Developers arguing against cleanup bill

Dispute over who has to pay for shuttered barite mine operation

Published on March 1, 2014

A dispute over the final bill for a mine site cleanup on the Avalon Peninsula is ongoing, at least 10 years after the mine was shut down.

And now, in a twist in the resulting legal case, the person identified by the Crown as owing for the remediation work, Kevin King of Clarenville, has pointed to two other people — named as directors of the now-defunct mining company — as being the ones responsible for any money owed to the province.

One of the two, William Gibbs, has yet to respond in the ongoing Supreme Court matter, according to the court file. He could not be located for comment.

The second, Leo Power of St. John’s, has denied being at all responsible for anything owed. He opted not to comment on the case when reached by phone Friday, directing questions to his attorney.

His official statement of defence, filed Feb. 25, states Power in fact denies ever being a director of the mining company, and was not someone responsible for commitments made around the mine.

The mine in question is the former Collier’s Point barite mine at Norman’s Cove-Long Cove. It was last operated by Phoenix Minerals, under a lease awarded March 24, 1998.

On June 2, 2003, the provincial government sent a letter to Phoenix Minerals, stating it was not complying with the Mineral Act in its operations, since it had not produced barite “in saleable quantities” for five years. And on Feb.5, 2004, the company’s mining lease was cancelled.

As previously reported, by the end of 2006, the company itself was dissolved.

As part of its site lease, Phoenix Minerals was required to complete remediation when finished with the mine site. The company failed to close out the mine and begin site rehabilitation in a timely manner, according to the province, leaving the government to take over the job.

The work progressed year by year and the ensuing bills were mailed to the company in 2007, 2008 and 2009 — costs going beyond the $90,000 security the company had set aside as required under its mining lease.

Rehabilitation work at the site ended in 2009.

A bill for a total of $259,410, covering all invoices to that date, was mailed to “Phoenix Minerals Corp” in April 2009.

“No amounts were paid by Phoenix Minerals Corp. or its directors, including the defendant (King), in satisfaction of these invoices and the invoiced amounts remain outstanding,” a government lawyer has stated.

The province is claiming King as the site lessee, “responsible for the control, management and direction of the Collier’s Point barite mine,” as defined under the Mining Act.

King has filed a statement of defence, saying he was listed as a director “due to a clerical error, and had no relationship with the corporation’s operations beyond May 27, 1998. He has claimed Gibbs and Power were responsible from that day forward.

A statement filed by Power, meanwhile, notes he “has no knowledge of having consented to serve as a director of Phoenix Minerals Corporation.”

A copy of a document from the provincial registry of companies from May 28, 1998, states King, Gibbs and Power as directors of the corporation, but includes no signatures for any of the three men.

He goes on to point out the province did not target him in the original claim and “denies that such an interpretation is available to the Plaintiff or to King based upon the failure of the Mining Act to explicitly impose personal liability for the costs of site rehabilitation on the directors of a corporate lessee.”

The mine site was first operated from 1902-05, when leased by Robert Rendell. The barite was, at that time, sold to North American paint companies, according to a history provided by the Town of Norman’s Cove-Long Cove, in its Integrated Community Sustainability Plan: 2010-2020.

Over the last century, the mine had different operators and the barite a different destination — the province’s offshore drilling rigs.

The barite was trucked to Halifax, N.S., and processed into drilling mud.