Tailings Management

Sherritt’s goal is that each joint venture operates and maintains its tailings management facilities in accordance with global best practices for safety. We continually review our facilities and procedures and are committed to pursuing the highest standards at our operations.

Sherritt’s tailings management facilities (TMFs) are located at the Moa Nickel Site and are a part of our Moa Joint Venture (JV). The Moa Nickel Site is operated by the Moa JV’s management, reporting to the Moa JV Board of Directors. The Moa JV is a 50/50 joint venture between Sherritt and a Cuban government agency. Accordingly, while the following reflects Sherritt’s approach to tailings management, Sherritt by itself cannot unilaterally control outcomes in relation to tailings management at the Moa Nickel Site. Sherritt remains committed to working with its Moa JV partner to advocate that global best practices are followed.

Management Approach

Governance and Assurance

Accountability and Resourcing

The Sherritt Board of Directors, through its Environment, Health, Safety and Sustainability Committee (EHS&S Committee), oversees implementation of our Sustainability Framework and Tailings Standard, including policies, systems, performance and auditing functions. Assurance activities associated with tailings management are conducted through the Sherritt Board Audit Committee. In 2021, changes to the committee structures are being proposed to consolidate several committees, to more clearly include review of environmental, social and governance (ESG) matters including tailings, and to address future assurance of tailings disclosures.

The following senior leaders are involved in the management of tailings:

  • The Executive Vice President and Chief Operating Officer reports directly to the President and Chief Executive Officer and is responsible for sustainability, health and safety, environment, community, and Indigenous affairs, including tailings management.
  • The Moa JV Chief Operating Officer chairs the regular internal tailings review meetings and reports directly to the Executive Vice President and Chief Operating Officer. Members of the internal tailings review team include members of the Moa Nickel Site senior management team and tailings management subject matter experts from the Moa JV operations. The group actions recommendations from the Independent Tailings Review Board (ITRB) and other audits and provides updates on operations, maintenance, monitoring and emergencies as applicable.

The mandate of Sherritt’s EHS&S Committee, which can be found here, includes the following:

  • (k) Ensure adequate and effective tailings management systems are in place and utilized, ensure compliance is monitored (including through external verification on such periodic basis as the Committee considers to be appropriate), and offer advice and recommendations to the Board in connection herewith.

The organization employs an independent Engineer of Record (EoR) to provide oversight and review of TMF design, construction and operation. The EoR for the Moa Nickel Site TMFs is Knight Piésold, one of the world’s leading consulting firms.

The Moa Nickel Site also has an Independent Tailings Review Board made up of independent experts who conduct annual third-party reviews of design, operation, surveillance and maintenance.

Risk Management

Dam failure is the greatest risk for our TMFs, located at the Moa Nickel Site and part of our Moa JV. Sherritt’s dam safety assurance program assesses the Moa JV’s tailings in line with international leading practice.

Sherritt’s operations are required to assess natural phenomena such as extreme flooding and seismic events, as well as operational criteria, and incorporate these factors into their TMF designs.

There are at least five levels of governance and assurance that Sherritt advocates its operations undertake on TMFs:

  1. Regular surveillance – Operations are expected to monitor their TMFs on an ongoing basis using piezometers, inclinometers, pressure gauges, remote sensing and other technologies, focusing on tailings dams, abutments, natural slopes and water levels. The results are assessed by the management team of the operation.
  2. Annual dam safety inspections (DSI) – Formal dam safety inspections are conducted annually by an external EoR, Knight Piésold, for all operations. A DSI evaluates and observes potential deficiencies in a TMF’s current and past condition, performance and operation.
  3. Independent Tailings Review Board – The ITRB, comprising two senior subject matter specialists, meets at least once a year, depending upon the nature of the facility and the issues being considered, to conduct a third-party review of design, operation, surveillance and maintenance of our TMFs. The results from the ITRB assessments are reported to the Moa JV management and Board of Directors, Sherritt’s senior management and the EHS&S Committee of Sherritt’s Board of Directors. Recommendations are tracked to completion by management internal reviews.
  4. Internal reviews – Sherritt’s COO conducts internal management reviews of Sherritt’s tailings facilities on a regular basis. Summaries are reported to the EHS&S Committee of Sherritt’s Board of Directors.
  5. Staff inspections – Tailings management facilities are inspected by trained operators and expert technical staff as frequently as several times daily, with formal staff inspections occurring at the Moa Nickel Site at least once a month.

The different levels of assurance are undertaken on the basis of national regulations, as well as, where appropriate, criteria aligned with international guidelines from the Canadian Dam Association and the International Commission on Large Dams.

In addition, where appropriate, the Moa Nickel Site conducts periodic dam safety reviews, which include reviewing maintenance, surveillance and monitoring, failure impact assessments, emergency management procedures, public safety and environmental management. The results are shared with the operation’s management and reviewed as part of the dam safety audits.

Tailings Management Standard

Sherritt has had an internal tailings management standard in place since 2018. Management at the Moa Nickel Site has adopted this standard and is in the process of implementing it. The standard aligns with the Mining Association of Canada’s Towards Sustainable Mining Tailings Management Protocol, and supports Sherritt’s goal of designing, constructing, operating, decommissioning and closing 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. Sherritt continues to review and evaluate monitoring systems and risk assessments to ensure the approach is robust and current.

Engaging with Communities

Sherritt advocates that its operations undertake proactive stakeholder and community engagement across a broad range of operational topics, including TMFs where appropriate.

