523 Rio Algom "The Elliot Lake story is a moral and human outrage.
What is more, it's apparently not yet over" (1).In surveying the RTZ imperial domain, the company's operations in Canada usually get little attention from the corporation's numerous critics. It is true that, in the frantic aftermath of RTZ's historic 1982 annual general meeting, one Canadian woman was dragged from the hotel by police, screaming that her relatives had died as a result of Rio Algom's operations at Elliot Lake (2). But this is the proverbial exception that confirms the rule. While RTZ's Australian associate, CRA, can barely set a foot on Aboriginal land without attracting a thousand quizzical eyes and, while the company's Rossing subsidiary has become synonymous with the colonisation of an entire country, what Rio Algom does in North America passes almost unnoticed in the world at large. Yet Rio Algom co-owns one of the world's largest copper complexes; it operates North America's only primary tin mine; its Atlas Steels subsidiary (though now sold) is more than likely to have produced the stainless steel sitting on any North American dinner table.
More important, until 1990 the company was the most reliable and important single producer of uranium in the RTZ agglomerate over the past twenty odd years. Despite the high costs of production from its mines at Elliot Lake, Ontario, plus declining ore grades (around 0.1 %) (3, 4), as well as contractual problems in the late 1970s, the company expanded production, until a downturn in 1990, and re-opened a mine in the USA which had closed the previous decade. It has also enjoyed (along with the Canadian company Denison) the largest of all long-term uranium contracts - with Ontario Hydro. It also has substantial old, un- reactivated uranium reserves (5).
The human cost of this record of uranium exploitation - unique in Canadian history - has usually been concealed, but we will gain some insight into it as the Rio Algom story unfolds.
Rio Tinto (forerunner of RTZ) commenced its penetration of Canada in 1953.
A geologist who worked for the CDA - the Combined Development Agency (see MKU) and had been employed by the agency in South Africa, staked a claim on old workings in the maple and fir pines of northern Ontario. This geologist, C F Davidson, enlisted the backing of the American mining financier, Samuel Hirschorn (also called J H Hirschorn in another source) (6). Hirschorn formed a company, used scores of his own employees in a secret operation, and located the Elliot Lake uranium vein: in one day, mine claims stretched over 20 miles (7). Two years later, Rio Tinto acquired a substantial interest in Algom Uranium Mines Ltd and, the following year, purchased virtually all of Hirschorn's interests in the Algoma mining camp (6). From this coup, the American financier created the modern art collection known as the Hirschorn Museum, in Washington DC. Through its acquisition, Rio Algom gained control of four companies: Algom Uranium Mines Ltd, Northspan Uranium Mines Ltd, Milliken Lake Uranium Mines Ltd, and Pronto Uranium Mines (6). All these mines operated in the Blind River-Algom region of the north shore of Lake Huron, collectively known as Elliot Lake, although there are several other lakes in the area (notably Quirke, Little Cinder, Crotch, McCabe and May) directly or indirectly affected by mining operations (8).
During the uranium boom of 1956-1959, created by the requirements of the US military, no fewer than 12 mines were in operation, with a workforce which exceeded 10,000 people (9). Seven of the eleven mills, and eight of the 12 mines - or almost 60% of the area's mining and milling capacity - were exploited by the companies later to be amalgamated as Rio Algom Mines Ltd in June 1960 (6, 10, 11). (The name Rio Algom Ltd was adopted in 1975.)
The Stanleigh Uranium Corporation's facility at Elliot Lake became associated with Rio Algom the same year, when it was merged with Preston East Dome Mines, to form Preston Mines Ltd (owned 81% by RTZ, and itself then owning 44% of Rio Algom) (6).
But in 1959, the US government ditched Canadian sources of uranium, as it moved to protect its own producers, especially from the Four Corners of the American South-West (12) . Officially, Rio Algom had been formed to bring together individual contracts signed by the Algom group of mines with Eldorado Nuclear. And, from the late 1950s, this Crown Corporation set about implementing the Canadian federal government's policy of creating stockpiles and stretching out deliveries until the demands of "civilian" nuclear power could stimulate their own market (6). Elliot Lake then went into severe decline, throwing thousands of people out of work and depleting the boom towns (13). By 1966, Canadian production overall was down to a quarter of its 1959 level, at less than 3900 tons - most of this produced by Rio Algom and Denison (6). Virtually all of these supplies were devoted, either to completing the stretched-out military contracts to the USA, or to the federal Canadian government's stockpile, or the British Atomic Energy Authority (AEA). As the Ontario Royal Commission on Electric Power Planning (the Porter Report) stated quite clearly in 1978: whatever protestations were made by the government ten years later, that they had not provided uranium for weapons purposes: "this country not only participated in the research which gave birth to the original atomic bomb but also, through the export of strategic material (ie uranium), subsequently facilitated their production. For example, the bulk of the uranium mined at Elliot Lake, Ontario, in the late 1950s and early 1960s was used in the production of nuclear weapons in both the United States and Great Britain" (14).
Although the second major uranium boom did not start until 1970, by 1968 Rio Algom was in a key position to benefit from it, having signed contracts of more than C$50 million for the following decade, with European and Japanese customers (10). That year, the company re-activated the Quirke mine, increasing its mill capacity from 3000 tonnes to 4500 tonnes per day, as well as sinking a new shaft to bring the New Quirke orebody into production (15). The old one was closed in 1971. The year before, the international uranium cartel was formed in Paris, between four governments France, South Africa, Australia and Canada and one corporation acting "as a sovereign state" (16). As that corporation was RTZ, Rio Algom naturally soon began to benefit from the operations of this price-fixing, contract- fixing, ring. By 1973, as prices began to rise and consumers moved to take up long-term contracts, exploration entered a new boom phase. In 1975, the US dropped its ban on uranium imports (17) and Rio Algom began expanding at Elliot Lake: this included re-development of idle mines and mills. By the end of that year, the company had secured contracts for nearly one million pounds of U308, for delivery until the early 1990s (11).
In 1976, the uranium cartel was disbanded, after its cover was blown by Friends of the Earth (FoE) in Melbourne (see MKU). By then, although construction work to increase the milling capacity at Elliot Lake was supposedly on schedule, and the old Panel mine was being reopened (19), the company was suffering from the federal Canadian government's "non-proliferation" policy. This prohibited uranium exports to suspect countries - including the EEC as a whole - and Japan. The material was put in storage, paid for by the customers (6, 19). However, there is a yellow lining to many a uranium cloud. In this case, it was the 1974 stipulation by the Canadian government that domestic power utilities should hold 15-year forward supplies of nuclear fuel (6, 20). At the same time that non-proliferation talks between the EEC, Japan and the Federal Canadian government had deadlocked (6), one of the world's biggest single utilities, Ontario Hydro - which already had a contract with Rio Algom - began negotiating a long-term contract (20) with both Algom and its brother company at Elliot Lake, Denison Mines (4, 6).
Anticipating an upsurge in production at Elliot Lake, officials of both Rio Algom and Denison told the town's community leaders that they should consider the impact of the influx of 600 more workers by April 1978 (21).
In 1978, Preston Mines Ltd (then sharing 43.8 % of Rio Algom's profits (22) and counted as a subsidiary) concluded its deal with Ontario Hydro for the supply of 27,700 tonnes U308 until well into the twenty-first century. C$ 188 million was advanced, interest-free, by Ontario (23). Uranium would be sold to the utility at a base price equal to Preston's costs, including depreciation of the plant, plus roughly C$4 per lb and one third of "any excess of the free market price for uranium over the base price" (24). No wonder that, at RTZ's annual general meeting in London in 1978, the company chair, Sir Mark Turner, boasted that the contract was an example (without putting it in so many words) of how miners can screw shekels out of publicly funded corporations. "The upshot is that Preston for no outlay at all gets a uranium mine with a guaranteed return of at least C$4 for every pound of uranium it produces and the prospect of better return if it can contain costs, and world uranium prices remain high" (24).
