Tailings Management

Management Approach

Sherritt produces two broad types of waste: mining waste and solid waste. Mining waste generally includes waste rock and tailings, produced as processing by-products. Solid waste consists of hazardous waste and non-hazardous waste. Hazardous wastes are identified by their chemical and physical properties, and their classification, handling, disposal and storage requirements are prescribed in regulations. Non-hazardous solid waste consists of materials that we use and produce that can be disposed of in municipal landfills and is not considered material for the purposes of this report.

We design and operate our tailings management facilities in Cuba and Madagascar to meet or exceed all applicable regulatory requirements in our operating jurisdictions. Ambatovy’s tailings management facility was also designed to meet the requirements of the Canadian Dam Association, the International Commission on Large Dams, and the Mining Association of Canada’s Towards Sustainable Mining (TSM) Tailings Management protocol.

Following the recent tailings dam failures in Brazil and Canada – including our own pond failure at the Obed Mountain mine in Alberta in October 2013 – we have begun developing an enterprise-wide tailings management standard. This standard will provide additional rigour in ensuring that our operating sites fulfill our commitment to designing, constructing, operating, decommissioning and closing all tailings facilities in such a manner that all structures are stable, all solids and water are managed within designated areas, and all management practices conform with regulatory requirements, sound engineering principles and good practice. This standard will also take into account lessons learned from a post-mortem review of the Mount Polley tailings pond failure conducted by the Mining Association of Canada and the latest guidance from the International Council on Mining & Metals.

Performance

Ambatovy Fort Site Moa Site Oil & Gas and Power
Total amount of overburden, rock, tailings and sludge (tonnes) 24,950,000 Not applicable 9,950,000 Not applicable

At our mining operation in Moa in 2015, we continued to work with our Cuban partners and industry experts to improve tailings and water management practices to better align with international best practice. The current tailings management facility is nearing capacity. We have retained an internationally respected engineering firm to design an extension of the facility that will ensure we can continue to store tailings until 2022. Detailed design work for the first stage of the extension is well underway and is expected to be finalized in 2016.

We also began investigating options for tailings management so that we can continue to support mining operations in Moa well beyond 2022. Throughout this process, we will strive to minimize environmental impacts and meet international good-practice standards in tailings management.

At Ambatovy, the tailings management facility (TMF) is a long-term construction project involving a continuous raising of the perimeter dams to meet capacity needs. The first two phases of Ambatovy’s TMF are currently operational. The detailed engineering of the third phase of the TMF started in 2015 and is expected to be complete in 2016. Once construction is complete, the TMF will provide sufficient storage capacity for the remaining mine life, which is approximately 30 years.

Update on Remediation of Obed Containment Pond Breach

As we reported in previous sustainability reports, on October 31, 2013, a breach occurred due to a geotechnical slump, in an on-site water containment pond at the Obed Mountain mine, then owned by Sherritt, that resulted in a significant release of mud, clay, coal particles and approximately 670,000 m3 of water into nearby creeks and the Athabasca River. We quickly mobilized our response team, working with regulatory bodies, and began engaging extensively with First Nations and local stakeholders to keep them informed and to address their concerns. After the sale of our coal operations to Westmoreland Coal Company in April 2014, we retained the environmental remediation and financial obligations associated with the breach, and have continued to work cooperatively with the Alberta regulator to address the impacts of the incident. Read more about it here.

In 2015, we continued environmental monitoring of water quality, soil and sediment quality, fish habitat, wildlife, and vegetation and wetland resources. We submitted an updated human health risk assessment to the regulators that found that no adverse impacts to human health are expected. We also submitted other reports, including an updated impact assessment report and the remediation activities report and plan. The reports indicate that the breach and the resulting release of polluted water and sediments had measurable but minor effects on fish and fish habitat in the nearby creek, and that there are no residual effects on water and sediment quality in any of the nearby creeks or in the Athabasca River. In 2015, we continued to engage regularly with First Nations, communities and government on our progress, and we received an award from the Canadian Public Relations Society for our communications response to the crisis. A more detailed account of our response and remediation activities during 2015 can be found on www.obed.ca.

