McArthur River mine could cost up to $1B to remediate

The McArthur River mine in Australia is looking at a nine-figure clean-up bill, says a new report on one of the world's largest producers of lead, zinc and silver.

The report by Monash University and the Mineral Policy Institute recommends that the mine stop operating until a public commission is set up and examines whether the mine can be made safe and at what cost, The Guardian reported on Sunday.

According to Gavin Mudd, the author of the report, remediating the site could could cost up to a billion dollars.

The crux of Mudd's argument is that Glencore's (LSE:GLEN) plan to leave an open pit is inadequate given the high proportion of acid-forming rock in the waste piles.

As explained by The Guardian:

With that much acid-forming rock, there wouldn’t be enough clay to properly encapsulate the mound and it would leach acid into the environment for years or centuries.

Mudd said the only viable option was to insist the company backfill the pit. He said that would minimise the amount of acid that would leach into the environment in the long term.

McArthur River, located in the Gulf of Carpentaria, has been plagued with environmental and social issues since it began mining in the 1990s. There have been issues with fish and cattle having elevated lead levels; waste piles left to smoulder have given off toxic fumes, disturbing nearby residents.

This time last year Glencore was warned it may have to shut the mine down unless it improves its environmental record and increases a financial bond covering rehabilitation of the site. Australia’s Northern Territory officials asked the company to release figures about lead contamination around the site, under the Freedom of Information Act. Glencore however claimed the data reported in the documents was out of date.

In The Guardian article Mudd notes that Glencore has not been forthcoming about how much waste rock is produced. But he suggests it is likely much higher than previous environmental assessments. A 2005 environmental statement said that acid-forming waste rock made up just 11% of the waste, but in 2015 another report found over 90% of the waste rock was acid-forming, the newspaper stated.

Three years ago Glencore was granted approval to increase the rate of mining from 2.5 million tonnes of ore annually to 5 million tonnes and the yearly yield of zinc and lead bulk concentrate from 360,000 dry metric tonnes to 800,000 dry metric tonnes.

The mine's scheduled closure date was also lifted by nine years to 2036.