Digging For Dollars To Pay For Cleanup Silver Valley Ores Made Many Companies Rich; Now Who Will Cover The Damages?

The escalating fight over mining pollution in the Coeur d’Alene Basin isn’t only about heavy metals washing downstream from Idaho’s Silver Valley.

It’s also about money, and who will pay for an expanded cleanup.

Behind the rhetoric is a bare-knuckles battle over the remaining cleanup costs that’s being fought in federal court, Congress and the Idaho statehouse.

Cleaning up the entire Idaho-Washington watershed from the Silver Valley to Lake Roosevelt could cost more than $1 billion, according to the worst-case scenario.

That’s if the government decides to dredge heavy metals from Lake Coeur d’Alene - a move the Environmental Protection Agency says is unlikely.

Cleanup cost estimates range from a low of between $50 million to $100 million from the mining companies to $1.2 billion from the Coeur d’Alene Tribe. The federal government estimates the damages tab at $970,230,000.

There’s no cleanup estimate yet for the heavy metals in the Spokane River in Washington, because all damage estimates end at the Idaho state line.

The EPA and the mining companies have already spent more than $160 million to clean up the worst pollution in a 21-square-mile Superfund site near Kellogg.

It won’t be possible to collect more from many of the companies that extracted over $5 billion in silver, lead and zinc from the Silver Valley since the 1880s.

Some no longer exist, and others are bankrupt. One major player, Gulf Resources and Chemical Corp., moved $160 million in assets into New Zealand real estate in 1989 before seeking bankruptcy protection in the United States.

Another, Bunker Limited Partnership, transferred all its assets to newly formed corporations by 1989 - a move the EPA’s Inspector General said in 1990 would make collecting for the Superfund cleanup “substantially more difficult.”

It’s likely the federal Superfund account will be tapped for part of the remaining cleanup.

Superfund is being used throughout the West, where $20 billion worth of cleanup projects are under way on 12,000 miles of rivers and 180,000 acres of lakes contaminated by mine pollution.

In North Idaho, the mining companies and state politicians are fighting the EPA’s decision last February to expand the cleanup throughout the Coeur d’Alene Basin, a 50-mile corridor from near the Montana border to the Spokane River in Eastern Washington.

Superfund is a powerful legal lever that could force the mining firms to pay triple damages if they balk at the final cost and have to be taken to court.

“There are four or five companies left of the 68 that used to operate in the Silver Valley. The last person out doesn’t want to get stuck with the entire bill,” said Laura Skaer, executive director of the Northwest Mining Association in Spokane.

The federal government’s not out to break the mining companies, said Chuck Clarke, an EPA regional director in Seattle.

“My assumption is, there’s going to be some significant portions of the cleanup that the liable parties won’t be able to pay for. The companies either don’t exist, or they don’t have the money,” Clarke said.

“We can require the companies to pay their fair share, but we aren’t looking to drive them to bankruptcy.”

Divvying up the bill

In 1990, the mining firms and orehauler Union Pacific Railroad agreed on a $120 million master plan for the worst-polluted area near Kellogg.

But with the bankruptcies and asset transfers of several participants, including Gulf and Bunker Limited Partnership, the original plan collapsed.

So far, the mining firms have paid nearly $64 million in legal settlements with EPA for cleaning up the Kellogg area, declared a Superfund site in 1983.

A 10-year cleanup there began in 1992. It’s the nation’s second-largest Superfund site, next to a Butte, Mont., copper mine.

The pollution damage near Kellogg was dramatic in the early 20th century. Trees died, the streams ran white with mine wastes, and 75 million tons of heavy metal tailings washed downstream into Lake Coeur d’Alene, killing livestock, swans and crops along the way.

When Bunker Hill officials decided to bypass the smelter’s emission controls after a September 1973 fire, unfiltered lead spewed into the air in the first three months of 1974.

Children who lived nearby had the highest blood-lead levels ever recorded in the United States. Lead levels in some area children still are three times the national average, a 1997 study shows.

Before it sold the Bunker Hill complex in the early ‘80s, Gulf Resources paid $31.8 million in out-of-court legal settlements to the families of 38 lead-poisoned children.

In 1985, mining companies reached an additional cleanup settlement with the state of Idaho, agreeing to pay $4.5 million for cleanup work outside the Superfund “box.”

