24 ELR 10388 | Environmental Law Reporter | copyright © 1994 | All rights reserved

The Summitville Story: A Superfund Site Is Born

Luke J. Danielson, Laura Alms, and Alix McNamara

Editors' Summary: When Congress enacted CERCLA in 1980, it put potential site owners and operators on notice that contaminating sites with hazardous substances can have severe consequences. Four years later, however, at least one company failed to heed that warning. In 1984, the Summitville Consolidated Mining Company, Inc. began operations at the Summitville mine site in Colorado. The result was a classic case of regulatory and corporate failure to prevent environmental disaster. In this Dialogue, the authors examine the reasons for the disaster at the Summitville site. They begin with the history of the site, which has hosted mining operations for over a century, and describe a permitting process that failed from the beginning to address potential site problems. They analyze the regulatory and administrative failures that contributed to these problems and suggest improvements to mining law that could avert similar disasters in the future. They argue that limitations of local mining law were only partly to blame for the Summitville debacle: Deficiencies in federal mining law and inattention by public interest groups also contributed. Federal mining law reform is needed to empower federal agencies to prevent irresponsible mining operations, and environmental groups should divert more resources to monitor the permitting process. The authors conclude that only greater government, industry, and public interest responsibility can prevent another Summitville.

Mr. Danielson is a partner in the Colorado law firm of Gersh & Danielson and Chairman of the Colorado Mined Land Reclamation Board. He received his J.D. in 1975 from the University of California. Ms. Alms is an attorney at Gersh & Danielson. She received her J.D. in 1993 from Washington University. Ms. McNamara is a Research Assistant for Gersh & Danielson. She received her B.A. in journalism in 1993 from Antioch College.

[24 ELR 10388]

From the top of the Summitville mine's defunct heap leach, a mass of leached-out gold ore hundreds of feet high, the signs of environmental disaster are visible everywhere. The leach pad, a pond-like structure covering 46 acres, contains over nine million tons of ore. Murky green water collects in pools along the heap's border, and milky water drains from old tunnels. Long coils of black pipe, once used to pump cyanide solution onto the heap, are now used to percolate water through the cyanide- and metal-laden ore as part of a detoxification process that will take years and millions of tax dollars to complete. Trailers filled with portable water treatment systems dot the site, and the scar of the open pit is visible for miles. The contrast with the surrounding landscape, where the austere, rugged peaks of Colorado's San Juan Mountains slope into miles of pristine wilderness, is dramatic.

In just eight years, the Summitville mine has progressed from initial permitting to an U.S. Environmental Protection Agency (EPA) emergency response site. Soon, it will land on the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)¹ national priorities list.

Since the former site operator, the now-bankrupt Summitville Consolidated Mining Company, Inc. (SCMCI), and its parent corporation, the Canadian-based Galactic Resources, Inc., abandoned operations in December 1992, there has been enormous national and international interest in ongoing developments at the mine. The phenomenal estimated costs of cleanup and environmental damage have spurred a state investigation,² and the Federal Bureau of Investigation and U.S. Department of Justice have launched a criminal investigation.³ The mine has become a symbol of corporate irresponsibility, failed engineering, and failed regulation. It is a case study in how financial considerations can dominate mining concerns. It presents a challenge to private environmental organizations, which must decide how to allocate their scarce resources. And it highlights the need to revise state and federal mining legislation.

More than anything else, Summitville is proof that massive environmental damage in the mining industry is not a relic of the distant past, but a very modern concern. If a mine can become a Superfund site in less than 10 years, the domestic mining industry still has significant problems, and federal and state environmental regulation must be strengthened.

[24 ELR 10389]

Background

The Site

Located near the headwaters of the Rio Grande roughly 25 miles southwest of Del Norte, Colorado, the Summitville site covers 1,400 acres on the northeast flank of South Mountain in the San Juan range, within two miles of the Continental Divide. Twenty-one acres of the site are public land administered by the U.S. Forest Service, available for mining under the General Mining Law of 1872.⁴ The remainder is private land, mainly leased. Mine site altitude varies from 11,400 to 12,500 feet, with long, cold winters and short, cool summers. Winter snowfall is heavy; snow depths of 10 feet or more are common, which adds enormously to the cost and problems of winter operations.

The Summitville mining district was discovered in 1870 by a group of prospectors from Santa Fe.⁵ A member of the party, L.J. Wightman, discovered gold in a stream next to their camp.⁶ Mining evolved gradually from surface or placer mining to more complicated methods of extraction. The original miners, joined by others in 1871,⁷ placer mined their claims, using pans, picks, and shovels to sluice gold.

As at many mines in Colorado and other western states, these methods eventually proved unprofitable. Miners turned to more direct methods of extraction. While some placer mining continued into 1888, the first lode discovery in 1872⁸ led to the emergence of lode mining, which progressed from open cuts to shafts to underground workings. Ore was hauled to mills, where it was crushed, mixed with water, and poured over copper/metallic mercury to extract gold from the ore.

Like many mining districts, Summitville experienced a boom-bust cycle. Following the lode discoveries of 1872-73, Summitville saw significant activity from 1875 to 1887.⁹ At that point, the high-grade ore declined. It was less profitable to mine the remaining low-grade sulfide ores. The district became relatively idle by 1890, but mining resumed in 1926 when lessees discovered the "Pickens Cut," a lode yielding $ 500,000 in gold.¹⁰

The 1930s saw the formation of consolidated mining companies.¹¹ Several companies acquired groups of claims and mined them as a unit with more capital. The productivity of these ventures is evident from the extent of visible disturbance, including the Iowa and Reynolds Adits -- two underground tunnels designed to reach the gold lode in previously inaccessible areas and to reduce the high cost of dewatering the mine by creating a free-draining tunnel. These tunnels were major sources of acid mine drainage and heavy metal contamination even before the Summitville mine was built and are much worse now.¹²

The years 1940 to 1950 saw declining activity at Summitville. In 1950, the district experienced several exploration programs and some rehabilitation, and in 1962, some copper, gold, and silver were produced from the Reynolds Tunnel. For the most part, activity was limited to exploration and improvement work until Galactic Resources began the Summitville project in 1984.¹³

Historic Water Degradation

The Summitville region is a highly volcanic assemblage of rock. Mineralization is obvious from the red and yellow colors of rock, lack of vegetation in many areas, and dramatic contrasts in rock formations throughout the district. Studies indicate considerable heavy metal loading and high acidity, even in small tributary streams where no mining has occurred.¹⁴ Naturally occurring exposed reactive geologic formations have further contributed to water degradation in the Alamosa River,¹⁵ and many tributaries have been contaminated by historic mining activity. The Wightman Fork, a tributary that flows by the Summitville site and ultimately joins the Alamosa River, was contaminated prior to Galactic's Summitville project by acid drainage from historic tunnels such as the Reynolds Adit. A recent report cites studies that identified water degradation in the Alamosa River and several of its tributaries as far back as the early 1900s.¹⁶

Table I below shows the extent to which naturally exposed geologic formations have caused high metal concentrations in some area streams. Two of the streams -- Alum Creek and Bitter Creek -- have no history of mining

TABLE I. METAL LOADS FROM DISCHARGING ADITS AND STREAMS DRAINING ALTERED MINERALIZED AREAS IN THE ALAMOSA RIVER BASIN DURING SEPTEMBER 1986.¹⁷

LOAD IN POUNDS PER DAY [24 ELR 10390] activity. The Wightman Fork is the stream that flows by the Summitville mine.¹⁸

It is fruitless now to try to obtain detailed information on water quality prior to the commencement of mining activity in the 1800s, or even on the water quality prior to the opening of the Summitville mine in 1984. Regulators, SCMCI, and various companies that may be designated as potentially responsible parties (PRPs)¹⁹ when Summitville becomes a Superfund site, have engaged in a running debate on this subject, which -- however important to allocation of liability -- is inconsequential, given the lack of substantive scientific data on water quality in the Alamosa and its tributaries.

Galactic has tried to minimize its responsibility for environmental damage by pointing to the acidity and metal concentrations existing prior to its operation. This argument would be more persuasive had the company provided substantive baseline data prior to commencing operation.

Despite evidence of natural stream acidity and heavy-metal content, it is indisputable that recent operations at Summitville have contributed directly and substantially to water quality problems downstream from the mine. Acid drainage from waste piles, repeated uncontrolled discharges of contaminated water from the land application system, and increased flow from the Reynolds Adit and other mine-related sources have resulted in a measurable increase in metal concentrations and a decrease in pH in Wightman Fork and the Alamosa River.²⁰ There have been allegations that these discharges led to fish kills in the Alamosa,²¹ but very limited baseline data on fish populations exist to substantiate these reports. Certainly, at this point, there are few fish to be found. The massive amount of exposed acid generating surface area in the waste piles, the open pit, and the leach pad will continue to react chemically and produce pollution for hundreds or thousands of years if not remediated.

Government agencies are now spending a small fortune attempting to determine, post facto, the extent of Galactic's responsibility and the extent of the responsibility attributable to prior operations or natural conditions. Not only has the lack of definitive baseline data heightened an already futile debate, but as will be seen below, it has contributed directly to on-site problems and hurt the position of the company and others who will become PRPs when Summitville becomes a Superfund site.

