Fool’s gold: the resource curse strikes Nova Scotia (Part 1)

There’s a 21st century gold rush starting in Nova Scotia on Canada’s Atlantic coast, just as industrial gold mining is increasingly coming into disrepute around the world. It has been described as an “environmental disaster,” which often leads to contamination of water sources on which life depends. This is the first in a series of four articles on mining and quarrying in Nova Scotia. Earlier versions of these articles appeared in May and June 2018 in the Halifax Examiner and the Cape Breton Spectator.

Part 1. Welcome to the gold rush

Atlantic Gold’s open pit gold mine in Moose River, Nova Scotia, one of four the company has planned, and one of six proposed for the province’s Eastern Shore. Photo: Joan Baxter

In October 2017, Vancouver-based Atlantic Gold opened Nova Scotia’s very first open pit gold mine, one of four it has planned for the province. The Touquoy mine, about 100 kilometres from Halifax, is named after French miner Damas Touquoy, who first worked the Moose River deposit back in the late 1800s.[1]

Officiating at the opening ceremony, and energetically applauding the cutting of the ribbon, was Nova Scotia’s Minister of Transport and Infrastructure Renewal, Lloyd Hines.

Years earlier, Premier Darrell Dexter’s NDP government in the province gave the mine a helping hand when then minister of natural resources, Charlie Parker, issued a vesting order allowing the mining company to expropriate land that had been in the Higgins family for 120 years.

It looks as if Nova Scotia, where small-scale, underground gold mining persisted from the mid-1800s until the 1940s, is once again pinning a good part of its future on gold.

Screenshot from Atlantic Gold website: Left to right: Lloyd Hines, NS Minister of Transportation and Infrastructure Renewal; Atlantic Gold Chair & CEO, Steven Dean; COO Maryse Belanger; Chief Terrance Paul, Co-Chair Assembly of NS Mi’kmaq Chiefs

A precious metal with no real value

Gold is a strange substance. It is a precious metal that has long been coveted for its beauty. But it has no intrinsic value like, say, water, which we need to live, or the surface vegetation and soil in which we grow our food, which miners call “overburden.”

Since human beings began mining gold several millennia ago, it is estimated  that only about 190,000 tonnes have been produced. The volume all that mined gold is 20,261 cubic metres, or roughly half the volume of concrete used to build Toronto’s CN tower.

Nearly every ounce of this gold is still around. About half is in jewellery, 20 percent in gold bullion investments, 17 percent in gold reserves, and just 14 percent is used in technology (electronics and dentistry). So it’s obvious that there is no need to produce any more gold for our technological needs. There is plenty of it sitting around unused and we don’t need to go digging for the estimated 54,000 tonnes that still exist underground.

Alan Septoff of the US-based Earthworks organization that leads a campaign called “No Dirty Gold” told me that gold is unique among the other mined metals; it has very limited use in technology. In other words, not one of us would suffer should gold mining stop today. Further, he says that industrial scale gold mining harms the environment “irreparably,” so by that standard, there is no such thing as “clean gold” unless it is recycled or vintage.

But of course as long as there is money to made from gold mining, and the metal is hoarded because of the monetary value that humans attribute to it, it will continue.

According to Ugo Lapointe of MiningWatch Canada, gold mining has entered a second – and particularly destructive – phase, going from small underground mines to get at high-grade deposits, to immense open pit ones with low-grade ore.

The Morila Gold Mine in Mali produced 200 tonnes of gold in the last 18 years. Mali is Africa’s third largest gold producer, but it remains one of the monetarily poorest countries on earth. Photo by: Joan Baxter

With the world’s richest veins and deposits already depleted, today’s mines rely on economies of scale, creating immense gashes on the earth’s surface that are visible from space, and extracting, crushing and processing vast amounts of rock that contain minuscule amounts of gold.

The advocacy organization Brilliant Earth reports that today’s industrial gold mining involves large amounts of cyanide to leach the metal out of the ore, and produces immense quantities of toxic waste, about 20 tonnes for a gold ring weighing a mere third of an ounce.

According to Lapointe, the millions or billions of tonnes of mine tailings left after the gold is extracted, need to be managed forever. “We may be blinded by the gold that we see in front of our eyes,” he says. “But we must also see the future legacy liability that will be left behind when the jobs are gone.”

