zi cken e Va a lle M y L a rd n a d a Bo nd Water Reasons for Decision Preliminary Screener: MVLWB Reference/File MV2011L2-0004 Number: Applicant: De Beers Canada Inc. Project: Snap Lake Diamond Mine, NT Decision from Mackenzie Valley Land and Water Board (the Board) Panel Meeting of April 4, 2012 Reasons for Decision Issued pursuant to section 26 of the Northwest Territories Waters Act (NWTWA) Application • The application was submitted to the Board pursuant to section 6 of the NWTWA, and the Board has accepted the application as complete. • Notice was given in accordance with sections 63 and 64 of the Mackenzie Valley Resource Management Act (MVRMA) and section 23 of the NWTWA. • There was a public hearing held in association with this application. Background The Snap Lake Diamond Project site is located on Snap Lake, NT (63 35’30 N, 110 52’00” W) and is owned and operated by De Beers Canada Incorporated (De Beers). On June 8, 2011 the Mackenzie Valley Land and Water Board (MVLWB or the Board) received Water Licence (WL) application MV2011L2-0004 from De Beers. Since this is a renewal of current WL MV2001L2-0002, with no modification to the development, the application was deemed exempt from MV2011L2-0004 – De Beers Canada Inc. – Snap Lake Mine Page 1 of 27 preliminary screening by the Board on August 18, 2011. The application was reviewed, deemed complete and distributed for public review and comments on June 24, 2011. Reviewer comments were received on July 28, 2011, with De Beers providing responses on August 18, 2011. This information formed the basis for the technical session. As part of the initial review process two (2) information requests (IR) were made of De Beers. IR#1, titled Water Quality Modeling of Total Dissolved Solid Concentrations in Snap Lake, was sent to De Beers on June 28, 2011. IR#1 requested that De Beers submit its plans for addressing predictions that TDS is predicted to exceed the Water Licence limits, yet De Beers did not request an increase to the WL limit for this Water Licence parameter1. De Beers responded on June 29, 2011 stating that “Modeling completed by Golder Associates Ltd. (GAL) indicates that the 350mg/L operationally defined WL limit will be exceeded within 7-8 years. However, De Beers is not requesting a change to the current limit at the present time as we need to complete appropriate scientific studies before doing so”2. IR#2 titled Application of the MVLWB Water and Effluent Quality Management Policy to Water License Application MV2011L2-0004 was sent to De Beers on August 5, 2011. IR#2 requested De Beers to explain how they are addressing the requirements of the Board’s new Water and Effluent Quality Management Policy. As part of IR#2, a table was provided for De Beers to complete.3 De Beers responded to IR#2 on August 26, 2011. A technical session was held from September 14 to 16, 2011 in Yellowknife. Following the technical session, the following reviewers submitted IRs: Aboriginal Affairs and Northern Development Canada (AANDC), Environment Canada (EC), and the Department of Fisheries and Oceans (DFO). The AANDC Inspector provided comments. De Beers provided responses to the IR’s on October 13, 2011. The Board also retained EcoMetrix Incorporated as an independent reviewer to calculate possible water quality objectives (WQOs) and associated effluent quality criteria (EQC). EcoMetrix provided their review on October 19, 2011. The review was subsequently distributed to reviewers and the Proponent. A public hearing took place on December 13 to 15, 2011 at the Explorer Hotel in Yellowknife, NT. The registered interveners were: AANDC, EC, DFO, Deninu Kue First Nation (DKFN), and the North Slave Metis Alliance (NSMA). The NSMA did not give a presentation at the hearing but did provide a written intervention. The following registered speakers gave presentations: Yellowknives Dene First Nation (YKDFN), Akaitcho Interim Measures Agreement (IMA) Office, Snap Lake Environmental Monitoring Agency 1 Board Information Request#1, dated June 28, 2011 2 De Beers response to Information Request #1, dated June 29, 2011 3 Board Information Request #2, dated June 28, 2011 MV2011L2-0004 – De Beers Canada Inc. – Snap Lake Mine Page 2 of 27 (SLEMA), and Mr. Tim Byers. During the course of the public hearing, the following undertakings were made to the Board: Undertaking 1: De Beers to provide a technical memorandum summarizing some of the literature and other information about chloride and the hardness relationship. This undertaking was completed and submitted on December 14, 2012, the second day of the public hearing. Undertaking 2: AANDC to provide any other security information that is held under other regulatory instruments which include the Environmental Agreement, the land leases, or any other form that INAC may have. AANDC