The Colorado Permitting Process as It Related to Summitville

The Colorado Mined Land Reclamation Act

Most regulatory responsibility for environmental aspects of mining operations falls on the states. In Colorado, mining operations are regulated under the Colorado Mined Land Reclamation Act of 1976 (the Act or MLRA),²² which is administered through the Colorado Division of Minerals and Geology (DMG)²³ of the Colorado Department of Natural Resources. The Colorado Mined Land Reclamation Board (MLRB) oversees the DMG's activities. The MLRB is a seven-member citizen board appointed by the governor and confirmed by the state senate.²⁴ It has the authority to grant permits and hear allegations of violations.²⁵

The Act makes it unlawful to mine without a permit,²⁶ and requires that all land disturbed after the effective date of the Act be reclaimed to a beneficial use.²⁷ Permit applicants must submit a mining plan²⁸ and a reclamation plan²⁹ and post a bond adequate to fulfill the reclamation plan should the operator default.³⁰

The Act provides for several different types of permits. SCMCI applied for, and was issued, a permit under § 112 of the Act.³¹ Its operation was required to meet the reclamation standards of § 116.³²

Operators must provide rather minimal public notice of their intention to mine a site. They must notify the commissioners of the county in which the project is located,³³ publish a legal notice in a local newspaper,³⁴ and notify by mail any owners of property within 200 feet of the land affected by the mining operation.³⁵

The standards for denying a regular permit are high.³⁶ In addition, the DMG must inspect the site and render a decision within 120 days after receiving a complete application, or the permit issues automatically.³⁷ The MLRB [24 ELR 10391] or DMG bears the burden of demonstrating the noncompliance required to deny the permit.³⁸ If a decision is not rendered within this time period, the permit is granted automatically.

The Summitville Permit: Contents of Application

In 1984, SCMCI began a series of pilot-scale heap leach tests at the Summitville siteto determine the viability of a large-scale, open pit cyanide heap leach. The company planned to mine the same ore zone that had previously been mined by underground methods through surface methods, using a cyanide leaching process to extract the gold from the ore.

Initially, the company sought a permit under § 110 of the Act, which applies to mines affecting less than two acres and extracting less than 70,000 tons per year of mineral or overburden.³⁹ The company designed the pilot-scale heap leaching to test the feasibility of a larger mine. As the § 110 pilot operation proceeded, the company applied for a § 112 permit for a full-scale mine operation on August 31, 1984.⁴⁰

A review of Summitville's § 112 permit application and of subsequent developments at the mine reveals the inadequacy of the statutes governing permitting,⁴¹ the failure-of the DMG and the MLRB to consider fully all aspects of the application before approval, and the failure of the company to comply with the mining and reclamation plan set forth in the permit application. In retrospect, while it can be argued that Summitville's permit application, at least in most respects, complied with the minimal requirements of the Act, the documents and information submitted by the company were, as allowed by existing rules and practice,⁴² scant relative to the proposed size of operations. One of the most noticeable features of the application was the paucity of baseline data.

Lenient regulations left the submission of any substantive data to the discretion of the operator, and required little more than general descriptions of existing environmental conditions.⁴³ SCMCI chose to submit limited baseline data, as the rules permitted. For instance, while the company provided a description of the wildlife, soils, vegetation, and hydrology, it included little quantitative information. An analysis of the information provided indicates that its sources were data provided by mining operations located on the site prior to Summitville rather than current field studies or analyses. SCMCI's discussion of area wildlife includes only one month of site-specific field work; its conclusions are drawn from a collection of studies and articles of varying relevance prepared by government agencies or by consultants for other mining companies.⁴⁴ Baseline data on water quality for tributaries below the mine site were sketchy consisting mainly of studies done by a previous company.⁴⁵ The climatological data, key to determining the water balance in the heap leach pad, were drawn from precipitation and evaporation rates at other locations, and was not site-specific.⁴⁶

The absence of any comprehensive baseline data requirement and the confusion that later arose from this absence, demonstrate the inadequacy of the regulations. Although SCMCI's § 112 permit application may appear incomplete or hastily assembled, it nevertheless complied in at least most respects with baseline data requirements, which required only general descriptions of water, wildlife, soil, vegetation, and climatology.⁴⁷

This led to several problems during the mine's operations. A faulty water balance calculation, based on nonsite-specific climatological data, led to significant problems with the water balance in the heap leach pad. A lack of water quality baseline data led to last-minute, time-consuming negotiations with the Water Quality Control Division. The lack of baseline data has also caused unnecessary disputes over allocating liability for the site's various environmental problems. Had the Act or rules and regulations contained more stringent requirements for baseline data, or had the DMG and the MLRB required such data in the operation's permit amendment, these problems could have been prevented.⁴⁸

The relative leniency of the Act and the MLRB's permit requirements reveal the extent to which legislators had originally conceived the Act as a postmining reclamation statute. This emphasis is evident from the terms of the Act itself.⁴⁹ Regulations under the Act required the applicant to submit both a mining plan⁵⁰ and a reclamation plan; however, the reclamation plan⁵¹ requirements were far more specific than those for the mine plan. Regulations required that the mine plan only identify affected land,⁵² give a general timetable for operations,⁵³ and describe the ore body to be mined and [24 ELR 10392] adjacent land.⁵⁴ The reclamation plan included more specific description for water, wildlife, soil, and vegetation. The regulations required this information solely for reclaiming the mined land at the end of the mining operation.⁵⁵

Experience has taught that reclamation is not solely a "postmining" activity and that concerns for environmental protection and successful reclamation must be integrated into mining operations throughout the life of the mine. These concepts were not widely recognized when Summitville was permitted, as reflected in the sketchy material required, submitted, and approved for the mine plan.

But the mine operator was also clearly to blame. SCMCI often partially changed, omitted, or completely altered key design features outlined in its permit application without consulting the DMG or the MLRB. This clearly violated the Act, which requires a formal amendment process.⁵⁶ Many of these changes occurred early in the construction phase, but were not reported by the company or discovered by the DMG until after completion.

Review of Permit Application

The regulatory agency's review of SCMCI's permit application was inadequate. SCMCI submitted its permit application on August 31, 1984, and the MLRB approved it on October 25, 1984. MLRB approval was conditional on the company's promptly reporting any cyanide spills, submitting construction reports or as-built modifications of the leach pad, and submitting a detoxification leachate model study.⁵⁷

This conditional approach was a critical mistake. The company provided documents piecemeal, repeatedly changed consultants and contractors, and altered key design features of the mine plan without informing the DMG. Certainly, the documents on file when the permit was approved did not describe or contemplate the operation's resulting physical structure.⁵⁸

In addition, the MLRB approved the permit before the public comment period had expired.⁵⁹ The MLRA requires that, after publication of the last legal notice, the public be given 20 days to comment on the proposal and the opportunity to appear at a hearing to contest the application.⁶⁰ Although the MLRB made early permit approval conditional on not receiving opposing comments within the statutory time, early approval indicated both unseemly haste and the low importance that the MLRB apparently placed on public participation. Also, the MLRB was no doubt responding to substantial pressure from local and county officials, chambers of commerce, and businesses to process the permit quickly. Furthermore, no one expressed any objection, before or after the approval.⁶¹

Citizen environmental organizations could have played a key role in preventing the MLRB's premature decision. However, not one environmental group objected to the decision. While it may be easier torally supporters in the wake of an environmental disaster than to participate in the tedious process of preventing one, this may be a change the environmental movement needs to discover how to make.

In this respect, however, things may not have changed in the 10 years since Summitville was approved. In September 1993, after Summitville's problems were clearly known, the MLRB was again asked to approve a permit for a high-altitude cyanide heap leach. The Agency anticipated hard questioning and much public comment. But there was very little.⁶² The Cresson project, approximately five times the size of Summitville, was approved without comment from any of the state's environmental organizations. At the same time, over 200 individuals and groups, including many of those same environmental organizations, have sought formal party status in a single suburban gravel pit quarry application.⁶³ These organizations need to reevaluate their priorities.

Mine Operation and Agency Enforcement

Construction

Summitville began construction of the heap leach pad and liner in the fall of 1985 and continued construction throughout the winter of 1985-86. Many of the problems that would later plague the mine during its operating life resulted directly from the company's decision to complete construction of the liner during the winter. Critical to the success of a heap leaching operation is an impermeable liner under the crushed ore material. This liner has two functions. First, it collects the "pregnant" cyanide solution that has percolated through the heap in order to convey it to the processing plant where the gold is ultimately removed from the solution. Second, it prevents the solution from entering the environment.

Despite the importance of the liner for environmental control, the permit did not restrict winter installation.⁶⁴ Liner construction occurred through the depth of the 1985 winter. This ill-advised winter construction, compounded by frequent snowslides, led to liner rips and tears and inadequately sealed seams that culminated in cyanide leaks soon after the company began initial operations in June [24 ELR 10393] 1986.⁶⁵ A recent Canadian Broadcasting Corporation report describes the severe problems experienced during winter construction:

The pad was built under nightmarish conditions -- subzero temperatures, 35 feet of snow, and avalanches that crashed into the construction site. In the words of one report, the pad liner froze, buckled, cracked and eventually leaked.⁶⁶

In proceeding with winter construction of the liner, the company acted contrary to common sense and its own consultant's advice. It was later alleged that the company was under pressure to meet gold production deadlines to fulfill the terms of a bank loan commitment.⁶⁷ Such haste during the critical phase of construction led to friction between the company and its consultants. On December 17, 1985, SCMCI fired the initial liner construction company, which then sued SCMCI.⁶⁸ Ultimately, the company became involved in litigation with the successor installation contractor, as well.⁶⁹

This haste also led to significant design changes that were neither submitted to the state regulators for approval as permit amendments nor thoroughly thought out.⁷⁰ Safeguards built into the process by one set of designers failed to be implemented by the next set of engineers as the project saw a veritable revolving door of consultants.

