1 Summary Assessment Report for Ajax Mine Project (Ajax) With respect to the application by KGHM Ajax Mining Inc. for an Environmental Assessment Certificate pursuant to the Environmental Assessment Act, S.B.C. 2002, c. 43 1 INTRODUCTION The Summary Assessment Report provides an overview of the environmental assessment (EA) for the proposed Ajax Mine Project (Ajax) as conducted by the Environmental Assessment Office (EAO). Ajax was subject to review under both provincial and federal EA legislation, and a cooperative EA was carried out by the EAO and the Canadian Environmental Assessment Agency (the Agency) from the formal commencement of the EA process in 2011 through to the final public comment period. Ajax requires the provincial Responsible Ministers to issue an environmental assessment certificate, and the federal Minister of Environment and Climate Change Canada (or Government in Council) to grant approval before the Project could proceed to permitting. In British Columbia (BC), the decision whether or not to issue an EA Certificate is made under the Environmental Assessment Act by the Minister of Environment and Climate Change Strategy and the Minister of Energy, Mines and Petroleum Resources (Ministers). This Summary Assessment Report is prepared by the EAO as an overview of key findings from the joint federal Comprehensive Study/provincial Assessment Report (the Joint Assessment Report) that was prepared by the EAO and Agency to meet the requirements of BC’s Environmental Assessment Act and the former Canadian Environmental Assessment Act. The Summary Assessment Report discusses the key issues, findings and conclusions of the EA and makes reference to sections of the Joint Assessment Report, where more detailed effects assessment can be found. The EAO has also prepared proposed EA Certificate conditions and a proposed Certified Project Description for consideration by provincial Ministers. 2 PROJECT DESCRIPTION KGHM Ajax Mining Inc. (KAM) has applied for an EA Certificate to develop, operate, and decommission an open-pit copper and gold mine and ore processing facility. The Ajax footprint would be approximately 1,700 hectares (ha) and the mine would operate for an estimated 23 years at a mining rate of 65,000 tonnes of ore per day. The proposed mine site is located within the Thompson Nicola Regional District, adjacent to the southern boundary of the City of Kamloops (population 90,000) (Figure 1). Some mine infrastructure would be, at its closest, approximately 1.8 kilometres (km) south and west of the residential areas of Aberdeen and Knutsford, respectively. A small number of rural residences and ranches would be within approximately 1 km to the east and west of the mine site. The Ajax footprint is held in largely fee simple land owned by KAM, with a small portion of Crown land. Ajax would be located within the asserted traditional territories of Tk’emlúps te Secwépemc (Tk’emlúps Indian Band) and Skeetchestn Indian Band, who were jointly represented by Stk'emlupsemc te Secwépemc Nation (SSN) in the EA. Ajax would also be located in the asserted traditional territories of Ashcroft Indian Band, Lower Nicola Indian Band, and Whispering Pines/Clinton Indian Band. The mine site ecosystems are typical of the warm, dry climate of the bunchgrass grasslands zone, and provide important habitat for wildlife. Jacko Lake, a popular recreation site, lies partially within the proposed open pit area of Ajax, and a number of creeks are present within the site, including Peterson Creek which flows out of Jacko Lake through Kamloops into the South Thompson River. Goose Lake Road Summary Assessment Report August 2017 I Page 1 bisects the mine site, and a section of the road would need to be closed as part of developing the tailings storage facility. The mine site has been impacted to varying degrees, by past and current activities, such as ranching and cattle grazing, and open pit mining by a subsidiary of Teck Resources Corp. between 1988-1991 and again between 1994- 1997. Approximately 17.7% of the 1700 ha Ajax footprint has remains of these mining activities, including approximately 25 ha of open pits and the remainder as reclaimed waste rock dumps. Ajax would include the following key Project components and activities: • Development of an approximately 300 ha open pit, with a maximum depth of approximately 577 metres (m); • Installation of a dam and dewatering of the northeast arm of Jacko Lake to allow for open pit development; • Construction and operation of an on-site ore processing plant that would produce copper and gold concentrates; • Construction and operation of a 685 ha tailings storage facility that would store thickened tailings, process water, and contact runoff water from mine facilities in an area bounded by natural topography and four embankments (dams); • Four mine rock storage facilities, as well as topsoil and overburden stockpiles; • Water management facilities, including collection