How Much Do Taxpayers Pay?

Source: Who Owns the West by Environmental Working Group

“Remediation of the half million abandoned mines in 32 states may cost up to 35 billion or more.”

Environmental Proctection Agency

Section 5. Taxpayers fund mine cleanups

They pollute, you pay. Mining companies are the leading toxic polluters in the nation. The public pays for much of the staggering cost of cleaning up abandoned mines across the West, some of which were orphaned as recently as five years ago. The Environmental Protection Agency estimates that billions of dollars are needed to protect Western drinking water supplies from mine waste, and that cleaning up the estimated half a million abandoned mines across the country may cost $35 billion or more (EPA 2000).

Hardock mining is the country's top pollution source. Metal mining accounted for 46 percent of pollution reported by all industries in 2001, yet comprised just 0.36 percent of industrial facilities, according to an EWG analysis of a federal pollution database known as the Toxics Release Inventory, a national tracking system that covers 650 priority pollutants from all US industries (EPA TRI 2002).

All of the top 10, and 18 of the top 20 polluting facilities in 2001 were mines or smelters, led by Kennecott's copper mine just outside of Salt Lake City, which alone accounted for 11 percent of national pollution reported from all industries. Copper compounds dumped at Kennecott's Salt Lake City operations comprised nearly one of every fifteen pounds of reported pollution nationally.

All told, the mining industry released 58 types of toxic chemicals to land, air, and water in 2001, led by copper at 930 million pounds. Arsenic ranked third in prevalence in mining waste at 366 million pounds, and lead ranked fourth at 333 million pounds. Other toxins released by the mining industry included mercury and cyanide.

Taxpayers on the hook. Taxpayers will pay much of the cost for cleaning up mines because mining companies often fail to provide enough money to cover the full cost of cleanup, operate mines to the point of bankruptcy, and leave little or no money for reclaiming and cleaning up pollution at the site.

Since 2000 the federal government has required mining companies to reclaim their sites and provide up-front financial assurances, so that cleanup can be completed with the company's money even if the company is unable or unwilling to do the work (CFR Forest Service 2004, CFR BLM 2004). But several recent bankruptcy cases show that government officials and mining companies can underestimate cleanup costs, so that the financial assurances ultimately fall far short of what is needed to clean up the site.

At a mine opened in the mid-1980s near Summitville, Colorado by Canadian-based Galactic Resources, Ltd., the State of Colorado required a $4.5 million bond to cover eventual closure and cleanup costs. The company went bankrupt in 1992, and leaking cyanide mining solutions killed a 17-mile stretch of the Alamosa River. The damage has already cost $155 million, more than 30 times the amount of the original bond.

A 2003 Nevada task force of government agencies, academics and private interests, reported that in the late 1990s, approximately 32 Nevada mining operations and exploration projects entered bankruptcy (MNBTF 2003, Gaskin 2004). The operations and explorations ranged in size from "medium" to as small as about five acres (Gaskin 2004). Regulatory agencies collected bonds from the failed operations but it became clear that the bonds would not cover costs. These costs included long-term treatment of hazardous mining solutions left in ponds and leaching from waste piles. These experiences led Nevada to amend its mining reclamation policies (MNBTF 2003).

Weak funding rules for companies. The federal government has struggled to set workable requirements for up-front financial assurances that will cover project reclamation and cleanup costs when the mines close, to combat mine abandonments that leave the mine cleanup bill to taxpayers. Mining companies remain in active discussion with the federal government on this issue, claiming that the current requirement for up-front financial assurances for mine cleanup is too stringent, and that bonding companies will not bear the risk of guaranteeing the cleanup cost. In a recent letter to the Department of the Interior, Newmont Mining Corporation notes that because of major losses suffered since 2000 "sureties are simply unwilling, or very reluctant, to underwrite reclamation bonds" (Newmont 2002).

Several states allow mining companies to use a "corporate guarantee" -- essentially a promise -- to ensure that adequate funds will be available for mine cleanup. These states include Arizona, Utah, Colorado and Wyoming. Nevada allows companies to use corporate guarantees to cover 75 percent of cleanup costs while South Dakota allows corporate guarantees by statute but recently began prohibiting them in practice.