In order to meet this contract, Preston decided to reopen the old Stanleigh mine (4, 28, 24, 25) . Meanwhile, Rio Algom itself achieved "impressive financial results in 1978 as U3O8 production increased by nearly 700,000 lb, although average recovery grade slipped (26).
That year the Quirke expansion was completed (27) on schedule (15), with a production rate of 8900 tonnes of ore per day (4).
Early in 1979, Rio Algom's uranium earnings declined (28). It had been clear a few years before that, as ore grades dropped further in the older deposits, new lodes would need to be brought into production. That year, the Panel mine was brought back into production after closure in 1961 (29).
This mine - "spectacularly located on a small peninsula in the Quirke Lake" (30) - was a showpiece for the company: boasting new trackless mining methods, more than 45,000 feet of underground development, and the dewatering of over 100 million gallons of floodwater. (This was not without its own financial compensations, however: the cost of de-watering was covered by recovery of nearly 50,000 lb of U3O8 by precipitation in the surface water treatment plant!) (31).
1980 was a year of mixed fortunes for Rio Algom (32). Preston Mines and Rio Algom finally merged on January 30th (33), as RTZ's interest in the new company reached 52.76% (34).
First production came out of the Panel mine in November 1979 (35). In March 1980, the company announced that it needed new customers to take up 13.7 million pounds of uranium, lost through a dispute with Tennessee Valley Authority - a "burdensome" search, but "not a matter of life and death", due to its contract with Ontario Hydro (34). In 1979, Rio Algom had signed new contracts for 2.8 million pounds, of which half was delivered, and buyers found for a further one million pounds (36). Then, in May, the company landed a contract with Kepco (Keko) of South Korea. By the end of 1980, it was boasting that it produced "... more uranium than any other company in North America" (37) - some 3750 tons (38). By now it was also exploring for uranium in Argentina (39) and had a JV with Soquem and Johns-Manville Corp, to explore the Canadian North-West Territories (NWT) and elsewhere in Canada (6). The NWT exploration, potentially damaging to indigenous welfare and land claims (185), appears not to have proceeded far. A "more favourable sales contract mix and improved operating efficiencies at the Panel facilities at Elliot Lake" (40, 41, 42), resulted in better results for 1981, as production reached 3500 tonnes (43). Rehabilitation of the old Stanleigh mine proceeded on schedule (40, 41, 44) despite a dispute with Ontario Hydro over prices (23). Deliveries to the utilities were deferred approximately 15% over the delivery period 1983-2004, without a reduction in the total contract: initial deliveries would, however, be made on time (45).
1982 uranium earnings were slightly down (46), but, once the Stanleigh mine came on stream in 1983, and a new contract was landed by the company's Lisbon mine in Utah (see later) (47, 48), it managed to triple its profits (49, 50). Thanks to Stanleigh, the company showed good earnings well into 1984 (49, 51). The Stanleigh mine, like the other Algomites, originally produced uranium for US nuclear weapons, and closed in 1960. Rio Algom not only devoted much money and labour (bankrolled, it should be remembered, by Ontario Hydro) into recommissioning it, but brought in some of the most sophisticated computer- controlled technology available, to win uranium from depths of up to 4000 feet below the surface (52). Its scheduled throughput of 4250 tonnes per day of ore was reached in Spring 1983 (53).
In 1984, Rio Algom recovered nearly 8 million pounds of uranium and, by the year-end, contracts were held for around 58 million pounds, for delivery between 1985-1995, as well as another 50 million pounds from Stanleigh for 1996-2020 (54).
The same year, an energy savings program was introduced at Elliot Lake, which included piping-in of natural gas (55). Uranium leaching was also expanded - material being left in the underground workings and sprayed with recycled mine water - while "experimental" areas were developed at Quirke and Panel, to test the feasibility of applying the technology to lowgrade in situ mineralisation (55).
In 1986, the Ontario Hydro contract once again came up for debate, with another 28% deferral of deliveries and a reduction in the workforce (56). The object was to supply the utility with lower priced uranium (the original contract having been signed at a time of exceptionally high prices) (57). Perhaps the most significant aspect of this re-negotiation was the prospect - previously thought highly unlikely (29, 58) - that, in order to cut the long-term costs of this contract, Rio Algom would "access" adjacent, higher-grade deposits at Milliken, Lacnor, Nordic, (56) and Spanish American, another old Elliot Lake property (53).
The following year, earnings fell again, thanks partly to a 19- day strike at Elliot Lake (59). A philosophical Ray Ballmer, in 1988, commented that the mines were now "into the sunset of [their] life" (43), as the company's longstanding contracts were due for final deliveries in the 1990s, with few prospects for new ones thereafter (except for Ontario Hydro's).
Despite (or because of) the heady expansion in Canada, Rio Algom has not neglected yellowcake production south of the border. In 1970, Rio Algom secured a contract to supply (through RTZ Mineral Services) the Swedish Sydsvenska Kraftaktiebolaget in Malmo, for the initial core and reloads for what was to become the highly controversial Barseback reactor - just across the sound from Denmark. It was then announced that RTZ Minserve would obtain "a major part of this contract from Rio Algom Corp in the USA, with deliveries to start in 1973" (60).
In response, the Lisbon mine and mill at Moab, Utah, was started up in 1972 (61) and, in 1975, had reached a mill throughput of 700 tons per day (11). By then, the company could boast contracts of 4,400,000 lb U3O8 (11) (which could have included consignments outside the Barseback contract), and it was noted number eleven in the league of holders of US uranium reserves (62).
In 1978 output was slightly decreased "in accordance with the planned sequence of mining" (27): average recovery was 4 lb per ton U3O8, while, that year, total output reached just over one million pounds (1,076,000) (27); the mine suffered from falling grades again the following year (44). 1981 saw modest production of 430 tonnes but, with the completion of deliveries then under contract, and "in view of the currently depressed state of the uranium market" (40), production was reduced by around 50% in October of that year, and some 120 of the 250 workforce were laid off (44, 45). Lisbon then set about "toll milling" ore produced by other companies, with the result that "a relatively high rate of capacity utilisation" was obtained during that year (47).
Another contract was negotiated in 1983, for supplies until 1986, and profits increased (48): it is not known who the customer(s) was. The mine was being run down by the end of that year (63), but, at the close of 1986, the Lisbon mill was still operating at capacity, thanks to "toll" contracts from other mines (53). This was partly because 200 tons per day (out of a total of 750 tons per day mill capacity) was by then, coming from a new mine, opened by Rio Algom in southeastern Utah.
The Mi Vida mine was originally exploited by the legendary Charles Steen - "uranium mining's first millionaire". It opened in the 1950s, but closed in the early 1970s (6:5). Re-opening Mi Vida was a minor gamble on Rio Algom's part: perhaps more important, it signalled to the industry as a whole - still suffering the depression of the turn of the decade, and the aftermath of the Three Mile Island disaster - that uranium in the USA was not completely on its last legs. With 50,000 tons ore, grading 0.2% U3Os, the Mi Vida mine began its second short life in 1983, and enabled the Lisbon mill to increase production from a 5-day to a 7-day week (64).