ponds to reclaim and recycle water, engineered dams on Jacko Lake to provide flood control, and a 2.7 km diversion of Peterson Creek around the south edge of the open pit; • Construction of access roads, and upgrades to existing transportation infrastructure including upgrades to the Inks Lake Road interchange at Highway 5 (Coquihalla Highway); • Construction of a 9 km, 230 kilovolt powerline from the BC Hydro transmission line through Knutsford to supply power for the mine; • Installation of a 5.3 km natural gas pipeline from Knutsford (connecting with a FortisBC pipeline) to provide heating and back-up electricity generation for the mine; • Offsite explosives manufacturing and storage located approximately 4 km northwest of the Ajax mine site; • Restoration of an existing water intake in Kamloops Lake and construction of a new 16 km water supply line to supply freshwater to the Project; and • A concentrate storage and shipping area. The life of the Project is divided into four phases: 2.5 years of construction, up to 23 years of operations, 5 years of decommissioning and closure, and 5 or more years of post-closure monitoring. Decommissioning of some project facilities and progressive reclamation would be undertaken during operation. Reclamation would continue through decommissioning and closure. Post-closure monitoring would be determined as required by regulatory government agencies, particularly the Ministry of Energy, Mines and Petroleum Resources (MEMPR). Summary Assessment Report August 2017 I Page 2 Figure 1: Location of the Ajax Mine Project Infrastructure Summary Assessment Report August 2017 I Page 3 Project Design Changes as a Result of the Environmental Assessment The original design and operation of a project, as it is proposed by a proponent, often changes during an EA in response to key issues that are identified by government agencies, Indigenous groups, and public stakeholders. During the Ajax EA, KAM modified aspects of the Project design during both the pre-Application and the Application Review phases to avoid or mitigate identified effects. The key Project design modifications included: Pre-Application phase: • Redesigning the Project configuration such that the majority of the Ajax footprint would lie adjacent to the southern boundary of the City of Kamloops and that some mine infrastructure would be further away from the boundary neighbourhoods targeted for expansion (e.g., Aberdeen, Pineview Valley); and • Redesigning the tailings storage facility from a ‘dry’ facility to a conventional ‘wet’ facility with thickened tailings and mine-rock buttresses on the embankments, to reduce potential dust, noise, and visual effects on residences, and reduce the potential for accidents and malfunctions associated with the original tailings storage facility design. Application Review phase: • Replacing the proposed Inks Lake offsetting plan with a Jacko Lake fish and fish habitat offsetting plan, the purpose of which would be compensate for the fish habitat lost as part of open pit development, and to ensure continued functionality of the SSN spring rainbow trout fishery; and • Redesigning the Peterson Creek diversion system presented in the Application from a pump-and-pipe system that would have altered the outflow of Peterson Creek, and changing to retain a gravity outflow system in order to reduce impacts to the quality of sport fishing in Jacko Lake to preserve fish habitat, and to ensure continued functionality of the SSN spring trout fishery. 3 STRATEGIC CONTEXT (IF APPLICABLE) Federal-Provincial Coordination Ajax required both federal and provincial EAs. The EAO and Agency conducted a coordinated EA over the course of six years, including co-chairing the technical working group, coordinating consultation with Indigenous groups where appropriate, and working together to identify and address technical issues in the assessment. The coordination resulted in the development of a joint federal Comprehensive Study Report / provincial Assessment Report (Joint Report) to support separate provincial and federal decisions. Since the federal EA was triggered under the former Canadian Environmental Assessment Act, it was not eligible for substitution provisions that were established under the Canadian Environmental Assessment Act, 2012. Summary Assessment Report August 2017 I Page 4 Engagement with Indigenous Groups The Province initiated an Ajax government-to-government discussion table in mid-2015 that included SSN, the EAO, the Major Mines Permitting Office of MEMPR, Ministry of Indigenous Relations and Reconciliation, Ministry of Forests, Lands, Natural Resource Operations and Rural Development (MFLNR), and other provincial agencies as necessary. This expanded consultation approach enabled the collaborative development of an Ajax Mine Government to Government Framework Agreement (Government to Government Framework) to further the relationship between SSN and the Province as it relates to Ajax. The