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Taxpayers Vulnerable for Buckhorn Mine Cleanup Costs

In November 2014, Kinross submitted a plan to Ecology that purported to detail the amount of money required to satisfy the company’s environmental mitigation and cleanup requirements on Buckhorn Mountain. This plan, known as the Environmental Protection Performance Security Plan (EPPS), contains the narrative and numeric components of the mine’s environmental reclamation bond. During a careful review of the EPPS by OHA and its consultants, serious omissions and underestimations were discovered, leading OHA to the conclusion that the amount of money secured by the bond is inadequate to protect taxpayers from shouldering the environmental cleanup costs at the Buckhorn Mine, should Kinross fail to meet its obligations.
 Sediment pond at Buckhorn
  Sediment pond perched above Gold Bowl Creek, built in construction fill to capture stormwater.


About the Environmental Protection Performance Security Plan (EPPS)

The EPPS is a legal requirement, imposed by both the Washington Metals, Mining, and Milling Act and the mine’s wastewater discharge permit. The purpose of requiring environmental mitigation and remediation bonding is to ensure that there is enough money available to cover environmental costs in the event that the company operating the mine becomes insolvent or otherwise unable to pay those costs. When mining companies go bankrupt, they frequently leave behind contaminated mine sites with long-term and potentially far-reaching impacts. This is especially true where contaminated water, already an issue on Buckhorn Mountain, is a concern.

State law requires environmental bonding to ensure that the environmental degradation caused by mining will be cleaned up without requiring taxpayer funds, in the event that the mining company is unable to perform those obligations. Bonds guarantee the availability funds, often taking the form of a letter of credit from a financial institution, but do not require an actual deposit of money. The money is only used if a mining company is unable to fulfill a required environmental clean-up obligation, an occurrence often the result of insolvency. In addition to being a requirement of state law, the mine’s wastewater discharge permit (NPDES) also requires an adequate amount of bonding, and the biennial review and update of that amount to reflect present conditions. 

The NPDES permit requires that the bond be updated every two years; however, the bond has changed little throughout the life of the mine.  What has changed is the understanding of the environmental impacts caused by mining on Buckhorn Mountain. Mining has more greatly impacted the area than the preliminary environmental review documents had predicted, but the related additional cleanup costs have yet to be reflected in the EPPS.

 
Buckhorn mine machinery
   

The Department of Ecology has the 

power to require an increase in the 

EPPS bond amount, but because 

mine impacts have the potential to 

last decades, it is a challenge to 

determine what amount will be 

adequate. 


Ecology takes steps toward independent review
(Status as of March 2016)

The Department of Ecology (Ecology) is currently developing a scope of work for an independent consulting firm to analyze the environmental reclamation needs and associated costs on Buckhorn Mountain. The previous analysis, conducted by the consulting firm Golder Associates for Crown Resources/Kinross Gold, failed to adequately consider the additional clean-up costs resulting from the environmental impacts of the mine.

Similar to other permit required documents (such as the Adaptive Management Plan), the Environmental Protection Performance Security (EPPS) analysis and bond were due in 2014, but submitted to Ecology in an unacceptable form. Instead of creating an EPPS analysis that was based on real conditions and known environmental impacts, the company based the cleanup tasks on what was described in the pre-mining environmental planning documents, documents that merely reflect a “best guess” of the mine’s impacts on the surrounding environment.

Because actual environmental impacts of the mine are greater than anticipated, a greater amount of financial resources will be necessary to bring mine area back to pre-mining conditions than originally thought. For instance, the EPPS submitted by Crown in 2014 states that the company only needs to make the funds available to operate the mine water treatment plant for seven years after reclamation of the mine. Given the inability of the mining company to control the spread of contaminants, it is possible that the mine water treatment plant will be required to treat the contaminated water for decades. The well-documented water contamination at the mine will take more resources to clean up than had the mine operated as envisioned by the 2006 documents. There is a sizable disparity between what would have been necessary to clean the mine up had it operated flawlessly and what will be necessary to clean up the environment based on reality. As it stands now, if the company becomes unable to pay for this additional cleanup, this disparity will be borne by Washington taxpayers – a result Ecology seeks to avoid.

Ecology is in the preliminary phase of retaining a consulting firm to obtain an independent review of the environmental cleanup needs and associated costs. The agency anticipates that the review will lead to a more appropriate amount of environmental bonding, ensuring that taxpayers will not ultimately be liable for environmental cleanup costs on Buckhorn Mountain.



Abandoned mine sites across the county cost taxpayers millions of dollars annually. Some of these costly contaminated sites were guaranteed by cleanup bonds later proven to be inadequate. South Dakota’s Gilt Edge Mine should be viewed as a cautionary tale by Washington regulators. At the Gilt Edge Mine, $6 million dollars in bonds were initially secured by the state government, but after the parent company of the mine operator declared bankruptcy, it became apparent that much more money would be needed to remediate the site. To date, over $30 million have been spent in an attempt to remediate the mine site, and state officials estimate nearly $90 million more will be needed to effectuate a complete cleanup of the site.   
Earthworks photo: Acid drainage polluted stream merges with unpolluted stream downstream from California's Jamestown mine - See more at: https://www.earthworksaction.org/issues/detail/acid_mine_drainage#.VudIDZMrJo4
Earthworks photo: Acid drainage polluted stream merges with unpolluted stream downstream from California's Jamestown mine - See more at: https://www.earthworksaction.org/issues/detail/acid_mine_drainage#.VudIDZMrJo4