Canada Gazette, Part I, Volume 149, Number 9: Regulations Amending the Metal Mining Effluent Regulations

February 28 , 2015

Statutory authority

Fisheries Act

Sponsoring department

Department of the Environment

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

The Mont-Wright mine is an open-pit iron mine located about 17 km west of Fermont on the east shore of Hesse Lake and 320 km north of Port-Cartier and Sept-Îles, in Quebec. The mine is owned by the ArcelorMittal Mining Canada Corporation (the AMMC Corporation). The mine has been in operation since 1975 and the AMMC Corporation expects to operate the mine until 2042.

Hesse Lake, located on the AMMC Corporation's mining property, consists of three basins: the North Hesse basin, the Centre Hesse basin and the South Hesse basin. Hesse Lake has been used to store tailings and effluent from the mine since the beginning of mining operations, well before the Metal Mining Effluent Regulations (MMER) came into force in 2002. The AMMC Corporation has been subject to the provisions of the MMER since they came into force in 2002. Parts of Hesse Lake are proposed to be added to Schedule 2 in order to allow the company to continue its activities in compliance with the requirements of the MMER.

Upstream from the North Hesse basin, which is used as a tailings management facility, there are two nameless lakes that the mining company refers to as “Lake #1” and “Lake E2.” In June 2013, the AMMC Corporation noticed the progression of the tailings management facility towards Lake #1 and a portion of its outlet stream, and towards the stream of Lake E2. The mining company has already taken temporary measures to slow the progression towards Lake #1 and Lake E2, particularly with the construction of a diversion canal. However, in order to allow the company to expand its current tailings management facility, Lake #1 and part of the outlet steam of Lake E2 are proposed to be added to Schedule 2 of the MMER.

Background

The MMER came into force on December 6, 2002, under the Fisheries Act. The Fisheries Act prohibits the deposit of deleterious substances in water frequented by fish, subject to conditions authorizing those deposits under regulations such as the MMER. The MMER permit those deposits in waters listed in Schedule 2. Also, the MMER prescribe the maximum authorized limits for deleterious substances in mine effluent listed in Schedule 4, and require that no effluent from mining operations be acutely lethal to rainbow trout. Further, the MMER require companies to monitor and test effluent to ensure they are in compliance with regulated limits.

The Mont-Wright mine covers a total area of 140 km². The AMMC Corporation expected to extract 169 million tonnes (MT) of materials in 2014, of which 103 MT would be stored as waste rock in dumps, 44 MT would be sent to the tailings management facility, and 22 MT would be shipped as iron concentrate. In total, over 585 MT of materials, including 331 MT of ore, have been extracted from the beginning of mine operation to the end of 2011. The current mining plan predicts production activities to continue until 2042.

On July 20, 2013, the AMMC Corporation submitted a notice of application to the Canadian Environmental Assessment Agency (the Agency) as required under the federal environmental assessment process. In light of the information contained in the notice of application, the Agency concluded that the proposed tailings management plan for the Mont-Wright complex until 2019 is not a designated activity, as set out in the Regulations Designating Physical Activities under the Canadian Environmental Assessment Act, 2012. (see footnote 1) Consequently, an environmental assessment is not required.

Hesse Lake

Hesse Lake is subdivided into three basins. The lake's Centre and South basins are natural water bodies that are frequented by fish and used to manage and treat effluent. The Centre Hesse basin is used to settle the particles contained in the water used to transport the tailings and to collect the drainage water from the watershed of the tailings management facility. That water is then sent to the concentrator. The South Hesse basin is used as a polishing basin before the final effluent is discharged to the environment. The North Hesse basin, which has been used to store the solid fraction of the tailings since the beginning of operation in 1975 (before the MMER came into force in 2002), is not a natural water body frequented by fish and its current morphology no longer corresponds to that of the original lake. Therefore, the North Hesse basin is not included in the proposed addition to Schedule 2 of the MMER. Accordingly, when Hesse Lake is mentioned in the rest of this document, it refers only to the Centre and South basins.

Lake #1 and its outlet

Lake #1 is located northeast of the tailings management facility, covers an area of 7.3 hectares and has an average depth of 0.56 m. The first 30 m of the stream of Lake #1 has an average width of 1.5 m and an average depth of 0.15 m. Three fish species inhabit Lake #1 and two species inhabit the first 30 m of the stream. Brook Trout and Pearl Dace are the species found in the stream and Burbot is the additional species found in Lake #1.