Biodiversity and Land

Management Approach

Sherritt’s operations are found in diverse locations, ranging from primary forests to island environments to industrial zones. Our approach to managing biodiversity is tailored to the context of each operation. At assets found in highly sensitive ecosystems, such as our Ambatovy mine in Madagascar, we follow a strict mitigation hierarchy: avoid impacts where possible, minimize any unavoidable impacts, repair any damage, and provide offsets (e.g., positive management interventions such as restoration of degraded habitat for residual impacts) wherever necessary.

This mitigation hierarchy, which forms the foundation of Ambatovy’s biodiversity-related work, was developed by the Business and Biodiversity Offsets Programme (BBOP), a multi-stakeholder initiative that seeks to develop best practice in biodiversity protection for developers of large greenfield projects. Ambatovy has been an active supporter of BBOP since its inception in 2006.

Ambatovy’s approach to conservation also conforms with the requirements of Madagascar’s regulator, the National Environment Office, and with the International Finance Corporation (IFC) Performance Standards on Environmental and Social Sustainability (2012 version), which includes a discrete standard on biodiversity conservation and sustainable natural resources management.

In 2009, Ambatovy established a Scientific Consultative Committee on biodiversity as part of its commitment to transparency and to apply international conservation expertise to its biodiversity management activities. The Committee includes 14 national and international independent scientists renowned for their expertise in biodiversity, conservation, and environmental management. The Committee convenes every two years to facilitate an external evaluation of Ambatovy’s implementation of the biodiversity management program and to make recommendations for the conservation of Madagascar’s unique biodiversity to management.

In Canada and Cuba, environmental baseline studies and impact assessments are conducted and biodiversity management plans are implemented, as required by regulation. However, the breadth and depth of our leading work at Ambatovy has demonstrated to us the value of developing a standard approach for addressing biodiversity considerations across the rest of the company. We have been evaluating the requirements of the Mining Association of Canada’s Towards Sustainable Mining Biodiversity Conservation Management protocol and how these could add value to our business. We intend to develop a minimum standard for biodiversity and land management within the next few years. It will be practical and risk based, and will provide us with a consistent set of requirements for identifying and managing biodiversity impacts.

Land Management

We recognize that the land entrusted to us is a valuable resource. We work with authorities and other organizations to manage and reclaim the land during active mining and once operations have ceased. This is demonstrated by our longstanding record of reclamation and remediation activities, which have been covered in previous sustainability reports. Our active mining properties in Cuba and Madagascar progressively rehabilitate land and regularly monitor progress against rehabilitation plans with the regulatory authorities in both jurisdictions.

The Fort Saskatchewan site manages land issues within its government-approved operating permit, which includes discrete requirements for soil management and planning. Our Oil & Gas operations in Cuba routinely mitigate any impacts of oil exploration and recovery activities when operations have ended. Drill sites are cleaned, topsoil is replaced and the land is returned to conditions similar to those that existed before drilling commenced. In accordance with the requirements of our operating permits, the land will be returned to the Cuban state after the expiry of the term of the contract.

Performance

Ambatovy’s Environmental Certificate

Our primary environmental focus for 2015 at Ambatovy involved carrying out the conservation actions in Ambatovy’s Environmental Management and Social Development Plan, such as implementing a robust biodiversity management system, establishing partnerships with non-governmental organizations to manage the offset sites (see below for more information), and restoring all remaining lands impacted during construction. Our performance against these actions led the independent engineer, who represents the consortium of lenders that provided Ambatovy with project financing, to conclude that we have met the necessary requirements of the IFC Performance Standards to receive our environmental certificate and, ultimately, achieve financial completion, which is a significant milestone along the path to ramping up Ambatovy’s operations.

