Yukon orders review of Wolverine Mine security payments

The Yukon government is trying to figure out how to avoid getting stuck with the bill to clean up old mine sites, when the owners go bust.

The government has hired PricewaterhouseCoopers to do an independent review of how security payments were determined for Yukon Zinc's troubled Wolverine Mine, in southeast Yukon. The report is expected next month. 

It's also asked the auditors to see whether Yukon should change its laws, to minimize financial risk associated with mine closure and cleanup.

The Wolverine Mine has been in temporary closure since 2015, and later underwent bankruptcy protection.

The Yukon government, meanwhile, was still owed around $25 million to a financial security fund established to eventually clean up the site. About $10 million had already been paid.

Last fall, Phoenix Global Investment bought the Wolverine Mine — and Yukon Mines Minister Ranj Pillai says that company is now expected to pay the $25 million.

"I will look to take the necessary means to protect Yukoners and the Yukon environment as we go through this process," Pillai said in the Yukon Legislature.

"We are exploring all options available to ensure the security is provided."

'A host of responsibilities'

NDP leader Liz Hanson raised the issue in the legislature, saying she was concerned that Phoenix Global Investment was taking on "a host of responsibilities," with little apparent experience in operating mines.

"We are concerned that, without adequate oversight and assurances from the new owner, we could see another repeat of the Yukon Zinc debacle and another four years of government care and maintenance as negotiations are ongoing," she said in the legislature.

She also questioned whether $35 million in security was enough.

Pillai responded by saying the review by PricewaterhouseCoopers will "ensure that the legislation and policy framework for determining security was properly implemented" for the Wolverine Mine.

He says the auditors have also been asked for recommendations to improve the framework for determining security payments.

Pillai also acknowledged that Phoenix Global Investment does not seem to have a track record in running mines, and that's a potential concern.

"This is not just about opening and running a mine; it's about going into one that has a very difficult situation to deal with."