Pollution from tailings dams is particularly risky for waterways and groundwater. The 2014 breach of the tailings pond at the Mount Polley gold mine in British Columbia is the worst environmental disaster in the province’s history, and the clean up has already cost the public $40 million.

Disastrous tailings pond break at Imperial Metals’ gold mine in British Columbia. Photo courtesy Cariboo Regional District

Wikipedia devotes an entire page to environmental disasters linked to cyanide leaks and dam failures at modern gold mines.

This explains why, in some places around the world, people are putting a stop to gold mining.

Just over a year ago, the tiny Central American country of El Salvador passed a law prohibiting all metal mining in the country, recognizing that the short-term gain from mining was not worth the risk to water. El Salvador is not a wealthy nation; it ranks 117th on the United Nations Human Development Index. Underemployment is high, the average annual income in 2017 was just US$ 8,900, and half the rural population lives on less than $2 a day.

Nevertheless, the country decided that the threats posed by large-scale gold or other metal mining outweighed its possible benefits. When the government of El Salvador decided to ban mining, it was hailed as a win for water over gold.

Last year, a municipality of 22,000 in Colombia voted in a referendum to prevent what would have been the world’s largest open pit gold mine and extracted $35 billion worth of gold in the mountains around it. The people of the agricultural community said they preferred to cultivate their crops and not risk contaminating their water or destroying the land that sustained them.

No such worries in Nova Scotia, in one of the world’s richest countries

Here in Nova Scotia in Canada, in one of the wealthiest nations on earth (ranked 10th on the UN Human Development Index), no such worries seem to burden the government.

Chilean Metals, a Canadian-Chilean company is promoting its “wholly-owned copper-gold” properties in Parrsboro and in Fox, Lynn and Bass Rivers, along the shore of theBay of Fundy, so environmentally remarkable it has been designated a UNESCO “biosphere reserve.” The junior mining company has been telling investors that a gold discovery in the area will be like a “moonshot.” Chilean Metals says it has optioned its Bass River North Project to Tejas Gold Inc.

Another junior company with its corporate headquarters in Vancouver, Resource Capital Gold Corp, is promoting its “Nova Scotia gold fields roll-up” at four “historically high-grade gold projects” it has acquired on the province’s Eastern Shore, at Dufferin, West Dufferin, Forest Hill and Tangier. The underground mine in Port Dufferin mine has already begun processing ore.[2]

Anaconda Mining is gearing up to do open pit and underground gold mining in Goldboro, between Isaac’s Harbour and Gold Brook Lake, also on the Eastern Shore. On August 1, 2018 registered its proposed mine for environmental assessment with the Nova Scotia Department of Environment.

In recent years, government geologists in the Geoscience Branch of the Department of Natural Resources (DNR, which has now been moved to the Department of Energy and Mines) used tens of thousands of dollars of public money, both provincial and federal, to collect data on potential gold deposits in 30,000 hectares of mostly forested land stretching from the ski hill in Wentworth valley to Earltown in the Cobequid Mountains of northern Nova Scotia.[3]

These data are going into a “request for proposals” that the Department of Energy and Mines will issue to invite mineral exploration companies to come and drill in the area, despite the fact that the “highest exploration potential” is in the watershed for the Tatamagouche water supply (This project is the focus of the third article in this series, available here and here).

Open for business, or open for exploitation? 

In recent years the government of Nova Scotia has been going all out to promote mining in the province. There has been a flurry of new quarries, and approvals for the expansion of existing ones throughout the province, which already has gaping holes in the landscape that cover close to 6,000 hectares.

It’s a rush for underground resources that is Made in Nova Scotia by the Government of Nova Scotia, along with a little help from the Mining Association of Nova Scotia (MANS), formerly the Chamber of Mineral Resources of Nova. MANS is a lobby group that “represents companies in all areas of mining and quarrying: exploration, discovery, development, production and reclamation as well as consultants and suppliers to the industry.”

