Reasons for Decision Ministerial Approval Ministerial Change Approval Pursuant to Section 16(2)(C) the Environmental Assessment Act

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Reasons for Decision Ministerial Approval Ministerial Change Approval Pursuant to Section 16(2)(C) the Environmental Assessment Act REASONS FOR DECISION MINISTERIAL APPROVAL MINISTERIAL CHANGE APPROVAL PURSUANT TO SECTION 16(2)(C) THE ENVIRONMENTAL ASSESSMENT ACT CAMECO CORPORATION KEY LAKE EXTENSION PROJECT Introduction The Environmental Assessment Act (hereinafter called the Act) states that where a proponent has received Ministerial Approval to proceed with a development and the proponent intends to make a change in the development that does not conform to the terms or conditions contained in the approval, the proponent must receive Ministerial Approval prior to making those changes. On February 13, 1981 Ministerial Approval was issued to Key Lake Mining Corporation for the Key Lake Mine and Mill Project (EAB#: 1976-006). Several changes to the Key Lake operation have also received Ministerial Approval pursuant to Section 16(2) of the Act (EAB# 1990-048, 1991-031, 1992-001, 1998-015, 2000-025, 2002-055, 2003-005). These changes have related to tailings deposition location and methodology, development of the mined-out Deilmann pit as the Deilmann Tailings Management Facility (DTMF), processing of ore from the McArthur River mine, processing of by-products generated at facilities in Ontario and increasing milling and processing rates at the facility. In March 2010, Cameco submitted a proposal for a change to the previously approved Key Lake operation to allow increased tailing storage in the existing DTMF, an increase of the Key Lake mill nominal annual production capacity, an increase to the ore storage area and modifications to the existing mill (the project). The proposal was sent to provincial agencies and the Government of Canada for technical review. Following technical review, it was determined that the proposed change did not conform to the terms and conditions of previous approvals and therefore Cameco would require approval under section 16(2) of the Act prior to proceeding and would be required to conduct an environmental impact assessment (EIA) for the proposed change. A joint ‘Project-Specific Guidelines and Scoping Document’ was prepared by the Environmental Assessment Branch (EAB) and the Canadian Nuclear Safety Commission (CNSC), the responsible authority for the federal environmental assessment, to assist Cameco in the development of the environmental impact statement (EIS). ________________________________________________________________________ Cameco – Key Lake Extension Project, Key Lake Operation Section 16(2)(c) – Reasons for Decision EAB# 2010-002 Page 1 of 8 Application of The Environmental Assessment Act When a proponent wishes to make a change to an approved development, the proposed change must be reviewed to determine if section 16 applies to the change. In seeking approval for the extension project at the Key Lake operation, Cameco has, in accordance with section 16(1) of the Act, informed the Minister of the proposed change before proceeding with it, and is seeking approval to proceed with the extension. I am therefore satisfied that the Proponent has met the requirements of subsection 16(1) of the Act. Under subsection 16(2) of the Act, once notice of a proposed change that does not conform to an existing approval has been received, a Ministerial decision is required. This decision determines the nature of the environmental assessment process required to review the proposed change. Ministerial decision options under section 16(2) of the Act are: (a) approve the proposed change and impose any terms and conditions that are considered advisable; (b) refuse to approve the change in development; or (c) direct the proponent to seek approval for the proposed change in the manner prescribed in sections 9 to 15 of the Act. The EAB reviewed Cameco’s request for changes to the Key Lake Operation, and this review was used in making my decision under section 16(2) of the Act. Proposed Changes The project is needed to meet future milling requirements in the Athabasca region. Cameco determined that continued use of the existing Key Lake mill would limit the environmental footprint of ore processing to the area affected by existing operations and be in alignment with recommendations from the 1997 Joint Federal-Provincial Panel on Uranium Mining Developments in Northern Saskatchewan (the Panel). The Panel recommended utilizing a regional milling concept to minimize the environmental footprint of the uranium industry and this concept is still relevant in the current environment. The proposed Key Lake extension project will involve increasing the tailings placement elevation from 466 meters above sea level (masl) to 505 masl, thereby increasing the approved capacity in the existing DTMF which will