Due to the shallowness of Lake #1 and its outlet, the lake serves mainly as a feeding ground for young Brook Trout and no spawning habitat has been found within it. It is likely that a very large part of the water body freezes during winter and is therefore not a viable habitat. Thus, the potential of Lake #1 for fish production is limited.

The natural topography of the site and the extension of the tailings management facility have recently led to a rapid progression of red-coloured water from the tailings management facility towards Lake #1.

Stream of Lake E2

Lake E2 is not included in the future expansions of the tailings management facility and will not be affected by the storage of tailings. A portion of its stream will be affected. The stream of Lake E2 is a relatively homogeneous stream located northeast of the tailings management facility. It is 1 815 m long with an average width of 1.5 m and an average depth of 0.30 m. A portion of its stream will be affected. The stream of Lake E2 provides a habitat for Pearl Dace and Northern Pike.

Figure 1: The Mont-Wright mine showing the location of Hesse Lake, Lake #1 and Lake E2

Objectives

The objective of the proposed Regulations Amending the Metal Mining Effluent Regulations (proposed amendments) is to add the following three water bodies to Schedule 2 of the MMER:

• Hesse Lake;
• Lake #1 and a portion of its outlet; (see footnote 2)
• A portion of a stream discharging waters from Lake E2. (see footnote 3)

Description

The proposed amendments would add the water bodies cited above to Schedule 2 of the MMER. If the proposed amendments are accepted, the AMMC Corporation will be required to develop and implement a compensation plan for the loss of the fish habitat, as specified in section 27.1 of the MMER.

Hesse Lake

The proposed amendments would add Hesse Lake to Schedule 2 of the MMER, delimited to the north by the dam and to the south by the control spillway.

The Hesse Lake compensation plan has been submitted to and reviewed by the Department of Fisheries and Oceans (DFO), and the AMMC Corporation has already completed a large part of the proposed habitat improvement work. In May 2010, DFO accepted the approach to offsetting the deterioration of fish habitat in Hesse Lake, based on several factors including the biological characteristics of the Hesse Lake and the planned improvements in fish habitat in the compensated area. The habitat improvement work was carried out in August 2010 at Barbel Lake to create quality spawning, fry rearing, resting and feeding areas for Brook Trout, and to promote the free movement of fish in problematic areas. The total habitat area created is 962 m². The program also includes a monitoring program in the five years following the completion of the work. The first monitoring work, performed in 2011, led to updates to the compensation plan and, since then, DFO has been satisfied with the work carried out. The next and final monitoring effort will be conducted in 2015.

Lake #1 and its outlet and the stream of Lake E2

The proposed amendments would also add to Schedule 2 Lake #1 and a portion of its outlet, extending from the mouth of the stream to a point 30 m downstream from Lake #1 and located in the expansion area of the tailings management facility. A portion of the stream of Lake E2 would also be added, extending from the northern limit of the proposed expansion of the tailings management facility, over a distance of 1 815 m south of that proposed limit.

Fish habitat compensation work would also be carried out in accordance with the MMER. The compensation plan for Lake #1 and its outlet and the stream of Lake E2 has already been submitted to and reviewed by DFO. DFO has accepted the approach to offsetting the deterioration of fish habitat. The main objective of the proposed compensation would be the improvement of the habitat of Brook Trout at the Moiré Lake outlet by expanding and alternating quality spawning, fry rearing, resting and feeding areas, while promoting the free movement of fish in the targeted sector. The proposed improvements would cover an estimated length of 145 m of developed habitat. In total, 14 improvements/structures and 70 m² of spawning areas would be put in place. These improvements include, among other things,

• the replacement of two sagging culverts located about 50 m from the Moiré Lake outlet with new structures that would improve the free movement of fish;
• the development of four spawning areas for Brook Trout (totalling 70 m²);
• the development of basins in order to diversify the habitat of the Brook Trout over a minimum length of 120 m.

Some works were completed in summer 2014. A report detailing the work has been submitted to DFO. It is suggested that an initial monitoring program be conducted in 2015, i.e. a year after the work has been completed. Following this, a report summarizing the results of the monitoring program would also be submitted to DFO. Two other monitoring programs will be conducted in 2017 and 2019.

“One-for-One” Rule

The “One-for-One” Rule would not apply to the proposed amendments, as there is no change in the administrative costs imposed on business, and the AMMC Corporation is already subject to the MMER.

