Imagine you own a coal mine in British Columbia. (Yes, governments in Canada are still approving new coal mines.)
Over the last three decades, you’ve made a bucket-load of money stripping the top off a mountain, and now you’re sitting on a pile of environmental liabilities that threaten to eat into your profits.
You have two choices. You could spend millions of dollars on a process known as reclamation, stabilizing hazardous waste and restoring the site to some semblance of its former ecological value, which is what you committed to when you opened the mine.
Or, you could declare the mine to be in “care and maintenance,” a status that is accepted as standard by most jurisdictions, despite the fact that it lacks a formal legal definition.
The status has very little to do with actual care or maintenance. It might more accurately be described as “abandonment and neglect,” but that wouldn’t sound nearly as elegant.
Care and maintenance is supposed to describe a temporary closure that is justified as a short-term response to a drop in commodity prices or some other emergency. But unlike other phases of a mine’s lifecycle, it is virtually unregulated in Canada, making it an excellent opportunity for companies to postpone their commitments to reclamation.
Given enough time, some companies are able to escape responsibility for closure altogether.
From Nova Scotia to British Columbia and beyond, mining corporations are doing exactly that, taking advantage of care and maintenance for their shareholders’ gain—at a loss to the rest of us.
According to a number of academic researchers and environmental organizations across Canada, this status is a gaping loophole by which mining companies maximize profits and avoid reclamation costs, foisting billions of dollars of liabilities onto the public.
The Breach spoke to academics, campaigners and regulators to expose for the first time how companies are abusing this loophole—and how it can be fixed.
Mining is big business in Canada. The sector makes up about four per cent of the country’s total GDP, according to Natural Resources Canada. Unfortunately, these companies often abandon their spent mines.
There are thousands of abandoned mine sites across the country. Each of these poses an environmental and safety hazard that companies have left provinces and territories responsible for.
According to a report MiningWatch Canada published in 2016, British Columbia, Ontario, and Quebec faced a total $13 billion of unsecured liability from abandoned mines. That figure includes the environmental costs incurred from abandoned mines and the estimated cleanup costs of mines that aren’t yet abandoned. It does not include the actual social and ecological costs of damage done by abandoned mine sites: there are no estimates available about the costs associated with a decades-long leakage of acid mine waste into the environment, for example.
Rachel Singleton-Polster, who conducted research on coal mines in northeastern B.C. at Simon Fraser University, found that no mining company in the province has ever had its “reclamation bond”—a financial assurance the company gives to the government to be returned upon mine closure—returned in full in the 53 years that reclamation bonds have been required.
Abandoned mines aren’t technically in care and maintenance, they’re a step beyond that. But care and maintenance is an unplanned phase that is often a precursor to abandonment.
The 19 major mines currently listed as “closed care and maintenance” in B.C. have been shuttered for an average of 13.5 years. Five have been in this allegedly temporary closure phase for between 20 and 30 years.
A period of temporary closure during a mine’s lifecycle is more or less unavoidable, whether it’s because of environmental conditions or commodity price volatility. But the open-ended nature of care and maintenance allows companies to use it for more than just temporary closure. When it’s no longer profitable to produce minerals at a site, companies can choose to declare their mines to be in care and maintenance, effectively closing them without fulfilling any of their legally mandated closure and reclamation responsibilities. If their reclamation bonds are less than the cost of those responsibilities, then they have no reason to properly close the mine.
‘Care and maintenance’ across Canada
Touquoy, an open pit gold mine in Nova Scotia, is nearing the end of its life. It’s expected to enter care and maintenance some time in 2024. But according to Karen McKendry, a campaigner with the Ecology Action Centre, this might be an example where care and maintenance is being used as part of a strategy to avoid mine cleanup and long-term maintenance costs.
She said that the mine’s owner, an Australian company called St. Barbara, has spun off its Nova Scotia assets into a smaller corporation. “It’s a red flag that they might split town to clear bankruptcy, but then clear themselves, the larger company, of any sort of collateral damage.”
In January, a Halifax Examiner journalist agreed with this assessment and laid out a “litany of environmental concerns” that the new, smaller company would most likely be unable to deal with.
Nearby, in New Brunswick, the exact scenario McKendry warned of is playing out in real time. The Caribou Mine entered care and maintenance last year. McKendry flagged this in a press release as “an all too familiar tactic used by the mining industry to get out of responsibilities and costs for decommissioning and reclaiming mines after their profitable life is over.”
Sure enough, with no income stream, The Caribou Mine’s owner, Trevali Mining Corporation, quickly plunged into insolvency. The New Brunswick government rushed in to ensure that the mine site—which requires constant monitoring and water treatment work—wouldn’t be fully abandoned. New Brunswick hired contractors and, amazingly, went so far as offering to rent equipment back from the company itself.
A similar story played out in Ontario in 2021. The provincial government set to work closing Lockerby Mine near Sudbury. CBC News reported that the province “became responsible for implementing the closure plan for the former mine.”
