Chapter 7. Uranium Mining in Northern Saskatchewan: A Public-Private Transition

Canada is a federation. Federal and provincial governments have responsibility for different functions of government. In a federal state like Canada, the powers of government are distributed between a central authority (the federal or national government) and regional authorities (the provincial governments). Canadian mining exploration, development, and regulation became the responsibility of the provincial governments in the 1930 Constitution Act. In addition, provincial governments already had responsibility for many policy areas related to the development of the uranium industry including fiscal regimes, occupational health and safety, labour, employment and training, education, municipal affairs, the environment, and public health. This led to a regulatory process for uranium mineral development within Saskatchewan consisting of:

Prior to World War II, the federal government also had jurisdiction over a number of policy areas of significance to the mining industry. These included federal fiscal matters, Treaty Indians living in mining regions, international trade, the environment, and all public policy functions on federal territories, such as the Northwest Territories.

Moreover, uranium had “strategic and potential military applications.” During the Second World War, uranium was deemed a “strategic national resource” and placed under the control of the Atomic Energy Control Act (Queen’s Printer 1946). The exploration, production, refining and treatment of uranium were to be for the “general advantage of Canada,” placing the mineral under federal jurisdiction. The Atomic Energy Control Board was established to regulate the industry and at the same time a crown corporation, Eldorado Mining and Refining Ltd., was created to develop and manage the resource. Both agencies were located in Ottawa. Some of the first mine developments regulated by the new process were the Beaverlodge mining operations on Lake Athabasca in northern Saskatchewan.

The changing regulatory framework towards uranium mining in Northern Saskatchewan

Initial federal regulation towards uranium was quite narrow during the first rounds of development in the Beaverlodge area on Lake Athabasca. Limited attention was paid to workers’ occupational health and safety, less to environmental protection, and no attention at all to reclamation, communities, or socioeconomic performance. Over time, levels of mine regulation increased as the provincial government became more involved in attempting to extract community, local, regional, and native benefits from the uranium developments. The increasing scope of regulation occurred in response to public hearings and government priorities.

Local community and native demands were expressed through public hearings. The hearings, as shown by Table 4, expanded the scope of “environmental impact” beyond ecological and health issues to employment, housing, sanitation, education, and training. They increased local and community participation in the process of uranium mine development.

Table 4. Public hearings on uranium mine development in Northern Saskatchewan.
Date	Name of hearing	Comment
1974–1978	Berger Inquiry into the Mackenzie Valley Pipeline in the Northwest Territories	A field inquiry. Listened to local communities and First Nations and factored their interests into the decision not to proceed with the pipeline at that time. Extended the scope of environmental hearings to include socioeconomic, community and native interests.
1977–1978	Bayda Commission Cluff Lake Board of Inquiry	Extended the scope of mine assessments to include biological effects; environmental considerations; worker health and safety; federal and provincial regulation; social, economic, community and northern benefits; disposal of nuclear wastes; proliferation and terrorism; and moral and ethical issues. Public hearings held in the North. Approved development subject to increased regulation, and recommendations made to clarify the federal and provincial jurisdictions over the environment.
1979	Key Lake Board of Inquiry	Comprehensive hearing process in many northern communities, large and small, into proposals by the provincial crown corporation to mine high-grade uranium. Approved the Key Lake Project with the addition of stronger socioeconomic performance targets in the form of quotas and reclamation requirements.
1993–1994	Rabbit Lake Panel	Environmental Assessment into the expansion of the Rabbit Lake mine to underground operations at Eagle Point and open pit operations in the A and D Zones.
1991–1997	Joint Federal Provincial Panel on Uranium Mining Developments in Northern Saskatchewan	Joint federal and provincial panel examined mining development proposals from private companies for McArthur River, Cigar Lake, Deilman Pit (Key Lake), McClean Lake and Mid-West Projects. In addition, the panel examined the cumulative effects of the developments. Comprehensive public northern hearings. Recommended proceeding with cooperative tripartite process to achieve social and economic benefits, plus increased environmental protection and monitoring by communities.

One of the provincial government’s public-policy goals was to meet the increasing social and economic disparities of the residents — native and non-native — of northern Saskatchewan. In part, the growing public-policy priority was a direct result of changing public opinion which became more supportive of mining development. This change happened because new regulations resulted in tangible benefits to northerners.

Saskatchewan used two distinct approaches towards the development of its northern uranium resourcesthrough federal and provincial crown corporations. Examples of this are the 1950s to 1980s development in the Beaverlodge and Uranium City areas by the federal crown corporation Eldorado Mining and Refining Limited; and the 1970s and 1980s development by Saskatchewan Mining Development Corporation — a provincial crown corporation.

In the 1990s, private-sector delivery occurred in a cooperative, transparent, state regulatory framework via the private uranium companies operating in Saskatchewan. This was a tripartite regulatory framework involving governments (federal and provincial), the mining industry, and the local communities, including northern and native residents and related organizations.