We require that our operations, and those of our joint ventures, develop and maintain emergency preparedness and response plans, and to communicate these plans with relevant stakeholders. Where appropriate, operations may also engage with local and regional emergency response services in scenario planning and practice exercises.

In Cuba, engagement with communities with respect to tailings management is conducted by Sherritt’s joint venture partners. This can include, but is not limited to, grievance resolution, risk management, and emergency response.

Continuous Improvement

Sherritt is committed to continually reviewing its joint venture facilities and procedures to maintain the highest standard of dam safety at its operations. Sherritt also works in partnership with local, national and international organizations to support improvements in tailings management across the industry, including the Mining Association of Canada (MAC). With the assistance of MAC, Sherritt is implementing the Towards Sustainable Mining (TSM) program, including the Tailings Management Protocol, in wholly owned operations and is working with its partners to implement it in the Moa JV.

Through MAC and updates to the TSM Tailings Management Protocol, Sherritt plans to align with the new Global Industry Standard on Tailings Management.

Tailings Management Facilities

There are several TMFs at Sherritt’s joint venture operation in Cuba – the Moa Nickel Site. The site is operated by the JV’s management, reporting to the joint venture Board of Directors. A geotechnical engineer is employed to provide oversight of design, construction and operation of the tailings facilities. Third-party engineering firms are utilized in the design and monitoring of tailings facilities. The design and operation of existing facilities meet or exceed all applicable regulatory requirements. There are no tailings produced at the Fort Site or the OGP sites.

At the Moa Nickel Site in Cuba, upstream and downstream designs have been used throughout the mine life. Stability is monitored as per the operating practices manual. Based on internal and third-party reviews of structural integrity and management systems, the facilities are operating to design specifications and are stable.

Sherritt works with its Cuban joint venture partner, the General Nickel Company S.A. of Cuba (GNC), to continually improve tailings management and achieve alignment with international best practices. As a member of the Mining Association of Canada, Sherritt has influenced its partner to begin implementing Sherritt’s Tailings Management Standard, which is aligned with MAC’s Tailings Management Protocol, at the Moa Nickel Site in Cuba, and to apply Canadian Dam Association criteria.

Sherritt and its joint venture partner also began investigating options for tailings management so that we can continue to support future mining operations. Throughout this process, Sherritt will strive to minimize environmental impacts and meet international good practice in tailings management. A rehabilitation plan has also been developed at the Moa Nickel Site and is underway in a section that is no longer active.

A more detailed disclosure on tailings facilities and management, including disclosures aligned with the Church of England Pensions Board’s tailings questionnaire, can be found here.

Performance

2020 Fort Site Moa Nickel Site OGP
Total amount of overburden, rock, tailings and sludge (tonnes) Not applicable 16,566,859 Not applicable

During 2020, the total amount of waste rock decreased at Moa due to reduced auxiliary works and construction activities conducted on site, such as road construction. The total amount of overburden increased due to the characteristics of the mining plan.

Long-term Tailings Disposal

Subsequent to the end of 2020, Los Lirios was selected by management as the preferred long-term storage option in early 2021. In addition, conceptual studies of future tailings disposal sites were updated by Knight Piésold (KP). As shown in the figure below, a proposed sequence of tailings management projects has been developed that will allow tailings disposal as follows:

  • North Extension – 2021 to 2022
  • Area 22, Stage 3 – 2022 to 2025
  • Los Lirios – 2024, for up to 15 years

Figure: Proposed Sequence of Tailings Management Facility Development at the Moa Nickel Site

Project 2019 2020 2021 2022 2023 2024 2025–2026 2027–2039
ALTF Closure Closure
North Extension Operation Closure or Future Stages
Area 22, Stage 3 Phase 1 Construction Phase 2 Construction Phase 3 Construction
Operation Closure
Long Term – Los Lirios Construction
Operation

Acid Leach Tailings Facility (ALTF): Closure and stabilization work continued in 2020. Monitoring activities are ongoing and informing the closure plans.

North Extension: As the ALTF approached capacity, the Moa JV retained Knight Piésold, an internationally respected engineering firm, to design an extension that would ensure continued capacity to store tailings. In 2020, operations, staged construction, and additional stability analyses on the North Extension occurred.

Area 22: Detailed design and permitting of this multi-phased short-term tailings solution were completed in 2020. Construction has begun, with completion of phase 1 expected by December 2021. Additional analyses have resulted in an increase to the size of the Area 22 catchment and an extension to the length of the estimated storage capacity from two years to three and a half years.

Los Lirios: Permitting and studies are underway for this long-term solution.

“Sherritt is committed to advocating for the responsible management of its joint venture tailings facilities to prevent impacts to human health and safety, the environment and communities. We are committed to aligning the design, operation and closure of our tailings facilities with international best practices. We continually review and strengthen our tailings management systems.”

Maryse Belanger, Chair, Environment, Health, Safety and Sustainability Committee of the Board of Directors

Update on Remediation of Obed Containment Pond Breach

As was 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 in Alberta, then owned by Sherritt. This 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 co-operatively with the Alberta regulator to address the impacts of the incident.

The activities completed in 2020 based on the Environmental Protection Order (EPO) include, but were not limited to:

  1. Management of water flow into the Apetuwon Creek;
  2. Active monitoring and reporting of water quality;
  3. Vegetation and wildlife monitoring;
  4. Aquatic and benthic invertebrate assessments;
  5. Fisheries inventory;
  6. Apetuwon Creek bank and stream bed repair, in accordance with the approved Reclamation Plan; and
  7. Environmental enhancements, planting, seeding and re-establishment of native plants and grasses.

