ARCHIVED — Regulations Amending the Metal Mining Effluent Regulations

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Vol. 144, No. 20 — May 15, 2010

Statutory authority

Fisheries Act

Sponsoring department

Department of Fisheries and Oceans

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issue: Terrane Metals Corporation (Terrane) is proposing to construct and operate an open-pit gold-copper mine north of Prince George, British Columbia. Terrane is proposing to dispose of potentially acid-generating waste rock and tailings from the mine within a tailings impoundment area (TIA) to be built in the King Richard Creek valley. The construction of a TIA in the King Richard Creek valley would result in the complete loss of fish habitat in a portion of King Richard Creek and in portions of the two unnamed tributaries of Alpine Lake. In order to dispose of the waste rock and tailings in this TIA, the Metal Mining Effluent Regulations (MMER) would need to be amended to designate these water bodies as a TIA.

A federal environmental assessment (see footnote 1) (EA) of the proposed Mt. Milligan mine was completed in September 2009, and included an assessment of alternatives for the disposal of waste rock and tailings. In this assessment of alternatives, Terrane concluded that the disposal of waste rock and tailings within a TIA in the King Richard Creek valley is the best alternative based on technical, environmental and socio-economic considerations. The comprehensive study report for the federal EA concluded that with consideration of the mitigation measures that would be implemented during construction and operation, the project is not likely to cause significant adverse environmental effects.

We have reviewed the above and are therefore proposing an amendment of Schedule 2 of the MMER to designate these water bodies as TIAs.

Description: The proposed Regulations Amending the Metal Mining Effluent Regulations (the proposed Amendments) would designate a portion of King Richard Creek and portions of two unnamed tributaries of Alpine Lake as TIAs by adding these water bodies to Schedule 2 of the MMER.

Cost-benefit statement: The present value of the total estimated cost of the proposed TIA associated with the Mt. Milligan mine is $157.2 million (over the 25-year analysis period discounted at 8%). This estimate includes capital and operating costs of $146.7 million for the proposed TIA, as well as costs to meet the monitoring and reporting requirements of the MMER. The estimated cost of $9.3 million for the closure and post-closure monitoring for the proposed TIA and $1.2 million for the implementation of the proposed habitat compensation plan are also included. The Government of Canada would incur a cost of approximately $62,200 associated with compliance promotion and enforcement of the proposed Amendments.

As a result of the proposed Amendments, there would be a loss of 45 371 m2 of fish habitat. As required under section 27.1 of the MMER, Terrane has proposed a fish habitat compensation plan to offset this loss of fish habitat.

Business and consumer impacts: The proposed Amendments would allow Terrane to build and operate the Mt. Milligan mine as proposed. The proposed Amendments are not expected to place any additional administrative burden on Terrane or affect its competitiveness in the domestic and international markets.

Domestic and international coordination and cooperation: Federal departments, including Environment Canada and Fisheries and Ocean Canada, cooperated and collaborated in the preparation of the federal EA, and this collaboration would continue throughout the development of the proposed regulatory measure.

As the British Columbia Ministry of Environment is responsible for the management of freshwater fish stocks in the province, consultations with them on the fish habitat compensation plan were conducted to help ensure consistency with regional fisheries management objectives. Collaboration between Fisheries and Oceans Canada and the British Columbia Ministry of Environment would also continue throughout the development of the proposed regulatory measure.

Public consultations on the proposed TIA were conducted with the local community, local and national Aboriginal organizations, industry, environmental groups, the Government of British Columbia, and other federal government departments. The proposed Amendments are supported by most of stakeholders. Some Aboriginal groups and persons and some environmental non-governmental organizations (ENGOs) are opposed to the proposed Amendments. Consultations are ongoing.

Issue

Terrane proposes to construct and operate the Mt. Milligan mine, an open-pit gold-copper mine, to be located approximately 155 km north of Prince George, British Columbia, between the communities of Mackenzie and Fort St. James (see Figure 1). Terrane is proposing to submerge potentially acid-generating waste rock and tailings produced during the 15-year operational life of the mine in a TIA to be constructed in the King Richard Creek valley. The construction of the proposed TIA would result in the complete loss of fish habitat in a portion of King Richard Creek and the loss of some intermittent fish habitat in portions of two unnamed tributaries of Alpine Lake. An assessment of alternatives for tailings disposal options prepared by Terrane concluded that this disposal method was the best available option for the disposal of potentially acid-generating waste rock and tailings from the Mt. Milligan mine from a technical, environmental and socio-economic perspective. In order to allow the use of the King Richard Creek valley as a TIA, amendments to the MMER would be required to list a portion of King Richard Creek and portions of two unnamed tributaries of Alpine Lake to Schedule 2 of the MMER, designating these water bodies as a TIA.

Figure 1: Location map of the Mt. Milligan mine

Figure 1: Location map of the Mt. Milligan mine

The risks associated with the disposal of potentially acid-generating waste rock and tailings in a TIA located in the King Richard Creek valley were evaluated as part of a comprehensive study report (see footnote 2) of the proposed Mt. Milligan mine under the Canadian Environmental Assessment Act (CEAA). Fisheries and Oceans Canada and Natural Resources Canada were the responsible authorities for the comprehensive study report and Environment Canada provided technical advice pursuant to its mandated responsibilities. A detailed assessment of alternatives for the disposal of waste from the proposed Mt. Milligan mine was conducted as part of the comprehensive study report. The comprehensive study report, prepared by the responsible authorities, stated that impacts of the proposed TIA could be mitigated through the implementation of the fish habitat compensation plan along with other mitigation measures. Specifically, the report concluded that with the mitigation measures that would be implemented during construction and operation, the project is not likely to cause significant adverse environmental effects.

