proposed TSF, was evaluated via federal and provincial EA processes, and RCDC advanced the project to the regulatory and permitting phase based on the outcomes of these processes.

The proposed Amendments address only the addition of a portion of a fish-frequented water body, Trail Creek, to Schedule 2 of the MMER, allowing that portion of the creek to be used for the disposal of tailings from the Red Chris Mine.

Therefore, given the absence of a non-regulatory option for tailings disposal that is technically feasible, a meaningful baseline scenario could not be constructed, and no benefit-cost analysis could be performed. Instead, the analysis below examines the impacts of the proposed Amendments on the environment, business, the government and society.

Environmental impacts

The environmental impacts of the proposed Amendments would be limited to the loss of fish and fish habitat, which would be offset by the gains associated with the fish habitat compensation plan.

The only fish species that has been identified in the portion of Trail Creek that would be added to Schedule 2 of the MMER is rainbow trout. However, there is no evidence of commercial, recreational or subsistence harvesting in this portion of Trail Creek. Therefore, no monetary value can be placed on this impact. Fishing activities in the immediate project area are limited, and any fishing that does occur is likely limited to Kluea Lake, located downstream of Trail Creek.

The loss of fish habitat associated with the proposed use of a portion of Trail Creek for tailings disposal would be offset by the development and implementation of a fish habitat compensation plan. The proposed Amendments would result in a loss of approximately 1 900 m2 of fish habitat once RCDC begins disposing of tailings. As required under section 27.1 of the MMER, RCDC has proposed a fish habitat compensation plan to offset this loss of fish habitat.

Habitat compensation measures would consist of the replacement of a highway culvert with a bridge. The culvert currently presents a barrier to the movement of fish (rainbow trout) in Snapper Creek upstream of the culvert and also presents a barrier to the downstream movement of sediments, tree branches and other habitat elements. Replacement of the culvert with a bridge would remove this barrier and is expected to improve fish habitat within Snapper Creek. In the 2 km of Snapper Creek upstream of the culvert, this work is expected to result in a gain of almost 8 800 m2 of fish habitat, resulting in a net gain in area of approximately 6 900 m2.

Costs to Government

A compliance and enforcement regime is already in place for the MMER; therefore, the proposed Amendments would not impose any additional costs on the federal government. Furthermore, the mine is in operation and has become subject to the MMER due to deposits of effluent into Quarry Creek downstream from the north tailings dam.

Costs to business

As noted above, as required under section 27.1 of the MMER, RCDC has proposed a fish habitat compensation plan to address the loss of fish habitat that would occur as a result of the proposed Amendments. Under this proposed plan, RCDC would undertake work that is expected to create 8 781 m2 of fish habitat, while the proposed Amendments would result in the loss of 1 905 m2 of fish habitat.

Based on RCDC’s estimates, the present value of the cost of the fish habitat compensation plan attributed to the MMER would be $184,000 in capital costs and $15,400 in monitoring and maintenance costs (discounted at 3% over the period 2015–2020).

Health impacts

Potential effects of the mine on human health relate to the consumption of fish, wildlife, plants and berries (including medicinal plants) or water containing potentially elevated concentrations of contaminants from the mine.

Health Canada, as an expert federal authority in the federal EA of the Project, is satisfied that all major potential health issues related to the Project were addressed in the EA process. The federal EA screening report concluded that “with the water and air quality standards being met, the monitoring programs implemented, along with the successful implementation of proposed mitigation measures the Project is not likely to cause significant adverse environmental effects on health conditions.”

It should be noted that these concerns are related to the project as a whole and are not related specifically to the proposed Amendments.

Distributional impacts

Over an estimated mine life of 28 years, the Red Chris Mine is expected to produce about 2 billion pounds of copper and 1.3 million ounces of gold. A financial analysis of the mine, as reported by the RCDC, has forecasted the net present value for the project of $423 million after tax (at a 5% discount rate).

The mine would benefit the local and regional economy as, according to RCDC, it is expected to employ about 270 people through the operational life of the mine. The company estimates that over 20% of the current employees are Aboriginal. Construction of the mine is complete and the mine began operating in February 2015.

Impacts on society and culture

During the EA, potential impacts on traditional land uses, including resource harvesting (hunting, fishing, trapping and plant use) were identified. The federal EA considered relevant analysis undertaken by the Government of British Columbia in the provincial EA and concluded that “the Project is not likely to cause significant adverse environmental effects on physical and cultural heritage.”

The federal EA also concluded that “the Project is not likely to cause significant adverse environmental effects on current use of lands and resources for traditional purposes by aboriginal persons.”

