May 24, 2003

Mike Bernier
Information Management Supervisor
MNR Chapleau District Office
190 Cherry Street
Chapleau ON P0M 1K0

SENT BY FAX (705) 864-0681

EBR Registry Number: PB03E2002
Dear Mr. Bernier:

Re. Proposed Boundary Amendment to theGroundhog River Provincial Park to permit a
Mine Effluent ditch from Falconbridge Ltd's Montcalm Mine to the Groundhog River

On April 25th 2003 notice was posted on the Environmental Bill of Rights electronic registry of a consideration being given by the Ministry of Natural Resources to a proposal to amend the 1999 Land Use Strategy boundary of the recommended Groundhog River Provincial Park (P1569) in order to remove approximately 2 hectares from one location along the river. The disposition of this same 2 hectares is being sought be Falconbridge Limited in order to permit a drainage corridor, including a mine effluent ditch, needed to convey contaminated mine effluent from Falconbridge Limited's Montcalm Nickel Mine to the Groundhog River.

According to the EBR posting, the area removed will be re-designated to Crown Land and a disposition, in the form of an easement (under Environmental Assessment Act Exemption Order MNR 26-7)will be issued to Falconbridge Limited. The posting also indicates that approximately 22 hectares to the recommended provincial park, and notes that the proposed addition is currently being held by Falconbridge Limited as a Mining Claim and is classified as Forest Reserve under the Land Use Strategy. This parcel of land is located along the 'Six Mile Rapids' portion of the Groundhog River, which is considered ideal sturgeon spawning habitat. This option does not require an amendment to Ontario's Living Legacy Land Use Strategy, according to the posting.


During the second quarter of 2001, Falconbridge purchased the Montcalm nickel-copper property near Timmins, Ontario, from Outokumpu for $14 million. Montcalm has the potential to produce a total of 5 million tonnes of ore at a rate of 750,000 tonnes annually. Should the project go ahead, Montcalm ore would be milled at the Kidd Metallurgical Division in Timmins and the concentrate would be processed at the Sudbury smelter. The project could contribute 8,000 tonnes annually to Falconbridge's Sudbury nickel output.(1) The property was previously operated by Outokumpu Mines Ltd.

Falconbridge Limited is in the process of seeking various permits related to their proposed nickel/copper mine in MontcalmTownship, approximately 70 km northwest of Timmins. Permit requests to date relate to approval of the construction and operation of a mine water treatment system to treat groundwater pumped for mine dewatering and surface runoff associated with potentially acid generating waste rock stockpiles. The treatment system is to comprise: a mine dewatering pipeline, a slimes settling basin, a run-off interceptor/collection ditch system, a diversion ditch system, lime treatment plant, pH monitoring station for lime feed control, metal-hydroxide sludge settling pond, discharge control structure (including overflow weir, facilities for pH and flow monitoring) a CO2 addition system for pH control, and a polishing pond.

According to a February 14, 2003 posting on the Environmental Bill of Rights electronic registry related to sewage works for the proposed mine, treated effluent will be discharged via a drainage-way to the Groundhog River, with contingency for a pumping system and buried pipeline. Falconbridge is now seeking disposition of 2 hectares of crown land within the Groundhog River Provincial Park in order to construct that drainage way.

Falconbridge had previously requested approval of the same mine water treatment system to treat the mine effluent. On July 26, 2002 notice of this application was posted on the Environmental Bill of Rights electronic registry for a 30 day comment period, ending August 25, 2002.(2) On February 7, 2003, notice was posted on the EBR registry that the application had been withdrawn by Falconbridge. The posting stated that during the review of Falconbridge's application, the Technical Support Section of the MOE expressed concerns about the proposal and indicated that an extensive set of field trials would have to be conducted to demonstrate to MOE's satisfaction that the proposed discharge scenario would not have an unacceptable environmental impact and that "Project timelines cannot accommodate a test program of this duration, and so Falconbridge has decided to apply for an approval for a different discharge option."

Falconbridge has also filed a closure plan with the Ministry of Northern Development and Mines.

Northwatch has commented to the Ministry of the Environment on the applications for approval of sewage works and to the Ministry of Northern Development and Mines with respect to the closure plan. We have also met with Falconbridge staff on two occasions, and have made two site visits.

Proposed Disposition of Crown Land

The EBR posting seeks comments on the proposed Boundary Amendment to the Recommended Groundhog River Provincial Park to allow 2 hectares to be removed from the Park and granted in a disposition to Falconbridge Limited for the purpose of constructing a mine effluent ditch through what would be the remaining provincial Park.

In our view, the issue of crown land disposition is not limited to the proposed removal of an area of the Groundhog River Provincial Park. Rather, the issue - ie. Falconbrdige's request - of land disposition is in place with either of Falconbridge's two "options".