In 2015, the government announced that it was redesigning its mineral promotion strategy in view of its goal of “attracting investments to the province’s mineral industry.”[4]

The same year, the province signed a new Memorandum of Understanding to update Nova Scotia’s “Mining One Window Process,” first signed in 1994 under the Liberal government of Premier John Savage. This process makes it easier and faster for mining companies to work in Nova Scotia, including “a streamlined environmental assessment process and success with Aboriginal consultation.” It was part of a powerful sales pitch made by Diane Webber of the former Department of Natural Resources in 2014 to the mining industry about the “tremendous opportunity” that Nova Scotia offers.

The One Window Process looks a lot like the “one-stop shop” investment vehicles that the World Bank Group invented and then, together with many Western countries, promoted in a host of resource-rich and monetarily poor countries in Africa hit hard by what is known as the “resource curse.”

These investment promotion vehicles have been very useful for moneyed investors from wealthier lands seeking to get their hands on natural resources and arable land on the continent. Indeed, much of what NS Premier Stephen McNeil’s Liberals have been doing to try to lure investors to the province is reminiscent of what impoverished developing nations such as Sierra Leone and Mali were urged to do by creditors (also called “donor” countries) and the World Bank Group to attract large foreign investors.[5]

Rolling out the red carpet, or giving resources away on a golden platter?

In the past two years, the NS government has overhauled the provincial mining legislation to “cut red tape for industry.” The new Mineral Resources Act requires “less frequent reporting on exploration licenses” by industry, and for DNR, frees up “more staff time to provide hands-on assistance to industry.”[6]

What it doesn’t do is designate any parts of the province as absolutely off limits to mineral exploration and mining. It hands power to the minister to “open selected areas in the province for mineral exploration.”[7]

This new legislation, not surprisingly, was “positively received by industry.”[8] The Mining Association of Nova Scotia issued a press release saying that it had worked with the government on the review of the Act for several years and that they were “pleased that the government has accepted many of our recommendations for improving the Act.”[9]

Another big favour to industry, one for which MANS had pushed, came in 2017. According to current minister of Transport and Infrastructure Renewal and former minister of DNR, Lloyd Hines, that was when the government brought in a fuel tax rebate for the mining industry. Hines said “senior mining partners in the province,” including MANS, were very grateful for this.[10]

Fuel taxes are needed to maintain and build provincial roads. Just about every dollar that Nova Scotians pay on the fuel they use in their personal vehicles is invested in roads.

Of course much of the fuel used by the mining industry is in vehicles at the mining sites and on private roads, but not all. Atlantic Gold plans to be using public roads and bridges to transport millions of tonnes of rock ore from one open pit mining site to another in eastern Nova Scotia.

Moving ore at Atlantic Gold’s Touquoy gold mine. Photo: Joan Baxter

“We’re going for gold”

For years, the Nova Scotia government has been funding mineral exploration in the province with its Mineral Incentive Program. In 2014, this included a grant of $50,000 to the large Canadian company, IAMGOLD (with mines on three continents) to explore for gold just south of the Cape Breton Highlands National Park.[11] This was the same year IAMGOLD sold just one of its numerous mines for half a billion dollars.

In the 2018 budget address, NS Deputy Premier and Minister of Finance and Treasury Board, Karen Casey, announced that the government would be building on the success of the opening of the Atlantic Gold open pit gold mine to launch the “Mineral Resources Development Fund.”

So in 2018, rather than the $400,000 given out under the Mineral Incentive Program, the government would be handing out $700,000 to “increase mineral exploration and mine development.” The government press release announcing the new fund quoted a delighted prospector and owner of a resources company, who proclaimed, “We’re going for gold.”

Three of five members of the Advisory Council for the Mineral Incentive Program represent industry.

While not many Nova Scotians know it, they have also been footing the bills to send prospectors, bureaucrats and politicians to international mining and investment extravaganzas, to solicit mining companies. One of these, the annual convention in Toronto of the Prospectors and Developers Association of Canada (PDAC), attracts thousands of “investors and 25,606 attendees from 135 countries” and bills itself as the “event of choice for the world’s mineral industry.”