The detailed and extensive monitoring data collected in 2020 clearly indicates a healthy environment in accordance with all provincial and federal environmental requirements. The data recorded indicates that there have been no long-term effects to the water quality, fish or wildlife populations in the Apetuwon Creek, adjacent streams or the Athabasca River. The work completed on the Apetuwon Creek to restore its hydrological function in the surrounding environment has demonstrated a high rate of success in all areas of environmental standards, and no long-term impacts as a result of the 2013 incident.

2020 saw the conclusion of the required activities as described in the original EPO from 2013 (EPO 2013/CR-34).

Energy, Climate Change and Air Quality

At Sherritt, we recognize that we have a role to play in helping to address the global climate challenge, which includes working to reduce our carbon footprint as well as supporting the transition to a circular and low-carbon economy. We are responsibly producing and supplying the commodities that advance everyday life. Our minerals and technology are also enabling the transition to global decarbonisation.

We have been developing innovative solutions for a low-carbon world, have been engaged in climate-related risk mitigation activities, and have had suitable governance structures in place for some time. However, we recently developed a comprehensive climate strategy and targets and have determined to align our disclosures with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). These are the first steps in an ambitious journey to do our part to tackle climate change and position the enterprise for success in the low-carbon future.

Governance

At Sherritt, we work to ensure that climate-related issues receive appropriate board and management attention – our Board and senior management consider climate-related risks and opportunities in the strategic planning process. Sherritt’s climate-related disclosures are reviewed using internal governance processes and disclosure procedures that are similar to those used for financial disclosures.

Sherritt’s Board of Directors  (the Board) provides oversight on all strategic matters, including the risks and opportunities related to climate change. Sherritt’s Board has an independent chairperson. The Board has established the Environment, Health, Safety and Sustainability (EHS&S) Committee, which is chaired by a member of the Board. Corporate officers and senior managers who establish priorities and plans for environmental, social and governance (ESG) programs provide this committee with quarterly updates on performance. The Committee meets and reports to the company’s Board of Directors quarterly. Risk management and assurance activities associated with climate change are conducted through the Audit Committee of the Board. The mandate of the committees can be found on the Corporation’s website. In 2021, changes to the committee structures are being proposed to consolidate several committees, to more clearly include review of climate-related issues and other ESG matters and to address future assurance of climate-related disclosures.

The Executive Vice President and Chief Operating Officer, who reports directly to the President and Chief Executive Officer, is accountable for climate change management. This position is also accountable for ensuring environmental, health, safety and sustainability performance meets corporate requirements, including implementation of the climate plan.

Management Approach

Sherritt supports the global climate change goals outlined in the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement.

We recognize the important role we can play in the shift to a low-carbon economy and have established a climate plan with targets for reducing our carbon footprint and the mining industry’s carbon footprint, with the ultimate goal of achieving net zero greenhouse gas emissions by 2050.

Figure: Sherritt’s Approach to Climate Change

Climate Risk and Opportunity Assessment
Adaptation to a Changed Climate
Mitigation Measures
Innovative Technological Solutions for Industry
Public Disclosure

 

Assurance Related to Climate Change

We conduct internal and external assurance on climate change disclosures. Following assurance, applicable management teams use the results to inform future actions and strategic plans.

Strategy

The Executive Vice President and Chief Operating Officer is responsible for delivering our climate plan and overseeing the progress of related committees and task forces. In 2020, management established a new strategic initiative focused on building a sustainable organization. As part of this initiative, we initiated development of a climate plan. Management has also established aspirational and interim targets related to climate change.

Our plan to contribute to global climate action, to adapt to a low-carbon economy and to continue to responsibly produce the materials essential for society is built around five pillars:

  1. Identify climate change–related risks and opportunities;
  2. Adapt to a changing climate;
  3. Mitigate impacts by reducing greenhouse gas emissions and improving energy efficiency;
  4. Innovate with technological and operational solutions; and
  5. Transparently disclose our progress.

Assessing climate change–related risks and opportunities is part of our risk management and strategy development processes. Effective and strategic management of climate change–related risks and opportunities across all aspects of our business is vital to our continued ability to operate.

Operational Implementation

When relevant, meetings chaired by the Executive Vice President and Chief Operating Officer include discussions on operational approaches to decarbonisation, including capital investments to improve energy efficiency and reduce greenhouse gas emissions, and strategies to incorporate more renewables into our energy mix. Our capital allocation processes prioritize the production of commodities essential to the transition to a low-carbon economy. Our Annual Report details our approach to capital allocation.

We work with industry associations and partners to support predictable policy mechanisms aimed at achieving cost-efficient emissions reductions. We continue to strengthen our processes to incorporate changes in local regulations and carbon pricing sensitivities into our business planning for existing assets, innovation pipelines, new investments and as part of our marketing activities. Our ongoing work plan and the increasing requirements we place on our operations give substance to our corporate approach and commitments on climate change.

All Sherritt operations are implementing the new Towards Sustainable Mining Climate Change Protocol. Plans are in place to complete gap analyses and develop implementation plans in 2021.

The Fort Site operates under a provincial GHG regulatory system. In 2019, the Fort Site created an Energy and Greenhouse Gas Improvement Plan. This plan evaluated several energy reduction projects to assess feasibility and value-add potential to the company.