Species of Concern

Ambatovy has commitments to protect and conserve species of concern (SOC) within the lands under its direct control. Our mining operation is located within the Ambatovy-Analamay forest, and our mine lease is subdivided into the mine footprint, which contains our active operations, and the surrounding conservation zone.

The Ambatovy-Analamay forest area is within the Torotorofotsy Ramsar Convention site, which is an internationally significant wetland. The forest area forming our lease comprises 21.5 km2 of high biodiversity value, featuring 1,700 species of vascular plants and 336 species of vertebrates. Within this area, we have identified nine priority species, of which four are considered to be endangered, according to criteria established by the International Union for the Conservation of Nature (IUCN), and five are SOC. We are responsible for the inventory and monitoring of a total of 109 SOC and the four endangered species, as well as retrieving all orchid species. Refer to this case study to learn more about our orchid conservation work.

In 2015, we reintroduced 280 individual SOC plants within the mine footprint zone, and 1,227 individual SOC plants in the broader Ambatovy-Analamay conservation zone under our control. Thanks in large part to this and other work, we were awarded the 2015 Syncrude Award for Excellence in Sustainable Development at the Canadian Institute of Mining, Metallurgy and Petroleum’s annual convention. Read this case study to learn more.

Invasive Species

One of the most significant potential threats to areas of high biodiversity is the introduction of non-native, exotic and invasive species, which can rapidly adjust to new conditions and have an adverse effect on the native biodiversity.

We have processes in place to control three invasive species at the Ambatovy mine site and the process plant and port site:

  • Norway rats: We have implemented a 6 km2 capture zone around five villages near the mine to prevent Norway rats from affecting the forest.
  • Crayfish: Crayfish control is implemented twice a year at six sites. Apart from capturing the crayfish in collaboration with local villagers, who are trained as capturers, we also organize campaigns to raise awareness about the crayfish and its impacts on agriculture, habitat and biodiversity.
  • Asian toads: We removed more than 17,000 Asian toads in Toamasina between August 2014 and June 2015. They are believed to have been introduced via a container from Southeast Asia at the Port of Toamasina, which is located near our plant site.
Response to Concerns over the Introduction of the Asian Toad

In 2015, two international non-governmental organizations approached Sherritt about the introduction of invasive Asian toads to Madagascar. They suggested that Ambatovy’s shipping activities through the port may have inadvertently introduced the species and requested that we take a leading role in the overall response. We have examined this issue critically, and while our assessment does not support their conclusion, we have responded to their queries formally and have had several constructive discussions on this topic with representatives from these and other concerned organizations and institutions.

During the timeframe that the toad is speculated to have arrived in Madagascar, Ambatovy accounted for less than 5% of the Port of Toamasina’s total traffic; and that percentage is even lower for shipments coming from the toad’s zone of origin, according to our records and those we obtained from Madagascar’s customs office.

Nevertheless, as a responsible actor that cares deeply about biodiversity management, we are committed to supporting the Government of Madagascar’s leadership in addressing this significant threat. We have joined the government’s national committee, which is comprised of several stakeholder groups, to mitigate the impacts of the Asian toad. We are also entering into a memorandum of understanding with Madagascar’s National Environment Office to carry out a joint eradication program that goes well beyond the scope of our own efforts to date (referenced above). We appreciate the growing urgency to take broader measures and are hopeful that our contributions will lead to lasting results.

In addition to addressing invasive toads and other fauna, we are also controlling three exotic plant species at the mine site, including the removal of the Lantana camara species over an area of 42 hectares (ha) and the removal of exotic pine and eucalyptus trees over approximately 1,600 ha.

