Cost of repairing mining's damage to the West? $2.5 billion


Last December, the U.S. Forest Service approved an exploratory permit for a controversial new hard rock mine adjacent to and underneath the Cabinet Mountain Wilderness of western Montana. Rock Creek Mine would be dug deep below the Wilderness Area, one of the first areas protected under the Wilderness Act of 1964. Every day miners would extract 10,000 tons of ore in search of silver and copper while producing up to 3 million gallons of waste water. Over 300 acres of waste rock would be piled up a short distance from the Clark Fork River, a major tributary of the Columbia River.

Before it can develop this mine, Sterling Mining will have to post the largest reclamation bond in Montana history - $77 million. That money will be needed after closure because the mine is almost certain to pollute Rock Creek, the Clark Fork River and Lake Pend Oreille with heavy metals. But the mine may also produce "acid mine drainage" that could require water treatment in perpetuity. There's no money in the reclamation bond to pay for this.

"It's all just a big leap of faith," says Bonnie Gestring of the Mineral Policy Center. "It's just a ludicrous thing to be authorizing a mine that needs water treatment in perpetuity."

The mine may also contaminate, dewater and drain two alpine wilderness lakes, Cliff Lake and Moran Basin, and two streams, Rock Creek and Bull River. "If these impacts were to occur, they would clearly be irreversible," Gestring said.

This scenario assumes Sterling does everything according to its plan. Any foul-ups would cause even greater problems. Though approval of the mine is under appeal in federal court, federal mining laws make it nearly impossible to block new mines on federal lands, and the Bush administration has rolled back some of the newer environmental safeguards enacted under Clinton.

The $77 million reclamation bond is significant because, after the valuable metals are dug out, there is no guarantee that Sterling will be around to do anything more than file bankruptcy papers, given the track record of its main people and the mining industry in general.

A study in 2000 by the Center for Science and Public Participation, a Bozeman-based think tank, shows that the total, potential reclamation liability of large mines in all the western states exceeds one billion dollars. Add to that another $1.4 billion dollars to clean up Idaho's Coeur d'Alene River Basin, and perhaps another $100 million more to take care of the W.R. Grace asbestos mine in Libby, and the costs exceed $2.5 billion. At Libby, where perhaps hundreds of people have gotten sick or died from lung disease, Grace filed for bankruptcy last year in the wake of lawsuits seeking compensation for victims and medical treatment. The Environmental Protection Agency has declared Libby a Superfund site. Many other western mines have declared bankruptcy, including 38 in Nevada alone, as well as one surety company that insures mines against environmental damages.

Even ASARCO, once one of the largest mining companies in North America, is threatening to walk away from its responsibilities to cleanup a Superfund site in Tacoma. The EPA has threatened to fine ASARCO $27,000 a day, but the Seattle Post-Intelligencer reports that the Mexican holding company that controls ASARCO may shift assets to other parts of its corporate empire and walk away. Interestingly, until 1999 ASARCO held title to development rights at the Rock Creek Mine but sold out because of the low price of copper.

So, it goes with mining in the West.

"Federal mining law lets miners have taxpayer-owned minerals for as close to free as you can get, then frequently sticks the same taxpayers again for the cost of cleaning up the messes made by the miners," says David Chambers, the Center for Science and Public Participation's director. "We're talking about toxic dumps that contaminate aquifers, kill rivers and wildlife and permanently scar the landscape - environmental disasters that will require remediation in perpetuity."

Before mines are constructed, federal laws require the owners to prove they will not violate the Clean Water Act. More often than not, these assurances eventually are broken. In central Idaho, the Grouse Creek Mine was hailed as a "state of the art" facility when it was built in the 1990s. It operated for just three years before cyanide was detected in salmon-bearing streams coming from the site. Now the Forest Service is trying to force the owner, Hecla, to put up one of its mines in Alaska as collateral for the cleanup. Hecla is also on the hook for cleanup costs in the Silver Valley.

In Montana alone, eight of 12 large mines permitted since 1979 were given a clean bill of health by state officials before construction began, but then developed serious water pollution problems. Three of these mines-Basin Creek, Beal Mountain, and Zortman-Landusky-were affected by Pegasus Gold Co.'s bankruptcy in 1998. Conservative estimates for unfunded reclamation at these bankrupt mines range from tens of millions of dollars to possibly more than $300 million at the Zortman-Landusky mine.

The Bureau of Land Management has asked Congress to spend $35 million in cleanup costs at Zortman -Landusky, and millions more to clean up the other sites. The Superfund program is going broke. The Republican-controlled 1995 Congress decided to end Superfund taxes paid by polluters, and now Bush is refusing to resume the tax.

Located about 155 miles north of Billings, Zortman-Landusky was the first large scale, cyanide heap leach gold-mining operation when it was built in 1979. It could not be built today; the state of Montana now bans the technology. Most of the waste rock and spent ore is generating acid, requiring treatment of all waters draining from the mine forever. All streams emanating from the mine area, including water flowing to the Fort Belknap Reservation, have been seriously polluted with acid and heavy metals.

The chief executive of Sterling Mining, Frank Duval, was a co-founder of Pegasus Gold. In 1988, after leaving Pegasus, Duval re-opened the Bunker Hill mine in Kellogg, Idaho, but closed it less than a year later and filed for bankruptcy, leaving unpaid taxes of more than $2.4 million owed to the county and local schools. Also, in 1988, Duval and another partner from Pegasus, Hobart Teneff, were cited for alleged violations of federal securities laws during their tenure with Pegasus Gold. They agreed not to break those laws in the future. (Teneff is now an officer in the Rock Creek venture.) In 1991, Duval and others filed for bankruptcy at another Silver Valley mine, leaving miners with unpaid wages.

Duval is also president and director of Midnite Mine, located next to a tributary of the Columbia River on the Spokane Indian Reservation. This operation has polluted wetlands, creeks, surface and ground water with elevated levels of heavy metals and radioactivity. In February 2000, the EPA listed the Midnite Mine as a Superfund Site.

The Rock Creek Mine is being appealed in court by eight conservation groups that claim it would degrade 7,000 acres of habitat vital to the survival of the Cabinet-Yaak grizzly bear population, destroy bull trout habitat in Rock Creek, and would discharge up to three million gallons of waste water a day into the Clark Fork River. Even the U.S. Fish and Wildlife Service now has second thoughts and has withdrawn its December 2000 finding that it would not jeopardize these species.

"We've said all along that this mine cannot be built without pushing the Cabinet's fragile grizzly bear population and bull trout in Rock Creek to extinction," said Mary Mitchell of the Rock Creek Alliance.

The Forest Service has until mid-April 2002 to respond to the appeal. If the appeal is rejected, the Rock Creek Mine will the first hard rock mine permitted by the Bush Administration. "It will serve as a precedent in allowing mining to proceed in federally designated wilderness," Mitchell said. "It also will focus attention on the current discussion to reform the antiquated 1872 Mining Law, which continues to wreak havoc on the nation's resources, environment, and its taxpayers."

Scroll to Top