How does remediating Giant Mine cost $4.38 billion?
Giant Mine was always going to be expensive. When the mine closed and the federal government had to step in, an initial 2010 estimate put remediation of the former gold mine at $1 billion.
But last fall, an updated estimate suggested the price tag is now $4.38 billion, more than quadruple the previous figure, and the work will now take until at least 2038.
Remediating the mine, which is on Yellowknife’s doorstep, involves freezing 237,000 tonnes of toxic arsenic trioxide dust – a byproduct of the gold roasting process – in chambers beneath the mine, alongside a range of other activities associated with cleaning the site to the highest standard possible.
Following the Giant Mine Remediation Project’s annual public forum earlier this month, Cabin Radio requested a breakdown of the project’s costs to better understand how the estimated cost of that work increased by more than $3 billion.
According to figures provided by project deputy director Natalie Plato, by far the biggest increase comes from the direct cost of remediation activities.
As of the latest estimate, Plato said in an emailed response, remediation costs increased by $2.4 billion. With a more detailed plan now in place, the project scope has broadened to include treating mine water to drinking-water standards for arsenic, filling all open pits, covering tailings, relocating a pond, treating a large amount of contaminated soil than was originally estimated, and using more borrow material (soil or sand removed from one place to act as fill material somewhere else).
The project timeline has been extended by nine years, in part to ensure that northerners have the capacity to bid on and participate in the work, an extension that Plato said will cost an estimated $196.3 million in extra program management costs and even an added $150.7 million in GST alone.
The care and maintenance estimate increased by $227.8 million, Plato said, mainly due to the extension of the project’s schedule, additional requirements for site stabilization and underground care and maintenance.
Estimated consultation and engagement costs rose by $96.6 million, a figure that includes a community benefits fund of up to $20 million agreed with the Yellowknives Dene First Nation in 2021.
Monitoring costs are expected to cost $163.7 million more than the 2010 estimate.
Finally, costs associated with research activities increased by $19.1 million, Plato said, and regulatory costs rose by $55.9 million due to increased reporting requirements.
Plato said the Giant Mine remediation team and Parsons, the contractor that serves as the main manager of work at the mine, had put together the overall estimate “using industry best practices, lessons learned across projects and required processes.”
She said the estimate was also “validated by an independent third-party expert in mine reclamation,” adding that the estimate will inform budget forecasting throughout the project’s lifetime.
This article is produced under a Creative Commons CC BY-ND 4.0 licence through the Wilfrid Laurier University Climate Change Journalism Fellowship.