In 2016, the Department of Natural Resources – with support from Nova Scotia Business Inc., the Greater Cape Breton Partnership and Atlantic Canada Opportunities Agency – funded the participation of six prospectors, representatives from the First Nations Membertou Band, staff from its Geoscience and Mines Branch. It also put on the “largest Nova Scotia Mining Breakfast” to date, an event hosted by then DNR minister, Lloyd Hines.[12]

In March 2018, Nova Scotia’s government and private prospectors shared a large booth at the PDAC convention in Toronto, handing out Nova Scotia tartan scarves to potential mining investors.[13]

Nova Scotia delegation at the 2018 Prospectors and Developers Association of Canada convention in Toronto. Photo courtesy Gregor Wilson

All of this has earned the province praise – from industry. Atlantic Gold describes itself as a company that focuses on projects in “mining friendly jurisdictions,” which can only mean Nova Scotia, since it is the only jurisdiction in which it operates.

Chilean Metals promotes the province as a desirable place to work because of its “favourable tax structure” and “mining friendly provincial government.” It describes the former Department of Natural Resources (mining has now moved to the Department of Energy and Mines) as a “supportive partner offering exploration assistance to the company.”

The province has also been wooing China, the world’s biggest producer and purchaser of gold, as a potential exploiter of the province’s underground. In 2017, DNR officials participated in the Canadian Mineral Investment Forum in Beijing and the China Mining Conference in Tianjin. They have invited the Chinese investment group to the province for a site tour.[14]

Government as a regulator or a cheerleader for industry? 

Some may ask why the Nova Scotia government seems so keen to behave like a cheerleader for industry rather than a regulator, apparently willing to ignore potential problems of unearthing vast amounts of toxins such as arsenic and also uranium, which are so prevalent under our feet in Nova Scotia.

The province is still struggling to document and deal with toxic tailings from historic gold mines, which operated from the mid-1800s until the 1940s, and left millions of tonnes of finely-ground waste tailings contaminated with mercury and arsenic, some more than a century old. Nor does it seem to be taking into consideration the long-term dangers of tailings ponds, which need to be monitored and maintained to prevent leaks, breaches, leaching, and contaminated groundwater for centuries after mines close.

But the mining industry has a powerful advocate with Sean Kirby, son of retired Liberal senator Michael Kirby, who heads MANS. Kirby is leading the charge to convince the government and public that mining is not just safe and modern, but key for “jobs and prosperity.”[15]

To spin what might otherwise have been an unpalatable message for environmentally aware people in the 21st century, MANS came up with the slogan, “Not Your Grandfather’s Mining Industry” and developed “an educational site” to explain how it all works with “games, videos and fun facts.”

MANS sponsors a video contest called “Mining Rocks” to get its message into schools across the province. Both Liberal and Progressive Conservative MLAs work with MANS to hand out prizes for this contest in schools around the province. In April, MLA Geoff MacLellan, who was then Minister of Energy, helped distribute MANS prizes in a school in Glace bay, Cape Breton.

Sean Kirby also pens frequent op-eds, extolling the virtues of the today’s mining industry, to soften up the public on why mining should be allowed in protected wilderness areas and argue that cyanide used in processing gold ore “generally poses little risk.”

This is a dubious claim, at best. Transport Canada classifies the sodium cyanide (solid) used in the gold extraction by Atlantic Gold as a Class 6.1, or highly toxic substance. Any truck carrying this dangerous good must have placards bearing a “6” and a skull and cross-bones.

Screenshot of Canadian government’s mandatory label for sodium cyanide

Sodium cyanide is extremely toxic to human beings; one twentieth of a teaspoon of sodium cyanide can be fatal. According to Chrissy Matheson, spokesperson for the Nova Scotia Department of Environment, Atlantic Gold is using about 35 tonnes of cyanide each week. The poison is transported to the mine by truck on public roads.

Kirby’s pro-mining PR hasn’t gone unchallenged. This author wrote a piece pointing out that modern gold mining is definitely not like that of our grandfathers’ times. They are often owned by highly complex multinational corporations that operate through a maze of subsidiaries for all kinds of tax and legal reasons, making it difficult to track them down or make them accountable for environmental or human rights abuses. These are not small underground mines around which communities grow, schools are built, and in which mining money circulates. The jobs they create tend to be short-lived, coming to an end when mines close, often after just a few years.

