Please find attached EC s cover letter and excel comment table for CZN s applications at Prairie Creek (MV2008D0014, MV2008T0012 & MV2008L2-0002).

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1 From: To: Cc: Subject: Date: Attachments: McMillan,Sarah-Lacey [Yel] Forbrich,Susanne [Edm]; Ogilvie,Carey [Yel]; Lowman,Lisa [Yel] MV2008D0014 MV2008T0012 MV2008L CZN - EC Comments Thursday, November 08, :40:58 AM CZN - Praire Creek Mine - EC Comment Letter.pdf ECCommentsCZNPrairieCreekWLLUPApplicationNov pdf Hi Julian, Please find attached EC s cover letter and excel comment table for CZN s applications at Prairie Creek (MV2008D0014, MV2008T0012 & MV2008L2-0002). Lisa Lowman is on holidays until November 19 th, in the interim, if you have any questions please feel free to contact me. Thanks, Sarah-Lacey McMillan Environmental Assessment Coordinator Coordonnatrice d'évaluation environnementale Environmental Protection Operations Activités de protection de l'environnement Environment Canada Environnement Canada 5019, 52 Street 5019, rue 52 P.O. Box 2310 C. P Yellowknife (NT) X1A 2P7 Yellowknife (NT) X1A 2P7 sarah-lacey.mcmillan@ec.gc.ca Telephone Téléphone Facsimile Télécopieur Government of Canada Gouvernement du Canada Website Site Web From: Julian Morse [mailto:jmorse@mvlwb.com] Sent: Friday, September 28, :34 PM To: rdiaz@dmcsltd.net; kris@cpaws.org; R_vprafke@sasktel.net; ejanes@cpaws.org; earl@canadianzinc.com; tcarey@sunsteinlaw.com; joachimb@dehcholands.org; sophieb@dehcholands.org; chief@dehgahgotie.org; ria_letcher@dehcho.org; dahti_tsetso@dehcho.org; lmandeville@denenation.com; Rick.Walbourne@dfo-mpo.gc.ca; Lorraine.Sawdon@dfo-mpo.gc.ca; sao_enterprise@northwestel.net; EANorthNWT [Yel]; chief@dehgahgotie.org; pvmetis@ssimicro.com; Gnwt_ea@gov.nt.ca; Rhonda_Batchelor@gov.nt.ca; Patrick_Clancy@gov.nt.ca; Duane_Fleming@gov.nt.ca; Amy_Lizotte@gov.nt.ca; Russell_Teed@gov.nt.ca; Mark_Davy@gov.nt.ca; Glen_Mackay@gov.nt.ca; web@fortliard.com; susanc@ssimicro.com; hrmc@northwestel.net; intergov@aandc.gc.ca; MDD@aandc.gc.ca; PDD@aandc.gc.ca; consultationsupportunit@aandc.gc.ca; Julian.Kanigan@aandc.gc.ca; Krystal.thompson@aandc.gc.ca; Charlotte.Henry@aandc.gc.ca; Scott.Stewart@aandc.gc.ca; Charlene.Coe@aandc.gc.ca; Robert.Jenkins@aandc.gc.ca; Nathen.Richea@aandc.gc.ca; CAU-UCA@aandc.gc.ca; greenash@comcast.net; joeacorn@theedge.ca; kakisalloyd@hotmail.com; ktctribalchief@northwestel.net; landsnresources@katlodeeche.com; chief@liidliikue.com; chief@nahadeh.org; receptionist@nahadeh.org; lands@nsma.net; Matthew.Spence@cannor.gc.ca; Kate.Witherly@cannor.gc.ca; rcc.nwtmn@northwestel.net;

2 Cc: 'Permits'; 'Amanda Gauthier - MVLWB' Subject: MV2008D0014 MV2008T0012 MV2008L CZN - Items for Review - Directive Response Please find the attached letter regarding Canadian Zinc Corporation s first set of responses to the MVLWB s May 11, 2012 Directive. This document forms a part of the review for the three files (MV2008D0014 MV2008T0012 MV2008L2-0002) associated with CanZinc s application for a mine and transfer facility at Prairie Creek. Comments are due on November 8, Please contact me if you have any questions, thank you. Julian Morse Regulatory Officer Mackenzie Valley Land and Water Board 7th Floor, th St. PO Box 2130 Yellowknife, NT Canada X1A 2P6 ph mobile fax jmorse@mvlwb.com Please note: All correspondence to the Board, including s, letters, faxes, and attachments are public documents and may be posted to the Public Registry.