State regulation and delivery

Beaverlodge area of Northern Saskatchewan, 1944–1981

Uranium deposits were first found in the Beaverlodge area north of Lake Athabasca in 1935. This region is in the northwest corner of Saskatchewan, 450 miles by air from Edmonton, or 450 miles south to Prince Albert. This was a period of state-owned uranium mine development in northern Saskatchewan. A federal crown corporation, Eldorado Mining and Refining Ltd. and its successor companies, developed the region under regulation by the federal government.

In 1943 the federal government created Eldorado Mining and Refining Limited as a crown corporation with a national monopoly on prospecting, mining, and processing uranium. The Crown monopoly excluded any private prospecting for uranium. In 1944 Eldorado staked mineral claims in the region. In 1946 the Atomic Energy Control Act was passed in the House of Commons to regulate all operations of the industry. Regulation was administered from Ottawa by the Atomic Energy Control Board. By March 1951 and after further exploration in the area, sufficient ore deposits had been identified to warrant a mine and mill. Production commenced in May 1953 and exploration activity increased, resulting in further finds and the establishment of as many as 12 uranium mines and three mills in the Beaverlodge area by 1958. Eldorado operated the Beaverlodge mine and mill continuously for 29 years, only closing in 1982.

Uranium production

Between 1953 and 1982 Eldorado mines in the Beaverlodge area produced some 45 million lbs of uranium concentrate (U₃O₈). Production of ore and yellowcake peaked in 1959/60 and 1967/8. In 1961 the Beaverlodge camp shipped some 2 160 tonnes of U₃O₈ valued at about $45 million, representing about 22 percent of Canadian production, as shown in Figure 4.

Figure 4. Eldorado production from Beaverlodge Operations, 1953–1982.

Source: Neil, A.E., Statistical Graphs of Beaverlodge Operations, 1953–1981, Eldorado Resources Ltd., Saskatchewan, 1982.

Decisions on a town site — Uranium City

Early decisions were required to secure a local labour force. Many workers would have to be skilled workers — and they were not present in the remote northwest of the province. This led to a protracted negotiation between the company based in Ottawa and the provincial government in Regina, both being remote from the mine site. Two options were discussed by the socialist Cooperative Commonwealth Federation (CCF) provincial government of the day and the company: either create many single mine towns or one planned town to service the region.

There was a mood in Canada at the time to end the development of shanty towns that had grown up around the mines in Ontario’s north, with their problems of drink, unruly behaviour, criminal activity and urban blight. The government in Regina wished to avoid these problems and offer a higher level of northern services and quality of life. At the time, it was felt both in the company and in the government that a single town site with comprehensive modern amenities would be preferable to a proliferation of shanty towns. Also, there would be savings in infrastructure costs. However, neither party wished to pay for the town.

Figure 5. Eldorado town site, Beaverlodge District, Northern Saskatchewan, 1952.

Source: Dougall, G., The History of Uranium City and District, Uranium City, 1982.

Mine development proceeded faster than the community. It became necessary to start the seasonal construction schedule and get material to the mine site. During 1951 the company built its own facilities to get supplies to the mine site. The federal Department of Transport built an airstrip. A port, Bushell, was established at Black Bay, about 15 miles distant, replacing the time-consuming portage between Lake Athabasca and Beaverlodge Lake. The provincial government immediately made land available for warehouses and port installations and squatter communities emerged in Goldfields and elsewhere in the Beaverlodge area. Problems of alcoholism soon started and it seemed that Saskatchewan was reproducing the standard mining model of Ontario shanty towns. The company acted, designating the area a liquor-free zone under the Atomic Energy Act on grounds that national defense and security of a strategic uranium resource took priority over local interests.

These developments prompted Saskatchewan to design a model town which would be called Uranium City based on the company town of Arvida, Quebec. The issue of who was to pay then resurfaced. One senior Saskatchewan civil servant noted that the public was not “prepared to allow speculators and industrialists to harmfully, and for their own selfish pecuniary interest, to exploit the renewable and non-renewable wealth of Saskatchewan” (Bothwell 1984, p.296). At this time, Saskatchewan Renewable Resources became the defender of local interests against the federal crown corporation.

Saskatchewan suggested that the federal crown corporation, Eldorado Mining and Refining Ltd., pay for the town but not own or control it. This was unacceptable to Eldorado, who announced a delay in the project and started building company housing closer to the mine site. This left a huge problem for the provincial government, since it led to squatter settlements in the bush around Beaverlodge of exactly the kind they had been trying to avoid. Furthermore, all the social problems of the squatter communities became a provincial responsibility and cost. The province backed down and, in July 1952, began to survey a townsite which became Uranium City.