Kirby’s push to have protected wilderness areas opened up for mining by swapping those for other pieces of land that could be protected, earned him the wrath of the Ecology Action Centre’s Raymond Plourde. He pointed out that when the protected areas were selected, this was done in consultation with the mining industry, and that “great pains had been taken to avoid areas deemed to have the highest mineral potential.” Elsewhere on the planet, Plourde wrote, major mining companies “largely accept the need for protected areas, but in Nova Scotia it seems they just can’t wrap their minds around it.”

The government responded by saying it was not considering land swaps. But this did not appease citizens concerned about the MANS campaign to have protected land such as Kluscap Wilderness Area in Cape Breton, sacred territory for the Mi’kmaq, opened up for a quarry. They organized a protest in Cape Breton and another in front of MANS headquarters, which is also Kirby’s residence in Ingramport, south of Halifax. (More detail on this protest can be found in Part 4 of this series, available here and here).

Think you own your property in NS? Not when it comes to mining

According to DNR spokesperson Bruce Nunn, the only areas that are not open to mineral exploration and mining in Nova Scotia are protected wilderness areas, nature reserves, beaches and provincial parks, and lands such as national parks and First Nation reserves.

Nevertheless, Section 21(1) of the Minerals Act authorizes the minister the authority to grant permission for anyone “engaged in duties under the Act or in geoscientific activities” to enter all lands in the province “at any reasonable time” and “pass over the land of any person by any reasonable means doing as little damage as possible.”

In an email, Nunn told me that federal lands, such as national parks, would normally be exempt from mineral exploration and mining. “However,” he said, “in some cases, and when permission is granted by the federal government, mineral rights may be issued over federal lands.”

Sometimes mineral rights under protected land were issued before the area was protected. According to Communications Director for NS Environment, Rachel Boomer, when this is the case the minister would “need to be of the opinion that the project would have minimal impact on the protected area” and “ be comfortable that the proposed project would not degrade the wilderness area.”

All this means that absolutely no lands in Nova Scotia are totally off limits for mineral exploration and mining. Any property owner in Nova Scotia could one day get a knock on the door from prospectors or exploration companies asking for permission to work on their property, and there is nothing they can do about it. What lies underground belongs to the government, which is keen to open the doors to miners.

Preoccupied by the (business) environment

On 9 March 2018, Nova Scotia’s Minister of Natural Resources, Margaret Miller, brought forward Bill 76, amendments to the Minerals Act, which establishes the rights and obligations around, in the minister’s words, “the responsible development of Nova Scotia’s mineral resources.” She told the legislature it fulfilled “a commitment of the Natural Resources Strategy.[16]

That document, “The Path We Share: A Natural Resources Strategy for Nova Scotia 2011 – 2020,” was developed with the input of thousands of Nova Scotians. It pointed out that, “Historically, mining practices focused on the economic benefits, with little attention given to the environmental impact.” It specified the need to ensure that any new mining operations include reclamation plans that stress biodiversity.

It minced no words about the environmental threats the province faces, and the harsh reality of what damage has already been done: “Threats to the province’s biodiversity include climate change, pollution and waste, invasive alien species, residential and industrial development, agriculture, forestry, mineral extraction, over-harvesting of species, and road network and infrastructure development. Over many decades, land ecosystems, freshwater ecosystems, and coastal zones have degraded, with serious long-term social, environmental, and economic consequences.”

The Natural Resources Strategy also referred to the province’s water strategy, Water For Life, which committed Nova Scotia to being “a national leader in water resource management,” stating that, “Water is essential for life and will be valued, kept safe, and shared.”

Minister Miller made no mention of these goals when she brought forward the amendments to the Mineral Resources Act. She used the word “environment” once, and then only to describe the “open-for-business environment” for mining that the Act supported.  She didn’t mention the word “water,” focusing instead on how the bill “cuts red tape” for industry and reduces “barriers to industry.”

So where does this leave the citizens of this province who are concerned about the environment and their water? One answer to that question came from the province’s Auditor General in 2017, when he reported that the Department of Environment had approved 53 of 54 projects, but monitored less than half of those to ensure the terms and conditions were met.

His conclusions? “Poor monitoring of approved projects increases risks to NS environment and makes terms and conditions less useful.”

