The Gulliver Key Lake Mining Corporation Dossier

347 Key Lake Mining Corporation

Not to be confused with Key Lake Explorations, the Key Lake Mining Corporation was set up in 1979 to develop the Key Lake uranium mine and mill in northern Saskatchewan (1). In 1985, this mine enormously assisted Canada to the top of the world's uranium production table. At 11 million pounds of uranium oxide, the Key Lake mine contributed well over a third of the country's output (total 29 million pounds) (2).

Key Lake is also, with little doubt, the world's largest operating uranium mine. (The minor doubt attaches to actual production from Rossing in Namibia, for which figures have not been produced since 1984. Rossing's 1984 production is assumed to have been around 8,200,000 lb and to have fallen from 1985) (3). Key Lake came into production in October 1983 and had produced 700,000 lb U3O8 by the end of the following month (4), although it was not officially opened until June 1984, the high clay content in the ore having posed initial "teething problems" (5). Production had reached 350 tons uranium a month by that time. The mine has a current design capacity of 4500 tons a year, although its mill throughput could rise to 5400 tons per year (5). Initially the smaller, Gaertner, orebody was being mined but it looked likely that this would be exhausted by 1987 (6). The mine itself is scheduled for decommission (7) when the larger Deilmann orebody will be brought into production. There are no current plans to exploit Boulders, a third, much smaller deposit (8).

In theory, according to the analyst Thomas Neff, Key Lake could deliver no less than 7400 tonnes a year by 1991. Neff gives the Key Lake reserves as 70,000 tons of uranium in ore, with an average grade of 2.8% (9). Other sources have specified 90,000 tons uranium oxide, with a slightly lower average grade of 2.35% (10).

In any event, there is no doubting the huge potential of this deposit, and the true extent of the orebody has yet to be properly defined. Says Neff: " ... there may be many more deposits at Key Lake ... though at greater depth and with no evident outcropping". Even at present production rates Key Lake will leave behind one of the world's largest pits: at a stripping ratio of 35:1, at least forty million cubic metres will have to be lifted off the surface of the earth (11). Although not the richest exploitable uranium deposit in the world (this dubious honour is now held by Cigar Lake), even the material in the low grade ore stockpile at the mine is at least twice as rich as that produced in most other western mines, while its average grade is ten times greater than Ranger and an estimated 75 times as great as Rossing (12).

Even these figures disguise the extraordinary richness of some parts of the two main orebodies - up to 45% U3O8 in Gaertner and 20% in Deilmann (with similar grades of nickel, about which little has been heard) (13). Key Lake Mining Corp started life as a JV, in which Inexco originally held an equal share with SMDC, Eldorado and Uranerz. Inexco sold its share to SMDC which then sold half of that to Eldor Resources. Perhaps because of this high degree of state and federal involvement, comments Neff, there were more delays than usual in bringing the project to fruition (9). The major "delay" centred around the Key Lake Board of Inquiry, set up by the provincial government in December 1979, some months after the company had acquired more land in the region (14). All environmental and anti-nuclear groups in the province refused to participate in the inquiry, in protest at its narrow terms of reference "... which could only recommend how, not whether, the mine should proceed" (15).

A spokesman for the Saskatoon Citizens for a Non-Nuclear Society criticised the Key Lake report for being even narrower than the Bayda Inquiry (which had sanctioned Amok's Cluff Lake Mine). It was, he said, "a slick and fatuous piece of public relations ... just what the NDP [ruling New Democratic Party] wanted" (15). The five major anti-nuclear groups boycotting the Inquiry also criticised the Board's refusal to translate proceedings into Cree and Chipewyan - the languages of the local residents (16). The recommendations of the Board included the following :

The board rather naively expected that half the money spent developing the mine would support individuals and businesses in the area, and that taxes, together with SMDC's own share of the profits, would account for half the total revenue during the life of the mine. (Up to C$3.9 million out of up to C$8 million.) There were further delays, while the SMDC tussled with governmental agencies over its specific responsibilities as uranium prices started to fall. Finally a surface lease agreement was signed in late 1981 (17).

Although the Federation of Saskatchewan Indians and other native groups largely supported Key Lake in the early days, because of the promise of jobs in an area fraught with unemployment of up to 95%, and discrimination against native workers, their position was by no means unanimous. In 1983, the Vice-President of the Association of Metis and Non-Status Indians (AMNSIS), Clem Chartier, said he would like to see all uranium mines closed, because the environmental and social disruption they caused outweighed "the minimal employment benefits". Said Chartier: "Key Lake's record illustrates the general failure of uranium development to benefit northern communities" (18).