At the end of 1986 and beginning of 1987, Rio Algom held contracts for the delivery of about 40 million pounds U3O8 from Elliot Lake, which were due to expire in 1995, and a further 57 million pounds due to be delivered to Ontario Hydro from the Stanleigh operations (53). Contracts
Not only have the Ontario Hydro contracts been drastically revised to postpone delivery, but so have those with Duke Power. This US utility was to receive 7690 tonnes from 19811990, and delayed part of the first half of this schedule until 1991 - 1992 (4). In 1977, Japanese contracts, involving at least 31 million pounds U3O8, destined for eight utilities from 1969-70 (65), were delayed by the Canadian government's non- proliferation measures - one of these was for 610 tonnes to the Japan Power Co (4).
Among Rio Algom's other contracts, the most significant are one for 7690 tonnes with BNFL of Britain (4) - this contract having been concluded in 1973, over 25 years, as the cartel wound into top gear (4); the 4.2 million pounds deal with Kepco from 1981 - 1990, to be delivered in an enriched form (66), with conversion by Eldorado Nuclear (67); and a 1981 contract with Preussische Elektrizitatswerk AG, to supply 3.4 million pounds U308 from 1983-1996 at C$28 lb (68).
The "Rossing contracts" are probably the most controversial single set of uranium deals ever concluded. Although Rossing remains the world's largest open-pit uranium mine, and the company has fulfilled numerous contracts over the past 13 years, it was the initial contracts, for 6000 and 1500 tons, which secured finance for the mine, and which therefore became the subject of this raging controversy. What is publicly known is that the British Foreign Office okayed these contracts in 1970 for supplies from Rossing, despite alternative sources being available. What is important from the point of view of Rio Algom is that the British Cabinet (a Labour government one, to boot) was given the distinct impression that the uranium it required for the British atomic programme through the 1970s and early 1980s would come, not from southern Africa, but from Canada - indeed from Rio Algom. In 1968, the UKAEA (British Atomic Energy Authority) authorised the conclusion of a contract with Rio Algom for such supplies. Tucked away in the small print of the Cabinet decision was an option to switch supply to South Africa, but only if the Cabinet was informed (69, 70). The deal was with Nuclear Engineering International, and the Rio Algom contract would be for 10,260 tons between 1968 and 1982 (72).
However, in early 1970, some eagle-eyed South Africa watcher in the Foreign Office, scrutinising a notification from the Ministry of Technology (MinTech) (74), learned that two major contracts were about to be signed by UKAEA - not with Rio Algom, but with Riofinex, for the supply of U3O8 from the Rossing deposit, which had been recently acquired by RTZ (69). The MinTech switch had occurred not simply with South Africa, but Namibia - an illegally occupied neo-colony of the apartheid state, officially under the aegis of the United Nations. The Foreign Office then informed the Cabinet - which discussed the new contracts, but was apparently confronted, not simply with a fait accompli, but with a self-fulfilling prophecy. The first contract, for 6000 tons, had supposedly been signed and allegedly could not be revoked. But this first contract did not become operable until the second, for 1500 tons, had gone through. At the time of the cabinet meeting, this had not happened: sitting in ignorance (and with vital information concealed from them) the Labour government's policy-makers passed the first Rossing deal, unaware that a second qualifying contract existed.
MinTech had argued that no supplies were available as an alternative to Rossing. This was palpably untrue as, by the late 1960s, a buyer's market existed in uranium, and there was a gross over-supply. Critics of the Rossing deal have pointed out that, probably the major reason for switching the contracts from Rio Algom to Rossing, was the Canadian government's preparedness to impose international safeguards, making it impossible to utilise Canadian uranium in the British military programme (69). That may be true, but is (as yet) unproven. In fact, Canada did not impose its safeguards policy until 1974, and the policy was not fully implemented until 1977 (6), when it certainly did affect Rio Algom's delivery schedules (73).
Anthony Wedgwood Benn, Britain's erstwhile Minister of Technology - officially responsible for the signing of the Rossing contracts - has consistently argued that his own department kept him in the dark about these highly sensitive deals. However, even if Benn was not aware of them, he should have been, and is therefore culpable for them (74). There are also equally consistent statements from RTZ over these years, that there was never any question of securing Canadian supplies for the British nuclear programme of the 1970s and beyond (74): Namibia - or at any rate South Africa - was always the chosen source. At the time the Rossing contracts were confirmed, the Canadian uranium industry was in a state of severe decline. (Production had dropped by three quarters from 1959 until 1966) (75). Moreover, in March 1970 - just after the contracts were supposedly "switched" - the Canadian government announced new measures to limit foreign ownership of Canadian uranium: henceforth foreign control would be restricted to 33.3% (75). (The measure was not implemented for nearly two decades.) Any anticipation of this would have led RTZ, the UKAEA, and MinTech to conclude that Canada was not necessarily as safe an option as some wanted to suggest. Four years later (as if to confirm its confidence in its nascent Namibian confrere) Rio Algom took a 10% stake in Rossing Uranium Ltd, through the exercise of an equity option of C$8.1 million (76), as RTZ sought to secure new financing for Rossing (4).
At Rio Algom's 1982 annual general meeting, the Taskforce on Churches and Corporate Responsibility, in Canada, challenged the company's continued profiteering from Namibia. Promising that a formal written reply would be forthcoming, the company's then- chair, George Albino, argued that the mine was a "mainstay" of the country's economy, which benefitted all citizens. It had "no racial barriers and no distinction in wage levels". The Taskforce, quoting the 1981 report from the UN Council on Namibia, countered that apartheid existed at all levels in the mine; unions were forbidden to operate; it was unlikely that workers were adequately protected from radiation hazards, given the failure of Canadian companies to safeguard their own workforce (77).
The Rossing contracts were concluded some time before the international uranium cartel came into operation, functioning among its members as the "Uranium Producers Club". But it is conceivable that RTZ anticipated the operations of the cartel, in which it was to be the key corporate partner: certainly there is evidence that, once the cartel was in operation (78), uranium prices rose high enough to justify development of Rossing (78).
Rio Algom participated in the cartel, both as part of the RTZ camp, and as a member of the small club of Canadian producers, protected by the Canadian government. As such it did not perhaps benefit as much from the contract allocations made by the uranium clique, as did other members. (Figures were divulged in 1976 showing that Rio Algom would deliver 840 tons up to 1977, and around 1700 tons between 1978 and 1980, out of a total of more than 10,000 allocated to Canadian producers (79)). As late as 1973, there were still intense discussions among MKU, Rossing, and Rio Algom, as to who would get what in the forthcoming round of contract fixing) (80).
At any rate, the following year, Rio Algom concluded a contract with the Tennessee Valley Authority (TVA) in the USA, for the supply of 17 million pounds U308, at around US$770 million. This gave a huge fillip to Rio Algom since it involved delivery from 1979 until 1990. When details of the cartel burst in Australia in 1976, and the US Justice department, as well as Westinghouse, began showing considerable interest in the operations of the uranium cabal (81), Rio Algom was named, along with others in the RTZ stable, as a prime violator of the Sherman Anti-Trust Act. By 1977, the company was "under severe legal pressure" from the US courts and, in the fall of that year, was held in contempt by the Salt Lake City Court, for not producing evidence so that Westinghouse could proceed with its case against the cartel. (This huge US utility claimed that it had defaulted on its own uranium contracts, solely because of the uranium price- hike stage-managed by the Uranium Producers Club.) Although fined US$10,000 a day for failure to comply with the Salt Lake order, a Denver court soon overturned this judgement, on the grounds that Rio Algom was simply following Canadian law (82). Nonetheless, a year later, along with eight other companies, Rio Algom was held in default by a Chicago Court, for failing to answer the Westinghouse charges (83). It was not until early 1981 that the company was off the hook (84).
Even then, the company was not fully in the clear: in 1982, WPPS (Washington Public Power Supply System) summonsed Rio Algom and seven other companies (including RTZ Mineral Services), for anti-Trust violations, as its construction costs shot through the ceiling (85).