provided this information on December 22, 2011. De Beers responded to Undertaking 2 on January 5, 2012. In addition to the undertakings, Board counsel requested De Beers submit evidence demonstrating De Beers’ financial capacity to meet the financial obligations of any possible changes to the security estimate.4 All undertakings were satisfied and the Board closed the record. The Board then reviewed the evidence on the record and prepared draft terms and conditions for the WL. This draft was distributed to reviewers and De Beers on February 6, 2012. The comment period deadline for reviewers was March 1, 2012. De Beers was given until March 12, 2012 to provide comments on the draft WL and to respond to reviewers comments. Comments on the draft terms and conditions were received from AANDC, EC, DFO, Government of the Northwest Territories – Environment and Natural Resources Department (ENR), YKDFN, SLEMA, and De Beers. The MVLWB met on April 4 and 5, 2012 to consider the draft terms and conditions of the WL and the comments submitted by reviewers and De Beers. Decision After reviewing the submission of the Applicant, the written comments received by the Board, and the Staff Report prepared for the Board and having due regard to all the facts and circumstances, the merits of the submissions made to it, and to the purpose, scope, and intent of the MVRMA and the NWTWA and Regulations made thereunder, the Board determined that MV2011L2-0004 be issued subject to the terms and conditions contained herein. The Board’s reasons for this decision are set out below. Details for each of the specific conditions are attached as Appendix A of these reasons. Appendices B and C also form part of these Reasons for Decision. Requirement of Section 14 of the NWTWA 4Page 216, transcripts of Snap Lake Project Public Hearing, December 13, 2011 MV2011L2-0004 – De Beers Canada Inc. – Snap Lake Mine Page 3 of 27 Existing Licensees After reviewing the submissions filed on the Public Registry and made at the public hearing, the MVLWB is satisfied that, with respect to paragraph 14(4)(a) of the NWTWA, the granting of this Licence to De Beers would not adversely affect, in a significant way, any existing Licensee, providing the conditions of the Licence are met. There are no other Applicants with precedence. Existing Water Users Paragraph 14(4)(b) of the NWTWA prohibits the issuance of a licence unless the MVLWB is satisfied that appropriate compensation has been or will be paid by the Applicant to people who were, at the time when the Applicant filed its application with the Board, members of the classes of water users, depositors, owners, occupiers, or holders listed in subparagraphs 14(4)(b)(i) to (viii), who would be adversely affected by the use of waters or deposit of waste proposed by the Applicant. The Board received no claims for compensation either during the prescribed period or afterwards. Provided that compliance with the License conditions is achieved, the Board does not believe that any users or persons listed in Paragraph 14(4)(b) of the NWTWA will be adversely affected by the use of Waters or the deposit of Waste proposed by the Licensee. Water Quality Standards Insofar as subparagraph 14(4)(c)(i) of the NWTWA is concerned, the MVLWB is of the view that compliance with the Licence conditions will ensure the waste produced by the operation of the Snap Lake Diamond Mine will be treated and disposed of in a manner which will maintain water quality consistent with applicable standards and the Board’s Water and Effluent Quality Management Policy. Effluent Quality Standards Consistent with subparagraph 14(4)(c)(ii) if the NWTWA, the Board is satisfied that the effluent standards it has set out in the WL as conditions are consistent with the Board’s Water and Effluent Quality Management Policy and will protect the receiving waters and environment. These are further discussed below in Part F: Conditions Applying to Water Management. Financial Responsibility of the Applicant The MVLWB must satisfy itself of the financial responsibility of De Beers under paragraph 14(4)(d) of the NWTWA before it can issue the Licence. The project will be undertaken by De Beers Canada which is a wholly owned subsidiary of De Beers Societe Anonym (DBsa). On November 4, 2011 Anglo American PLC MV2011L2-0004 – De Beers Canada Inc. – Snap Lake Mine Page 4 of 27 and the Oppenheimer Family (CHL Holdings Limited) announced their agreement for Anglo American to acquire the Oppenheimer family’s 40 percent interest in DBsa. Upon completion of the transaction, Anglo American will become the majority shareholder in DBsa, and thus De Beers will become a member of the Anglo American Group. This transaction remains subject to regulatory and governmental approvals and is expected to close in the second half of 2012.