Table 2: Impacts statement (qualitative)

Qualitative and non-monetized impacts
A. Industry Overall positive impact, enabling the use of a portion of Trail Creek for tailings disposal by RCDC, thus allowing the mine to proceed as planned.
  The total incremental cost related to the proposed Amendments for industry would be associated with the development and implementation of the fish habitat compensation plan: $184,000 in capital cost plus $15,400 in monitoring and maintenance costs (present value, discounted at 3% over the period 2015–2020).
B. Government A compliance and enforcement regime is already in place for the MMER; therefore, no incremental costs are anticipated.
C. Environment Environmental benefits are anticipated due to the development and implementation of a fish habitat compensation plan.
D. Society The Project is not likely to cause significant adverse environmental effects on current use of lands and resources for traditional purposes by Aboriginal persons.

“One-for-One” Rule

The “One-for-One” Rule would not apply to the proposed Amendments as they would not impose new administrative requirements on the regulated community.

Small business lens

The proposed Amendments would not trigger the small business lens as the Red Chris Development Company is not considered a small business as per the Treasury Board Secretariat definition. (see footnote 11)

Consultation

The Red Chris Mine was subject to provincial and federal EAs that were completed in 2005 and 2006, respectively. During those EAs, the British Columbia Environmental Assessment Office led consultations with the proponent, local governments, First Nations, federal and provincial agencies and other interested communities. The federal government did not conduct separate consultations but was fully engaged through a cooperative EA process, and participated in an Interagency Committee Working Group, a Fisheries Compensation Plan Technical Working Group and First Nations meetings.

The Red Chris Mine is located in the traditional territory of the Tahltan Nation, and the Tahltan Nation is the only First Nation that was engaged in consultations on the EA and in subsequent consultations. The Tahltan Nation is governed by the Tahltan Central Council. The Tahltan Heritage Resources Environmental Assessment Team (THREAT), made up of Tahltan Nation members and consultants, works on behalf of the Tahltan Nation to review proposed development projects and provide advice to the Tahltan leadership regarding impacts on Tahltan interests in Tahltan territory.

Following the 2010 Supreme Court of Canada decision on the federal EA of the Red Chris Mine, the process of issuing provincial government permits related to the mine was initiated. The Northwest Mine Development Review Committee, consisting of representatives of RCDC, the provincial government, the federal government and the Tahltan Nation, facilitated discussions related to permitting for the mine and provided a mechanism for federal government and Tahltan Nation engagement on matters related to the mine. In addition, the Red Chris Monitoring Committee was formed in 2012 to “provide a regular forum for interaction and advice among the Tahltan, RCDC, and provincial regulatory agencies on matters pertaining to the environmental management of the Red Chris mine.” (see footnote 12)

Since 2010, DFO also engaged the Tahltan Nation in discussions on the fish habitat compensation plan proposed by RCDC. These discussions led to significant changes to the plan, supported by the Tahltan Nation.

In mid-2012, Environment Canada initiated preparations for consultations on the proposed Amendments. These consultations, planned for the fall of 2012, would have consisted of one session in Smithers, British Columbia, and one in Ottawa. However, these consultations were postponed in response to concerns raised by the Tahltan Central Council regarding

Progress was subsequently made in addressing Tahltan Nation concerns regarding seepage and the fish habitat compensation plan, and in April 2013, the Tahltan Central Council communicated that it was “ready to meet with Environment Canada to develop a plan for consultation regarding the MMER amendment.” In July 2013, Environment Canada, DFO and THREAT agreed that, in addition to holding a public consultation session in Smithers, British Columbia, consultation sessions would be held in three communities closer to the Red Chris Mine, specifically Telegraph Creek, Dease Lake and Iskut.

As per this plan, Environment Canada and DFO held five consultation sessions on the proposed Amendments. Participants at all sessions included representatives of Environment Canada, DFO, RCDC and THREAT. Other participants are indicated in parentheses.

The consultation sessions provided participants with an opportunity to comment on the proposed Amendments and the associated fish habitat compensation plan. Participants were also invited to submit comments in writing following the consultation sessions.

At these consultation sessions and in the written comments, a range of opinions and concerns were expressed regarding the proposed Amendments and the associated fish habitat compensation plan, and regarding the Red Chris Mine as a whole.

The proposed Amendments are strongly supported by industry. They are also supported by the leadership of the Tahltan Central Council, with one of the Chiefs stating that the mine is going ahead and that they want to ensure that it goes ahead in the most environmentally responsible manner possible. (see footnote 13)

A small number of members of the Tahltan Nation who participated in the consultation sessions expressed opposition to the mine as a whole. In addition, some ENGO representatives and members of the general public expressed opposition to the mine as a whole and to the proposed Amendments.

Comments raised at the consultation sessions and submitted in writing are summarized below.

Comments on the proposed Amendments and the assessment of alternatives for tailings disposal
Comments on the proposed fish habitat compensation plan
Comments on the Red Chris Mine as a whole
Comments on potential impacts on water quality
Developments following the 2014 Failure of the Mount Polley Mine TSF

On August 4, 2014, the tailings dam at the Mount Polley Mine in British Columbia failed, releasing 17 million cubic metres of mine waste water and 8 million cubic metres of tailings into Polley Lake, Hazeltine Creek and Quesnel Lake in the Fraser River system. The Mount Polley Mine is operated by the Mount Polley Mining Corporation, which, like RCDC, is a wholly owned subsidiary of Imperial Metals Corporation.