For example, the mining plan proposed in the application suggested that the operation would contain three relatively small separate heap leaches.⁷¹ In fact, the company, without amending its permit, designed and built one large heap leach.⁷² Once the ore at the bottom of the heap was leached out, the company placed an intermediate liner on the heap and piled more ore on top of that. The leached ore in the heap is now hundreds of feet high, with a number of intermediate liners. This creates enormous problems for detoxification of the heap material. This system was not approved when the permit was granted.⁷³ Nor was it approved before it was built.

Similarly, because of concern that precipitation would cause moisture to rise in the heap, potentially causing overflow of toxic material, the initial application provided that each November, prior to the snow season, a 20-mil polyvinyl chloride cover would be installed on top of the heap to prevent infiltration from snowmelt.⁷⁴ In addition, the ore heaps would be graded to provide better drainage. These features were not included in the project as built, which contributed to later problems.

The company also changed the location of the waste rock pile. The South Cropsy waste pile was constructed in 1986, at a location not specified in the company's permit. The company did not submit any design or permitting documents to the DMG. Only in 1987, after Summitville was in operation, did SCMCI finally submit an application for an amendment to conform its permit to the mine it had already built and started to operate.⁷⁵

This clearly violated the terms of the MLRA.⁷⁶ The Act required a permittee seeking to increase affected acreage or otherwise revise its reclamation plan to obtain approval for a permit amendment.⁷⁷ In this respect, the statute and regulations were adequate; neither the regulators nor the company had a systematic approach to monitoring construction at the site. Monitoring and managing an enormous and complex construction process under tight time limits is a very difficult task. In this case, the project got out of the control of both the company and regulators.

More stringent regulations governing construction inspection and reporting requirements could have prevented some of the problems surrounding construction of the heap leach pad. Existing regulations contained no requirement for a quality assurance or quality control program, no requirement that the consultants report noncomplying installation to the DMG, and no clear guidance to the DMG or its inspectors on how to treat noncomplying site conditions. The statutes and regulations provided almost no specific construction requirements for mining operations.

The only reporting requirement in the statute was the requirement of an annual report.⁷⁸ The statute did not even require the company to report emergencies to the DMG.⁷⁹ It did not require the DMG to make critical point inspections to ensure integrity of the liner or require the company to certify compliance with design conditions or to stop construction if major problems arose.⁸⁰

The Act provided very limited authority to the DMG's inspectors to issue cease and desist orders in the field.⁸¹ Under most circumstances, only the MLRB could issue cease and desist orders,⁸² and the grounds for issuing such orders were very limited.⁸³

DMG files reveal that while staff performed several inspections of the site during the winter and spring of 1986, heavy snow prevented inspectors from making any comprehensive inspections of the entire heap leach pad area. It was not until a May 29, 1986, inspection that a DMG inspector, Ann Baldridge, identified serious damage to the integrity of the heap leach liner. Records at the DMG show that staff inspectors continued to inspect the mine throughout that spring and made a total of three [24 ELR 10394] inspections during June 1986.⁸⁴ Clearly, the DMG was inspecting the site, and the frequency of inspections indicated serious concern. Despite the growing seriousness of the problems detailed in inspection reports, the DMG apparently favored a "wait and see" policy over issuing citations. The basic problems with the heap leach liner were in fact promptly identified by the inspectors,⁸⁵ but their reports appear to have simply "died" somewhere among the DMG's management, with responsible officials making no record of what they were thinking or whether they were thinking about the situation at all.⁸⁶

Operation and Enforcement

On June 5, 1986, Summitville began leaching operations. The lower liner was completed, but only part of the upper liner was done. Leaching began where the upper liner was finished, while construction continued on the rest of the upper liner. On June 11, the company reported to the DMG that cyanide had began to appear in the leak detection system between the upper and lower liners. The company reported cyanide solution entering the system at just under one-half gallon per minute (gpm).⁸⁷

When state regulators began questioning the source of this contamination, SCMCI, through its consultants, responded with a mass of technical arguments and explanations. The company argued forcefully that while the cause could be a leak in the upper liner, it was probably due to "overspray," where cyanide sprayed over the edge of the completed portion of the upper liner infiltrated back under that liner through the leak detection system.⁸⁸ The company asserted that more careful measures to prevent overspray and completion of the upper liner would solve the problem.

Under the MLRA, a violation of a permit condition or term authorizes the MLRB to issue a cease and desist order, suspend or revoke the permit,⁸⁹ or impose civil penalties.⁹⁰ Yet during this period the MLRB failed to exercise any of these options, and the DMG did not recommend that they be exercised. The MLRB could have easily found that the cyanide leaks constituted a violation of permit conditions or the statutory requirement that off-site areas be protected from damage.⁹¹ Instead, while the project continued to operate, the DMG attempted to address the applicant's technical arguments. At this critical point, the agency failed to take any enforcement actions against the company for its failure to contain cyanide solutions.⁹²

Despite its apparent reluctance to take vigorous enforcement actions against the company for failure to contain cyanide solutions, the DMG did not waste time in noting other unrelated violations soon after the company began operations. In July 1986, following a DMG inspection report that noted possible violations, the MLRB issued its first notice of violation (NOV) and assessed a $ 3,600 civil penalty against the company.⁹³

In June 1986, after the heap was loaded and the mine was in full operation, it became obvious to inspectors⁹⁴ that the cyanide solution improperly existing under the upper liner was not primarily the result of "overspray," but the result of leaks in the liner itself.⁹⁵ By June 18, it became clear that the lower liner was also leaking.⁹⁶

This led to an immediate problem: By the time it became clear that the lower liner was also leaking and that heavy metal bearing cyanide solution was entering the French drain under the liner system, the heap was loaded with a substantial amount of ore.⁹⁷ The company asserted that it would be uneconomical to remove this material from the leach pad in order to repair the liner. Further, the heap already contained a large volume of cyanide solution, which would require storage during the attempted repair, and there was no place to put it.

In September 1986, SCMCI submitted a technical revision to the MLRB and the DMG requesting permission to install a permanent sump and pumpback system.⁹⁸ This would enable the company to pump the contaminated liquids from under the heap leach pad and prevent groundwater contamination. However, the only place to put this liquid was back into the heap. Every time the liquid cycled, more groundwater was brought into the system and more liquid would go into the heap.

The feasibility of putting this liquid back into the heap depended critically on the water balance calculation: Did natural evaporation of the site exceed precipitation (negative water balance) or fall short of precipitation (positive water balance)? In short, left to its own devices, would the heap tend to dry out over time or to accumulate water? The DMG believed, based on the company's baseline data, that evaporation exceeded precipitation, making it safe to add more [24 ELR 10395] liquid to the heap. The baseline data were wrong,⁹⁹ so this conclusion also proved wrong in the long run, with bad consequences.

In October 1986, the DMG and the MLRB approved the revision¹⁰⁰ and a permanent sump -- known as the French drain sump -- was constructed downstream from the mine to intercept the contaminated liquid, which was pumped back into the heap leach pad. Continuous circulation of the contaminated water required that the circulation pumps operate constantly, effectively requiring continued operation of the leaching system.

The implementation of the pumpback system appeared to be a feasible temporary solution to the problem. However, by June 1987, the system began to experience repeated power failures. This resulted in nine cyanide spills over the course of the summer, with the system releasing over 85,000 gallons of contaminated fluids into Cropsy Creek.

Up to this point, the Colorado Water Quality Control Division (WQCD) had not been involved with the Summitville project. However, in December 1989, following the cyanide spills, the WQCD issued a NOV and assessed a $ 27,000 penalty. A month earlier, the MLRB had also issued an NOV, but refrained from assessing a fine because the WQCD was also taking action.¹⁰¹

At this point, the Colorado legislature dealt regulators a major blow by cutting funding for the Minerals Program by 50 percent.¹⁰² Thus, just at the point that the problem was escalating out of control, the DMG was distracted by layoffs, demoralization, and administrative confusion.

