Whitehorse Daily Star

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Pictured above: LEWIS RIFKIND

Mine is short $3 million for security obligations

The “temporary” closure of the Wolverine Mine raises questions about the Yukon’s method of collecting reclamation security,

By Chuck Tobin on January 28, 2015

The “temporary” closure of the Wolverine Mine raises questions about the Yukon’s method of collecting reclamation security, says a spokesman with the Yukon Conservation Society.

Lewis Rifkind noted today it appears the Yukon Zinc Corp. has put up at least $7.5 million but is still short $3 million or so in the amount of security the Yukon government requires for reclamation security.

It is somewhat of a catch-22, however, because of the hardship the mine is experiencing, it does not have revenue coming in, pointed out Rifkind, the society’s mining watchdog.

He said requiring a security bond up front for the total reclamation cost would put an additional burden on companies seeking to raise financing.

On the other hand, said Rifkind, if the mine went belly-up today, Yukon taxpayers would be on the hook for the shortfall in the money needed for closure and reclamation of the site southeast of Ross River.

In Rifkind’s recollection, this is the first case where Yukoners are on the hook under the new regulatory regime that came with devolution of federal authority to the territory on April 1, 2003.

Up until then, Ottawa was responsible for permitting and regulating mines, and looking after any issues that arose, such as the bankruptcy of the Faro mine and the tens of millions it continues to cost every year to manage the mess left behind.

Rifkind acknowledged there is no easy solution to the issue with the Wolverine Mine, but it does suggest the government might want to revisit the policy around security deposits to cover reclamation costs once mining is complete.

Under the territorial policy adopted following devolution, a mining development must have enough security posted on any given day to cover the entire cost of reclamation to that point in mine’s life.

The Minto Mine, for instance, has $50 million in security available for reclamation, and the bond continues to increase as the mine continues to expand.

Yukon Zinc shut down its Wolverine operation last Thursday because of what it described as instability in the metal markets, particularly the price for silver.

Company spokesman Alex Wu told the Star Monday the company is viewing the shutdown as temporary and will re-assess the situation in three months. In the mean time, a crew will be maintained to look after care and maintenance of the site.

Yukon Zinc is working with its contractors and suppliers to arrange financing for outstanding debts, he said.

Wu said today the state-owned Chinese company which owns Yukon Zinc is not broke.

In the first official statement issued today by Yukon Zinc, the company said approximately 140 of its employees will be given a temporary layoff in the next couple of weeks and some 80 contract employees are also affected.

“This is a very difficult decision, and we understand the impact it has on our employees, contractors and local communities.” said the company’s CEO, Jingyou Lu.

“We will continue to review the situation and decide the best way forward.”

Yukon Zinc has been running at 75 per cent of its production capacity since October 2013, the statement points out.

Production began in early 2011.

See related stories.

Comments (10)

Up 0 Down 0

No one at the wheel on Feb 3, 2015 at 5:07 pm

The Yukon is going down the road and no one is at the wheel. It will soon go off the road and the real damage will be done. Yukon Party needs a new leader, simple as that. Scott Kent would make a good leader from the group. At least he is trying to move forward.

Up 28 Down 8

Mr M on Jan 30, 2015 at 1:45 pm

Jim Kenyon , Dennis Fentie , Archie Lang! These fine upstanding citizens and YP members, sold out to the Chinese Government years ago!
Pasloski just continues to follow in his idols footsteps! NDP is a great opposition, but logic says YP is on their last term and the resurgent Liberal Party will form the next government!

Up 25 Down 4

Me M on Jan 30, 2015 at 1:39 pm

Maybe we should turn it into a golf course and call it Mountainview ! AL could be president, and all his buddies from the government could golf for free, not really much different than how the reality of the YP operates.

Up 28 Down 4

yukon56 on Jan 30, 2015 at 8:21 am

I thought that all bonds had to be in place before development. WTF?????

Up 24 Down 19

Francias Pillman on Jan 29, 2015 at 1:32 pm

This is good news. Very good. Please don't pay what you owe. You will never mine here again. Greedy without regard. Please leave our Yukon. You should of never been here in the first place.

Up 16 Down 11

Josey Wales on Jan 28, 2015 at 11:01 pm

Hmmm...how about we merely "pretend" that the mine is a ski hill that ...gasp...we dare not try to live without... and it shouldn't bother anyone?
Less the tax payers....as per.

Up 37 Down 2

just my thoughts. on Jan 28, 2015 at 5:55 pm

In case there is any doubt as to who owns the Wolverine Mine and the resources therein, and who is repsonsible for the remediation, as per the article linked below, from the CBC:

"its majority owner, a Chinese state-owned company"
'Chinese state-owned company' = Chinese government.

http://www.cbc.ca/news/canada/north/yukon-s-wolverine-mine-shutting-down-due-to-falling-resource-prices-1.2932490

Up 44 Down 13

June Jackson on Jan 28, 2015 at 4:36 pm

Maybe Wolverine (Yukon Zinc) had friends in Government and Minto didn't..one had to cough up the full amount..the other didn't.. Someone else in another article said.. we'd better be careful about putting all our eggs in one basket..

I try so hard to find something nice to say about the Pasloski government..and I just can't find anything.. they bathe regularly? or do they?

Up 62 Down 12

just my thoughts. on Jan 28, 2015 at 3:44 pm

What a scam! The Chinese government is the majority owner of Yukon Zinc which owns the Wolverine Mine.
You are telling me that the Wolverine Mine owners are crying poor? More like the Chinese government would rather pocket the profits and have Yukoners clean up their environmental messes.

These are the people who Stephen Harper and his Yukon Party minions are counting on to provide the money to 'Unlock Canada's Resource Wealth'. They'll unlock it alright. To send it straight to China, and leave the mess behind for Canadians.

Up 61 Down 14

Mark Southerland on Jan 28, 2015 at 3:30 pm

This is not a major issue for the Yukon Party.
Since this mine has put so much into our economy the YP will fund the $3,000,000 shortfall if required through the same line object used for the golf course shortfall.

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