Mining regulators in Trempealeau County, Wis., said Tuesday that they took action against the wrong company last week when inspectors discovered permit violations at a frac-sand mine in Arcadia.
The county's Department of Land Management issued a news release saying that it had issued a "stop-work'' order to Texas-based Superior Silica Sands; further investigation found that mining activity on the site known as the Guza mine was being conducted by Cameron Rail Site, a local company.
"It appears that Superior Silica Sands LLC was only conducting construction-related activities on the site but was not conducting mining activity at the site,'' the news release said.
Rick Shearer, president and CEO of Superior Silica Sands, said his company was not in violation in any way. "We are pleased that the record has been corrected,'' Shearer said in an interview.
Officials from Cameron Rail did not respond to requests for comment.
Superior Silica's parent company, Emerge Energy Services LP, suffered a sharp drop in its stock price last week after initial news of the "stop-work" order appeared in numerous news outlets.
In Tuesday's statement, the county said it first investigated activity at the Guza mine Oct. 6 at the request of the state Department of Natural Resources (DNR). The DNR had received information that someone was working the mine without a valid land reclamation permit. When county agents arrived, the mine was in operation and Superior Silica had company signs at both entrances, the statement said. In addition, the county knew that the mine site had been annexed in August by the city of Independence for use by Superior Silica.
"At the time, the information available to the [Department of Land Management] suggested that Superior Silica Sands LLC was operating the site,'' the county said. "Rather, [mining] was being conducted by Cameron Rail Site.''
According to a pre-annexation agreement between Independence and Superior Silica, the mining company agreed in July to pay royalties to the city based on tonnage of sand production. But the company said in its own statement last week that it hadn't begun to mine and was just grading and excavating in the area with the intent to build a frac sand processing plant to begin operations in 2015.
Regulatory authority over a mine's required reclamation permit goes to cities when a mine is annexed, the county said Tuesday, but in the case of the Guza mine, that authority has not yet been transferred to Independence. For now, the reclamation permit is legally held by Cameron Rail Site, the county said.
The county's statement said its Land Management Department has now found three violations of the corresponding reclamation plan: disturbing land within 300 feet of a nearby stream; pumping a sand-water slurry through a pipe beneath the stream when only water was allowed, and using unlined settling ponds for water containing polyacrylamide mining chemicals. The reclamation permit requires the ponds to be lined with concrete to prevent leaching.
The county said it has provided Cameron Rail with a corrective action plan listing steps that must be taken to comply with the reclamation plan.
In its own release on Friday, the Trempealeau County Health Department said it received calls from concerned citizens regarding the safety of their drinking water due to the proximity of their wells to the Guza mine.
"It is very unfortunate and the problem is under investigation,'' county health officer Sherry Rhoda said in the news release. "At this time we do not know what effect this will have in the long run on our groundwater."
The county's Department of Land Management also said it "has no reason to believe there are any immediate public health threats or concerns at the site.''