ARCHIVED — Regulations Amending the Metal Mining Effluent Regulations

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Vol. 143, No. 4 — February 18, 2009

Registration

SOR/2009-27 February 5, 2009

FISHERIES ACT

P.C. 2009-160 February 5, 2009

Her Excellency the Governor General in Council, on the recommendation of the Minister of Fisheries and Oceans, pursuant to subsection 36(5) of the Fisheries Act (see footnote a), hereby makes the annexed Regulations Amending the Metal Mining Effluent Regulations.

REGULATIONS AMENDING THE METAL MINING EFFLUENT REGULATIONS

AMENDMENT

1. Schedule 2 to the Metal Mining Effluent Regulations (see footnote 1) is amended by adding the following after item 9:

Item

Column 1

Water or Place

Column 2

Description

10.

A portion of Wabush Lake, Newfoundland and Labrador

That portion of Wabush Lake near the towns of Labrador City and Wabush in western Labrador. More precisely, the area bounded by

(a) the southern limit, extending from 53° north latitude, 66°50′24″ west longitude to 53° north latitude, 66°52′57″ west longitude, and

(b) the outlet of Wabush Lake, extending from 53°09′4.7″ north latitude, 66°47′3.5″ west longitude to 53°08′57.5″ north latitude, 66°47′2.9″ west longitude.

11.

Flora Lake, Newfoundland and Labrador

Flora Lake located at 52°55′ north latitude, 66°49′ west longitude, near the towns of Labrador City and Wabush in western Labrador.

12.

A portion of an unnamed tributary stream to Flora Lake, Newfoundland and Labrador

A portion of an unnamed tributary stream to Flora Lake, Newfoundland and Labrador. More precisely, an area extending from the mouth of the stream (52°52′9.94″ north latitude, 66°47′14.26″ west longitude) for a distance of 75 m upstream from Flora Lake.

13.

A portion of an unnamed tributary stream to Flora Lake, Newfoundland and Labrador

A portion of an unnamed tributary stream to Flora Lake, Newfoundland and Labrador. More precisely, an area extending from the mouth of the stream (52°52′10.70″ north latitude, 66°47′6.49″ west longitude) for a distance of 580 m upstream from Flora Lake.

14.

A portion of an unnamed tributary stream to Flora Lake, Newfoundland and Labrador

A portion of an unnamed tributary stream to Flora Lake, Newfoundland and Labrador. More precisely, an area extending from the mouth of the stream (52°52′57.45″ north latitude, 66°47′25.23″ west longitude) for a distance of 256 m upstream from Flora Lake.

COMING INTO FORCE

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

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issue: The Carol and Scully iron ore mines have been in operation in Newfoundland and Labrador and have deposited mine tailings into natural, fish-bearing water bodies since the 1960s. Both mining operations have been subject to Metal Mining Effluent Regulations (MMER) since these came into force in 2002. Both these mines were granted transitional authorizations under the MMER which allowed them to temporarily deposit tailings with higher suspended solid concentrations than those specified in the MMER into these water bodies. However, as these transitional authorizations expired on December 6, 2008, to continue mining operations the companies will continue tailings disposal in these water bodies once they are designated as tailings impoundment areas (TIAs).

Alternatives (such as on-land disposal) to this practice have been assessed and Environment Canada and Fisheries and Oceans Canada agree that the continued use of these water bodies for tailings disposal is the preferred option on environmental, technical and socio-economic grounds.

In the absence of the designation of the water bodies as TIAs and the expiry of the transitional authorizations, the mines would not have been in compliance with the MMER requirements. To continue mining operations, other tailing disposal options would have to have been adopted which would have had a greater impact on the environment. The assessment of tailings disposal alternatives concluded that the continued use of the water bodies as TIAs is the best option. Therefore, the Regulations Amending the Metal Mining Effluent Regulations (hereinafter referred to as the Amendments) add the water bodies associated with the two mines to Schedule 2 of the MMER.

Description: The Amendments designate all or portions of five water bodies associated with the Carol and Scully mines as TIAs. The effluents from the TIAs will be required to meet the effluent discharge limits of the MMER and the companies will be required to implement fish habitat compensation plans to offset the loss of fish habitat as a result of the continued use of these water bodies for tailings disposal.

Cost-benefit statement: In present value terms, the total estimated incremental cost for the owners/operators of the two mines is $55.3 million (calculated over a 25 year timeframe at a discount rate of 8%). This includes incremental operating and maintenance costs for tailings management, and capital and monitoring costs for the implementation of the fish habitat compensation plans. There will not be any incremental costs to government.