Water Quality Control Division Enforcement Actions and Permitting

By 1988, it had become obvious to the company that new means were needed to deal with the cyanide solution escaping the heap leach pad.¹⁰³ Since the contaminated groundwater had been pumped back into the heap, the accumulation rate in the heap had doubled. Increased liquid depth in turn increased the hydrostatic head on the liner and the rate of leakage from the heap.¹⁰⁴

Unanticipated water balance problems in the heap exacerbated the problem. Natural precipitation exceeded evaporation, gradually increasing the water level in the heap. The problem was further exacerbated by the failure to install a winter cover over the heap to prevent snowmelt infiltration, a design feature recommended by Summitville's own consultants, but never implemented by the company.¹⁰⁵

Prior to this point, the company was unable to consider discharging the fluids from the heap because Summitville had not acquired a Colorado Pollutant Discharge System (CPDS) permit: The company had represented that the project would be a "zero discharge facility," and thus avoided any Clean Water Act permitting. Faced with the prospect of rising heap leach pad fluids, however, the company entered into negotiations with the WQCD to seek a CPDS permit.¹⁰⁶

Summitville faced many hurdles in obtaining the permit. Because there were no good baseline data available, water quality regulators were extremely hesitant to accept the company's view of the extent of prior contamination in local streams. Water quality regulators, therefore, required the company, if it was to discharge the fluids, to demonstrate compliance with the stringent water quality standards applicable to pristine waters. In its application, Summitville was forced to comply with best available technology (BAT) standards, which the company was ultimately unable to meet.¹⁰⁷

In May 1989, the WQCD approved Summitville's discharge permit. A month earlier, the company had obtained DMG and MLRB approval of a process solution water treatment plant, which the company would use to treat water before discharging it into the Wightman Fork. Treating the water and discharging it was seen as a solution to the continued ominous rise of the liquid level in the heap. By June 1989, it became apparent that the water treatment plant was incapable of treating water to the extent required by water quality regulators.¹⁰⁸ Further, the stringent water quality standards imposed on the company lowered the output rate of the treatment plant. This limited the ability of the water treatment plant to lower the water level in the heap. The water treatment plant could slow but not prevent the inexorable rise of fluid.

By this point, SCMCI may well have been regretting the absence of the WQCD during the initial permitting of the mine and the lack of any water quality baseline data. Had such baseline data been provided, more realistic effluent levels would have been established. This would have given the company a better chance of complying with effluent limits.

The Federal Water Pollution Control Act,¹⁰⁹ commonly known as the Clean Water Act (CWA), seeks to restore and maintain the chemical, physical, and biological integrity of the nation's waters.¹¹⁰ It reasonably could be expected that mining operations, which commonly use or affect water sources, would be regulated under the CWA. Historically, however, the CWA has only regulated "point source discharges," [24 ELR 10396] as defined by the CWA¹¹¹ and the Colorado Water Quality Act (CWQA).¹¹²

Despite the conservation objectives of the CWA and the CWQA, the regulatory control of the CWA over many mining operations is hindered by their claim to be nondischarge facilities. Amendments to the CWA have sought to broaden environmental protection by expanding federal and state authority. These requirements might have played a critical role in Summitville's mining operation if they had existed at the time the permit was granted. The stormwater regulations prescribed by CWA § 1342(p)¹¹³ and embodied in EPA's rules at 40 C.F.R. § 122.26(b)(14)¹¹⁴ provide for the state to require a permit for certain discharges composed entirely of stormwater. In addition, Congress has authorized a "nonpoint source program" under the CWA for more generalized runoff.¹¹⁵ This program, however, only became effective in Colorado in 1989, when the federal government provided funding for a nonpoint source program. The program was not an effective regulatory tool at the time of the Summitville permitting.

The Colorado legislature has now adopted enabling legislation for the stormwater program, which became effective September 30, 1993.¹¹⁶ The WQCD will then begin the process of subjecting sites such as Summitville to the stormwater program. The WQCD, through its Industrial Permits and Enforcement Unit, is also developing a formal WQCD policy that will require permits for certain "zero discharge" facilities. Cyanide heap leach mines, like Summitville, are one type of facility that will be required to obtain a water quality permit even at the zero discharge level. The existence of these requirements during Summitville's initial permitting process would have involved water quality regulators earlier in the project and could have reduced the environmental damage the mining operation caused.

Land Application

On realizing that its water treatment plant would never meet the BAT effluent standards prescribed by the WQCD, SCMCI was forced to consider other options for eliminating accumulating heap liquids. The company submitted yet another technical revision to the DMG, this time for a land application system. The company was to spray contaminated liquid as a fine mist over a relatively flat piece of land, where the liquid would evaporate and percolate at a controlled rate into the ground. The lack of substantive groundwater regulations allowed the MLRB to approve this type of land application system.¹¹⁷

It is hard to imagine what else could have been done at this point, except stand by and watch the heap overflow. The theory behind the land application system was that the cyanide in the liquid would either break down in the presence of oxygen and ultraviolet light or absorb onto soil particles, avoiding any discharge into the Wightman Fork.

Unfortunately, regulators failed to require, and the company failed to complete, an adequate analysis of the subsurface conditions for the land application system. The plan was particularly poorly thought out by the company and its consultants. While the company did submit information on subsurface conditions, this information contained nothing to indicate that a clay layer existed a short distance below the surface, preventing water from percolating to the extent expected. Further, the company did not own all of the land on which the land application was to occur. SCMCI was unable to obtain permission from one private landowner to use a portion of his land that was proposed and approved for the land application system. As a result, the amount of liquid initially proposed to be sprayed over roughly 17 acres of land was sprayed over five to six acres. This change was not promptly called to the attention of the DMG. Nor was it the subject of a permit amendment. All of these factors contributed to overland runoff of solution into the Wightman Fork.¹¹⁸

In a July 1990 inspection of the site, WQCD inspectors discovered that the land application system was resulting in overland flow of contaminated fluids into the Wightman Fork. The agency did not act until February 4, 1991, when it issued a NOV for discharging without a permit.¹¹⁹

Settlement Agreement

By this time the signs of accumulating environmental problems had become easy to read. The land application system was discharging large amounts of contaminated liquid into the Wightman Fork. Water quality in the Wightman Fork showed a decrease in pH from 1989 to 1990, and an increase in metals and cyanide. In addition, drainage from the improperly located Cropsy waste pile was resulting in toxic seepage, probably the biggest long-term water quality problem at the site. This was discharging to the Cropsy Creek from the "550 Diversion." Breakdowns of the pumpback system were also contributing to unpermitted discharges, which continued throughout 1991.¹²⁰ In February 1991, SCMCI received NOVs from both the WQCD and the MLRB due to these problems.¹²¹

On July 1, 1991, SCMCI, the MLRB, and the WQCD signed a settlement agreement addressing SCMCI's accumulating violations.¹²² The two agencies and the company drafted the agreement in response to the problems that prompted the February 1991 NOVs. The settlement agreement, while not addressing every shortcoming of the Summitville operation, succeeded in achieving some very significant on-site environmental improvements and resolving [24 ELR 10397] some of the legal and permitting problems.¹²³ The company and the agencies signed a later amendment to the agreement on July 20, 1992.¹²⁴ In addition to addressing stormwater requirements, the amendment raised the company's bond by $ 5 million.¹²⁵

The stipulations of the 1991 agreement are indicative of the rigorous analysis and straightforward enforcement that should have been exercised from the beginning of the mine's operation. It is true that because SCMCI had applied as a nondischarge facility, it avoided dealing with the more detailed discharge permit requirements. However, had the DMG and the MLRB exercised the same attention to detail in their review of the permit application in 1984, many of these problems might have never occurred.

The regulators' optimism that the company had committed itself to a program that would remedy some of the site's worst problems was dashed in December 1992, when the company declared bankruptcy without warning, terminating its commitment to pay for continuing operation of the water treatment plant and the complex system of pumps and pipes that was keeping massive active discharges of contaminants from overflowing the heap. The company's withdrawal from its agreements with 11 days' notice was a supreme act of corporate irresponsibility. The bankrupt mining operation left both state and federal regulators, without any advance warning, heirs to an abandoned mine at the beginning of one of the most severe winters in recent history.¹²⁶ The timing of the bankruptcy was extremely unfortunate and has been the subject of much deserved criticism.¹²⁷

Analysis

In retrospect, Summitville's permit should have prohibited winter construction of the liner. Beyond that, the DMG clearly should have required the operation to shut down in June 1986, when the leak was first detected. The failure to do this put regulators in a bind. When the DMG eventually concluded that both the primary and secondary liners were failing to contain the cyanide solution, it could have ordered that no more cyanide be added to the circuit, but the company would still have had to operate the circulation pumps to protect the groundwater. The regulators' rationale for choosing not to exercise this option may have been that, because it was necessary for the circuit to operate, the best could be made of a had situation by allowing continued gold recovery, which would provide the company with a source of revenue for environmental protection and allow workers to continue their employment. The decision to allow the operation to continue placed regulators in the defensive position of "damage control."

The fact that SCMCI's performance bond was inadequate fatally weakened regulators' bargaining position in dealing with the company. If the mine was closed, the bond would be inadequate to complete reclamation, a fact of which all involved were acutely aware.

Some of the problems at Summitville also arose from the company's failure to report accidents to the DMG in a timely manner. Problems were discovered weeks, sometimes months, after they had occurred, making reclamation more expensive. Regulations requiring notice to the DMG could have partially remedied this problem.¹²⁸

Generally, failure to regulate more effectively can, in part, be blamed on less than adequate statutory authority. The MLRA failed to provide sufficient authority to the MLRB to deny a permit and failed to include any emergency reporting requirements that would have held SCMCI responsible for contacting the DMG following cyanide spills or other environmentally harmful occurrences.¹²⁹

An additional factor contributing to Summitville's problems was the perceived lack of political support for the regulatory program, concretely demonstrated by the legislature's 50 percent reduction of the "Minerals Program" budget in 1987.¹³⁰ This substantial reduction of the program's funding acted as a catalyst in the Summitville disaster.

