DEQ takes legal action for mine reclamation funds

The struggle over who pays for the reclamation of a Lewistown-area mine has moved into the courts.

The CR Kendall Corporation filed for bankruptcy protection in November, but it has yet to finish restoration work on the CR Kendall Mine north of Lewistown in the North Moccasin Mountains. So last week, the Montana Department of Environmental Quality  asked the court not to let the company out of an obligation to pay $6.2 million for the remainder of the mine reclamation.

See, here’s the rub for Montana taxpayers. The state requires mining companies to pay a bond upfront, and the sum is supposed to be enough to pay for reclamation. But the bonds are never is enough, particularly because mine waste almost always pollutes the water, so it must be treated for decades if not forever. And too many mining companies go bankrupt before reclamation is finished. So state coffers are robbed of millions that could be spent on better things.

For example, $23.6 million of taxpayers’ money has been used for reclamation of the Zortman-Landusky Mine near Fort Belknap because mine operator Pegasus Gold Inc. went bankrupt.  The Beal Mountain gold mine west of Butte has cost another $12.8 million.

In the case of CR Kendall, the original bond was $1.8 million — with interest, that amounts to $2.3 million today. But in its recently published closure plan, the DEQ calculated that long-term water treatment will cost at least $8.4 million. The CR Kendall Corporation has claimed it has only $200,000 cash on hand.

So now let’s consider the Tintina Mine, which is planned to punch through the water table of the Sheep Creek drainage and extract acid-producing waste rock. Water will need treatment during and after the mine operations.

Will Tintina’s bond cover the reclamation once the company has pulled up stakes and left Meagher County in another bust-following-the-boom situation? Highly doubtful. And because Tintina Resources is just a tiny subsidiary focused on just one mine, it wouldn’t take much over-spending to drive it into bankruptcy. That would leave the partners footloose and fancy-free, able to move on to a different company and a different mine with no financial hindrance.

When will Montanans stop playing the dupe just for a few short-term jobs that usually don’t go to Montanans? Natural resource extraction jobs never last, and people are often spit out in the end. Just ask the workers who are now leaving the Bakken.