There will be some loss of fish habitat in the water bodies associated with the two mines. However, the mining companies will be required, under section 27.1 of the MMER, to implement fish habitat compensation plans to offset this loss. As a consequence, the Amendments will result in an estimated net gain of fish habitat equivalent to approximately 1 090 hectares (ha). In addition, the mines will change their tailings management practices which will lead to improvements in water quality and fish habitat in the water bodies to be used as TIAs.

Business and consumer impacts: As the transitional authorizations have expired, the designation of the water bodies as TIAs will allow the mines to continue their operations. The effluents discharged from the mines are subject to the effluent discharge limits specified in the MMER. Therefore, the Amendments will not place any significant additional administrative burden on the mines or affect their competitiveness in the domestic and international markets.

Domestic and international coordination and cooperation: Consultations with the Government of Newfoundland and Labrador, local and Aboriginal communities, industry, other government departments and environmental non-governmental organizations have been conducted. In general, the designation of the water bodies associated with the mines as TIAs is supported by the provincial government and local communities. In general, Environmental Non-Governmental Organizations (ENGO) are opposed to the use of natural fish-bearing water bodies for tailings disposal purpose, however, no significant concerns specific to these Amendments was expressed.

Issue

Carol and Scully iron ore mines in Newfoundland and Labrador have been operating and depositing mine tailings into natural, fish-bearing water bodies since the 1960s. These mines are subject to the MMER and were operating under transitional authorizations issued under the MMER allowing them to discharge higher concentrations of suspended solids than those specified in Schedule 4 (see footnote 2) of the Regulations. These transitional authorizations expired on December 6, 2008.

Both mines will continue tailings disposal in these water bodies for the remaining life of their operations, which is expected to exceed 30 years. The environmental assessment for Carol Mine considered a number of alternatives to this practice. Scully Mine will not make any changes to its existing tailings disposal practice, therefore an environmental assessment is not required under the Canadian Environmental Assessment Act, 1992. Tailings disposal alternatives were assessed for the Scully Mine in the 1960s. No other alternatives have since been identified or assessed.

An amendment to the MMER is required for the mines to continue their tailings disposal into these water bodies. The water bodies affected by continued tailings disposal will be added to Schedule 2 of the MMER and thereby be designated as TIAs. Environment Canada and Fisheries and Oceans Canada have assessed the risks associated with continued disposal of tailings in these water bodies and are satisfied that the economic and environmental impact of allowing the continued use of the water bodies is minimal.

Objective s

The objective of the Amendments is to ensure that mine tailings from the Carol and Scully mines are disposed of in an environmentally, technically and socio-economically sound manner.

No fundamental changes to the policy objectives, scope or requirements of the MMER will be undertaken as part of these Amendments.

Description

The Amendments

The Amendments add five fish-bearing water bodies associated with the Carol and Scully mines to Schedule 2 of the MMER, thereby designating all or portions of these water bodies as TIAs. These water bodies, located in south western Labrador, include:

  • a portion of Wabush Lake that is north of 53° north latitude;
  • all of Flora Lake;
  • 75 m of an unnamed stream draining into Flora Lake;
  • 580 m of a second unnamed stream draining into Flora Lake; and
  • 256 m of a third unnamed stream draining into Flora Lake.

The Amendments will come into force on the day they are registered.

Background

The MMER came into force on December 6, 2002 under the Fisheries Act, and in 2007 applied to 93 metal mines across Canada. The MMER updated and strengthened the previous Metal Mining Liquid Effluent Regulations (MMLER) which were made in 1977. The MMER impose limits on releases of arsenic, copper, cyanide, lead, nickel, zinc, radium-226 and total suspended solids (TSS), and prohibit the discharge of effluent that is acutely lethal to fish. The MMER also include provisions to designate natural fish-bearing waters as TIAs, as at some sites the disposal of mine waste in such water bodies may be the preferred disposal option for better pollution prevention and reduction of long term environmental risks. In addition, these provisions are intended to apply to some existing mines that were in operation before the MMLER came into force in 1977 and have been depositing tailings into natural, fish-bearing water bodies since that time.

The MMER also include provisions requiring the development and implementation of fish habitat compensation plans. This requirement is based on “The Policy for the Management of Fish Habitat” (see footnote 3) (1986) developed by Fisheries and Oceans Canada to ensure that there is no net loss of fish habitat as a result of various development projects. The requirement is specified under section 27.1, and the habitat compensation plans need to be approved by the Minister of Fisheries and Oceans Canada. These plans are designed to offset the loss of fish habitat as a result of the use of fish-bearing water bodies as TIAs. The section also requires a mining company to submit to Fisheries and Oceans Canada an irrevocable letter of credit to ensure that adequate funding is available to implement the habitat compensation plan in the event that the company is unable or unwilling to complete the implementation of the plan.