The Mt. Milligan mine was also subject to an environmental assessment conducted under provincial legislation, and this environmental assessment, completed in March 2009, reached similar conclusions. (see footnote 3)

Objectives

The objective of the proposed Amendments is to allow the disposal of potentially acid-generating waste rock and tailings from the Mt. Milligan mine in the best available manner, based on technical, environmental and socio-economic considerations. This in turn would contribute towards minimizing the impacts on fish, fish habitat and the use of fisheries resources.

No change to the policy objectives or requirements of the MMER will be undertaken as part of the proposed Amendments.

Description

The proposed Amendments

The proposed Amendments would add a portion of King Richard Creek and portions of two unnamed tributaries of Alpine Lake, natural fish-frequented water bodies, to Schedule 2 of the MMER, designating them as a TIA. This would enable waste rock and tailings from the proposed Mt. Milligan mine to be disposed of in the King Richard Creek valley. Any effluent from the proposed TIA would be subject to the requirements of the MMER.

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

Background

The MMER came into force on December 6, 2002, under the Fisheries Act and in 2008 applied to 98 facilities 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 designate natural fish-frequented water bodies as TIAs as 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. Approval for the use of a water body as a TIA for new mining projects requires an environmental assessment and an assessment of alternatives for waste disposal. The assessment of alternatives for waste disposal must clearly demonstrate that the use of a water body for waste disposal is the option that makes the most environmental, technical and socio-economic sense. Having reviewed this, an amendment to the MMER is being proposed.

In the case where a fish-frequented water body has been designated as a TIA, section 27.1 of the MMER requires the development and implementation of a fish habitat compensation plan which has to be approved by the Minister of Fisheries and Oceans. This requirement is based on the “Policy for the Management of Fish Habitat” (1986) (see footnote 4) developed by Fisheries and Oceans Canada to ensure that there is no net loss of the productive capacity of fish habitat as a result of the use of the water body as a TIA. The MMER also requires the mining company to submit to Fisheries and Oceans Canada an irrevocable letter of credit to ensure that adequate funding is available to implement all elements of this habitat compensation plan.

Effluent discharged from a TIA must be discharged through a final discharge point and must meet the effluent quality limits specified in the MMER to protect downstream ecosystems. In addition, the MMER require that environmental effects monitoring must be conducted downstream from the final discharge point to determine if there are any effects on fish, fish habitat, or the use of fisheries resources.

The proposed Mt. Milligan mine

The proponent, Terrane, is proposing to construct and operate the Mt. Milligan mine, an open-pit gold-copper mine and milling facility, located approximately 155 km north of Prince George, British Columbia. The proposed Mt. Milligan mine is expected to provide approximately 700 jobs during the two-year construction phase and approximately 400 direct jobs during its operational life of 15 years.

The proposed Mt. Milligan mine would generate approximately 294.4 million tonnes (Mt) of waste rock and 328.5 Mt of tailings during its operational life. Terrane has determined that approximately 35.8 Mt of waste rock and 16.5 Mt of tailings would be potentially acid-generating. Terrane is proposing to dispose all of the mine waste into a TIA created by constructing a dam and several embankments in the King Richard Creek valley, with the exception of a small amount of tailings and waste rock that will be back-filled into one of the open pits at the end of operations. Runoff, contact water and any spills from the mine operations area will be directed into the proposed TIA. The proposed TIA would include portions of King Richard Creek and two unnamed tributaries of Alpine Lake (see Figure 2).

Figure 2: The proposed Mt. Milligan site and water bodies proposed for addition to Schedule 2

Figure 2: The proposed Mt. Milligan site and water bodies proposed for addition to Schedule 2

The tailings would be transported to the proposed TIA by conventional slurry delivery and distribution pipeline from the milling facility. Potentially acid-generating waste rock would be deposited within the proposed TIA, and would be completely submerged under the tailings slurry. This would prevent the chemical reactions that cause acid generation.

At the end of mining operations, the proposed TIA would be drained into the open pit via an overflow channel. A wetland is proposed to be established on the surface, and where accessible native wetland plants will be planted. A bog wetland would also be established over much of the central and western portions of the proposed TIA. Terrane predicts that the wetlands, water cover and saturated conditions within the proposed TIA would prevent acid production and avoid metal leaching, thereby protecting the environment.

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 proposed Amendments, and is one of the mitigation measures identified in the comprehensive study report.

The Habitat Evaluation Procedure (HEP) developed by the U.S. Fish and Wildlife Service (1981) was used by Terrane to calculate the net change in habitat productive capacity for the Mt. Milligan Project. This procedure derives a dimensionless habitat unit (HU) by multiplying a species and life stage-specific rating of habitat quality by the amount of that habitat type affected (hectares or cubic metres). Total habitat units are calculated by summing all habitat units calculated for each life stage and fish species for each habitat type affected. This is done for habitat lost or altered because of the project and for any habitat created or enhanced during compensation; the same accounting system is used for both sides of the habitat balance sheet. These dimensionless habitat units are used as the basis for determining the habitat lost to gained ratio required by Fisheries and Oceans Canada to help assess whether an offset of habitat losses can or has been achieved.