As the city grew, both the federal and provincial governments provided services. Saskatchewan installed a local administrator and created an office for a mining recorder. The federal government opened two stores, a garage, and a restaurant. A school was opened for 60 children — and the province opened its liquor store before its hospital. By 1958 the Uranium City/Beaverlodge area had over 5 000 residents — some living outside the town at the mine sites.

Employment and accommodation

The mine and related operations employed 17 886 person years between 1951 and 1982. The Eldorado Beaverlodge mines averaged an annual employment of 575 persons over its thirty-year lifespan. There was a steady build-up of employment over the first seven years — from 250 to 900 in 1960 as shown in Figure 6. In following years, there was a steady decline with intermittent peaks in 1964 and 1981.

Initially, most mine employees lived in company camps at the mine site. The company proceeded much faster in getting the mine under construction and into production than did the province in preparing the new town site for accommodation and services. Much of the early infrastructure construction at Uranium City was undertaken with company equipment and crews.

Figure 6. Eldorado employment, 1951–1981.

Source: I.C.B. Price, Eldorado Resources Limited, Annual Reports, 1951–1981.

Between 1951 and 1955 only a little over 20 percent of the mine employees were living in the town. In fact, as Table 5 illustrates, it was not until the company developed an aggressive program of company housing in Uranium City that there was a significant increase in mine accommodation in the town.

Table 5. Sources of accommodation for Eldorado employees, 1953–1981.
Year	Eldorado campsite	Uranium City			Offsite in Edmonton/ Saskatoon
Year	Eldorado campsite	Townsite	Company housing	Other housing	Offsite in Edmonton/ Saskatoon
51–55	78%	8%	4%	9%	Less than 1%
56–60	80%	8%	3%	9%	Less than 1%
61–65	56%	6%	10%	28%	Less than 1%
66–70	30%	3%	20%	47%	Less than 1%
71–75	31%	3%	21%	44%	Less than 1%
76–80	38%	5%	20%	37%	0%
81	22%	7%	50%	17%	5%
Source: I.C.B. Price, Eldorado Resources Limited, Annual Reports, 1951–1981.

Northern, native, and community participation in mine employment

In the early 1950s there were very few trained mine employees available in northwestern Saskatchewan. The closest communities to the new mine site at Camsell Portage, Fond du Lac, Black Lake, and Stony Rapids were still primarily engaged in traditional hunting and gathering pursuits. In a detailed review of the sources of employees in 1974 the mine personnel manager found that nearly two-thirds of his employees came from the rest of Canada, as Figure 7 demonstrates.

Figure 7. Sources of mine employees, Eldorado Beaverlodge Operations 1974, % of total employment.

Source: I.C.B. Price, Eldorado Resources Limited, Annual Reports, 1951–1981.

Only two people were hired from the Northern communities outside Uranium City. For the most part, most of the quarter of employees sourced from the town itself initially came from outside northern Saskatchewan. At the time, corporate personnel policy focused exclusively on securing the mine labour supply. Throughout the life of the mine, turnover rates had been high, averaging 67 percent a year. These fell slowly throughout the life of the mine, but still imposed a very high corporate cost in terms of training, staffing, and meeting the rigorous safety requirements associated with mining uranium.

The company adopted a policy of “out-of-region” recruiting. A personnel review of Beaverlodge Operations suggested that recruiting out-of-province as well as internationally should become a priority for hiring trained miners and technicians (Price 1984, p. 17). A related personnel policy (Ibid, p.9) involved flying employees to the mine. “Morale among the families of married personnel is an important factor to be taken into account. A modified ‘trips out’ policy, put into effect in May for staff and salaried employees and their families, was well received.”

While training programs were employed so mine workers could upgrade their skills, there was little outreach to train northern residents living in distant communities and often in poverty. An underlying factor in training northern residents for mines was their overall level of education. In the 1960s while nearly half of the children entered into the school system, only two percent stayed in school for grades 10, 11 and 12. Only 12 percent were completing grades 7, 8 and 9.

Native training for employment was not a priority for Eldorado until twenty years after the start of the first mine. A formal training program for the employment and training of Athabasca Basin Indians was started in 1976. Numbers in the program were small, but seen as effective in terms of the retention and job performance of the new trainees. In 1977 there were nine candidates in the company program, of whom seven were still employed at year end — 1 percent of that year’s mine employees. However, by 1980 — after thirty years of mine operations in the Beaverlodge — area nearly ten percent of the mine employment was native.

By 1979, near the end of the life of the mine Eldorado introduced a commuting program for residents of Black Lake, Stony Rapids, and Fond du Lac to improve the employee retention rates of residents of these communities. A total of 32 commuters were hired between August and December of 1979, 14 of whom remained on payroll at year end. According to Price (ibid, p.36), the personnel manager of the day noted: “The present work schedule does not favour a commuting program and results have been disappointing. Off the job problems contribute the major factor for this turnover.”

