Vale Tailings Are a Huge Risk for Ontarians

The recent collapse of two Vale tailings dams at Mariana and Brumadinho, Brazil, ecological catastrophes that left hundreds dead, underscore the urgent need to reform Ontario’s Mining Act to provide greater security to mining communities, the environment and the public treasury.

The Ministry of Energy, Northern Development and Mines’ (ENDM) most recent Table of Financial Assurances, updated on March 31, 2019, continues to list seven of Vale’s sites as assured under the “Financial Test” despite the fact that in February Moody’s downgraded the company’s credit rating to junk status. Under the Mining Act, companies that have provided financial assurance in the form of the financial test must deposit realizable financial assurances in full within 30 days of having their credit rating downgraded.

There is no indication that the government of Ontario has acted to ensure Vale complies with this provision of the Act. An inquiry sent to the Ministry (ENDM) received no response to the time of writing.

Vale Canada estimates the costs of remediating and maintaining its Central Tailings Facility – forever – at $330.4 million. When the company includes its smelter, two refineries, and Copper Cliff North Mine in Sudbury and the refinery in Port Colborne, the total estimate comes to $548 million.

Without realizable financial assurances, these clean-up costs will revert to the public, should Vale declare bankruptcy, or find itself unable to pay.

An “Asset Retirement Obligation” line on the Vale Canada Inc.’s balance sheet is the only financial security for the public when (not if) the company closes the operations

The largest of the seven mine sites is the Copper Cliff Central Tailings Area, which (according to company documents available online) covers an area of 35 square kilometers and contains some 547 million tons of toxic mine waste. The wastes in the impoundment will have to be managed forever. The company says it is “one of the largest tailings operations in the world”.  The screenshot taken from Google Maps below gives an impression of the severity of the environmental challenge.

Aerial Overview, Copper Cliff Central Tailings Area (Google Maps)

The public has good reason to mistrust profit-driven mining companies like Vale when it comes to tailings management and environmental rehabilitation. Indeed, there are strong indications that Vale executives knew about the structural problems plaguing the Brumadinho tailing dam before it collapsed. According to Reuters, Brazilian prosecutors alleged that Vale managers responsible for ensuring the dam’s stability pressured a third-party engineer to “make up technical numbers, and falsely pledge the stability of the dam, which allowed for the situation of risk to be perpetuated.”

The risk of similar tragedies occurring in Canada is real. The government of Ontario must act to ensure that they do not come to pass.