CASE STUDIES IN MINING AND SUSTAINABILITY

D. H. Horswill, D. R. Parker and D. W. Godlewski

Cominco Ltd.

INTRODUCTION
Throughout history, mining has played a major role in the social and economic
development of communities and the growth of nations. In the western half of
the North American continent was opened by the mining industry. Towns like
Kellogg, Idaho, Trail and Kimberley, British Columbia, and many, many others
exist today because of our industry. In South America too, mining has been the
key to economic growth and development in many areas.

Public acceptance of our industry was strong –indeed, unquestioning. Meeting

the challenge of new frontiers and finding ways of succeeding, when all odds
were against them, the frontier miners created a wealth on which families could
thrive and prosper. Great human migrations followed the miners to the new and
uncharted wilderness. Houses sprang up, schools and hospitals were built, and
roads, railways and communication links became the infrastructure
underpinning the progress of subsequent generations.

A notable past, but what happened along the way? Today, critics regard our
industry as destructive, uncaring, Neanderthal, unwilling to fully appreciate the
public’s concerns about the environment, balanced growth and social justice. In
many countries –not just industrialized ones– mining is largely under siege.
Environmentalists believe that we are major polluters, and social activists
believe that we don’t contribute our fair share to society’s well–being. We are
regarded as part of the problem of environmental destruction and social
injustice.

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THE SULLIVAN – A CENTURY OF MINING
The Sullivan has been one of the most important mines in Canadian history.
Exploration in what is now known as the East Kootenay area of British
Columbia began in the late 1800s. The Sullivan orebody was discovered in
1892, and mining commenced in 1909. But the real key to the mine’s economic
success came in 1916, when Cominco developed the processes necessary to
make separate lead and zinc concentrates from the ores in the milling process.
Since that time, the mine has consistently been one of the world’s most
significant producers of lead and zinc.

The central focus of this paper is to consider how mining activities contributed to
sustainability. To answer this question, it is important to consider how
exploitation of a finite resource can be regarded as sustainable. Are the social,
economic and environmental aspects of the activity of mining and the use of
metals consistent with sustainable development?

The now well–recognized concept of sustainable development holds that

society’s pursuit of development that meets current needs should not
compromise the ability of future generations to meet their own needs.
Sustainability, then, contemplates multigenerational enjoyment of a quality of
life that includes social and economic benefits and a healthy environment in
which to live. So how does the legacy of the Sullivan Mine measure up?

When exploration began in the East Kootenays, there were no roads, no towns
and virtually no infrastructure beyond a few scattered trading posts and hunting
trails. Natural resource development and the building of railroads opened the
West for community and economic development. The Sullivan Mine played a
major part in that history. The people who came to work the Sullivan built a
community around the mine that later became the City of Kimberley. Today,
approximately 6,000 people live in Kimberley and, despite the mine’s imminent
closure, the outlook for the city has never been better. But before discussing

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how Kimberley is adapting to life after mining, it is important to look back on
what mining has meant to the four generations affected by its existence.

Between 1909 and 2000, the Sullivan has produced ore containing almost 9
million tonnes of zinc, and more than 9 million tonnes of lead and 280 million
ounces of silver metal, with a total value of production of more than $20 billion
dollars in today’s prices.

Over the mine’s 91-year life, the average number of employees has exceeded
1,000 people. With annual salary plus benefits estimated to average Cdn.
$68,000 per employee in today’s terms, the total contribution from the mine to
employees has exceeded $6 billion in today’s dollars. Taxes, payments to
suppliers, the purchase of local and provincial services, and profits to
shareholders have made up most of the rest of the mine’s $20 billion direct
contribution to the local and provincial economies. In addition, the Sullivan also
created what economists refer to as indirect, secondary and “tertiary” benefits.
These include economic contributions to the local retail industry and purchases
of services, housing, education, etc., throughout the region. These amount to
approximately three times the direct contribution, or another $60 billion in total
gross product added to the economy of British Columbia from the Sullivan Mine
over its long life. That level of economic activity made possible the building of a
social and economic infrastructure that places this region among the most
advantaged in the world.

Typical of the Sullivan situation is the fact the mine has numerous fourth-
generation employees, and the number of children who have grown up, earned
an education and gone on to other occupations either within or outside the
region is too numerous to mention. Many individuals who got their start in
Kimberley have achieved wide recognition in academia, the arts, athletics and
business.