Procurement of essential mine and community services for the mine were usually obtained from southern mining suppliers. While Eldorado looked towards Uranium City as a local source of northern employment, there were few specialized services developed in the town to supply the mine. Most mine purchasing and inventory requirements were flown in from Edmonton. When local supply was considered, it had a short lifespan. For example, originally the company had supplied laundry services, but in 1961 the service was transferred, under contract, to a Uranium City firm. In May 1962 the Uranium City laundry went bankrupt and Eldorado made arrangements with an Edmonton firm to handle their Beaverlodge needs on a fly-out, fly-in basis.

Decline of Uranium City

Fourteen years after closure of the mine in 1982, the population of Uranium City had fallen to 201 with 66 occupied dwellings. During its operating life, the Beaverlodge mining complex developed and accumulated:

The Beaverlodge operation was the first uranium site in Canada to have a planned decommissioning with regulatory approval. Previously, mining operations that closed conducted salvage operations wherever economically feasible and abandoned their property. There was no further consideration of environmental or public safety concerns. Remote mine sites like Beaverlodge often were abandoned, just as if everyone had left the site after the last shift, leaving the site “as is.”

There were no lack of regulatory requirements specific to mine closure. A corporate report (Eldorado Nuclear Ltd. 1982, p.1) summarizing the Beaverlodge decommissioning, allocated approximately $370 000 for closure in 1981 to meet federal regulatory requirements. Subsequently, the company established four rules:

Neither the local communities nor the public were consulted or invited to participate in the closure planning or implementation by either the Company or the government agencies. The decline of Uranium City left a long-term legacy of very high social, economic, and human costs in the form of unsafe and derelict abandoned buildings, as well as education facilities, without any provision of either policing or medical support. They remain a public safety hazard to this day.

Key Lake Mining, and Saskatchewan Mining Development corporations

Saskatchewan Mining and Development Corporation (SMDC) was created as a provincial crown corporation in 1974 to explore for, develop, mine, store and sell uranium and other minerals. The company intended to increase the employment and income benefits from mining for Saskatchewan residents. Provincial legislation provided the company with the right to take a share in any private-sector mine development or property. The provincial crown corporation took equity positions in both Cluff Lake and Key Lake Mining operations.

Saskatchewan crown corporations were historically established to become agents of social and economic change. Earlier in the century, the province used them to provide rural telephone and power services. After World War II the scope of crown corporations was extended throughout the economy. The province, therefore, expected the new mining crown corporation to meet its public policy goals of improving the conditions of life for northern people and their communities.

The company was regulated through both the federal Atomic Energy Control Board and provincial legislation. However, both the legal structure and operations of provincial Crown corporations left them exempt from both federal and provincial regulation.

In 1974 SMDC entered into a partnership with Uranerz Exploration to explore for uranium and in 1975 and 1976 major ore bodies were discovered in the Key Lake area. The Key Lake Mining Corporation was established to develop the properties and open pit production began in 1983. An annual production rate of 5.0 million kg U made the mine the world’s largest uranium producer at the time. Decisions to proceed on high quality ores at Key Lake made the closure of the low grade, uneconomic mines in the Beaverlodge area inevitable.

The Key Lake mining operations increased northern and native employment over that achieved during the Eldorado years in Beaverlodge. Uranium mine employment rose from 84 in 1981, to over 400 in 1987. During this period of public ownership, northern employment at the mine averaged 26 percent of the total work force. Numerical targets were introduced in attempts to increase northern participation at Key Lake. However, as can be seen in Figure 8, the share that northerners held of total mine employment actually declined between 1981 and 1988.

Figure 8. Northern mine employment as % of total mine employment, Key Lake Mine 1981–1988.

Source: Cameco Corporation 2000.

Related procurement employment in communities was less developed. While initial attempts to develop local, community and Indian companies had been started, these had yet to have a major effect on local communities or the Northern economy. Cameco was created from the 1988 merger of the federal crown corporation Eldorado Nuclear Ltd., and its provincial counterpart Saskatchewan Mining Development Corporation. Procurement from northern suppliers then stood at $10.6 million — or 10.8 percent of total company northern mine procurement. By 1995 this had risen to $44 million and by 1998 to $117 million, as shown in Figure 9.

Figure 9. Procurement spending at Cameco in 1989, 1995, 1998.

Source: Cameco Corporation 2000.

[1] Graham Parsons is an economist and President of the Organisation for Western Economic Cooperation. He has been Secretary of Economic Policy for Saskatchewan and Chief Economist for Western Canada. Ron Barsi is Senior Environmental Manager for Clifton Associates Ltd., and President of PANS Joint Venture. He created the environmental regulatory and monitoring process for mining in Saskatchewan.

Uranium mine development through the state

The regulatory framework for uranium development