N.W.T. government paying for Mactung upkeep, a mineral exploration site it shares with Yukon

MLA calls for tougher financial security laws as government ownership of abandoned exploration site continues to cost taxpayers money.

The N.W.T. government is paying $87,000 to clean up an exploration site that straddles N.W.T./Yukon border

The Mactung property is located about eight kilometres northwest of MacMillan Pass in the Yukon. The Government of the Northwest Territories owns it, and is spending $87,000 to clean it up. (North American Tungsten)

The N.W.T. government is paying $87,000 to clean up an exploration site that straddles the N.W.T/Yukon border.

On Aug. 31, the Department of Environment and Natural Resources contracted the work out to KBL Environmental Services, to be done in the spring.

In light of this, Frame Lake MLA Kevin O'Reilly is calling on the territorial government to draft laws that require exploration and mining companies to post financial securities with actual money to back them up.

Why does the territorial government own Mactung?

The territorial government bought the Mactung exploration project in 2015 for $2.5 million dollars as a stipulation to hand over the now-abandoned Cantung tungsten mine to the federal government. This came after North American Tungsten — the company that owns both these properties — filed for bankruptcy.

The government requires a company to pay a security deposit up front to guarantee taxpayers won't have to foot the bill for environmental clean-up in case the company folds. In the case of North American Tungsten, the federal government — which was responsible for collecting securities for N.W.T. projects before devolution — accepted Mactung as collateral along with cash to acquire a water licence for Cantung.

Because nobody came forward to offer an adequate price for the Mactung property, the devolution deal requires the territorial government to hold onto it until somebody does.

Frame Lake MLA Kevin O'Reilly says the territorial government needs more fiscally responsible mining regulations. (Alex Brockman/CBC)

O'Reilly says that as it stands now, the territorial government has the freedom to accept anything as a security.

"A company can write a promise on the back of a napkin and the minister in his or her discretion can accept that as financial security," he said.

This is something O'Reilly says needs to change.

One of the mandates of the 18th Legislative Assembly is to create a "sound financial security system to prevent public liabilities."

"Here we are two years into our mandate and nothing has been done," said O'Reilly. "There's been no new policy, no new legislation, no new regulations to prevent this sort of thing from happening over and over and over again."

Craig Scott, executive director of Ecology North, agrees.

"Ecology North believes that it should be a priority of the GNWT [Government of the Northwest Territories] to ensure that industry upholds their end of the bargain and puts up adequate funding to reclaim disturbed and contaminated sites," he said. 

According to Department of Lands spokesperson Toni Riley, new Land and Water Board guidelines are expected to be released in the coming months. 

As well, the Lands Department is working with the Departments of Finance and Environment and Natural Resources to review "options on choice of security form," stated Riley in an email.

Taking care of Mactung

Two years after acquiring Mactung, the N.W.T. government still owns it because nobody has come forward with a good offer for the property.

According to Drew Williams, spokesperson for the Department of Industry, Tourism and Investment, the work at Mactung is not a cleanup in the sense of what would happen on a contaminated site.

He characterized it as what would occur on any active exploration project.

"In this case, [the work] got suspended in the bankruptcy process," he stated in an email. "As the now responsible mineral property owner, we're just catching up to where we need to be."

As well, Williams said the Northwest Territories Geological Survey is studying the site to better understand the tungsten deposit contained within it.


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