Conservation Partnerships and Collaboration

In 2015, Ambatovy initiated two important partnerships with civil society organizations to assist in managing the offsets we have created to compensate for our disturbances. We engaged Conservation International to manage the Ankerana forest – our 5,715 ha offset that is located some 70 km northeast of the mine site. We also reached an agreement with Asity Madagascar, which is associated with BirdLife International, to manage the Torotorofotsy wetlands. We feel that these respected civil society organizations bring both credibility and additional expertise in managing biodiversity. Both the Ankerana and Torotorofotsy offsets are important demonstrations of our commitment to evolving international best practice and to protecting and enhancing the rich biodiversity that surrounds the mine area and beyond.

Ambatovy also continued working closely with local experts, communities and suppliers on conservation activities. For instance, in 2015 we purchased more than $3,000 worth of native tree species from the local community to assist in our ongoing mine reclamation activities. In addition, we hired local residents as patrols in the Ankerana forest offset to ensure that there is no unauthorized use of – or other threats to – the core conservation area, such as illegal logging and lemur trapping. These residents conducted 960 person-days of foot patrols in the forest in 2015.

Biodiversity Management at Moa

Our open pit nickel mine near Moa, Cuba, is located approximately 15 km north of Alejandro de Humboldt National Park, a UNESCO World Heritage Site particularly known for its extensive suite of endemic species of flora.

Decades before the park became a World Heritage Site, the state-owned predecessor company of the Moa Joint Venture received a concession to develop a valuable mineral deposit within the park. Minor exploration work was carried out, once in the 1970s and again in the 1990s. In 2001, the Cuban government declared the park to be a protected area and a national park, and shortly afterwards UNESCO designated it to be a World Heritage Site.

Absolutely no exploration work of any kind has been carried out in the park since then. In 2008, the Moa Joint Venture officially relinquished its concession, and about three years later, at a meeting with Cuba’s National Council of Hydrographic River Basins, the Joint Venture agreed to evaluate the best approach to rehabilitating the impacted areas and include this work in its annual environmental management plans. Around that same time, the park authority was commissioned to carry out an impact assessment.

This collaborative effort led to the development of a long-term biodiversity management plan to restore the affected areas. This plan is being executed collaboratively by the Moa Joint Venture, Cuban regulatory agencies and the Park Authority. The plan encompasses soil conservation; the creation of hydro regulation channels to restrain floodwater and prevent erosion; reforestation of endemic species such as the ocuje (Calophyllum antillanum), which is prized for producing a very hard, durable wood, and the Cuban oak; as well as other areas.

In 2015, 6 ha of forest were recovered and we received a special recognition from the environmental regulator and the National Council of River Basins for rehabilitation work along the Toa River basin, Cuba’s most significant hydric resource.

Biodiversity Management Elsewhere

In Canada, our refinery’s impacts on biodiversity are minimal, given that it is located in an industrial zone within the city limits of Fort Saskatchewan. Our energy operations in Cuba also have minimal impacts on biodiversity, given the small footprint and nature of our activities. In 2015, no significant conservation activities were required or undertaken at these sites.

Land Management

In 2015, both Ambatovy and the Moa Joint Venture practiced progressive reclamation in accordance with their operating permits and commitments. There were no changes to the operational footprint of the Fort Saskatchewan refinery or our Cuban Oil & Gas operations, in part because these areas are still active.

The table below shows the amount of land (owned or leased, and managed for production activities or extractive use) disturbed or rehabilitated.

Ambatovy Fort Site Moa Site Oil & Gas and Power Total
Total amount of land disturbed and not yet rehabilitated (ha) 2,854 100 308 40 3,302
Total amount of land newly disturbed within 2015 (ha) 82 0 48 Not applicable 130
Total amount of land newly rehabilitated within 2015 to the agreed end use (ha) 6 0 32 Not applicable 38

Water

Management Approach

As the global population swells, the demand for fresh water continues to grow and societal concerns about water quality and availability increase. We understand and share these emerging concerns, which are common at all our divisions.

