February 20, 2013 in City

Hecla reopens Lucky Friday

Mullan silver mine was shut down after 2011 incidents
By The Spokesman-Review
 
Updated to correct the amount of money Hecla Mining could pay in penalties if four citations are upheld.

Hecla Mining officials on Tuesday announced the company has resumed silver production at the Lucky Friday mine, which closed more than a year ago after two miners were killed and seven injured in three separate events in 2011.

Regulators from the federal Mine Safety and Health Administration ordered Hecla to close the mine in Mullan, Idaho, after a wall collapsed near the main silver shaft in December 2011. Seven miners were injured. Two miners were killed in earlier accidents that year.

Officials of the Coeur d’Alene-based company said Tuesday they’ve resolved the safety issues and received clearance from regulators to resume operations.

“This is a great day for Hecla,” company CEO Phillips Baker said Tuesday at a news conference in downtown Spokane. He cited roughly $60 million in safety improvements and other mine investments that resolved issues identified by federal regulators.

“We believe the Lucky Friday Mine is in better condition than at any time in its history,” Baker said.

The company began mining silver and other metals from the mile-deep main shaft last week. Baker said Hecla has about 300 workers employed again. About 90 percent of them were working at the Lucky Friday before silver mine operations halted in January 2012.

Company officials made a series of focused safety upgrades, he said. They include:

• Adding several new safety-focused managers and trainers.

• Helping develop safer mining practices, particularly by having miners use a team approach to identify concerns.

• Investing $2.3 million in new mining equipment, including new telehandlers and scissor lifts. Those machines allow miners to remove ore from upper walls while working inside protective cages or baskets, said Larry Radford, the company vice president for operations.

• Installing 61,000 rock bolts and 20 miles of chain-link fence throughout the mine to improve stability.

The Mullan mine, which has been in operation for seven decades, typically produces about 3 million ounces of silver per year.

At current silver prices of around $30 per ounce, the 12-month impact felt by Hecla not producing silver comes to roughly $90 million in lost revenue.

Baker said the company expects to hit full production by the second half of this year. He estimated the Lucky Friday will produce 2 million ounces of silver this year.

The mine’s reopening is a major economic boost to the Silver Valley and North Idaho. Area officials have been eager to see the mine reopen, as Hecla miners are paid more than workers in manufacturing and construction.

In his remarks Tuesday, Baker said Hecla spent roughly $30 million on the rehabilitation of the main silver shaft and $26.2 million for capital projects that are part of ongoing expansion and upgrades to mine operations.

Baker also said the improvements were undertaken in part to resolve a “potential pattern of violations” notice sent to Hecla by the Mine Safety and Health Administration.

“Everything we’ve done ties to that process,” Baker said. Baker said the company expects to answer MSHA concerns and remove the potential violations notice.

Hecla is also contesting four citations issued by MSHA related to the 2011 deaths and injuries. If the federal agency concludes Hecla was negligent in how it operated the mine, the company faces fines up to $362,000.

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