All effluent discharged from TIAs must meet the effluent discharge limits specified in the MMER to help ensure the protection of downstream ecosystems. In addition, the MMER require that environmental effects monitoring be conducted downstream from the TIAs to determine if there are any effects on fish, fish habitat, or the use of fisheries resources.

Carol Mine and the TIA

The Carol Mine, which is owned and operated by the Iron Ore Company of Canada, is located in western Labrador near the communities of Labrador City and Wabush. It employs about 1 900 people in Labrador and in Sept Îles, Quebec (see Figure 1). The Carol Mine has been in operation since 1962, and tailings have been deposited into Wabush Lake since that time.

 

Figure 1: Location of the Carol and Scully Mines

Wabush Lake is almost 25 km long and almost 4 km wide, with a south to north flow of water which then discharges into Julienne Lake through the Julienne Narrows. The tailings that are deposited into the lake are non-toxic and non-acid generating. The TIA, located at the south end of Wabush Lake, consists of pipelines discharging tailings into a beach area which has gradually filled-in a portion of the lake since mining operations began.

Tailings discharged into Wabush Lake have historically resulted in a visible red colour (known as red water) in the lake, caused by minute iron oxide particles that stay suspended in the water following tailings discharge. There are no regulatory requirements related to the colour of effluent discharged to the receiving environment, as there is no evidence that red water adversely impacts fish or fish habitat. The primary concern with red water is aesthetic. However, it does appear that red water caused a slight discoloration of the tissue of whitefish present in the lake, and this may have contributed to a reduction of recreational fishing in Wabush Lake.

In preparation for the designation of Wabush Lake as a TIA, Carol Mine has changed its tailings management practices. Existing tailings pipelines have been consolidated into a single discharge point at the northern edge of the existing tailings beach. Tailings will be discharged into a deep trench along the west side of the lake, north of the existing tailings beach. The trench, up to 100 m deep and extending about 10 km north from the existing tailings beach, is an area of less productive habitat compared to other, shallower areas of the lake. As tailings disposal progresses, the trench will fill up and the beach will expand northward. Over the remaining life of the mine, estimated to be at least 30 years, the beach will extend to a point about 7 km north of its current location (see Figure 2). As the beach moves northward, the tailings pipeline will be extended to keep the discharge point at the edge of the beach. In total, it is estimated that about 630 000 000 m3 of tailings will be deposited in the trench, representing about two-thirds of the total capacity of the trench, and covering about 26% of the surface area of the TIA. Effluent from the TIA will be discharged through the Julienne Narrows into Julienne Lake and will be required to meet all MMER effluent discharge limits.

 

Figure 2: Tailings disposal alternatives considered for the Carol Mine

To address the problem of red water and suspended solids, Carol Mine has started adding a chemical known as a flocculant to the tailings prior to discharge. The flocculant causes the fine materials in the tailings to bond into heavier, faster settling particles. As a consequence, the fine particles in the tailings stream settle rapidly and remain confined in the deep portion of the trench rather than remaining suspended in the water column. This results in a significant reduction in red water and improvement in the overall quality of water in Wabush Lake. Carol Mine will continue this practice over the remaining life of the mine.

The Wabush Lake TIA will encompass the area of the lake that is north of 53° north latitude, near the northern end of the existing tailings deposit. Thus, the southern most portion of Wabush Lake, including the mouth of the Flora River, will not be part of the TIA.

Scully Mine and the TIA

The Scully Mine, which is operated by the Wabush Mines as a joint venture, is located in western Labrador about 6 km south of the Carol Mine. Operations at the Scully Mine commenced in 1965, employing approximately 1 000 people in Labrador and Sept-Îles, Quebec. The operation produces about 13.5 million tonnes of tailings annually, and like the Carol Mine tailings, they are non-toxic and non-acid generating. Due to differences in the composition of the ore from the Scully Mine, the red water concerns associated with tailings discharged are much less significant than for the Carol Mine.

Flora Lake was selected as a TIA for the Scully Mine during the planning of mine operations in the early 1960s. The tailings divide the lake into two basins, a North and a South Basin, connected by a stream flowing along the east side of the tailings deposit. The water flow through the system is from the South to the North Basin through a stream to the North Basin and from there discharging into the Flora River, which in turn discharges into the southern end of Wabush Lake (see Figure 1).

