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State lawmakers consider tougher financial oversight on hard-rock mining

Bill would end self-bonding and require companies to demonstrate financial fortitude
Wastewater pours out of the Gold King Mine above Silverton. Colorado lawmakers are considering a bill that would ban the practice of self-bonding and require hard rock mining companies demonstrate they can pay to treat polluted water should a mishap occur.

Colorado senators gave initial approval to a bill this week that would make Colorado the first western hard rock mining state to ban the practice of self-bonding, a controversial financial surety that has often left taxpayers footing the bill for mine clean up around the country.

The bill, which has already been approved by the House, would also require hard-rock mining companies demonstrate they can pay to treat polluted water and give a timeline for that treatment before receiving permits. The bill is backed by the state’s Department of Natural Resources, which issues mining permits, said Ginny Brannon, director of the Division of Mining, Reclamation and Safety. She added the bill codifies into law long-standing practices of the division.

“We don’t permit applications that have water treatment that goes on forever,” Brannon told the Senate Agriculture and Natural Resources committee. “As for self-bonds, we don’t like them. We look for other forms of financial assurance.”

The bill passed on a vote of 4-1, and now heads to the Senate floor. The House passed it in February.

La Plata County commissioners, public health officials, anglers and farmers have all cheered House Bill 1113 as a necessary step to prevent disasters like the Gold King Mine spill, which dumped 3 million gallons of mining sludge into the Animas River in 2015. If passed into law, the bill will not affect abandoned mines like the Gold King, a long-shuttered 19th century mine whose cleanup was being overseen by the Environmental Protection Agency. But it would require operators of new mines to prove they can pay for water treatment in the event of a spill.

“No one is under the illusion that this legislation would fix a legacy mine,” said La Plata County Commissioner Julie Westendorff, who traveled to Denver to testify in support of the bill. “Our goal is, let’s not have future legacy mines.”

By eliminating self-bonding, House Bill 1113 would end a practice that allows a mine to submit financial statements proving it can pay for any mishaps, such as spills, that occur during reclamation. Self-bonding is risky; if a company goes out of business or files for bankruptcy, the cost of cleanup passes to taxpayers. There is currently one Colorado mining operation using self-bonding, but its operation does not require water treatment.

While Coloradans will never have to pay for water treatment from the Gold King mine, in 2023 the ongoing treatment from another Superfund site, the Summitville mine south of Del Norte, will fall to the state. The Colorado Department of Public Health and Environment will pay $2.2 million a year for water treatment from Summitville.

Colorado has six hard rock mines that require water treatment – three will have indefinite water treatment, and three have water treatment end dates that are unknown but could change, according to the Division of Mining, Reclamation and Safety. All were permitted more than three decades ago, when reclamation laws were new in Colorado.

While House Bill 1113 is not retroactive, one provision might mean its new standards for water treatment and self-bonding would apply to existing mines, said Scott Hardt, a lawyer with the Denver firm Davis Graham & Stubbs and which represents Newmont Mining Corp., one of the world’s largest gold mine companies with a flagship mine in Teller County. Mines frequently adjust their plans and amend their permits, he said, which would could make the mining operation subject to new requirements for water treatment.

“There’s a real risk that as an unintended consequence that it would apply to all existing mines,” Hardt said.

The bill’s sponsor, Sen. Kerry Donovan, D-Vail, disagreed. But Sen. Don Coram, R-Montrose, who owns and is reclaiming uranium mines in western Colorado, thinks the bill could trap mining companies into meeting the new requirements; his amendment to fix the bill was shot down in committee.

Coram voted for the bill, adding: “We will continue conversations.”


Jul 7, 2016
House passes bill to push abandoned mine cleanup

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