Pacific Abrasives upgrades to increase quality of slag

Pacific Abrasives will need to borrow funds and enter into a Mortgage of Lease with the City of Grand Forks and Community Futures.

Upgrades at Pacific Abrasives are about 80 per cent complete. The company

The Grand Forks slag pile has been in the news recently after Pacific Abrasives, the company which processes and sells the slag, was told from their primary customer that the product was declining in quality. The slag is a byproduct of the smeltering process from Granby River Smelter that ran in the early 1900s.

In 2014, the city earned $235,063 from slag. At $2.30 per short tonne of blended slag, they are removing about 100,000 tonnes per year.

The city received a letter from Pacific Abrasives dated Sept. 22, 2015 which said in order for them to continue to carry out business by providing a quality product on a timely basis, a major upgrade to plant operations is required. In order to carry out the upgrades, Pacific Abrasives will need to borrow a substantial amount of funds and enter into a Mortgage of Lease with the City of Grand Forks and Community Futures.

Council agreed unanimously to postpone both approving the Mortgage of Lease agreement and approving the city entering into a non-disturbance agreement with Community Futures.

A letter from Pacific Abrasives (PA) to Sasha Bird, City of Grand Forks manager of development and engineering, stated that their only customer, CanAm Minerals, Inc., had advised them there is a noticeable and continuing deterioration over the past several years.

“We’ve received a request from Granby River Mining Co. and Pacific Abrasives for them to enter into a Mortgage of Lease agreement,” said Bird to council. “Their one customer in the United States has been concerned about the quality of the product over the last few years. In order for Granby River Mining Co. or Pacific Abrasives to provide a better product they need to have upgrades to their equipment. They approached Community Futures to secure funding for this. Along with that, they would require a mortgage of lease agreement.”

In the letter, Steve Hagman, PA’s vice president and chief financial officer, wrote, “We can accomplish this with expansion and renovation of our storage capacity along with a significant improvement to the material sizing screen decks to produce accurate sizing of the material received from Granby River Mining Co.”

Hagman said the changes would not only significantly improve the quality of the product but could also increase production by as much as 20 per cent.

A letter to the city on the same day from PA stated that the mortgage of lease would be necessary in order to provide financing for plant upgrades at its operations in Grand Forks. PA has entered into an agreement with Community Futures to borrow up to $418,000. As part of the security being requested by Community Futures for the loan, PA has been requested to provide a collateral guarantee and a mortgage of interest in the lease.

Allin addressed council and stated that they are looking at other issues with the slag pile such as remediation for the site for 50 years from now. “How do we ensure there is a process for funding this is 50 years time that doesn’t leave the burden on the taxpayer at this time?” he said. “How is the site going to look in 50 years? How can we make sure we can pass on that legacy to the community for the future to make sure there is a reserve fund in place for that remediation.”

Councillor Ross asked whether council could meet with Premier Clark and Minister Bennett once again discuss the slag pile.

“The premier and Mr. Bennett said there could be some avenue for us to get some funding,” she said. “Because really we’re cleaning up a mess that was dumped there in the early 1900s. This is an opportune time for us to thank Premier Clark and Mr. Bennett and asking them as we move forward what they can do to partner with us.”

Slag Pile/UBCM

Members of council and CAO Allin met with Premier Christy Clark and Bill Bennett, Minister for Energy and Mining, at UBCM regarding the slag pile and taxes imposed.

Councillor Ross wrote in her report to council that she thought the meeting went extremely well. “CAO Allin brought forward the issue and reiterated the fundamental flaws in the tax that the province has imposed upon customers who are accessing the slag,” she said. “This will slow down the draw down on the slag pile. Premier Clark agreed that the tax made no sense and seemed to be on our side of the debate.”

Ross explained to Clark and Bennett that the environmental implications and potential dangers of leaving the slag pile without further draw down on the pile. “It’s proximity to a relative pristine river (Granby) is a very real threat and photos showing the location of the pile in relation to the river were effective,” she said. “Both Bennett and Clark seemed to agree that this generation of citizens shouldn’t have to deal with errors and decisions made by previous generations; dumping slag along a river so close to a town and leaving our children with a toxic waste site.”

Background

Grand Forks was once home to a massive smelter built by the Granby Smelting Co. The smelter opened in 1900 and grew to become the largest copper smelter in the British Empire. The Granby River, then known as the North Fork of the Kettle River, was dammed and a power plant constructed.

The smelter operated until 1919 when the world copper market plunged. The plant is gone, but the mountain of black slag (waste rock from the smelting process) remains.

Slag, a vitreous residue, was a byproduct of the smelting process. At first, the slag was granulated and dumped along the river bank. Later, the substance was removed from the smelter in molten form and hauled outdoors for disposal. Two small locomotives pulled the molten slag on narrow tracks onto a mound of solidified slag and pour out. It solidified into a black, grainy material.

Then in 1911 the slag was granulated again and brought by conveyor belts to the top of two large piles. For many years the slag piles were the visible remains of two decades of copper smelting in Grand Forks. By the time the smelter operation was closed down, the slag piles dwarfed the large buildings of the smelter itself.

The slag was sold to Pacific Abrasives, an American company, beginning in 1971, and they produced abrasive materials for various purposes.

Over the years the revenue from the sales went into the city’s general funds but the slag reserve bylaw of 1977 dedicated those revenues to community enhancement projects. Among those was the refurbishment of the old post office into City Hall, the building of the aquatic centre, the library, the fire hall and more.

As per the slag reserve bylaw, the money may be spent on capital, including machinery and equipment.

In 2002, the City of Grand Forks formed a lease extension, consolidation and eighth modification agreement with Pacific Abrasives and Supply Inc.

The original lease agreement with Pacific Abrasives was signed in 1976 for 30 years. There was a 30-year renewal clause signed, which will expire in 2036.