The development of the proposed TIA for the Mt. Milligan mine would result in the complete loss of stream habitat in the King Richard Creek equivalent to 24 941 HUs (44 323 m2). Fish habitat in King Richard Creek has only marginal value for rainbow trout due to the presence of numerous beaver dams throughout the creek limiting its suitability as habitat for rainbow trout. Extremely low densities of rainbow trout have been captured in King Richard Creek in summer and few adult trout have been captured moving upstream into King Richard Creek from Meadows Creek in spring. These data, coupled with the physical habitat, strongly suggest that rainbow trout production in King Richard Creek is very low.

In addition to King Richard Creek, the north arm of the proposed TIA would encroach into the Alpine Creek watershed and would cover portions of two unnamed tributaries of Alpine Lake. These tributaries are considered to be intermittent fish habitat, with only occasional use by fish moving upstream from Alpine Lake. An equivalent of 262 HUs (1 048 m2) of fish habitat in these tributaries would be permanently lost as a result of the proposed TIA.

Therefore, fish habitat equivalent to 25 203 HUs (or 45 371 m2) would be lost or altered as a result of the construction of the proposed TIA.

In order to meet MMER requirements, Terrane has proposed a fish habitat compensation plan (see footnote 5) to offset the loss of fish habitat that would result from the designation of King Richard Creek and Alpine Creek as a TIA. The proposed plan quantifies the expected fish habitat loss and details the compensation measures.

The mitigation and compensation measures to be taken under the proposed habitat compensation plan include the following components:

  • construction of spawning/rearing channels in lower Rainbow Creek where there is a lack of habitat for the rainbow trout born within the year (gain equivalent to 16 776 HUs). This measure can also benefit Arctic grayling population and habitat; and
  • replacement of culverts creating barriers to fish migration in the Nation River watershed, providing access to 88 km of upstream habitat for rainbow trout as well as for bull trout and Arctic grayling (gain equivalent to 14 142 HUs).

The proposed compensation measures have been specifically targeted to create or enhance habitat for rainbow trout in the Rainbow Creek watershed as it is the most abundant and widely distributed fish species in the watershed. Rainbow trout are also valued by people as it is an important sport fish species in the region, it is culturally important and is used for subsistence by local Aboriginal communities. By targeting compensation for rainbow trout, the objective of no net loss of fish and fish habitat would be achieved.

The proposed fish habitat compensation plan was developed with the objective of offsetting the expected habitat loss with new or rehabilitated fish habitat. The total direct fish habitat created or rehabilitated as a result of these measures would be equivalent to 30 918 HUs or about 1.1 times the fish habitat that would be lost. While the surface area of habitat that would be created or rehabilitated is less than the surface area that would be lost as a result of the proposed Amendments, the habitat that would be created or rehabilitated would be more productive than the habitat that would be lost. Therefore, the proposed compensation measures would offset the loss of fish habitat.

While the focus of the proposed compensation measures is on rainbow trout, efforts have also been made to help ensure that the compensation plan is consistent with the British Columbia Ministry of Environment’s regional fisheries management objectives. The British Columbia Ministry of Environment is responsible for the management of freshwater fish stocks in the province. This includes the management, enhancement, and conservation of species or populations that have been designated by the province as critically imperilled (red-listed) or at-risk (blue-listed). Populations of red-listed Arctic grayling and blue-listed bull trout reside in the Nation River, downstream of the proposed Mt. Milligan mine. As a result, compensation options that benefit these populations are included in the proposed compensation plan.

It should be noted that the proposed fish habitat compensation plan has not yet been finalized. If the proposed Amendments are approved, then in accordance with the requirements of subsection 27.1(1) of the MMER, the final fish habitat compensation plan would need to be approved by the Minister of Fisheries and Oceans prior to the deposit of tailings or waste rock into the proposed TIA by Terrane.

If the proposed fish habitat compensation plan is approved, Terrane would be required, under section 27.1, to implement that plan, monitor its implementation, and to take measures to verify the extent to which the plan’s purpose has been achieved.

Regulatory and non-regulatory options considered

A report on the assessment of alternatives for the disposal of tailings and waste rock from the proposed Mt. Milligan mine was submitted by Terrane to Fisheries and Oceans Canada and Environment Canada in July 2008. (see footnote 6) This assessment of alternatives identified the alternative that Terrane recommended as the best alternative based on technical, socio-economic, and environmental considerations. In preparing the comprehensive study report, which evaluates the potential impacts of the project under the Canadian Environmental Assessment Act, federal responsible authorities considered Terrane’s assessment of alternatives.

Non-regulatory options, that is, mine waste disposal options that would not involve amendments to the MMER, were not assessed in the federal comprehensive study report. Due to the nature of local topography and drainage, Terrane concluded that there are no potentially viable tailings and waste rock disposal options that would not impact a fish-frequented water body.