TVA took Rio Algom to court in the USA in order to void its contract with the Canadian company. This was as a direct result of Westinghouse restraining TVA from making payments for a delivery of uranium to Eldorado, title to which would pass to TVA when the uranium oxide was stored at Port Hope and transported as UFG to destinations in the US by Rio Algom (86). Apparently TVA already had suspicions of a cartel, when it concluded the contract in 1974. Although it asked fifty-three US and foreign companies to quote a price for uranium supplies, only three replies had been received! (7). In the early 1980s TVA was again in dispute with Rio Algom over the contract price, which had apparently increased considerably between 1979 and 1980 (86).
As Rio Algom moved to find buyers for the uranium at the centre of the dispute (87), it also began an action in the Ontario Supreme Court against TVA, for C$600 million breach of contract (88). Later, the Canadian company accused both TVA and Westinghouse of conspiracy- claiming that TVA had decided it did not really need the uranium it had contracted to buy, while Westinghouse was primarily concerned to reduce the costs of TVA's own litigation against the huge electric corporation. (TVA was one of the original customers whose supplies were interrupted as an alleged result of the cartel) (89). In the end, virtually all parties had settled out of court, and TVA dropped its action against Rio Algom, in return for a wider settlement which secured C$200 million for TVA from seven companies, including Rio Algom (90, 91).
Thus, an extraordinarily complex internecine battle came to its fitful conclusion. There may be little honour among thieves, but none of them were prepared to finally kill-off the geese which lay the yellow eggs.
The USWA - the United Steelworkers of America: the main union involved in mining uranium at Elliot Lake - had expressed deep concern over the health effects of radiation from the early days of mining (17). Briefs were submitted by the miners to both federal and Ontario provincial governments as early as 1958, when the Union first demanded the appointment of a Royal Commission (17). The federal government passed the buck to the provincial government, which handed it to the mining companies (92).
Both governments were long aware of the hazards associated with the industry but, at least until 1975, deliberately concealed their existence or effects. For example, a letter in early 1969 from the Ontario Workman's Compensation Board to the Occupational Health Division of the federal Ministry of Health, stated that 16 out of 20 deaths to Elliot Lake miners were the result of lung cancer: the majority of workers had been exposed to radiation levels above the maximum permitted (93). Stephen Lewis, a former leader of Ontario's New Democratic Party (NDP), himself dug up surveys by Denison and the Algom group of companies, covering the period 1958 to 1974. He discovered that "... in no individual year, from 1959 to 1974 inclusive, in no survey, quarterly, three times a year, or semi-annually, in not a single instance, did the average underground dust counts for the uranium mines of Elliot Lake fall below the recommended limits. Not one." Concluded Lewis: "It's really quite horrendous" (93).
Governmental "wisdom" in these years was put bluntly - that the mining companies could investigate and police themselves. It was not until well into the 1980s that the situation materially changed. Not only that - but miners were also excluded from health and safety meetings concerned with their own working environment (17).
Although Denison Mines cannot be acquitted of negligence in monitoring the work hazards of Elliot Lake, it was undoubtedly Rio Algom that was most culpable - indeed criminally negligent - during the period 1958-1980. The USWA compared company records obtained from Rio Algom in 1975-76, with government readings of radiation exposures throughout the company's mines in the area. The USWA survey showed that Rio Algom had consistently underestimated hazards in virtually every part of the mining complex and mills, by deliberately under-reading radiation levels (94). In one case, the company recorded radiation levels no less than 30% below that of the government's (17) . No wonder that Dr D V Bates, on a visit to Elliot Lake in 1979 as chair of the British Columbia Royal Commission on Uranium Mining (BCRUM), was prompted to make this comment on the region's Health Protection Surveillance facility: "The general impression ... is that it commands so little in the way of resources that presumably the company at all levels regards the whole of the surveillance program as a very low priority activity" (95). (A little later, Dr Bates was to recommend a moratorium on uranium mining and exploration in British Columbia: a moratorium which is still in place today).
Again, while both the Atomic Energy Board of Canada (AECB) and the Ontario Department of Mines, had authority to insist on improvements at the mine site, their respective responsibilities until the 1980s were not at all clearcut, and allowed for widespread negligence. Kenneth Valentine, National Director of Health and Safety for the USWA in 1980, stated baldly in a submission to the BCRUM that, in his opinion: "... there have been situations where almost [every company at Elliot Lake] should have their licence revoked ... In the final analysis, I would suggest that, at the very least, the AECB is guilty of criminal negligence ... And as a result of their failure, their dereliction of duties, untold numbers of people have died" (96). The Staff Representative of the USWA at Elliot Lake itself told the same Commission that his union didn't "... know of one case where the AECB has charged the employer ... The lack of enforcement is exactly the same as the lack of any regulation" (97).
The medical profession has hardly been more responsive or responsible. In particular, the Workmen's Compensation Board (WCB), set up supposedly to evaluate medical grounds for compensation, has not been well served by its doctors. Until the 1980s, the Board only accepted exposure to radon "daughters" as grounds for declaring that cancers were industry-related (17, 98). Thus, workers in the thorium-separation plant operated by Rio Algom until the 1970s - who were exposed to up to 40 times the radiation level recommended by the International Commission for Radiological Protection (ICRP) - failed to gain any compensation from the Board (97).
For many years, too, whole-body radiation caused by gamma rays - now acknowledged as a key source of various cancers - was not entertained as a causative factor (99).
Up until 1974, a chest clinic at Elliot Lake gave miners yearly chest X-rays, ostensibly to identify incipient cancers. Despite the fact that some miners were showing deterioration, their licences were renewed, and they were sent back down the mines (97). That year, when the limit for silicosis compensations was lowered by 25%, and a large number of new cases became eligible for compensation, "neither community doctors, Ontario Workers' Compensation Board, nor the companies, said anything to the men" (100). One man, Joe Zuljan, was told by a WCB doctor that, although he had 10% disability for silicosis, he was fit to return to underground working at Elliot Lake. He did not return. Nonetheless, in two years he was dead (100).
This is not to gainsay the contribution of one or two doctors who stood out against the trend. In 1976, one doctor, with thirteen year's experience of Elliot Lake, claimed he had warned of carcinogenic working conditions, no less than seventeen years before, but had been ignored (101).
Historically, the miners of Ontario - unlike their fellow workers in Alberta and Nova Scotia - were fairly quiescent from the 1920s until the 1960s, when they joined miners throughout Canada striking for better wage, health and safety measures (102).
Then, in 1974, a "wildcat" strike, initiated by Ed Vance at Denison's operations at Elliot Lake, set in train major improvements in health and safety throughout the country (102).
The three-week industrial action was prompted by revelations - ironically, at a symposium in France (17) - that the abnormal cancer rates among Elliot Lake miners had been known for five years to various provincial government agencies (103). Indeed, an Ontario Ministry of Health Report made in December 1972, observed that deaths from lung cancer among the miners exceeded the expected rate in the general population by a factor of between three and five (99).
The immediate practical result of the strike was the appointment of the Royal Commission on the Health and Safety of Workers in Mines, usually known as the Ham Commission after its Commissioner, James Ham. This reported in 1976, and its conclusions, were potentially devastating.
Ham decided that, of 956 deaths on the Ontario Uranium Nominal Roll of 15,094 miners (who worked longer than one month), eighty-one had died from lung cancer during 1955-74, as against 45 expected for the population as a whole. Ham found that typical exposures among the lung cancer cases were in the 70 WLM (Working Levels per month) range. ("Working Level" is an acknowledged way to measure extent and length of exposure and its cumulative impact). These results, though smaller than found elsewhere (in Colorado in particular) "... are just as likely to overstate the quantity of radiation actually needed to produce cancer".