As for the “myth that mining brings jobs and prosperity,” Joan Kuyek, co-founder of MiningWatch Canada, says that is debunked when one looks beyond industry spin, at the environmental and other costs that are its legacy.

Unfortunately, it looks as if the government of Nova Scotia has been well and truly taken in by the tales of gold that the industry likes to spin, and decided it’s full speed ahead – or backwards – when it comes to mining the province.

(Next in the series: Part 2. Going For Gold)

[1] Eleanor Belmore. 1990. Caribou Gold Mines 1864 – 1990

[2] Patrick Whiteway. Dufferin Update. The Geological Record, Fall 2017, Vol 4(4): p 2. https://novascotia.ca/natr/meb/pdf/tgr.asp [accessed April 12, 2018]

[3] A Freedom of Information request was submitted on February 8, 2018, to find out how much this project has cost the provincial and federal governments, and for records of internal and external communication on it. No specific details on costs were released, but emails showing budgeted costs related to this project indicate that tens of thousands of dollars were spent on travel and exploration expenses, which would be in addition to regular DNR staff costs.

[4] Diane Webber and Donald James. Mineral Promotional Strategy. The Geological Record: Summer 2015, Vol 2(1): p 2.

[5] The Oakland Institute. Understanding Land Investment Deals in Africa: Country Report: Sierra Leone. 2011. pp 14 – 15. https://www.oaklandinstitute.org/understanding-land-investment-deals-africa-sierra-leone [Accessed May 14, 2018]

[6] Donald James and Lori Blackburn. Introducing Bill 149: the new Mineral Resources Act. The Geological Record, Spring 2016: Vol 3(2): p 6

[7] Ibid

[8] Ibid

[9]Ibid

[10]Lloyd Hines. Nova Scotia Legislature, Assembly 63, Session 1, House 18mar09. Hansard Debates and Proceedings, p 2881. https://nslegislature.ca/legislative-business/hansard-debates/assembly-63-session-1/house_18mar09#HPage2881

[11] Nova Scotia Mineral Incentive Grants Approved for 2014. The Geological Record, Fall 2014: Vol 1(2): p 7

[12] Diane Webber. Promoting Nova Scotia at PDAC 2016. The Geological Record, Spring 2016, Vol 3(2): p 2

[13] A month later, in April 2018, Nova Scotia was the only province that didn’t show up and host a booth in Newfoundland at the national recruitment fair for rural doctors, because it was “expensive.”

[14] Garth DeMont. China: an Immense Market Opportunity for Nova Scotia. The Geological Record, Fall 2017, Vol 4(4): p 7

[15] As of publication, there has been no reply to an email sent April 26 to Sean Kirby at MANS with questions about mining in Nova Scotia.

[16] March 9, 2018. NS Legislature. Hansard House of Assembly Debates and Proceedings. . Public Bills for second Reading. Bill No. 76. pp 2877 – 2882

[1] Eleanor Belmore. 1990. Caribou Gold Mines 1864 – 1990

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2 Comments, RSS

  1. Dick Groot September 11, 2018 @ 8:49 pm

    Thank you Joan for this essential piece of in depth journalism. Unfortunately the dismal science (economics) so defined by John K. Galbraith, stil cannot credibly quantify the cost of the use of water and air and the degradation of the environment. So these are not counted in their exonomic models, pushed aside as externalities. Hence society never pays the full costs of the consumption of its products. Please keep up your good work. we need it to stop this race to the bottom.

  2. David Simms September 12, 2018 @ 8:33 pm

    Thanks for the excellent article. I live in BC and I’ve followed mining for years. While underground mining is bad enough, open-pit mining is simply horrible and the reports from around the world point out how dreadful it is. I have to ask myself what is happening to this country; the political process has been usurped because there’s no realistic opposition. The leftovers from mining will affect the environment forever. Until recently, it seems that mining might have been kept out of public view but the brazen actions of the corporations, aided and abetted by the banks, investment houses and governments no longer have any shame about bringing their terrible activities into plain view within more densely populated areas. Nowadays, many First Nations seem to represent the only honest appraisal of these projects. There’s no room for the falsehoods generated by environmental assessments or the like. Opposition needs to dig in its heels and stop these projects. There’s simply no room for compromise.

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