Several coal producers in western Canada are running into an expensive need to control toxic selenium in water runoff from mine sites, which is an increasing problem as well for U.S. coal producers like Patriot Coal (NYSE: PCX) in Central Appalachia.
For example, Teck Resources Ltd. (TSX: TCK.A and TCK.B, NYSE: TCK), Canada’s largest producer of metallurgical coal, has been working since September 2009 on an environmental review at the British Columbia Environmental Assessment Office (EAO) for a coal mine expansion area called Line Creek Operations Phase II (LCO2). In a May 24 letter to the EAO, the Canadian federal government’s environmental agency, called Environment Canada, drew attention to the selenium issue.
“In addition to comments submitted on April 18, 2012, Environment Canada has reviewed additional sections of the Line Creek Operations Phase II Project Application related to selenium exposure and migratory birds, and offers additional comments in the attached Appendix to this letter,” said the letter. “This review did not include comments on the impact of proposed habitat changes on migratory birds, nor does it include comments on the potential effects of calcite precipitation on prey availability for aquatic birds.”
The letter said the amount of selenium which is predicted to be released in the local study area and the regional study area from all project-related activities is not clearly presented in documents so far. Several of the environmental design features proposed to mitigate changes to water quality and aquatic health identify management actions which suggest additional selenium will enter the local study area. Environment Canada said it recommends that all selenium sources be included when predicting selenium concentrations in water, as they are used in the model to estimate potential exposure in birds.
Teck proposes with this project to develop two new operating areas adjacent to the existing Line Creek Operations, providing a total of 52 million tonnes of clean coal for future mining. The proposed new operating areas are Burnt Ridge North and Mount Michael, collectively referred to as Line Creek Operations Phase II.
U.S. EPA says it is also concerned about selenium
The U.S. Environmental Protection Agency has also gotten into the act, since the Line Creek operation is close enough to the Montana border to raise concerns. EPA said in an April 16 letter to the EAO: “The EPA’s primary area of concern with the proposed project involves potential regional water quality impacts, particularly impacts associated with elevated levels of selenium in mine drainage moving downstream via the Fording River and Elk River in British Columbia toward Lake Koocanusa and the Kootenai River in Montana. It is important to emphasize that our water quality and aquatic life concerns result from the overall cumulative selenium loads from all the Teck Coal Ltd. (Teck) Elk River Valley coal mines, and not just from the Line Creek Mine and its proposed LCO2 expansion, although that is the topic of this current review.”
EPA said it does not agree with Teck’s conclusion in the LCO2 application that the proposed project does not have potential for significant adverse effects to water quality and aquatic health. “We believe significant water quality and aquatic life effects are already occurring in the Elk River and upstream waters which threaten Lake Koocanusa, and these effects are likely to be aggravated by the proposed LCO2 and other Teck mine expansions,” the agency wrote. “Teck’s methodology for determining ‘significance’ of environmental effects discounts environmental concerns that we consider to be significant. There are important uncertainties and unknown environmental risks associated with the proposed LCO2 Project that preclude a finding of no potential for significant adverse impacts.”
Teck operates six open-pit mines in western Canada: Cardinal River, Coal Mountain, Fording River, Greenhills, Elkview and Line Creek. Five of these mines are in the Elk Valley of southeastern British Columbia, with Cardinal River located in west-central Alberta. Teck also is working on a restart of the long-shut Quintette strip mine in northeastern British Columbia.
Teck says it has plans to deal with the selenium issue
Teck said in a September 2011 project update that it has undertaken a review and evaluation of site specific selenium management options that could be implemented at the Line Creek Operations (LCO) to contribute to Teck’s commitment to stabilize and reduce the trend of selenium loadings in the Elk Valley. The evaluation considered options that could be implemented for both LCO2 and the existing LCO, and which could meet an immediate objective of reducing and maintaining LCO’s selenium loads to below 2010 levels, as assessed in the Fording River downstream of the confluence of Line Creek.
The site specific selenium management options analysis conducted for LCO will form a component of the regional selenium management plan that is being developed by Teck. “The review and evaluation of site-specific selenium management options is now complete and selenium management options for the proposed Project have been incorporated into the overall project plan,” Teck added. “Specifically, active selenium water treatment in Dry Creek was identified as the most suitable option for the Project and will contribute to Teck’s objective of maintaining total selenium loadings from LCO to below 2010 levels in the Fording River downstream of Line Creek.”
Teck added: “As part of the evaluation of selenium management options at LCO, Teck has also identified selenium management options that will be implemented at the existing LCO to contribute to maintaining total selenium loadings from LCO to below 2010 levels. These include installation of selenium active water treatment in West Line Creek in two phases, to be commissioned in 2014 and 2018, respectively. These selenium management measures are not part of the Project; however, they have been designed to mitigate cumulative effects of existing LCO and the Project and will be evaluated as part of the environmental assessment for the Project.”
Said Teck about this situation in an April 24 statement covering first-quarter results: “Work is ongoing to develop and implement selenium management plans for each of our six operating coal mines and the Quintette project. It is possible that permitting for current and future projects may be delayed or withheld until appropriate selenium management plans are developed and implemented. We have begun to implement a number of measures, including a water treatment plant, entailing expenditures of approximately [C]$80 million over the next 3 years, however, our plans are not yet complete and additional costs may be incurred, which may be significant.”