Early estimates costed each job at Key Lake at a million dollars per workplace (using figures supplied by the Key Lake Board of Inquiry (KLBI) itself) (19) . As the Inter-Church Uranium Committee put it: "More jobs are created in the construction phase of the mine, but these are [even] shorter [than during mining] and are measured in months. Without other developments taking place, the major effect of the mine(s) will be to increase the number of skilled and semi-skilled unemployed. At a million dollars per job, it is easy to see that uranium mining cannot support very many people for very long" (20).

Three years after the KLBI Final Report, the corporation's president Peter Clarke acknowledged that the turnover rate for northern native peoples' employment had declined from around 60% in autumn 1983 to 40% in spring 1984 (as against 23% for non-native people): only 35% of the total workforce was indigenous, against the 50% recommended by the inquiry. (All members of the workforce are members of the United Steelworkers of America [USWA]) (21).

These figures have been disputed by AMNSIS, whose secretary Frank Tomkins told a press conference in late 1983 that only 27% of the mine's employees at that time were native northerners (18). In another statement, at the same time, KLMC's president Peter Clarke stated that the attrition rate among native employees was 50%-60% as against half that for non-native employees (22).

By the end of 1984, the province's New Democratic Party (by then in opposition) had reversed its earlier pro-uranium policy and voted to phase out all uranium mining in Saskatchewan. The Inter-Church Uranium Committee, joined by the Regina Group for a NonNuclear Society (RGNNS), was also calling for the closure of Key Lake on economic grounds (23).

But what angered and disconcerted large numbers of other people in the province was an almost unprecedented series of spills and leaks which commenced almost as soon as the mine was operational. This immediately called into question claims that Key Lake was environmentally safer than any other uranium mine.

Certainly, worries about the intensity of radiation exposure had been expressed in the early days. First it was pointed out that there was no precedent for dealing with the level of radiation hazard at Key Lake. Although the Cluff Lake orebody is among the world's most dangerous mines, it is much smaller than its Saskatchewan neighbour (24). In any case, the report of the inquiry into Cluff Lake (Bayda) had not even been released before the Key Lake mine was under-way (25). Mine officials themselves have estimated that "one hour's exposure to the grey seam at the bottom of the Gaertner pit ... provides as much radiation as a medical X-ray" (26). Special measures announced to protect miners (lead-lined driving cabs and the separate treatment of high level radium in the tailings) (24) could not placate a critical public. (Some of them were cynical enough to suggest that the high concentration of native people in the workforce might relate directly to greater fears for the long-term safety of white miners.) Moreover, the original shifts involved miners often working a 12-hour day on a seven-day rota. According to Terry Stevens, the USWA representative negotiating for the mine force in 1983, miners in the company's bulk neutralisation area have been exposed to radiation "twelve times the allowable limit, without being advised by the company as required by the surface lease" (22).

But it is the lack of environmental protection which has created concern in the province - not helped by the fact that :

  1. Several pages of the KLBI report on the mine are lifted virtually verbatim from the company's own EIS (Environmental Impact Statement). "The position taken by the KLBI on the surrounding geography ... the orebodies, the mine design, the lakes, the overburden, groundwater, mining and milling and waste management is nearly identical to that of the corporation" (25).

  2. Even so, a company claim that it could totally control and treat all liquid wastes from the mining and milling operations is not to be found in the KLBI final report (25).

  3. The company had illegally drained several lakes near the mine site in 1978, even before the KLBI was established.

  4. Approval for Uranerz - the operating company in the mine construction phase - to discharge industrial waste from its dewatering operation was granted in February 1978, even before the earlier Cluff Lake Inquiry had been completed (25).

  5. In August 1979 - months before the KLBI was appointed - the RGNNS tried to stop the draining through court action, arguing that the permit had not been legally granted since Environment Department approval had not been given. The case was lost - on the spurious grounds that, by then, the drainage had been 90% completed (25).

  6. In June 1981, although its drainage lease expired, the company continued draining. After public pressure, Ted Bowerman, the Environment Minister, laid charges against the company and secured the derisory fine of C$500. By then, of course, that particular operation had been completed (25).
KLMC's President, Peter Clarke, freely admitted in 1983 that his company's major technical problem was to "push more ore into the (mill) grinder so that the plant, designed to produce between eight and 12 million pounds a year of yellowcake ... can approach 100% capacity". Although Clarke was quoted as saying that "the mill sets a standard process for uranium extraction with only a few minor differences" (27), an article in the Canadian Mining Journal six months later, outlining the "minor differences", was considered important enough to be quoted at length in the prestigious Mining Annual Review (28).

According to the article, "technically advanced ore treatment involved a two-stage leaching procedure with a 99%-plus extraction ratio, the installation of brand new French Krebs mixer settlers (never before employed in America), and - to meet strict environmental regulations - a bulk neutralisation plant, treating about 5000m/day, which removes radium before it reaches the effluent stage." There were to be no settling ponds, as all water leaving the plant "is held in monitoring ponds to double check that it meets the environmental standards before being released" (29).