Bonding

Adequate bonding may be the most important single element of the MLRA program. Deficiencies in the Act's bonding requirements became evident soon after Summitville declared bankruptcy in December 1992. While the MLRB had increased the company's bonding requirement several times during the life of the mine,¹³¹ it was soon clear that the amount was inadequate to remedy the environmental [24 ELR 10398] damage at the site. Part of the bond's inadequacy was due to the fact that the MLRB, as required by law, accepted a "salvage credit bond" of $ 913,000, secured by on-site mining equipment, which later proved to be nearly valueless, subject to prior county tax liens, and needed at the site for environmental control.¹³² In addition, the bond originally calculated at the time the permit was approved did not include the estimated cost of heap detoxification or water treatment.

It may not have been possible to bond adequately for the cleanup necessary at the Summitville site. Bonds prescribed by the MLRB are based on the estimated cost of reclamation. The Act requires the MLRB to determine the amount and duration of financial warranties based on the nature, extent, and duration of the proposed mining operation and the magnitude, type, and estimated cost of planned reclamation.¹³³ Absent from the factors that may be considered for reclamation bonds is the possibility and potential effect of an unpredictable disaster.¹³⁴ Even the most careful and comprehensive analysis of Summitville's permit application would not have produced a bond figure sufficient to cover ultimate costs of the unanticipated problems. This is not to exonerate the DMG. The fact is that in 1984, bonds were not set on any predictable, scientific basis. Summitville's bond was inadequate to pay for even the anticipated costs of reclamation.

The inadequate bond value forced regulators to enter into long and tedious negotiations with the company instead of simply forfeiting the bond and closing the mine.¹³⁵ Regulators lacked the leverage and flexibility that an option to forfeit on an adequate bond would have provided.¹³⁶

SCMCI's abrupt bankruptcy and inadequate bond point to inadequacies in the existing regulations. The MLRA places full legal liability for the ultimate cost of reclamation on the operator.¹³⁷ The bond is the DMG's principal protection from an operator's insolvency. If, as has often been the case in the mining industry, the operation becomes insolvent, recovery is limited to the value of the bond; the Act does not provide for recovery from other company assets or from the company's owners or officers.¹³⁸ The Act differs in this way from the Surface Mining Control and Reclamation Act,¹³⁹ which explicitly provides for the personal liability of persons controlling the operator for the reclamation costs.¹⁴⁰

Post-Bankruptcy: Environmental Conditions and Future Recommendations

Environmental Damages

Following SCMCI's bankruptcy, government agencies, with almost no warning, inherited a complex site with enormous problems. They began a difficult battle during one of the worst winters in many years. By the time EPA assumed control of the mine site¹⁴¹ under its emergency authority following the company's bankruptcy, the liquid in the heap had far exceeded its anticipated level¹⁴² and was threatening to overflow with the anticipated spring meltoff. During spring runoff, the heap had the potential for discharging heavily contaminated liquids at the rate of 300 gpm. Currently, EPA is working to treat and contain three major sources of contaminated water on site: (1) the heap leach pad, where an accumulation of metals and cyanide, including contaminated runoff from an acidic waste pile, continue to collect; (2) the French drain; and (3) the Reynolds Adit.¹⁴³

Summitville's legacy also includes millions of tons of acid-bearing, metal-heavy waste rock that continue to release toxins into ground and surface water sources. The Cropsy waste pile, located in violation of the Mined Land Reclamation Permit, contains six million tons of sulfide-rich waste rock and continues to contaminate surrounding waters. To limit discharges from this source, effluent from the Cropsy is being diverted to the heap pad, once again increasing the liquid in the heap. The site also has smaller waste rock dumps, which are sources of acid rock drainage. None were being controlled or treated until EPA began its emergency response action.

Excavation of the open pit exposed considerable acid-bearing rock, and the progression of the pit design from a terraced configuration, over which most surface water flowed, to an open pit configuration, into which most surface water infiltrates, has increased the collection of precipitation and infiltration inside the pit.¹⁴⁴ The addition of waste and oxygen to the ores generates sulfuric acid and releases heavy metals. This material is finding its way into, and eventually drains out of, the historic Reynolds Adit.

Since assuming control of the site, EPA has spent over $ 10.8 million on monitoring. During the winter, EPA was spending an average of $ 30,000 a day to prevent heap overflow. Overall costs during the winter totalled $ 3.5 million dollars.¹⁴⁵ It is estimated that cleanup could cost up to $ 120 million.¹⁴⁶ The immediate project of moving the six-million ton Cropsy waste pile to an acceptable location is in itself an enormous engineering task.

[24 ELR 10399]

The expected Superfund listing of Summitville is triggering a rash of litigation. Galactic, its officers, other mining companies whose only involvement in Summitville may have been a little core drilling or sampling, landowners, engineering consultants, and others are girding for battle over their relative responsibilities for on-site conditions. For EPA, state regulators, lawyers, potential criminal defendants, and the various mining companies who will be PRPs at this site, Summitville will go on for a long time.

This is one of the costliest failures in the recent history of the mining industry. However, the cleanup cost is likely to be dwarfed by the increased price industry will pay in the form of more stringent regulation and public distrust.

Public Land Law

While the blame for the failures of Summitville can be placed at least partially on the inadequacies of state regulations, the mine's failure also demonstrates the weaknesses in existing federal laws governing mining activity. Among these laws is the General Mining Law of 1872 (the 1872 Mining Law), which regulates mining activity on public lands. The 1872 Mining Law grants an individual the right to prospect on public land, to locate a mining claim, and to mine the claim.¹⁴⁷ Drafted to encourage exploration and extraction on public lands, the Act requires no royalty and carries no bonding or reclamation requirements, though some such requirements are now itposed under the Federal Land Policy and Management Act.¹⁴⁸ The public lands are open to any interested prospector.¹⁴⁹

While only 21 acres of the project site are currently administered by the U.S. Forest Service (Forest Service), most of the private land was originally public land that only became private under the 1872 Mining Law, and the Forest Service did precious little to use any leverage it did have to ensure resource protection.

The National Environmental Policy Act (NEPA)¹⁵⁰ partially mitigates the 1872 Mining Law's "open door policy." Under NEPA, the Forest Service must conduct an environmental assessment (EA)¹⁵¹ to determine whether a proposed action on public land is a major federal action significantly affecting the quality of the human environment.¹⁵² If it is, the Forest Service must prepare a full environmental impact statement (EIS). Less damaging alternatives must be considered.

Nevertheless, the 1872 Mining Law, as interpreted by complacent land management agencies, severely curtails NEPA's effect. In completing its EA and issuing a "finding of no significant impact" on the Summitville project, the Alamosa District of the Rio Grande National Forest argued that it had approved the mine's operating plan because it had no legal alternative. The District wrote:

The no action alternative would be in violation of the 1872 General Mining Law which allows for exploration and development of minerals on public domain lands. This alternative would also deny information about the nation's mineral reserves.¹⁵³

While it must be kept in mind that the Forest Service approval extended only to use of its 21 acres and various associated road rights-of-way, the idea that this project has "no significant impact" defies logic. The 1872 Mining Law, particularly in the hands of a land agency with a long track record of dodging difficult environmental concerns and a desire to portray itself as helpless whenever it faces a tough issue, can render the EA/EIS process relatively meaningless. The 1872 Mining Law can also put land management agencies assessing proposed mining operations in the difficult position of overlooking problems that realistically should merit denial of, or drastic changes to, a mine proposal. A more critical assessment of the operating plan by the Forest Service could have identified and targeted potential problems before they occurred.

Proponents of the proposed Mineral Exploration and Development Act of 1993 (MEDA)¹⁵⁴ have recognized this problem by providing public land management agencies with the authority to deny approval of mining operations. This Act would strengthen discretion over permit applications and lend more weight to the NEPA EA process. MEDA would also address inadequate bonding requirements. Approximately $ 12 million¹⁵⁵ has been spent to date on efforts to monitor the site at Summitville. SCMCI's $ 4.7 million bond, set as part of the settlement agreement described above, would cover only a fraction of the reclamation cost, even if it were all in a form convertible into cash, which it is not. This bonding was only achieved after lengthy negotiations with the company.¹⁵⁶

MEDA would impose a royalty requirement of 8 percent of the value of production¹⁵⁷ and more stringent claims maintenance requirements calling for annual rental fees.¹⁵⁸ One-half of all royalties collected would be combined with annual and other fees to fund the "Abandoned Hardrock Mine Reclamation Fund,"¹⁵⁹ which would be distributed both directly and through grants to eligible state reclamation programs to address erosion, groundwater contamination, and other environmental damage. While there is much dispute over the specifics of different proposed legislation, some revision of the 1872 Mining Law is imperative.

A comprehensive reclamation fund would ensure adequate funding for state regulatory agencies should the mine operator declare bankruptcy or otherwise abandon reclamation procedures. In addition, a more stringent federal mining law, combined with a greater willingness by federal land agencies to deny or condition permits, would lessen the burden on state regulatory agencies.

