Province, mining company in court battle over contaminated land in Sheet Harbour

The province of Nova Scotia is battling a mining company in court to recover money it says it's owed to clean up contamination at the Port of Sheet Harbour.

The details of the case date back to 2008, when ScoZinc Ltd. signed a lease with Nova Scotia Business Inc. (NSBI) to use the port to store and ship lead and zinc concentrate.

ScoZinc, which has since changed its name to EDM Resources, operates a lead and zinc mine in Gays River, N.S., near Shubenacadie.

Part of ScoZinc's lease required it to remediate any contamination resulting from the use of the leased area, and the company had to provide a $100,000 reclamation bond to pay for any damage or restoration.

In September 2008, less than six months after signing the 10-year lease, ScoZinc's ship loader broke and lead concentrate spilled over the premises, according to court documents filed by the province.

A decade later, the two parties renewed the lease for another 10 years, and the province required the company to increase the reclamation bond to $130,000 and complete an environmental baseline study.

The province says the company failed to do either, and in June 2020, NSBI gave ScoZinc notice that it had defaulted on its lease.

Excessive lead found at site

For its part, the company said it was having difficulty getting insurance and financing for the extra $30,000 and in July 2020, ScoZinc gave notice it would terminate the lease.

The termination of the lease meant the company was required to conduct an environmental site assessment and create and carry out a reclamation plan.

Eventually, ScoZinc completed the assessment, which found lead levels exceeding commercial standards in eight of 32 samples, and levels exceeding industrial standards in three of eight samples.

According to the court documents filed by the province, ScoZinc told NSBI in June 2021 "without any supporting evidence or certified site closure documents" that it had completed the remediation. The company then requested the return of the $100,000 reclamation bond.

Three days after that, NSBI informed ScoZinc that the company had failed to complete its obligations and said NSBI would use the $100,000 to fix the problems.

Court-order applications

In April of this year, the province, on behalf of Invest Nova Scotia (formerly NSBI), filed an application for a court order that would force ScoZinc to remediate the property.

The company, in turn, sought its own court order to force the province to return its $100,000 bond.

ScoZinc says it completed the remediation, including removing the storage building, the earth underneath and resurfacing the area with fresh, clean gravel. It claims the province has breached its contract by not returning the bond.

The company says after the remediation was done, soil testing showed no excess lead or zinc within the remediated area.

ScoZinc also claims in its court documents that any contamination occurred before the 2008 lease, and no environmental testing was done before that lease began.

The company denies it ever caused contamination, and says other companies are responsible.

Offshore wind companies interested in property

According to the court documents, Invest Nova Scotia is in discussions with offshore wind developers to use the property to store and preassemble components for use in the northeastern U.S.

"As offshore wind components are installed in the ocean, it is imperative that the Port of Sheet Harbour is certified as being free of contamination," the document says.

Previous negotiations with offshore wind developers failed in part because of tight timelines for NSBI to prepare the site and deal with environmental remediation.

The province says as of April, the Port of Sheet Harbour lands remain contaminated with lead.

In a statement, Invest Nova Scotia said it could not comment on the case while it is before the court.

ScoZinc's lawyer did not respond to an email from CBC News on Friday.