Teck’s Elk Valley cleanup could cost $4.7B, says environmental group

The cleanup cost for British Columbia’s Elk Valley river, polluted by toxic materials from Teck Resources’ (TSX: TECK.A, TECK.B; NYSE: TECK) coal mining activities, could reach at least $6.4 billion (US$4.7 billion), according to a report from the not-for-profit group Wildsight.

The report, commissioned by the Kootenay-based environmental organization underscores a substantial disparity between the $1.9 billion required by the province for Teck to reserve for emergency shutdowns and mine reclamation, and the projected expenses of the company’s initiatives to combat selenium pollution resulting from coal mining in the valley.

Selenium, a naturally occurring element toxic to fish in high concentrations, has been seeping for decades from waste rock piles surrounding Teck’s coal mines.

Teck, in response to Reuters, refuted Wildsight’s estimates, deeming them inaccurate and inconsistent with calculations made under B.C. government policy.

“Their provisions with respect to capital spend do not align with B.C. government policy and their use of simplified assumptions overstate ongoing water treatment operating costs alone by 50-60%,” said Dale Steeves, Teck’s director of stakeholder relations.

The report, conducted by consulting firm Burgess Environmental, calculated the $6.4 billion by assessing the costs of implementing Teck’s current plan, which involves constructing water treatment plants until 2027 and operating them for 60 years.

Since 2014, Teck has allocated over $1.4 billion towards mitigating selenium concentrations, with plans to invest an additional $150 million to $250 million by the end of 2024.

The miner sold its coal assets to Glencore (LSE: GLEN) and two Asian steelmakers for US$8.9 billion last year, as it shifts its focus to critical metals like copper. The deal is pending approval from the Canadian government.

Glencore declined to comment on the report.

“We hope that both Glencore and the Canadian government will give careful consideration to this report as they assess the sale, ensuring accountability for the selenium crisis is upheld throughout the ownership transfer,” remarked Simon Wiebe, mining policy and impacts researcher at Wildsight.

Teck’s shares were down 0.8% to $59.62 apiece on Tuesday at mid-day, valuing the company at $30.8 billion.

(With files from Reuters)