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Beyond the economic activity related to the operation of the Sullivan is the utility
of the products from the mine itself. Since 1909, the Sullivan produced enough
metal to manufacture a half billion lead-acid batteries, make countless X-rays
and other photographic images, and provide the zinc content for 160 million
automobiles. If these metals were used only once and discarded, then one
might truly question the sustainability of metals production; however, the fact
that metals can be recycled and renewed over, and over again creates the
opportunity for them to play a fundamental role in sustainability.

Metals Contribute to Sustainability

In Canada, the lead-recycling rate for lead acid batteries is over 90%. The
recycling rate for zinc is more difficult to ascertain because it is used in a
multitude of diverse applications that can extend over long periods of time. X-
ray images, for instance, are retained for years by hospitals but are ultimately
recycled. Zinc protects steel against corrosion, thus extending the productive
life of society’s building blocks –everything from steel structures, such as
bridges and buildings to automobiles, appliances and toys. Because zinc’s
function is to prolong the life and utility of material goods, it reduces overall
energy and other resource demands. Accordingly, it has been referred to as the
“green” metal. It is estimated that 35% of current annual zinc production comes
from recycled sources. This rate will continue to climb, as the coordinated
activities of producers, manufacturers and consumers become even more
focused on re–use and recycling.

Mining in a New Environment

Protection of the environment is one of the key tenets of sustainability. When
the Sullivan Mine began, society’s environmental consciousness and priorities
were far different than they are today. Generally, citizens did not think then of
the world as having limits to growth, and a finite capacity to absorb the wastes
that resulted from society’s activities.

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Until relatively recently, there was little awareness of the effects that mine waste
tailings could have on the environment. The Sullivan Mine was built at a time
when environmental management was not a primary consideration. In
recognizing its responsibility, the company has had to play catch–up to bring the
Sullivan Mine to an environmentally safe and protected status. Not until 30
years ago did scientific knowledge link the generation of waste rock to the
creation of acid rock drainage (ARD) and ARD’s potential to harm fisheries.
However, as this understanding grew, Cominco pioneered the development of
high–density sludge water treatment. In the 1970s, the company installed the
world’s first operating plant in Kimberley to treat acid rock drainage.

Today, Cominco has faced up to the task of reclaiming all of the tailings areas
and waste dumps in order to bring them back to productive land use that will
sustain wildlife and natural use for future generations. It is normal to see deer,
elk and other wildlife foraging in the new habitat that was once areas of mine
waste.

By the time reclamation is complete, Cominco will have spent approximately

$70 million to accomplish its objectives. Although this has been a costly
experience, much has been learned about how to reduce mining’s impact on
the environment.

One key tenet of sustainability is the commitment to involve the public in

planning and decision–making in a meaningful way. In Kimberley, the Sullivan
Mine Public Liaison Committee (SMPLC) was formed 10 years ago to do just
that. Chaired by a government official, the SMPLC provides a forum where
people can receive information about Cominco’s plans, make comments and
reach decisions by consensus on the best way forward.

An Endowment for Future Generations

Another key to sustainability is to ensure that current practices do not jeop-
ardize the ability of future generations to meet their own needs. Far from

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hampering that ability, the Sullivan Mine has vastly enhanced it. The social
capital created by the mine’s operations –which includes a community of
educated and able people, and infrastructure such as schools, hospitals and
roads– has given the city of Kimberley the foundation upon which it can build its
future. Cominco and the city of Kimberley teamed up in the early 1990s to
transform the city into a tourist resort and retirement destination. They have also
investigated numerous industrial opportunities, none of which has actually taken
root, but some of which may take hold in the future.

Land that Cominco has held over the years has been turned over to the city to
enable it to develop recreational facilities. Many years ago the company helped
develop the Kimberley ski hill, which is now being successfully operated and
expanded as a private undertaking. A new 27-hole golf course is being
constructed in the Kimberley area, which combined with the well-known Trickle
Creek course and the original Kimberley course will bring the city to the peak of
prominence as a golf destination in the East Kootenay area. With these
amenities in place, Cominco has also entered into a venture with a well-
established and experienced developer to build a 1,000–unit residential
community that will help sustain the tax base after the mine closes.

The company’s legacy to the community will also include a mining museum to
chronicle the history of mining in the region and the vital role that this industry
has played in the economic and social development of the Kootenay region of
BC and the northwestern United States. The local Bavarian railroad, the
reclamation work and the remaining structures from the mine will all play a role
in giving tourists, students and the public at large a living understanding of the
importance of mining, and in particular the Sullivan Mine, to British Columbia’s
past, present and future.