In 2019, Sherritt joined a strategic energy management (SEM) program in partnership with CLEAResult, a leader in energy efficiency. The program is sponsored by Natural Resources Canada and supported by Energy Efficiency Alberta. The goal of the program is to develop and apply an energy management system to identify and implement energy improvement opportunities. In 2020, Sherritt worked with CLEAResult to create a list of energy initiatives, advance efficiency projects and develop a predictive model linking production and energy use. The SEM program is 24 months in duration and will wrap up in late 2021.

An initiative was launched in 2020 to increase the use of renewable energy at the Moa Nickel Site. To date, two electric vans have been delivered, with two more expected in 2021. Additional opportunities to electrify light vehicles are currently under review.

The Moa Nickel Site purchased electric forklifts and is exploring the use of electric buses for transporting personnel to and from work. Work has commenced on a feasibility study for the installation of a 20 MW solar panel power plant of solar panels on the administration building. Solar panels are also being installed in remote camps to supply electrical power and lighting needs.

Innovation

Meetings chaired by the Executive Vice President and Chief Operating Officer include reviews of Sherritt’s innovation pipeline and discussions on how our technologies can contribute to industrial decarboniation efforts. Our Technologies Division is pursuing several promising innovations with a relatively low global warming potential for the mining and oil and gas industries, as described below.

1. Treatment of High-Arsenic Copper

Sherritt is developing a hydrometallurgical process to improve the ability of copper producers to treat high-arsenic levels in a more sustainable fashion. When compared to traditional copper smelters, the benefits of Sherritt’s hydrometallurgical process include extending the life of aging copper mines, making arsenic inert, producing zero direct carbon emissions and no atmospheric emissions of sulphur or arsenic, and facilitating employment and processing at source, avoiding transportation emissions associated with exporting concentrates.

2. Bitumen Upgrading

Sherritt is developing a bitumen upgrading process that will increase pipeline capacity and eliminate diluent cost, reduce carbon emissions and slag waste, and allow the introduction of clean hydrogen into the oil value chain.

3. Other Initiatives

Management is also exploring several shorter-term projects that have the potential to lower the carbon footprint of our products, such as the Moa Nickel economic cut-off grade project. Through improved resource modelling and mine planning at Moa Nickel, this project has the potential to maximize resource utilization and minimize the treatment of material with high acid consumption, thus managing our carbon footprint.

We are also investigating exciting green technologies such as green hydrogen. Stay tuned for more information.

Risk Management

Assessing climate change–related risks and opportunities is part of our risk management and strategy development processes. Effective and strategic management of climate change–related risks and opportunities across all aspects of our business is vital to our continued ability to operate.

Metrics and Targets

We are in the process of developing climate and energy management systems that will improve how we manage climate-related risks and opportunities.

Our Targets
  • Achieve net zero greenhouse gas (GHG) emissions by 2050;
  • Reduce overall GHG emissions intensity from 2019 levels by 10% by 2030;
  • Obtain 15% of total energy from renewable sources by 2030; and
  • All operations independently verified to have achieved Level A in the TSM Climate Change Protocol by 2024.

A more detailed disclosure on our climate-related governance, strategy, innovation projects, risk mitigation, metrics and performance can be found in our 2020 Climate Report.

Air Quality

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 from 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 we regularly review and revise processes to minimize the release of PM through our activities.

The Fort Site is a member of the Fort Air Partnership (FAP), which collects, records and manages air quality data within the Fort Saskatchewan air shed. Sherritt works alongside other industrial representatives in FAP to collect and report reliable, independent and transparent air quality data 24 hours a day, seven days a week. In December 2019, Sherritt finalized its Air Emission Reduction Plan.

In recent years, Sherritt has made continuous improvements to air emissions management. We have been investing in updates to aging infrastructure, working to identify and mitigate point sources, and putting initiatives in place to reduce emissions. Continuous and discrete emissions monitoring occurs at the Fort Site, and emissions reporting continues to improve in Cuba. Efforts are underway to implement ISO 14001 at the Moa Nickel and Fort Site to ensure that significant emissions risks are identified and controlled, and air quality management continues to improve. In 2021, Sherritt will finalize and roll out an Air Management Standard as part of its Sustainability Framework.

Performance

2020 and recent highlights:

  • Sherritt experienced an overall decrease of 12% in Scope 1 greenhouse gas emissions compared to 2019 emissions, mainly due to a reduction in available gas for processing in OGP;
  • Conducted external benchmarking of climate strategies, plans, and disclosures;
  • Conducted internal workshops to develop a climate plan;
  • Assessed disclosure recommendations related to the Task Force on Climate-related Financial Disclosures (TCFD) and started to develop a multi-year alignment plan; and
  • Established aspirational and interim targets related to climate change.

GHG Emissions and Energy Consumption

2020 Fort Site Moa Nickel Site OGP Total
Scope 1 GHG emissions(kt CO2e) 334 602 1,062 1,998
Scope 2 GHG emissions(kt CO2e) 79 61 7 147
Scope 1 or direct emissions arise from sources owned or controlled by the organization.
Scope 2 emissions refer to indirect emissions generated from the purchase of electricity.

The Technology Innovation and Emissions Reduction Regulation (TIER) came into force in Alberta on January 1, 2020. Under TIER, Sherritt is given a facility-specific benchmark and assigned a 10% reduction target for 2020 emissions. The reduction target will increase by 1% each year starting in 2021. There are separate facility-specific benchmarks for ammonia production as well as for nickel and cobalt production.