scope of this agreement included the EA, permitting, negotiation of a provincial accommodation package and linkages to broader reconciliation initiatives. As part of the Ajax government-to-government discussion table, the EAO began a dialogue with SSN regarding a more collaborative approach to SSN involvement in the provincial EA. SSN and the EAO began co-writing an Ajax Mine EA Collaboration Plan (EA Collaboration Plan) in May 2015. In July 2015, SSN Joint Council formally initiated their own community-based review, referred to as the SSN Assessment Process, which is further described in Section 6 below. Accordingly, additional process steps were then identified in the EA Collaboration Plan to embed the SSN Assessment Process in the provincial EA process. The Ajax Mine Government to Government Framework Agreement, including the EA Collaboration Plan, were implemented in practice in early 2016 and formally signed by SSN Joint Chiefs and the Province in September 2016. The purpose of the EA Collaboration Plan, which was one of the first such agreements developed between the EAO and an Indigenous group, was to support informed decision-making, to ensure that SSN has direct input into the provincial EA decision-making process and that to ensure SSN’s input would be adequately considered. The plan identifies key collaboration points including commitments by both parties to share specific information and draft materials. The plan also establishes an approach to issues management and resolution. Ultimately, this enhanced collaborative approach with SSN resulted in a unique and flexible EA process and activities that included timeline changes, additional rounds of comments and responses resulting directly from the SSN Assessment Process, over 50 meetings with SSN, provincial participation in SSN Assessment Process events, and a commitment by the EAO to include and consider the results of the SSN Assessment Process in the assessment report prepared by the EAO and Agency. 4 ENVIRONMENTAL ASSESSMENT PROCESS The Ajax EA has been active for more than six years, and has included extensive engagement with government agencies, Indigenous groups, and the public on the potential environmental, economic, social, heritage, and health effects, including cumulative effects, of the Project as required under the Environmental Assessment Act. Key steps in the process are presented below. Pre-Application Phase On February 25, 2011, the EAO determined that Ajax was reviewable pursuant to the Reviewable Projects Regulation, since it is a new mining facility that would have a production capacity of at least 75,000 tonnes per year Summary Assessment Report August 2017 I Page 5 of mineral ore. Consequently, the EAO issued an order under Section 10 of the Environmental Assessment Act requiring Ajax to undergo an EA. On June 3, 2011, the EAO issued an order under Section 11 of the Act (Section 11 Order) which set out the requirements for a public comment period on KAM’s project description document in coordination with the Agency’s requirements for the federal comprehensive study EA. On January 11, 2012, the EAO issued another Section 11 Order, which set out the complete scope, procedures and methods for the EA, including requirements for consultation with Indigenous groups. The EAO, together with the Agency, established a technical advisory working group to review key documents and provide advice during the EA. The working group included representatives of federal, provincial, and local/regional governments, whose mandates and skill sets were relevant to the review of Ajax, as well as representatives of potentially affected Indigenous groups. Following working group, public and Indigenous group consultation, the EAO and Agency issued joint Environmental Impact Statement Guidelines / Application Information Requirements to KAM in June 2013, based on an initial project design for an open pit mine with a dry-stack tailings storage facility, located to the east and south of the City of Kamloops and which included some infrastructure located within municipal boundaries. In August 2013, in consideration of extensive public feedback, KAM announced project design changes that resulted in key project components being situated further south from the City of Kamloops and changed the approach for tailings management from dry-stacked to conventional wet tailings storage. The EAO and Agency held another public comment period in late 2014 to gather feedback on revisions to the Application Information Requirements that were proposed to capture the Ajax design changes, and subsequently issued a final revised Environmental Impact Statement Guidelines / Application Information Requirements in July 2015. KAM submitted its final Application for screening in September 2015. Following an extended screening evaluation period by the EAO and Agency, with input from the working group and SSN, the EAO accepted the Application for review. Application Review