3 1+1 Canada Environment Environncmcnt Canada Environmental Protection Operations Prairie and Northern Region nd Street, 4th Floor P.O. Box 2310 Yellowknife, NT. X1A 2P7 November 8th 2012 EC file: MVLWB files: MV , MV2008T0012, MV2008L Julian Morse, Regulatory Officer Mackenzie Valley Land and Water Board ih Floor, th St. Yellowknife, NT X1A 2P6 Via Attention: Mr. Morse RE: Type A WL Application, MV2008L and Type B LUPs MV2008D0014 & MV2008T Canadian Zinc Corporation, Prairie Creek Mine Site NT Environment Canada (EC) has reviewed the above-mentioned applications submitted by Canadian Zinc Corporation (CZN) to the Mackenzie Valley Land and Water Board (MVLWB) and provides comments in the attached excel table. In addition, EC also provides comments related to CZN's Geochemical Characterization Report (April 2008) for your consideration. EC's contribution to your request for specialist advice is based primarily on the mandated responsibilities of the pollution prevention provisions of the Fisheries Act, the Species at Risk Act, the Canadian Environmental Protection Act and the Migratory Birds Convention Act. Please note that EC was unable to complete the review of water-related issues, however will bring questions to the technical sessions and will endeavor to provide these to the Proponent as soon as possible. As well, please note that comments on the Draft Wildlife Management Plan are based on the April 2012 version (as an update has not yet been provided). Canada Page 1 of 2

4 In closing, should you require further information, please do not hesitate to contact Lisa Lowman at (867) or via at Sincerely, Original signed by Sus ne Forbrich Manager, Environmental Assessment and Marine Programs Prairie and Northern Region Environment Canada Attachment cc: Carey Ogilvie (Head EA-North, EA and Marine Programs Division, EC) Lisa Lowman (Senior EA Coordinator, EA and Marine Programs Division, EC) EC Expert Review Team Page 2 of 2

5 GENERAL INSTRUCTIONS FOR EXCEL TEMPLATE: 1. Do not leave blank rows above or between comments. 2. Do not modify or delete the instructions or the column headings (i.e. the grey areas). 3. Each comment must have an associated topic and recommendation. 4. All formatting (i.e. bullets) will be lost when this file is uploaded to the Online Comment Table. 5. If necessary, adjust the cell width and height in order to view all text. 6. Cutting and pasting comments from WORD documents cannot include hard returns (spaces between paragraphs). 7. If you would like to create paragraphs within a single cell, please use a proper carriage return (ALT & ENTER). App #: MV2008T0012, MV2008D0014, MV2008L Review of: Canadian Zinc Corporation Work Plan and Consolidated Project Description (CPD) Reviewing Agency: Environment Canada (EC) Date: November 8, 2012 TOPIC COMMENT RECOMMENDATION Be as specific as you think is appropriate; for example a section or page of the document, a recommendation #, general comment, etc. Comments should contain all the information needed for the proponent and the Board to understand the rationale for the accompanying recommendation. Recommendations can be for the proponent or for the Board. Recommendations should be as specific as possible, relating the issues raised in the "comment" column to an action that you believe is necessary. Section 2.6 "Mine Waste Management", Subsection "Waste Rock", Page 40 and Figure 2-14: Waste Rock Pile; Conceptual Layout, Page 41 of the CPD Section 2.6 states: "The