Financial collapse of Caribou mine owner raises alarm over potential cleanup cost

The Caribou mine site is about 55 kilometres southwest of Bathurst. Production was halted last summer and most of its employees were laid off.  (François Lejeune/Radio-Canada - image credit)
The Caribou mine site is about 55 kilometres southwest of Bathurst. Production was halted last summer and most of its employees were laid off. (François Lejeune/Radio-Canada - image credit)

Opposition politicians are voicing alarm at the prospect of New Brunswick paying cleanup costs for the Caribou mine following the financial collapse of Trevali Mining Corp.

Earlier this week, a judge approved placing Trevali's New Brunswick division in receivership, a process to liquidate assets to pay creditors.

Mining was suspended last year, almost a decade after Trevali became the latest company to mine the site since the 1960s.

"We already have one environmental mess in Bathurst that we're trying to fix," said René Legacy, the Liberal MLA for Bathurst West-Beresford, referring to a former mill site in the city.

"We don't need a second one."


The Caribou site southwest of Bathurst covers about 2,000 hectares and includes an underground mine, open pit mining sites, a mill, tailings ponds and dams.

The provincial government has yet to answer any questions about its role at the zinc mine and how much it could cost to remediate the site.

Company documents suggest the cost could be more than $49 million. Court filings say the province has several million on hand from Trevali to cover cleanup, but it's not clear if this would be sufficient.

Trevali's collapse and the failure to find a buyer for Caribou last fall has led to the province taking a direct role at the mine site, including renting equipment.

Court filings say the province plans to use a contractor to secure the mine site and continue environmental tasks after Trevali staff are terminated.

Receivership does not necessarily mean an immediate cleanup of the site and there is still the possibility another company may buy the mine. However, the province has indicated in court filings it will use the coming weeks to prepare a reclamation plan.


"My concern is that once again, the province of New Brunswick is going to be stuck with having to manage the environmental cleanup and ongoing water treatment at another mining operation, or defunct mining operation, in New Brunswick," David Coon, the leader of the New Brunswick Green Party, said in an interview.

Coon said the province needs to change the Mining Act to make sure shareholders take on greater environmental liability.

New Brunswick requires providing financial security, such as cash or reclamation bonds, to the government that could cover the estimated cost of mine closure and reclamation.

The Department of Natural Resources and Energy Development had a cash security worth $3.9 million US at the end of 2021, according to a statement by Trevali's chief financial officer filed in court last summer. It's unclear if the amount has changed since then.

The statement says a further $5.2 million US in reclamation bonds and $2.5 million US in letters of credit were also posted with the province. It wasn't clear if those would have any value given the company's financial status.

Various documents reviewed by CBC News show different potential cleanup costs for the mine site.

The 2018 report pegged the cost at $12.5 million US.

However, a Trevali financial statement published last March puts environmental rehabilitation, mine closure and reclamation activities at $36.7 million US. That's about $49 million Canadian at the current exchange rate.

The 2018 estimate included reclamation of the site, construction of a new dam, and water treatment for three years. The report says the new dam would address "rehabilitation of historical liabilities."

Province won't comment

CBC News has asked the province for an interview several times since last Friday about the liability issue and what funds the province has for reclamation. Nick Brown, a spokesperson for the province, said it won't comment at this point.

Louise Comeau, director of climate change and energy solutions with the Conservation Council of New Brunswick, said the government should be more transparent about what's happening.

Comeau wonders whether the remediation bond would be sufficient and if money set aside for cleanup is now being used already for the equipment rental.

"If we don't have a bond, they're in contravention of their own legislation," Comeau said of the province.

"If we do have a bond and it's not adequate, then the government once again failed in its duty to ensure that the company posted a bond adequate to the liabilities that we face."

Jacques Poitras/CBC
Jacques Poitras/CBC

Trevali bought the mine in 2012 and within months announced an agreement with the provincial government that says the province is financially liable for the cleanup costs related to the historic mine operations.

The agreement means "approximately two-thirds of the environmental liability at the Caribou mine is held by the province of New Brunswick, with Trevali NB being liable for the remaining one-third," says the statement from the chief financial officer.

A 2018 report for the company about the mine says the province's liability agreement relates to an open pit, a waste rock storage area and old tailings ponds dating back to when Anaconda Canada Exploration Ltd. mined at the site decades ago.

"Historical mining activities at the site have severely affected portions of North and South Branch Forty Mile Brook," the report states of waterways on the site.

"Well and surface monitoring data show a direct correlation between the historical Anaconda tailings and elevated metal concentrations and low pH values found in Forty Mile Brook."

One of the primary concerns the province expressed in recent court filings about Trevali going bankrupt or into receivership was the need to treat acidic water at the mine and to pump water out of the underground portion of the mine.

The filings say that without security, there was a risk thieves could interrupt the mine's power supply and halt water treatment, which could cause environmental damage.

Coon said it's alarming the province hasn't visited the mine site recently to monitor environmental compliance and has instead been trusting the company for dam inspections and monitoring tailings ponds.

"You've got Forty Mile Brook there, which is an important watercourse hooked into the Nipisiquit watershed, you've got a lot of wetland," Coon said. "So there's a serious environmental concern around that, and that means that for the foreseeable future, a water treatment system has got to be maintained.

"The dam on the tailings pond has to be inspected regularly and that's all going to fall to the province — and Lord knows what happens if the dam deteriorates."

Jacques Poitras/CBC
Jacques Poitras/CBC

The 2013 agreement between Trevali and the province was heralded by then-energy and mines minister Craig Leonard.

"This is an important milestone in the Trevali project and will bring it one step closer to creating many jobs in Bathurst region," Leonard said in a news release. "At the same time it will be critical in helping to protect the environment for many years to come."

Coon said the history of the mine, including stop-and-start production by various companies and a previous bankruptcy, should've been a warning sign to the government.

"It was dumb, just dumb to do that," Coon said of the agreement.

"We're not talking about something like Brunswick Mines, where you had a rich deposit of minerals there which lasted for 50 years and then eventually where it was played out," he said.

"This one, it has been up and down and just hasn't had the richness of ore that seems to be able to sustain it for the long-term."