Protecting the public from the risk of ultimately bearing cleanup costs for U.S. mines has so far eluded regulators, in part because of the high and often uncertain costs associated with mine cleanups. Insurance companies won't take the risk, and mining companies can't afford the cleanup bills.

Abandoned mines and water pollution - a huge problem in size and scope. According to government studies 500,000 abandoned mines across the country collectively pose threats to drinking water, soil and wildlife, including endangered species. State and federal budgets will be hard-pressed to absorb even a small fraction of the estimated $35 billion needed to clean up these sites (EPA 2000) - many of which mining interests purchased from the federal government for a few dollars an acre.

Nationally, the Environmental Protection Agency estimates that mine wastes contaminate 40 percent of western headwaters and places a price tag of $2 billion for cleanup of fewer than 100 of the hundreds of thousands of abandoned hardrock mines across the country (EPA 2000).

Mines become Superfund sites. As of January 2003 there were 87 mines or smelters listed on the Superfund National Priorities List for cleanup. Just a few are listed below:

  • ARCO's Anaconda copper smelter site, which polluted 300 square miles of land in Montana with arsenic, copper, cadmium, lead, and zinc ( Read more from EPA)
  • Bunker Hill mining site in the Upper Coeur d'Alene river basin in Idaho, an area where 100 million tons of mine waste have been dumped to the river system, where an estimated 20 miles of streams are unable to sustain a reproducing fish population, and where about 10 miles of tributaries are completely void of aquatic life ( Read more from EPA)
  • Asarco's smelter site in East Helena, Montana, where 100 years of lead smelter operations polluted the Helena valley with 20 hazardous substances including arsenic and lead, according to EPA ( Read more from EPA)
  • Asarco and Newmont's California Gulch mine outside of Leadville, Colorado, where mine wastes pollute the Arkansas River ( Read more from EPA)
  • Summitville ( Colorado), where cyanide leachate from a gold mine abandoned in the early 1990's killed all wildlife in a 17-mile stretch of the Alamosa River ( Read more from EPA)

Some of these sites will eventually require hundreds of millions of taxpayer dollars for remediation. The government's inclusion of these mines on the National Priorities List for cleanup signifies that each of these sites poses a significant current or potential threat to human health or the environment.

Section 6. Federal rollbacks of public health and environmental safeguards from hardrock mining operations

Since 2001, the Bush Administration has systematically dismantled a number of important improvements in mining safeguards. These rollbacks heighten the urgency of addressing the adequacy of a regulatory system that allows near unlimited rights to corporations to claim public lands, and that can leave taxpayers with tens of billions of dollars in cleanup bills, wrecked landscapes, and polluted drinking water.

The Bush Administration has:

  • Stripped from federal regulations language that would have required government officials to deny a permit for mines that would pose substantial irreparable harm to environmental, scientific, or cultural resources;
  • Attempted to disavow the government's authority to deny a mine permit for any reason, arguing that federal law allows all standard mining practices on all public land. This attempt was overturned in court;
  • Reversed a permit denial for a major open pit mine in California that would destroy lands sacred and historic to the Quechan Native American Tribe;
  • Reinterpreted the 1872 Mining Law through secretarial order so that its only provision that protects the environment now allows the unlimited use of public land for toxic mine waste disposal;
  • Removed from federal mining regulations protections for surface and groundwater
  • Weakened federal mining regulations to control erosion and revegetate areas denuded by mining operations;
  • Opened up for mining 2.6 million acres of wilderness quality land in Utah that had been on track for permanent wilderness protection; and
  • Opened up for mining vast tracts of pristine roadless areas throughout the west by allowing companies and states the right to build new roads over old "highways" that can include hiking trails, old pack animal trails, or paths for recreational vehicles.

Beginning on inauguration day with a broad stay of pending Federal regulations, the Bush Administration has orchestrated a series of reversals of public health and environmental safeguards, including those affecting hardrock mining operations. Collectively, these actions have opened wilderness and roadless areas to mining, overturned limitations on the amount of public land available for toxic mine waste dumping, and weakened the authority of government officials to deny mine permits, even in cases for which permanent degradation of public resources is believed inevitable. Ten years after broad reform of federal mining law was narrowly blocked in the Senate, mining corporations still enjoy a freedom to mine on public lands without parallel among other potential public land uses, as they have since passage of the federal mining law over 130 years ago.

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