specific location of the Waste Rock Pile (WRP) is 400 m to the north of the 930 level portal in a ravine on the north-west slope of the Harrison Creek valley. The WRP location and design is shown in Figures 2-11 and The design includes upslope clean runoff diversion around the pile, and pile leachate collection during operations in a seepage collection pond. A cut-off trench will be installed at the toe of the pile to either force seepage to surface for collection, or collect it directly and feed it into the seepage collection pond. The collected water will be routed via pipeline (to the main site) or via borehole (to the underground) into the overall site water management system. " EC recommends the Proponent continue to monitor the collection from the "cut off" and diversion channels to ensure that the run off is not flowing through the waste rock pile. Section 2.10 "Aggregates", Page 80 of the CPD Section 2.10 states: "Additional requirements would be provided by borrow sources along the Sundog Valley and at the Grainger Gap consisting of talus material above the high water mark. For each fill location, the volume of borrow will depend on cut volumes nearby." EC recommends the Proponent assess the borrow materials for acid generating potential. EC also recommends the Proponent ensure the borrow materials are not acid generating. Section 2.4 "Camp Facilities", Subsection "Garbage Incineration", Page 31 of the CPD Attachment 24, "Draft Incineration Management Plan" CZN is planning to incinerate waste at the mine site and has provided a Draft Incineration Management Plan. EC seeks further detail on the management plan including the following areas: equipment selection, operator training, operational procedures, stack testing and contingency plans. EC recommends the Proponent finalize the Incineration Management Plan in consultation with EC and the GNWT prior to the water licence hearing. EC recommends the Board include the implementation of the Incineration Management Plan as a measure under the water licence. Attachment 15, "Draft Contaminant Loading Management Plan" CZN has provided a Draft Contaminant Loading Management Plan. EC seeks further detail on the management plan including the following areas: mitigation options, contingency plans and additional monitoring (i.e. snow sampling, dustfall, ambient TSP). EC recommends the Proponent finalize the Contaminant Loading Management Plan in consultation with EC and the GNWT prior to the water licence hearing. EC recommends the Board include the implementation of the Contaminant Loading Management Plan as a measure under the water licence. Widlife Mitigation and Monitoring Plan (WMMP) April 2, 2012 (Attachment 3 in April 5, 2012 Application Additional Information) EC notes that CZN s Commitment #101 states that the WMMP will be updated during the permitting process and will be further discussed in the forum of the Technical Advisory Committee. The April 2, 2012 draft of the WMMP does not appear to have been substantially updated from the February 23, 2011 draft that was submitted as part of the environmental assessment process. EC is also not aware of any meetings of the Technical Advisory Committee to discuss the draft WMMP. EC recommends that the Proponent meet with the Technical Advisory committee to discuss comments on the draft WMMP. These comments should be addressed in an updated WMMP to be submitted to the Board prior to issuance of the land use permits and water licence.