Small business lens

The small business lens would not apply because the proposed amendments do not increase costs to small business, and the AMMC Corporation is not considered a small business.

Consultations

As part of the process for the proposed amendments, two consultation sessions were conducted: one in 2013 and the other in 2014. Both were co-chaired by Environment Canada (EC) and DFO. The purpose of the consultation sessions was to give participants the opportunity to comment on the proposed amendments. Participants were also invited to submit comments in writing following the consultation sessions. The participants consulted were from the AMMC Corporation, mining industry associations (provincial and national), Aboriginal groups and communities (national and local), and environmental non-governmental organizations.

The Hesse Lake consultation was held on March 27, 2013, in Ottawa. The following is a summary of the comments:

• An Aboriginal representative asked about the compliance rate and the number of infractions involving the Mont-Wright mine site.

EC replied that the performance of the mine in relation to the compliance of effluent concentrations was very good and that the public could consult the report entitled Summary Review of Performance of Metal Mines.

• A representative from an environmental organization made reference to the red waters incident of 1977 and to the water treatment plant built thereafter. He asked whether the mine drainage waters that flow through Webb Lake and ultimately into the Pékans River were treated.

A representative from the AMMC Corporation replied that most of the site's waters flowed through the Hesse basins and that, consequently, when these waters were discharged from the HS-1 final discharge point, there was no longer a red water problem.

• A representative of an environmental organization asked about the physico-chemical process and, more specifically, the potential impact of the flocculent used to treat red water.

The AMMC Corporation stated that the red colour stemmed solely from the nature of the iron ore and that the colouring was not linked to the flocculent or to acid drainage. The flocculent is primarily used to settle suspended particles.

• An Aboriginal representative said that, in his opinion, the aspect of land use by Aboriginal people was not given much consideration. He added that he was quite familiar with the site and that a trap line was located on it. In addition, a communal camp is located at Daigle Lake. The Pékans River and, to a larger extent, the Moisie River watershed are part of a territory used for both water consumption (drinking) and goose hunting.

The AMMC Corporation replied that, following an agreement in principle, an agreement was signed in February 2012 with the Aboriginal people at the local level. Until now, the financial aspect has been the main consideration; however, the implementation of a joint committee should progress in order to resolve the more specific practical issues.

• A representative from an environmental organization asked whether Carheil Lake (located 14 km from Fermont) had been considered in the choice of the compensation plan, as Carheil Lake has been known to be contaminated by cyanobacteria since 2005. In addition, Carheil Lake is used for sportfishing by the inhabitants of Fermont and the Innu.

The AMMC Corporation explained that, to its knowledge, Carheil Lake is located in the headwaters area. Because of the lake's location, the Lake Trout, which is a slow-growing species, would have been difficult to introduce and the development of spawning grounds would have been difficult as well. The sites in proximity of Fermont were considered, but no site was retained. Ultimately, Barbel Lake was chosen. DFO added that, when searching for a compensation plan, no public consultations were conducted and that, in general, the site choice was made by the consulting firm mandated by the company, with possible involvement from the local inhabitants.

• A representative from an environmental organization asked why in 1975 an environmental assessment was not conducted for this mine.

DFO replied that the Canadian Environmental Assessment Act (CEAA) came into force in 1984 and that it does not contain any requirements for pre-existing projects. In addition, as there have not been any major changes for many years, an environmental assessment is not required.

The consultation concerning Lake #1 and its outlet and a portion of the stream of Lake E2 was held on March 19, 2014, in Ottawa.

The stakeholders expressed various opinions and concerns, particularly about when Lake #1 would be affected by the tailings, and the implications associated with the listing of the first water bodies in Quebec without an environmental assessment, either at the provincial or the federal level. A few people representing environmental non-governmental organizations expressed their opposition to these proposed amendments. Following is a summary of the comments:

• The representative from an environmental organization asked why a federal or provincial environmental assessment was not conducted for this mine.

EC replied that there is no trigger for the CEAA in the current project. A representative from the mining industry added that a provincial environmental assessment process had initially been started when the mining company realized, in the summer of 2013, that such an assessment was not required and that only a certificate of authorization was necessary in this case.

• An Aboriginal representative asked when Lake #1 would be affected by the advancing water originating from the current tailings management facility and stated that, in his opinion, the lakes should be protected and that a compensation plan should be the option chosen as a last resort.