Tailings are currently deposited along the former western shoreline of Flora Lake. The tailings are contained on the west side of the deposit by berms (see footnote 4) constructed in the central portion of the deposit, and further south by a ridge along the western shore of the South Basin. Tailings disposal into the central portion of the lake has raised the water level in the South Basin by approximately 4.6 m.

Scully Mine will continue the current method of tailings disposal in Flora Lake. The berms will be raised to allow for vertical expansion of the deposit, and the deposit will continue to expand eastward and southward into the South Basin, eventually occupying 68% of the original lake. The continued use of the South Basin for tailings disposal will result in further increases in the water level in the South Basin. This will result in the inundation of portions of three streams draining into the South Basin. As a result, the portions of these streams that will be affected are included in the TIA, as depicted in Figure 3.

Figure 3: Details of South Basin of Flora Lake

No tailings will be deposited into the North Basin of Flora Lake. The northern portion of the tailings deposit is being progressively re-vegetated. The North Basin will be used as a settling pond. The final discharge point for effluent from the TIA will be located at the outlet of Flora Lake into the Flora River, and effluent will be required to meet all MMER effluent discharge limits.

Fish habitat compensation plans

Designating these water bodies as TIAs will result in the loss of fish habitat. However, in accordance with Section 27.1 of the MMER, the companies will be required to implement compensation plans to offset that loss. The fish habitat compensation plans will also include monitoring to determine the extent to which the objectives of the plans have been achieved. Results of the monitoring will be reported to Fisheries and Oceans Canada and will be publicly available.

Wabush Lake

To compensate for the loss of fish habitat in Wabush Lake, a number of fish habitat compensation measures will be implemented, as described in the fish habitat compensation plan. (see footnote 5) The compensation is based on the expected final extent of tailing disposal in the lake bed in the TIA. In order to estimate the amount of fish habitat expected to be lost, surveys were conducted to characterize lake depth, sediment, aquatic vegetation, fish species present, and the suitability of habitat for fish. It was estimated that an equivalent of approximately 1 870 ha of fish habitat will be lost as a result of designating the lake as a TIA.

The compensation measures will consist of the restoration and improvement of fish habitat south of the southern limit of the Wabush Lake TIA, specifically in Area 2 and Beaver Bay (see Figure 1).

Compensation will be accomplished by means of the changes in tailings management practices, as described in the revised Tailings Management Plan (February 2006) (see footnote 6) and in the fish habitat compensation plan. The red water and the concentration of suspended solids in Wabush Lake will be reduced as a result of the addition of the flocculant to the tailings. This, together with the establishment of a single tailings discharge point at the north end of the tailings beach, and the south to north flow of water through the lake, will result in the improvement of the water quality and clarity in Area 2 and Beaver Bay. The improvement in water clarity will result in increased light penetration in the lake, enhancing the productivity of aquatic plants in shallow water habitat (the littoral zone) in Area 2 and Beaver Bay. This, in turn, will lead to increases in overall productivity in those areas, with habitat gains expected for all species of fish present except lake chub, which has a more restricted distribution in Wabush Lake. It is expected that the habitat quality in Beaver Bay and Area 2 will begin improving within a year following the implementation of the habitat compensation plan, and will continue to recover thereafter.

As a result of these measures, an equivalent of 2 960 ha of fish habitat will be created. This will result in an estimated net gain equivalent to approximately 1 090 ha of fish habitat in Wabush Lake, more than offsetting the loss of habitat (1 870 ha) from the continued disposal of tailings in the lake.

Flora Lake and three tributary streams

The loss of fish habitat in Flora Lake will occur as a result of the use of the South Basin for tailings disposal. Inundation of the three tributary streams caused by the continued use of the South Basin will result in the loss of riverine fish rearing and spawning habitat. A methodology similar to the one used for the Carol Mine was used to quantify the estimated habitat loss in Flora Lake and the three tributary streams (for details see the revised fish habitat compensation plan, 2007). (see footnote 7) It is estimated that an equivalent of 34.5 ha of fish habitat will be lost, including 34 ha of lake habitat and 0.5 ha of stream habitat, due to the designation of these water bodies as TIAs.

The loss of fish habitat in Flora Lake and the three streams will be compensated for in two phases. Phase 1 will include the extension of an existing water body called Loon Pond. Loon Pond is located northwest of the Flora Lake tailings deposit, and is believed to have formerly been part of Flora Lake. An area composed of granular material covering 21 ha and adjacent to Loon Pond will be excavated to a depth of one metre. Appropriate features and vegetation will be added in the newly dredged area to increase the habitat diversity. This project will increase the shallow water habitat available for the fish species present in Loon Pond.