In 2020, Sherritt complied with TIER by purchasing technology fund credits paid to the province, supporting further reductions in Alberta.

In 2020, the Fort Site reported GHG emissions of 334 kilotonnes (kt) of CO2 equivalent, which is comparable to 2019 emissions. Additionally, the Fort Site purchased 43 kt of technology fund credits (>10% of total emissions), paid to the province of Alberta, for its 2020 emissions. The Fort Site recorded a total energy consumption (including purchased electricity, fossil fuel and waste fuel consumption) of 5,033 terajoules (TJ) in 2020, which is a slight decrease over the previous year.

The amount of diesel used in 2020 at the Fort Site decreased by 75%, after seeing an anomaly in 2019. The increased use of diesel seen in 2019 was largely due to the use of rental air compressors while the electric compressor was being repaired.

The Moa Nickel Site produced 602 kt of CO2 equivalent during 2020; this amount is comparable to the previous year. Moa Nickel consumed a total of 6,500 TJ of energy in 2020, including generated and purchased electricity as well as fossil fuel consumption (crude oil, diesel and natural gas). This represents a 6% increase over the previous year.

OGP reported the production of 1,062 kt of CO2 equivalent during 2020 from its Boca de Jaruco, Puerto Escondido and Varadero facilities. This represents a 24% decrease from the previous year, due to a reduction in gas available for processing. The OGP operations reported a decrease in energy usage of 6% compared to 2019. OGP also flared 75 million m3 of hydrocarbons associated with its oil production processes during the year, representing an increase of 14% from 2019. A decrease in diesel consumption at OGP in 2020 was due to decreased production; diesel usage is linked to production.

In 2020, Sherritt reported an overall decrease of 12% in Scope 1 greenhouse gas emissions compared to 2019 emissions, mainly due to the 24% decrease in emissions at OGP.

OGP’s preventive maintenance program ensures optimal operation of our equipment, and we conduct quarterly monitoring of emissions from our key sources to verify proper combustion. Our Oil & Gas operations have additional reporting metrics under the Global Reporting Initiative; please refer to the Performance section for this information.

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.

Sherritt’s Scope 2 emissions are relatively low due to the significant generation of electricity at host sites in Cuba. Therefore, Scope 2 emissions are of a lower order than our Scope 1 emissions.

Air Quality

In 2020, Sherritt had one reportable air quality–related incident at the Fort Site. It involved a continuous emissions monitoring uptime failure at the Leach Plant. It was a technical non-compliance with our licence where no exceedance of the emissions limit took place.

The Moa Nickel Site continued to focus on reducing fugitive H2S emissions, and in 2020 gas ducting was fabricated and installed for fugitive gas collection, hermetic seals were improved to reduce ambient gas emissions, and operations were optimized to reduce total emissions. There are allocations in the long-range plan and capital budget for further projects to mitigate the H2S emissions in the sulphur plant.

2020 Fort Site Moa Nickel Site OGP
Air emissions – NOX (tonnes) 1,374 1,446 4,805
Air emissions – SOX (tonnes) 101 13,354 14,135
Air emissions – TPM (tonnes) 93 Not reported Not reported
NOx – Nitrogen oxide
SOx – Sulfur oxide
TPM – Total Particulate Matter

Our air emissions are regulated under requirements in the jurisdictions where we operate.

The 2020 emissions at the Fort Site are consistent with historical levels. Most of the NOx and SOx emissions are from our utility generation (natural gas combustion) and fertilizer production (ammonia and sulphuric acid production). Ammonia is released primarily from ammonia scrubbers in the Fort Saskatchewan refinery, which uses an ammonia-based leaching process. PM is primarily generated 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, the Moa Nickel Site emits NOx and SOx from the powerhouse and the sulphuric acid plant. The 2020 volume of NOx represented a decrease from 2019 due to a substantial reduction in operating hours of heavy equipment due to lower availabilities/utilization of equipment, while SOx emissions increased. The new operating standard approved in 2018 by the Environment Ministry for the Moa Nickel Site included a reduction in emissions for various effluent or gas streams (such as acid trains and neutralization stack) and liquid discharge limits (waste liquor).

All excess gas that was previously flared and burned at Oil & Gas is being repurposed as it is collected and sent to the Energas plants for the production of power. In 2020, OGP’s NOx and SOx emissions decreased by 20% and 46%, respectively. The NOx reduction is due to the reduction in gas being burnt or used as fuel for power generation, while the decrease in SOx is attributable to the reduction in gas and to the sulphur plant (Train B) being repaired and put back in service in Varadero. With the plant up and running, more SOx was being processed and made into solid sulphur as opposed to being flared.

Biodiversity and Land

Management Approach

Sherritt’s operations are found in diverse locations, ranging from island environments to industrial zones. Our approach to managing biodiversity is tailored to the context of each operating site.

In Canada and Cuba, Sherritt conducts environmental baseline studies and impact assessments, and implements biodiversity management plans as required by regulation. As a member of the Mining Association of Canada, we are working to implement the Towards Sustainable Mining Biodiversity Conservation Management Protocol at our operations. In addition, as part of our Sustainability Framework we have developed a standard for biodiversity and land management that aligns with TSM and provides additional guidance to Sherritt’s divisions. It provides us with a consistent set of requirements for identifying and managing biodiversity impacts. All sites have completed gap analyses against this standard and are implementing multi-year plans to align systems and performance.