6 TOPIC COMMENT RECOMMENDATION Be as specific as you think is appropriate; for example a section or page of the document, a recommendation #, general comment, etc (Attachment 3 in April 05, 2012 Application Additional Information) - Section Waste Management and Camp Infrastructure Organization Comments should contain all the information needed for the proponent and the Board to understand the rationale for the accompanying recommendation. The Waste Management Plan and/or WMMP should include monitoring of waste facilities for the presence of wildlife signs indicating attraction to wastes as well as auditing of waste streams to ensure that wastes are properly segregated and disposed of. Although this concern is somewhat addressed in Section of the WMMP, there is no indication of the frequency with which areas will be inspected for wildlife signs. Recommendations can be for the proponent or for the Board. Recommendations should be as specific as possible, relating the issues raised in the "comment" column to an action that you believe is necessary. EC recommends that the Proponent provide more a detailed description of the frequency, timing and methods for monitoring waste facilities and camp infrastructure and auditing of waste management practices. The WMMP should include a sample data sheet for inspections of waste management facilities and camp infrastructure. Additional Information) - Section 5.4 Management of Toxic Substances - last bullet. Additional Information) - Section 5.4 Management of Toxic Substances - last bullet. More detail is required on the timing and frequency of water storage pond inspections for their use by waterfowl and waterbirds. There should be a schedule for regular monitoring of the water storage ponds (including the 2nd proposed water storage pond which may or may not be constructed) during times of the year in which migratory birds are present in the area. During an EC visit to the site earlier in the year, it came to EC's attention that water within the existing polishing pond may contain potentially elevated ph and zinc concentrations which could pose a safety risk for humans and may also pose a risk to wildlife. Currently there is no barrier to prevent wildlife from gaining access to the polishing pond. EC recommends that the Proponen provide a more detailed description of the frequency and timing of inspections of the water storage ponds for their use by waterfowl and other waterbirds. EC recommends that the Proponen install a barrier around the perimeter of the polishing pond and install deterrent devices to prevent wildlife and migratory bird access to the area until it is decommissioned. Additional Information) - Section Traffic Management - last bullet. The Proponent states that a 20 m buffer will be used to protect active birds nests if they are found during inspections of the access road prior to maintenance work occuring during July to September. This setback distance is too small to adequately protect the nests of most migratory birds from disturbance, especially those desginated as species at risk. EC also notes that the Barn Swallow was recently assessed by COSEWIC as a Threatened species, and the range for this species overlaps with the Prairie Creek mine site and access road. EC recommends that the Proponen use the following setback distances to protect the migratory birds nests: Migratory birds : Songbirds 30 m Waterfowl 100 m Gulls/Terns 200 m Species at Risk : Olive-sided Flycatcher, Rusty Blackbird 300 m Common Nighthawk 200 m Barn Swallow 100 m Horned Grebe 100 m from the high water mark of the wetland or waterbody containing a nest For birds that are not listed under the Federal Migratory Birds Convention Act (e.g. raptors, ravens), the Proponent should consult with the GNWT-ENR for recommended setbacks (some of these are outlined in Table 6 of AANDC s document Northern Land use Guidelines Northwest Territories Seismic Operations ) Consolidated Project Description - Section Camp Facilities. Section 2.4 of the Consolidated Project Description states that the kitchen and accomodations trailers will be demolished and replaced. Demolition or removal of existing infrastructure may pose a risk of disturbing or destroying the nests and eggs of migratory birds that may nest on existing infrastructure. Incidental disturbance or destruction of nests and eggs of migratory birds is prohibitted under Section 6(a) of the Migratory Bird Regulations. EC recommends that demolition/removal of existing infrastructure be conducted outside of the migratory bird breeding season (May 7 - August 10). If demolition cannot be scheduled outside the breeding season, EC recommends that areas be inspected for the presence of nests prior to demolition. If an active nest is found the area should be avoided using an appropriately sized buffer zone until nesting is complete (i.e. young have left the nest).