In Phase 2, an estimated 13 ha of habitat in a tributary of the Exploits River known as Anstey’s Steady will be rehabilitated. This tributary was previously used for log drives, and much of the bed is covered with sunken logs and bark, degrading the habitat. The rehabilitation will consist of the removal of accumulated sunken logs and bark as well as the placement of suitable natural features to help re-establish the original river bed and thus fish habitat use.

The loss of riverine habitat by the continued use of the South Basin will be compensated for by reconfiguring a drainage channel known as the “Compensation Channel.” This channel was excavated in the early 1980s to redirect flow from an unnamed pond immediately to the south of the central portion of the tailings deposit to Wahnahnish Lake located to the west of Flora Lake. The channel will be re-designed with more natural hydrological features. The end result will be a meandering, natural looking watercourse providing a wider diversity of habitat types that will sustain a greater abundance and variety of species. It is estimated that 0.5 ha of stream habitat will be created.

Once completed, the combined phases of the lake and riverine compensation plan will rehabilitate 34.5 ha of fish habitat to offset the anticipated loss of fish habitat, meeting the requirements of section 27.1 of the MMER.

Regulatory and non-regulatory options considered

Regulatory options

Construction of dikes in Wabush Lake — Carol Mine

Eight tailings management options were evaluated for the Carol Mine with respect to environmental, technical, and economic considerations. (see footnote 8) The objective was to identify an option that would have minimal net adverse effect on the environment, now and in the future, be technically sound with the minimal potential for failure, and be economically viable. The alternatives assessed included the designation of all or a portion of Wabush Lake as a TIA using containment dikes and on-land tailings disposal options.

A preliminary Tailings Management Plan (TMP) for the Carol Mine was developed in 2000. (see footnote 9) This plan proposed the construction of a 15 km long dike from south to north in the middle of Wabush Lake, enclosing an area of about 32 km2. The company proposed that the area enclosed by the dike be designated as a TIA.

Subsequently, the mining company conducted research into the feasibility of adding flocculants to the tailings to reduce red water and suspended solids. (see footnote 10) As a result of this work, and concerns about the potential impacts of the proposed dike on fish habitat and recreational use of the lake, a revised TMP was prepared in February, 2006. According to the revised TMP, tailings would be deposited in the trench along the west side of the lake and flocculation would be used. Rather than building a large dike, three smaller dikes would be constructed between the eastern shore of the lake and three islands in the north end of the lake, establishing a single channel at the northwest corner of the lake. The proposed TIA would have consisted of a portion of Wabush Lake bounded by the existing tailings beach to the south and by the small dikes to the north.

Although the implementation of the preliminary or the revised TMPs would reduce red water and suspended solids in all or a portion of Wabush Lake, both TMPs had a number of disadvantages, including:

  • construction of the dikes would impact a larger area of fish habitat, and the dikes would be constructed in shallow water areas with more productive fish habitat. Specifically, the current proposal would impact 47% less fish habitat than the original 2000 proposal;
  • construction could result in an increase in TSS in the lake, and disturbance of the lake bottom and shoreline during construction;
  • during construction there would be a risk of spills of fuels or other hazardous materials and increased air emissions associated with the vehicle operations;
  • the dikes would reduce recreational use of the lake; and
  • material for the dikes would need to be quarried on land, resulting in impacts on wildlife habitat.

Due to the disadvantages associated with the construction of dikes to manage tailings, this option is not being considered any further.

Designating a portion of Wabush Lake as TIA — Carol Mine

The Carol Mine TMP was further revised and a final TMP was released in June, 2006 which is the basis for the current designation of a portion of Wabush Lake as a TIA. The final TMP proposes tailings disposal in the trench and the use of a non-toxic flocculant. However, the proposal to construct dikes was not included in the final TMP. Tailings deposition will cover approximately 26% of the lake bed of Wabush Lake and the TIA will extend from 53° north latitude, near the north end of the existing tailings beach, to the outlet of the lake at the Julienne Narrows.

The environmental, technical, and economic advantages of using a portion of Wabush Lake as a TIA as outlined in the final TMP include:

  • reduction in red water and suspended solids in the lake, leading to improved water quality and clarity, which in turn is expected to lead to improvements in fish habitat in the lake;
  • an increase in the recreational access to the lake and reduction in the amount of fish habitat affected by the project (approximately 47% less as compared to the dike proposed in preliminary TMP);
  • ensuring sufficient capacity of the trench to contain all of the tailings produced, including any tailings generated in the event of an expansion of the project; and
  • the lowest relative capital cost.