Water is central to our metallurgical process for producing nickel, and we manage it carefully. Where feasible, process water is recycled or reused within the process itself. Runoff is controlled through diversions and catchments to minimize any release to the environment. For each operation, we conduct baseline studies, assess risks and engage stakeholders to inform them of our water management planning.

Pumping water for use in our processes takes a considerable amount of energy, and we are continually taking steps to identify how we can optimize our practices and minimize the amount of water and energy we use.

We are also vigilant in our monitoring to ensure that we are not unduly contaminating surface water or groundwater resources with our process discharges. There are stringent regulatory water quality limits that apply to our discharges to ensure protection of the receiving environment, and our monitoring programs are designed to comply with the emission limit values in each jurisdiction, and to help us detect any unanticipated problems and manage risk beyond regulatory obligations.

Our approach to water management varies across our operations, depending on technical requirements, local climate, water bodies and stakeholder interests. Building on the range of water management practices and initiatives in place, we are working towards the development of a corporate water standard that will apply across all divisions.

Performance

Water Use

Ambatovy Fort Site Moa Site Oil & Gas and Power Total
Total water withdrawal (m3) 27,900,000 2,500,000 4,900,000 300,000 35,600,000

Ambatovy reported 27.9 million m3 of water consumption in 2015, which is consistent with prior years. Water for our processes is withdrawn from a variety of sources at the mine, plant and port facilities, including the Ivondro River, the Mangoro River, Antsahalava Creek and groundwater wells. Potable water for the plant site originates from wells at the facility. Our water withdrawal is monitored quarterly by the regulator.

Our Fort Saskatchewan site withdraws water from the North Saskatchewan River under provincial licenses for use in our processes. We purchase potable water from the local municipality. The total water withdrawal for the Fort Saskatchewan site in 2015 was 2.5 million m3, including 2.4 million m3 taken from the river and 0.1 million m3 of purchased potable water. We report our water withdrawal monitoring results to the provincial regulator on a monthly basis. Process effluent and stormwater (snowmelt/rainwater) that we collect on our site are treated to meet the regulated water quality guidelines. This water is then transferred to the municipal wastewater collection system, where it is treated further and then discharged into the surrounding environment along with wastewater from the wider municipality.

Our Moa site in Cuba withdrew 4.9 million m3 of water for its processes in 2015. Water is collected in our adjacent reservoir and is treated before use.

Oil & Gas and Power reported a total water withdrawal in 2015 of 0.3 million m3, drawn primarily from municipal water sources, and groundwater sources at Power facilities.

Water Quality

In 2015 at Ambatovy, the concentration of manganese in water that we discharge from our tailings management facility sometimes exceeded the regulated limit established by Madagascar’s environmental agency. Manganese at low concentrations poses only aesthetic concerns; that is, it imparts a discoloration to drinking water. At higher concentrations, it can have adverse health effects. To safeguard public health, we offered an alternative source of potable water to residents located close to the discharge point and who may use nearby water sources for drinking water. We also provided regular water quality updates to residents and the regulator. Based on the findings of a root cause analysis of the issue, we began implementing corrective actions, including building up tailings beaches to reduce the manganese before discharge and installing a permanent pumping house in order to regain compliance with our permit requirements. We expect this issue to be resolved in 2016.

At Fort Saskatchewan, we monitor water quality at several locations within the site’s treatment system, and review the results to ensure compliance before the release of water into the municipal collection system. We reported our water quality results to the municipality on a monthly and to the Alberta regulator on an annual basis. There were no non-compliance events during the year sourced to Sherritt operations.

Historic activities at Fort Saskatchewan have had an impact on groundwater quality. We have installed a series of wells to monitor groundwater quality and we remove and treat affected water as required. We report regularly to the Alberta regulator about our activities and effects.

When we invested in Moa more than 20 years ago, we inherited a legacy water management issue, which has affected water quality in a nearby river. Over the years, we have been working with our Cuban partners and the regulatory agency to address this issue. In 2015, we investigated long-term treatment options for water management. We expect to come to a decision with our Cuban partners on the preferred solution in 2017, and to begin implementation soon thereafter.

