Nearly ten years ago, on August 4, 2014, one of ÎÚÑ»´«Ã½’s worst mine disasters occurred when a tailings pond at the Mount Polley copper mine near Williams Lake collapsed, spilling 20 million cubic metres of water and mine slurry into Hazeltine Creek, Polley Lake and Quesnel Lake and mowing down trees and erasing streambeds.
The company that owns the mine, Imperial Metals (TSX:III), spent $70 million on environmental remediation, and ten years trying to rebuild its financial health, its reputation and trust between it and the local community, including the Williams Lake First Nation.
The company recently marked the upcoming 10th year anniversary of the disaster by taking a group of elders from the Williams Lake First Nation on a tour of the area to get a first-hand look at some of the environmental rehabilitation that’s been done.
Williams Lake First Nation Chief Willie Sellers credits Imperial Metals for the work it has done both on the environmental remediation front, and in its relationship building with First Nations.
“When we did the tour with our elders group…you really get a better idea of the amount of work that has been done to date – tens of millions of dollars worth of remediation and reclamation work that’s happened at that mine site in that disaster area,” Sellers told BIV News.
“And you can’t help but commend them for the work that’s being done, and it gives you peace of mind that there is progress and they didn’t just get off scot-free.
“That being said, there is still a ton of work to do, and there’s still this uneasiness when it comes to mining in the territory because we went through one of the biggest mining disasters in the history of this country.”
Imperial Metals CEO Brian Kynoch is proud of the work the company has done to repair the damage its mine caused.
“We didn’t run away from a big problem," he said. "We got down to work and figured out how we were going to put the creek back together and make things right. From my perspective, we’ve done that.”
Before the disaster, Imperial Metals owned two copper mines in ÎÚÑ»´«Ã½ – Mount Polley and Huckleberry – and was still in the process of building the new Red Chris copper-gold mine, which went into production in 2015.
The Mount Polley tailings pond failure disaster was investigated by both federal and provincial agencies. Imperial Metals was never charged with any wrongdoing.
An expert technical panel convened by the ÎÚÑ»´«Ã½ government to investigate the disaster concluded that the tailings pond collapse was caused by a sudden, unexpected failure of the foundation of a perimeter dam enclosing the tailings pond, and that the problem was fundamentally a design problem.
Two engineering firms responsible for the tailings pond’s design, maintenance and supervision were sued by Imperial Metals, however, which got $108 million in an out-of-court settlement, and one of the engineers of record faced a disciplinary hearing, and was eventually fined $25,000 and was banned from practising as a professional engineer in ÎÚÑ»´«Ã½
The tailings pond collapse didn’t just cause environmental damage, it also caused serious reputational and financial damage to Imperial Metals.
“Our original feeling, post TSF failure, was devastation,” Sellers said. “It created a lot of animosity towards industry. There’s been a lot of work done to date in rebuilding and fixing the relationship that we have with industry in the territory over the last 10 years, and I think Mount Polley has been a big part of helping us rebuild that.”
Mount Polley employs 340 people, including a number of Williams Lake First Nation members and contractors.
Since the disaster, Imperial Metals has struggled not only with the cost of remediation and loss of revenue from the mine shutting down, but with low copper prices as well, which forced the shuttering of Huckelberry mine.
Imperial Metals’ share price dropped 41 per cent in a single day, following the August 4, 2014 disaster, from $16.80 per share, to $9.98 per share. Imperial has struggled ever since to turn a profit.
While the company posted a $77 million net profit in 2017, it has otherwise posted annual net losses for a decade, and its share values have languished in the $2 to $3 per share range for the last two years.
In the first quarter of this year, Imperial reported quarterly revenue of $85 million and a $9 million net loss, but Kynoch said he expects Mount Polley will turn the profit corner this year.
“Mount Polley will be profitable this year,” Kynoch said. “Both Mount Polley and Red Chris had good first halfs for production.”
The Mount Polley mine itself was shut down in 2014, while the tailings pond was repaired, and though it restarted in 2016, it was shut down again in 2019, due to low copper prices, and only restarted again in June 2022.
Imperial Metals also owns the Huckleberry mine, which it shut down in 2016, due to low copper prices. It remains in care and maintenance. For a number of years, the only revenue coming in for Imperial was from Red Chris.
Red Chris opened in 2015, at a capital cost of about $750 million, according to Kynoch. Imperial Metals was floundering financially when, in 2016, Australia’s Newcrest Mining bought a 70 per cent stake in Red Chris for $1.1 billion.
Last year, Newmont Corp. (TSX:NGT,NYSE:NEM) acquired Red Chris when it bought Newcrest, and now the mine is poised for a major expansion.
Kynoch said Imperial Metals will focus first on the Red Chris mine expansion before it thinks about restarting Huckelberry.
“Our thoughts are now, ‘let’s get over that hump, get over financing the block cave at Red Chris, and then see what we can do at Huckleberry,’” Kynoch said.
Newmont and Imperial Metals are planning a major expansion that would see a new block cave mining operation developed at Red Chris.
Block cave mining is a highly capital intensive approach that is typically used only for large-scale, high production mining operations.
Newmont has estimated the capital cost of the project to be $2.6 billion, so Imperial Metals' share of that would be $780 million.
