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B.C. carbon tax helps pay for remote mine to switch from diesel to hydro

An open-pit copper and gold mine in remote northern B.C. is switching from  diesel to hydro to power some of its operations, funded in part by  carbon tax revenue from industry. 

The project at the Mount Milligan Mine, 155 kilometres north of Prince George, recently received $440,000 from the province’s CleanBC Program for Industry,  which allocates funds to projects that reduce greenhouse gas emissions.  The project, which will cost a total of $1.34 million, is one of 13  that received grants totalling $12.5 million in the first round of  funding.

The Mount  Milligan project will reduce air pollution and cut greenhouse gas  emissions by 48,000 tonnes of carbon dioxide equivalent over the next 10  years, according to a government news release. However, according to the company’s 2020 technical report, the mine will close in 2028.

Nikki Skuce, director of Northern Confluence, an initiative that aims to  improve land use decisions in B.C., said the hydro initiative could set  an example for other mines in the province. “Hopefully more mines will  do the same and new mines will factor low-carbon solutions in at the  front end,” she wrote in an email. 

Skuce said  the CleanBC program helps B.C. address a growing desire by consumers  and companies for mines to have higher environmental standards. Minerals  and metals are used in a variety of sustainable products — from  electric vehicles to solar panels — and major companies like BMW and  Microsoft are starting to acknowledge the need to source sustainable raw  materials.      

“Interestingly,  as we move toward a more low-carbon future, there will be an increase  in demand for minerals and metals,” she wrote. “But shifting to  low-carbon solutions requires more responsible mining, which also means  protecting watersheds and communities from tailings dam risks, ensuring  the polluter pays and requiring community consent.”

Toronto-based  Centerra Gold acquired the Mount Milligan Mine in 2016 when it  purchased former owner Thompson Creek Metals. In 2017, the mine’s water  sources — surface water run-off and a creek — started drying up. 

The  company got permission from the B.C. Environmental Assessment Office to  access alternative water sources, including groundwater wells, two  creeks and a lake. These sources are farther from the mine site, so the  company had to install pumping stations and a water pipeline. This  infrastructure has been powered by diesel ever since. In the company’s application to the Environmental Assessment Office to install hydro infrastructure, it estimated it would burn 900,000 litres of diesel in 2019.   

The  provincial investment supports the installation of a 4.8-kilometre  overhead transmission line to tie the water infrastructure into the  mine’s existing connection to the BC Hydro grid. 

The  Ministry of Environment and Climate Change Strategy told The Narwhal in  an emailed statement that industry carbon tax contributed $46 million to  the $56-million 2019 annual budget for the CleanBC Program for  Industry. The program is getting a boost this year — B.C.’s 2020 budget  nearly doubled the funding capacity to $105 million. 

The  program has two arms: the CleanBC Industrial Incentive Program, which  offers financial incentives to companies that reduce their greenhouse  gas emissions, and the CleanBC Industry Fund, which finances greenhouse  gas emissions reduction projects such as the one at Mount Milligan. 

Other  projects supported by the CleanBC Industry Fund include a zero-emissions  employee shuttle at a coal mine, a retrofit at a natural gas facility  that eliminates methane venting and natural gas reduction projects at a  pair of sawmills. 

“Our  government is building a better future for people throughout B.C. by  investing in new projects that will reduce emissions and support clean  development opportunities for industry,” Environment Minister George  Heyman said in a statement. “We recognize the importance of working  together with businesses to reach our CleanBC targets and build a  stronger, more innovative economy where people in communities across the  province thrive.”

Centerra  did not reply to multiple interview requests and the Ministry of  Environment and Climate Change Strategy said it didn’t know when the  Mount Milligan hydro infrastructure would come online. 

“Generally,  all projects included in this year’s funding round will be completed  over the next two to three years or earlier,” spokesperson David Karn  wrote in an email.

Because  the Mount Milligan Mine will close in 2028, even if the company gets the  hydro project up and running by the end of 2021, it would only have a  lifespan of six years. 

Within  commuting distance from the towns of Fort St. James and Mackenzie, the  Mount Milligan Mine has been a boon to the local economy since starting  construction in 2010. As of fall 2019, it employed 680 people — 65 per  cent of whom are locals.

The mine has been recognized by the British Columbia Technical and Research Committee on Reclamation for its fish habitat mitigation and compensation plan and partnerships  with local First Nations, though those relationships have been strained.  The Nak’azdli Whut’en First Nation chose not to participate in the  project’s environmental assessment because it felt the provincial  process did not adequately represent its interests. 

After construction began, the nation highlighted its concerns with the company and its mining operations in numerous letters to the Environmental Assessment Office. Notably, it expressed  frustrations around environmental impact and lack of transparency. 

“When a  sewage spill occurred in the winter of 2011 and a diesel spill in the  summer of 2011, Nak’azdli was not advised of it by the committee, the  proponent or B.C., and we were not included in the clean-up plan,” the  nation wrote in a letter dated 2012. “Rather, we found out about the  spills on our own.”

After the  mine’s inauspicious beginnings, the Nak’azdli Whut’en First Nation has  since entered into an agreement with Centerra Gold and is now involved  in monitoring environmental impacts. 

A  spokesperson for the nation told The Narwhal the community had yet to  review the hydro project and therefore could not comment.

Matt Simmons, Local Journalism Initiative Reporter, The Narwhal

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