provide 40 years of additional tailings management capacity at the anticipated mill production rate. The change also includes increasing the nominal annual production capacity of the Key Lake mill, currently at 7.2 million kilograms of uranium (18.7 million pounds uranium oxide (U3O8)) to a nominal 9.6 million kilograms of uranium (25 million pounds U3O8). The ________________________________________________________________________ Cameco – Key Lake Extension Project, Key Lake Operation Section 16(2)(c) – Reasons for Decision EAB# 2010-002 Page 2 of 8 project will include construction or modification of facility components necessary to sustain production from existing ore deposits and support milling of ores from other potential deposits including: construction of a 500,000 m3 capacity, lined storage facility to increase the capacity to receive off-site ore and mineralized material; and physical modifications to the existing mill. The project activities will be completed within the existing Key Lake operation’s surface lease. Environmental Assessment of the Proposal Public notice of the EIA was first given on June 8, 2010 pursuant to Section 10 of the Act. Cameco prepared and submitted the initial EIS in July 2012 entitled, “Key Lake Extension Project - Draft Environmental Impact Statement” dated April 2012 to the ministry for technical review. The EIS underwent technical review by provincial ministries and agencies and reviewers requested additional information prior to finalizing the EIS, including clarification regarding tailings chemistry and consolidation rates, effluent characteristics and sampling/monitoring procedures. Cameco subsequently submitted additional information and a final EIS in December 2013 which addressed information deficiencies identified during technical review. The final EIS and the technical review comments (TRC) document prepared by EAB were then made available for public review from January 27 to February 28, 2014 pursuant to Section 12 of the Act. Comments were received from Saskatchewan Environmental Society (SES), the Athabasca Land & Resource Office and the Kineepik Métis Local Inc. (Local #9) during this time. Having made my decision to issue a ministerial approval, the Act requires me, pursuant to subsection 15(2), to state the reasons for the decision. Reasons for Decision Alternatives Considered Four options were considered by Cameco to achieve additional tailings storage capacity: a new above ground tailing management facility (TMF); use of the mined-out Gaertner pit; a new purpose built in-pit TMF; and extended use of the DTMF. The assessment concluded that the preferred option of extending the use of the DTMF is the preferred stakeholder (i.e. public and regulatory representatives) option and would limit the additional disturbance required for ongoing operations. It does not involve any physical changes to the DTMF, does not increase the footprint of the Key Lake operation, and does not require any changes to key management and operational aspects of the DTMF. Cameco also evaluated a potential change to mill chemistry within the solvent extraction circuit. Options considered included converting the process chemistry from the current ammonia-based process to a combination of strong acid/hydrogen peroxide (the process ________________________________________________________________________ Cameco – Key Lake Extension Project, Key Lake Operation Section 16(2)(c) – Reasons for Decision EAB# 2010-002 Page 3 of 8 used at Rabbit Lake). The study concluded that due to economic, safety and operational (i.e. tailings production) considerations, the Key Lake mill will continue to use the ammonia chemistry process. After review of the alternatives considered for the project, technical reviewers were satisfied with the analysis and preferred options identified. Potential Impacts The activities related to the project will occur entirely within the existing Key Lake operation surface lease boundaries. The project-environment interactions are well understood, have largely been characterized, and are supported by regular monitoring programs that are in required by both provincial and federal licenses for the facility. Cameco has committed to maintaining existing programs and developing additional monitoring, follow-up, contingency and management plans to address issues which may develop. Cameco has evaluated the possible impacts of the project on the biophysical environment, the possible mitigation measures that could be employed to eliminate or mitigate (reduce) the impacts, and any residual effects that might remain after the mitigation is in place. In undertaking the EIS, a number of valued ecosystem components (VECs) were identified to facilitate the assessment and interpretation of potential effects associated with the proposed project. Traditional knowledge was used in the EIS by identification of VECs and identification
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