Redefining mining

What are placer and quartz mining? Placer operators extract loose minerals, typically  gold, that have settled at the bottom of water courses like streams and wetlands. Quartz, or hard rock mining, extracts minerals like gold, silver, copper, nickel and zinc by tunneling into bedrock or carving massive open pits into the earth. Placer mines are much smaller than quartz mines, but far more numerous.

Now is a rare opportunity to reform Yukon's mining system to respect environmental and social values, and align with First Nations rights under the Final Agreements and the United Nations Declaration on the Rights of Indigenous Peoples. As the Yukon  rewrites  its mining laws, we must learn from the errors of the last century.

The deadline to give your input is May 9th 2023.

Free entry mining

Any adult can obtain a powerful series of land rights by simply pounding a few stakes into the ground and paying a $10 fee. This “free entry” mining system is a relic of the Gold Rush era. It’s a first come, first serve mentality to land rights that ignores First Nation relationships with the land and water, and the visions other Yukoners hold for the land.

Holding a mining claim grants a series of powers, including exclusive mineral rights and the ability to conduct initial exploration work. Placer and quartz claims also exert a tremendous amount of influence over land use planning.

Why is land use planning so important?

Land use planning is a central part of the tradeoffs that Yukon First Nations made in signing the Umbrella Final Agreement. Nations that signed Final Agreements agreed to relinquish claims to land title across the majority of their Traditional Territories. In return, the Final Agreements set up processes to ensure that decisions about the land and water are made collaboratively between First Nations and the Yukon government. Land use planning is a key piece, providing a platform for all Yukoners to share their hopes for the future. Mining claims make that harder.

Let’s focus on the Dawson Region. Early in the land use planning process, the Yukon government sent the Dawson Land Use Planning Commission a map showing its conservation priorities. The Yukon government only identified a small portion of the region as having "significant conservation value," and only in places without mining claims.

The Yukon government routinely uses mining claims as an argument for keeping lands open to development, in spite of other priorities that people hold for these same lands. The Draft Dawson Land Use Plan proposed protecting Antimony Creek, key habitat for sheep and caribou. However, the Yukon government informed the Dawson Land Use Planning Commission that conservation did “not match with [the] significant existing amount [of] mineral claims.”

The Commission also proposed protections for the Indian River’s headwaters. These wetlands brim with life, store massive amounts of carbon and hold tremendous cultural and spiritual importance to Tr'ondëk Hwëch'in. Unlike the rest of the Indian River, the headwaters haven’t yet been transformed by placer mining. Still, the Yukon government wrote that the Indian River’s headwaters shouldn’t be a protected area so as to “honor existing placer interests.”

The Commission had wanted to provide solid protections for Antimony Creek and the Upper Indian River, but the mining claims there proved too big of a hurdle.

Let’s stay in the Dawson Region. The Fortymile caribou herd spends summers in the mountains west of Dawson, and depends on alpine ridgelines to feed, migrate and avoid predators. The Recommended Dawson Land Use Plan proposes strong protections for the heart of the herd's range in Wëdzey Nähuzhi, or the Matson Uplands. However, the boundaries are drawn so as not to include quartz mining claims.

This appears to be a well-intentioned effort to conserve the maximum amount of caribou habitat without infringing on mining claims. But put another way, mining claims are determining which parts of the Fortymile caribou herd’s range get the strongest protections. That's putting the cart before the caribou.

We need to replace the Yukon’s old free-entry staking system with a process that recognizes mining is not always the best use of land. A new system must align with the Final Agreements and Aboriginal rights, and require the free, prior and informed consent of First Nations. One option would be for First Nations and the Yukon government to agree to where mineral staking is acceptable, and only allow staking on these lands. New mining laws should also clarify what happens when mining claims that are expropriated, such as claims within newly protected areas. It’s reasonable for claim holders to know what compensation they could expect—such as refunding the fees paid or expenses incurred over the life of a claim.

Filling out the  Yukon government’s survey  on mining legislation?  Give your feedback on claims and staking under the “Disposition and Acquisition” section, questions 2.1 to 2.4.

Mineral exploration

After staking claims, the next stage in mining is exploration. Exploration spans a wide spectrum of work, from small-scale activities like collecting rock samples at the surface, all the way up to building roads, helicopter pads and work camps, drilling, using explosives, and excavating up to two hundred thousand tonnes of rock.

Most exploration projects never progress to a fully fledged mine, but exploration can still be damaging. Exploration work in the Klondike Plateau, stretching back decades, has left spiderwebs of scars across mountain slopes that persist to this day. In 2021, an exploration company working on the Michelle Creek claims in the Peel Watershed dropped a 200 litre fuel drum from a helicopter, bursting on impact.

Over the past few years there’s been a lot of focus on mining exploration in the Tsé Tagé (Beaver River) Watershed, northeast of Mayo. That’s where ATAC Resources wants to build a 65 kilometre access road to their mining claims, and where Metallic Minerals Corporation applied for a 10 year exploration permit for another remote and wild part of the watershed.

In January the Yukon Supreme Court found that the Yukon government failed to appropriately consult the First Nation of Na-cho Nyäk Dun when it approved exploration work, but the Yukon has appealed the ruling. At the heart of Na-cho Nyäk Dun’s case is how mining exploration threatens to transform lands that are still awaiting land use planning.

Mining exploration can leave lasting impacts, and these projects need to be taken very seriously, especially in areas without land use plans. First Nations should have a leading role in determining where advanced exploration can occur.

There are many sections of the  Yukon’s mining survey  related to exploration: such as questions about licensing, reclamation, and whether holding a mining claim should provide a legal right to exploration work.

Mining Royalties

Royalties are meant to be part of the social contract between mining companies and the public. In return for the privilege of extracting valuable minerals from the earth, companies should return a share of the profits to the public. Except in the Yukon, where companies extract resources and often pay few royalties back.

