In Montana, we value and appreciate our history of natural resource-based industries and their contributions to our communities and livelihoods across our state. Responsible mining operations, coupled with a commitment to safeguard our air, water, and environment will continue to be an important driver of our state’s economy, even as the state works to reclaim and restore legacy impacts of past activities.
Last month the state issued a notice of violation to Hecla Mining and its CEO, Phillips S. Baker Jr., for a violation of the state’s bad actor law. Under Montana’s Metal Mine Reclamation Act, mining “bad actors” — individuals or companies who fail to adequately reclaim sites, are prevented from new mining or exploration in Montana until they meet their old cleanup responsibilities.
On February 6, 1998, Pegasus Gold announced the departure of chief financial officer Phillips Baker to pursue other opportunities. A little over a month later, the company filed for bankruptcy. SEC filings show that Baker and other corporate officers were awarded millions in bonuses in the run up to and aftermath of the bankruptcy — on top of already significant annual salaries and securities. The bonuses would later be called “inexcusable” by Republican U.S. Sen. Conrad Burns. Baker was not only the CFO of Pegasus, he also served as a principal officer and director of each of the Pegasus subsidiaries responsible for operating the Zortman-Landusky, Basin Creek, and Beal Mountain mines.
The impacts of the Pegasus Bankruptcy are still felt today. The Beal Mountain site emits pollutants into the headwaters of the Clark Fork River, damaging water quality and the local trout fishery. Acid mine drainage from the Zortman-Landusky mines continues polluting waters and sacred sites utilized by the Assiniboine and Gros Ventre Tribes and the adjacent Fort Belknap Indian Reservation.
Taxpayers have already been saddled with $32 million in costs for site reclamation and water treatment at the Zortman-Landusky site, and now must foot an over $2 million annual bill for water treatment each year in perpetuity. The Zortman-Landusky site alone produced $300 million in gold over 20 years for Pegasus.
The Montana Legislature passed the original bad actor provisions of the Metal Mines Reclamation Act in 1989. Pegasus testified in support of the bill, noting they “had no tolerance for people who abused the reclamation laws of Montana.” Pegasus encouraged the “passing of the bill to provide additional burdens for those who had broken the reclamation laws if they wished to come back to Montana” according to legislative records. In 2001, the legislature strengthened these prohibitions in direct response to the financial and environmental disaster wrought by the Pegasus default.
Hecla Mining enjoys a relatively strong reputation for responsible mine development and reclamation. The state has issued a notice of violation to Baker, Hecla’s current CEO, and to Hecla offering them 30 days to rectify the violation before any action will be taken to address their outstanding permits for exploration and operation at the proposed Rock Creek and Montanore Mines in the Cabinet Mountains. By demonstrating that Baker is no longer mining or conducting exploration in the state, compliance with Montana law can be achieved without unreasonable delay.
The citizens of Montana and the Montana Legislature were clear when they began to pick up the pieces in the aftermath of the Pegasus debacle: We must hold those individuals and companies who foul our state’s lands and waters and profit at the expense of our taxpayers accountable. Put simply, if you make a mess in Montana, you clean it up or you’re barred from creating a new one. The state is fulfilling its duties under Montana law, while continuing to work with those companies and individuals who embrace the responsible stewardship required to mine our natural resources. Until the people of Montana change the law, Phillips S. Baker Jr. needs to address these outstanding impacts, or mine somewhere else.