The proponent developed four mine development concepts (MDCs) by combining different mine components (such as open pit, mill and waste disposal sites). Associated with these MDCs are the alternatives for the disposal of tailings and potentially acid-generating waste rock, which were evaluated as part of the environmental assessment. The four MDCs and the associated waste disposal options are as follows:

  • MDC 1 (see footnote 7) — disposal of all tailings and potentially acid-generating waste rock at the King Richard Creek site;
  • MDC 2 — disposal of all tailings and potentially acid-generating waste rock at the Upper Rainbow Creek site;
  • MDC 3 — disposal of non-acid generating tailings at the Upper Rainbow Creek site and potentially acid-generating tailings and waste rock at the King Richard Creek site; and
  • MDC 4 — disposal of non-acid generating tailings at the Limestone Creek site and potentially acid-generating tailings and waste rock at the King Richard Creek site.

The four tailings and waste rock disposal options are discussed below and illustrated in Figure 3.

Figure 3: Mine development concepts (MDCs) assessed

Figure 3: Mine development concepts (MDCs) assessed

Regulatory options

The regulatory option available to achieve the objective described above is to add fish-frequented water bodies that would be impacted by the mine to Schedule 2 of the MMER.

The tailings disposal options evaluated that would have a direct impact on fish-frequented water bodies are summarized in the following table highlighting the environmental footprint and the associated cost impacts of each tailing disposal option.

Table 1: Comparison of Tailing Disposal Options

Mine development concepts

Total Disturbed Area by the Proposed Mine (ha)

Fish-Frequented Streams Affected by the TIAs (km)

Total Undiscounted Cost of TIA (million 2009$)

Total Undiscounted Cost of HCP 1 (million 2009$)

MDC 1

1 319

11.0

$213.7

$1.2

MDC 2

1 700

12.4

$220.2

$3.8

MDC 3

1 841

14.3

$234.0

$4.4

MDC 4

2 788

26.5

$275.4

$8.1

1 HCP refers to Habitat Compensation Plan

Mine Development Concept 1

The MDC 1 proposes the construction of a TIA in the King Richard Creek valley located east of the proposed Mt. Milligan mine. This TIA would impact a portion of King Richard Creek and portions of two unnamed tributaries of Alpine Lake. The proposed TIA would be built on relatively flat terrain and would comprise a three-sided impoundment embankment. The construction materials would be obtained primarily from the open-pit and selected excavations within the area of the proposed TIA. The assessment of tailings disposal options prepared by Terrane concluded that the proposed use of King Richard Creek and portions of two unnamed tributaries of Alpine Lake as a TIA was the mine waste disposal alternative that made the most environmental, technical and socio-economic sense.

The advantages of this alternative, as identified by the proponent, include

  • compact mine design;
  • relatively small footprint for the non-acid generating waste rock disposal site as a large volume of waste rock would be used to construct the embankment;
  • significantly reduced potential for leaks or pipeline bursts and the associated environmental risks as the tailings would not be pumped under high pressure. This is because the TIA would be at a lower elevation than the milling facility, which would enable a gravity flow of tailings in the initial years with pumping of tailings required during later years; and
  • containment of any accidental discharge (e.g. tailings leak, overflow in the milling facility, contaminated runoff from the milling facility or open-pit) and lower risk to the environment as the surface water would flow by gravity into the TIA.

Some of the key disadvantages of this disposal option include

  • risk of groundwater seepage due to the presence of very permeable glacial materials underlying a portion of this location, requiring appropriate measures to be implemented to prevent such seepage; and
  • limited availability of water from precipitation and run-off for ore processing during the initial years of mine operation as the tailings catchment area is small, requiring the construction of a separate water retention pond in Meadows Creek.

The comprehensive study report for the proposed Mt. Milligan mine concluded that the use of King Richard valley as a TIA was not expected to have significant adverse environmental effects when mitigation measures were considered. It is on this basis that the addition of a portion of King Richard Creek and portions of two unnamed tributaries of Alpine Lake to Schedule 2 of the MMER is being proposed.

Mine Development Concept 2

The TIA associated with MDC 2 would be located approximately 8 km to the southwest of the proposed mine in the headwaters of Rainbow Creek. The TIA would be comprised of a main dam and three smaller dams with construction materials obtained from excavations within the TIA.

The main advantage this site offers is the significant storage potential for increased volume of tailings and meeting the water requirement for ore processing. However, this option was found not to be viable based on environmental and technical considerations. The fish habitat impacted by this option was characterized as highly productive and there is also a potential for seepage to affect watersheds other than Rainbow Creek. As the site is located at a substantial distance from the milling facility, the necessity for pressurized tailings and pipelines may present a higher spill risk. Mine closure would be more complex at this site due to the distance of the TIA from the mine and the number of dams that would need to be maintained and monitored in the long term.

Mine Development Concept 3

The MDC 3 would require the operation of two separate TIAs located in King Richard Creek valley and Upper Rainbow Creek. The potentially acid-generating tailings and waste rock would be disposed of in a TIA in the King Richard Creek valley reducing the pumping requirements. The non-acid generating tailings would be disposed in the Upper Rainbow Creek. The tailings would be delivered to the TIA in King Richard Creek valley in a manner similar to MDC 1 and offers similar advantages. As with MDC 2, the mining process water requirements would be met by pumping water from the Upper Rainbow Creek site.