Following this incident, the Government of British Columbia established an independent review panel to investigate the cause of the failure, including geotechnical standards, the design of the dam, maintenance, regulations, inspection regimes, as well as other matters the Panel deemed appropriate. On January 30, 2015, the panel delivered its final report into the cause of the Mount Polley tailings dam failure. The panel concluded that the failure was caused by the inadequate design of the dam, which did not take into account the weakness of the soil on which it was constructed. (see footnote 17) The panel also made recommendations on actions to protect against similar failures at other mines in British Columbia and identified best practices and technologies that could be considered for implementation in British Columbia. The Government of British Columbia has accepted all conclusions and recommendations in this report and is moving forward to implement the latter.

Following the Mount Polley incident, RCDC, the Tahltan Central Council and the Government of British Columbia agreed to conduct an independent technical review of the proposed tailings dams at the Red Chris Mine. This review concluded that the design of the proposed dams is feasible and that they will be stable if constructed properly. The review also noted that effluent from the TSF is predicted to meet provincial water quality objectives without any treatment. The review also made 22 recommendations that focused on operation and management of the TSF and water quality and that included the following:

RCDC is now working with the Tahltan to implement the recommendations. (see footnote 18)

Regulatory cooperation

Federal departments, including Environment Canada and Fisheries and Oceans Canada, cooperated in the preparation of the proposed Amendments. The Government of British Columbia supports the proposed Amendments, which are consistent with their policies and programs.

Rationale

The proposed Amendments would add a portion of Trail Creek that is fish-frequented to Schedule 2 of the MMER, allowing RCDC to dispose of tailings from the Red Chris Mine in this portion of the creek.

RCDC would be required to develop and implement a fish habitat compensation plan to offset the loss of fish habitat that would occur as a result of the proposed Amendments. An overall environmental benefit is anticipated through habitat gains resulting from the implementation of this plan. The proposed Amendments would also enable the full operation of the mine as planned, which is expected to bring positive economic benefits for society and local communities, including First Nations.

The proposed Amendments are supported by industry and are generally supported by the leadership of the Tahltan Nation. Certain participants in the consultations, including some members of the Tahltan Nation, expressed concern about the proposed Amendments and the impacts on fish habitat as well as the potential impacts on downstream water quality.

Implementation, enforcement and service standards

RCDC would be informed of the proposed Amendments, and Environment Canada and DFO would confirm RCDC’s obligations with respect to section 27.1 of the MMER.

The Red Chris Mine is subject to the MMER, and would be regardless of whether a portion of Trail Creek is added to Schedule 2 of the Regulations. The proposed Amendments would not impact the manner in which the MMER are enforced. Compliance with all provisions of the MMER is being enforced by Environment Canada in accordance with its plans for enforcement, particularly for mines newly subject to the MMER. Compliance and enforcement activities are carried out in accordance with the Compliance and Enforcement Policy for the Habitat Protection and Pollution Prevention Provisions of the Fisheries Act (see footnote 19)

Contacts

Mr. Chris Doiron
Manager
Mining Section
Mining and Processing Division
Industrial Sectors Directorate
Environment Canada
351 Saint-Joseph Boulevard
Gatineau, Quebec
K1A 0H3
Telephone: 819-420-7688
Fax: 819-420-7381
Email: Chris.Doiron@ec.gc.ca

Mr. Yves Bourassa
Director
Regulatory Analysis and Valuation Division
Environment Canada
10 Wellington Street, 25th Floor
Gatineau, Quebec
K1A 0H3
Telephone: 819-953-7651
Fax: 819-953-3241
Email: RAVD.DARV@ec.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to subsection 36(5) of the Fisheries Act (see footnote a), proposes to make the annexed Regulations Amending the Metal Mining Effluent Regulations.

Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Chris Doiron, Manager, Mining and Processing, Industrial Sectors Directorate, Environment Canada, Gatineau, Quebec K1A 0H3.

Ottawa, April 23, 2015

JURICA ČAPKUN
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE METAL MINING EFFLUENT REGULATIONS

AMENDMENT

1. Schedule 2 to the Metal Mining Effluent Regulations (see footnote 20) is amended by adding the following after item 25:

Item Column 1

Water or Place
Column 2

Description
26. A portion of Trail Creek, British Columbia A portion of Trail Creek, located approximately 20 km southeast of the community of Iskut, British Columbia. More precisely, a 0.6 km portion of the creek extending southwards and downstream from a natural barrier located at 57°42′59″ north latitude and 129°44′10″ west longitude, to the centre of a dam constructed at 57°42′43″ north latitude and 129°44′20″ west longitude.

COMING INTO FORCE

2. These Regulations come into force on the day on which they are registered.

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