The Sullivan mine converted nature’s capital –ore in the ground– to financial,
social and human capital that will sustain a community and its people for years
to come. The lessons learned throughout the life of the Sullivan Mine offer an

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example for other communities, present and future, to consider, as they pursue
their own path to sustainability.

COMINCO’S EXPERIENCE AT PEND OREILLE, WASHINGTON, USA

Cominco’s newest mine, the Pend Oreille, presents a somewhat different
picture than that of the Sullivan, although the beginnings look very much the
same. Mining by other companies in the Metaline Zinc-Lead District in
northeastern Washington State began in 1869, and by 1928 it represented the
largest and most important base-metal producing area in the state. The yearly
value of production during its heyday never dropped below $1 million per year,
and production continued until 1977, when the last mine closed.

The long–time residents of Metaline Falls, many of whom had worked the mines
as young people, waited for them to reopen. It was not that the deposits at
Metaline had been exhausted. Rather, an economic downturn forced a stop to
activity. Attempts to reopen the Pend Oreille came and went over the years.

In 1995, Cominco American Incorporated purchased the Pend Oreille mine.

Cominco, the world’s largest zinc-mining company, has a zinc refinery not more
than 100 kilometres to the north in Canada at Trail, British Columbia. It had
operated mines like the Pend Oreille in Canada and the United States for years,
and with the Sullivan Mine in Kimberley closing Cominco sought to identify new
sources of concentrates for its Trail facility. Guarded optimism once again
became apparent in the Metaline area.

There were, of course, many hurdles to overcome before reopening the Pend
Oreille mine could become a reality. Not the least of these was a company-
mandated economic hurdle put into place by its President and Chief Executive
Officer, David Thompson. Mr. Thompson had seen too many times the road
traveled by mining companies that thought they were “growth companies.”
Mining promoters touted mineral deposits as future revenue streams that would

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continue to appreciate in time as commodity prices invariably increased. In
reality, however, the opposite often happened, and as commodity prices
declined, so did the profitability of the operation, leading eventually to closure of
the mine and often the ruination of the company. Cominco therefore pledged to
the investment community that it would invest only in new operations that could
make a rate of return of 10% at historically low metal prices (in this case,
US$.45/lb for zinc).

The rationale for this approach is self-evident: if a robust rate of return on

investment can be achieved at low commodity prices, our operations should be
able to weather any economic storm. To investors this should make good
sense, but this strategy also offers added benefits. Communities that depend
upon mining for jobs could enjoy greater certainty that these jobs would
continue, and regulatory agencies could be more assured that the company
would be financially able to address any long-term closure issues. This is one of
the main precepts of sustainable development: companies must remain viable
in order to provide long-term social and economic benefits to society while
fulfilling their obligations to the environment.

In order to attain this rate of return, the Pend Oreille resource needed to be
increased to allow mining for at least 10 years –enough time to recoup the
substantial costs of the mine’s reopening (US$70 million) and achieve an
acceptable return on investment. At the time of the feasibility study that defined
the project for Cominco, the mine’s reserves were 6 million tonnes grading 7.2%
zinc and 1.3% lead. Given a proposed operating rate of 2,000 tonnes per day,
this equalled a mine life of approximately eight years. A new ore zone
discovered in an area southwest of the present mine added more than two
million tonnes to the resource total. While these resources are not currently
contained in the economic reserve, the drilling density is adequate to predict
that an additional million and a half tonnes of reserves are present.

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Local Support Is Key
Cominco recognized that, despite strong local support, part of the community
had serious doubts about the reopening. Some people were not overly
enthusiastic about what they saw as “dirty industry” returning, and others
worried about how the reopening would affect their way of life.

Due to the relatively short lifespan of the orebody, it was realized that there was
a real risk of creating a disruptive “boom/bust” economic cycle associated with
the construction and operation of the mine. This cycle of rapid economic growth
during development and operation followed by severe economic downturn after
closure has been the rule rather than the exception for natural resource
development in the rural western United States. As had been previously
encountered by Metaline Falls, communities suffered at both ends. Not only
was the way of life altered by the rapid influx of people and capital at the front
end, but a rapid fall from economic viability as the mine shutdown left most
people no choice, but to abandon the town in search of another life. Moreover,
sudden economic failure after brought with it the environmental problems of
failed waste–disposal measures that, in turn, left a legacy of pollution.

