Providing coverage of Alaska and Northwest Canada's mineral industry
December 2017

Vol. 22, No. 50 Week of December 10, 2017

Mining News: EPA nixes mine bonding proposal

Agency says state, federal requirement already address U.S. mining risks, added assurances would impose undue burden on sector

Shane Lasley

Mining News

The U.S. Environmental Protection Agency has decided not to impose additional bonding requirements on the American mining sector, the regulator announced on Dec. 1.

Under the Obama Administration, EPA had proposed the implementation of hefty new financial assurance requirements for mining operations in the U.S. under Section 108(b) of the Comprehensive Environmental Response, Compensation, and Liability Act, more commonly kwon as CERCLA or Superfund.

CERCLA was enacted by Congress in 1980 in response to releases and potential releases of hazardous substances that may endanger public health or the environment. Part of this was to ensure that U.S. industries had bonding in place to cover the costs of such events at their facilities.

During a July testimony before the U.S. House Subcommittee on Energy and Mineral Resources, Arizona Department of Environmental Quality Director Bret Parke said that over the nearly four decades since CERCLA was passed, states have set up financial assurance programs that surpass the issues Congress aimed to address when it passed the Superfund act.

During the same hearing, Coeur Mining President and CEO Mitchell Krebs made a similar point, noting that his Chicago-based mining company already has roughly $200 million of bonding in place to cover the estimated cost of closure and post-closure activities at its three U.S. mines.

“Last December, EPA issued a proposed rule to require hard rock mining companies to demonstrate and maintain financial responsibility ‘consistent with the degree and duration of risk associated with their mining operations’, which sounds like a great idea. The only problem is, it already exists,” he said.

During a public comment period that ran from January into July, EPA heard arguments for and against the proposed bonding requirements and decided that the financial assurances in place at the state level, along with bonding required by the U.S. Bureau of Land Management and U.S. Forest Service on federal land, covered the needs described in CERCLA.

“After careful analysis of public comments, the statutory authority, and the record for this rulemaking, EPA is confident that modern industry practices, along with existing state and federal requirements address risks from operating hardrock mining facilities,” said EPA Administrator Scott Pruitt. “Additional financial assurance requirements are unnecessary and would impose an undue burden on this important sector of the American economy and rural America, where most of these mining jobs are based.”

Sen. Lisa Murkowski, R-Alaska, who serves as chairman of the Committee on Energy and Natural Resources and the Interior-EPA Appropriations Subcommittee, has been outspoken in her opposition of the CERCLA 108(b) regulations since the Obama administration EPA began working on them in 2011.

“I’m pleased the EPA took all of the facts into consideration and decided against imposing new, duplicative, and burdensome financial assurance requirements for hardrock mines,” Murkowski said. “Significant requirements are already in place at both the state and federal levels to ensure resources are available for mine cleanup and environmental protection. Today’s decision will protect mining jobs, our nation’s mineral security, and help ensure we can responsibly access the materials needed for our national defense, manufacturing, and other high-tech industries.”

National Mining Association President and CEO President and CEO said EPA’s decision not to stack extra bonding requirements on the U.S. mining sector “shows that reason can prevail.”

“At a time when America is completely import-dependent for many key minerals, we should be supporting domestic mining and encouraging investment in the U.S. to lessen our dependence on foreign supply chains,” he added.

It is estimated that if EPA would have implemented the proposed CERCLA financial requirements, the costs to the U.S. mining industry would have been upwards of $7.1 billion.

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