In 2015, Moa did not record any significant spills. There were, however, two minor overflows involving the release of a diluted liquid at the spillway of Moa’s tailings facility. Both incidents were managed in conformance with regulatory requirements.

There were also two minor spills at our Oil & Gas and Power operations in 2015. One involved a tank level indicator that failed to perform properly, resulting in a 3 m3 overfill of emulsion (insoluble droplets) to the ground. The second took place during a regular inspection and cleaning of a condenser. High water levels in our condenser pit led to 311 m3 of sea water being pumped to the ground.

Energy and Climate Change

Management Approach

We operate an energy-intensive business. Energy consumption is a major input to our processes at all of our divisions, and energy-related costs are the second-largest component of unit operating costs after labour. These realities mean that we are motivated to reduce energy consumption and maximize efficiencies at every stage of our production cycle, from mining and oil recovery through to processing, refining and shipping finished products, and generating electricity. Concerns about the possible impacts of climate change on the planet and on our business increase the urgency of this issue for us, and affirm our role in contributing to global efforts to reduce greenhouse gas (GHG) emissions.

We have evaluated our management approach to energy and climate change against the requirements of the Mining Association of Canada’s Towards Sustainable Mining Energy and Greenhouse Gas Emissions Management protocol and intend to develop and implement a corporate standard across the company in the coming years.

Air Quality

Broadly speaking, managing air quality around our operations is an important element of our environmental programs company wide. We are conscious of the potential impacts of our operations and take great care to ensure that all applicable air quality regulations are properly followed.

Air emissions generally comprise two types of sources. The first type includes specific discharges of gases from our process stacks and vents – such as sulphur oxides (SOX), hydrogen sulphide (H2S) and nitrogen oxides (NOX). When emitted into the air, these compounds can pose risks to human health and lead to environmental degradation. The second type of air emission includes small airborne particles generated from activities in the open environment, called particulate matter (PM). PM is predominantly produced as a result of traffic on unpaved roads at our facilities, excavation activities at our mines, and fertilizer production at our refineries. We have strict safeguards in place at all sites to minimize the risk of air releases and regularly review and revise processes to minimize the release of PM through our activities.

Performance

GHG Emissions and Energy Consumption

Ambatovy Fort Site Moa Site Oil & Gas and Power Total
Scope 1 GHG emissions(kt CO2e) 2,035 359 626 1,611 4,631

GHG emissions at Ambatovy, for the mine, plant and port facilities, were estimated at a combined total of 2,034 kilotonnes (kt) of CO2 equivalent during 2015, representing a 10% increase over 2014 emissions. The increase is the result of the ramp-up of Ambatovy to full nameplate throughput during the year. As there is a lack of large-scale power available in Madagascar, the use of coal for power generation at Ambatovy accounts for the majority of the GHGs produced. Ambatovy consumed 2,008,000 gigajoules (GJ) of energy in 2015 from a mix of coal-fired power and diesel gensets. This represents an increase of 5% over 2014 energy consumption, again reflecting ramp-up of production. In 2015, Ambatovy took steps to reduce the use of light vehicles on site and optimize the use of electric vehicles as a means of reducing emissions.

Fort Saskatchewan reported GHG emissions of 359 kt of CO2 equivalent in 2015. Sherritt has purchased 39 kt of carbon credits to help offset our 2015 GHG emissions and comply with provincial regulations. Fort Saskatchewan operates within the Alberta GHG regulatory system; as such, we track and report all emissions and are required to make reductions in, or to purchase equivalent credits for, emissions arising from both the combustion of fossil fuels and the venting of certain streams within our ammonia plant. Fort Saskatchewan recorded total energy consumption (including purchased electricity) of 5,061,000 GJ in 2015. During the year, the site conducted assessments of opportunities to reduce emissions, including an internal study on cogeneration for heat and power. Additional work on this topic is planned for 2016.

