Hudbay still plans to shut down most of its operations in Flin Flon next year, but it’s looking at new ways to use its local facilities, particularly with its tailings.
The company announced its third-quarter results in a conference call Nov. 3, which included news about the planned closure of much of it’s Flin Flon operations, including 777 mine and most of its surface-level operations. That shutdown is still scheduled for next summer, but one area which will remain - the tailings facility - is now the focus.
Hudbay will be looking at ways to extract mineral remnants from the tailings ponds on its own Flin Flon property, the company announced in the third-quarter call. Hudbay also announced plans to hold a scoping study on the tailings pond next year to see whether or not the company could reprocess tailings once 777 closes. That, according to the company, “could further increase metal production, defer closure costs and reduce the environmental footprint of the tailings facility,” as stated on the call.
If the scoping study shows positive signs, a feasibility study could follow - along with, as was said in a company statement, possibly using the company’s pre-existing Flin Flon facilities to process what is found.
“This opportunity could utilize the Flin Flon concentrator, with modifications, after closure of the 777 mine, creating operating and economic benefits to the Flin Flon community,” reads the statement from the company.
“It could also provide the opportunity to redesign the closure plans, increase metal production, defer certain closure costs and reduce the environmental footprint of the FFTIS [Flin Flon Tailings Impoundment System].”
There was no timeline for when an initial scoping study could be completed for the Flin Flon tailings.
The company stated it will be tasked with looking after the tailings facility for longer than originally thought, having to take on responsibility for the site for at least another century - until 2122, 22 years longer than initially thought.
As a result of the change, the company estimates it will cost hundreds of millions of dollars to decommission and restore the site more than initially planned.
“As part of the company’s ongoing efforts to update its Flin Flon closure plan, a comprehensive update completed in the third quarter of 2021 resulted in an increase to the decommissioning and restoration (“DRO”) provision of approximately $144 million compared to June 30,” reads the third quarter update.
“This increase is mostly attributable to long-term water treatment and monitoring obligations, along with cost inflation for other remediation activities. The increase in water management costs is primarily a result of the addition of 22 years to the post-closure water management period (to the year 2122), which after applying a very low discount rate, represents a significant portion of the DRO increase.”
The change means that Hudbay’s total cost for environmental obligations for the site is up to $322 million, with about a quarter of that money due to be paid in the next 15 years after the Flin Flon closure. The rest of the money is set to be spent once Hudbay’s Snow Lake operations shut down, which the company currently anticipated to be in 2037 based on current reserves.
The $322 million cost includes $23 million for tailings stability work in Flin Flon, which will be finished by the end of next year, $13 million for demolition costs relating to Flin Flon operations before 2030, $33 million to build and operate a water treatment plant starting in 2030 and $46 million each to demolition in Snow Lake after 2037 and in management costs and activities.
The biggest chunk of the bill - half of it in total, valued at $161 million - would be in post-shutdown environment management dollars from 2037 onward until 2122, including collecting and treating water.
Meanwhile, Hudbay still plans to mine out 777 as much as possible before shutting it down in less than nine months.
“The 777 mine is now within nine months of closure and the focus continues to be on mining out the remaining reserves by completing the necessary ground rehabilitation in order to access old workings and remnant stopes,” reads the comment.