The final TMP triggered a screening level environmental assessment under the Canadian Environmental Assessment Act. Fisheries and Oceans Canada was the responsible authority and Environment Canada and Natural Resources Canada provided technical advice as federal authorities. The screening level environmental assessment concluded that, “…with consideration to the mitigations that will be implemented during construction and operation, the project is not likely to cause significant adverse environmental effects.” Furthermore, the screening report states that potential effects to fish and fish habitat associated with the TIA can be avoided through the implementation of fish habitat compensation and other mitigation practices. Based on the above considerations, the preferred option is to designate a portion of the Wabush Lake as a TIA.

Designating Flora Lake and the three tributary streams as TIA — Scully Mine

Scully Mine will not change the current practice of tailings disposal, therefore, an environmental assessment was not required. Alternatives for tailings disposal which were considered during the planning of the mine in the early 1960s involved the use of fish bearing water bodies. (see footnote 11) It was determined that, given the volume of tailings to be deposited and the nature of the local topography and drainage, there were no alternatives for tailings disposal that would not impact a fish bearing water body. Environment Canada and Fisheries and Oceans Canada have considered the risks associated with the addition to Schedule 2 of Flora Lake and portions of three streams that drain into Flora Lake, and are satisfied that the environmental impact of designating these water bodies as TIAs would be minimal. Hence, no other alternatives were considered.

Non- r egulatory o ptions

On-land disposal of mine tailings — Carol Mine

On-land disposal was considered for the Carol Mine. However, as part of the 1999 evaluation of tailings disposal options, it was concluded that on-land disposal of mine tailings would result in “more severe environmental impacts associated with new disturbance of natural undisturbed terrain.” In particular, on-land disposal would necessitate the construction of a 21 km pipeline, and the establishment of a disposal area approximately 8 km by 5 km in size. In addition, there would be impacts on recreational use of the area.

C osts and benefits

Costs

The incremental cost for the Carol Mine includes operating and maintenance costs for the implementation of the final TMP, including the tailings discharge pipelines and the flocculation system. The present value of the incremental cost is estimated to be $52.3 million (calculated over a 25 year timeframe at a discount rate of 8%).

Since there will be no changes in the tailings disposal practices for the Scully Mine, there will be no tailings management costs associated with these Amendments.

As a result of the Amendments, it is estimated that fish habitat equivalent to approximately 1 870 ha in portions of Wabush Lake and 34.5 ha in Flora Lake and the three streams that drain into Flora Lake will be lost. However, as previously described, both Carol and Scully mines will be required to implement fish habitat compensation plans to offset this loss of fish habitat.

There will be additional incremental costs to both the Carol and Scully mines associated with the implementation of the fish habitat compensation plans. For the Carol Mine, the present value of the estimated incremental cost is $0.4 million (calculated over a 25-year timeframe at a discount rate of 8%) for the implementation of the fish habitat compensation plan, primarily for monitoring the implementation of the plan. The present value of the estimated incremental cost for the Scully Mine is $2.6 million (calculated over a 25-year timeframe at a discount rate of 8%) for the implementation of the habitat compensation plan. The cost for the Scully Mine is higher than for the Carol Mine due to the nature of the compensation works to be undertaken. In accordance with Section 27.1 of the MMER, the owners/operators of the two mines will be required to submit irrevocable letters of credit to ensure that adequate funding is available to cover these costs.

Since both the Carol and Scully mines are existing mines subject to the MMER, there will not be any incremental costs to government as a result of these Amendments.

The present value of the total incremental costs is estimated to be $55.3 million (calculated over a 25-year timeframe at a discount rate of 8%).

Benefits

The addition to Schedule 2 of water bodies associated with the Carol and Scully mines will allow these mines to continue to operate in a sound manner based on environmental, technical and socio-economic considerations. The environmental assessment (see footnote 12) for the Carol Mine concluded that “with consideration to the mitigations that will be implemented during construction and operation, the project is not likely to cause significant adverse environmental effects.”

Further, the implementation of the fish habitat compensation plans is expected to result in a net gain of fish habitat equivalent to approximately 1 090 ha. In addition, changes in tailings management practices will result in the reduction of red water and improvement of the water quality in Wabush Lake. This is expected to contribute towards improvements in fish habitat and increased recreational use of the lake by local residents.

Rationale

The assessments of alternatives for tailings disposal for the Carol and Scully mines concluded that continued use of Wabush and Flora Lakes for tailings disposal is the best option from an environmental, technical and socio-economic perspective. It also concluded that the risk associated with continued disposal of tailings in these water bodies is minimal. For the Carol Mine, changes in the tailings management practices and the associated habitat compensation plan are expected to lead to improvements in water quality and fish habitat in Wabush Lake. For Scully Mine, the fish habitat compensation plans will offset the loss of fish habitat associated with the continued use of Flora Lake for tailings disposal.