Due to the operational complexity of operating two separate TIAs (especially as one of the TIA sites is located at a considerable distance from the mine) and due to environmental considerations, this option was rejected. The risk of spills is higher at this site due to the requirement for pressurized tailings and pipelines to the Upper Rainbow Creek site. Similar to MDC 2, there is a potential for seepage into other watersheds and groundwater with this option. The TIA was also found to impact fish habitat characterized as highly productive, thereby resulting in a larger environmental footprint.

Mine Development Concept 4

Similar to MDC 3, the MDC 4 option would include two separate TIAs located in the King Richard Creek valley and in Limestone Creek. As with MDC 3, the potentially acid-generating tailings and waste rock would be disposed in the King Richard Creek valley. The non-acid generating tailings would be disposed in Limestone Creek.

The advantages of this option are similar to those of MDC 3 and would address the potential for seepage associated with MDC 2 and MDC 3. However, the option was not considered viable due to the operational and closure complexities, increased risks of spills and impact on highly productive fish habitat.

Impacts of the proposed Amendments associated with MDC 1 tailing disposal option

The impact analysis identifies, quantifies and monetizes to the extent practicable the impacts associated with the proposed Amendments. The key elements of the framework include the following:

  • costs associated with the construction, operation and closure of the proposed TIA, monitoring and reporting, and implementation of the fish habitat compensation plan have been estimated;
  • all costs are expressed as present values in 2009 dollars over a 25-year timeframe; and
  • a social discount rate of 8% has been used for this analysis.

The impacts of the proposed Amendments are discussed in detail below.

Industry costs

The capital cost for the construction of the embankments and associated works in the proposed TIA would be incurred in the initial years. For the purpose of this analysis, the operation and maintenance costs for the proposed TIA would be incurred over a period of 15 years. Terrane would also incur incremental costs related to the final closure and post-closure monitoring of the proposed TIA after the mine operations cease in year 15.

It is estimated that fish habitat equivalent to approximately 25 203 HUs (45 371 m2) would be lost as a result of designating a portion of King Richard Creek and portions of two unnamed tributaries of Alpine Lake as a TIA. However, as previously described, Terrane is required to implement a fish habitat compensation plan to offset this loss of fish habitat.

The costs for the implementation of the proposed fish habitat compensation plan would primarily be incurred in the first year. In addition, as required under section 27.1 of the MMER, the company would be required to submit an irrevocable letter of credit to ensure that adequate funding is available to cover these costs.

The following table summarizes the incremental cost impacts of the proposed TIA associated with MDC 1 tailing and waste rock disposal option.

Table 2: Present Value of Total Industry Costs (2010 to 2034)

Incremental Costs

Present Value
(2009 million $)

Tailing impoundment area

Construction costs

$133.6

Operation and maintenance costs

$13.1

Closure costs

$1.9

Post-closure costs

$7.4

Sub-total

$156.0

Habitat compensation plan

Construction costs

$1.0

Monitoring costs

$0.1

Management costs

$0.1

Sub-total

$1.2

Total

$157.2

Government costs

The undiscounted cost to government associated with compliance and enforcement for the Mt. Milligan mine is estimated to be $6,000 per year. This period includes compliance and enforcement activities over the 15-year operational life of the facility plus an additional 3 years to achieve recognized closed mine status, as required under the MMER. The incremental costs are associated with administrative compliance verifications, site inspections and other routine enforcement activities. The present value of the cost to government is estimated to be approximately $62,200 over 25 years.

Total costs

The present value of total costs to industry and government are estimated to be in the order of $157.2 million over 25 years.

Environmental impacts

The proponent has identified the potential impacts on fish and fish habitat resulting in the loss of fish habitat equivalent to 25 203 HUs (45 371 m2), due to designating a portion of King Richard Creek and portions of two unnamed tributaries of Alpine Lake as a TIA. The impacts that were identified in the EA and assessed in the comprehensive study report by Fisheries and Oceans Canada and Natural Resources Canada relate to rainbow trout. Rainbow trout was selected for the evaluation due to its sensitivity to alterations in habitat and water quality, its wide distribution in the watershed, and its importance and value to Aboriginal communities and as a recreational fishery. The major potential impacts on fish and fish habitat due to the proposed TIA could result in changes in water quality, alteration or loss of fish habitat and its productive capacity and changes in stream flows. However, the impacts on fish and fish habitat due to the proposed TIA would be offset by the creation of new and rehabilitation of existing fish habitat (as outlined in the proposed habitat compensation plan subsection above).

The proposed Amendments would allow Terrane to dispose of tailings and potentially acid-generating waste rock in the most environmentally, technically and socio-economically sound manner available.

The federal environmental assessment considered the environmental impacts to the terrestrial environment that would occur as a result of the proposed TIA. The comprehensive study report stated that the mining project as a whole would have impacts on the terrestrial environment. However, the comprehensive study report concluded that with the successful implementation of the required mitigation measures and the Wildlife Management Plan by Terrane, the mining project is not likely to cause significant adverse environmental effects to wildlife or wildlife habitat.

Impacts on Aboriginal communities

The current uses of lands and resources for traditional purposes by Aboriginal persons that have been identified include hunting, fishing and trapping and the use of vegetation for sustenance and for medicinal and ceremonial purposes.

