GNWT says Ekati, Prairie Creek security shortfalls aren't issues

The Government of the Northwest Territories says two mines with a security shortfall of more than $176 million aren't considered problems.

Without security deposits, mine clean-up cost falls on N.W.T. taxpayers

The Government of the Northwest Territories says "there isn't an issue" with the Prairie Creek Mine, even though its owner Canadian Zinc has only paid $500,000 of the $6.5 million security deposit it owes.

The Government of the Northwest Territories says two mines with a security shortfall of more than $176 million aren't considered problems. 

Mines typically have to post security deposits in order to prove the owners can afford to pay clean-up bills if they abandon exploration and mine sites.

In the past, after some mining companies have gone bankrupt, that cost has fallen to taxpayers, like the clean-up of Yellowknife's Giant Mine, which is expected to cost the federal government close to $1 billion.

In total, Canadian taxpayers are on the hook for $8 billion in clean-up work across the country.

According to documents tabled in the legislature, Dominion Diamonds, which is the majority owner of the Ekati Diamond Mine, was supposed to post a $253-million security deposit for the mine. 

But the company has only posted $82 million, which means it owes almost $171 million in securities to the territorial government.

For the last year, the territorial government has allowed Dominion to continue operating despite the shortfall. It says it's negotiating with Dominion and the issue should be settled soon.

Canadian Zinc owes $6 million

The territorial government says a shortfall for the owner of the Prairie Creek Mine, Canadian Zinc, isn't a shortfall at all. 

Security for Prairie Creek was set at $6.5 million, but the company has only put up $500,000. It's currently disputing the security amount set by the Mackenzie Valley Land and Water Board.

Mark Warren, Deputy Minister of Lands for the territory, says the $500,000 is enough to clean up the site right now.

"So there isn't an issue with the securities not matching up to the environmental impacts there because the company has gone on shutdown until they get an answer for the appropriate level of securities."

In the past, taxpayers across Canada have had to foot the bill for any clean-ups left unfinished in the territory.

With devolution now in place, any new ones will be paid for by territorial taxpayers alone.