Cominco approached the project with these considerations in mind. The mayor
of Metaline Falls was asked to constitute a committee of local stakeholders who
would be interested in working with the company to plan for the eventual
closure of the mine, and its impact on local quality of life. This committee,
originally formed to address a narrow issue of post-closure economic
sustainability, has now expanded its mission to include issues in the
development and operations stages as well as during and after closure. The
Selkirk Community Cominco Planners (SCCP) was designed to offer all
members of the local community a voice in how the operation should conduct its
affairs to plan for the future. It was the inclusive nature of this committee that led
to its success and to its vision for the community.

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Project Goes Ahead
The US$70 million Pend Oreille project commenced in October of 2000. The
two–year construction program involves refurbishing the existing concentrator,
sinking a 381-metre (1250-foot) internal shaft and other mining preparation
activities. The mine is scheduled to begin production in the summer of 2002,
and is expected to produce 84,000 tonnes (92,600 tons) of zinc concentrate and
13,000 tonnes (14,300 tons) of lead concentrate per year. Concentrate will be
shipped to Cominco's nearby Trail facilities.

The mine is expected to have a minimum life of 10 years and to provide

operational employment for approximately 170 people. Added to this are almost
150 additional jobs during the construction phase. Job multiples –the result of
secondary employment in the community-in-general as a consequence of the
primary job development– would bring total employment to 237 in the
immediate communities and more than 400 state-wide. It is estimated that the
total annual economic impact of this mine, including labour income and
purchases, will be US$22 million per year for the county and more than US$40
million for the state (Perimedes Group, 1999).

Local Impact Should Be Positive

This level of employment in an area of chronic underemployment is not without
its own problems. Currently, there is a local shortage of labourers with the
needed skill–sets for complex construction and mine development. In order to
meet the rapid development schedule, it was necessary to ultilize contractors
from outside the community. Cominco looked at this as a community
opportunity as well as a challenge. In order to improve general economic
opportunities during development, the contractors were encouraged to utilize
local employees. This in turn would provide a resident pool of trained
employees for Cominco during subsequent years of operation. The SCCP
responded to this challenge with a local mine safety training program, in which
more than 60 residents participated in order to receive the training required to
apply for work at the mine. Résumés of local workers have been collected and

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categorized so that contractors for the mine development stage can draw upon
local expertise and workers to fill out their rosters. Businesses have been
encouraged to provide a catalogue of their services, so that these contractors
can draw as much as possible upon local resources for equipment and
services.

The SCCP has begun to address issues of health care, economic development
in tandem with the mine, economic sustainability throughout the mine-life cycle,
training and education, infrastructure development and reuse of the mine
property following closure. At a recent community open house, more than 150
residents from an area with a population of less than 1,000 spent three hours
discussing what they wanted their community to look like as the mine
developed. These activities have empowered the community to take on a
significant role in carrying out the project and planning to benefit both present
and future generations.

The reopened mine will also provide the community with new economic drivers
through provision of ancillary services to the mine. Some of the ideas currently
being explored in terms of startup or “bootstrap” economic opportunities include
analytical services, surveying and computer-aided drafting. Local entrepreneurs
are being encouraged to form partnerships with outside resources to develop
local branches of services for the mine. At the same time, high–speed fibre–
optic cable Internet access is being brought to the community, so that these
startup businesses can begin to build clientele outside the immediate region,
thereby increasing their opportunities for success after mine closure.

Closure itself will provide other opportunities as well. One issue that looms large
in the local community is the reuse of the facility after mining ceases. This, in
fact, was the primary function envisioned for the SCCP when it started. One
opportunity being explored is to reuse the mill building itself to provide a site for
industrial arts classes and production. Art forms such as glass-blowing, welding,
casting, and large-format sculpture could easily be accommodated in this large

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open space, which has ready access to power and heavy-lift capacity. The
physical setting, while now clearly a mine property, could during reclamation
become a wonderful rustic setting along the Pend Oreille River. The local arts
community is especially intrigued with this concept. Other potential uses for the
site include additional fairways and greens for the local golf club, hiking and
nature trails, and an outdoor auditorium. Although still in the formative stage,
this process helps to bring a varied and active community involvement to the
development of a new mine with a view to post–mining activities that will benefit
and sustain the community in the future. As Cominco has learned elsewhere,
creating a direct link with the community offers many benefits. It creates a
conduit for open communication and information–sharing on everything from
environmental performance to business opportunities and employment needs.
One of its more important functions is to provide the mine operation with insight
into community concerns, needs and priorities. The SCCP will play a vital role in
ensuring openness and transparency in operations management, and will
provide a vehicle to build trust, cooperation and mutual respect between the
community and the operation.