This was because lung cancer had already been in place as a cause of death, due to fairly low exposures. The lapse of time between genesis of cancers and death allowed further exposure which did not alter the fatal outcome, but inflated minimum exposure levels pre-disposing to cancer. In view of this, Ham concluded that 10 WLM would have to be a maximum threshold, "to be at all plausible in relation to the Ontario experience" (104). Equally important (especially in the light of later research into the effects of low-level radiation in general) was Ham's judgment that excess lung cancers occur at lower radiation levels than could have been adequately studied in US uranium mines to date. (He referred specifically to Radon Daughter Exposure and Respiratory Cancer, Quantitative and Temporal Aspects by Lundin, Wagoner and Archer, published by the National Institute for Occupational Safety and Health, in Washington in 1971).
The Royal Commission had revealed 93 "silicotics" (people suffering from silicosis), ascribed to Elliot Lake operations, by the end of 1974. K A Valentine, in his 1980 submission to the Key Lake uranium Inquiry, claimed that, by early 1975, nearly 500 miners had lung disabilities, wholly or partly ascribable to dust exposure in the mines and mills, of whom 147 were afflicted by silicosis, and 200 predisposed to the disease. Over the period 1974-1980, said Valentine, more than five hundred such cases had developed and the situation had not markedly improved (99).
James Ham's report led directly to a new provincial Mining Act and new set of regulations in 1978 (105). However, just after the new legislation was passed, the Federal government reverted to the old Ontario laws. Since uranium mining was covered by federal legislation, Rio Algom and Denison workers were left with the savage irony that, the very changes they had struck in support of, were now denied them (103).
After threats of strike action, further negotiations, and a work stoppage, in October 1981 the USWA won a new collective wage agreement, covering 400 employees at Rio Algom and Denison mines (106) . More important than the mediocre wage increase was a new three-year contract, empowering the USWA to appoint inspectors (eight at Rio Algom and five at Denison), paid and trained by the companies, to be responsible for monitoring all safety, health and environmental hazards (105, 106) . The provincial right to refuse unsafe work was, at last, incorporated into the agreement (Bill 70, as it is known). Commented Homer Seguin of the USWA: "I don't think there is anywhere in North America that will have such powerful health and safety people". According to Ken Valentine: "It is extremely important that the Elliot Lake experiment succeed - it will determine the future of this type of effort for all of North America" (105). ("The next step," added Ken Valentine in an interview with the anti-nuclear paper Birch Bark Alliance, "would be co-determination of the workplace. But we're a ways off from that yet") (105).
The process was still not complete, however. It was not until mid- 1984 that, by signing amended collective agreements, the workers at Elliot Lake finally gained a complete legal right to refuse "unsafe work" - and stand on the same footing as all other Ontario miners (107).
Miners at Rio Algom (and Denison mines) in Canada, are now better safeguarded than uranium workers anywhere in the world. But perhaps this fact should not be over-stressed. Since there is no radiation limit which is absolutely safe - let alone those maintainable in underground uranium workings - the Elliot Lake monitoring is, at best, an admirable holding operation: at worst, it might beguile some workers, public enforcement agencies, and others, into granting the industry a blank cheque for further development. Although Rio Algom showed no sign of supporting the Ontario legislation until the writing appeared on the pit-wall, the company has apparently taken care not to disturb implementation of the 1981-84 agreements. On the other hand, the Elliot Lake precedent has not been taken up outside of Canada, let alone within the RTZ group. And, long after the agreement was signed, the USWA was still demanding the investigation of workers who had been subject, without their consent, to "aluminium dust" "therapy" from 1943 to 1979 (when the union stopped it), as well as the funding of their own Workers' Health Centre (108).
The radiation and pollution effects of Rio Algom's operations on the surrounding land and rivers are more intractable and, so far, have merited much less preventive action. However, it should be pointed out that, in this area too, the USWA have probably been the most vocal objectors to company practices. They swiftly raised their voices when they discovered that waste from Eldorado's Port Hope UFG refinery was to be sent back to their area, for the extraction of small amounts of uranium, before being dumped in the tailings pile (103).
In 1978, the Porter Commission (officially, the Ontario Royal Commission on Electric Power Planning, chaired by Arthur Porter) estimated that some 80 million tonnes of uranium tailings were to be found near Elliot Lake. "Several lakes and streams have been badly contaminated" as a result, declared Porter, who warned that the quantities might reach "several hundred million tonnes" by the turn of the century, while "there are no obvious technological solutions in sight". Indeed, "the problem is probably more difficult to handle than the ultimate disposal of high level radioactive wastes, partly because of the extremely large volumes involved" (109).
Barely two years later, other Canadian researchers were estimating that, around 110 million tonnes of such tailings had already accumulated nationwide, of which the vast majority (100 million) were a bequest of operations at Elliot Lake (17). If spread over a two lane highway, three feet deep, according to Miles Goldstick, these wastes would stretch all the way from Halifax to Vancouver, coast to coast. According to another observer: "... local residents continue to pick blueberries within a 40 foot high wall of uranium tailings" (110).
Based on both Rio Algom's, and Denison's, expansion plans in the late 1970s, the AECB estimated that the volume of solid wastes could double by 1990, reaching a billion tons by the year 2010 (111). The Toronto group, Energy Probe, in the early 1980s, projected premature cancer fatalities from this carcinogenic bequest to future generations, of 60,000 over the next 110,000 years - not to mention those caused by the thorium-radium 226- radon decay cycle, which spans around half a million years (112). Canada's uranium wastes are dumped either onto the land surface, or into lakes and rivers. In 1978, says Miles Goldstick, uranium mills were spewing out 14,000 tonnes of solid wastes, and double that amount in liquid effluent, each day. Although the Ontario Water Resources Commission began waste monitoring in 1957, and the Department of Health started investigating drinking water pollution the following year: "little of this information has been made available to the public" (17, 113).
In addition, tailings were long used as construction and building material. This problem was recognised by 1976, when the AECB set up a joint Federal-Provincial Taskforce to deal with it, and decontaminate the sites. Setting 0.02 WL as the allowable radiation limit (114), the Taskforce found that 40% of the houses at Elliot Lake needed attention, ranging from "immediate remedial action" to "further investigation" (115). One section of Elliot Lake township was later rendered a "ghost town" with only a fifth of its 251 buildings deemed habitable (116). Even then, the 0.02 WL set by the provincial government was heavily criticised as far too high. Commented Dr Gordon Edwards, of the Canadian Coalition for Nuclear Responsibility, in 1978: "... continuous exposure to 0.02 WL for 12 hours per day could lead to a whopping 31% increase in the incidence of lung cancer for males" (117).
But, as usual with uranium mining, it is the problems caused by the tailings disposal (or lack of it) that are the worst.
These problems can be summarised as: those caused by radioactive releases into the air, especially of Radium-226, and by releases into water (flowing streams, lakes and groundwater); acidity caused by heavy metals; pollution caused by chemicals used in the milling and comminution processes, specifically ammonium and nitrates (17). Gauging the impact of all these malign influences on humans, animals, plants and aquatic life is extremely difficult, and has hardly begun. In its final report on the Elliot Lake expansion plans (made in 1979, after the Ontario legislature had compelled Algom and Denison to submit to the environmental assessment process), the Ontario Environmental Assessment Board commented that: "... considerable effort and time is required before solutions to the long term aspects of waste management can be found ... the companies, as well as the various provincial and federal agencies, have only recently come to grips with the problems . . . " (118) . In particular, desperately little is known about the ways in which human beings take up radioactive traces, or heavy metals, through the food chain: ironically, thanks partly to the devastation caused by thirty and more years of mining at Elliot Lake, more is known about the damage to fish (17). Similarly, the migration of tailings through groundwater with a potentially disastrous effect on future generations - only began receiving attention in 1978, at a point when thousands of tonnes of radioactive and acidic sludge would have found their way into aquifers and streams (17).