Phase The 180-day Application Review phase of the EA began on January 18, 2016. During the review, the EAO and Agency sought comments on the Application from the working group, Indigenous groups, and the public. The EAO and Agency continued to carry out joint public consultation activities during Application Review, which included holding a 75-day public comment period between January and April 2016, and hosting 4 open houses in Kamloops. Over 3300 comments were submitted on the Application, and over 600 people attended the open houses. On May 4, 2016, the EAO suspended the review timeline at KAM’s request, to provide KAM additional time to participate fully in the SSN Assessment Process and also to respond to the substantial volume of submissions Summary Assessment Report August 2017 I Page 6 received during the comment period from the public, SSN, and the working group. Over the course of the 11-month suspension, KAM prepared supplemental information in response to key issues and information requests from the EAO and Agency, and the working group and SSN continued to provide review and comment. On March 29, 2017, the EAO determined that KAM had provided adequate information to continue the EA, and lifted the timeline suspension. At the same time, the EAO proactively extended the provincial review timeline by 110 days. This extension enabled the alignment of the provincial and federal timelines for completion of the coordinated EA, the development of a federal-provincial Joint Assessment Report, and the provision of an additional public comment period on the Joint Assessment Report and proposed provincial EA Certificate conditions, prior to Ministerial referral. Other Required Authorizations If a provincial EA Certificate is granted by Ministers and the EA is approved by the federal government, Ajax would require various permits from federal, provincial, and local government agencies prior to proceeding to construction. The key provincial permits would be provided by MEMPR under the Mines Act, and the Ministry of Environment and Climate Change Strategy (MOE) under the Environmental Management Act. Key federal authorizations would be required from the Department of Fisheries and Oceans Canada (DFO) under the Fisheries Act, and Natural Resources Canada under the Explosives Act. Local government permits would be required from the City of Kamloops and the Thompson Nicola Regional District. A list of the main permits and authorizations is provided in Section 1.3 of the Joint Assessment Report. 5 KEY ISSUES AND CONCLUSIONS OF THE ENVIRONMENTAL ASSESSMENT The EA considered the Project’s potential adverse environmental, economic, social, heritage, and health effects, including cumulative effects. Environmental, health and heritage assessments are required by both federal and provincial legislation and were jointly assessed by the EAO and Agency. The social and economic valued components required by provincial legislation only were assessed by the EAO. EAs in BC use valued components as a methodological or organizing framework for the assessment of the potential effects of projects. Valued components are components of the natural and human environment that are considered by the proponent, public, Indigenous groups, scientists and other technical specialists, and government agencies involved in the assessment process to have scientific, ecological, economic, social, cultural, archaeological, historical, or other importance. The Joint Assessment Report for Ajax assesses the valued components included in the Application, and is organized as per Table 1. Summary Assessment Report August 2017 I Page 7 Table 1: Valued Components Assessed in the Joint Assessment Report Environment Health • Surface Water Quality and Quantity • Human Health (including air quality, domestic • Groundwater Quality and Quantity water quality, country foods, noise and vibration) • Fish and Fish Habitat • Vegetation (including rare plants, Social and Economic wetlands, grasslands) • Community Well-being • Wildlife (including amphibians, reptiles, • Recreation migratory birds, raptors, non-migratory • Local and Regional Economy game birds, mammals (bats, badgers)) • Accommodation, Infrastructure, Public Facilities • Greenhouse Gases and Services • Air Quality • Land and Resource Use • Noise and Vibration • Property Values • Current Use of Land and Resources for • Aboriginal Economies Traditional Purposes Heritage • Heritage The Joint Assessment Report assesses the impacts of Ajax on valued components, identifies key mitigation measures, and reaches conclusions on the residual effects. The EA also considered how accidents and malfunctions and effects of the environment on the Project could affect these valued components. These assessments were based on the Application provided by KAM, supplemental materials, and consultation with the working group, Indigenous groups, and the public. The EAO and Agency concluded that Ajax would result in