Why did that happen? Because in 2005, as the long-producing mine neared the end of its life, Falconbridge Limited, a large company that would later become part of the global mining conglomerate Xstrata, sold the end-of-life mine to a junior company that had incorporated just two years earlier. The mine was in and out of care and maintenance throughout the new owner’s short tenure. By 2015, the company went bankrupt. Workers reported to work one morning to find that the gate to the mine had been locked.
Falconbridge, St. Barbara and other mining companies benefit from putting mines into care and maintenance and selling them to junior companies that don’t have the resources to pay for cleanup. But the practice of care and maintenance itself serves as a pipeline to bankruptcy and abandonment—even when pursued for what might be considered legitimate reasons.
Quintette is a truly massive coal mine, impacting nearly 3,600 hectares of land, on Treaty 8 territory in northeastern B.C. It is one of the projects that the B.C. Supreme Court ruled had caused devastating damage to a First Nation’s treaty rights through “death by a thousand cuts.”
Quintette was a core part of northern B.C.’s industrialization. It was built as part of a government-funded megaproject built in the early 1980s, the Northeast Coal project. But that project was largely a failure: Quintette opened in 1982, went bankrupt in 1990, closed in 2000, was permitted to reopen in 2013, and then immediately entered care and maintenance. It’s been in care and maintenance ever since, meaning that it’s been temporarily closed for the majority of the 40 years since it opened.
Quintette isn’t alone in this. According to Singleton-Polster, every single coal mine in northeastern B.C. has entered care and maintenance for at least two years during its lifecycle.
The ecological damage of these sites is described by Singleton-Polster as “slow violence.”
Instead of triggering a single catastrophic event, such as the dam collapse that sent millions of cubic metres of waste from Imperial Metals’ Mount Polley mine into waterways in B.C., these mines are causing progressive harm through their ongoing disturbance of an area, she said.
Singleton-Polster’s research focused on caribou, a keystone species she called the “canary in the coal mine” for northeastern B.C., and she highlighted the practice of care and maintenance as problematic.
By putting a mine into “care and maintenance,” companies are able to extend the mine’s life. What was permitted as a 10, 20 or 30-year mine is suddenly—with no regulatory oversight—there for 50 years or longer. The B.C. government approves these mines in sensitive caribou habitats by explicitly citing the fact that regulations require the mines to be reclaimed after closure.
By pushing closure off indefinitely through care and maintenance, companies are technically following the law. But Singleton-Polster and others reiterated that there is little to no regulation surrounding the practice of care and maintenance in virtually any jurisdiction. By failing to regulate that loophole, governments are complicit in this slow violence being perpetrated against caribou, ecosystems more broadly, and First Nations whose treaty rights depend on wildlife.
A strategy for maximizing profits
When there are legal tools available that allow companies to make more money, they take them. That’s capitalism. And that may be what Teck, the company that until recently owned Quintette, did with care and maintenance at the mine.
During the more than 20 years that Quinette has been in care and maintenance, Teck has stated that it would reopen the mine once demand improved, and Teck executives have identified the commodity price that would need to be reached for Quintette to be profitable. The B.C. Mine Information website still to this day dutifully reports that “Teck plans to re-open this mine once coal prices improve.”
But prices for metallurgical coal soared in 2017, stayed high for years except for one dip, then soared again in 2021. The company still didn’t reopen the mine. Instead, in 2022, it sold the mine to another company.
Singleton-Polster found a potential motive for this hiding in plain sight: former Teck CEO Don Lindsay told shareholders, “We’re choosing not to open [Quintette] because we are strong believers that we make more money on price than volume.”
That suggests Teck, which dominates metallurgical coal production in B.C., may have purposefully kept Quinette closed, keeping coal off the market in order to keep prices high. The company produced 83 per cent of the province’s total coal in 2020.
“It doesn’t take much to read between the lines and see oh, okay, you can keep Quintette closed so that your mines in the Elk Valley are making more,” Singleton-Polster said.
Teck acted like a one-company cartel, sitting on Quintette in its low-cost care and maintenance mode to maximize profits from its other mines.
The company did not respond to The Breach’s request for comment.
The problem is international
Teck’s position in the metallurgical coal market makes that a somewhat unique use of care and maintenance, but leveraging the status as a tool to maximize profit—often by bullying governments or workers—is far from unique.
Jamie Kneen, the Canada Program co-lead with MiningWatch Canada and co-chair of the BC Mining Law Reform Network, said that Anaconda Copper, an American company that operated in both the United States and Chile throughout the 20th century, made a habit of responding to strikes by putting mines into temporary closure, offsetting the lost production by ramping up production in the other country.
“With these global conglomerates, that’s even more of a problem,” Kneen said.
“They’ve got enough capacity that they can move things around in response to not just labour, but any other kind of financial pressure on the company. They’re able to absorb that much more effectively because they can move globally.”
In 2018, the government of the Democratic Republic of Congo raised cobalt royalties from two per cent to 10 per cent. The mining conglomerate Glencore responded to this by putting its Mutanda mine—the largest cobalt mine in the world—into care and maintenance and threatening to leave the country altogether.
There are plenty of instances of less deliberate, but equally problematic, uses of care and maintenance.