Lime would be used for acid control while the tailings were to be kept sealed in a bentonite/sand pond which, when decommissioned, would be totally sealed and kept above the local water table "while the drainage system will remain in place to provide a long-term monitoring system" (30).

According to the Mining Journal a few months later, strict environmental protection procedures include monitoring of lake sediments, wild life and air quality, as well as vegetation, while contaminated solution from the sprays discharging into the tailings pond is recycled back to the mill (7).

Given this supposedly unique system of contamination control, it was all the more galling and outrageous - that, less than a hundred days after the official opening of the mine, a dyke eroded, releasing 100 million litres of water containing precisely the radioactive isotope, radium-226, which the new technology was intended to contain. Though this was the major accident (indeed, comparable to the massive leakage into the Rio Puerco from United Nuclear's tailings dam in July 1979), Key Lake has experienced a dozen similar leaks in the space of a few months (31). One of these occurred only two days after "The Big One" but, although investigators from the mine pollution branch of Saskatchewan Environment were at the mine site when it happened, it was another two days before they were officially informed (32).

The government agency Saskatchewan Environment acknowledged that the major spill was the largest in the history of the province and "a significant risk to the environment" (33). The USWA called it "a catastrophe", and accused the company of downplaying the dangers (33). Bob Mitchell, who chaired the KLBI, was flummoxed: "This just could not have happened based on the presentation (to the Inquiry) that the Key Lake Corporation made" he was reported as saying. "They [the KLMC] proved to our satisfaction that what happened ... couldn't have happened" (33). Dr Pat Tones, a senior scientist with the Saskatchewan Research Council (SRC) declared that the radium levels in the contaminated water "are certainly much higher than anything we've encountered in the lab or in nature" (33). Somewhat hypocritically (given their go-ahead for the mine) the opposition NDP charged the Conservative government in the province with putting workers' safety and the environment at risk and pointed out that the six-person monitoring committee, intended to pre-empt such disasters, hadn't met for the previous year (34).

Both the company and Saskatchewan Environment tried to minimise the dangers and the likelihood of recurrence. Claiming the spill was due to "human error" when a pump was left running (35), Peter Clarke of the KLMC rejected calls for a public inquiry (36) while his namesake Dave Clark, for the government, contented himself with the statement: "From a technical standpoint, all that's happened is that the surface area of the reservoir has been increased" (37). A nuclear physicist from the provincial University, Henry Caplan, claimed that, while it would be inadvisable to drink from the polluted water, "you can swim in it". (Not that he did!) (37).

Within a few days, with contaminated water building up under the ice at the mine site, and the threat of radium escaping elsewhere (38), the NDP leader Allan Blakeney was calling on the government to rethink its "full-speed ahead policy" on uranium (39).

Environment Minister Neil Hardy was having none of it, however, and he described the spills as "normal start-up problems" (40). The company started repair work at the site (39), as a former maintenance worker, Kal Manno, charged that, months before, he had warned of the likely weakening in two reservoir walls and had been asked to resign for his candidness (41). Peter Clarke dismissed Manno as just a disgruntled employee (42), while a group of northerners, with the support of the local mayor and members of the Metis community, set up a Northern Camp for Ecology at Pinehouse Lake, the Metis community closest to the mine site (43).

Writing in the Saskatoon Star Phoenix a nuclear chemist and president of the Saskatchewan Environment Society, Ann Coxworth, predicted that up to 2000 people could die from ii) ingesting the contaminated spill water, if it entered drinking supplies (44).

KLMC announced several possible methods of dealing with the spill - including construction of a new water treatment plant (45)- as the Saskatchewan Association of Northern Local Government, along with the Inter-Church Uranium Committee (ICUC) and Greenpeace, demanded a full public inquiry into the disaster (46). Within the next two months, as the KLMC began pumping out Gerald Lake (against the wishes of the Atomic Energy Control Board which claimed it would "create more problems than it would solve" (47), calls for a public inquiry increased. The NDP leader called for the resignation of the Environment Minister Neil Hardy (48). While promising an inquiry into "union health and safety concerns" at Key Lake (49), the Department of Labour declared that risks from Key Lake were only "a worker/management problem" and not connected with lack of occupation safety and health standards (50).

In a press release in February 1984, a representative of the Pinehouse local community authority, George Smith, rubbished KLMC's plans to clean up Gerald Lake. After a trip to the site, Smith said: "[the contamination] is much worse than I thought. The radioactivity is in Gerald Lake and in the muskeg. You cannot clean it up. It is not like a bath-tub; you cannot suck all the water out of the muskeg. I have been in the bush long enough to know that in the spring the water will get into Wolf Lake, David Creek, the Wheeler River, Wollaston Lake, and eventually into Churchill Lake, the last unpolluted river system in Saskatchewan" (51).