It is the Serpent River Basin which receives all discharges from the Elliot Lake complex and, until the early 1960s, all waste water entering the system went untreated (17). By 1980, so many tailings were being dumped that, in the headwaters of the Serpent River - where flows are very low during the summer- liquid wastes from the mines comprised between one half and two- thirds of the total flow (119).
In 1976 - a watershed year for the region, in several respects - the International Joint Commission on the Great Lakes (IJC) identified the outflow of Serpent River into Lake Huron as the greatest single source of Radium-226 and thorium isotopes in this tract of freshwater. Just one kilometre into the lake, huge concentrations of Radium-226, thorium and other metals, were well above standards set by the IJC (119).
More significant was a 1976 report by the Ontario Ministry of the Environment - initially secret, but divulged the following year (120) which concluded that eighteen lakes in the Serpent River system had been contaminated as a result of uranium mining, to such an extent that they were unfit for human use and all fish life had been destroyed (121).
By this time, Rio Algom had commenced its expansion programme and re-activation of old mine and mill facilities. "Changes to the surrounding terrain," RTZ blithely declared, "are expected to be negligible." Citing reductions in the use of freshwater and chemicals in plant recycling, and other improvements "over the years", the company studiously avoided referring to the impact of its tailings on rhe river, lakes and the life dependent on them (122). Yet two years later, "in spite of several years of remedial action", Professor Scharer of the University of Toronto reported that there was still no possibility of fishing or safe swimming in the Quirke, Whiskey, McCabe or Hough Lakes (112).
Let us look briefly at the specific impacts of mill tailings production and disposal at Elliot Lake (in particular those caused by Rio Algom) and examine what the company has done about them in the last ten-to-fifteen years.
Radium-226 poses particular problems where it is deposited on lake bottoms. In 1971, the Ontario Water Resources Commission identified levels of radium in the lakes with levels up to 50 times the background radiation level, and up to fifteen times the maximum water quality level 3pCi/l (pico-Curies per litre), as set by the government (12). Although, by 1978, radium levels in Quirke Lake had been lowered (by dilution, reduction in mining, and new Rio Algom treatment facilities) to 5pCi/l, they were still twice the target level for drinking water, as set by Health and Welfare Canada (17). Clearly, the expansion of Quirke Lake mining could increase concentrations further. Radium-226 levels in May Lake were, in 1978, still 9pCi/l - around four times the government-set limit (119).
Alarmingly, barely two years later, a federal provincial committee recommended that, instead of lowering radium levels to meet health criteria, the standards themselves be lowered:. this was in line with a recommendation by the ICRP that maximum permissible radiation for bone marrow could now be increased nine times. Sister Rosalie Bertell, of the Jesuit Centre in Toronto, and a world expert on radiation (with special knowledge of Elliot Lake) called the decision "murder". In her opinion, "the blatant reason for the change is because the radium is too expensive to clean up" (124).
Radium, thorium, and uranium, dissolve more easily - hence pose greater problems - under conditions of high acidity (17) . Mainly because sulphuric acid is used in mill processing, acid wastes have long proved a killer of aquatic life in the region, and are a prime reason for the absence of fish in the lakes (at least until recently). Mature freshwater fish cannot survive in water whose acidity (measured as pH - a high pH reading being alkaline, a low being acidic) is outside the range of pH5 - pH9. At May Lake in 1980, acidity was well within the range of vinegar (3.1). Although, by then, acidity at Quirke Lake was reducing (to around pH 5.5), expansion of the plant once again posed a threat (17).
Acidity levels are inversely linked to the dangers posed by heavy metals: the higher the pH, the more gas given off by ammonium liquid. At Quirke Lake, concentrations of ammonium have exceeded the Ontario Drinking Water Quality Criteria (17), while high concentrations of nitrogen compounds have been located some 40km downstream of the mine (119). Iron levels at May Lake (119), copper levels at Quirke and Dunlop Lakes, have given cause for concern in recent years (17). Copper is especially threatening to fish. (It kills young salmon at 0.1 ppm [parts per million] - one tenth of the human drinking water limit (125) - and can prove poisonous to sheep at 0.5 ppm). Copper levels measured downstream of the Quirke Lake facilities have reached 0.11 ppm, and at Dunlop Lake, 0.58 ppm.
This environmental "bill of account" would not be complete without some discussion of "accidents" resulting from mine operations at Elliot Lake. These include unexpected seepages, unintended movement of solid wastes, dam and dyke failures, re- solution, or erosion, of barium-radium precipitates, waste pipeline breaks, pump failures, a decant tower collapse, the accidental release of a large volume of sulphuric acid and release of fine sands in the decant effluents (119). In 1964, some 82,000 tonnes of waste drained into Quirke Lake, due to "overtopping" of the dam (95). And, in 1979, within a month of the Panel mine and mill being modernised (126), a tailings line broke, leading to liquid and solid contamination of Quirke (116).
What has Rio Algom done in response to this liturgy of destruction and hazards which will persist for aeons to come? At no point has it closed one of its mines on health or safety grounds. Instead, it has introduced a barium chloride treatment process, which is applied to run-off waters before they are released into the lakes (127). However, although this process - together with some recycling of plant water, and some treatment of run-off from abandoned sites - was reducing Radium-226 levels in part of the Serpent River quite dramatically between 1966 and 1982 (according to the IJC: from 11.7pCi/l to 1.43pCi/l) (127), the barium chloride "solution" may simply shift half the problem downstream. According to experts from the Environmental Protection Service of Environment Canada, well under half the total radium contamination is removable by this process: namely, the dissolved part. The radium which is in suspended solid form merely gets carried further towards the sea, where its impact is much more difficult to gauge (128).
Neutralisation of acid wastes has been practised at Elliot Lake through the addition of lime to tailings, but this strategy - according to the British Columbia Royal Commission on Uranium Mining - has largely failed (95). In 1978, as the Quirke mill entered its expansion phase, and Rio Algom's chair, George Albino, outlined the plans at the Ontario Environmental Assessment Board, the company made it clear that it did not intend to alter the use of nitric acid in the ion exchange circuit, or ammonia for the precipitation of uranium (although studies had indicated that magnesia might be substituted for ammonia) (129). The problematic relationship between acidity control and ammonium levels has already been mentioned: it is also important to note that, as acidity is lowered, so the level of total dissolved solids (tds) rises, and - up to the turn of the 1970s - was rising quite dramatically (119).
Although Rio Algom prides itself on re-vegetation of some of the tailings piles and, by 1979, claimed to have re-vegetated more than 400 acres of wastes (using huge amounts of limestone and fertilisers), in 1980 it was noted that the cover was only six inches thick, while Radium-226 was accumulating in grasses and bull-rushes, at ten times the background radiation level (112) (130).
In 1983, a proposal to dump tailings under the water at Quirke Lake was vigorously adopted by two firms of consultants as a means of controlling (and disguising) the galloping tailings crisis. The proposal, though apparently supported by the AECB, was firmly rejected by Denison and Rio Algom. Rio Algom, in particular, argued that the company did not need a new disposal area, and would be proceeding with land-fill as usual. "Rio Algom has a commitment to our current buyers to keep costs as low as possible". The development of Quirke Lake would be an "unwarranted cost," it declared (131).