After the Fukushima nuclear disaster in Japan, uranium prices plummeted. Uranium mines around the world entered care and maintenance, intending to reopen when the market stabilized. Prices are finally recovering, but many of the companies that own these mines have been bleeding resources, maintaining mine sites (or failing to) with no revenue stream.
In one example, an Australian company operating in Namibia and Malawi, Paladin Energy, put its mines into care and maintenance when uranium prices fell. By 2017, it was insolvent. The company restructured, offloading one of its Malawian mines to a holding company with no assets other than the closed mine.
That holding company still claims it intends to reopen the distressed asset, but it’s been six years and at some point they are liable to run out of money—leaving the Malawian government holding the bag.
A path forward
Nikki Skuce, co-chair of the BC Mining Law Reform Network, said that care and maintenance is a tricky problem to fix because there are legitimate reasons to allow temporary closures of mines. She pointed to the closure of the Mount Polley mine during the aftermath of the 2014 tailings disaster as an obvious example, but even commodity price swings seem to carry some weight.
It might be tricky, but all the experts who spoke with The Breach identified some possible reforms.
First, care and maintenance should be defined and planned for explicitly. Mines are required to submit operating plans and reclamation plans in virtually all jurisdictions. But despite the fact that nearly all of them go through a period of care and maintenance at some point, very few regulators require mines to explicitly lay out a temporary closure plan, nor do they have clear guidelines regarding what’s required of companies during temporary closures.
In a report produced for the BC Mining Law Reform Network, Steven Emerman, a consultant who specializes in tailings dams, wrote, “The expression care and maintenance does not appear in any of the mining regulations or guidance documents in British Columbia.”
This is remarkable given that it appears on the B.C. Mine Info website and throughout government inspection reports and other documents.
The Breach asked the B.C. government to clarify what it means when agencies list a mine as in care and maintenance. Despite multiple emails and phone calls with The Breach, the government was unable to provide an answer.
B.C. isn’t alone in granting this strange, implied status. McKendry said that despite being treated as a quasi-official status, there is very little written about care and maintenance in Nova Scotia’s laws and policies.
This bizarre regulatory gap appears to be global: Mia Pepper, who studied care and maintenance at RMIT University in Australia, described an almost identical situation there.
“There’s almost no definition. There’s kind of a general understanding of what it is, but there’s no legal definition, which means that when you implement different regulations, it’s up to regulatory discretion about when they enact a whole suite of regulatory tools to apply.”
Pepper said that care and maintenance—which she calls a loophole—and the emphasis on regulatory discretion not only sets the stage for mine abandonment but also incentivizes poor environmental and safety regulation prior to abandonment.
A few of the researchers and campaigners The Breach spoke with said that they thought care and maintenance should come with a time limit, too. They said it’s fine for a mine to shut down for a couple of years because of a disaster or commodity price dip. But when a mine has been in care and maintenance for decades, the costs of its slow violence may outweigh the shrinking prospects of its reopening.
‘The climate equivalents of war profiteers’
According to an International Energy Agency analysis, new mines take more than 16 years to develop and open on average. Commodity prices can move dramatically in 16 years, which partially explains why many of the mines in Canada in long-term care and maintenance have barely operated at all. The Yellow Giant mine in northwestern B.C., for example, opened in late 2014 and entered care and maintenance less than a year later.
Aimee Boulanger, executive director of the Initiative for Responsible Mining Assurance, said the prospect of a transition to clean energy could worsen this problem.
“When you’ve got big price fluctuations as we’ve been seeing in the market, and lots of speculation like we see right now for things like lithium, copper and nickel that are tied to the energy transition, you get a big push for more. Prices rise dramatically, and everyone’s rushing in. When prices fall, suddenly not all of [the mines] are economically viable. So you can see things go into this quasi-stalled space.”
Emerman, the tailings dam expert, said the best strategy would be to avoid the demand in the first place by focusing on policies that would allow a transition away from fossil fuels without ramping up mineral demand: things like public transit and maximizing mineral recycling and reuse.
He described the alternative, which is where society seems to be headed now: “A possible future is very, very bad, where you just have acceleration and…bigger mines and bigger tailings dams. That’s a very scary situation.”
Emerman was blunt: he doesn’t believe that a corporation-controlled, profit-driven approach to mineral extraction can fix the current situation. “It’s very dangerous…when you have a crisis and you have people who see the crisis as a way to make money. They’re essentially the climate equivalents of war profiteers. How can I make a buck off of this emergency?”
Kneen called for a more interventionist approach from governments for mineral planning. He described B.C.’s regulatory environment as the “wild west,” warning that a “push to mine more will mean that existing weaknesses in regulation and enforcement will continue and get worse.”
He also suggested that any government approach to “critical minerals” should include strategic stockpiling to allow the state to smooth price spikes that might otherwise impact the pace of the energy transition.
Pepper also called for a more strategic, centralized approach to mine planning. “[We need to] say, okay, we know we’ve got huge lithium deposits here, which ones do we want to mine now?
“Instead of saying, let’s mine them all now…let’s have a staged approach. Let’s have some consideration…about what we want to mine and when.”