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The state’s environmental review of the project predicts that it will cost $200 million to close the mine, and $3.5 million to $6 million annually to treat the water — perhaps for hundreds of years.
History in other states, however, shows how difficult it can be to predict a mine’s environmental impact, the fate of the company that owns it, and even how much rain will fall in and around a mine site in the decades ahead.
The Summitville gold mine in Colorado is often described as the poster child for inadequate financial assurance. In 1992, its owner, Galactic Resources, declared bankruptcy and abandoned the site, leaving behind byproducts from the cyanide leaching it had used to extract the gold. In all, the EPA spent $150 million to stabilize the site. The company’s financial assurance was $4.5 million.
The Zortman-Landusky gold mine in Montana is another example. In 1999, its owner declared bankruptcy, turned off the water treatment plant and left. Some financial assurance had been built into the project, but the state had underestimated the volume of water needing treatment. Taxpayers there were assessed to create a $34 million trust fund to pay for it.
Other projects, though, have been adequately funded.
At the Iron Mountain Mine in California, after years of pollution and litigation, the company and the EPA reached a settlement providing $300 million for the first 30 years of cleanup, and a $514 million investment contract that will kick in after that.
The Cobalt Mine in Idaho is a recent example often cited by regulators, including the Minnesota DNR, as a model for financial assurance. When completed, the mine would process 800 tons of ore per day to extract cobalt, gold and copper. It agreed to provide $44 million in a financial assurance bond.
But its Canadian parent company put the project on hold last year as cobalt prices dropped and it was unable to raise $100 million to build it.
The DNR already has received thousands of public comments on the PolyMet proposal as part of the legally required environmental review that will remain open until mid-March. (For more information, go to www.dnr.state.mn.us/input/environmentalreview/polymet.)
And though the review does not address how much the state will need to protect taxpayers, Richards said: “We welcome people’s suggestions on what it should be.”
Josephine Marcotty • 612-673-7394