The most "unwarranted cost" bequeathed by Rio Algom has been borne by the Native Canadians from the Serpent River Band, living downstream of the Elliot Lake operations some of them working in the mine and sulphuric acid plant. By 1978, the band could no longer drink the water, or fish in the river system (132). Although there might have been some marginal improvement in their habitat since, evidence from a comprehensive Environmental Impact Protection Program, carried out by the Toronto Jesuit Centre, along with three native Canadian bands (including Serpent River) between 1982 and 1984, makes disturbing reading:
About twice as many young adults (36 years and under) reported chronic disease at Serpent River as at the other two reserves studied (Mississagi and Spanish - which are not uranium - related).
The Serpent River band also reported the largest proportion of participants of all ages with chronic disease.
The most frequently reported diseases on all three reserves were diabetes, cardio-vascular diseases, arthritis and deafness. However, diabetes and cardio-vascular disease appear to affect the Serpent River band at a significantly younger age.
Just as chronic diseases are more frequent at Serpent River, so are pregnancies which end in fetal death (133). The report also analysed diseases in terms of occupational exposures, and concluded that, in males over 45 years, "ill health" is reported by more men with exposure to the acid plant or uranium mine (75%) than those not exposed (43%).
There is a higher than expected number of unexplained fetal deaths and abnormal live births among uranium miners, relative to non-uranium miners under 45 years old. There also seems to be an elevated rate of unexplained fetal deaths, and subnormalities in live-born offspring, for acid workers in the same age group (133).
Although the study is necessarily limited - and cannot expect to show up radiation-induced cancers which take 30 years to develop - its conclusions are that: "Occupational exposure appears to have a significant effect on Band members. The costs may well outweigh any benefits derived from nearby resource developments" (153).
Rio Algom's second major operation centres on the lucrative Lornex deposit in the Highland Valley of British Columbia, where Lornex Mining Corp has substantial interests in copper and molybdenum (134). Rio Algom acquired its interest in Lornex in 1965 (134). By 1969, it owned 36% along with Yukon Consolidated Gold Corp Ltd (24%), and various individuals, including Egil Lorenstzen, the prospector who found the lode (40%) (135). At the time, it was the lowest-grade copper deposit ever developed (135). Bechtel, who carried out the economic analysis of the deposit in 1968, concluded that, even with a faltering market, the mine could be viable (135). In March 1969, Rio Algom announced that it would raise C$120 million, to finance the venture, by issuing debentures and common-stock, to lift its own holding to more than 50%. Funding would come from Yukon Consolidated (though its interest would drop to 19%) and from two consortiums - one Canadian, and one Japanese (136). A month later, Rio Algom promised that the mine would come into production within five years, and that all output would be supplied to Japan (135). The company, by then, had secured some highly-favourable rates of investment from six Japanese smelting companies and banks. The smelters would loan nearly C$30 million with "the cost to Lornex [being] less than the current rates in Canada" (135), and three Canadian banks would provide C$60 million, "the largest bank loan ever provided for the development of a single non-ferrous mining project in Canada" (135). It would soon be the largest base-metal mine in Canada. Elsewhere
In 1975, Rio Algom made a cash offer for all shares it did not hold in Lornex, and, as a result, increased its interest from 59.8% to 66.51% (11). Over the next ten years, Rio Algom's interest in Lornex crept up to 68.8% (134). During that decade, its fortunes fluctuated, but overall, the Lornex story is a remarkable chapter in Canadian mining history, and more than a minor footnote to the RTZ saga. On several occasions, Lornex has boosted Rio Algom when the company's uranium interests took a fall - in 1979 for example (137)i in 1980 (138) and again in 1983 (139), when production from the mine reached record levels, and the company explored further afield (140).
However, in 1981, thanks to lower prices - not only for copper and molybdenum, but also silver, which is an important Lornex by-product earnings fell. At the same time, the mine was expanded by 68%, more or less on schedule (141) - a factor which did not improve results (41), though Rio Algom claimed that the expansion programme was mainly self-financed, and production costs were "low" (40) . In 1982, too, the company ran a loss (142) - indeed its worst deficit on record (140).
In that year, however, Lornex reached agreement with Teck (itself a 22% shareholder in Lornex) (143), to acquire a 39% interest in the Bullmoose metallurgical coal project (144, Teck 51%, Nissho Iwai Coal Development, Canada,10%) which was set up to supply nearly two million tonnes a year of coking coal to Japanese steel mills, with lesser tonnages to other customers (140). Construction of Bullmoose was completed in 1983, and production started the following year (143, 145).
Lornex's fortunes improved the next year, thanks to better market prices (139), although they dipped in 1984 (146), resulting in a "total loss" (147).
By 1985, the Highland Valley deposit was clearly suffering from rising costs, declining ore grades, and dwindling reserves (134). Early the following year, Lornex announced a merger between its British Columbia copper operations and those of Cominco (Lornex 45%, Cominco 55%) (148), later to be joined by Highmont Mining (taking 5% of Cominco's share) (134) . The Highland Valley Copper partnership (HVC) combines Lornex's mill and mine with Cominco's Bethlehem mill and mine (134). Essentially, this new JV was of prime benefit to Teck, which - since the reorganisation of Canadian Pacific and Cominco the same year - has ended up hole-shot position. Not only does Teck retain its interest in Lornex, but it has become the largest shareholder in Cominco, and owns half of Highmont (149). But Lornex has also benefitted - as its 1986 results showed (150), as well as those of 1987 (151).
In 1988, Lornex began a major new construction programme at Highland Valley, at around C$70 million. With the milling rate expanded nearly 50%, the complex was expected to become the second largest in the world "and one of the most cost-efficient" (152). No wonder company chair, Ross Turner, could claim, in 1988, that Lornex, with cash reserves of around C$120 million, might now expand beyond British Columbia. "There are outside shareholders," said Turner, "and it has to be managed to the benefit of the shareholders"(134).
Apart from uranium, copper, molybdenum and coal, Rio Algom has also been dabbling in that wonder-metal which virtually every Canadian mining house has found itself unable to resist: gold. In 1977, Riocanex (Rio Algom: 100%) found gold in Newfoundland, at Cape Ray, 19 miles north-east of Port aux Basques (19, 154) . Drilling continued in 1978 and 1979, though a major project has yet to emerge (155). However, in 1981, Riocanex bought 50% of the Nelson property in British Columbia (where gold is associated with copper, silver and other minerals). Drilling that year indicated some 7 million tonnes of copper at 0.4% with 1.5 grammes/tonne of gold and 6.6 grammes/ tonne silver. Riocanex reduced its primary exploration efforts in 1982, concentrating on "known mineral deposits" (47). Over the next six years, Rio Algom itself was to consolidate exploration in Chile and Spain, as well as North America, acquiring 60% of the Sage Creek steam coal project in British Columbia, an option to buy into a tungsten-tin mine in southwestern Spain (La Parilla) - where major drilling took place in 1986 (143) - and further copper and gold properties in North America (156).
One of these exploration projects was to lead the company into considerable controversy, and an eventual withdrawal from a potentially highly-rewarding mine. The Cerro Colorado copper deposit in Chile (not to be confused with the Panamanian deposit of the same name - subject to even more opposition and a pullout by RTZ itself) lies nearly 100km east of Iquiqui port,2600 metres up in the high Andes. It contains some 70 million tonnes of copper sulphide ore, of fairly high grade (1.33%) with some gold and molybdenum (157). In 1980, the Japanese company, Nippon Mining, withdrew from the venture and transferred its share to Rio Algom. Rio Algom agreed to develop the deposit, and commissioned Davy-Mckee of Canada to complete a technical assessment and feasibility study (157). When these were completed in 1984, they confirmed that a 14,000 tonnes/day open- pit operation was feasible. Water would be drawn from the Andes by pipeline, and two small hydro-electric dams would be constructed. A development decision was expected before the end of 1985, but the feasibility study advised waiting until the price of copper had risen (47, 158).