The AMMC Corporation replied that, in the short term, the construction of temporary structures, which began in 2013, would guarantee the protection of Lake #1 for a period of about two years.

• An Aboriginal representative asked about the socio-economic impacts and EC's expectations after 2025. He also pointed out that, in his opinion, there was a certain lack of planning with regard to tailings.

EC replied that the company will have to develop a long-term plan and that any future requests for the addition of water bodies to Schedule 2 must cover all needs until the estimated end of the life of the mine.

The AMMC Corporation then stated that the message had been very well and very clearly received. The company also provided clarification concerning the delays in the time frame. With the addition and registration of Lake #1, operations should be able to continue until 2019, after which time other measures will have to be put in place.

• Environmental organizations are opposed to the proposed amendments and think that natural water bodies frequented by fish should not be destroyed to store mine waste.

EC said that it understands and respects these concerns. Nonetheless, the proposed amendments are proceeding in the context of an existing legislative framework under the Fisheries Act and the MMER.

• An environmental organization questioned the fact that EC did not require the AMMC Corporation to assess the alternative solutions for the storage of tailings in accordance with current EC guidelines.

The AMMC Corporation has submitted to EC a document that assesses different alternative solutions including the listing of these lakes.

• Environmental organizations feel that the public and Aboriginal consultations were not adequate.

There have been a number of consultations, including consultations on the proposed amendments in March 2013 and March 2014, where both local and national Aboriginal representatives and other stakeholders were invited. Also, the AMMC Corporation met with the local Aboriginal communities with regard to the proposed amendments a few months before the March 2014 consultation. DFO also stated that the local Aboriginal communities had been invited to submit comments on the compensation plan.

• An environmental organization questioned the fact that a portion of the stream of Lake #1 was probably contaminated before prior authorization was obtained and that penalties should be imposed against the AMMC Corporation.

According to the characterization of Lake #1 and its outlet done by the AMMC Corporation in the summer of 2013, only Lake #1 and the first 30 m of the outlet downstream of the mouth of Lake #1 are considered to be water bodies frequented by fish. At the time of the consultation, no water bodies frequented by fish had been impacted by tailings in this area.

• An environmental agency suggested to the AMMC Corporation that it bury the tailings in the mine pits.

According to the document on alternative solutions prepared by the AMMC Corporation, the pits still seem active; therefore, they would not be available for the disposal of mine waste. EC will expect the AMMC Corporation to assess the possibility of burying the mine waste in pits that will no longer be in operation in the future.

In addition to the two consultation sessions organized by EC, the AMMC Corporation consulted local Aboriginal groups and communities. An impact and benefit agreement (IBA) was negotiated with the local Aboriginal Innu community of Uashat mak Mani-Utenam (the Uashaunnuat).

Rationale

Because of the proposed amendments authorizing the deposit of tailings originating from the Mont-Wright iron mine, the AMMC Corporation would be able to continue its storage and effluent management activities in Hesse Lake and expand the current tailings management facility towards the north by including Lake #1 and a portion of its outlet, as well as a portion of the stream of Lake E2, while respecting the provisions of the MMER and providing benefits to Canadians.

As part of the proposed amendments, alternatives to the listing of various lakes to Schedule 2 of the MMER were assessed. New retention basins could be built as an alternative to the use of Hesse Lake. The AMMC Corporation estimates the construction costs of these new basins at more than $100,000,000. The creation of new basins requires, among other things, the construction of dykes, water treatment plants and pumping stations.

An alternative to the addition to Schedule 2 of Lake #1 and its outlet and the stream of Lake E2 would be to build dykes around Lake #1 and the stream of Lake E2 in order to protect them from the deposition of tailings. According to the AMMC Corporation, the construction cost of the dykes would be in the order of $4,000,000 to $6,000,000. In addition to these construction costs, outlet channels would also be required. This would result in the deterioration or draining of Lake #1 and of the stream of Lake E2. Therefore, the construction of dykes would not offer any environmental or economic benefits over the listing of the proposed water bodies in Schedule 2. Consequently, this option is not feasible. However, the proposed amendments would benefit Canadians and industry.

This approach would allow the AMMC Corporation to continue its current operations, but would not be sufficient for it to continue its activities beyond 2019. After 2019 and until the end of the estimated life of the mine, the company is aware that it needs to have a more comprehensive plan. Such a long-term comprehensive plan must include its entire needs, in particular all uses of water bodies frequented by fish. After 2019, the development of a new tailings management facility and the construction of related structures could trigger a provincial environmental assessment process.

