Mining company sues Montana over 'bad actor' decision

By MATTHEW BROWN

Associated Press

BILLINGS — An Idaho mining company sued Montana environmental regulators Friday for labeling the company and its president “bad actors” who should pay for cleanups at several polluted sites before pursuing two new mines beneath a wilderness area.

Attorneys for subsidiaries of Hecla Mining described the state’s allegation that the company is responsible for past and ongoing pollution from defunct mines as frivolous.

Hecla, based in Coeur d’Alene, Idaho, claims to be the oldest precious metals mining company in the United States. It says it had no direct involvement in the polluted mines at issue.

Hecla’s president, Phillips S. Baker Jr., who also chairs the National Mining Association, was formerly the chief financial officer for Pegasus Mining Co. of Spokane, Washington.

Pegasus’ 1998 bankruptcy left state and federal agencies on the hook for pollution cleanups at its Montana mines, including the Zortman-Landusky gold mine on the edge of the Fort Belknap Indian Reservation. Ongoing cleanup work at the shuttered sites has cost an estimated $100 million to date. Bonds put up by Pegasus covered only a portion of the bill.

State officials first revealed to The Associated Press earlier this week that Hecla could be asked to reimburse taxpayers for more than $30 million in cleanup work. That claim is based on Montana’s so-called bad actor law that blocks individuals and companies who don’t reclaim or pay for the reclamation of old mines from starting new ones.

Baker said in a statement provided by Hecla that he would “pursue every avenue to restore my reputation and my good name.”

Attorneys for the three Hecla subsidiaries — Montanore Minerals Corp., Troy Mine Inc. and RC Resources — asked a Lincoln County district judge to reject the alleged violations. They said the state’s reading of the law “erroneously equates” Baker and Pegasus and assumes he had control over activities at the now-defunct mines that polluted surrounding waterways with contaminants including arsenic and cyanide.

“Mr. Baker neither directed nor controlled mining operations at any of the Pegasus entities’ mines,” wrote the subsidiaries’ attorney, William Mercer and Victoria Marquis. “If Pegasus failed to perform (cleanup work) pursuant to its permit with the department, Pegasus is exclusively liable.”

Mercer served as U.S. attorney for Montana under former President George W. Bush.

In response to the lawsuit, Montana Department of Environmental Quality Director Tom Liver said state officials said they stood by their decision to enforce the bad actor law and were prepared to defend it in state court.

A coalition of environmental groups that had urged Livers to take action against Hecla and Baker will seek to intervene in the case, said Aurora Janke, an attorney with the environmental law firm Earthjustice

Hanging in the balance in the case are two copper and silver mines proposed by Hecla in northwestern Montana that would employ about 300 workers each. The Montanore and Rock Creek mines would be constructed beneath the Cabinet Mountains Wilderness, an area of remote, glaciated peaks and valleys south of Troy.

Environmentalists say the two projects could harm imperiled species including grizzly bears and bull trout.

Hecla bought Montanore in 2016 for almost $30 million. Last May, a U.S. District judge ruled that federal officials violated laws meant to protect threatened species and their habitat in approving the mine’s development.

Leading Montana Republicans have pushed hard to develop Montanore and Rock Creek. U.S. Sen. Steve Daines and Rep. Greg Gianforte in September penned a joint letter to the Trump administration urging it to speed up environmental reviews of the two mines.

Both lawmakers said Friday that they continue to support the projects.

Last year, Baker was among mining industry representatives who successfully lobbied the Trump administration to repeal an Obama-era mining pollution proposal. It would have required mining companies to prove upfront they have the financial wherewithal to clean up their pollution.

Baker wrote in a letter to Environmental Protection Agency Administrator Scott Pruitt that there was no need for the rule because mining companies already provide enough financial assurances to cover cleanup costs.

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