Initially, Rio Algom and RTZ asked the Chilean junta's Foreign Investment Committee to authorise US$250,000 to construct the mine and mill (40, 159). As 1985 came to an end, it was thought that financing for Cerro Colorado was all sewn up. Rothschild and Sons Ltd - long associated with investments in RTZ and in financing the Churchill Falls project in Labrador (160), with which Rio Algom was associated in the 1960s - was a probable (unnamed) backer. Also involved was the British Export Promotion Agency, a government parastatal, which promised US$135 million in loans, so long [of course!] as they were used to buy British mining services and equipment. West Germany's KWF financing agency would grant credits of US$80 million, in exchange for two thirds of the production (which would go to Norddeutsche Affinerie). Most crucial was an agreement by the Finnish government financing agency, VTL, to pump in US$35 million, in exchange for a third share of the output to Outokumpu Oy. Rio Algom would also reportedly purchase the major equity in Cerro Colorado (at US$60 million) but might share it with an "undisclosed partner" - probably Corfo, the Chile Development Corporation, which was expected to provide an additional US$30 million to increase the overall equity of the venture (157).
Within a few months, however, Rio Algom's participation in Cerro Colorado was on ice. Its 1985 Annual Report put it tersely: "... it had been decided not to pursue development of ... Cerro Colorado ... because of recent difficulties encountered in completing satisfactory financing and commercial terms" (156). In fact, although sale of a 25% interest in the mine did go through to Outokumpu (161), the Finnish government then stepped in, under pressure from trade unionists and other groups, to halt direct support for the Pinochet regime, with its appalling record on [lack of ] human rights. Ironically, the Finnish government was not to prevent financing for Outukumpu two years later, when the Finnish company decided to buy into the Escondida copper mine, in which Rio Algom's parent, RTZ, holds a 30% interest. Up until now, Cerro Colorado - although all its feasibility studies have been completed - has not commenced production (162).
Rio Algom's ventures into another major metal have also had a chequered history. In 1982, the company raised C$157.5 million from north American banks (163), to acquire a large tin deposit at East Kemptville in Nova Scotia (164, 166), discovered six years previously (165), with a projected 17 year life (166). The mine and mill took 18 months to construct (167), and production was underway in 1986. All the output was contracted to RTZ's 100%-owned smelter at Capper Pass, on Humberside (168) (169). However, in October 1985 - just four days after the mine officially opened - the International Tin Council caved in under demands from its creditors, and the market price of tin collapsed. A year later, Rio Algom asked a consortium of six banks - which had borne the financing costs, without recourse to Rio Algom itself (one of those adroit moves that have characterised all RTZ companies over the past twenty years) (1 G8, 170) - to take control of the mine. Meanwhile, because of the suspension in tin trading, Rio Algom and Capper Pass had made a special price arrangement for the treating of the Canadian concentrates (168).
Barely a year later, with the price of tin starting to improve, Rio Algom offered to buy back the mine (171). Apparently the Bank of America (61.9%), seeking to offload a costly asset it didn't want, put the mine up for tender and only Rio Algom and RTZ made the running (172). A bare seven months later, Capper Pass was itself up for sale, amid statements that the former managing director had failed to agree with RTZ on how the plant should be run (173). This announcement followed, a large-scale and highly effective campaign by local people, joined by national campaigners and the media, to call Capper Pass to account for a horrendous excess of child leukaemias in the area downwind of the smelter (174) . Naturally RTZ and Capper Pass denied that this spotlight of adverse publicity had anything to do with the plant's reduction in output and offer for sale (173). What is more likely is that the public campaign, combined with possible pressure from Rio Algom to renegotiate the East Kemptville smelting deal (even possible interest from Rio Algom in taking over and re-structuring Capper Pass), threw doubt on Capper's viability at a crucial time. By "coincidence" RTZ sold up its interests in Cornish tin mines in April the same year: these had also been supplying feedstock to Capper Pass (175).
As part of its 1985-86 expansion and acquisitions programme, Rio Algom bought up all outstanding common shares of the Potash Company of America from Ideal Basic Industries, at the turn of 1985 (156). This gave the company 87.8% of the voting rights in PCA (53), and mining and concentrating facilities in Saskatoon and New Brunswick (156). At the time, potash prices were weak, but naturally Rio Algom was looking to a more settled future. Substantial losses, flooding in the Saskatoon mine (151, 176), followed by a strike in 1988 (177), have not augured well for Algom's potash ventures to date.
If, by 1985, diversification had become the watchword of the company (156), by the beginning of 1988, the top echelons were dissatisfied with the persistent "somewhat conservative image of the company". This did not mean further diversification outside of mining, however: on the contrary, the new chair, Ross Turner, was determined to "set mining as [our] main thrust over the next several years" - starting with North America (134), and new gold and uranium properties in particular (179). (Only a month later, however, Andrew Buxton of RTZ Metals was warning Canadian companies, and others, not to devote "too much time" looking for gold rather than other metals) (180).
Within the year, the company entered into a letter of intent with Kerr-McGee, the most notorious US uranium miner of the 1950s and 1960s, to acquire not only Kerr McGee's uranium properties in Wyoming, but also the issued and outstanding shares of Kerrmac's uranium company, Quivira Mining, with it's operations in the Grant's mineral belt of New Mexico. Thus, Rio Algom was once again on the brink of uranium expansion in the USA, reviving old properties.
Turner took over from George Albino, who had joined the company in its early years (1965), and in 1981 had risen to become Chief Executive and Chair, devoted to "a fundamental strategy for growth" (181). A pale and inconspicuous character, Albino was abruptly thrown through the Algom portals in late 1987, without official explanation (182). Later the company claimed he had been guilty of insider dealing (directing Rio Algom to buy shares in Atlas Steels, which were held by his wife, and profiteering from privileged information on the sale of certain Rio Algom shares). Albino counter-claimed with a C$10 million suit for wrongful dismissal, and a claim for an annual pension of nearly C$500,000 a year, protesting that Rio Algom had already intended to acquire the Atlas shares, while transactions with his own company's shares had been "conducted openly and with full knowledge of both financial circles and the company" (152).
In any event, in August 1988, Ray Ballmer became the vice-chair, Turner was the chair, and (lo and behold!) Colin Macaulay, formerly chief executive of the Rossing mine in Namibia, got drafted-in to become the new President and Chief Operating officer (183).
In his seven-year stint at the helm of Rio Algom, Albino had distinguished himself perhaps only once with his critics. When asked at the RTZ annual general meeting, in 1985, whether the provisions of the US Mill Tailings Act of 1978 would apply to the huge expanse of radioactive tailings left to future generations at Elliot Lake and Utah, he replied that he "was not aware of what this Act" - the most important set of environmental recommendations in post-war uranium history- "was about" (184)!
Contact PARTiZANS, 218 Liverpool Rd, London N1 1LE, UK.
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.
Distribution: Sales to bookshops: Pluto Press, 345 Archway Road, London N 6 5AA, UK. Sales to the mining industry and libraries: Uitgeverij Jan van Arkel, A. Numankade 17, 357t KP Utrecht, the Netherlands.
***Note to electronic texts: selections from Minewatch are available to researchers on corporate and mining affairs. However, the detailed REFERENCES and CHARTS in the print version are not available in electronic form. You are encouraged to order the complete book from the sources above.***
All rights reserved. © Minewatch, 1992.
Page last updated December 1, 1997.
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