Management has systems in place to detect and report spills on land and water. At Sherritt, these are classified as minor, reportable, or high-severity environmental incidents. All identified incidents or spills are investigated and steps are taken to prevent recurrence. There was one significant environmental incident reported in 2020.

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 disturbed land during active mining and post operation. This is demonstrated by our longstanding record of reclamation and remediation activities. The Moa Nickel Site in Cuba progressively rehabilitates land and regularly monitors progress against rehabilitation plans with the regulatory authorities.

The OGP operating sites in Cuba are committed to ongoing environmental protection while routinely mitigating impacts of oil exploration and recovery activities. 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 expiry of the term of the contract.

The Fort Site manages land issues within its government-approved operating permit, which includes discrete requirements for soil management.

Performance

Biodiversity Management at Moa Nickel

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. The Moa Nickel Site has long partnered with the Cuban authorities in the restoration and protection of these lands. For more information, refer to this case study.

In 2017, the reforestation program in the park concluded and the Moa Nickel Site received recognition from the environmental regulator, CITMA, for its achievements. In 2020, due to COVID-19 restrictions and related risks, no monitoring campaign was conducted. However, the ecological monitoring carried out in 2019 had showed a favourable evolution of rehabilitated areas, including abundant species of flora and fauna.

In 2020, the mine footprint was 875 hectares, whereas an additional 790 hectares have been rehabilitated according to local standards. This work has helped mitigate the visual and environmental impact of the mining concession during development. Additionally, this rehabilitation work has acted as an effective erosion control and sedimentation tool in the tributaries of adjacent rivers and streams, decreasing the sedimentation pollution load into the bay of Moa.

Biodiversity Management Elsewhere

Following several years of discussions and multiple short-term extensions, the Fort Site’s operating licence was renewed for a 10-year period by Alberta Environment and Parks, effective February 1, 2021.

In Canada, our refinery’s impacts on biodiversity are minimal, given that it is located on previously disturbed land in an industrial zone within the city limits of Fort Saskatchewan. As part of Sherritt’s implementation of the TSM Biodiversity Conservation Management Protocol, the Fort Site completed a biodiversity assessment in late 2019, which established baseline information on landscape integrity, habitat composition, suitability, and species diversity. The assessment also identified potential significant biodiversity aspects to be managed at the Fort Site, including aquatic ecosystems like wetlands and creeks. Based on the results of the assessment, the site is in the process of drafting a biodiversity conservation plan.

As part of Sherritt’s implementation of the TSM Biodiversity Conservation Management Framework, the Fort Site adopted a Biodiversity Conservation Management Plan in June 2020. This plan identifies communities of interest in the local area, significant biodiversity aspects for the site and general management objectives regarding these significant biodiversity aspects. In December 2020, the first Annual Biodiversity Report was submitted to the Fort Site management team to support decision-making processes at the facility.

As outlined in the Biodiversity Conservation Management Plan, the Fort Site is working towards the development of new biodiversity-related standards to help meet the site’s management objectives. These new standards are related to improved wildlife sighting processes; responsible management of migratory birds and protected species; protection of creeks and wetlands on Sherritt property; and control of invasive vegetative species.

Our energy operations in Cuba also have minimal impacts on biodiversity, given the small footprint and nature of our activities. In 2020, no significant conservation activities were required or undertaken at these sites.

Land Management

In 2020, the Moa Nickel Site continued to practise progressive reclamation in accordance with its operating permits and commitments. The total amount of newly disturbed land at the Moa Nickel Site in 2020 was 45% higher than in 2019 due to the availability of new equipment in Cuba. This machinery was used to clear additional land, ahead of plan, in preparation for mining operations in the future. Newly rehabilitated land during the year was 95% higher, mainly due to increased rehabilitation efforts in accordance with the Tarea Vida plan and due to increased workforce availability from contractors.

There were no changes to the operational footprint of the Fort Saskatchewan refinery (COREFCO) or the OGP operations in Cuba.

The table below shows the amount of land (owned or leased, and managed for production activities or extractive use) disturbed and rehabilitated in 2020.

2020 Fort Site Moa Nickel Site1 OGP Total
Total amount of land disturbed and not yet rehabilitated (ha) 131 875 54 1,060
Total amount of land newly disturbed within 2020 (ha) 0 82 0 82
Total amount of land newly rehabilitated within 2020 to the agreed end use (ha) Not applicable 40 Not applicable 40
1Data reported for the Moa Nickel Site represents land disturbance that occurred from 1994 onwards – or the years that the Moa Joint Venture between Sherritt and the Cuban state has been in place. The data does not reflect any mining activity at the site that pre-dates the joint venture.

An incident that met Sherritt’s definition of a significant environmental incident was reported in 2020 at our OGP Division, where 31,000 litres of heavy crude oil were spilled. This incident was related to a leak from a corroded oil and gas production line. The line was repaired and the corroded section was replaced. The spill was contained and cleaned up immediately using a vacuum truck. The amount of leaked hydrocarbons triggered the classification as a significant environmental incident. There were no impacts on local communities or the environment.

Water

Management Approach

The growing global population is putting pressure on fresh water availability and quality, and these concerns are expected to increase due to climate change. Sherritt understands and shares these emerging concerns. Water is central to our metallurgical process for producing nickel and to the generation of steam at Energas, and it is managed 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. At each operating site, baseline studies are conducted, risks are assessed and stakeholders are engaged to involve them in the water management planning.

