Bad Actor Law and Initiative 186

Zortman-Landusky Mine

We tend to focus on Superfund and historical impacts of mining, but two issues affecting proposed and current mines have been making headlines lately. You may have heard about Montana’s Bad Actor law or initiative I-186, both have provoked strong opinions on either side, but what are the facts? We’ll spend the next couple episodes exploring these issues, starting with the Bad actor law.

The bad Actor law is a provision of Montana’s 2001 Metal Mine Reclamation Act. It says companies or executives of companies that fail to reclaim mining sites can’t begin new projects unless they reimburse the state for cleanup. The legislation was in response to problems the state had with mining company Pegasus Gold. At the time, Montana had been stuck with large cleanup bills after Pegasus went bankrupt and abandoned reclamation of the Zortman-Landusky, Basin Creek, and Beal Mountain mines, where cleanup is ongoing.

The provision saw its first application only recently. Late last year a coalition of conservation groups filed an enforcement request with the Montana Department of Environmental quality, asking the DEQ to stop Idaho mining company Hecla from proceeding with two proposed mines in Northwest Montana. It turns out Hecla’s president and CEO, Philip Baker, was the Chief Financial Officer at Pegasus when they declared bankruptcy. Not only was he at the financial helm, he had received sizable bonuses as the company folded.

The DEQ agreed with the request and issued a violation letter to Hecla, halting their proposed mines. They advised Hecla and Baker that they may seek to comply with the bad actor laws by repaying the State of Montana in full for expenses incurred to carry out reclamation at the abandoned Pegasus Mines or demonstrate that Phillips Baker and any entity under his direction and control will not conduct mining or exploration activities in Montana.

When Pegasus defaulted on its reclamation obligations, Montana and federal agencies were forced to take over responsibility for millions of dollars in unpaid reclamation costs. As of last year, public agencies had spent more than $74 million for water treatment at Zortman-Landusky alone. Acid mine drainage continues to be a problem there, requiring extensive treatment.

Hecla quickly challenged the ruling in a court in Lincoln county, home to one of their proposed mines. The Hecla challenge claims that Baker is not involved with mining operations in Montana, and that the Hecla subsidiaries that own the mining sites are not subject to the bad actor law.

But the DEQ maintains the provision does indeed apply. DEQ Director Tom Livers issued a statement that reads, “We reached our decision based on careful deliberation of the legal issues. We stand by it and are prepared to defend it.” The DEQ has come under fire from state law makers and mining advocates for the decision.

It remains to be seen how this situation will play out. Just last week the forest service issued an environmental statement on Hecla’s Rock Creek Mine near Noxon, approving the first phase of operation. The mine has been embroiled in controversy for years, the ore body is under the Cabinet Mountain wilderness and in the Clarkfork watershed, and environmental groups have been challenging the approval.

Mining advocates feel the bad actor ruling is just the latest in a long series of attacks on the industry. Conservation groups feel they are protecting the environment and Montana tax payers from future degradation and expensive reclamation. If history has shown us anything here in Butte, it is that the proper cleanup should be part of the plan from the beginning, because holding corporations responsible after the fact can be a lengthy and frustrating process.

Stay tuned to our next episode where we will investigate initiative I-186, which will be on the ballot in November. If passed, it would require hard-rock mine operations to have a reclamation plan that won’t require perpetual water treatment.

Dave Hutchins reporting for KBMF