Inactive or abandoned hardrock mines are a significant problem in the United States today. It has been estimated [24 ELR 10400] that there are 557,650 hardrock and abandoned mine sites in this nation and that the cost of cleaning them up will range from $ 32.7 billion to $ 71.5 billion.¹⁶⁰ The current federal, state, and private funds spent to reclaim such sites do not address the magnitude of this problem.¹⁶¹

In an ideal world, it should not matter whether the acid drainage at Summitville came from Galactic's operations, operations during the 1930s, or operations during the 1890s. Funds should be spent to maximize environmental cleanup, not resolve legal fine points. At Summitville, a small fortune has already been spent trying to allocate liability.¹⁶²

1993 Amendments to the Colorado Mined Land Reclamation Act

Following the Summitville bankruptcy, an awareness of the serious deficiencies in current legislation led lawmakers and members of the DMG and the MLRB to draft legislative revisions. The 1993 amendments to the MLRA¹⁶³ recognize the scale and hazards of modern chemical mining by creating a new class of permits for operations that (1) use toxic or acidic chemicals or (2) expose or disturb acid- or toxic-forming materials as a result of the mining operation.¹⁶⁴ The amendments require operators of these mines to meet more stringent permitting standards and to develop environmental protection plans.¹⁶⁵ This is an explicit recognition that reclamation and environmental protection must be integrated into mining operations throughout the life of the mine, not just aftermining has ceased. Similar to the right that MEDA would grant to public land management agencies to deny approval of mining operations, amendments to the MLRA grant the MLRB the right to deny a permit if there are serious or unresolved public health or environmental concerns.¹⁶⁶ The revised MLRA also sets forth emergency reporting requirements, which require a company to report any accidents immediately.¹⁶⁷ It allows the MLRB to extend the review period by 60 days for complex operations.¹⁶⁸

The amendments to the MLRA also strengthen the MLRB's bonding authority by allowing it to reject bonding vehicles (such as real estate) that often prove inadequate or difficult to administer, by abolishing the "salvage credit" bond, and by granting the MLRB discretion to accept or reject letters of credit.¹⁶⁹ In addition, the amended Act creates an emergency response fund similar to the federal fund proposed in MEDA that would use the monies collected from civil penalties to address reclamation problems requiring immediate attention.¹⁷⁰ As an additional safeguard, the amended Act increases permit and annual fees to reflect better the cost of permitting and inspecting mining facilities.¹⁷¹ This has allowed a staffing increase at the DMG, which now has 16 professional staff members¹⁷² to monitor the state's 1,935 mines.¹⁷³

The environmental problems in the domestic mining industry are not a relic of the distant past. They can and will happen any time that effective regulatory programs are not maintained.

Conclusion

The environmental tragedy of Summitville cannot be blamed on one party alone; all parties involved share some of blame. The company should have complied strictly with applicable regulations. The company's consultants should have monitored the mine's technical problems more closely and expressed their reservations more clearly. State administrators should have acted more decisively when there was still time. Legislators should have supported a more effective regulatory program.¹⁷⁴ And the public should have participated more diligently in the approval process. Blaming Summitville on an irresponsible promoter -- however much justification there may be for this -- misses a vital point. The mining industry has long been a haven for wild promotions, and an effective regulatory scheme must take this into account.¹⁷⁵

Strictly speaking, Summitville is not the fault of local, state, or national environmental organizations. But those organizations should learn at least one important lesson from Summitville: An environmental presence in the decisionmaking process may help avert many future catastrophes. It is easy to raise funds after an Exxon Valdez disaster, but raising money for, and public interest in, preventing such a disaster before it happens is more important.

The MLRB repeatedly sees dozens or even hundreds of citizens protesting the construction or operation of local gravel quarries. While these quarries may pose environmental problems, the magnitude of these problems is not anywhere near the magnitude of the problems created by a Summitville project. Just as often, the MLRB receives no public comment, or only minimal comment, on massive chemical mining projects because the impact of these projects on citizens' interests seems remote.¹⁷⁶ This is a major challenge for environmental groups in the 1990s.

The Summitville situation also creates a challenge for state and federal legislators. Statutes encouraging agency skepticism in the permitting process, such as by authorizing extended review or permit denials, can help discourage operations that create excessive environmental risks. [24 ELR 10401] In addition, coordination between agencies at the beginning of the permitting process can help lessen misunderstanding and encourage cooperation while generating important baseline data. In the case of the CWA, federal or state requirements for baseline data from supposed nondischarge facilities would minimize problems should discharges occur later.

The benefits of domestic environmental protection are limited unless there is also increased international cooperation. Without unified efforts, environmental enforcement in the United States will only export the problem.¹⁷⁷

If the United States is to achieve the twin goals of maintaining a viable domestic mining industry and preventing the kind of environmental tragedy represented by Summitville, we must realize that no one except the irresponsible fringe element of the mining industry is benefitted by weak regulatory programs or lax enforcement. Certainly, the events at Summitville have led to a nationwide push for better environmental regulation. Just as clearly, some of the proposals that have been advanced are ill-considered, and would achieve limited environmental benefits while imposing enormous costs on the mining industry. The industry itself would be much better off if it had thrown its powerful political weight behind maintenance of a reasonable, balanced, and adequately funded program in Colorado. The law abiding mining industry will pay an enormous share of the price at Summitville, as will downstream farmers and recreationists, taxpayers, local government, and others. The ultimate lesson is that we are a long way from having "solved" the regulatory problems of lessening the impacts of mining on environmental resources on a domestic U.S. level, much less on an international basis.

1. 42 U.S.C. §§ 9601-9675, ELR STAT. CERCLA §§ 101-405. For a discussion of CERCLA liability for abandoned mines, see Jan G. Laitos, Federal CERCLA Liability for Abandoned Mines, 23 COLO. LAW 371 (1994). See also National Priorities List for Uncontrolled Hazardous Waste Sites, Proposed Rule No. 14, 58 Fed. Reg. 27507 (May 10, 1993) (proposal to list the Summitville site on the CERCLA national priorities list).

2. Katie Kerwin, Romer Orders Inquiry Into Mining Company, ROCKY MTN. NEWS, Apr. 7, 1993, at 3A.

3. Mark Obmascik, Summitville Mess Probed, DENV. POST, Jan. 25, 1994, at 1A.

4. 30 U.S.C. §§ 22-54 (1988).

5. It is possible that Spanish explorers may have mined the site earlier. See Deanna B. Shriver, History of the Summitville Mining District, SAN LUIS VALLEY HISTORIAN, vol. XXII, no. 1, at 1-2 (1990).

6. Id. at 8.

7. Id.

8. Id.

9. Knight Piesold & Co., Chronological Site History, Summitville Mine 16 (May 25, 1993).

10. Id. at 17.

11. Id.

12. Knight Piesold & Co., supra note 9, at 3.

13. Knight Piesold & Co., supra note 9, at 21.

14. J. David Holm & Robert M. Kirkham, Environmental Problems and Reclamation Activities at Inactive Metal Mine and Milling Sites in San Luis Valley, WATER IN THE VALLEY (Colorado Groundwater Ass'n ed. 1989).

15. Id. at 1.

16. Knight Piesold & Co., supra note 9, at 43.

17. Holm & Kirkham, supra note 14. September is a relatively low flow month and it would not be surprising if spring and summer loading was a good deal higher.

18. The very fact that local creeks bear names such as Iron Creek, Bitter Creek, and Alum Creek is some indication of the natural level of mineralization. Almost two tons of iron per day flows down Alum Creek alone. Holm & Kirkham, supra note 14.

* Includes some mine drainage

19. 42 U.S.C. § 9607, ELR STAT. CERCLA § 107.

20. Knight Piesold & Co., supra note 9, at 43-51.

21. Kit Miniclier, Mine's Toxic Leaks Render River Lifeless, DENV. POST, Nov. 11, 1991, at 1A; see also Memorandum from Donald P. Holmer, Professional Engineer, Colorado Water Quality Control Division, to J. David Holm, Director of Water Quality Control, Colorado Water Quality Control Division (Aug. 2, 1990) (on file with the Colorado Division of Minerals and Geology); Memorandum from J. David Holm, Director of Water Quality Control, Colorado Water Quality Control Division, to Pat Nelson and Robert Shukle, Professional Engineers, Colorado Water Quality Control Division (Aug. 2, 1990) (on file with the Colorado Division of Minerals and Geology).

22. COLO. REV. STAT. §§ 34-32-101 to -127 (1991). An excellent analysis of the Act is contained in a study by the Environmental Law Institute. See ENVTL. L. INST., Regulation of Mining Waste in Colorado, in STATE REGULATION OF MINING WASTE: CURRENT STATE OF THE ART (1992).

23. At the time of the permit issuance, the DMG was known as the Mined Land Reclamation Division.

24. COLO. REV. STAT. § 34-32-105 (1991). The seven members are appointed to represent various constituencies. Id. § 34-32-105(2). One of the authors is a member of the MLRB, appointed to represent the conservation community.

25. Id. § 34-32-107; see also id. § 34-32-105.

26. Id. § 34-32-109(1).

27. Id. § 34-32-102(3)(b).

28. Id. § 34-32-112(2).

29. Id. § 34-32-112(1).

30. Id. § 34-32-117.

31. Id. § 34-32-112. But see infra notes 41, 47 and accompanying text. The Mineral Rules and Regulations classify such operations as "regular" operations. 2 COLO. CODE REGS. § 407-1 (Rule 2) (1988).

32. COLO. REV. STAT. § 34-32-116 (1991).

33. 2 COLO. CODE REGS. § 407-1 (Rule 2.2.1(1)) (1988).