The comprehensive study report of the federal environmental assessment concluded that “provided that the Proponent successfully implements the required mitigation measures, the [Responsible Authorities] are satisfied that the Project is not likely to cause significant adverse effects to current use of lands and resources for traditional purposes by Aboriginal persons.”

Conclusion

The impacts of the proposed Amendments are summarized quantitatively and qualitatively in the following table:

Table 3: Proposed Amendments — Impact Statement (million $)

Incremental impacts

Base Year: 2010

2027

Final Year: 2035

Total
(PV) 2010–2035

Average Annual

A. Quantified industry costs

TIA construction and operation

$81.0

-

$3.6

$146.7

$5.8

TIA closure and post-closure

-

$4.5

$3.9

$9.3

$0.4

Habitat compensation plan

$1.0

-

-

$1.2

$0.05

Total industry costs

$82.0

$4.5

$7.5

$157.2

$6.3

B. Quantified Government costs

Enforcement and compliance promotion

$0.01

$0.01

-

$0.1

$0.004

Total Government costs

$0.01

$0.01

-

$0.1

$0.004

Total costs

$82.02

$4.51

$7.5

$157.3

$6.3

C. Qualitative impacts

Fish habitat

  • Low productivity fish habitat would be lost as a result of designating a portion of King Richard Creek and portions of two unnamed tributaries of Alpine Lake as a TIA. However, this loss would be compensated through the creation or rehabilitation of high productivity fish habitat to offset the loss of fish habitat resulting from the proposed TIA.

Industry

  • Small quantities of water from the proposed TIA would be reclaimed and recycled for use in the mine.

The proposed Amendments, within the prescribed timeframe, would result in an estimated cost of $157.3 million (present value) over the 25-year period.

While the impact on fish habitat could not be monetized, the loss of the fish habitat due to the proposed TIA would be offset by the implementation of the fish habitat compensation plan.

Consultation

During the federal environmental assessment of the Mt. Milligan project, the following Aboriginal groups whose rights or title may be affected by the project were engaged:

  • McLeod Lake Indian Band;
  • West Moberly First Nations;
  • Halfway River First Nation;
  • Nak’azdli First Nation;
  • Tsay Keh Dene Band;
  • Takla Lake First Nation; and
  • Métis BC Nation

These Aboriginal groups participated to varying degrees in the federal environmental assessment process.

The comprehensive study report from the federal environmental assessment process states that “discussions between the [responsible authorities] and First Nations will continue during the subsequent regulatory phases of the Project (i.e., MMER), as well as for authorizations, permitting and licensing.” These discussions are ongoing.

Consultation on the proposed MMER Amendments

Environment Canada and Fisheries and Oceans Canada held consultation sessions on the proposed Amendments to the MMER associated with the Mt. Milligan mine. These sessions were held in October 2009 in Prince George, British Columbia, and Ottawa, Ontario. These consultation sessions took place during the public review period of the comprehensive study report.

The objective of these consultation sessions was to provide an opportunity for participants to comment on aspects of the comprehensive study report for the Mt. Milligan Project related to the Fisheries Act and on possible amendments to the MMER.

Participants in the Prince George session included local residents, local Aboriginal groups and persons, and Terrane. Participants in the Ottawa session included representatives of national Aboriginal organizations, environmental non-government organizations (ENGOs), and the mining industry, including Terrane.

The proposed Amendments are supported by the provincial government, industry, local communities and businesses, and most of the Aboriginal groups within the project area. The proposed Amendments are opposed by some Aboriginal groups and persons and by some ENGOs.

Comments were raised at the two consultation sessions and were submitted in writing. Government of Canada responses to these comments are summarized below.

Comments on the assessment of alternatives for disposal of waste rock and tailings

  • Some ENGOs and national Aboriginal organizations are opposed on principle to the designation of any water body as a TIA. They are of the view that the use of a natural, fish-frequented water body as a TIA is inappropriate, regardless of the environmental assessment conclusions.

While understanding these concerns, Environment Canada and Fisheries and Oceans Canada officials are of the view that in some instances the use of water bodies is an appropriate waste disposal option when compared to other alternatives.

For any project which includes a proposal for the disposal of mine waste in a natural, fish-frequented water body, the project proponent must assess alternatives for mine waste disposal to identify the option that would have the least short-term and long-term adverse effects on the environment, would be technically sound with minimal potential for containment failure, and would be economically feasible. Based on the evaluation, the recommendation to allow the use of a natural, fish-frequented water body as a TIA is made.

As part of the environmental assessment, Terrane conducted an assessment of alternatives for waste disposal which concluded that the use of a portion of King Richard Creek and portions of two unnamed tributaries of Alpine Lake is the preferred alternative for the disposal of waste rock and tailings. Based on this assessment, Environment Canada and Fisheries and Oceans Canada are satisfied that the use of a portion of King Richard Creek and portions of two tributaries of Alpine Lake for the disposal of wastes from the proposed Mt. Milligan Mine is preferable to the other options available at this site and is not likely to cause significant environmental impacts.

  • ENGOs and national Aboriginal organizations stated that options considered in the alternatives assessment should have included land-based options. Furthermore, they stated that an assessment of alternatives based only on cost considerations for tailings treatment or dam construction is inadequate and flawed as it results in the proponent selecting the cheapest disposal option.

