Alberta orders Sherritt to clean up Obed spill

The Alberta government has slapped an environmental-protection order on Coal Valley Resources and Sherritt International (TSX: S) after last month’s waste-water spill in the Athabasca River.

The spill occurred on Oct. 31 after a breach in a containment pond at the companies’ idled Obed Mountain coal mine near Hinton, Alta. As a result, 670,000 cubic metres of process water and sediment — containing mostly clay, mud, shale and coal fines — gushed into two creeks that flow into the Athabasca River. This created a stretch of murky water measuring 150 km that travelled down the province’s longest river at a rate of 2–5 km per hour. The company is still investigating the cause of the berm failure.

On Nov. 19, Alberta’s Environment and Sustainable Resource Development (ESRD) department ordered Sherritt — Coal Valley’s parent company — to clean up the mess. The ESRD told the miner to create detailed plans to contain the mine waste-water solids remaining in the Apetowun and Plante creeks, and stop more solids from entering the Athabasca River. It also requires that Sherritt submit an impact-assessment plan by Dec. 13, evaluating the effects of the spill on all affected water bodies, associated habitats and vegetation. A long-term sampling and monitoring plan — along with a wildlife mitigation and remediation plans — are also due by that date. 

In a preliminary report on water quality, the government said there doesn’t appear to be any immediate risks to communities along the Athabasca River that use proper water-treatment plants. But as a precaution, it notes community water-treatment plants should avoid processing water from the river when the plume is near. Anyone who uses the river for drinking water or for their livestock should also seek an alternative source, it adds.  

“Water quality samples collected within approximately 40 km downstream of the release point contain elevated concentrations of many organic and inorganic contaminants,” the report states.

Among the contaminants were mercury, arsenic, lead, iron, aluminum and polycyclic aromatic hydrocarbons, notably pyrene, which is carcinogenic.

The report says these appear to dilute as the plume moves downstream, and could be safely removed with proper water-treatment plants.

Jessica Potter, ESRD’s spokesperson, said the plume has started to freeze, but it is still approaching downstream communities. It hit the town of Fort McMurray in late November.

Potter says the Alberta government is assessing the potential impacts on human health, drinking water, fish and wildlife.

“In terms of understanding what the [environmental] impacts are, we still have to do some more long-term monitoring and a bigger fish assessment in the spring. So right now we are still investigating just what the impacts are,” she noted.

“We are deeply concerned about what’s happened here, and we are committed to making this right,” Sean McCaughan, Sherritt’s senior vice-president for coal, was quoted as saying by The Globe and Mail. Sherritt has started its own sampling tests, noting the results indicate the water “poses no risk to human health or safety.”

Obed says that the cleanup is underway, and that it is working to minimize any potential environmental impacts. A spokesperson for Sherritt adds it’s too early to predict the time frame and costs associated with the cleanup.   

Sherritt closed Nov. 22 at $3.50, within a 52-week range of $3.25 to $6.18. It has a $1-billion market capitalization and 297.3 million shares outstanding.