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Political Issues on the Fort Belknap Reservation from Gold Mining

This page was written by Erin Klauk as part of the DLESE Community Services Project: Integrating Research in Education.

Assiniboine Chief. Details

Pegasus Gold operated the Zortman-Landusky gold mine complex just south of Fort Belknap in the Little Rocky Mountains of north-central Montana. The mine, originally permitted in the late 1970s, was the first large-scale open-pit cyanide heap leach mine in the United States. According to the Supplemental Environmental Impact Statement addressing the mine's reclamation and closure, in 1992 the Montana Department of Environmental Quality (MDEQ) reported that cyanide and heavy metals from the mine had contaminated the water. In 1995, Pegasus agreed to pay $36 million to settle state, federal and tribal lawsuits, of which $32 million was to be directed towards water management and treatment facilities (Putting a Price on Pollution: Financial Assurance for Mine Reclamation and Closure (more info) ).

Pegasus Gold declared bankruptcy in 1998, after which the MDEQ and Bureau of Land Management (BLM), which shared responsibility with the state for the site, assumed control of the mine. At that time no surface reclamation had been performed on more than 85 percent of the site, and problems related to cyanide and acid drainage discharge were evident (Putting a Price on Pollution: Financial Assurance for Mine Reclamation and Closure (more info) ).

After the bankruptcy, the Fort Belknap tribes filed a federal lawsuit questioning the adequacy of the proposed reclamation. Following extensive investigations, the state and federal agencies chose a preferred alternative totaling $52.1 million for surface reclamation. However, the existing amount of financial assurance for surface reclamation was approximately $29.6 million. This left a $22.5 million shortfall in the surface reclamation costs covered by the bond. State and federal agencies acknowledge that this shortfall does not include the cost of water treatment in perpetuity (i.e. for at least 1,000 years). Water treatment will cost another $11million for a total shortfall in cleanup costs of $33.5 million (Putting a Price on Pollution: Financial Assurance for Mine Reclamation and Closure (more info) ).

Just before declaring bankruptcy, the board of directors of Pegasus voted for its own members more than $5 million in bonuses. Then they created a new company, Apollo Gold, consisting of the remaining profitable assets of Pegasus Gold. While taxpayers are paying Pegasus's' clean-up bills for Zortman-Landusky, Pegasus's' executives have cashed in and started a new company based on the company's valuable assets (Putting a Price on Pollution: Financial Assurance for Mine Reclamation and Closure (more info) ).

Assiniboine Woman. Details

To further investigate policy issues on the Fort Belknap Reservation from gold mining, follow the links below.

Policy Resources of Gold Mining on the Fort Belknap Reservation

Resources containing information about policies on gold mining on the Fort Belknap Reservation.

  • De-coding Cyanide: An Assessment of Gaps in Cyanide Regulation at Mines. This paper presents comments on environmental issues surrounding cyanide use in the metal mining industry, with emphasis on the various cyanide-leach processes used to extract gold and silver. Information is included about the chemical contents of impacted waters and soils, common cyanide cleanup techniques, long term impacts from cyanide, and the potential impacts to municipal waste and drinking water, and recommendations for the regulatory agencies and the mining industry. The author points out many shortcomings in both industrial practices as well as in analytical techniques and our understanding of the true effects of cyanide. (more info)
  • Final Report of the State-Tribal Relations Committee. This document identifies common bonds between Indians and non-Indians in Montana and proposes state legislation for the mutual benefit of both groups. Of particular interest is the general and environmental information provided about the Fort Belknap Indian Reservation and the Northern Cheyenne Indian Reservation. Also included are detailed appendices including the committee�s response to issues presented by the Fort Belknap Tribe. (more info)
  • Final Supplemental Environmental Impact Statement for Reclamation of the Zortman and Landusky Mines.. This is the Final Supplemental Environmental Impact Statement for reclamation of the Zortman and Landusky Mines in north central Montana. The purpose of this document is to present several alternatives for the reclamation of the mine complex. The report includes the history of the site, the site geology and hydrology, a description of contamination issues, and 12 alternative plans for reclamation of the mines. Also included are four detailed appendices, an extensive list of tables and figures, and a collection of photos from the mines. (more info)
  • Fort Belknap Tribes File New Lawsuit Over Mining Pollution. This February 2004 article in Indian Country Today discusses a lawsuit over mining pollution at the Zortman-Landusky mine complex on the Fort Belknap Indian Reservation. The Assiniboine and Gros Ventre tribes allege that pollution from mine tailings and open-pit excavation in the Little Rocky Mountains continues to pollute streams and groundwater, the tribes say, and the contamination is impacting the adjacent reservation and its residents. They also argue that the quantity of water flowing from the mine areas has been diminished. (more info)
  • Putting a Price on Pollution: Financial Assurance for Mine Reclamation and Closure. This 56-page PDF provides information about financial assurance for mine reclamation and closure. The topics covered include mine reclamation and liability; closure and financial assurance; and a state by state analysis of existing mines and estimated liability. Tables in the appendix list disturbed acreage, mine ownership, commodities extracted and existing total financial assurance amounts. The report includes four case studies; Colorado�s Summitville mine, Montana�s Zortman-Landusky mine, Nevada�s gold mining bankruptcy, and New Mexico�s Molycorp mine. The authors conclude that regulations should be strengthened and enforced to protect the public from huge shortfalls in surety bonds that would cover any reclamation issues. (more info)
  • We've Seen Enough Destruction from Mining. This High Country News article discusses the Zortman-Landusky Gold Mines owned by the now bankrupt Pegasus, and water contamination that has resulted from them. (more info)



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