You have decided to invest in a new metal mine in Canada. The reports tell of great ore reserves, a favorable political climate, and funding enough to make it through the regulatory process. As I note below, however, there is one other factor you should investigate before putting money into share in a new Canadian mine. Ask hard questions about where the mine intends to place their tailings. In particular, if they plan to put their tailings in a lake, take a hard look at their prospects.

Keep in mind that many a Canadian mine puts their tailings into a local lake and that such a practice is generally very cost-effective. Yet there is developing debate about this practice that may hold up the mine you invest in and delay or reduce your returns. Let us consider the issues below in further detail.

A new report from the Globe and Mail states that sixteen Canadian mining companies have applied to dispose of mine tailings in lakes across the country. The report concludes:

Byng Giraud, vice-president of policy and communications for the B.C. Mining Association, six of whose members are among the companies applying for permits, said putting tailings in bodies of water is often the best option available. We have some of the best environmental scientists in the world on this and certainly we work closely with [the Department of Fisheries and Oceans] and environmental assessment to determine what uses are the best, he said.

Conversely critics say:

When environmental legislation was changed to prohibit mining companies from using lakes as tailings ponds an exception was created for companies already doing so, said John Werring, a salmon conservation biologist with the David Suzuki Foundation’s Marine and Fresh Water Conservation Program. Now new mining initiatives are trying to do the same thing, he said. It’s absolutely outrageous that the government is even considering turning pristine lakes into tailings ponds, especially when everyone’s being told you have an onset of global warming and the need to conserve water, he said.

Placing tailings in lakes in the United States is simply not done. Whether this is because of stronger water-protection laws or because there are fewer lakes, is a matter of debate. I suspect it is the absence of the plethora of lakes that characterizes the Canadian landscape.

The alternatives to lake disposal include: not mining in the first place; underground mine backfill; open pit backfilling; behind a large earth dike in a nice deep valley; on a flat piece of nearby land; or cementing the whole mass into a new tumulus as durable as the pyramids of the pharos.

If it is impractical to put all the tailings back underground or in the open pit (generally the case as a result of bulking of the rock on removal from the stopes), then in-lake disposal nicely meets the criterion for long-term geomorphic stability.

There are water quality issue involved. In most instances the lake is put out of operation. I believe, although I have no substantive technical basis for my belief, that the long-term impact on water quality from in-lake disposal is likely to be far less than from even the best designed and constructed above-grade facility. While costly, there are however, many things the metallurgist can, and should, do to their waste, i.e., tailings, before discharging them to lakes so that the probability of long-term water quality impact is significantly reduced or better still eliminated.

The question of whether an individual mine should be allowed to use a local lake is of course not simply a debate about where to put the tailings. The debate is more about the fundamental questions, including: the need for the mine and its minerals from this particular deposit; the impact of economic development versus detriment to the environment; the cost of alternative disposal options; the long-term consequences such as the probability that the tailings will wonder off into the downgradient rivers and lakes as pharaonic time elapses; and the laws and regulations that open debate have put into place.

It is not possible to predict the outcome of this debate and the possible consequences to mine development and investment opportunities, but I must advise that you pause to consider the implications before being lured into investing simply because the ore body is rich and the politician helpful.