Hecla Troubles Watched Closely Costly Cleanup Near Salmon River Raises Concerns About Coeur D’Alene Basin Effort

A defunct gold mine in central Idaho is turning into a money pit for Hecla Mining Co.

Disappointing levels of gold ore forced the Grouse Creek Mine to close just 2 years after it had opened, resulting in a $97 million loss for Hecla.

Now, the company is poised to spend another $23 million to keep cyanide at the mine site from leaking into endangered salmon habitat.

The open pit gold mine sits at the edge of the Sawtooth National Recreation Area on tributaries of the Salmon River. Cyanide from the mine’s leaking tailings pond started showing up in nearby Jordan Creek last year.

Hecla diverts contaminated ground water to keep it from reaching the creek. But state and federal officials want the source of the cyanide - a 500-million gallon pond of mining wastewater - emptied as fast as possible.

“We wish we could wave a magic wand across the pond and make it disappear,” said Helen Hillman of the National Oceanic and Atmospheric Administration in Seattle.

The longer the pond remains, the greater the risk of cyanide and metals reaching the creek and harming fragile runs of wild salmon and steelhead, federal officials said. Though no dead fish have been found, as few as 15 salmon and 15 steelhead make the 800-mile return trip from the ocean to spawn in the area each year, Hillman said. Each one is federally protected under the Endangered Species Act.

Hecla estimates that it will cost $23 million to drain the tailings pond and treat the water to levels the company can discharge into a Salmon River tributary.

The expenditures come at a critical time for the 109-year-old mining company, also facing a lawsuit over pollution in the Coeur d’Alene Basin. Low gold and silver prices and lack of investor interest in precious metals have led to a nine-year string of losses for Hecla.

The $23 million budgeted for the Grouse Creek work contributed to the company’s $48 million loss last year. It’s also one of the factors depressing Hecla’s stock price, which closed Friday at $1.25.

“We intend to de-water the pond in a way that will protect the fishery,” said Vicki Veltkamp, Hecla’s vice president of corporate and investor relations.

But the company’s responsibility to shareholders also mandates the most cost-effective approach, Veltkamp said.

The timing and level of the cleanup have been sticking points for federal agencies negotiating with Hecla and environmental groups who say the mine was a mistake from the beginning.

Federal officials wanted Hecla to empty the pond this summer. Hecla would have had to build a wastewater treatment plant last year to meet the deadline. Company officials said the time line was too ambitious.

Now the Forest Service, the lead agency for the federal government, has indicated that it may use a portion of the Superfund law to force Hecla to an agreement. It’s an option, though a voluntary agreement is preferable, said Pat Trainer, the Forest Service’s on-site coordinator.

The pond’s problems get worse with time, said Nick Ceto, the Environmental Protection Agency’s mining coordinator in Seattle.

Hecla is intercepting contaminated ground water and pumping it back into the pond. Putting more water in the pond increases the pressure on the leaks, Ceto said. The long-term risk of the pond overflowing and sending contaminated water into the Salmon River also increases.

“You can understand our frustration,” he said. “It’s now spring and we still don’t have an agreement in place.”

Hecla officials, however, said the federal government’s original time line and water treatment standards weren’t realistic.

“We could not sign something with a deadline we could not meet,” said Bill Booth, a vice president with Hecla.

The company did, however, sign a consent order with the state of Idaho, which also has jurisdiction over the Grouse Creek Mine. Hecla agreed to pay $51,500 for cyanide discharges into Jordan Creek last fall, and begin draining the pond next year.

But a final state time line for emptying the pond and the discharge limits for effluent are still in negotiations.

It could take several years to drain the pond, said Jim Johnston, regional administrator for the Department of Environmental Quality in eastern Idaho. The time line depends on the flows in the Yankee Fork, where the treated wastewater will be pumped.

Johnston’s goal is to protect fish, without setting unrealistic water treatment standards for Hecla. The company is working to complete three technical studies by June, which the state will consider when it sets the criteria.

“Economics do enter into the decision,” Johnston said. Per state statute, water quality regulations have to protect fish, while being “reasonable and practicable,” he said.

Environmentalists like Tom Blanchard bristle at the idea that economics are part of the equation.

“The Salmon River is really the pristine river of Idaho, one of the great resources and attractions of the state,” said Blanchard, a member of the Boulder-White Clouds Council.

People from all over the world come for the recreational experience. The water should be cleaned to the highest level, regardless of the cost to the company, he said.

Environmental groups also have concerns about discharging the treated tailings pond water into the Yankee Fork, a Salmon River tributary.

Unfortunately, there’s not an ideal way to dispose of the wastewater, said NOAA’s Hillman. Her agency has worked closely with EPA to set mixing zone standards in the Yankee Fork. That allows the treated wastewater to be diluted before it moves downstream.

Both cyanide and metals are extremely toxic to fish, Hillman said. Metals damage the gill structure of fish, which disrupts their ability to breath, Hillman said. Fish lose their ability to detect and avoid pockets of metals in the water after chronic exposure, she said.

Veltkamp, from Hecla, said public fears of the situation have been overblown. Cyanide was used at the mine to leach gold out of rock. It breaks down naturally in sunlight, which is why cyanide levels in the tailings pond dropped substantially from last year, Veltkamp said.

The highest concentrations of cyanide recorded in Jordan Creek ranged from 0.02 to 0.07 parts per million, according to Hecla. NOAA, however, is recommending cyanide levels no greater than 0.0052 parts per million at the edge of the mixing zone in Yankee Fork.

The Coeur d’Alene Tribe and Hecla shareholders are watching the situation at Grouse Creek closely.

The tribe is suing Hecla and other mining companies over pollution in the Coeur d’Alene Basin.

“Any kind of a cleanup is a positive,” said Bob Bostwick, the tribe’s press secretary.

Roger Sparks, a shareholder from Ellensburg, Wash., recently sold the Hecla stock he bought 1-1/2 years ago at $2.75 per share. The company’s environmental liabilities were a factor in his decision.

Hecla can’t make money at current market prices of $5 per ounce for silver. Cleanup costs add to the company’s financial troubles, he said.

“Hecla’s a fine company, a good old name in the business,” Sparks said. “But ultimately, you have to make money.”