Environment Canada and Fisheries and Oceans Canada accept Terrane’s conclusion that due to the nature of local topography and drainage, there are no potentially viable land-based options for mine waste disposal.

Environment Canada and Fisheries and Oceans Canada also clarified that the alternatives assessment considered environmental, technical and socio-economic aspects of each alternative. Costs included in the alternatives assessment related to the construction, operation, closure and post-closure maintenance and monitoring as well as costs associated with the implementation of the fish habitat compensation plan.

  • ENGOs expressed concern that, in light of the expansion plans announced by the mine, the proposed TIA may not have adequate capacity, given the increase in the amount of tailings and waste rock that would be produced in the event of an expansion.

In assessing alternatives for mine waste disposal, Terrane took into consideration the capacity of each of the MDCs and concluded that the proposed TIA would have adequate capacity to handle the additional tailings and waste rock that would be associated with any expansion of the project. The environmental assessment of the project did not explicitly address the possibility of project expansion, as a result, Terrane’s conclusion cannot be confirmed.

Comments on the consultation process

  • Some Aboriginal groups and persons expressed concern about the adequacy of Aboriginal consultation prior to the completion of the comprehensive study report.

In response to written comments on the comprehensive study report, the responsible authorities stated that “it is the intent of the [responsible authorities] to continue consultations with Aboriginal groups in order to gain further understanding of the potential adverse impact that anticipated federal regulatory approvals may have on their asserted Aboriginal rights and/or title, and in order to identify any additional appropriate accommodation measures that may be required.” (see footnote 8)

  • During the Ottawa consultation session, it was suggested by some ENGOs that insufficient time had been allotted for questions and discussion.

Environment Canada is of the view that based on past experience with such sessions, adequate time was planned for questions and discussions. It is also noted that participants were invited to provide written submissions following the consultation session.

Comments on the proposed habitat compensation plan

  • Environmental non-government organizations and national Aboriginal organizations expressed concern that the fish habitat compensation plan does not adequately demonstrate that there would be no negative impacts on fish habitat in Rainbow Creek that would need to be compensated. These groups also noted that the habitat compensation plan did not address species other than rainbow trout and would not result in a “no net loss” of fish habitat as a result of the proposed mine.

Fisheries and Oceans Canada is of the opinion that the implementation of the proposed habitat compensation plan in accordance with section 27.1 of the MMER would offset the loss of fish habitat directly associated with the TIA. This plan has to be approved by the Minister of Fisheries and Oceans and the terms of the approved plan are enforceable under the MMER. In addition, it is noted that the proposed habitat compensation plan would include measures to improve fish habitat in water bodies not directly impacted by the TIA, such as the Arctic grayling habitat in Rainbow Creek and Arctic grayling and bull trout habitat in the Nation River.

Rationale

The proposed Amendments would allow Terrane to dispose of tailings and potentially acid-generating waste rock from the proposed Mt. Milligan mine in a TIA which would consist of a portion of King Richard Creek and portions of two unnamed tributaries of Alpine Lake.

The project was subject to a federal environmental assessment and a comprehensive study report was prepared. In preparing this report, federal responsible authorities considered Terrane’s assessment of alternatives for the disposal of waste rock and tailings. The Minister of Environment concluded that the proposed Mt. Milligan mine “is not likely to cause significant adverse environmental effects.” This conclusion takes into account the conclusions of the comprehensive study report, the results of a public comment period on the report, the responsible authorities’ responses to these comments, and the implementation of the proposed mitigation measures and follow-up program, including the implementation of the fish habitat compensation plan.

The proposed Amendments are necessary in order to create the TIA for the proposed project.

During consultations with stakeholders, general support was expressed for the proposed Amendments. Some Aboriginal groups and persons and some ENGOs have expressed concerns about the proposed Amendments.

Implementation, enforcement and service standards

Terrane would be informed of the proposed Amendments and would receive information from Environment Canada that confirms their obligations under the MMER. This would be undertaken in accordance with Environment Canada’s practices to promote compliance with the MMER, particularly for facilities newly subject to the regulatory requirements. Fisheries and Oceans Canada would confirm Terrane’s obligations with respect to section 27.1 of the MMER.

The proposed Amendments would not impact the manner in which the MMER are enforced. With the exception of section 27.1, compliance with all provisions of the MMER would be enforced by Environment Canada in accordance with the Department’s plans for enforcement, particularly for facilities newly subject to the MMER. Fisheries and Oceans Canada would be responsible for enforcement of section 27.1. Compliance and enforcement activities would be carried out in accordance with the “Compliance and Enforcement Policy for the Habitat Protection and Pollution Prevention Provisions of the Fisheries Act”. (see footnote 9)

There are no service standards associated with designating the water bodies as TIAs in Schedule 2 of the MMER.

Performance measurement and evaluation

Terrane, as owner/operator of the Mt. Milligan mine, would be subject to the regulatory requirements of the MMER, including section 27.1 which requires the development and implementation of a fish habitat compensation plan.

Terrane has proposed that the Mt. Milligan mine would operate as a closed-loop facility with no effluent discharge. However, in the event of an effluent discharge, Terrane would be required to conduct regular effluent monitoring at all final discharge points and to report the results to Environment Canada on a quarterly and annual basis. Terrane would also be required to conduct environmental effects monitoring to determine if effluent from the Mt. Milligan mine is having effects on fish, fish habitat or the use of fish resources. The results of environmental effects monitoring would also be reported to Environment Canada.