34. Id. § 407-1 (Rule 2.2.2(3)).

35. Id. § 407-1 (Rule 2.2.2(4)).

36. COLO. REV. STAT. § 34-32-115(3) (1991); see also ENVTL. L. INST., supra note 22, at 8.

37. COLO. REV. STAT. § 34-32-115(1) (1991).

38. Id. § 34-32-115(4).

39. Id. § 34-32-110(1)(a).

40. GALACTIC RESOURCES, INC. REGULAR (112) PERMIT APPLICATION M-84-157 (Aug. 31, 1984) [hereinafter AUGUST 1984 PERMIT APPLICATION] (on file with the DMG); see also Luke J. Danielson & Alix McNamara, The Summitville Report: What Went Wrong 6 (Mar. 25, 1993) (on file with the Colorado Department of Natural Resources).

41. For a discussion of these inadequacies, see ENVTL. L. INST., supra note 22, at 53-55.

42. COLO. REV. STAT. § 34-32-202-127 (1991); 2 COLO. CODE REGS. § 407-1 (Rules 1-8) (1988).

43. 2 COLO. CODE REGS. § 407-1 (Rule 2.1.2(8)-(12)) (1988).

44. AUGUST 1984 PERMIT APPLICATION, supra note 40, at H32-H33.

45. While SCMCI did supply some baseline data, most of this was based on studies done by consultants to prior operations, and was inadequate for determining average flow and loading rates. When SCMCI ultimately was forced to apply for a discharge permit, the Colorado Water Quality Control Division officials found the data inadequate. See Danielson & McNamara, supra note 40, at 34.

46. Knight Piesold & Co., supra note 9, at 34-35.

47. 2 COLO. CODE REGS. § 407-1 (Rule 2.1.2(8)-(11), (K)) (1988) ("(K)," which appears in the Code of Colorado Regulations, should probably read "(12)").

48. The Colorado Revised Statutes, as amended by Act of June 3, 1993, require an "environmental protection plan" for all operations classified as "designated mining operations." COLO. REV. STAT. § 34-32-116-5 (1993) (Colorado Revised Statutes § 34-32-103(3.5) defines "designated mining operations"). Proposed amendments to the Mineral Rules and Regulations of the MLRB require extensive baseline for designated mining operations as a provision of the environmental protection plan. Proposed Amendment to the Mineral Rules and Regulations of the Colorado Mined Land Reclamation Board, Rule 6.4.20 (to be codified at 2 COLO. CODE. REGS. § 407-1). Under the amended statute, Summitville would have been classified as a "designated mining operation." COLO. REV. STAT. § 34-32112.5 (1993).

49. For a comprehensive analysis of the regulation of Colorado's mining waste, see ENVTL. L. INST., supra note 22.

50. 2 COLO. CODE REGS. § 407-1 (Rule 2.1.2(4), (5)) (1988).

51. COLO. REV. STAT. § 34-32-116 (1991).

52. Id. § 34-32-103(1.5); 2 COLO. CODE REGS. § 407-1 (Rule 2.1.3(4)(d) (1988).

53. 2 C § 407-1 (Rule 2.1.2(5)(e)) (1988).

54. Id. § 407-1 (Rule 2.1.2(5)(f)).

55. Id. § 407-1 (Rule 2.1.2(8)-(11)) (1988).

56. COLO. REV. STAT. § 34-32-112(8) (1991); see also ENVTL L. INST., supra note 22, at 8.

57. GALACTIC RESOURCES, INC. MINING AND RECLAMATION 112 PERMIT NO. M84-157 (Oct. 25, 1984) (on file with the DMG).

58. AUGUST 1984 PERMIT APPLICATION, supra note 40.

59. Colorado Mined Land Reclamation Division, Minutes, Oct. 14, 1984; see also Danielson & McNamara, supra note 40, at 9.

60. COLO. REV. STAT. § 34-32-114 (1993).

61. Danielson & McNamara, supra note 40, at 8.

62. It should be noted that the mine did attract some initial opposition, prompting the formation of a group, Citizens for Victor! (Victor is a small Colorado town located approximately one mile east of the Cresson project.) However, the group's concerns were negotiated with the company before the permit came to the attention of the MLRB. Citizens for Victor! agreed to withdraw formal opposition to the mine after the company agreed to keep all mine facilities out of the Wilson Creek drainage. Telephone Interview with Roger Flynn, Director, Western Mining Action Project, and Attorney for Citizens for Victor! (Feb. 16, 1994).

63. BRADLEY FAMILY PARTNERSHIP, SOUTH TABLE MOUNTAIN QUARRY, PERMIT M-92-112 (on file with the DMG).

64. However, a consultant's report submitted as part of the permit application does include general provisions for liner construction during dry conditions. See Klohn Leonoff, Hydrological and Geotechnical Engineering, Summitville Heap Leach Facility, vol. 1, at v-9, 14, 26 (Aug. 29, 1984) (on file with the DMG).

65. Anne Baldridge et al., Inspection Report of Summitville Project (June 18, 1986) (on file with the DMG).

66. The Fifth Estate (Canadian Broadcasting Corporation television broadcast, Sept. 21, 1993).

67. Summitville Consol. Mining Co. v. Klohn Leonoff Ltd., No. C880756, slip op. at 16-17 (Sup. Ct. Brit. Colum. July 19, 1989); see also Danielson & McNamara, supra note 40, at 18-19.

68. Gundle Lining Sys., Inc. v. Summitville Consol. Mining Co., No. 86-M-15 (D. Colo. Jan. 6, 1986).

69. Klohn Leonoff Ltd., slip op. at 16-17.

70. Company management implemented as many as six sets of design changes during construction without a formal application for permit amendment. Paul Jones, former Chairman of the Board, Colorado Mining Association, and current Chairman of the Summitville Mine Task Force, Colorado Mining Association, Statement at the Earth Resources Consortium, Denver, Colorado (Oct. 7, 1993).

71. AUGUST 1984 PERMIT APPLICATION, supra note 40, at D24.

72. Knight Piesold & Co., supra note 9, at 27.

73. AUGUST 1984 PERMIT APPLICATION, supra note 40, at D25-D34.

74. Klohn Leonoff, supra note 64, at 15.

75. Knight Piesold & Co., supra note 9, at 32.

76. COLO. REV. STAT. § 34-32-109(7) (1991).

77. Id. § 34-32-112(8).

78. Id. § 34-32-116(3).

79. Id. §§ 34-32-101 to -127.

80. Id.

81. Id. §§ 34-32-123, -124.

82. Id. § 34-32-124(2).

83. Id. § 34-32-124.

84. Anne Baldridge et al., Inspection Report of Summitville Project (June 18, 1986) (on file with the DMG); Anne Baldridge, Inspection Report of Summitville Project (June 23, 1986) (on file with the DMG); Anne Baldridge, Inspection Report of Summitville Project (June 27, 1986) (on file with the DMG).

85. See supra note 84.

86. While there may have been some communication between DMG inspectors and management, no record of any such communication exists in the DMG's Summitville files. Research of the DMG files (February & March 1993, October & November 1993).

87. Letter from Roger Leonard, General Manager, SCMCI, to Anne Baldridge, Reclamation Specialist, DMG (June 11, 1986) (on file with the DMG).

88. Memorandum from Anne Baldridge, Reclamation Specialist, DMG, to file (July 15, 1986) (on file with the DMG); see also Danielson & McNamara, supra note 40, at 25-27.

89. COLO. REV. STAT. § 34-32-124(6) (1991).

90. Id. § 34-32-124(7).

91. Id. § 34-32-124.

92. Danielson & McNamara, supra note 40, at 46.

93. The MLRB issued the NOV and assessed the civil penalty for failure to comply with the mine plan, failure to salvage topsoil completely, and sediment control problems. See Letter from Anne Baldridge, Reclamation Specialist, DMG, to Roger Leonard, General Manager, SCMCI (July 29, 1986) (on file with the DMG).

94. See supra note 84.

95. Knight Piesold & Co., supra note 9, at 28-29.

96. Anne Baldridge, Inspection Report of Summitville Project (June 18, 1986) (on file with the DMG).

97. A report claims that by June 18, 1986, the heap leach pad had already been loaded with approximately 209,000 tons of ore, placed across an area spanning roughly 1.5 acres. The highest ore placement was 11,450 feet high and approximately 40 feet thick. See Summitville Consol. Mining Co., Inc., Heap Leach System Report, vol. 1, at 17 (Apr. 1, 1992) (on file with the DMG).

98. Letter from Roger Leonard, General Manager, SCMCI, to Anne Baldridge, Reclamation Specialist, DMG (Sept. 29, 1986) (on file with the DMG).

99. It has been reported that the company based its precipitation levels on records from Wolf Creek pass. It was later discovered that Summitville receives 35 feet more snowfall than the Wolf Creek site. This led to a severe miscalculation in Summitville's water balance, which would eventually contribute to the threat of overflow at the heap spillway. See Mark Obmascik, Mine Becomes Bottomless Money Pit, DENV. POST, Feb. 21, 1993, at 14A. It also appears that the company, not wanting to take the time to gather evaporation data from its own site, submitted evaporation data gathered at a mine site several miles away, which turned out to show a higher evaporation rate than existed at Summitville.

100. Letter from Anne Baldridge, Reclamation Specialist, DMG, to Roger Leonard, General Manager, SCMCI (Oct. 27, 1986) (on file with the DMG).

