Despite having made a substantial start on the Murray River Project, HD Mining is returning the project to Care and Maintenance Status.
That’s the word from Jody Shimkus, former Vice President for HD Mining, who is now acting as a consultant.
Shimkus appeared before Council on July 14 to bring them the news. She says the company made the decision back in May, for a variety of reasons.
The first reason, she says, is the tariff situation. “We’ve had challenges just bringing up equipment from the United States,” says Shimkus. “We’re also facing additional challenges getting equipment that’s utilized in Europe approved in Canada. Given some of these financial uncertainties right now, we’ve decided to put the project back in care and pay maintenance as of July 1 of this year.”
Over the last few months, she says, they’ve been getting the site ready to go back into care and maintenance.
Despite the company not going ahead with the mine, she says they will still have safety and security on site. “We will meet all of our existing permit obligations,” says Shimkus. “That includes ongoing monitoring at the site in accordance with our permit conditions and we’ve developed a comprehensive care and maintenance plan which has been submitted to the Ministry of Mines as required by our permit condition.”
She says the company will also continue to manage the residences at 100 Southgate and make sure that they are maintained.
She says mines move in and out of care and maintenance quite often. “If the situation changes, we will come back to notify you of our restart plan.”
HD submitted a request for a determination from the BC Government to determine if the mine had made a substantial start back in October of last year.
On March 24 of this year, Alex MacLennan, Chief Executive Assessment Officer of the Environmental Assessment Office declared that yes, the mine had made a substantial start.
“Every Environmental Assessment Certificate (EAC) has a deadline by which the Project must be substantially started in the reasonable opinion of the Minister or delegated authority,” says MacLennan in his determination. “That deadline is usually five years and can be extended, on one occasion only under the Act, for an additional five years to a maximum of ten years.”
HD received its EAC on October 11, 2015. Federal approval was granted in 2017, which put the project two years behind. Dogged by a couple court cases over their hope to bring in Temporary Foreign Workers to complete a bulk sample, and the ever-present issue of caribou recovery (which wasn’t in place until February 2020), the mine requested a five year extension in 2020.
Last year, HD began work on a number of infrastructure projects. While the company still had no estimated date they were planning to start mining coal, they wanted to get a substantial start on the mine.
Why? As MacLennan explains, “if the Project has been substantially started, then the EAC, including any conditions, remain in effect for the life of the Project…. If the Project has not been substantially started by the deadline set out in the EAC or by the end of the period of extension, if an extension has been granted, then the EAC expires.”
That means the mine was faced with losing its EAC permit in October of this year. But, again, according to MacLennan, “the requirement that a project to be substantially started by the deadline specified in the EAC is intended to balance the economic development and environmental protection purposes of the Act. This time limit ensures that the assessment used to inform the Ministers’ decision to issue an EAC remains appropriately current given the potential for existing conditions of the Project area to change over time and the potential for advances in technology that could result in improved mitigation measures.
“In addition, a project that has been substantially started is more likely to proceed in the near future, which means that the assessment conducted in respect of it, and the limitations and conditions placed on it through its EAC, remain timely. By contrast, a project that has not been substantially started is less likely to be completed in the near future such that the assessment and EAC could become outdated. In that case, the Project would be required to go through a new assessment.”
By getting a determination that the mine has indeed been significantly started, the company is now able to go into care and maintenance without fear of losing their EAC.
“We received the substantial start determination and that allows the project another 10 years to fully construct and be operational. We met that deadline with the activities that we undertook during construction. When we come out of care and maintenance it will be relatively easy to move back into construction.”
Shimkus says the delays on getting the mining equipment approved is being held up by the Ministry of Mines. “We have a monorail system at the site that is used at underground mines in Poland and we’re working on a certification process for that with the Ministry of Mines.
Another issue the mine is facing, says Shimkus is getting power to the site. “Getting power there is a real concern. We’ve been having some very constructive discussions with other operators and owners of infrastructure in the area. I can’t go into a lot of detail right now, but part of our strategy is to look at existing opportunities for power in the area, and then we’d have to go to BC Hydro to talk about any required interconnection studies. There is a real concern about the availability of BC Hydro power. We’re hearing that from other operators that it could be a challenge.”
Currently, the mine has diesel generators on-site to provide power, but Shimkus says they are looking at lining up electrical power even during care and maintenance.
To date, HD has spent more than $294 million to advance the project, including exploration, engineering, equipment, construction, financial and management costs.”I consider this as evidence of HD Mining’s intention to advance the Project in the near term,” writes MacLennan.
“HD Mining has also negotiated benefit agreements with West Moberly First Nations and Saulteau First Nations and has presented a draft agreement to McLeod Lake Indian Band. The effort put into negotiating and concluding these agreements indicates to me a strong interest from HD Mining in advancing the Project.”
Above photo: A file photo from 2012 of construction out at the HD Mine’s Murray River Project. The mine is being put into care and maintenance again.
Trent is the publisher of Tumbler RidgeLines.