The proposed drainage ditch has attached to it the issues associated with amending the boundary of a provincial park to allow a mining activity, the establishment of an easement for a mining activity through a provincial park, and the release of a mine effluent - in itself a mining activity - into the provincial park, ie into the Groundhog River. The proposal would also require related infrastructure, including access roads.

The proposed "alternative" of a 14 km pipeline similarly has a number of issues attached to it. While technically outside the boundaries of the provincial park, this option would still require a disposition of crown land. Given the inevitability of impacts on the Park and the Groundhog River more generally should Falconbridge proceed with their project as currently proposed (to the Ministry of the Environment and Ministry of Northern Development and Mines) such a request for disposition of crown land would have to be carefully considered by the Ministry of Natural Resources and made subject to public consultation. This option would bring with it a high level of disturbance in the project area, and would require related infrastructure, including access roads. It also enable the release of large volumes of toxic mine effluent into the Groundhog River and into the provincial park.

The following is a brief summary of key concerns related to these "options":

- the Permitting Support Document does not sufficiently address issues related to potential groundwater contamination through seepage from the effluent ditch

- consideration should be given to lining the discharge drainage way as one means of preventing groundwater contamination

- the Permitting Support Document indicates that the channel will be "periodically widened to create settling ponds, or rock-check dams will be used at strategic locations to preserve hydraulic gradients";(3) more detail should be provided, including a discussion of anticipated environmental impacts and proposed mitigating measures related to the potential "widening" of the drainage way, and a description of the criteria by which the decision will be made to either "widen" the drainage way or install rock-check dams

- the Company's consultants proposed to use riprap to protect the banks of the Groundhog River from erosion at the terminal 500 m, but provide no explanation of how they arrived at 500 m as the appropriate length, or why they would not use riprap for the entire length of the drainage was as a possible response to the anticipated problems with the drainage way's banks slumping

EBR Posting PB03E2002

As stated above, on April 25th 2003 a notice was posted on the Environmental Bill of Rights electronic registry with the proposal title "Boundary Amendment to the Recommended Groundhog River Provincial Park". In addition to our comments with respect to the broader question of disposition of crown lands related to this project, we provide the following comments specific to the EBR posting:

Given these errors and omissions it is our view that the EBR notice should be reposted with correct and accurate information, in order to more adequately meet the purposes and objectives of the EBR and its associated electronic registry.

Related Concerns with the Montcalm Project

To provide some context for our response to the proposed disposition of crown lands for the purpose of a mine effluent ditch for the Montcalm Mine, we wish to summarize our concerns with the project in general. In summary, our concerns include but are not limited to the following points:


As we expressed in our previous comments to other Ministries, we are concerned that approvals are being sought - and possible given - in a piecemeal fashion, rather than within the context of an overall review process which is done in a coordinated fashion, with all of the various permit applications and requests for approval available for review prior to any single approvals being granted. In our view, the review of requests for the various approvals required under the Environmental Protection Act, the Mining Act, the Ontario Water Resources Act, the Public Lands Act, the federal Fisheries Act, and the Canadian Environmental Assessment Act should be done in a coordinated fashion, with the information needed to support each application taken into consideration in the review of the other applications. This would require the proponent to provide the information in a reasonable, timely and comprehensive manner, and to assist the various agencies in accomplishing a coordinated review by providing all of the relevant information and full supporting documentation for all of the necessary permits prior to the proponent's pursuit of any single approval. In the absence of such an approach being adopted by the proponent, we have urged other Ministries to simply defer consideration of any single application until such time as all applications and their supporting documentation are available.

With respect to the proposed disposition of crown lands for the purpose of allowing direct discharge of mine effluent into the Groundhog River, with respect to the related proposal to amend the boundaries of the Groundhog River Provincial Park, we are strongly of the view that these proposals should be rejected, for a number of reasons, including the following:

Should you wish clarification on any of the above noted concerns, please do not hesitate to contact us at your convenience. Thank you for your attention.

[original signed]

Brennain Lloyd

cc. Mr. Gord Miller, Environmental Commissioner of Ontario
    Mr. Rob Galloway, Northeastern Ontario Regional Director, Ministry of Natural Resources
    Ms. Adair Ireland-Smith, Managing Director, Ontario Parks
    Hon. Jerry Ouellette, Minister of Natural Resources


1. Falconbridge Limited Restated Management's Discussion & Analysis for the quarter ending June 30, 2001

2. EBR Registry Posting Number IA02E0854

3. 2003 Permitting Support Document, Page 45, Section 4.12

4. 2003 Permitting Support Document, Page 71, paragaph 1

5. 2003 Permitting Support Document, Page 11, paragraph 3

6. 2003 Permitting Support Document, Page 41, paragraph 1