101. Chronological Summary of Events, SCMCI Permit M-84-157 (on file with the DMG).

102. Legislative Overview (Feb. 17, 1993) (on file with the DMG).

103. A report commissioned by SCMCI in 1988 predicted that at normal winter precipitation, the heap would overflow a spillway heap pad elevation of 11,552 feet by December 1989. At maximum precipitation, the heap would overflow by June 1989. See Golder Associates, Heap Leach Pad Water Balance Estimate (Apr. 1988) (on file with the DMG).

104. Knight Piesold & Co., supra note 9, at 29.

105. Klohn Leonoff, supra note 64, at 53.

106. Knight Piesold & Co., supra note 9, at 38.

107. Danielson & McNamara, supra note 40, at 33-34.

108. Knight Piesold & Co., supra note 9, at 38.

109. 33 U.S.C. §§ 1251-1387, ELR STAT. FWPCA §§ 101-607.

110. Id. § 1251(a), ELR STAT. FWPCA § 101(a).

111. Id. § 1362, ELR STAT. FWPCA § 502. Point source discharges as defined by CWA § 502 excluded agricultural stormwater discharges and return flows from irrigated agriculture. Id.

112. COLO. REV. STAT. § 25-8-103(14) (1990).

113. 33 U.S.C. § 1342(p), ELR STAT. FWPCA § 402(p).

114. Mining is specifically addressed at 40 C.F.R. § 122.26(b)(14)(iii) (1992).

115. 33 U.S.C. § 1329, ELR STAT. FWPCA § 319.

116. 2 COLO. CODE REGS. § 407-1 (Rule 6.4.2) (1988).

117. See ENVTL. L. INST., supra note 22, at 17-18.

118. Telephone Interview with Harry Posey, Geologist, DMG (Oct. 8, 1993).

119. Knight Piesold & Co., supra note 9, at 38-39.

120. Knight Piesold & Co., supra note 9, at 30.

121. Knight Piesold & Co., supra note 9, at 39.

122. 1991 Settlement Agreement (July 1, 1991) (on file with the DMG).

123. In this agreement, the MLRB and the WQCD assessed fines of $ 57,000 and $ 43,000, respectively. In addition, the agreement required that SCMCI submit a Surface Water Management Plan and Best Management Practices Plan. The settlement agreement's compliance plan called for significant on-site improvements. The compliance plan required treatment of water from the Cropsy waste pile 550 Diversion, the submittal of an application for a CPDS permit for Cropsy waste pile discharges, termination of the land application system by October 30, 1991, the submittal of a wastewater discharge plan, and SCMCI's promise of no unpermitted discharges by October 30, 1991. The plan also required wastewater from the treatment plant to comply with CPDS effluent limitations by October 30, 1991. In addition, the agreement required the company to submit a surface water management plan identifying point source surface discharges, stormwater point source discharges, and nonpoint source discharges to state waters. The agencies required that quantity and quality of stormwater runoff be monitored and that the company develop a best management practices plan for stormwater discharges that would comply with state and federal regulations. In addition, SCMCI was required to develop a Revised Water Sampling Protocol for surface and groundwater monitoring, to be submitted by June 3, 1991. See 1991 Settlement Agreement Compliance Plan (July 1, 1991) (on file with the DMG).

124. Knight Piesold & Co., supra note 9, at 39-40.

125. Knight Piesold & Co., supra note 9, at 41.

126. The company employees who operated the environmental systems and who stayed on their jobs with no assurance of pay while the company's management apparently tried to maximize its leverage under bankruptcy law deserve a note of acknowledgement.

127. The Mine That Killed a River, DENV. POST, Jan. 3, 1993, at 2D; Mark Obmascik, Bankrupt Mine Costly to EPA, DENV. POST, Dec. 24, 1992, at 1B; Mark Obmascik, Taxpayers Get $ 15 Million Shaft in Summitville Mine Fiasco, DENV. POST, Dec. 12, 1992, at 1B.

128. COLO. REV. STAT. § 34-32-121.5 (1991), amended by Act of June 3, 1993, S.B. 93-247 (1993).

129. Id.

130. Legislative Overview, supra note 102.

131. Summitville's original bond was for $ 1,304,509. In addition to the $ 913,801 submitted in the form of salvage credit on August 24, 1989, the company also submitted $ 5 million as part of the amended settlement agreement on June 21, 1992. Of this, $ 2.5 million was put into a special account, to be released following the completion of summer 1992 reclamation activities. This was later released to the company. At the time the mine declared bankruptcy, the bond stood at $ 4,718,310 -- well below the estimated $ 170 million cleanup cost now projected by EPA. See Knight Piesold & Co., supra note 9, at 41-42.

132. COLO. REV. STAT. § 34-32-117(a)(VIII) (1991). Id. § 34-32-117(c) (1991), amended by Act of June 3, 1993, S.B. 93-247 (1993), allows the MLRB to refuse to accept financial warranties under specified conditions. Summitville's salvage credit bond would have met these conditions. The amended statute eliminates the predicament caused by Summitville's salvage credit bond in realizing a security interest in the mining operation's water treatment plant: if the DMG sold the plant, necessary water treatment would stop; if it did not sell the plant, the security interest would have no value.

133. COLO. REV. STAT. § 34-32-117(4) (1991).

134. Id.

135. Id. § 34-32-118.

136. Id. §§ 34-32-118, -124.

137. Id. § 34-32-117.

138. Id. § 34-32-117.

139. 30 U.S.C. §§ 1201-1328, ELR STAT. SMCRA §§ 101-908.

140. Id. § 1232, ELR STAT. SMCRA § 402.

141. SCMCI filed for Chapter 7 bankruptcy liquidation in federal court on December 1, 1992. EPA assumed control of the mine site on December 16, 1992. See Knight Piesold & Co., supra note 9, at 22.

142. At its high point in the spring of 1993, the heap contained 200 million gallons of cyanide solution, and was five feet from overflowing, with the fluid level rising. Some computer projections were predicting overflow by the last week of May. Telephone Interview with Hays Griswold, On-Scene Coordinator, Denver, Colo., EPA (Oct. 8, 1993).

143. Summitville Mine Removal Action, Site Summary 4 (1993) (on file with the DMG).

144. Telephone Interview with Harry Posey, supra note 118.

145. Danielson & McNamara, supra note 40, at 41.

146. Telephone Interview with Hays Griswold, supra note 142.

147. 30 U.S.C. § 22 (1993).

148. 43 U.S.C. §§ 1701-1784, ELR STAT. FLPMA §§ 102-603.

149. 30 U.S.C. § 22 (1993).

150. 42 U.S.C. §§ 4321-4370d, ELR STAT. NEPA §§ 2-209.

151. 22 C.F.R. § 161.8(b) (1993).

152. Id. § 161.8(a).

153. U.S. FOREST SERVICE, ALAMOSA RANGER DISTRICT, SUMMITVILLE PROJECT, SUMMITVILLE CONSOL. MINING CO. INC., ENVTL. ASSESSMENT (Dec. 14, 1984).

154. H.R. 322, 103d Cong., 1st Sess. (1993).

155. Telephone Interview with Hays Griswold, supra note 142.

156. Again, it should be noted that a bond is for anticipated reclamation problems, not unanticipated disasters. Bonds for "worst case" disasters would make mining expensive indeed.

157. H.R. 322, supra note 158, § 410.

158. H.R. 322, supra note 158, § 104.

159. H.R. 322, supra note 158, §§ 301-302.

160. MINERAL POLICY CTR., BURDEN OF GILT 4 (June 1993).

161. Id. at 32-33.

162. This does not imply that a very hard look at the responsibility of Galactic and its management is not in order.

163. COLO. REV. STAT. §§ 34-32-101 to -127 (1991), amended by Act of June 3, 1993, S.B. 93-247 (1993). The authors played some role in drafting and negotiating the amendments.

164. COLO. REV. STAT. § 32-32-103(3.5) (1993).

165. Id. § 34-32-112.5.

166. Id. § 34-32-115.

167. Id. § 34-32-121.5.

168. Id. § 34-32-115(2).

169. Id. § 34-32-117.

170. Id. § 34-32-122.

171. Id. § 34-32-127.

172. Telephone Interview with Bruce Humphries, DMG (May 19, 1994).

173. Report of the State Auditor, Preliminary Draft, DMG Minerals Program, Performance Audit (Nov. 1993).

174. The fact that the reforms in the 1993 Amendments passed both houses of the legislature unanimously may be an indication that the problem of political support for the state regulatory program is behind us, at least for the moment.

175. It has, after all, been 80 years since George Graham Rice wrote My Adventures With Your Money (1913).

176. A new high altitude heap leach project five times the size of Summitville was just approved by the MLRB. One individual citizen -- and no organizations -- appeared to comment on the application. See supra notes 57-61 and accompanying text.

177. For example, the promoter who created Galactic Resources and developed the Summitville project, Robert Friedland, has turned his attention to gold mines outside North America. Vivian Danielson, Friedland Strong Supporter of Guiana Shield Gold Rush, N. MINER, Mar. 29, 1993, at B1. He is currently promoting a cyanide heap leach operation in the Kilometer 88 gold district along the border between Venezuela and Guyana. Friedland has recently obtained a series of Canadian court gag orders to restrain Canadian news media from, inter alia, reporting about his involvement in the Summitville environmental problems. Penelope Purdy, Coloradans Pierced Censors' Veil to Fax the Facts to Our Canadian Friends, DENV. POST, Sept. 20, 1993, at B7.

24 ELR 10388 | Environmental Law Reporter | copyright © 1994 | All rights reserved