The RGNNS also submitted to the Minister of the Environment a detailed scientific critique of Environment Canada's clean-up plan (52). The critique claimed that :

  1. The 100,000 m3 of contaminated water in Gerald Lake to be pumped out represented only a sixth of the total. The Lake's radioactivity level was no less than 8 billion becquerels due to the presence of radium 226.

  2. 90% of the heavy radionuclides were in the sediment, representing a concentration 5000 times the provincial standard for drinking water, thus much higher than admitted by the provincial authorities or the company.

  3. The intended Spring clean-up in 1984 could not possibly deal with the toxicity which, by then, would simply have moved further into the river system.

  4. Several previous spills had been close to employees' drinking water area; workers returned to camp with contaminated clothing and bodies.
RGNNS's conclusion was that "There is no safe way to mine uranium; the wastes cannot be contained" (53).

As if to underline the validity of the opposition's claims, yet another radioactive spill was recorded in the summer of that year, when a pipe carrying water from a reservoir to the tailings ponds got disconnected (54).

The KLMC partners agreed to market their own share of production, related directly to the equity they hold in the project (55). Buyers include Ontario Hydro - there was some speculation in 1984 that this huge public utility might abandon or renegotiate its US$50 a pound contract with Rio Algom and Denison at Elliot Lake (22) - two Swedish groups and Belgium's Synatom (9).

These contracts were, however, only achieved after conflicts between the federal and provincial governments: the federal government wanting a floor price of US$30 a pound, with the province angling for terms which were much more flexible and close to the spot-market price. Uranerz's 1981 contract with Synatom was eventually approved at a price tied to the spotmarket prices, with a pricing mechanism linked into subsequent annual price reviews (9). Initially the requirement that Canadian uranium be hexed in Canada was eased, but later re-enforced, reportedly causing two US buyers to back off (56).

In August 1985, the SMDC and Eldorado Nuclear signed a C$250 million JV sales contract to supply 2700 tons of Key Lake uranium to Japan's Kyushu Electric Power Corp from 1987 to 1999 (57).

The most controversial contract by far has been one signed between the Saskatchewan government and the military dictatorship in South Korea, not long after the Vice-President of SMDC visited the country in early 1981 (58).

Under the contract, Key Lake uranium was to start being delivered in 1983, refined at Port Hope, Ontario, and enriched in France or the USA (59).

Condemning the sale, the ICUC pointed out that a 1978 report from the International Organisations of the US Congress spotlighted South Korea's clandestine nuclear weapons programme, while a Ford Foundation report at around the same time claimed the South Korean regime could construct up to 36 plutonium bombs a year (59).

After several years' research into the end use of Saskatchewan uranium, the ICUC in early 1986 declared that any Canadian yellowcake could end up in nuclear weapons programmes (60).

Production at the mine in 1986 exceeded nominal capacity (4650 tons) by 200 tons, representing 40% of total Canadian production, and no less than 13% of total western world output for that year (61). Development of the Deilmann orebody proceeded apace, with stripping of the Deilmann pit area, preparative to mining in 1988. The Gaertner pit was mined out the same year, although stockpiled ore provided feed, as the company moved onto Deilmann (61). Yet another output record was achieved the following year - no less than 5200 tons uranium was produced (possibly a world record, although incomplete figures from Rossing during the early 1980s suggest that the RTZ-managed mine in Namibia might have exceeded this) (62). The Gaertner orebody was then allowed to flood. KLMC also conducted a 10,000- ton heap-leach test in 1987, to verify uranium extraction rates from lower-grade cobble ores: a 10,000-ton leach facility was being considered for operation in 1988 (62).

In 1989, KLMC began production from the Deilmann deposit but as the orebody is contaminated with more molybdenum than the Gaertner, this necessitated the installation of a special treatment circuit. 2600 tonnes of uranium was produced in the first six months of that year (63). With the establishment of a Canadian Mining and Energy Company in March 1989, Cameco took over operation of Key Lake (63); Uranen retained its one-third interest (64). Production for both 1989 and 1990 was around 12 million pounds, confirming the mine as by far the world's biggest single producer of uranium (65).

Contact : Inter-Church Uranium Committee, Box 7724, Saskatoon, Canada S7K 4R4 (tel: 306/934 3030)

Regina Group for a Non-Nuclear Society (RGNNS), 2138 Mclntyre St, Regina, Saskatchewan S4P 2R7, Canada.

Saskatoon Environmental Society, Box 1372, Saskatoon, Saskatchewan S7K 3N9, Canada.

SOURCE: "The Gulliver File - Mines, people and land: a global battleground" by Roger Moody.

Published in 1992 by Minewatch, 218 Liverpool Road, London Nl ILE, UK, and WISE-Glen Aplin, Po Box 87, Glen Aplin Q 4381, Australia.

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