Political Issues on the Fort Belknap Reservation from Gold Mining
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) ).
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.