That settlement avoided a potentially much larger bill: a $50 million natural resources damages lawsuit that Jim Jones, Idaho’s former attorney general, had filed against the companies in 1981.

Now an attorney in private practice in Boise, Jones said the mining companies killed his request to the Idaho Legislature for $300,000 to develop a natural resources damage study for the lawsuit.

“It went through the Senate, but got bottled up in the House. At that point we thought we’d better settle for what we could get,” Jones said.

He wanted a settlement in the tens of millions. But Idaho Gov. John Evans settled with the mining companies for $4.5 million. The damage assessment never was conducted.

Critics say the settlement is woefully inadequate and a symbol of mining’s political clout in Idaho.

“In contrast to Idaho, Montana recently settled with ARCO (Atlantic Richfield Co.) for $215 million for mine pollution in Butte,” said Mark Solomon, executive director of The Lands Council , a group pushing for a basinwide cleanup.

Montana is pursuing some $200 million in additional claims for mining pollution in the upper Clark Fork River basin.

The 1985 Idaho settlement was “a tragic mistake,” said Ernie Stensgar, chairman of the Coeur d’Alene Tribe. In a 1991 lawsuit against the mining companies pending in U.S. District Court in Boise, the tribe is claiming $600 million in natural resource damages.

Last Tuesday, U.S. District Judge Edward Lodge ruled in Boise that the tribe owns the southern third of the lake - giving the Coeur d’Alenes new clout in arguing their natural resource damage claims.

A mining company spokeswoman said she couldn’t comment on the adequacy of the 1985 settlement with Idaho.

“The people who reached that settlement aren’t the same people who are running the companies now,” said Holly Houston, executive director of the Coeur d’Alene Basin Mining Information Office.

Placing blame

The companies, including Hecla, Sunshine, Asarco and Coeur d’Alene Mines, are willing to pay $50 million to $100 million to clean up heavy metal pollution outside of the Kellogg Superfund site, Houston said. The U.S. Justice Department wants to send a bigger bill. In March 1996, the federal government joined the tribe in suing the mining companies over resource damages - for lost fisheries, degraded water quality and metals-damaged wildlife.

The companies named in 1996 included Asarco Inc., Government Gulch Mining Co., Federal Mining and Smelting Co., Hecla Mining Co., Sunshine Mining Co., Sunshine Precious Metals Inc., Coeur d’Alene Mines Corp. and Callahan Mining Corp. The Justice Department added some 23 additional companies in August 1997.

The mining companies have counter-sued, saying they produced ore at the government’s request during the world wars of the 20th Century, and the government failed to regulate their mining wastes.

They also don’t think that Lake Coeur d’Alene and the lower Coeur d’Alene River should be dredged at a cost of up to $500 million, Houston said.

The EPA will decide on the extent of the remaining cleanup by 2000, the EPA’s Clarke said.

Work started last month to track possible “hot spots” of metals pollution on Lake Coeur d’Alene beaches and shoreline.

“We’ll make some decisions soon about the lake,” Clarke said. “If we don’t find problems on the shorelines, we can say that,” alleviating fears that tourism will be hurt.

“I’m not urging people to stay away from the lake. But if we keep putting nutrients in, there may be future issues” to deal with, he said.

Recent studies by the U.S. Geological Survey say water quality is now good, but tons of heavy metals on the lake bottom could partially dissolve and move downstream into Eastern Washington if the lake’s water quality deteriorates.

In their defense in U.S. District Court in Boise, the mining companies are arguing for a strict statute of limitations for any remaining cleanup.

Both sides agree that legal liability inside the Superfund “box” ends after completion of the Kellogg cleanup in 2002.

But the mining companies argue that the statute of limitations for the rest of the Coeur d’Alene Basin already has expired. The Justice Department says the legal meter runs for another three years after the Kellogg work is finished.

The mining companies want a brokered agreement that limits their liability and puts decisions in the hands of Idaho politicians.

Meanwhile, the Coeur d’Alene Tribe is insisting on full reparations for their land.

“Some in public life may consider it dangerous to increase our knowledge of the pollution,” Stensgar said. “A lack of knowledge is far more dangerous.”

CLEANUP COSTS Estimates range from a low of between $50 million to $100 million from the mining companies to $1.2 billion from the Coeur d’Alene Tribe. The federal government estimates the damages tab at $970,230,000.