The Yukon’s Placer Mining Act requires placer operators to pay 37.5¢ an ounce in royalties. That’s because the Placer Mining Act assumes that gold is worth $15 an ounce, its value during the Gold Rush. Today gold is worth around $2500 an ounce.

 _{Image: Placer mining on the Indian River.} 

Royalties for quartz mining are hardly better. The Yukon’s Quartz Mining Act only requires royalty payments once a mine starts to turn out a profit, which can take years to happen, if at all. The Wolverine Mine paid a total of $0 in royalties to the Yukon public over its operating life, before Yukon Zinc went bankrupt and left Yukon taxpayers on the hook for cleanup costs that have already reached $12 million.

Even for profitable mines, the Yukon doesn’t receive much back in royalties. A company can generate up to $1 million dollars in revenue while paying just 3% back in royalties. (An individual earning the same amount would pay 33% income tax). Royalty rates incrementally increase with higher revenues, until $35 million, when royalty rates are capped at 12%. The Yukon’s royalty rates are so low that the territory often generates more revenue from camping fees than from mining royalties.

The Yukon should get reasonable royalty payments. It’s not only about fairness—requiring higher royalty rates could also ensure that mining projects in the Yukon are more financially viable. If companies can’t afford higher royalty rates at the outset, then they might also be at greater risk of insolvency down the line.

How would you improve the royalty system in the Yukon? Give your feedback on royalties in questions 7.1 and 7.2 of the  Yukon’s mining legislation survey .

Security and abandonment

The Wolverine Mine opened to much fanfare. The Yukon’s EMR Minister predicted a  “great future”  for Wolverine, and the Yukon government awarded Yukon Zinc consecutive awards for responsible mining practices at Wolverine. But barely four years after Wolverine opened, Yukon Zinc, the mine’s parent company,  collapsed amid falling metal prices. Wolverine went into temporary closure in 2015.

The Yukon government was slow to grasp the urgency of the situation. A contractor warned in 2015 of dangers at Wolverine, including flooding in the mine’s underground caverns. The contractor recommended installing bulkheads to stem floodwater, but a prolonged back and forth between Yukon Zinc and the Yukon government over design meant that the bulkheads weren’t ever built. By June 2017 water had engulfed the entirety of the underground mine.

Yukon Zinc was required to build a water treatment plant for use during the mine’s final closure, but the plant hadn’t been built yet when the company’s finances collapsed. Without a water treatment plant, contaminated floodwater had to be pumped into tailings ponds, skyrocketing the costs of remediation. The Yukon government reassessed the costs of cleanup at over $35 million, but Yukon Zinc failed to pay anything beyond the initial $10 million in security it had initially provided.

The story of the Wolverine Mine leaves the Yukon with many hard lessons. The Yukon’s new mining laws need to include guardrails to ensure that another Wolverine can’t happen again.

The global accounting firm PWC analyzed the pathway to disaster at Wolverine. PWC found that the Yukon’s mining framework “does not include an assessment of companies’ financial risk.” As a result, the Yukon government was unaware of “the extent to which the Wolverine Mine was sensitive to changes in metal prices.”

Had the Yukon government fully grasped the financial fragility of Yukon Zinc it could have required a higher security payment at the outset of mine development, and stepped in sooner to take control of flooding and water treatment at the mine. PWC wrote that financial assessments “must be a pre-condition of licence approval” and that the Department of Energy, Mines and Resources “should have the right to deny a license based on the findings of the risk assessment in order to limit their potential liabilities.” This would require changes to the Yukon legislation.

Environmental risks and cleanup costs need to be secured from the beginning. A mining company’s finances need to be comprehensively assessed during the licensing phase for quartz mines. Companies with moderate financial risk should be required to post higher security in advance. Companies with high financial risk should not be permitted, unless they can find more robust mining companies to underwrite their projects. 

Let’s make sure a disaster like Wolverine never happens again. Several parts of the  mining legislation survey  are relevant, including questions 4.1 and 4.2 (Licensing) and questions 6.1 to 6.3 (Financial security).

Reclaiming mines

Reclamation and closure is meant to be the final chapter in mining, but the story lives on. While words like reclamation and restoration allude to putting the land back together to the way it was before, in practice that is all but impossible. For example, reclaimed placer mines in the Indian River are interspersed with shallow ponds and revegetated hummocks of old tailings, whereas the wetlands that were there before were flat and meandering, with layers of carbon-rich peat. In spite of the best reclamation efforts, natural peatlands can’t be restored, and much of the carbon they store is lost to the atmosphere.

We need to establish clearer rules for reclamation, ensure they are enforced, and tie a company's track record of reclamation to their ability to get permits and undertake future projects. Still, there should be clear understanding at the outset that regardless of reclamation work, the land won’t ever be the same after it’s mined. As a reclamation researcher put it, “ Yukoners need to know likely reclamation outcomes, not ambiguous or aspirational ones .”

Send in your thoughts about reclamation in section 8 of the  Yukon’s mineral legislation survey .

The Yukon’s recent history is inextricably linked with mining. It’s a history that lives on in textbooks and museums, but also in the legacies that mining has engraved into the land: like the Faro Mine, Wolverine, or the scars of mining roads that could take generations to heal. 

Many of the toxic legacies of mining that the Yukon lives with were perfectly legal under the rules of the day, and those laws grow even more outdated with each passing day. It’s critical for the Yukon to reimagine its mining laws and align them with the Final Agreements and the principles of free, prior and informed consent. Let’s usher in a new era of more responsible and more accountable mining in the Yukon.

 Give your input on the Yukon's mining laws by May 9th! 

 _{Main image: old placer mining equipment.}