Conservationists lined up Wednesday in support of the embattled management of a Montana mining company, citing concerns that a longstanding environmental agreement could suffer if a takeover by investors including former Gov. Brian Schweitzer succeeds.
The Clinton Group, a New York hedge fund, has nominated a slate of replacement directors for Stillwater Mining Co. that includes Schweitzer, a Democrat who left office after eight years in January due to term limits.
The dissident group has heaped criticism on Stillwater Chairman and CEO Frank McAllister for spending hundreds of millions of dollars on copper and gold projects in Argentina and Canada that face uncertain prospects.
The 1,664-employee company operates two platinum and palladium mines in southern Montana's Beartooth Mountains. Schweitzer claims he's trying to save the company from financial ruin.
But two conservation groups — the Cottonwood Resource Council and Stillwater Protective Association — are urging shareholders to retain the current management and board of directors at the company's upcoming annual meeting in May.
They cite the success of their 2000 "good neighbor agreement" with Stillwater. The deal provided environmental protections for the area around the mine and cooperation with local communities on issues such as traffic and company-sponsored housing. In return, the groups dropped litigation over the mine.
Even under new leadership, the company would be held to the legally binding agreement.
Nevertheless, Jerry Iverson with Cottonwood Resources Council said he's concerned a new board and management team would emphasize short-term profits over sustainable mining practices.
Iverson said the Clinton Group appears to "want to go in for the quick extraction and get out."
"That's the opposite of the sustainable and responsible message that the good neighbor agreement encourages," he said.
Schweitzer and Clinton Group managing director Greg Taxin said Wednesday they had no problems with the way environmental issues have been handled by the company under McAllister and no intentions of deviating from the good neighbor agreement.
"That part of it works," Schweitzer said. "We just want to get back to the basics of the running the (Montana) mines instead of pouring money down the drain in South America."
Taxin, who is also nominated as a board member, rejected Iverson's contention that the Clinton Group was interested only in short-term gain as a "red herring."
No matter how long the hedge fund retains its 1.3 percent stake in Stillwater, he said that if the takeover succeeds, a new and more qualified board would be in place to better run the company.
Stillwater spokesman Dan Gagnier said the company appreciated the support of the conservation groups and called the good neighbor agreement a cornerstone of the company's operations.