At Moa, we produced 626 kt of CO2 equivalent during 2015, a slight decrease from the 637 kt emitted in 2014. We consumed a total of 7,982,000 GJ of energy in 2015, including generated and purchased electricity. Significant progress was made on the construction of a 2,000 tonnes/day sulphuric acid plant, which will allow us to produce more of our own acid as an input to our process and reduce imported acid, and will produce by-product steam, which will reduce fuel oil combustion. Once fully operational, the acid plant is expected to reduce CO2 emissions at Moa by approximately 100 kt per year.

Oil & Gas and Power (OGP) reported the production of 1,611 kt of CO2 equivalent during 2015 from the Boca de Jaruco, Puerto Escondido and Varadero facilities. Our Oil & Gas operations reported energy usage of 35,966 GJ and our Power facilities consumed 26,404,045 GJ. OGP also flared 89.2 million m3 of hydrocarbons associated with its oil production processes during the year. OGP’s preventative maintenance program ensures optimal operation of our equipment, and we conduct quarterly monitoring of any emissions from our key sources to verify proper combustion.

Since 2007, Energas has generated well over one million Clean Development Mechanism (CDM) credits at the Varadero combined cycle power generation facility in recognition of its low GHG emissions relative to other sources of electricity in Cuba. While there are many benefits to the program, the relative administrative costs are significant and, due to Sherritt’s financial constraints, our participation has diminished in recent years. Read this case study for more information on our efforts to obtain CDM credits over the last few years.

Air Quality

In 2015, Sherritt experienced two air quality incidents, both at Ambatovy. One involved a release of H2S at the plant site that led to the fatality of a worker (refer to Health and Safety Performance for further commentary). The second involved a minor process emission of SO2 that posed a temporary health risk to the nearby community (refer to Public Safety Performance for information on our response).

Ambatovy Fort Site Moa Site Oil & Gas and Power
Air emissions – NOX 3.2 μg/m3 1,600 tonnes 1,582 tonnes 6,069 tonnes
Air emissions – SOX 10.3 μg/m3 87 tonnes 15,874 tonnes 12,817 tonnes
Air emissions – TPM 6.7 μg/m3 PM10 60 tonnes Not calculated Not applicable
Note: In Madagascar, our current monitoring system records air emissions as a concentration rather than a total mass (which is what we monitor at our other operations), and we base our ambient air quality observations at ground level. So we are unable to normalize these data across Sherritt.

Our sources of emissions to the atmosphere are regulated under requirements in the various jurisdictions where we operate. In Madagascar, our current monitoring system records air emissions as concentration rather than as a total mass (which is what we monitor at our other operations), and we base our ambient air quality observations at ground level. So we are unable to normalize these data across Sherritt. This is also the first year we are including data on air emissions from Ambatovy in our report. Ambatovy emissions include: SO2 from the start-up of the acid plant, ammonia from refinery scrubbers and vents, H2S from the mixed-sulphide and hydrogen sulphide plants, NOx from fossil fuel use (from gensets, the coal-fired power plant and mobile equipment), and PM with a diameter of less than 10 microns from stockpiles, the power stacks and roads.

Our 2015 emissions at Fort Saskatchewan are consistent with historical levels. Most of the NOx and SOx emissions come from our utility generation (natural gas combustion) and fertilizer production (sulphuric acid production) activities. Ammonia is released primarily from ammonia scrubbers in the metals refinery, which uses an ammonia-based leaching process. The PM is generated primarily from the production of ammonium sulphate fertilizer and from traffic on unpaved roads. Additional information on air quality in Fort Saskatchewan can be found on the Fort Air Partnership website.

In Cuba, Moa’s NOx and SOx emissions are generated from the sulphuric acid plant and the powerhouse. The 2015 volumes are in line with amounts discharged in 2014. OGP’s NOx and SOx emissions showed a decrease from the previous year, due to the optimal operation of the equipment at our OGP facilities.