significant adverse effects to physical and cultural heritage due to effects to Indigenous heritage, and to the current use of land and resources for traditional purposes due to impacts to Indigenous fishing and to cultural and ceremonial activities. The EAO and Agency determined that there would be residual and cumulative effects to a range of other valued components that were assessed and concluded that, with the implementation of mitigations and legally-binding conditions, these adverse impacts were not likely to be significant. The Joint Assessment Report further describes the key issues raised, the status of resolution, and the EAO and Agency’s conclusions regarding these residual effects, including the confidence associated with the significance determinations. To ensure the residual adverse effects of Ajax are adequately avoided, minimized or offset, and to ensure that uncertainty would be managed to the extent possible, the EAO proposes 42 conditions and a Certified Project Description, which, if Ministers issue an EA Certificate for Ajax, would become legally binding and subject to compliance and enforcement oversight. Summary Assessment Report August 2017 I Page 8 The remainder of this section provides a summary of several themes that were main focuses of the EA: air quality and human health; Jacko Lake and the area identified by SSN as Pípsell; social and economic effects; grasslands, wildlife and ecosystems; and the risk of a tailings storage facility failure. Air Quality and Human Health Due to the proximity of Ajax to the City of Kamloops and in consideration of the region’s arid climate, mountainous topography, and prevailing wind direction, the potential impacts on air quality and human health were primary concerns during the EA. This was emphasised in concerns raised by the public about the health and nuisance effects of adding Ajax-related dust to the current environment which already experiences exceedances of guidelines for total suspended particulates (TSP) and fine particulate matter (PM and PM ), particularly in the valley bottom. 10 2.5 While transportation, home heating, industrial emissions, and dust from roads and disturbed lands are the major human contributors to current local air quality conditions, air quality objective exceedances are often episodic, driven by external forces such as a forest fire, or are the consequence of local domestic and industrial emissions that accumulate when meteorological conditions result in poor dispersion. The primary impacts of Ajax to air quality would occur during operations, most noticeably under high wind conditions. The haul roads, the tailings storage facility, mine rock storage facilities, and blasting would be the major sources of dust and particulate matter emissions from the Project. The working group, Indigenous groups, and the public raised concerns about the ability of KAM to meet their stated commitment to control 90% of dust emissions from haul roads. The haul roads are the dominant contributors of PM and PM . In consideration of a lack of supporting information regarding this level of emissions control and to 10 2.5 help bracket the uncertainty regarding dust management, the EAO and Agency required KAM to present updated dispersion modelling results during review, including scenarios of 90%, 80% and 70% haul road dust suppression as well as a short-term “upset case” scenario of 0% active mitigation on haul roads. In response to information requests from the EAO and Agency, KAM provided supplementary information about key mitigation measures in an updated fugitive dust management plan. The plan included predictive meteorological forecasting, predictive air dispersion modelling, and real-time air quality monitoring to guide operations and mitigation actions. The plan also committed to actions that would be implemented for various project components in the event of unexpected circumstances that lead to the generation and dispersion of dust, up to and including the curtailment of specific mining activities (such as haul truck restrictions) during periods of extended dry conditions and high winds. MOE, as the provincial agency responsible for air quality monitoring and management under the Environmental Management Act, advised the EAO that KAM’s conceptual approach to monitoring and management approach was reasonable and would be subject to further detailed requirements at permitting. MOE also noted that the plan would be less effective in dealing with short-term events (e.g. less than one-hour), particularly dust storms during the summer periods. The EAO and Agency concluded that concentrations of 24-hour TSP, 24-hour PM , and 24-hour PM from Ajax are 10 2.5 predicted to exceed the applicable air quality objectives at the mine site boundary, but would decrease rapidly with distance from the mine site. Prior to reaching upper Aberdeen, these concentrations would generally decrease to Summary Assessment Report August 2017 I Page 9