Yukon's Minto Mine ceases operations, territory steps in to secure site

The owners of the Minto Mine in central Yukon have pulled up stakes without warning, leaving the territorial government on the hook to manage the site and protect the local environment.

Minto Metals, which has operated the copper-gold mine site near Pelly Crossing, Yukon, announced in a news release on Saturday that it had ceased all operations, and the Yukon government now had control of the site. The mine was one of three quartz mines operating in Yukon, and a major employer in the central part of the territory.

In the news release, company CEO Chris Stewart called it an "extremely difficult and disappointing decision," but did not provide details. He said the company was "acting responsibly" in cooperation with the Yukon government to avoid any environmental damage.

John Streicker, Yukon's mines minister, said that he heard the news late Friday. 

"We've known for some time that they were dealing with financial issues," said Streicker, on Monday morning.

"I haven't talked to Minto directly to ask them specifically what led to it, but I would say that because we've been working closely with them, we were ready to step in right away."

Streicker says the priority is to ensure that the site is secure, and that water treatment continues. He said the territorial government immediately hired a contractor who then had the water treatment facilities back up and running "basically within 24 hours."

"The team has moved very quickly and the reports I'm getting are that things are in hand," Streicker said Monday morning.

The mine site, in operation since 2007, is on the Selkirk First Nation's category A settlement lands, meaning the First Nation earns all royalties from the mine. Streicker said the territory would meet with the First Nation to provide updates. 

A government official said Monday that Minto owed about $1.37 million in outstanding royalties to the First Nation.

During operations, Minto Mine had about 180 mine staff and subcontractors working on site according to a government spokesperson. Over the weekend, there were about 50 workers there from the government's subcontractor.

Since 2007, the mine has produced about 500 million pounds of copper, according to the company.

Tailings storage and spring melt

Last month, the territorial government warned that the mine's tailings storage pits were running out of room.

Officials cautioned that storage capacity could soon be depleted, increasing the risk of untreated water from tailings pits spilling into nearby Minto Creek, and from there into the Yukon River downstream. The company was ordered to divert contaminated water to another pit.

The government said in April that Minto was required to take action once the available storage capacity dropped to below 300,000 cubic metres. The facility is now nearing that threshold, with storage capacity at about 318,000 cubic metres. It was at about 360,000 cubic metres less than a month ago. 

Streicker said the goal now is to ensure the tailing facilities are not overwhelmed. Minto Metals recently got a second water treatment plant up and running, and Streicker said both plants were operating as of Sunday.

"Our main focus is around protecting the environment but that also in turn helps to make sure that the mine would be viable going forward," he said.

"We believe that it's an important mine."

It's not clear how much taxpayers might be on the hook for. The government has about $75 million in security payments from Minto, but Streicker said the company had fallen behind in payments. He said the territory would use a bit of that $75 million right now to ensure water treatment continues, "and then we'll see where things land." 

He also said he was aware of four liens filed against the company.

"So those things are still there and will work their way through the courts," Streicker said. 

Still, the minister said what's happened at Minto over the last few days shows that the system is working.

"So a mine company stepped away from their mine. We're back in there within 24 hours using the money that they gave us for security, to make sure that we protect the environment and to protect the ability for that mine to have a viable future — that, to me, is things working," Streicker said.

"I won't say that the system is perfect, but right now things are happening the way that they should."

More scrutiny needed

Still, the minister acknowledged that Yukon has been working with First Nations to rewrite mining laws. And according to Sebastian Jones of the Yukon Conservation Society, the news about Minto shows exactly why that's necessary. 

Jones described the mine site as being already "half worn out" when Minto Metals bought it a few years ago from Capstone Mining, and he said Minto's financial struggles could have been predicted.      

"It was pretty obvious that this company did not have a lot of resources and that we were in for a world of pain," Jones said.

"There needs to be far more scrutiny and far more rules around how these mines get to operate."