7 TOPIC COMMENT RECOMMENDATION Be as specific as you think is appropriate; for example a section or page of the document, a recommendation #, general comment, etc. Comments should contain all the information needed for the proponent and the Board to understand the rationale for the accompanying recommendation. Recommendations can be for the proponent or for the Board. Recommendations should be as specific as possible, relating the issues raised in the "comment" column to an action that you believe is necessary. Additional Information) - Section Data Analysis and Reporting. Section of the WMMP states that all wildlife reports will be submitted to First Nations, GNWT ENR and Parks Canada whereas CZN Commitment #120 states that reports will also be submitted to EC. EC recommends that the wildlife monitoring reports also be submitted to EC. Section should be updated to include EC in the list of agencies to which wildlife reports are submitted. Additional Information) - Section 8.1 Mortality Thresholds. Section: 3.2.1: 2005/2006 Program. Wall Washing, (Page 7). Section 8.1 of the WMMP states that all project-related wildlife mortality will be included in a report submitted to First Nations, GNWT ENR and Parks Canada. The Proponent states that, Two mine wall washing stations were installed on the 930 Level underground workings to provide an estimate of underground reaction rates and secondary mineral formation". Given that the mine site and portions of the access road lie outside the Nahanni National Park Reserve boundary and that EC has a mandated responsiblity for migratory birds under the Migratory Birds Convention Act, it is recommended that EC also be notified in the event there is project-related mortality of a migratory bird (e.g. waterfowl or other water birds using the Water Storage Pond). EC requests further clarification: EC acknowledges that the test is a legitimate test; however, does an underground condition truly represent the surface weather conditions that the waste rock will be subjected to when left on the ground surface? The resident time for wash water on the wall rock surface is very short, therefore it is uncertain if this method will provide a meaningful result. Section: Acid-Base Accounting (Page 15). Section states that ABA results indicate that all host and waste rock material had available buffering capacity within the samples with near-neutral to alkaline paste ph values ranging between 7.3 and 9.9. Most samples in the data set had ph values greater than 9.0". EC requests further clarification: How does the Proponent plan to ensure that the ph stays within the prescribed limits of 6.0 to 9.5? Section Acid Generation Classification (Page 28). Section states that, More specifically, as illustrated in Figure 4.10, 62% of MQV and 71% of SMS samples classified as PAG. For MQV, the remaining samples (38%) classified as having uncertain potential for acid generation. All MQV samples would classify as PAG if calculated-sulphide rather than pyriticsulphide was used to calculate AP. However, the use of calculated-sulphide is considered overly conservative since galena and sphalerite do not typically generate acid as a byproduct of oxidation. For SMS, the remaining samples (29%) classified as non-pag due the higher abundance of NP in the samples; however, these samples were treated as uncertain due to their substantial sulphur content and uncertainty in effective NP. Although the predominant acid generation is pyrite (FeS). PbS and ZnS, in contrast to the oxidation of pyrrhotite, the oxidation of pure galena and sphalerite by themselves will not lead to acid mine drainage, however, they are soluble at low ph and release metals in solution, and as such similar mitigative measures should apply. In addition, the MQV samples are classified as uncertain. The same precaution applied to the PAG samples should also apply to the 38% classified as uncertain. EC is pleased to see that the Proponent is using the calculated-sulphide as the PAG & non-pag decision. EC recommends that similar mitigative measures for pyritic sulphide apply to PbS and ZnS. In addition, with respect to the MQV samples that were classified as uncertain, EC recommends that the same precaution applied to the PAG samples should also apply to the 38% classified as uncertain. EC is however pleased to see that the Proponent is using the calculated-sulphide as the PAG & non-pag decision.

8 TOPIC COMMENT RECOMMENDATION Be as specific as you think is appropriate; for example a section or page of the document, a recommendation #, general comment, etc. Section: Waste Rock (Page 51). Comments should contain all the information needed for the proponent and the Board to understand the rationale for the accompanying recommendation. Section states that, Because the waste rock is expected to be net acid consuming (i.e. non-potentially acid generating) but potentially metal leaching, the objective of the soil cover will not be to limit acid generation, but to restrict the formation and discharge of leachate. The cover is intended to promote the runoff of rainfall and snowmelt and limit potential infiltration to the waste rock and resultant discharge of leachate. Recommendations can be for the proponent or for the Board. Recommendations should be as specific as possible, relating the issues raised in the "comment" column to an action that you believe is necessary. EC requests further clarification: EC is unclear from the above statement if the Proponent plans to collect any leachate for treatment should there happen to be water infiltration despite the soil cover. Section: Ore (Page 52). Section states that, The results of ore characterization suggest that the ore does have the potential for acid generation and metal leaching; therefore, should it be intended that ore stockpiles remain on surface during operations, they should either be covered or capped to minimize the ingress of oxygen and water infiltration, or placed on a lined pad with collection of surface water runoff. It is unclear from the above statement as to whether the Proponent s commitment is to cover or cap in order to minimize the ingress of oxygen and water infiltration, or to place the material on a lined pad with collection of surface water runoff. EC recommends that the Proponent make a commitment to implement one of the stated options and collect and treat any resulting leachate.