Without designating the water bodies as TIAs, the mines will not be able to continue operations and dispose of tailings in these water bodies. To continue mining operations, other tailing disposal options would have to be adopted, which federal officials believe would result in larger environmental impacts. Implementation of other options would require the construction of on-land disposal areas and associated infrastructure. Completion of the construction work would take a significant amount of time. During this time the mines would have to cease operations, with significant implications for corporate revenue and the 2 900 or more people employed by them. This could also impact other economic benefits that flow from the operation of these two mines which are the main employers in Labrador City and Wabush and are the mainstay for the local economy. The mining companies also contribute significantly to the provincial economy in terms of taxes and royalties.

During consultations on the environmental assessment for the Carol Mine, organized by Fisheries and Oceans Canada in 2006, strong community support was expressed for the TIA designation. The community support was based on the expected improvements in water quality, fish habitat and recreational use of Wabush Lake as a result of anticipated reductions in red water and suspended solids. The elimination of dikes in Wabush Lake, as previously proposed, was also well received. Subsequent consultation on the TIA designation in 2007 and 2008 (as discussed below) did not identify any additional concerns.

Environment Canada and Fisheries and Oceans Canada officials are satisfied that the environmental and economic impact of the Amendments will be minimal. The implementation of fish habitat compensation plans will offset the loss of fish habitat associated with the designation of these water bodies as TIAs. Accordingly, the water bodies will be designated as TIAs through this Amendment.

Consultations

In 2007, Fisheries and Oceans Canada consulted with Aboriginal groups on the proposed Amendments and the associated fish habitat compensation plans. These consultations were undertaken as the proposed use of these water bodies as TIAs and the associated fish habitat compensation plans could potentially impact the rights of Aboriginal groups in the area. Three Aboriginal groups were contacted: the Labrador Innu Nation, the Innu Takuaikan Uashat Mak Mani-Utenam of Sept-Îles and the Matimekush-Lac John of Schefferville. These groups all have unresolved land claims in the area of the Carol and Scully mines.

Fisheries and Oceans Canada officials sent letters to these Aboriginal organizations, informing them of the proposed Amendments and inviting them to provide comments. The Aboriginal groups did not identify any concerns regarding potential conflicts between the proposed Amendments and their traditional use of the area.

In May, 2008, Environment Canada held a consultation session on the proposed Amendments. The consultation session was attended by representatives from industry, including the project proponents, regional and national Aboriginal organizations, environmental non-governmental organizations (ENGOs), other federal government departments, and the provincial government. Presentations were made by the mining companies on the key features of the mining operations, tailings management and fish habitat compensation plans. Environment Canada and Fisheries and Oceans Canada also made presentations to the stakeholders on the proposed Amendments and the requirements of the fish habitat compensation plans in the context of the two mines. Environment Canada, Fisheries and Oceans Canada and the project proponents’ responses to the questions and comments raised at the consultation session are summarized below. No written comments were received on the proposed Amendments.

Use of natural fish-bearing water bodies as TIAs

ENGO representatives expressed opposition, in general, to the use of natural fish-bearing water bodies for tailings disposal purpose, but did not express significant concerns specific to the proposed Amendments.

Environment Canada and Fisheries and Oceans Canada officials understand this concern. However, they are of the opinion that for some mining sites, the use of water bodies is the most appropriate tailings disposal option. A range of alternatives are quantitatively and qualitatively evaluated as part of the environmental assessment process in order to identify the option that would present minimal net adverse short-term and long-term effects on the environment, be technically sound with minimal potential for containment failure, and be economically feasible. Each case is considered individually and the decision to use a water body for tailings disposal takes into account site-specific factors.

Impact on water quality

ENGO representatives expressed concern about drinking water supplies for the area and the impact of the use by the Carol Mine of flocculating agents on water quality.

Given that the municipal water supply is located upstream of the water bodies to be used as TIAs, it would not be affected by the designation. The flocculating agent being used by the mine is non-toxic and is added to reduce the turbidity and the red colouration of the water in the lake. The use of non-toxic flocculating agents would improve water quality as the particles settle faster and remain confined in the trench rather than remain in the water column. It should also be noted that the effluent from the final discharge point is required to meet all the relevant water quality standards specified in the MMER.

F ish habitat compensation plans

Concern was expressed by ENGO representatives that the project proponents are only required to compensate for the fish habitat to be impacted in the future and not in the past.

Environment Canada officials explained that the MMER came into force in 2002 and the requirements, including the requirements for the implementation of fish habitat compensation plans, do not apply retroactively to past project impacts.