Effective Permitting Process

A more direct benefit can be seen in how smooth and orderly the permitting
process has been so far. In January 1998, Cominco submitted its formal
proposal to reopen the mine to the lead regulatory agency, the Washington
Department of Ecology. The recent mining law required a full Environmental
Impact Statement (EIS) to be completed for any new mine in the state. The
work was begun following initial scoping in March 1998 and the selection of an
independent EIS contractor in July. In February 2000, not quite two years later,
the draft EIS was submitted for review, and in July 2000 the Final EIS was
published. It is important to note that neither the EIS nor any of the permits
received up to the date of this paper were challenged or appealed. It is
extremely rare in today’s world for a new mine to be permitted so quickly and
without controversy. Clearly this success is due in part to the environmental
aspects of the mine itself: it is an existing facility, it is an underground mine, it is

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non-acid generating, and its environmental impacts are relatively minor. With
anti-mining sentiments today, however, even this would not be enough to
guarantee permitting success. Cominco’s focus on community participation to
incorporate sustainability criteria helped to develop the trust and openness that
the local community needed to fully embrace the proposal and facilitate
successful permitting. Stakeholders who really do have a stake in the permitting
process are more willing to acknowledge, and understand the proponents’ point
of view. An informed and engaged local population is better prepared to
address issues and put in place conditions necessary to allow their support for a
project. In short, they “take ownership” of the project.

The community’s overwhelming acceptance of Cominco helped bring envi-

ronmental activists to the table to talk about environmental impacts and
proposed mitigation. In keeping with the level of transparency it intends to
achieve, Cominco has established a collaborative committee, including rep-
resentatives from local and national environmental groups, to address
environmental concerns as the mine progresses. Two passive water–treatment
options for the mine’s discharge are being evaluated to move beyond regulatory
compliance, and achieve the enhanced water quality objectives that the
environmental groups and Cominco agree are desirable. It is a new and
somewhat controversial concept, but one that the company believes will
optimize its capacity to bring the project forward in a constructive and timely
manner.

The success of the sustainable development approach at Pend Oreille has led
to Cominco incorporating it in other development projects. With a positive
community/company relationship to use as an example, it is anticipated that
other communities will grant the social licence to operate more freely. With
continued acceptance comes more access to opportunities. Greater access to
opportunities contributes to continued financial success as a corporation, and
with continued financial success comes sustainability. It is a closed loop. It is a
new paradigm; it is the way the industry must operate to survive.

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CONCLUSION
The mining and metals industry can earn the public’s trust and, with that, the
right to contribute to the solution of the world’s greatest challenge –achieving
sustainability. We have contributions to make and obligations to fulfill. The
benefits of our activities must always exceed the risks. Many other companies
are also making significant inroads along the path to sustainability. Collectively,
our industry must work to re-establish a positive place in the collective
consciousness through economic, social and environmental performance, and
engaging with other stakeholders to communicate openly, share successes and
concerns and address ongoing challenges and opportunities cooperatively.

The mining and smelting industry and the metals we produce are part of the
solution in addressing existing world problems. If we wish to earn a valued and
respected position in society’s quest for sustainability, there are many things we
must do and be seen to do:

1. We must identify issues, concerns and priorities at the earliest stages of

project planning and throughout the mine life cycle.
2. We must ensure before proceeding that the projects we pursue will be
financially viable throughout the operating cycle.
3. We must use our best efforts to employ sound and reasonable
environmental best practices at all our operations.
4. We must demonstrate social responsibility by ensuring that decisions are
made in consultation with stakeholders and reflect the need for fair distribution
of benefits.
5. We must engage our critics in constructive dialogue with a view to
achieving understanding, mutual respect and cooperation.
6. We must be accountable for our decisions and work with other
stakeholders to address the detrimental impact of past practices.
7. We must work with users of our products to promote re-use, recycling
and safe handling to ensure that future generations benefit from the renewable
utility that metal products can provide.

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8. We must ensure that our actions and achievements measure up to our
stated commitment to sustainability. To this end, we must identify acceptable
indices of performance, monitor results and report on our progress.

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