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

Sherritt’s operations also conduct monitoring to help ensure that they are not contaminating surface water or groundwater resources with process discharges. All of the water discharges comply with the appropriate jurisdictional regulatory requirements and are monitored and controlled as necessary to ensure compliance and to protect the receiving environment. The monitoring programs are also designed to help detect any unanticipated problems and manage risk beyond regulatory obligations.

Sherritt’s approach to water management varies across its operations, depending on technical requirements, local climate, water bodies and stakeholder interests. Building on the range of water management practices and initiatives in place, in 2020 Sherritt developed a corporate Water Standard that the sites will implement in 2021–2022.

Performance

Water Use

2020 Fort Site Moa Nickel Site OGP Total
Total water withdrawal (million m3) 2.26 15.18 5.12 22.56

The Fort Site withdraws water from the North Saskatchewan River under provincial licences for process use. Current total industrial use is a small percentage of total flow, and therefore water restrictions are not anticipated. Water use and discharges in 2020 remained within the historical range.

The Fort Site purchases potable water from the local municipality. The total water withdrawal for the Fort Site in 2020 was slightly lower than in previous years: 2.26 million m3, including 2.17 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 monthly. Process effluent and stormwater (snowmelt/rainwater) collected on our site are treated to meet local 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 municipality.

Late in 2020, Sherritt received a wastewater discharge permit from the Alberta Capital Region Wastewater Commission. The permit replaces the quality provisions of the previous agreement and will define effluent discharge terms for the next several years.

The Moa Nickel Site in Cuba withdrew approximately 15 million m3 of water for its processes in 2020. This is slightly higher than the previous year and was due to mineral characteristics and production requirements. Water is collected in the adjacent reservoir and treated before use.

In 2020, OGP reported total water withdrawal of 5.12 million m3, which is slightly higher than 2019. Water is drawn primarily from saltwater sources and some municipal sources. Oil & Gas service rigs only use recycled water, resulting in a net zero effect on the water supply.

Water Quality

At the Fort Site, we monitor water quality at several locations within the site’s treatment system, and review the results to ensure compliance before water is released into the municipal collection system. We report our water quality results to the municipality monthly and to the Alberta regulator on an annual basis. At the Fort Site, there were no water quality non-compliance events sourced to Sherritt in 2020.

In 2020, Sherritt continued its participation in the Capital Region Water Management Framework’s Steering Committee through the Northeast Capital Industrial Association (NCIA). The goals of the framework are to maintain or improve the quality of the water in the North Saskatchewan River, manage the impact on water quantity, and implement a science-based and world-class water management framework. In 2020, Sherritt Environmental Advisors continued discussions with the Alberta Capital Region Wastewater Commission and the City of Fort Saskatchewan in regard to a new water discharge permit for the Fort Site. A new permit was awarded in October 2020 and is effective as of January 1, 2021.

In 2020, the Fort Site replaced several wells as part of routine maintenance of the seepage collection system designed to manage groundwater migration patterns at the seepage pond. In addition, new monitoring wells were installed as part of a study to better calculate the effectiveness of the current seepage systems. The results of the study are expected in Q2 2021.

When we invested in the Moa Nickel Site more than 20 years ago, we inherited a legacy water discharge issue, which has affected water quality in a nearby river. Within the site’s operating licence, it is permitted to discharge certain amounts of waste liquor directly to a local river. Waste liquor is the overflow solution from the mixed sulphide thickeners, and it is currently untreated. Over the years, we have been working with our Cuban partners and the regulatory agency to address this issue. In 2017, we agreed to a phased approach to addressing local riverine water quality. During 2019, the first phase was completed, which involved relocating the effluent discharge to support river rehabilitation and diminish any potential impacts to the health of the local community. The Moa Nickel Site also focused on erosion control in areas around the mine to prevent sediment from reaching the rivers and the Moa Bay.

In 2020, the Moa Nickel Site experienced six reportable water-related incidents. These incidents were related to exceedances of parameters in the discharge into the river as well as volumetric flow exceeding the daily limit. These medium-severity incidents were related to a project that increased processing capacity in the facility. Various actions were taken to address the discharges, and the site worked with the local regulator to modify the approval standards. These incidents presented no lasting impacts and no environmental damage. No employees or community members were harmed during these incidents or while they were being addressed.

There were no significant water quality issues recorded at OGP in 2020. Energas worked with the local environmental regulators to prepare site-wide water balances for all of the sites. These water balances will provide baseline information and insight for potential improvements. In addition to the site groundwater monitoring programs, OGP repaired and tested all septic tank systems in Energas facilities.

Waste

Management Approach

Sherritt produces two broad types of waste: mining waste and solid waste. Mining waste generally includes waste rock and tailings, which are produced as by-products. Solid waste consists of hazardous waste and non-hazardous waste. Hazardous wastes are identified by their chemical and physical properties, and regulations prescribe their classification, handling, disposal and storage requirements. 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. Further information on overburden, waste rock, tailings and sludge can be found in the Tailings Management section of this report.

Regulations around waste management vary across jurisdictions and are dependent on the supporting infrastructure in the region or country. Sherritt is currently developing a waste management standard to set minimum expectations for all operations regarding waste management, including disposal and recycling.