Environmental Liabilities, Closure and Reclamation

Management Approach

The reputation of the mining sector has been affected by the historical mismanagement of mine properties that closed before regulations were in place to address closure and associated costs. We take seriously our responsibility to provide adequate financial resources to address the closure of our properties once reserves have been depleted.

Regulations have been strengthened around the world. As part of the permitting process, mining and energy companies are now required to prepare closure plans with associated cost estimates, and to provide host governments with financial assurance to cover the costs of environmental remediation in case the company is no longer able to complete the work. In addition to these regulatory requirements, international accounting and securities exchange rules require public companies to account for the reasonably expected liabilities associated with the closure of mining and energy properties. These estimates, like those provided to host governments, are based on the closure plans and assumptions contained therein.

We comply with regulatory requirements regarding closure planning and related environmental rehabilitation obligations, cost estimates and financial assurance in each of the jurisdictions where we operate. We also meet the requirements of the Ontario Securities Commission, which obliges publicly listed companies in Ontario to estimate and disclose their environmental rehabilitation provisions. We review these provisions on a quarterly basis. Whenever possible, we engage in the progressive reclamation of our properties over the life of the operation, rather than initiate such activities at the time of closure.

Performance

The current estimate of Sherritt’s share of total anticipated future closure and reclamation costs to be incurred over the life of the company’s various assets and investments is approximately $107.8 million (excluding operating expenses).

In 2015, we continued to carry out our environmental liability obligations related to the containment pond breach at the Obed mine, a non-operational coal mine in Alberta that we owned at the time of the incident in 2013. Our 2015 remediation work is described under Tailings Management.

Closed Properties

As part of our acquisition of Dynatec Corporation in 2007, we inherited three now-closed assets from Highwood Resources Ltd.:

  • Mineral King, a former lead-zinc and barite mine and processing facility near Invermere, British Columbia. In 2014, Sherritt completed the reclamation work plan as required by the provincial regulator. Portals for accessing the mine were covered and secured, coverage of the tailings pond with topsoil was completed, access roads were pulled back, and designated areas were seeded and fertilized. A 2015 inspection by British Columbia’s regulator required additional work on the portals and surface depression. This work is planned for 2016/2017. Once reclamation is complete and approved by the government, we intend to transfer future liability to the new property owner.
  • Parsons, a former barite mine and processing facility near Parson, British Columbia. In 2014, we completed the regulator’s reclamation work plan, which involved: a general clean-up, monitoring, seeding, and the removal of an invasive species. A 2015 inspection by the regulator has required additional geotechnical, geochemical, and subsidence closure work, which is planned for 2016/2017. Once vegetation is re-established and land certification requirements are met, we will take steps to release the property to the provincial government.
  • Canada Talc, a former talc mine in Madoc, Ontario, and processing facility near Marmora, Ontario, and associated claims areas. In 2012, remediation of the mine was completed and the processing facility was sold. The Ontario regulator retained a security deposit for further surface and groundwater sampling and geotechnical monitoring, which will continue until 2017.

Current Operations

All of our mining assets that are currently operational have more than 20 years of resources and production capacity in their lifecycles. Each has up-to-date closure plans that meet host jurisdiction regulations and cost estimates that we believe reasonably and appropriately address the liabilities at each site.

In 2015, Ambatovy continued its work on a mine restoration strategy, including the cost estimates for the mine site restoration. The operation also engages in planning discussions on a quarterly basis with our finance department about projected environmental rehabilitation obligation costs.

At Fort Saskatchewan, our closure plan incorporates a set of robust considerations which account for both likely and unlikely obligations that we may need to address, and our current cost estimates cover the reasonable obligations.

For our OGP operations, all assets will revert back to the Cuban state for closure, as outlined in our permits and related agreements.

For information on our reclamation activities in 2015, please refer to Biodiversity and Land Performance.