Canadians

The use of Hesse Lake, Lake #1 and its outlet, as well as the stream of Lake E2 for mine waste disposal would help maintain and increase the mining operations of the AMMC Corporation. The mine benefits the regional economy, with nearly 3 000 permanent employees working for the AMMC Corporation, including 1 500 employees at Mont-Wright. The company is expected to reach higher annual production levels in the coming years and to extend the life of the facilities of the Mont-Wright mine until 2042. The Mont-Wright iron mine is considered one of the largest in North America.

In addition to the benefits concerning Hesse Lake, the proposed amendments to the MMER would add Lake #1 and its outlet, as well the stream of Lake E2 to Schedule 2 and avoid the construction costs of the dykes.

Government

A compliance and enforcement regime is already in place for the MMER. The proposed amendments would not result in any additional cost to the Government.

Industry

The proposed amendments concerning Hesse Lake would not result in any additional cost to the AMMC Corporation as it is already subject to the MMER and the habitat improvement work described in the compensation plan for the loss of fish habitat has already begun. However, there is still a monitoring program at Barbel Lake to be completed by 2015.

Concerning Lake #1 and its outlet, and the stream of Lake E2, the AMMC Corporation has selected the sites to carry out the habitat improvement work described in the compensation plan. The cost of the work and of the monitoring program, estimated at $200,000, has been undertaken in 2014.

However, the proposed amendments to the MMER would allow the AMMC Corporation to continue to efficiently manage the waters and treat the effluent from the Mont-Wright iron mine and maintain its current and future activities, without any interruptions.

Implementation, enforcement and service standards

The AMMC Corporation will be informed of the proposed amendments and EC will confirm the proponent's obligations under section 27.1 of the MMER.

The Mont-Wright iron mine is already subject to the MMER and the proposed amendments would not have any impact on the way in which the Regulations are enforced. EC ensures the compliance of all provisions of the MMER in accordance with the Department's Regulatory Enforcement Plan. Compliance and enforcement activities are conducted in accordance with the Compliance and Enforcement Policy for the Habitat Protection and Pollution Prevention Provisions of the Fisheries Act. (see footnote 4)

Contacts

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

Yves Bourassa
Director
Regulatory Analysis and Valuation Division
Economic Analysis Directorate
Environment Canada
10 Wellington Street, 25th Floor
Gatineau, Quebec
K1A 0H3
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 sent by mail to Chris Doiron, Manager, Mining and Processing, Industrial Sectors Directorate, Department of the Environment, Gatineau, Quebec K1A 0H3, by fax to 819-420-7381 or by email to Chris.Doiron@ec.gc.ca.

Ottawa, February 19, 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 5) is amended by adding the following in numerical order:

Item	Column 1 Water or Place	Column 2 Description
24.	Lake Hesse, Quebec	Lake Hesse, located at 52°46′21″ north latitude and 67°20′58″ west longitude, approximately 15 km west of the town of Fermont, Quebec. More precisely, the area bounded by (a) the contour of elevation around Lake Hesse at the 620 m level, (b) the dam built at the north end of Lake Hesse, and (c) the control dam built at the south end of Lake Hesse.
25.	An unnamed lake approximately 20 km west of Fermont, Quebec and a portion of its outlet	An unnamed lake, located at 52°49′43″ north latitude and 67°22′23″ west longitude, approximately 20 km west of the town of Fermont, Quebec, and a portion of its outlet. More precisely, the area bounded by (a) the contour of elevation around the lake at the 660 m level, and (b) the outlet of the lake extending from the mouth of an outlet stream at 52°49′33″ north latitude and 67°22′18″ west longitude for a distance of 30 m downstream from that mouth.
25.1	A portion of an unnamed stream discharging waters from an unnamed lake, other than the one referred to in item 25, approximately 20 km west of Fermont, Quebec	A portion of an unnamed stream discharging waters from an unnamed lake, other than the one referred to in item 25, approximately 20 km west of the town of Fermont, Quebec. More precisely, the 1815 m portion of the stream that extends southwards and downstream from the point located at 52°50′02″ north latitude and 67°21′29″ west longitude to the point located at 52°49′20″ north latitude and 67°21′39″ west longitude.

COMING INTO FORCE

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

[9-1-o]