An Aboriginal representative inquired about the selection process for determining which fish species would be targeted when compensating for habitat in Loon Pond.

The stakeholders were informed that the fish habitat expected to be lost in the South Basin of Flora Lake and the associated proposed compensation was based on physical and biological surveys. These surveys quantified the existing fish habitat and the utilization of the habitat by the fish species in the lake. The compensation measures identified in the fish habitat compensation plan are aimed at creating habitat (such as spawning, rearing and overwintering habitat) which would be suitable for fish species already present in Loon Pond and would help ensure that there is “no net loss of fish habitat.”

An Aboriginal representative expressed concern that some of the fish habitat compensation measures for the Scully Mine would not be implemented in the local area.

As explained above, the selection of habitat is based on physical and biological surveys, the purpose of which is to identify the most suitable habitat for the fish species under consideration. It is, therefore, possible that habitats which are located in other areas may be identified as being the most appropriate to ensure that there is no net loss of fish habitat. Fisheries and Oceans Canada is responsible for making the final determination of the appropriateness of proposed compensation measures and location.

Mine closure plans

ENGO representatives inquired about closure plans for the mines and why these were not included in the background information package provided for the consultation session.

In response, it was indicated that the development of closure plans is not subject to regulation under the Fisheries Act, although the MMER continue to apply to closed mines for three years after the end of commercial operations. However, both mines have prepared closure plans as part of the provincial permit requirement. These plans are public documents and are available on request from the responsible provincial ministry.

Consultations on the proposed Amendments following publication in the Canada Gazette, Part I

On October 25, 2008 the proposed Amendments were published in the Canada Gazette Part I for a 30-day comment period. During this period, Fisheries and Oceans Canada and Environment Canada received three submissions, all of which were from industry and were in support of the Amendments.

Implementation, enforcement and service standards

The Amendments will come into force on the day they are registered.

Implementation of the Amendments will include provision of information to the proponents on their obligations under the MMER. Since both mines are currently subject to the MMER and aware of their obligations, this information will relate to the need to establish new final discharge points at the outlets from the TIAs.

The Amendments will not impact the manner in which the MMER are enforced. Compliance with all provisions of the MMER except Section 27.1 (fish habitat compensations plans) will be enforced by Environment Canada. Compliance with Section 27.1 will be enforced by Fisheries and Oceans Canada. 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 13)

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

Contact

Mr. Chris Doiron
Chief, Mining Section
Mining and Processing Division
Public and Resources Sectors Directorate
Environment Canada
351 St. 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

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

Footnote 1
SOR/2002-222

Footnote 2
Schedule 4 of the Regulations sets out the authorized limits of deleterious substances.

Footnote 3
The policy is available from the Fisheries and Oceans Canada Web site at: http://www.dfo-mpo.gc.ca/oceans-habitat/habitat/policies-politique/operating-operation/fhm-policy/pdf/policy_e.pdf.

Footnote 4

Footnote 5
Iron Ore Company of Canada (November 2006), The IOC Carol Project: Final Tailings Management Plan - Fish Habitat Compensation Plan. Prepared by: Minaskuat Limited Partnership.

Footnote 6
Iron Ore Company of Canada (February 2006), The IOC Carol Project: Revised Tailings Management Project, Registration/Referral. The document is available from the IOC Web site at: http://www.ironore.ca/main/PDF/1007310_Registration_9%20Feb.pdf.

Footnote 7
Wabush Mines (January 2007), Revised Fish Habitat Compensation Plans, Flora Basins, Wabush Mines, Wabush, Labrador. January 2007. Prepared by: Sikumiut Environmental Management.

Footnote 8
Golder Associates (October 1999), Engineering Report on Tailings Disposal Options.

Footnote 9
Iron Ore Company of Canada (2000), Carol Mine Tailings Management Plan.

Footnote 10
Iron Ore Company of Canada (December 2004), Final Report: Effects of the Flocculation Treatment on Physical and Physico-chemical Properties of Iron Ore Tailings.

Footnote 11
Wabush Mines (2007), Revised Fish Habitat Compensation Plan, Flora Basins: Wabush Mines, Wabush, Labrador: Appendix A — MMER Schedule 2 Application. Prepared by: Sikumiut Environmental Management.

Footnote 12
Fisheries and Oceans Canada (2006), Canadian Environmental Assessment Act (CEAA) Screening Environmental Assessment Report: Carol Project Revised Tailings Management Plan, No Dykes Scenario, Wabush Lake, Labrador.

Footnote 13
The policy is available at: http://www.ec.gc.ca/alef-ewe/default.asp?lang=En&n=D6B74D58-1