Big bond, bad prices hinder Rock Creek 

Mining stumbling blocks

Will the Forest Service approve the Rock Creek Mine? If a new Forest Service chief under President Bush echoes his boss’ view of natural resources, the answer is probably yes. But unless the price of precious metals changes dramatically in the near future, Sterling Mining may opt not to begin construction of the mine even if the permit is granted.

In addition to the sagging precious metals market, Sterling is trying to figure out how to settle a debt with the state of Montana over its existing Troy Mine near Noxon. At issue is the value of bonds posted by Sterling and former mine owner ASARCO. It seems that the state did not adequately check the damage the mine was doing for 21 years. As a result, the bond, first posted in 1978, was never updated by the Department of Environmental Quality (DEQ).

The original $2.7 million dollar bond was found to be a mere $7.75 million short of what’s needed for adequate restoration, including a cool million to serve as a “starting point for a water treatment bond,” according to a March 2000 DEQ report. (Water quality problems developed at the site, despite initial reassurances from ASARCO.) But in fact, that amount is actually shy of what will be needed to clean up the Troy mine. DEQ will recalculate the amount of cash Sterling will have to post after the company updates its reclamation plan to meet the requirements set forth by DEQ.

Despite the well-publicized dine-and-dash pattern established by mining companies doing business in Montana (the state currently has a liability of at least $24.6 million, and a potential liability of a much greater amount, all due to inadequate reclamation bonds) the existing state bond laws are unlikely to change, and with a predicted weakening of any federal opposition to the mine, Sterling may get their permit. None of this stopped Rick Stern of the Rock Creek Alliance from visiting the Troy Mine recently.

“It was really interesting,” Stern observes. “All the machinery used to crush and grind the ore is powered by electricity, and with deregulation, the cost of operating the mine is reaching the point where it’s not economically feasible to keep it running.”

To Stern, however, any temporary downturn in metals prices, or similar delays due to energy rates, are secondary to the notion that the mine should be nixed based on existing environmental laws.

“If they get the permit, we’ll appeal,” Stern says. “There are a number of ways to challenge any decision less than denying a permit, both in court and out, and we’ll be looking at all of them.”

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