Performance

Waste Production

2020 Fort Site Moa Nickel Site OGP
Total non-hazardous waste (tonnes) 1,606 12,390 735
Waste recycled – includes recyclables sent off site (batteries, plastics, electronics, etc.) (tonnes) 145 728 175
Waste sent to landfill (tonnes) 1,606 9,860 2,126 m3
Hazardous waste1 (tonnes) 2,002 1,802 725
1Hazardous waste is defined by each local jurisdiction. Total amount of overburden, rock waste, tailings and sludge is included and discussed in the Tailings Management section of this report.

At the Fort Site, a significant increase in hazardous waste was observed in 2020. However, a review of the data since 2017 shows that the volume of hazardous waste in 2019 represented an anomaly when compared to previous years. The volume of hazardous waste in 2020 was in line with typical volumes of prior years, showing a decrease of 63% compared to 2018, and within the expected range of hazardous waste for the Fort Site. On the other hand, total non-hazardous waste decreased by 41% at the Fort Site, driven by variations in construction activity. Waste quantities are expected to fluctuate, primarily based on facility demolition and construction activities.

At the Moa Nickel Site, there was a decrease of 26% in both hazardous waste and total non-hazardous waste produced in 2020 compared to 2019. Non-hazardous waste decreased due to COVID-19 restrictions, which caused a reduced number of workers and activities taking place on site. The overall quantity of waste sent to landfill decreased by 28% compared to the previous year. Hazardous waste decreased due to a reduction of contaminated soil, with sulphur sent to the contaminated waste deposit. Waste sorting has improved over the last few years.

At OGP, there was a significant decrease in non-hazardous waste compared to 2019. In 2019, 80% of a sulphur unit was dismantled, considerably increasing the amount of metal waste discarded. The remaining 20% of the sulphur unit was dismantled in 2020 during the maintenance shutdown.

In 2020, record keeping and reporting of hazardous waste at OGP improved, with the inclusion of sand used for blasting equipment for surface preparation. Although 2020 data shows a drastic increase in hazardous waste compared to 2019 due to changes in the classification of this type of waste, the amount of hazardous waste produced aligns with that of previous years. All hazardous waste at OGP is sent to various companies licensed to receive and treat this type of waste in Cuba. The only type of waste sent to landfill is domestic in nature. Recycled waste at OGP depends on equipment replacements and life cycles. Restrictions due to COVID-19 led to a decrease in maintenance activities, which consequently reduced the amount of recyclable waste produced.

Total non-hazardous waste at Sherritt and its joint ventures decreased by 48% in 2020, mainly due to reduced operational and maintenance work conducted at OGP compared to 2019. On the other hand, hazardous waste saw an overall increase of 26%, mainly due to an anomaly in 2019 at the Fort Site and to improved reporting at OGP, and not due to an actual increase of this type of waste.

Environmental Liabilities, Closure and Reclamation

Management Approach

We take seriously our responsibility to provide adequate financial resources to address the closure of our properties once reserves have been depleted.

As part of the permitting process in Canada, mining and energy companies are 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 $131.1 million (excluding operating expenses). The decrease in anticipated costs compared to 2019 is mainly a result of changes in estimates rather than the completion of rehabilitation obligations.

In 2020, we continued to carry out our environmental liability obligations related to the containment pond breach at the Obed Mountain mine, a non-operational coal mine in Alberta that we owned at the time of the incident in 2013. Our remediation work is described under Tailings Management.

Closed Properties

As part of our acquisition of the Dynatec Corporation in 2007, we inherited three 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 closure of the glory hole. The work was originally planned for 2017, but it was delayed due to weather and was completed in 2018. An inspection in 2019 resulted in additional requirements for risk assessment, invasive plant management and closure of subsidence openings. The blasting and closure work, along with additional obligations such as the completion of an ecological risk assessment and invasive plant management plan, were submitted in 2020. It is expected that the execution of these new reclamation obligations and monitoring will take until 2023–2025 to complete. Once the completion of all closure plan requirements is verified by the government, Sherritt intends to sell the property.
  • Parsons, a former barite mine and processing facility near Parson, British Columbia. In 2014, Sherritt completed the regulator’s reclamation work plan, which involved a general clean-up, monitoring, seeding and the removal of an invasive species. An inspection in 2019 resulted in additional requirements for risk assessment, soil characterization and invasive plant management; these requests were submitted in 2020. The execution of these additional remediation obligations is expected to take until 2023–2025 to complete.
  • 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 occurred in 2017; however, in early 2019 further sampling and monitoring was requested, so the planned request to release security will be delayed until completion and approval by the regulator. The remediation activities were suspended in 2019 due to austerity and are planned to recommence in 2021. It is expected that these reclamation obligations will take until 2023–2024 to complete.

Current Operations

Our mining assets that are currently operational have a minimum 15-year mine life of resources and production capacity in their life cycles. Our mine has an up-to-date closure plan that meets host jurisdiction regulations and cost estimates that we believe reasonably and appropriately address the liabilities at the site.

In 2020, the Moa Nickel Site continued to action the closure plan for the legacy Acid Leach Tailings Facility (ALTF).

At the Fort Site, the closure plan incorporates a set of robust considerations accounting for both likely and unlikely obligations that we may need to address, and our current cost estimates cover the reasonable obligations. Sherritt’s closure plan, included in the operating licence renewal, was accepted and issued by the regulator on February 1, 2021.

For the OGP operating sites, 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 2020, please refer to Performance in Biodiversity and Land.