In order to review and assess the effectiveness of the MMER, Environment Canada examines all reports submitted, for all facilities subject to the MMER, in accordance with the MMER requirements with respect to effluent and environmental effects monitoring. If the proposed Mt. Milligan mine goes ahead, then this would include reports submitted by the owner/operator of the Mt. Milligan mine.

In order to meet the requirements of section 27.1 of the MMER, Terrane would be required to develop and implement a fish habitat compensation plan to offset the loss of fish habitat resulting from the proposed Amendments. This plan would include descriptions of habitat that would be lost, habitat measures to be implemented, and measures to be taken to monitor the plan’s implementation and verify the extent to which the plan’s purpose has been achieved. Terrane would also be required to submit an irrevocable letter of credit to cover the plan’s implementation costs. The results of monitoring conducted under section 27.1 would be reported to and would be available upon request from Fisheries and Oceans Canada.

Contacts

Mr. Chris Doiron
Chief, Mining Section
Mining and Processing Division
Public and Resources Sectors Directorate
Environment Canada
351 Saint-Joseph Boulevard
Gatineau, Quebec
K1A 0H3
Telephone: 819-953-1105
Fax: 819-994-7762
Email: Chris.Doiron@ec.gc.ca

Mr. Markes Cormier
Senior Economist
Regulatory Analysis and Instrument Choice Division
Environment Canada
10 Wellington Street, 24th Floor
Gatineau, Quebec
K1A 0H3
Telephone: 819-953-5236
Fax: 819-997-2769
Email: Markes.Cormier@ec.gc.ca

PROPOSED REGULATORY TEXT

Notice is hereby 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, Chief, Mining and Minerals, Mining and Processing Division, Public and Resources Sectors Directorate, Department of the Environment, Gatineau, Québec K1A 0H3.

Ottawa, April 29, 2010

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 10) is amended by adding the following after item 15 is amended by adding the following after item 15:

Item

Column 1

Water or Place

Column 2


Description

16.

A portion of King Richard Creek, British Columbia

A portion of King Richard Creek, located approximately 60 km southwest of the town of Mackenzie, British Columbia. More precisely, a 3.3 km portion of the creek extending northwards and upstream from the centre of a dam constructed at 55°06′42″ north latitude and 123°59′29″ west longitude, to the centre of a dam constructed at 55°07′52″ north latitude and 124°00′50″ west longitude.

17.

A portion of an unnamed tributary to Alpine Lake, British Columbia

A portion of an unnamed tributary to Alpine Lake, located approximately 60 km southwest of the town of Mackenzie, British Columbia. More precisely, a 900 m portion of the tributary extending southwards and upstream from the centre of a dam constructed at 55°08′19″ north latitude and 124°00′27″ west longitude, to the centre of a dam constructed at 55°07′59″ north latitude and 124°01′00″ west longitude.

18.

A portion of an unnamed tributary to Alpine Lake, British Columbia

A portion of an unnamed tributary to Alpine Lake, located approximately 60 km southwest of the town of Mackenzie, British Columbia. More precisely, a 590 m portion of the tributary extending southwards and upstream from the centre of a dam constructed at 55°08′18″ north latitude and 124°00′41″ west longitude, to the centre of a dam constructed at 55°08′09″north latitude and 124°01′08″ west longitude.

COMING INTO FORCE

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

[20-1-o]

Footnote a
R.S., c. F-14

Footnote 1
Fisheries and Oceans Canada and Natural Resources Canada (September 2009), Comprehensive Study Report Pursuant to the Canadian Environmental Assessment Act for the Proposed: Mount Milligan Gold-Copper Mine in North-Central British Columbia (available from the CEAA Web site at www.ceaa.gc.ca/050/documents/38855/38855E.pdf)

Footnote 2
Ibid.

Footnote 3
Information on the provincial environmental assessment of the project is available at http://a100.gov.bc.ca/appsdata/epic/html/deploy/epic_project_home_285.html.

Footnote 4
The policy is available from the Fisheries and Oceans Canada Web site at www.dfo-mpo.gc.ca/oceans-habitat/habitat/policies-politique/operating-operation/fhm-policy/pdf/policy_e.pdf.

Footnote 5
AMEC Earth & Environmental (February 2009). Mt. Milligan Copper-Gold Project Fish Habitat Mitigation and Compensation Plan

Footnote 6
Knight Piésold Consulting (July 2008), Mt. Milligan Project Mine Waste Alternatives Study

Footnote 7
MDC 1 represents the proposed waste rock and tailing disposal option.

Footnote 8
Canadian Environmental Assessment Agency. December 1, 2009. Responsible Authority Response to Public Comments on Comprehensive Study Report for the Proposed Mount Milligan Gold-Copper Mine (October 2, 2009 to October 31, 2009). www.ceaa.gc.ca/050/documents/39637/39637E.pdf

Footnote 9
The policy is available from the CEPA Registry Web site at www.ec.gc.ca/alef-ewe/default.asp?lang=En&n=D6B74D58-1.

Footnote 10
SOR/2002-222